[Financial Performance](index=1&type=section&id=Financial%20Performance) [Comprehensive Statement of Comprehensive Income](index=1&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's revenue significantly increased, but fair value changes and higher financing costs led to a loss attributable to owners, despite overall profit growth Comprehensive Statement of Comprehensive Income Key Financial Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 4,193,421 | 1,065,661 | | Gross Profit | 2,261,532 | 738,631 | | Profit for the Year | 170,294 | 11,058 | | Loss Attributable to Owners of the Company for the Year | (458,067) | (314,660) | | Basic and Diluted Loss Per Share | (7.61) HK cents | (5.22) HK cents | - Net fair value loss on financial assets at fair value through profit or loss was **HKD 1,188,877 thousand**, compared to a gain of HKD 12,643 thousand in the prior year, significantly impacting profit[4](index=4&type=chunk) - Finance costs significantly increased to **HKD 1,630,572 thousand**, from HKD 269,611 thousand in the prior year[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) Total assets and liabilities grew substantially by year-end 2022, boosting net assets, yet equity attributable to owners shifted to a deficit Consolidated Statement of Financial Position Key Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 41,202,190 | 7,819,203 | | Total Current Assets | 27,755,419 | 15,131,248 | | Total Assets | 68,957,609 | 22,950,451 | | Total Current Liabilities | 18,301,999 | 10,600,265 | | Total Non-current Liabilities | 35,080,832 | 3,737,683 | | Total Liabilities | 53,382,831 | 14,337,948 | | Net Assets | 15,574,778 | 8,612,503 | | Equity Attributable to Owners of the Company | (36,053) | 1,408,651 | - Non-controlling interests significantly increased to **HKD 8,506,390 thousand** (2021: HKD 85,769 thousand), reflecting changes in equity structure due to acquisitions[8](index=8&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Company Information](index=6&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Shandong Hi-Speed Holdings Group Limited completed its name change in July 2022 and diversified its financial services to include industrial, standardized, non-standardized, and licensed financial investments - The company's English name changed from “China Shandong Hi-Speed Financial Group Limited” to “Shandong Hi-Speed Holdings Group Limited”, and its Chinese name from “中国山东高速金融集团有限公司” to “山高控股集团有限公司”, effective July 15, 2022[9](index=9&type=chunk) - The Group primarily engages in industrial investment, standardized investment business, non-standardized investment business, and licensed financial services[9](index=9&type=chunk) [Application of Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=2.%20%E6%87%89%E7%94%A8%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group adopted several revised HKFRSs this year, with the Board anticipating no material impact on current or prior period financial statements - The Group first applied HKFRS 3 (Revised), HKAS 16 (Revised), HKAS 37 (Revised), and Annual Improvements to HKFRS 2018-2020 in the current year[10](index=10&type=chunk)[11](index=11&type=chunk) - The Directors expect that the application of all new and revised HKFRSs will not have a significant impact on the consolidated financial statements in the foreseeable future[12](index=12&type=chunk) [Basis of Preparation](index=7&type=section&id=3.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) Consolidated financial statements are prepared under HKFRS, HK GAAP, and Companies Ordinance disclosure requirements, primarily on a historical cost basis, with certain financial instruments measured at fair value - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and disclosure requirements of the Companies Ordinance, and comply with the Listing Rules[13](index=13&type=chunk) - The consolidated financial statements have been prepared on a historical cost basis, except for investment properties, certain financial instruments, and financial guarantee contracts which are measured at fair value at the end of each reporting period[13](index=13&type=chunk) [Operating Segment Information](index=7&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group strategically transformed from financial to industrial investment, restructuring its reportable segments to four, including a new "Industrial Investment" segment and discontinuing "Technology Finance" - The Group is steadily advancing its transformation from a financial investment group to an industrial investment group, with reportable operating segments restructured from five to four for the year ended December 31, 2022[14](index=14&type=chunk) - A new “Industrial Investment” segment was added, primarily engaged in industrial investment-related businesses, including the acquisition of a 43.45% equity interest in Shandong Hi-Speed New Energy[15](index=15&type=chunk) - The “Technology Finance” segment has ceased operations[15](index=15&type=chunk) [Segment Revenue and Results](index=9&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A%E5%8F%8A%E6%A5%AD%E7%B8%BE) Industrial Investment was the primary driver of revenue and profit, while standardized and non-standardized investments, along with licensed financial services, recorded losses 2022 Segment Revenue and Results | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Industrial Investment | 3,644,438 | 1,713,054 | | Standardized Investment | 191,281 | (941,582) | | Non-standardized Investment | 212,851 | (133,568) | | Licensed Financial Services | 144,853 | (571,344) | | Technology Finance | - | (5,075) | | Unallocated | 14,391 | 66,560 | | Total | 4,193,420 | (1,556) (Loss before tax) | - The Industrial Investment segment showed **significant revenue and results**, becoming the Group's primary growth driver[18](index=18&type=chunk) [Geographical Information](index=10&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) Over 90% of the Group's revenue and assets were generated or located in China as of year-end 2022, precluding detailed geographical segment disclosure - For the year ended December 31, 2022, given that over **90% of the Group's revenue was generated in China**, no geographical segment information regarding the location of the Group's revenue is presented[20](index=20&type=chunk) - As of December 31, 2022, given that over **90% of the Group's assets were located in China**, no geographical segment information regarding the location of the Group's assets is presented[21](index=21&type=chunk) [Classification of Revenue from Contracts with Customers](index=11&type=section&id=%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E6%94%B6%E7%9B%8A%E5%88%86%E9%A1%9E) Customer contract revenue surged in 2022, primarily from new businesses like electricity sales, construction, and clean heating services Classification of Revenue from Contracts with Customers (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Electricity sales and entrusted operation services | 3,007,375 | – | | Construction and related services | 295,716 | – | | Provision of clean heating services | 294,659 | – | | Technical consulting services | 46,686 | – | | Consulting service income | 47,931 | 63,427 | | Brokerage business income | 19,777 | 35,798 | | Asset management and performance income | 14,929 | 6,375 | | Commission income | 2,447 | 35,415 | | Internet new media service income | – | 6,301 | | **Total** | **3,729,520** | **147,316** | - Total revenue from contracts with customers in 2022 was **HKD 3,729,520 thousand**, a significant increase from HKD 147,316 thousand in 2021[24](index=24&type=chunk) [Revenue](index=11&type=section&id=5.%20%E6%94%B6%E7%9B%8A) The Group's total revenue grew significantly, driven by a substantial increase in customer contract revenue and interest income from financial assets at fair value through other comprehensive income Revenue Composition (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,729,520 | 147,316 | | Finance lease income | 14,619 | 55,914 | | Interest income from money lending business | 37,017 | 52,146 | | Interest income from debt investments | 87,750 | 233,950 | | Interest income from financial assets at fair value through profit or loss | 53,331 | 186,133 | | Interest income from financial assets at fair value through other comprehensive income | 226,955 | 290,576 | | Dividend and distribution income from financial assets at fair value through profit or loss | 43,508 | 99,626 | | Dividend income from financial assets at fair value through other comprehensive income | 721 | – | | **Total Revenue** | **4,193,421** | **1,065,661** | [Other Income](index=12&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income saw a substantial increase, mainly from other interest income, government grants, and management income Other Income Composition (HKD thousands) | Income Source | 2022 | 2021 | | :--- | :--- | :--- | | Bank interest income | 18,115 | 15,363 | | Other interest income | 55,174 | – | | Government grants | 28,462 | – | | Management income | 19,317 | – | | Others | 4,894 | 9,692 | | **Total** | **125,962** | **25,055** | [Other Gains and Losses, Net](index=12&type=section&id=%E5%85%B6%20%E4%BB%96%20%E6%94%B6%20%E7%9B%8A%20%E5%8F%8A%20%E8%99%A7%20%E6%90%8D%EF%BC%8C%E6%B7%A8%20%E9%A1%8D) Net other gains and losses significantly increased in 2022, primarily due to bargain purchase gains from subsidiary acquisitions, despite various asset impairment losses Other Gains and Losses, Net Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Impairment loss recognized on goodwill | (13,227) | – | | Impairment loss recognized on operating rights | (19,881) | – | | Impairment loss recognized on property, plant and equipment | (75,316) | – | | Write-off of intangible assets | (400,279) | – | | Exchange losses, net | (70,023) | (1,309) | | Gain on disposal of subsidiaries | – | 171,135 | | Bargain purchase gain on acquisition of subsidiaries | 1,431,330 | 131,380 | | **Total** | **918,859** | **246,636** | - A **bargain purchase gain of HKD 1,431,330 thousand** from the acquisition of subsidiaries was the primary reason for the significant increase in net other gains and losses this period[26](index=26&type=chunk) [Impairment Losses on Financial Assets Reversed/(Recognized), Net](index=12&type=section&id=%E5%B7%B2%20%E6%92%A5%20%E5%9B%9E%EF%BC%8F%EF%BC%88%E7%A2%BA%20%E8%AA%8D%EF%BC%89%E7%9A%84%20%E9%87%91%20%E8%9E%8D%20%E8%B3%87%20%E7%94%A2%20%E6%B8%9B%20%E5%80%BC%20%E虧%20%E6%90%8D%EF%BC%8C%E6%B7%A8%20%E9%A1%8D) In 2022, net impairment losses on financial assets shifted from recognition to reversal, mainly due to the reversal of impairment losses on trade and other receivables Net Impairment Losses on Financial Assets (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Finance lease receivables | 11,067 | (3,009) | | Loan receivables | (78,347) | (356,875) | | Trade and other receivables | 235,453 | (28,671) | | **Total** | **168,173** | **(388,555)** | [Finance Costs](index=13&type=section&id=9.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs rose sharply, driven by increased interest expenses on bank borrowings, other borrowings, bonds, and lease liabilities Finance Costs Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Interest on bank borrowings | 658,033 | 82,658 | | Interest on other borrowings | 554,288 | 44,754 | | Interest on bonds | 363,125 | 350,100 | | Interest on share option granted to non-controlling interests | 136,587 | – | | Interest on lease liabilities | 178,489 | 2,105 | | **Total** | **1,630,572** | **269,611** | [Loss Before Tax](index=13&type=section&id=10.%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) Loss before tax was primarily affected by fair value losses on financial assets, finance costs, and various depreciation and amortization expenses Major Components of Loss Before Tax (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Total employee benefit expenses | 269,610 | 196,140 | | Auditor's remuneration | 7,050 | 3,178 | | Fair value loss/(gain) on financial assets at fair value through profit or loss, net | 1,188,877 | (12,643) | | Depreciation of property, plant and equipment | 791,996 | 6,265 | | Depreciation of right-of-use assets | 165,714 | 14,320 | [Income Tax Credit](index=14&type=section&id=11.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The Group received significant income tax credits, largely from net deferred tax credits and tax exemptions for its new energy operations in mainland China Income Tax Credit (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 196,885 | 2,739 | | Deferred tax credit, net | (368,602) | (14,942) | | **Income Tax Credit** | **(171,850)** | **(12,203)** | - Certain subsidiaries in mainland China engaged in photovoltaic and wind power station operations enjoyed **income tax exemptions and reductions**[33](index=33&type=chunk) [Dividends](index=15&type=section&id=12.%20%E8%82%A1%20%E6%81%AF) The Board does not recommend any dividend payment for the reporting period - No dividends were paid or proposed for the year ended December 31, 2022[35](index=35&type=chunk) [Loss Per Share](index=15&type=section&id=13.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) Basic and diluted loss per share for 2022 expanded to 7.61 HK cents, reflecting an increased loss attributable to owners Loss Per Share Calculation Data | Indicator | 2022 | 2021 (Restated) | | :--- | :--- | :--- | | Loss for the year attributable to owners of the company for calculating basic and diluted loss per share (HKD thousands) | (458,067) | (314,660) | | Weighted average number of ordinary shares (thousands) | 6,021,561 | 6,022,346 | | **Basic and Diluted Loss Per Share (HK cents)** | **(7.61)** | **(5.22)** | [Financial Assets at Fair Value Through Other Comprehensive Income](index=16&type=section&id=14.%20%E6%8C%89%E5%85%AC%E5%85%81%E5%80%BC%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through other comprehensive income decreased by year-end 2022, mainly due to reductions in listed equity and bond investments Financial Assets at Fair Value Through Other Comprehensive Income (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 1,270,726 | 2,356,830 | | Total Current Assets | 3,248,546 | 3,081,963 | | **Total** | **4,519,272** | **5,438,793** | - The Group designated certain listed equity instruments to be measured at fair value through other comprehensive income, as they are intended for long-term holding[38](index=38&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=17&type=section&id=15.%20%E6%8C%89%E5%85%AC%E5%85%81%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through profit or loss significantly decreased by year-end 2022, primarily due to a reduction in the scale of listed equity investments held for trading and investment funds Financial Assets at Fair Value Through Profit or Loss (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 4,188 | 43,195 | | Total Current Assets | 3,370,194 | 6,188,427 | | **Total** | **3,374,382** | **6,231,622** | [Finance Lease Receivables](index=18&type=section&id=16.%20%E6%87%89%E6%94%B6%E8%9E%8D%E8%B3%87%E7%A7%9F%E8%B3%83) Total finance lease receivables significantly declined by year-end 2022, with decreases in both non-current and current portions Finance Lease Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Non-current assets | 29,912 | 366,996 | | Current assets | 481,834 | 501,751 | | **Total** | **511,746** | **868,747** | Ageing Analysis of Finance Lease Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within one year | 481,834 | 501,751 | | Later than one year but not later than two years | 29,912 | 302,104 | | Later than two years but not later than three years | – | 64,892 | [Loan Receivables](index=18&type=section&id=17.%20%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE) Total loan receivables (net of impairment) slightly decreased by year-end 2022, although the non-current portion increased Loan Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Loan receivables | 3,869,964 | 4,089,503 | | Less: Provision for impairment losses | (451,210) | (397,770) | | **Net** | **3,418,754** | **3,691,733** | Ageing Analysis of Loan Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 1,762,644 | 1,547,463 | | 91 days to 180 days | 646,563 | 621,643 | | 181 days to 1 year | – | 788,764 | | 1 year to 2 years | 1,009,547 | 733,863 | [Contract Assets](index=19&type=section&id=18.%20%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2) New contract assets emerged in 2022, primarily from electricity price subsidies, construction contracts, and retention money, indicating expansion in new energy businesses Contract Assets Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Receivables for electricity price subsidies | 587,320 | – | | Construction contracts | 448,286 | – | | Retention money | 51,140 | – | | **Total** | **1,086,746** | **–** | - Receivables for electricity price subsidies refer to central government renewable energy subsidies that will be invoiced and settled for photovoltaic and wind power station projects after being included in the national renewable energy generation project list[46](index=46&type=chunk) [Trade and Other Receivables](index=20&type=section&id=19.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade and other receivables significantly increased, driven by renewable energy trade receivables, electricity price subsidies, prepayments, and other deposits Trade and Other Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Trade receivables (renewable energy) | 2,200,781 | – | | Receivables for electricity price subsidies | 5,938,240 | – | | Prepayments | 754,102 | 91,564 | | Deposits and other receivables | 4,929,951 | 852,788 | | **Total (net of impairment)** | **14,822,208** | **1,048,184** | - Ageing analysis of trade receivables and bills receivable (excluding electricity price subsidies) shows **HKD 903,681 thousand** due within 90 days[49](index=49&type=chunk) - Ageing analysis of electricity price subsidies shows **HKD 2,209,563 thousand** due over 2 years[50](index=50&type=chunk) [Trade and Bills Payables](index=22&type=section&id=20.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) Trade and bills payables substantially increased, with a majority aged over two years, reflecting business expansion Ageing Analysis of Trade and Bills Payables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 152,310 | – | | 91 days to 180 days | 145,828 | – | | 181 days to 1 year | 245,366 | – | | 1 year to 2 years | 285,510 | – | | Over 2 years | 1,112,799 | – | | **Total** | **1,941,813** | **–** | [Issued Share Capital](index=22&type=section&id=21.%20%E5%B7%B2%E7%99%BC%E8%A1%8C%E8%82%A1%E6%9C%AC) In 2022, the company executed a share consolidation and repurchased and cancelled some shares - In July 2022, the company implemented a share consolidation, merging every four shares of HKD 0.00025 par value into one consolidated share of HKD 0.001 par value[53](index=53&type=chunk) - The Group repurchased and cancelled **2,915,000 shares** of the Group's shares from August to October 2022, for a total consideration of approximately **HKD 9,701,000**[53](index=53&type=chunk) [Events After the Reporting Period](index=23&type=section&id=22.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%BE%8C%E4%BA%8B%E9%A0%85) After the reporting period, the company acquired full equity interests in three target companies, further expanding its new energy investments - On December 20, 2022, the company's indirect non-wholly owned subsidiary buyer entered into equity transfer agreements with China Power Construction Henan Electric Power Co., Ltd. and others to acquire all equity interests in Shangqiu Ningdian New Energy Co., Ltd., Lankao Jinfeng Qingdian New Energy Co., Ltd., and Shenqiu Yingdian New Energy Co., Ltd[54](index=54&type=chunk) - Upon completion of the acquisitions on January 1, 2023, these target companies became indirect wholly-owned subsidiaries of the company[54](index=54&type=chunk) [Comparative Amounts](index=23&type=section&id=23.%20%E6%AF%94%E8%BC%83%E9%87%91%E9%A1%8D) Certain comparative amounts have been restated to align with the current period's presentation and disclosure - Certain comparative amounts are presented to conform to the presentation and disclosure for the current period[55](index=55&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Financial Performance Overview](index=24&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) The Group achieved significant growth in revenue, gross profit, and profit for the year in 2022, but basic loss per share attributable to owners expanded due to external factors and strategic shifts 2022 Key Financial Indicators Overview | Indicator | 2022 (HKD) | 2021 (HKD) | | :--- | :--- | :--- | | Revenue | 4,193,421,000 | 1,065,661,000 | | Gross Profit | 2,261,532,000 | 738,631,000 | | Profit for the Year | 170,294,000 | 11,058,000 | | Basic Loss Per Share Attributable to Owners of the Company | 7.61 HK cents | 5.22 HK cents | - As of December 31, 2022, the Group's total assets were approximately **HKD 68,957,609,000**, total liabilities approximately **HKD 53,382,831,000**, and net assets approximately **HKD 15,574,778,000**[56](index=56&type=chunk) [Market Review](index=24&type=section&id=%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) In 2022, global economic challenges led to market downturns, while China maintained stable growth through supportive policies despite domestic and external demand weaknesses - In 2022, the global economy was affected by the Russia-Ukraine conflict, high inflation, and interest rate hikes by overseas central banks, leading to a significant downturn in equity and bond markets[57](index=57&type=chunk) - China's economy experienced weakened domestic and external demand due to recurring epidemics and real estate controls, but the government maintained overall economic and social stability through moderately loose monetary and proactive fiscal policies[57](index=57&type=chunk) - In October 2022, the 20th National Congress of the Communist Party of China was held, outlining plans for Chinese modernization, a modern industrial system, and a modern financial system[57](index=57&type=chunk) [Group Strategy and Operations](index=25&type=section&id=%E9%9B%86%E5%9C%98%E6%88%B0%E7%95%A5%E5%92%8C%E7%B6%93%E7%87%9F) The Group pursued strategic transformation in 2022, shifting to industrial investment in new energy, technology, and infrastructure through major acquisitions, while adopting defensive risk management - The Group adopted “specialization, focus, marketization, and institutionalization” as its strategic transformation guidelines, focusing on strategic emerging industries such as new energy, new technology, and new infrastructure[58](index=58&type=chunk) - The significant acquisition of Shandong Hi-Speed New Energy in May 2022, by subscribing to a 43.45% stake and becoming its controlling shareholder, marked the initial transformation from a financial investment company to an industrial investment company[58](index=58&type=chunk) - The Group's total assets as of the end of December 2022 were approximately **HKD 68.96 billion**, an increase of about two times compared to the same period last year[58](index=58&type=chunk) - The Group adopted a defensive operating strategy, significantly reducing non-standard investment business, continuously decreasing the scale of standardized investment business, and strictly controlling investment risks[59](index=59&type=chunk) - In June 2022, the Group successfully issued its first **USD 500 million green bond**, receiving Fitch A and Moody's A3 ratings, and an ESG entity rating of “2” from Fitch Evergreen[59](index=59&type=chunk)[60](index=60&type=chunk) [Business Review](index=26&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group shifted its focus to industrial investment in green and new energy sectors, while standardized and non-standardized investments incurred losses due to market volatility, and licensed financial services losses expanded [Industrial Investment](index=26&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E7%94%A2%E6%A5%AD%E6%8A%95%E8%B3%87) Industrial investment became the core asset allocation, with the Group becoming the controlling shareholder of Shandong Hi-Speed New Energy and a major shareholder in Shandong Hi-Speed Environmental Energy, generating HKD 1.71 billion in profit - Industrial investment has become the company's core asset allocation direction, with industrial assets accounting for approximately **HKD 52.2 billion** of total assets[61](index=61&type=chunk) - Completed an investment of approximately **HKD 4.685 billion** to subscribe for a 43.45% stake in Shandong Hi-Speed New Energy, becoming its controlling shareholder[61](index=61&type=chunk) - Indirectly holds a **23.07% stake in Shandong Hi-Speed Environmental Energy**, becoming its largest shareholder, effectively controlling two listed companies in the new energy and green environmental protection sub-sectors[61](index=61&type=chunk) - During the reporting period, the industrial investment business segment recorded a profit of approximately **HKD 1.71 billion**[62](index=62&type=chunk) [Standardized Investment](index=27&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E6%A8%99%E6%BA%96%E5%8C%96%E6%8A%95%E8%B3%87) Standardized investment recorded a HKD 954 million loss due to global interest rate hikes and capital market volatility, prompting the team to adjust strategies - The Chinese and Hong Kong stock markets remained weak due to geopolitical conflicts, soaring energy prices, US Federal Reserve interest rate hikes, and China's economic slowdown, leading to investment losses[63](index=63&type=chunk) - During the reporting period, the standardized investment business recorded a fair value loss of approximately **HKD 954 million**, compared to a loss of approximately HKD 116 million in the prior year[63](index=63&type=chunk) [Non-standardized Investment](index=28&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E9%9D%9E%E6%A8%99%E6%BA%96%E6%8A%95%E8%B3%87) Prioritizing risk control, the Group significantly reduced non-standardized investment and credit exposures, resulting in a HKD 134 million loss - The Group prioritized risk prevention, significantly reducing non-standardized investment business, and providing financing services in real economy sectors such as new energy, new infrastructure, and new technology, aligned with the Group's strategic transformation direction[64](index=64&type=chunk) - During the reporting period, the non-standardized investment business recorded a loss of approximately **HKD 134 million**, compared to a profit of approximately HKD 253 million in the prior year, mainly due to a decrease in the fair value of financial assets and a proactive reduction in business scale[64](index=64&type=chunk) [Licensed Financial Services](index=28&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E7%89%8C%E7%85%A7%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) Licensed financial services recorded a HKD 571 million loss, primarily due to the write-off of licenses related to the Asia Lease Exchange asset trading platform - The licensed financial services business recorded a loss of approximately **HKD 571 million**, compared to a loss of approximately HKD 306 million in the prior year[65](index=65&type=chunk) - The expanded loss was mainly due to the **write-off of the book value of licenses** related to the Asia Lease Exchange asset trading platform[65](index=65&type=chunk) [Outlook](index=29&type=section&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) Global economic growth is expected to slow in 2023, but China's market and green/industrial investments show potential, with the Group deepening its strategic focus on industrial investment - Global economic growth is expected to weaken in 2023, with continued risk aversion in capital markets, but the Chinese market is expected to regain momentum, with steady economic growth[66](index=66&type=chunk) - China will increase support for industrial optimization and upgrading, high-tech industries, and fundamental research in key areas, with green investment expected to continue rapid growth[66](index=66&type=chunk) - The Group will focus on industrial investment, supplemented by standardized and non-standardized investments, utilizing diversified capital operation models to achieve short, medium, and long-term investment allocation in key industrial quality assets[66](index=66&type=chunk) [Industrial Investment Outlook](index=29&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E7%94%A2%E6%A5%AD%E6%8A%95%E8%B3%87) The Group will deepen its strategic transformation, focusing on high-growth new energy, new infrastructure, and new technology sectors, combining strategic and controlling equity investments to enhance enterprise value - The Group will focus on growth-oriented, high-prosperity industries aligned with national strategic direction and key policy support, especially emerging industries such as new energy, new infrastructure, and new technology[67](index=67&type=chunk) - Will organically combine strategic equity investments and controlling equity investments to expand the scale of industrial investment[67](index=67&type=chunk) - For invested targets such as Shandong Hi-Speed New Energy and Shandong Hi-Speed Environmental Energy, post-investment management will be strengthened to promote a comprehensive enhancement of enterprise value[68](index=68&type=chunk) [Standardized Investment Outlook](index=30&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E6%A8%99%E6%BA%96%E5%8C%96%E6%8A%95%E8%B3%87) Standardized investment aims to boost absolute returns and identify quality targets for industrial investment, focusing on new energy, high-end manufacturing, and recovering consumption sectors - The standardized investment business will focus on enhancing absolute returns and identifying quality investment targets for industrial investment, achieving “primary and secondary market” linkage[69](index=69&type=chunk) - Key focus areas include the new energy industry, high-end manufacturing, large consumption sectors with strong long-term certainty, and industries where prosperity is bottoming out and recovering[69](index=69&type=chunk) - Standardized bond investment business will maintain a prudent investment strategy, actively managing portfolio duration and various risks to achieve stable returns[69](index=69&type=chunk) [Non-standardized Investment Outlook](index=30&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E9%9D%9E%E6%A8%99%E6%BA%96%E6%8A%95%E8%B3%87) The Group will maintain a prudent investment strategy, focusing on quality collateralized assets and industrial transformation synergy, while reducing credit exposures and supporting leading enterprises in key sectors - The Group will continue its prudent investment strategy, focusing on “securing quality collateralized assets” and “synergy with the Group's industrial transformation” as two main lines for investment[70](index=70&type=chunk) - Closely monitor financing needs in new energy, new consumption, and high-tech industries, providing capital support for quality leading enterprises[70](index=70&type=chunk) [Licensed Financial Services Outlook](index=31&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E7%89%8C%E7%85%A7%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) The Group will prudently conduct licensed financial services, concentrating on securities brokerage, QFLP, and finance leasing that align with its strategic transformation to enhance comprehensive service capabilities - The Group will prudently conduct licensed financial services in Hong Kong and mainland China, primarily focusing on securities brokerage and QFLP and finance leasing businesses that have synergistic effects with the Group's strategic transformation direction[71](index=71&type=chunk) [Liquidity and Financial Resources and Capital Structure](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90%E4%BB%A5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) By year-end 2022, the Group maintained ample liquidity with increased cash, assets, and borrowings, and a slightly higher gearing ratio Liquidity and Capital Structure Overview (HKD thousands) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 4,392,562 | 1,334,300 | | Total Assets | 68,957,609 | 22,950,451 | | Total Borrowings | 43,787,262 | 13,947,223 | - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of assets, liabilities, and other commitments meets funding requirements[72](index=72&type=chunk) [Bank Loans and Other Borrowings](index=31&type=section&id=%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E8%B2%B8) Total outstanding borrowings significantly increased, with a higher proportion of long-term liabilities and a broader range of effective interest rates Outstanding Borrowings Composition (HKD thousands) | Borrowing Type | 2022 | 2021 | | :--- | :--- | :--- | | Bank borrowings | 26,767,180 | 4,375,155 | | Bonds | 8,521,297 | 7,898,646 | | Other borrowings | 8,498,785 | 1,673,422 | | **Total** | **43,787,262** | **13,947,223** | - Approximately **69.3%** of the total outstanding borrowings were long-term liabilities (2021: 25.5%)[73](index=73&type=chunk) - The effective interest rate for bank borrowings ranged from **2.60% to 7.05%** (2021: 1.02% to 6.11%), and for other borrowings from **0.40% to 8.01%** (2021: 0.30% to 3.74%)[73](index=73&type=chunk) [Gearing Ratio](index=32&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The Group's gearing ratio slightly increased to 63.50% by year-end 2022 Gearing Ratio | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Gearing Ratio | 63.50% | 60.77% | [Foreign Exchange Risk Management](index=32&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group primarily faces Renminbi foreign exchange risk, which management deems insignificant, thus no hedging instruments were used - The Group's monetary assets, liabilities, and transactions are primarily denominated in Renminbi, Hong Kong Dollars, and US Dollars, mainly facing **Renminbi foreign exchange risk**[75](index=75&type=chunk) - During the reporting period, management considered the foreign exchange risk impact insignificant and therefore did not use any financial instruments for hedging purposes[75](index=75&type=chunk) [Pledged Assets](index=32&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of year-end 2022, various assets, including financial assets, receivables, properties, and subsidiary equity, collateralized certain Group borrowings and bills payable - Certain of the Group's borrowings and bills payable were pledged by financial assets at fair value through other comprehensive income, financial assets at fair value through profit or loss, finance lease receivables, trade receivables and contract assets, property, plant and equipment, investment properties, franchise rights, and equity interests in subsidiaries[75](index=75&type=chunk) [Contingent Liabilities and Capital Commitments](index=33&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) The Group had no significant contingent liabilities but committed capital for clean energy project development and joint venture investments during the reporting period - The Group had no significant contingent liabilities during the reporting period[76](index=76&type=chunk) Capital Commitments (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Construction, material and equipment costs for developing clean energy projects | 354,361 | – | | Capital injection into joint ventures | 320,883 | – | [Major Investments and Acquisitions and Disposals](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E6%94%B6%E8%B3%BC%E5%87%BA%E5%94%AE) The Group completed a significant acquisition of Shandong Hi-Speed New Energy, becoming its controlling shareholder, aligning with its industrial investment strategy [Major Investments](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of year-end 2022, the Group held no individual investments with a fair value exceeding 5% of its total assets - As of December 31, 2022, the Group did not hold any individual investments with a fair value representing **5% or more of its total assets**[77](index=77&type=chunk) [Future Plans for Major Investments and Capital Assets](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of year-end 2022, the Group had no future plans for major investments or capital assets - As of December 31, 2022, the Group had no future plans for major investments or capital assets[77](index=77&type=chunk) [Major Acquisitions and Disposals](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Group acquired a 43.45% stake in Shandong Hi-Speed New Energy, making it a subsidiary and focusing on the new energy industry - On May 19, 2022, the Group completed the subscription for **48,804,039,247 new allotment ordinary shares** of Shandong Hi-Speed New Energy, indirectly owning approximately **43.45%** of its enlarged issued share capital and becoming its controlling shareholder[77](index=77&type=chunk) - Shandong Hi-Speed New Energy and its subsidiaries primarily engage in the investment, development, construction, operation, and management of photovoltaic power generation, wind power generation, and clean heating businesses in China[77](index=77&type=chunk) [Issuance of Debt Securities](index=34&type=section&id=%E7%99%BC%E8%A1%8C%E5%82%B5%E6%AC%8A%E8%AD%89) In 2022, the Group successfully issued multiple US Dollar and Renminbi secured bonds, including a USD 500 million green bond, for refinancing and general corporate purposes - On January 26, 2022, Coastal Emerald issued floating rate secured bonds with a total principal amount of **USD 220 million** due in 2023[79](index=79&type=chunk) - On June 15, 2022, Coastal Emerald issued **4.10% secured bonds (green bonds)** with a total principal amount of **USD 500 million** due in 2025[80](index=80&type=chunk) - On December 20, 2022, Shandong Hi-Speed New Energy issued corporate bonds with a total principal amount of **RMB 465 million**, with interest rates ranging from **4.20% to 4.90%**[80](index=80&type=chunk) [Employees and Remuneration Policy](index=35&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) Employee count significantly increased to 2,077 by year-end 2022, primarily due to the Shandong Hi-Speed New Energy acquisition, with the Group focusing on competitive compensation and development Employee Count | Year | Employee Count | | :--- | :--- | | December 31, 2022 | 2,077 | | December 31, 2021 | 163 | - The increase in employee count was mainly due to the completion of the acquisition of Shandong Hi-Speed New Energy on May 19, 2022[81](index=81&type=chunk) - The Group provides competitive remuneration packages, welfare policies (such as social insurance, housing provident fund, paid annual leave, etc.), and share option schemes, and is committed to providing diversified training and development opportunities[81](index=81&type=chunk)[82](index=82&type=chunk) [Events After Reporting Period](index=35&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%BE%8C%E4%BA%8B%E9%A0%85) Other than the acquisition disclosed in Note 22 to the financial statements, there were no other significant events for the Group after the reporting period and up to the date of this announcement - Other than those disclosed in Note 22 to the financial statements in this announcement, there were no other significant events for the Group after the reporting period and up to the date of this announcement[83](index=83&type=chunk) [Other Information](index=36&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Dividends](index=36&type=section&id=%E8%82%A1%20%E6%81%AF) The Board does not recommend any dividend payment for the reporting period - The Board does not recommend the payment of any dividends for the reporting period[84](index=84&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&type=section&id=%E8%B3%BC%20%E8%B2%B7%EF%BC%8C%E5%87%BA%20%E5%94%AE%20%E6%88%96%20%E8%B4%96%20%E5%9B%9E%20%E6%9C%AC%20%E5%85%AC%20%E5%8F%B8%20%E4%B9%8B%20%E4%B8%8A%20%E5%B8%82%20%E8%AD%89%20%E5%88%B8) The company repurchased and cancelled 2,915,000 shares for approximately HKD 9.7 million, demonstrating confidence in its business outlook - During the reporting period, the company repurchased a total of **2,915,000 shares** on the Stock Exchange for a total consideration of approximately **HKD 9,701,000**, which have been cancelled[84](index=84&type=chunk) - The Board believes that the share repurchases demonstrate the company's confidence in its own business outlook and prospects, and will benefit the company and create value for shareholders in the long run[84](index=84&type=chunk) Share Repurchase Details (2022) | Month | Number of Shares Repurchased (thousands) | Repurchase Price Per Share (HKD) (Highest) | Repurchase Price Per Share (HKD) (Lowest) | Total Consideration (HKD thousands) (Approx.) | | :--- | :--- | :--- | :--- | :--- | | August | 1,000 | 3.28 | 3.28 | 3,280 | | September | 1,513 | 3.44 | 3.09 | 4,988 | | October | 402 | 3.58 | 3.55 | 1,433 | [Corporate Governance](index=36&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complied with all Corporate Governance Code provisions during the reporting period, except for the vacant CEO position, with other executive directors managing daily operations - During the reporting period, the company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, except for the vacant position of Chief Executive Officer[86](index=86&type=chunk)[87](index=87&type=chunk) - Mr. Wang Xiaodong serves as the Chairman of the Board, and the company is identifying suitable candidates to fill the vacancy of Chief Executive Officer[87](index=87&type=chunk) [Audit Committee](index=37&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, composed of two non-executive and three independent non-executive directors, reviewed the Group's consolidated results for the year ended December 31, 2022 - The Audit Committee comprises two non-executive directors and three independent non-executive directors[88](index=88&type=chunk) - The Audit Committee has reviewed the Group's consolidated results for the year ended December 31, 2022[88](index=88&type=chunk) [Review of Preliminary Announcement](index=37&type=section&id=%E5%AF%A9%E9%96%B1%E5%88%9D%E6%AD%A5%E5%85%AC%E5%91%8A) The company's auditor reconciled the preliminary announcement figures with the consolidated financial statements but provided no assurance on the announcement itself - The company's auditor, Crowe (HK) CPA Limited, has reconciled the relevant figures in the Group's preliminary announcement for the year ended December 31, 2022, with the amounts contained in the Group's consolidated financial statements for that year[89](index=89&type=chunk) - The auditor does not express any assurance on the preliminary announcement[89](index=89&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=37&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) Directors confirmed compliance with the Model Code for Securities Transactions throughout the reporting period - The Directors confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period[90](index=90&type=chunk) [Publication of Annual Results and Annual Report](index=38&type=section&id=%E5%85%AC%E4%BD%88%E5%85%A8%E5%B9%B4%E6%A5%AD%E7%B8%BE%E5%8F%8A%E5%B9%B4%E5%A0%B1) This announcement and the annual report will be published on the Stock Exchange and company websites, and dispatched to shareholders - This announcement is published on the Stock Exchange website (www.hkexnews.hk) and the company's website (www.sdhg.com.hk)[91](index=91&type=chunk) - The annual report for the year ended December 31, 2022, will be published on the Stock Exchange website and the company's website, and will also be dispatched to the company's shareholders in due course[91](index=91&type=chunk)

Financial Performance - The Group recorded revenue of approximately HK$1,216,778,000, representing an increase of approximately 125.16% year-over-year compared to HK$540,396,000 for the Corresponding Period[10] - Gross profit was approximately HK$680,917,000, an increase of approximately 99.18% year-over-year from approximately HK$341,859,000 for the Corresponding Period[10] - Profit for the period amounted to approximately HK$300,921,000, reflecting an increase of approximately 16.41% year-over-year compared to approximately HK$258,493,000 for the Corresponding Period[10] - Basic earnings per share attributable to owners of the Company was approximately HK$1.26 cents, a decrease of approximately 34.03% year-over-year from the restated basic earnings per share of approximately HK$1.92 cents for the Corresponding Period[10] - Profit before tax for the period was HK$231,451,000, slightly down from HK$262,200,000 in the prior year, reflecting a decrease of 12%[90] - Profit for the period attributable to owners of the Company was HK$75,863,000, down from HK$115,388,000, representing a decline of 34%[92] - Total comprehensive loss for the period amounted to HK$15,514,000, a significant decrease from a comprehensive income of HK$244,952,000 in the same period last year[96] Assets and Liabilities - As of June 30, 2022, total assets were approximately HK$77,646,002,000, significantly up from HK$22,950,451,000 as of December 31, 2021[11] - Total liabilities were approximately HK$60,425,574,000, up from HK$14,337,948,000 as of December 31, 2021[11] - Net assets amounted to approximately HK$17,220,428,000, compared to HK$8,612,503,000 as of December 31, 2021[11] - The Group's total borrowings amounted to approximately HK$46,877,458,000 as of June 30, 2022, up from HK$13,947,223,000 at the end of 2021[44] - Outstanding bank borrowings were approximately HK$24,253,508,000 as of June 30, 2022, compared to HK$4,375,155,000 on December 31, 2021[45] - The Group's gearing ratio was approximately 60.37%, a slight decrease from 60.77% as of December 31, 2021[48] Strategic Initiatives - The Group completed a major acquisition of SDHS New Energy, becoming its controlling shareholder with a 43.45% equity interest, marking a significant step in its strategic transformation[16] - The Group aims to enhance its long-term investment value by shifting its business focus from financial investment to industrial investment[15] - The Group's strategic transformation focuses on increasing industrial investment and exploring opportunities in new energy, new technology, and new consumption[15] - The Group will continue to follow the overall strategy of expanding and strengthening the industrial asset side while improving the debt asset side and focusing on mezzanine assets[34] - The Group plans to explore investment opportunities in strategic emerging industries such as new energy, new infrastructure, and new technology[37] Investment Performance - The new industrial investment business segment recorded a profit of approximately HK$1,946,652,000 during the reporting period[26] - The standard investment business recorded a loss of approximately HK$234,969,000, compared to a profit of approximately HK$188,171,000 in the corresponding period[28] - The non-standard investment business recorded a loss of approximately HK$788,189,000, compared to a profit of approximately HK$91,559,000 in the corresponding period[31] - The Group invested in high-quality projects such as NewLink Group and Horizon Robotics, which achieved rapid growth in the first half of the year[26] - The Group's investment strategy included a combination of minority equity investment, holding investment, and light and heavy asset investments[23] Financial Management - The Group has adopted more prudent financial and risk management measures to ensure steady growth and healthy development[21] - The international credit rating of the Group was upgraded from BBB+ to A-, reflecting its increasing credit capability[21] - The Group will continue to suppress credit exposure within its portfolio while tracking existing investment projects[41] - The Group aims to opportunistically invest in high-quality assets when prices are low, while strictly controlling investment risks[34] Employee and Corporate Governance - As of June 30, 2022, the Group had 2,437 employees, a significant increase from 174 employees in the corresponding period, primarily due to the acquisition of SDHS New Energy[64] - The Group actively attracts talent and has implemented a competitive internal remuneration policy to retain and motivate employees[65] - The Group's human resources management system is continuously optimized to ensure a friendly and healthy workplace for employees[66] - The Company has adopted the Model Code for Securities Transactions by Directors and confirmed compliance during the Reporting Period[80] - The Company complied with all applicable provisions under the Corporate Governance Code except for the separation of roles between the Chairman and the CEO, which remains vacant[81] Market Conditions - The macro economy in China achieved a GDP growth of 0.4% in the second quarter of 2022, indicating a shift from decline to gradual recovery[15] - The Hang Seng Index fell 6.6% in the first half of the year, while the A-share CSI 300 index dropped 9.2%[15] - The Chinese economy is expected to rebound on a quarterly basis in the second half of the year, driven by improved market expectations and confidence[34] Legal and Compliance Issues - The Group's foreign exchange risk is primarily related to Renminbi fluctuations, which may impact performance, but management considers the exposure to be insignificant[48] - The Group did not have any significant contingent liabilities during the reporting period[51] - The Group is currently negotiating repayment schedules and additional security for outstanding sums due to CSCHK and Safe Castle[58] - Legal actions will continue to recover the remaining outstanding amounts due from Okay Airways under Settlement Agreement – 2[62] Revenue Recognition and Accounting Policies - The Group recognizes revenue from electricity sales, clean heat supply services, and trading income at the point when control of the asset is transferred to the customer, typically upon delivery[128] - Revenue from construction services, including photovoltaic power plants, is recognized over time based on the proportion of actual costs incurred relative to estimated total costs[133] - The adoption of revised HKFRSs has had no significant financial effect on the Interim Financial Statements[143] - Management makes judgments and estimates that affect the application of accounting policies and reported amounts of assets and liabilities[144]

Market Performance and Economic Context - In 2021, the Hong Kong stock market rose from 27,000 points to over 31,000 points, reflecting a recovery in consumer demand and corporate profits[12]. - The capital market faced challenges due to rising US bond yields and inflation concerns, impacting Chinese high-yield US dollar bonds[12]. - During the reporting period, China's economy grew by 8.1% year-on-year, exceeding the government's target of over 6%[54]. - Global inflation rates reached multi-year highs, with the U.S. consumer prices rising 6.8% year-on-year in November 2021, the highest in 39 years[52]. - The U.S. Federal Reserve announced plans to reduce bond purchases and may enter into interest rate hikes, adding uncertainty to global economic recovery[52]. - The People's Bank of China lowered the reserve requirement ratio for bank deposits by 0.5% in July and December 2021 to support economic growth[54]. - China's economy is facing "shrinking demand, supply shock, and weakening expectations," necessitating a focus on stabilizing growth and relaxing monetary and fiscal policies in 2022[79]. Company Strategy and Transformation - The company is transitioning from a financial investment group to an industrial investment group to maximize long-term investment value[12]. - The Group aims for strategic transformation into an excellent industrial investment group, focusing on specialization, concentration, marketization, and institutionalization[21]. - The Group's strategic transformation goal is to become an excellent industrial investment company, focusing on "professionalization, specialization, marketization, and institutionalization" over the next five years[90]. - The Group established a Strategic Development Committee to pursue the goal of becoming an excellent industrial investment company, with a strategic roadmap for the next five years[88]. - The Group aims to strengthen the differentiated competitive advantages of each subsidiary and enhance overall efficiency through cross-border linkages and integrated services[89]. - The Group will deepen internal synergy with Shandong Hi-Speed Group to utilize resource advantages for broader market development[93]. Financial Performance - The Group recorded revenue of approximately HK$1,065,661,000, a decrease of approximately 16.24% year-over-year from HK$1,272,354,000[44]. - Gross profit was approximately HK$738,631,000, representing a decrease of approximately 8.61% year-over-year from HK$808,181,000[44]. - Profit for the period amounted to approximately HK$11,058,000, a turnaround from a loss of approximately HK$18,307,000 in the previous period[44]. - As of December 31, 2021, total assets were approximately HK$22,950,451,000, down from HK$24,966,194,000 in 2020[45]. - Total liabilities were approximately HK$14,337,948,000, a decrease from HK$15,309,446,000 in 2020[45]. - Net assets stood at approximately HK$8,612,503,000, down from HK$9,656,748,000 in 2020[45]. Investment and Business Segments - The company established three business divisions: fixed income, standardized equity, and industrial investment to enhance professional investment capabilities[17]. - The fixed income business contributes stable profits, while industrial investment increases net assets and generates sustained cash flows[21]. - The Group targets industries such as new energy, new technology, new consumption, and big health, selecting high-quality assets with high growth potential[22]. - The standard investment business recorded a loss before tax of approximately HK$146.8 million, compared to a profit of approximately HK$923.9 million in the previous period[61]. - The non-standard investment business generated a profit before tax of HK$253.6 million, down from HK$495.2 million in the previous year[58]. - The license business segment reported a profit before tax of HK$17.1 million, recovering from a loss of HK$84.1 million in the previous year[58]. - The financial leasing segment recorded a loss before tax of HK$323.2 million, an improvement from a loss of HK$985.8 million in the previous year[58]. - The financial technology segment reported a loss before tax of HK$5.1 million, compared to a loss of HK$224.1 million in the previous year[58]. Risk Management and Governance - The Group established an internal audit department to enhance its comprehensive risk management and internal control system[30]. - The Group implemented rigorous investment decision-making procedures to ensure controllable risks for investment targets[31]. - The Group's risk management system includes a scientific risk control and early warning mechanism to minimize potential risks[30]. - The governance structure has been continuously optimized, focusing on two-way communication with shareholders and director diversity[16]. - The Group's credit risk management policies include comprehensive due diligence on lending business and a review mechanism to ensure regulatory compliance and commercial reasonableness[155]. Human Resources and Employee Management - As of December 31, 2021, the group had 163 employees, a decrease from 512 employees in the corresponding period of 2020, primarily due to the disposal of Coastal Silk Limited[194]. - Employee costs, including directors' remuneration, were approximately HK$196,140,000, representing an increase of 4.88% compared to the previous period[196]. - The group has implemented an internal remuneration policy to attract and retain outstanding talents, with competitive remuneration packages based on market levels and individual merits[195]. - The group emphasizes a people-oriented approach to talent management, continuously investing resources to attract and retain talents[199]. Asset Management and Financial Services - The Group provides integrated financial services related to cross-border investment and financing needs, leveraging its licenses in both Mainland China and Hong Kong[68]. - The structured financing business focuses on short-term, collateralized, and low-risk commercial loans to utilize funds more effectively[70]. - The Group plans to launch a new IPO margin financing business to attract new customers and increase interest margin income[100]. - The Group will leverage its QFLP license to attract overseas funds and promote foreign investment in state-encouraged industries, meeting diverse investment needs[98].

Financial Performance - Revenue for the six months ended June 30, 2021, was HK$540.4 million, a decrease from HK$621.5 million in the same period in 2020[8] - Gross profit increased to HK$341.9 million in 2021 from HK$284.3 million in 2020[8] - Net profit attributable to the company's owners was HK$115.4 million in 2021, compared to a loss of HK$65.6 million in 2020[8] - Basic earnings per share were 0.48 HK cents in 2021, compared to a loss of 0.27 HK cents in 2020[8] - Total comprehensive income for the period was HK$244.95 million in 2021, compared to a loss of HK$383.81 million in 2020[10] - The company reported a net loss of 65,645 thousand HKD for the period[14] - Other comprehensive losses for the period amounted to 399,008 thousand HKD[14] - Total comprehensive income for the period was HKD 115,388 thousand, with a total comprehensive income attributable to equity holders of HKD 258,493 thousand[15] - Revenue for the six months ended June 30, 2021, was approximately HK$540.4 million, a decrease of 13.05% compared to HK$621.5 million in the same period last year[148] - Gross profit increased by 20.23% to HK$341.9 million, compared to HK$284.3 million in the previous year[148] - Net profit for the period surged by 337.32% to HK$258.5 million, up from HK$59.1 million in the same period last year[148] - The company's attributable profit turned around to HK$115.4 million, compared to a loss of HK$65.6 million in the previous year[148] - Revenue for the six months ended June 30, 2021, was HK$540.4 million, a decrease from HK$621.5 million in the same period in 2020[198] - Gross profit increased to HK$341.9 million in 2021 from HK$284.3 million in 2020[198] - Net profit attributable to the company's owners was HK$115.4 million in 2021, compared to a loss of HK$65.6 million in 2020[198] - Basic earnings per share were 0.48 HK cents in 2021, compared to a loss of 0.27 HK cents in 2020[198] - Other comprehensive loss for the period was HK$13.5 million in 2021, significantly lower than HK$442.9 million in 2020[200] - Total comprehensive income attributable to the company's owners was HK$97.5 million in 2021, compared to a loss of HK$507.4 million in 2020[200] Financial Assets and Investments - The company's financial assets at fair value through profit or loss recorded a net gain of HK$151.98 million in 2021, up from HK$24.87 million in 2020[8] - The fair value loss included in other comprehensive income that will not be reclassified to profit or loss was HKD 239,065 thousand, and the fair value loss that may be reclassified to profit or loss was HKD 108,072 thousand[19] - The total fair value of financial assets at fair value through other comprehensive income (FVOCI) was HK$5,198.986 million as of June 30, 2021, compared to HK$4,884.539 million as of December 31, 2020[57] - The Group realized a net gain of approximately HK$12.713 million from the sale of the Belt and Road Stable Growth Fund during the six months ended June 30, 2021[61] - The fair value of the sold portion of the Belt and Road Stable Growth Fund at the time of sale was approximately HK$120.487 million[61] - Non-listed equity investments in other regions decreased to HK$257.397 million as of June 30, 2021, from HK$262.961 million as of December 31, 2020[57] - Listed equity investments in Hong Kong decreased to HK$111.684 million as of June 30, 2021, from HK$140.321 million as of December 31, 2020[57] - The Group's investment in the Belt and Road Stable Growth Fund was HK$83.913 million as of June 30, 2021, down from HK$175.930 million as of December 31, 2020[57] - The fair value of financial assets measured at fair value through other comprehensive income increased from HKD 4,884,539 thousand as of December 31, 2020, to HKD 5,198,986 thousand as of June 30, 2021[131] - The fair value of financial assets measured at fair value through profit or loss increased from HKD 5,914,185 thousand as of December 31, 2020, to HKD 6,751,356 thousand as of June 30, 2021[131] - Non-listed equity investments in other regions were valued at HKD 257,397 thousand as of June 30, 2021, compared to HKD 262,961 thousand as of December 31, 2020, with a discount for lack of marketability of 20.0%[133] - Listed equity investments in Hong Kong were valued at HKD 111,684 thousand as of June 30, 2021, compared to HKD 140,321 thousand as of December 31, 2020, using Level 1 inputs[133] - Notes in other regions were valued at HKD 776,278 thousand as of June 30, 2021, compared to HKD 237,476 thousand as of December 31, 2020, using Level 2 inputs[133] - Non-listed bonds in other regions were valued at HKD 779,469 thousand as of June 30, 2021, compared to HKD 899,501 thousand as of December 31, 2020, using Level 3 inputs with a discount rate of 6.63%[133] - Listed bonds in Hong Kong, China, and other regions were valued at HKD 287,715 thousand, HKD 68,180 thousand, and HKD 1,243,147 thousand respectively as of June 30, 2021, using Level 2 inputs[133] - Investment funds in other regions were valued at HKD 83,913 thousand as of June 30, 2021, compared to HKD 175,930 thousand as of December 31, 2020, using Level 2 inputs[133] - The fair value of Haitong Anxin Preferred Tiered Bond Fund decreased to HKD 358,019,000 as of June 30, 2021, from HKD 368,694,000 as of December 31, 2020[68] - SCCS Investment Fund LP's fair value increased to HKD 266,574,000 as of June 30, 2021, from HKD 256,840,000 as of December 31, 2020[68] - Amber Hill ES Fund SPC's fair value slightly increased to HKD 165,655,000 as of June 30, 2021, from HKD 165,435,000 as of December 31, 2020[69] - ABCI China Rising Private Equity 3 SP and CEL Odyssey Project Fund LP's fair value increased to HKD 601,069,000 as of June 30, 2021, from HKD 540,171,000 as of December 31, 2020[70] - The fair value of non-listed equity investments in a Cayman Islands entity engaged in AI development in China increased to HKD 167,172,000 as of June 30, 2021, from HKD 151,530,000 as of December 31, 2020[71] - The fair value of non-listed equity investments in a Chinese limited partnership focused on automotive design and manufacturing increased to HKD 399,682,000 as of June 30, 2021, from HKD 370,159,000 as of December 31, 2020[71] - The unrealized loss on listed equity investments in Hong Kong was HKD 94,884,000 for the six months ended June 30, 2021, compared to a loss of HKD 56,890,000 for the same period in 2020[73] - The realized gain on listed equity investments in Hong Kong was HKD 225,797,000 for the six months ended June 30, 2021, compared to a loss of HKD 21,106,000 for the same period in 2020[75] - The realized gain on other investment funds in other regions was HKD 14,636,000 for the six months ended June 30, 2021, compared to no gain or loss for the same period in 2020[75] - The realized gain on listed bonds in other regions was HKD 16,525,000 for the six months ended June 30, 2021, compared to HKD 6,312,000 for the same period in 2020[75] - The fair value of a financial asset at amortized cost as of June 30, 2021, was approximately HKD 155,256,000, which was used as collateral for other borrowings[76] Segment Performance - The company reclassified its reportable operating segments, splitting the securities investment segment into standard investment and non-standard investment segments, and renaming the lending segment to licensed business segment[27] - The company's reportable segments include standard investment, non-standard investment, licensed business, financial leasing, and fintech, with unallocated segments consolidated under "unallocated"[28] - The company's standard investment segment focuses on investing in listed securities and bonds for interest income, dividend income, and capital appreciation[28] - The company's non-standard investment segment engages in direct investment activities, including debt instruments, unlisted bonds, notes, unlisted equity investments, and investment funds[28] - The company's licensed business segment provides lending services, securities brokerage, asset management, advisory services, and asset trading platforms[28] - The company's financial leasing segment is involved in direct financial leasing and advisory services[28] - The company's fintech segment focuses on online investment, technology-driven lending services, and internet new media services[28] - The company's segment performance is evaluated based on adjusted profit before tax, excluding unallocated income, financing costs, expenses, and share of associates' performance[28] - The company allocated all assets and liabilities to reportable segments, except for corporate assets, deferred tax liabilities, certain borrowings, and other payables and accruals[28] - Standard investment business achieved a pre-tax profit of HKD 188,171,000, an increase of 84.71% compared to the same period last year[153] - Non-standard investment business generated revenue and pre-tax profit of HKD 225,622,000 and HKD 91,559,000 respectively[154] - Licensed business revenue decreased by 71.13% to HKD 43.64 million compared to HKD 151.15 million in the same period last year[155] - Financial leasing business revenue increased by 53.72% to HKD 94.12 million, with pre-tax loss decreasing by 38.75% to HKD 115.65 million[156] - Tech finance business revenue was HKD 18.67 million, down from HKD 63.46 million last year, and the company sold Coastal Silk Limited for HKD 171.14 million, exiting the tech finance business[157] Assets and Liabilities - Total non-current assets decreased from 6,471,950 thousand HKD to 5,875,709 thousand HKD, a decline of 9.2%[12] - Total current assets decreased from 18,494,244 thousand HKD to 16,801,720 thousand HKD, a decline of 9.1%[12] - Total current liabilities decreased from 7,758,594 thousand HKD to 4,032,683 thousand HKD, a significant decline of 48%[12] - Net current assets increased from 10,735,650 thousand HKD to 12,769,037 thousand HKD, an increase of 19%[13] - Total assets minus current liabilities increased from 17,207,600 thousand HKD to 18,644,746 thousand HKD, an increase of 8.3%[13] - Total non-current liabilities increased from 7,550,852 thousand HKD to 8,973,432 thousand HKD, an increase of 18.8%[13] - Equity attributable to owners of the company increased slightly from 2,393,777 thousand HKD to 2,491,312 thousand HKD, an increase of 4.1%[13] - Total equity remained relatively stable, increasing from 9,656,748 thousand HKD to 9,671,314 thousand HKD, a marginal increase of 0.15%[13] - Total assets as of June 30, 2021, were HK$22.68 billion, a decrease from HK$24.97 billion as of December 31, 2020[149] - Net assets increased slightly to HK$9.67 billion, compared to HK$9.66 billion at the end of 2020[149] - Cash and cash equivalents decreased significantly to HK$2.01 billion from HK$5.05 billion at the end of 2020[149] - Total borrowings decreased to HK$12.66 billion from HK$14.83 billion at the end of 2020[149] - Total assets as of June 30, 2021, were approximately HK$22.68 billion, with a net asset value of HK$9.67 billion[166] - The company's debt-to-asset ratio decreased to 55.84% as of June 30, 2021, from 59.40% at the end of 2020[166] - Cash and cash equivalents totaled HK$2.01 billion as of June 30, 2021, representing 8.88% of total assets[167] - Outstanding borrowings included bank loans of HK$3.49 billion, bonds of HK$7.47 billion, and other borrowings of HK$1.70 billion as of June 30, 2021[168] - The company's issued share capital increased by 4.07% to HK$2.49 billion as of June 30, 2021[170] Expenses and Costs - Administrative expenses increased to HK$225.1 million in 2021 from HK$196.3 million in 2020[8] - Finance costs significantly increased to HK$128.19 million in 2021 from HK$1.13 million in 2020[8] - Unallocated expenses increased significantly, with employee benefits rising to HKD 68,897,000 from HKD 38,080,000 year-over-year, while lease payments decreased to HKD 1,188,000 from HKD 6,683,000[30] - Total employee benefit expenses increased to 118,677 thousand HKD from 92,507 thousand HKD in the previous period[42] - Employee costs, including director remuneration, amounted to HK$118.68 million for the reporting period[173] Borrowings and Financing - Total borrowings as of June 30, 2021, were HKD 12,662,127,000, a decrease from HKD 14,829,314,000 as of December 31, 2020[106] - Bank borrowings increased to HKD 3,492,948,000 as of June 30, 2021, from HKD 2,931,344,000 as of December 31, 2020[107] - Unsecured loans guaranteed by Shandong Hi-Speed Group amounted to HKD 2,446,131,000 as of June 30, 2021, up from HKD 2,044,256,000 as of December 31, 2020[107] - The company had two secured loans as of June 30, 2021: (i) a loan guaranteed by the company with a book value of approximately HKD 23,306,000 (secured by financing lease receivables of approximately HKD 19,032,000), and (ii) a loan guaranteed by a subsidiary with a book value of approximately HKD 126,281,000 (secured by financing lease receivables of approximately HKD 180,345,000)[108] - As of June 30, 2021, the company's bonds included: (i) a 3.80% bond maturing in 2021 with a value of HKD 1,168,616,000, (ii) a 3.95% bond maturing in 2022 with a value of HKD 3,944,398,000, (iii) a 3.95% bond maturing in 2024 with a value of HKD 1,558,774,000, and (iv) a 4.30% bond maturing in 2029 with a value of HKD 789,996,000[109] - The total bond value as of June 30, 2021, was HKD 7,472,284,000, compared to HKD 11,348,620,000 as of December 31, 2020, reflecting a decrease due to repayments and interest payments[110] - Coastal Emerald Limited issued a 3.80% guaranteed bond (3.80% Guaranteed Bond-I) with a principal amount of USD 800,000,000, which matured on June 1, 2021, and was fully repaid during the six months ended June 30, 2021[111] - Coastal Emerald issued a 3.95% guaranteed bond (3.95% Guaranteed Bond-II) with a principal amount of USD 200,000,000 on May 24, 2021, maturing on May 24, 2024, and guaranteed by the company[112] - As of June 30, 2021, the group had six outstanding other borrowings, including a USD 15,000,000 loan secured by financial assets at fair value through other comprehensive income (FVOCI) of approximately USD 30,000,000, with an annual interest rate of 3.50% and due for repayment by June 28, 2022[113] - The company had three outstanding other borrowings totaling approximately $70.86 million (equivalent to approximately HK$549.35 million) as of December 31

Financial Performance - For the year ended December 31, 2020, the group recorded revenue of approximately HKD 1,272,354,000, representing a year-on-year increase of approximately 42.30%[42]. - The net loss for the year was approximately HKD 18,307,000, significantly improved by about 99.07% compared to a loss of HKD 1,961,815,000 in the previous year[42]. - Total assets as of December 31, 2020, were approximately HKD 24,966,194,000, up from HKD 23,198,805,000 in 2019, while total liabilities increased to approximately HKD 15,309,446,000 from HKD 12,947,348,000[42]. - The financing lease business recorded a loss of approximately HKD 990,345,000, an increase of 155.38% compared to the previous year, primarily due to impairment losses on receivables[45]. - The lending business recorded a profit of approximately HKD 72,120,000, an increase of 55.70% compared to HKD 46,319,000 in the same period last year[47]. - The fintech segment reported a loss of approximately HKD 194,013,000, compared to a profit of HKD 171,864,000 in the same period last year, primarily due to increased impairment losses on receivables, goodwill, and software[48]. - The group realized a non-recurring other income of approximately HKD 188,794,000 from the repurchase of shares from a subsidiary[46]. - The investment portfolio recorded unrealized gains of approximately HKD 276,931,000 and realized gains of approximately HKD 525,444,000, a significant improvement from the previous year's losses[46]. Risk Management - The company will maintain a proactive approach to risk management as a core value and priority in its development strategy[50]. - The company has established a comprehensive risk management system, which is regularly reviewed to ensure effectiveness[187]. - The board of directors is responsible for the overall risk management framework, with the executive committee and audit committee overseeing specific functions[188]. - The risk management function is primarily carried out by the company's risk management department, responsible for identifying, assessing, preventing, and monitoring market, credit, and liquidity risks[191]. - Each business department and subsidiary serves as the first line of defense in risk management, ensuring compliance with internal procedures and authorized limits[193]. - The company conducts regular internal audits of subsidiaries to evaluate the reasonableness of business operations, asset security, and the effectiveness of internal controls[200]. Corporate Governance - The company has complied with the corporate governance code as of December 31, 2020[153]. - The board consists of 5 executive directors, 3 non-executive directors, and 4 independent non-executive directors[158]. - The company has adopted a board diversity policy to ensure a balanced composition based on various factors, including gender, age, and professional qualifications[160]. - Independent non-executive directors are crucial for the board's operation, providing independent judgment to ensure shareholders' interests are prioritized[159]. - The company has established procedures for directors to seek independent professional advice at the company's expense[159]. - The company encourages all directors to participate in ongoing professional training to stay updated on relevant laws and regulations[169]. Strategic Initiatives - The company aims to deepen its "investment + investment banking" strategy and expand its market layout with the support of Shandong Hi-Speed Group[40]. - The company plans to continue seeking potential acquisition targets that can create synergies and enhance profitability[51]. - The company will strengthen its overall investment research and project development capabilities to discover more quality projects and investment opportunities[50]. - The company aims to optimize and integrate internal and external resources to enhance the coordination of various business lines while exploring new development opportunities[50]. Employee Management - The employee costs for the company amounted to approximately HKD 187,018,000, representing a 15.51% increase compared to the previous year[79]. - The company has 512 employees as of December 31, 2020, down from 562 in the previous year[79]. - The company has implemented a series of employee benefits to enhance employee engagement and motivation[82]. - The company has a policy to provide competitive compensation and benefits to attract and retain talent[80]. Environmental Commitment - The company emphasizes its commitment to sustainable development by implementing green office policies and encouraging low-carbon commuting among employees[83]. - The company has installed energy-efficient LED lights in its offices, replacing traditional fluorescent tubes, to reduce carbon emissions[83]. - The company encourages employees to minimize electricity usage by utilizing natural light and turning off appliances during non-working hours[83]. - The company has implemented measures to reduce energy consumption related to air conditioning by adjusting temperatures to reasonable levels[83]. Legal and Compliance - The company has not reported any significant violations of applicable laws and regulations during the reporting period, ensuring no major adverse impact on its business operations[84]. - The company has purchased appropriate liability insurance for its directors and senior officers[141]. - The company has confirmed that all independent non-executive directors remain independent as of the report date[123]. Shareholder Information - The company did not recommend any dividend distribution for the reporting period, consistent with the previous year[97]. - The total number of issued shares as of December 31, 2020, is 24,089,384,437[147]. - The company has no provisions for preferential rights for existing shareholders regarding new share offerings[116]. - The company has maintained sufficient public float as per the listing rules[149].

Financial Performance - Revenue for the six months ended June 30, 2020, was HKD 621,480,000, a 88% increase from HKD 329,973,000 in the same period of 2019[11] - Gross profit for the same period was HKD 284,328,000, compared to HKD 186,119,000 in 2019, reflecting a 53% increase[11] - The company reported a net profit of HKD 59,109,000 for the six months ended June 30, 2020, a significant recovery from a loss of HKD 1,609,642,000 in 2019[11] - Operating cash flow for the six months ended June 30, 2020, was HKD 702,906,000, a significant increase from HKD 49,867,000 in the same period of 2019[26] - The company reported a pre-tax loss attributable to owners of HKD 65,646,000, compared to a loss of HKD 1,617,719,000 in the previous year[55] - The company’s basic and diluted loss per share improved to HKD (0.27) from HKD (6.62) in the previous year[11] Assets and Liabilities - The total assets as of June 30, 2020, amounted to HKD 25,313,919,000, up from HKD 23,198,805,000 as of December 31, 2019[15] - Current assets rose to HKD 18,489,287,000, compared to HKD 16,483,653,000 at the end of 2019, showing a 12% growth[15] - The company’s liabilities increased to HKD 8,254,656,000 from HKD 5,662,346,000, reflecting a 46% rise in current liabilities[15] - Total liabilities increased to HKD 15,595,665,000 from HKD 12,947,348,000, representing a rise of 20.4%[39] - The total equity attributable to owners of the company decreased to HKD 2,452,297 from HKD 2,959,705, reflecting a decline of approximately 17.1%[16] Financial Assets - The fair value of financial assets measured at fair value through profit or loss decreased to HKD 58,607,000 from HKD 656,697,000[15] - The fair value of financial assets measured at fair value through other comprehensive income totaled HKD 4,809,153,000 as of June 30, 2020[150] - The fair value of financial assets classified as fair value through profit or loss was HKD 6,409,238,000 as of June 30, 2020, compared to HKD 2,857,429,000 as of December 31, 2019[150] Cash Flow and Financing Activities - Cash and cash equivalents decreased by HKD 4,640,337,000, down from HKD 273,487,000 in the prior year[26] - The company issued bonds generating proceeds of HKD 6,200,251,000, while repaying bonds amounting to HKD (4,678,937,000)[26] - The financing activities generated a net cash inflow of HKD 2,178,483,000, compared to an outflow of HKD (26,619,000) in the previous year[26] - As of June 30, 2020, total borrowings amounted to HKD 15,019,020,000, an increase of 19.5% from HKD 12,564,641,000 as of December 31, 2019[121] Segment Performance - The company has four reportable operating segments: securities investment, lending, finance leasing, and technology finance[33] - Advisory service revenue reached HKD 106,175,000, up from HKD 38,042,000 in 2019, marking an increase of 179.5%[43] - The lending business reported a profit of approximately HKD 28,153,000, an increase of 154.66% compared to approximately HKD 11,055,000 in the same period last year[168] - The technology finance segment recorded a profit of approximately HKD 30,371,000, a 70.62% increase from approximately HKD 17,800,000 in the same period last year, driven by business expansion[169] Impairment and Losses - The company recognized a financial asset impairment loss of HKD 252,572,000, an increase from HKD 166,698,000 in the previous year[47] - The group recognized an impairment loss of approximately HKD 126,119,000 related to receivables from financing lease arrangements for the six months ended June 30, 2020[159] - The financing leasing business recorded a loss of approximately HKD 188,818,000, an increase of 35.42% compared to the same period last year, primarily due to decreased market demand and increased impairment losses[166] Corporate Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange rules for the six months ending June 30, 2020[191] - The audit committee, consisting of three independent non-executive directors and two non-executive directors, reviewed the unaudited interim consolidated financial statements for the six months ending June 30, 2020[193] - The company has maintained compliance with applicable laws and regulations without any significant violations impacting operations[181] Market Outlook and Strategy - The group is actively adjusting investment strategies in response to market opportunities, leading to significant growth in business revenue during the first half of 2020[165] - The company plans to strengthen its management foundation and clarify its development strategy to seize new market opportunities in the second half of the year[171] - The company aims to enhance its asset management brand in the market while optimizing its existing asset portfolio to improve asset quality and overall returns[172]

Financial Performance - The group's operating revenue for the reporting period reached approximately HKD 894 million[10] - The company recorded a net loss of approximately HKD 1,961,815,000 for the reporting period, compared to a net loss of HKD 691,176,000 for the previous nine months[14] - Total revenue for the year was HKD 894,149 thousand, with a gross profit of HKD 577,557 thousand, indicating a gross margin of approximately 64.5%[174] - The company reported a total comprehensive loss for the year was HKD 1,654,588 thousand, compared to HKD 955,114 thousand in 2018, indicating a significant increase in overall losses[176] - The company experienced a significant increase in other comprehensive income, reporting HKD 307,227 thousand for the year, compared to a loss of HKD 263,938 thousand in 2018[176] - The company reported a fair value loss on financial assets measured at fair value through profit or loss of HKD (1,363,056) thousand for the year, compared to HKD (230,758) thousand in 2018[174] - The company achieved a net profit of 181,065 thousand yuan for the year, which is a significant increase compared to the previous year's net profit of 15,084 thousand yuan, indicating a growth of over 1,100%[182] Asset and Liability Management - Total assets as of December 31, 2019, were approximately HKD 23,198,805,000, up from HKD 13,377,465,000 a year earlier, while total liabilities increased to HKD 12,947,348,000 from HKD 8,499,219,000[14] - As of December 31, 2019, the company's total assets and borrowings were approximately HKD 23.2 billion and HKD 12.6 billion, respectively, with a debt-to-asset ratio of about 54.16%[26] - The company's total liabilities amounted to HKD 5,662,346 thousand in current liabilities, slightly down from HKD 5,953,403 thousand in 2018[180] - The net asset value of the company increased to HKD 10,251,457 thousand from HKD 4,878,246 thousand in 2018, reflecting a strong improvement in equity[180] Investment and Financing Activities - The company successfully issued USD 1.5 billion bonds, with total subscriptions exceeding USD 10 billion, achieving a subscription multiple of over 9 times[10] - The company issued $550 million of 5.95% guaranteed notes due in 2020 on January 15, 2019, and later increased this issuance by an additional $50 million due to strong market response[25] - The company reported a significant increase in cash reserves, totaling 631,756 thousand yuan, which provides a strong liquidity position for future investments[182] - The financing activities generated a net cash inflow of HKD 10,956,422,000, a significant increase from a net outflow of HKD 226,230,000 in the prior period, suggesting improved financing conditions[192] Risk Management - The risk management framework has been further improved, enhancing overall risk management capabilities[10] - The company has established a comprehensive risk management framework involving the Board, management, risk management support departments, and business units[137] - The company faces significant credit risk primarily from non-standard business operations, with established guidelines for risk prevention and post-investment management mechanisms in place[145] - The company has implemented a liquidity risk management mechanism, regularly assessing liquidity coverage ratios to ensure timely access to sufficient funds[146] Corporate Governance - The company plans to enhance corporate governance and risk capital management to optimize performance assessment systems for sustainable value creation[12] - The board of directors consists of 5 executive directors, 3 non-executive directors, and 4 independent non-executive directors, ensuring a diverse skill set and experience[108] - The independent non-executive directors confirmed their independence as of the report date, ensuring compliance with listing rules[76] - The company emphasizes the importance of transparency and accountability in corporate governance[105] Employee Management - The group had 562 employees as of December 31, 2019, with employee costs amounting to approximately HKD 161.91 million, a significant increase from HKD 97.4 million for the same period in 2018, driven by business expansion and salary adjustments[29] - The group emphasizes talent management and employee development, implementing training programs and competitive compensation packages to retain and motivate staff[29] - The company has established a new reserve fund for employee stock options, which is expected to enhance employee retention and motivation[185] Strategic Partnerships and Collaborations - Strategic cooperation was established with Shandong Expressway Group for joint acquisitions of infrastructure assets and asset securitization[10] - The company aims to deepen collaboration with Shandong High-Speed Group to provide valuable products and services while expanding its customer base[12] - The company is actively exploring quality investment opportunities along the "Belt and Road" initiative and in the Guangdong-Hong Kong-Macao Greater Bay Area[10] Market Conditions and Economic Outlook - The financial market performance was volatile due to global trade tensions and economic outlook concerns[10] - In 2019, the global economic growth rate was revised down to 2.9% by the IMF, the lowest level since the global financial crisis, with China's GDP growth slowing to 6.1% from 6.6% in 2018[22] Compliance and Legal Matters - There were no significant legal or regulatory violations reported during the period that could adversely affect the group's business operations[32] - The company has not engaged in any hedging activities or significant investments during the reporting period[28] Financial Reporting and Audit - The audit committee, composed of four independent non-executive directors, reviewed the group's consolidated performance for the year ending December 31, 2019[34] - The board is responsible for preparing true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards[169] - The auditor's goal is to obtain reasonable assurance that the consolidated financial statements are free from material misstatement due to fraud or error[170] Changes in Accounting Standards - The company adopted Hong Kong Financial Reporting Standard 16 (HKFRS 16) for leases effective from January 1, 2019, using a modified retrospective approach without restating prior comparative information[198] - Under HKFRS 16, all leases are recognized as right-of-use assets and corresponding liabilities, eliminating the distinction between operating and finance leases[198]

Financial Performance - The company reported a loss of HKD 1,609,642,000 for the six months ended June 30, 2019, compared to a loss of HKD 458,625,000 for the same period in 2018, indicating a significant increase in losses[10]. - Total revenue for the first half of 2019 was HKD 329,973,000, up from HKD 281,900,000 in the previous year, representing an increase of approximately 17.1%[10]. - The gross profit margin decreased, with a gross loss of HKD 143,854,000 compared to a gross loss of HKD 80,775,000 in the prior year[10]. - The basic and diluted loss per share for the period was HKD 6.62, compared to HKD 2.11 in the same period last year, reflecting a worsening financial position[10]. - The total comprehensive loss for the period was HKD 1,225,719,000, compared to HKD 595,677,000 in the previous year, highlighting an increase in overall losses[12]. - The adjusted loss before tax for the group was HKD 1,607,745,000 for the six months ended June 30, 2019, compared to HKD 543,130,000 for the same period in 2018[40]. - The group reported a loss before tax of HKD 1,382,284,000 for the six months ended June 30, 2019, compared to a loss of HKD 31,925,000 in the same period of 2018[51]. - The company reported a net loss of HKD 1,609,642,000 for the period, compared to a net loss of HKD 458,625,000 in the prior year, marking an increase in losses of approximately 251.5%[196]. - Total comprehensive loss for the period amounted to HKD 1,225,719,000, up from HKD 595,677,000 in the previous year, reflecting a worsening financial performance[198]. Asset and Liability Management - The total liabilities of the company as of June 30, 2019, were not disclosed in the provided documents, but the significant losses indicate potential liquidity concerns moving forward[13]. - Non-current assets decreased from HKD 7,065,366 thousand to HKD 6,151,801 thousand, a decline of approximately 12.9%[14]. - Current assets totaled HKD 6,201,052 thousand, slightly down from HKD 6,312,099 thousand, representing a decrease of about 1.8%[14]. - Total liabilities increased from HKD 5,953,403 thousand to HKD 6,060,437 thousand, an increase of approximately 1.8%[14]. - The net asset value decreased from HKD 4,878,246 thousand to HKD 3,652,527 thousand, a decline of around 25.1%[15]. - The company reported a decrease in cash and cash equivalents from HKD 681,398 thousand to HKD 412,339 thousand, a reduction of approximately 39.5%[14]. - The total equity attributable to owners decreased from HKD 4,795,026 thousand to HKD 3,561,087 thousand, a decline of about 25.7%[15]. - The company’s borrowings increased from HKD 5,393,192 thousand to HKD 5,520,427 thousand, an increase of approximately 2.4%[14]. - The company’s total assets as of June 30, 2019, were HKD 726,316,000, compared to HKD 580,248,000 as of December 31, 2018, indicating growth in asset base[60]. - The total liabilities increased to HKD 6,060,437,000 from HKD 5,953,403,000, indicating a rise in financial obligations[200]. Revenue and Income Sources - Other income for the period was HKD 186,119,000, a substantial increase from HKD 37,772,000 in the same period of 2018[10]. - The securities investment segment generated revenue of HKD 55,769,000 for the six months ended June 30, 2019, down from HKD 56,611,000 for the same period in 2018[40]. - The financing lease segment reported revenue of HKD 181,733,000 for the six months ended June 30, 2019, compared to HKD 92,776,000 for the same period in 2018[40]. - The technology finance segment's revenue was HKD 70,596,000 for the six months ended June 30, 2019, an increase from HKD 65,229,000 in the previous year[40]. - The lending business generated revenue of approximately HKD 21,875,000, a decrease from HKD 67,284,000 in the previous year, due to borrowers repaying loans and a more cautious operational approach[151]. - The consulting service revenue reached HKD 38,042,000, up 9.5% from HKD 34,804,000 in the previous year[46]. - The fee income significantly increased to HKD 97,772,000, a rise of 86.6% compared to HKD 52,336,000 in the prior period[46]. - Internet new media service revenue surged to HKD 18,576,000, compared to HKD 3,677,000 in the same period last year, marking a growth of 404.5%[46]. Investment Performance - The company recorded a fair value loss on financial assets of HKD 1,382,284,000, compared to a loss of HKD 31,925,000 in the previous year, indicating a significant deterioration in asset performance[10]. - The company reported a fair value gain on equity investments of HKD 363,511,000, up from HKD 234,251,000 in the previous year, indicating some positive performance in equity investments[12]. - The company’s financial assets measured at fair value through other comprehensive income rose from HKD 1,719,189 thousand to HKD 2,082,700 thousand, an increase of about 21.1%[14]. - The fair value reserve as of June 30, 2019, included a net fair value gain of approximately HKD 547,124,000, compared to HKD 183,613,000 as of December 31, 2018[22]. - The company’s financial assets measured at fair value through profit or loss decreased from HKD 1,789,930 thousand to HKD 691,947 thousand, a significant decline of approximately 61.3%[14]. - The net unrealized gain on financial assets measured at fair value through other comprehensive income for the six months ended June 30, 2019, was HKD 363,511,000, compared to HKD 234,251,000 for the same period in 2018, showing an increase of approximately 55%[61]. - The total fair value of financial assets measured at fair value through profit or loss was HKD 691,947,000 as of June 30, 2019, down from HKD 1,789,930,000 as of December 31, 2018[72]. - The net unrealized loss for financial assets measured at fair value through profit or loss for the six months ended June 30, 2019, was HKD (1,385,385) thousand, compared to a loss of HKD (24,390) thousand for the same period in 2018[76]. Cash Flow and Financing Activities - Operating cash flow for the six months ended June 30, 2019, was a net cash outflow of HKD 26,336,000, compared to a net cash outflow of HKD 658,949,000 for the same period in 2018[25]. - The company’s investment activities resulted in a net cash outflow of HKD 220,532,000 for the six months ended June 30, 2019[25]. - The company’s financing activities resulted in a net cash outflow of HKD 26,619,000 for the six months ended June 30, 2019, compared to a net cash outflow of HKD 216,923,000 in the same period of 2018[25]. - The company’s cash flow from operating activities showed a significant improvement compared to the previous year, indicating a positive trend in operational efficiency[25]. - The company issued guaranteed bonds totaling HKD 4,698,023,000 during the period, with a repayment of HKD 4,687,793,000[107]. - The company’s interest expense on bonds for the period was HKD 158,301,000, compared to HKD 140,938,000 for the previous period[107]. - The company’s interest payments on bonds during the period amounted to HKD 94,455,000, compared to HKD 91,675,000 in the previous period[107]. - The company has outstanding other borrowings amounting to approximately HKD 1,561,772,000, with an interest rate of 4.5% due by December 31, 2020[111]. Corporate Governance and Compliance - The company has adopted the standards set out in the Listing Rules Appendix 10 regarding the conduct of directors in securities trading, confirming compliance for the six months ended June 30, 2019[182]. - The Audit Committee, composed of four independent non-executive directors, reviewed the unaudited interim consolidated financial statements for the six months ended June 30, 2019[183]. - The company is focused on enhancing its internal controls and financial reporting processes as part of its governance framework[183]. - The company has complied with the corporate governance code as of June 30, 2019, with some deviations noted[180]. Employee and Human Resource Management - As of June 30, 2019, the group had 602 employees, with 542 located in China[163]. - Employee costs for the six months ended June 30, 2019, amounted to approximately HKD 75,885,000, an increase from HKD 64,557,000 for the same period in 2018, reflecting business expansion and revenue growth[163]. - The group has implemented various human resource measures, including training programs and development opportunities, to attract and cultivate talent[163]. - The group encourages employees to participate in financial knowledge training to enhance their professional capabilities[163]. Strategic Initiatives and Future Plans - The company plans to develop a leading asset trading platform and comprehensive service provider in the Greater Bay Area and other regions, leveraging policy advantages[152]. - The company aims to deepen cooperation with countries along the "Belt and Road" initiative and the Guangdong-Hong Kong-Macao Greater Bay Area, seeking quality investment opportunities[154]. - The company has no specific acquisition targets as of the report date but will continue to seek potential acquisition targets that can enhance profitability[155]. - The company is focused on maintaining a prudent and compliant strategy to become a leading investment and financial holding platform in the Greater China region[155]. Market and Economic Conditions - The company is monitoring foreign exchange risks, particularly related to the Renminbi, and will consider appropriate hedging measures if necessary[160]. - The company has no significant contingent liabilities or capital commitments as of June 30, 2019, aside from those disclosed in the financial statements[161]. - The company has no major investment projects or future plans for significant investments or acquisitions as of the report date[162].

Financial Performance - For the nine-month period ending December 31, 2018, the group recorded a revenue of approximately HKD 427 million and a net loss of approximately HKD 691 million, compared to a revenue of HKD 458 million and a net profit of HKD 671 million for the previous fiscal year[98]. - The net loss attributable to shareholders was approximately HKD 705 million, primarily due to increased impairment provisions for financial assets and a significant decrease in fair value gains on financial assets measured at fair value through profit or loss[98]. - The financing lease business reported a loss of approximately HKD 465 million, primarily due to impairment losses of about HKD 293 million, including goodwill impairment of approximately HKD 147 million[105]. - The securities investment segment experienced an unrealized fair value loss of approximately HKD 223 million, contrasting with an unrealized fair value gain of approximately HKD 460 million in the previous fiscal year[107]. - The lending business recorded a revenue of approximately HKD 83,064,000, an increase from HKD 50,383,000 in the previous year, primarily due to business expansion[108]. - The structural entities recorded revenue of approximately HKD 114 million and a net loss of HKD 13 million during the reporting period[184]. Assets and Liabilities - The group’s total assets as of December 31, 2018, were approximately HKD 13.38 billion, down from HKD 14.41 billion as of March 31, 2018, while total liabilities were approximately HKD 8.50 billion, slightly down from HKD 8.57 billion[104]. - The asset-liability ratio as of December 31, 2018, was approximately 60.44%, up from 55.70% as of March 31, 2018[115]. - As of December 31, 2018, the loan portfolio was approximately HKD 1,332,366,000, slightly down from HKD 1,358,805,000 as of March 31, 2018[108]. - As of December 31, 2018, the total assets of the structural entities were approximately HKD 949 million, with total liabilities of approximately HKD 64 million, resulting in a net asset value of approximately HKD 885 million[184]. Business Strategy and Development - The company aims to expand its market presence by actively seeking quality investment opportunities along the Belt and Road Initiative and in the Guangdong-Hong Kong-Macao Greater Bay Area[100]. - The group plans to enhance its financial technology capabilities and innovate its business models to adapt to new market conditions and opportunities[100]. - The group is committed to developing a comprehensive financial service platform, integrating investment and investment banking services to enhance overall capabilities[98]. - The group plans to develop a leading asset trading platform in the Guangdong Free Trade Zone, leveraging policy advantages[111]. - The group is focused on diversifying its financial services and leveraging the strengths of Shandong High-Speed Group as a major shareholder[112]. - Future strategies may include further acquisitions and partnerships to strengthen market position and drive growth[134]. Corporate Governance and Management - The company emphasizes the importance of corporate governance and compliance, as reflected in the diverse backgrounds of its board members[133]. - The management team includes professionals with advanced degrees and certifications, such as CPA and MBA, ensuring strong governance and financial oversight[135]. - The company is focused on expanding its market presence and enhancing its investment strategies through experienced leadership and board members[134]. - The company has confirmed that all independent non-executive directors remain independent as of the report date, in compliance with listing rules[174]. - The audit committee, composed of four independent non-executive directors, reviewed the group's consolidated performance for the nine months ended December 31, 2018[128]. Employee and Talent Management - As of December 31, 2018, the group had 579 employees, with 531 located in China, and incurred employee costs of approximately HKD 97.4 million for the nine months ended December 31, 2018, compared to approximately HKD 60.646 million for the year ended March 31, 2018, indicating a significant increase in employee costs aligned with business expansion[122]. - The group emphasizes talent acquisition and development, implementing training programs and development opportunities for employees to enhance professional service levels[122]. - The group encourages employees to participate in financial knowledge training to enhance their existing financial expertise[122]. Compliance and Risk Management - There were no significant violations of applicable laws and regulations that adversely affected the group's business and operations during the reporting period[126]. - The company will continue to monitor the relevant legal and operational environment to comply with applicable laws and regulations[191]. - The company has implemented internal control measures to mitigate operational risks associated with the VIE structure[191]. - The company has not purchased any insurance to protect against risks related to the VIE structure and its transactions[190]. Shareholder Information - The company did not recommend the distribution of any dividends for the reporting period[145]. - The company has not established any arrangements for shareholders to waive or agree to waive any dividends[145]. - The largest customer accounted for 7.9% of the group's revenue, while the top five customers together represented 25.7% of total revenue, indicating a moderate customer concentration risk[169]. - As of December 31, 2018, the company's paid-up earnings amounted to approximately HKD 1,524,577,000, with an additional share premium account of HKD 4,784,098,000 available for distribution in the form of bonus shares[168]. Financing Activities - The group issued USD 550,000,000 and an additional USD 50,000,000 guaranteed notes at a 5.95% interest rate, maturing in 2020, to enhance business funding[115]. - The company issued a total of $40 million in convertible bonds, with a conversion price of HKD 0.35 for the A tranche and HKD 0.42 for the B tranche, at an annual interest rate of 6%[149]. - The company redeemed the second tranche of convertible bonds totaling $40 million, which had an annual interest rate of 8%, using the proceeds from the fifth tranche issuance[149]. - The company repurchased shares to enhance net asset value and earnings per share for the benefit of shareholders, as authorized at the 2018 annual general meeting[167].