[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Financial Summary](index=1&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, NUI Environmental Group's revenue slightly decreased by 0.6% to HK$165.1 million, but net loss significantly narrowed by 43.0% to HK$13.51 million, with loss attributable to owners decreasing by 47.6% Key Financial Data Comparison for H1 2025 (HK$'000) | Metric | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 165,119 | 166,070 | -0.6 | | Net Loss | (13,509) | (23,706) | -43.0 | | Loss Attributable to Owners of the Company | (10,619) | (20,248) | -47.6 | | Basic Loss Per Share (HK Cents) | (0.35) | (0.67) | -47.8 | Key Balance Sheet Data Comparison (HK$'000) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 862,783 | 869,053 | -0.7 | | Cash and Cash Equivalents | 234,196 | 220,823 | +6.1 | | Bank Borrowings | 50,043 | 44,752 | +11.8 | - The Board resolved **not to declare any dividend** for the six months ended June 30, 2025[2](index=2&type=chunk) [General Information](index=6&type=section&id=General%20Information) These interim financial statements are presented in Hong Kong Dollars, which is the Company's functional currency, while Chinese subsidiaries use Renminbi as their functional currency - Financial statements are presented in **HKD**, with Chinese subsidiaries using **RMB** as their functional currency[8](index=8&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) These interim financial statements are prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34 "Interim Financial Reporting" issued by the HKICPA, approved by the Board on August 15, 2025 - The statements are prepared in accordance with the **Listing Rules** and **HKAS 34 'Interim Financial Reporting'**[9](index=9&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) The Group applied amendments to HKAS 21 "Lack of Exchangeability," but with no non-exchangeable foreign currency transactions, there is no material impact on this interim financial report, and no other new standards were applied - Amendments to **HKAS 21 'Lack of Exchangeability'** were applied, but with no material impact[11](index=11&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, Group revenue was HK$165.1 million, gross profit increased to HK$26.04 million, operating profit turned positive to HK$28 thousand, loss before tax narrowed to HK$7.75 million, and loss for the period was HK$13.51 million Key Data from Condensed Consolidated Statement of Profit or Loss (HK$'000) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 165,119 | 166,070 | | Cost of Sales | (139,075) | (146,139) | | Gross Profit | 26,044 | 19,931 | | Operating Profit/(Loss) | 28 | (8,725) | | Loss Before Tax | (7,749) | (18,847) | | Loss for the Period | (13,509) | (23,706) | | Loss Attributable to Owners of the Company | (10,619) | (20,248) | | Basic and Diluted Loss Per Share (HK Cents) | (0.35) | (0.67) | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, loss for the period was HK$13.51 million, with other comprehensive income of HK$11.85 million, mainly due to positive exchange differences, leading to a significantly narrowed total comprehensive loss of HK$1.66 million Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$'000) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the Period | (13,509) | (23,706) | | Exchange Differences on Translation of Financial Statements | 24,539 | (19,839) | | Changes in Fair Value of Equity Investments | (13,300) | 24,200 | | Other Comprehensive Income for the Period, Net of Income Tax | 11,849 | 2,811 | | Total Comprehensive Loss for the Period | (1,660) | (20,895) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$1.25 billion, with a slight decrease in non-current assets and an increase in current assets, while net current assets increased to HK$120 million, total liabilities increased to HK$294.2 million, and net assets slightly decreased Key Data from Condensed Consolidated Statement of Financial Position (HK$'000) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 872,570 | 893,426 | | Current Assets | 379,729 | 354,189 | | Total Assets | 1,252,299 | 1,247,615 | | Current Liabilities | 259,387 | 246,862 | | Non-current Liabilities | 34,825 | 36,303 | | Total Liabilities | 294,212 | 283,165 | | Net Assets | 958,087 | 964,450 | | Equity Attributable to Owners of the Company | 862,783 | 869,053 | [Business Review and Outlook](index=7&type=section&id=Business%20Review%20and%20Outlook) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from hazardous waste incineration and landfill, industrial wastewater treatment, and factory facility leasing, with total revenue for H1 2025 at HK$165.1 million, a slight decrease of 0.6% year-on-year, and operations divided into three reportable segments - The Group's revenue primarily comes from **hazardous waste incineration and landfill services**, **industrial wastewater treatment and related services**, and **factory facility leasing income**[13](index=13&type=chunk) - The Group presents three reportable segments: (i) **industrial and medical waste environmental treatment and disposal services**; (ii) **eco-electroplating wastewater treatment and management services, utility support, and factory building leasing in eco-electroplating zones**; and (iii) **investment in plastic dyeing businesses**[16](index=16&type=chunk) - All of the Group's revenue and non-current assets are generated from and located in **China**[20](index=20&type=chunk) [Revenue Breakdown](index=7&type=section&id=Revenue%20Breakdown) In H1 2025, revenue from hazardous waste incineration and landfill services was HK$108.44 million, industrial wastewater treatment and related services was HK$43.60 million, and factory facility leasing income was HK$13.08 million Revenue from Contracts with Customers by Service Type (HK$'000) | Service Type | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Hazardous Waste Incineration and Landfill Services | 108,444 | 105,297 | | Industrial Wastewater Treatment and Related Support and Management Services | 43,596 | 46,282 | | **Total Revenue from Contracts with Customers** | **152,040** | **151,579** | | Factory Facility Leasing Income | 13,079 | 14,491 | | **Total Revenue** | **165,119** | **166,070** | [Segment Results, Assets, and Liabilities](index=9&type=section&id=Segment%20Results%2C%20Assets%2C%20and%20Liabilities) In H1 2025, the waste treatment segment recorded a loss of HK$17.16 million, the utility support and facilities segment recorded a profit of HK$13.73 million, and the plastic dyeing investment segment recorded a profit of HK$3.39 million, resulting in a total segment loss of HK$31 thousand Reportable Segment Results (HK$'000) | Operating Segment | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Environmental Treatment and Disposal of Waste | (17,156) | (27,403) | | Utility Support and Facilities | 13,732 | 12,677 | | Plastic Dyeing Investment | 3,393 | 3,425 | | **Subtotal of Reportable Segment Results** | **(31)** | **(11,301)** | | Unallocated Head Office and Corporate | (7,718) | (7,546) | | **Total (Loss Before Tax)** | **(7,749)** | **(18,847)** | Reportable Segment Assets and Liabilities (HK$'000) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Reportable Segment Assets | 1,225,003 | 1,220,984 | | Reportable Segment Liabilities | 286,716 | 280,315 | [Other Gains and Income](index=12&type=section&id=Other%20Gains%20and%20Income) In H1 2025, other gains primarily consisted of dividend income of HK$3.70 million, a slight year-on-year decrease, while other income was HK$2.83 million, down 20.5% year-on-year, mainly due to reduced service provider rebates, and net finance income was HK$0.35 million, a 62.2% year-on-year decrease Other Gains, Income, and Net Finance Income (HK$'000) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Other Gains (Dividend Income) | 3,704 | 3,745 | | Other Income | 2,833 | 3,564 | | Net Finance Income | 345 | 913 | - Other income decreased by **HK$731,000**, primarily due to reduced service provider rebates during the period[51](index=51&type=chunk) - Net finance income decreased by **HK$649,000**, mainly due to lower interest income from free cash deposits during the period[58](index=58&type=chunk) [Components of Loss Before Tax](index=13&type=section&id=Components%20of%20Loss%20Before%20Tax) Loss before tax for H1 2025 was deducted for depreciation, operating lease expenses, staff costs, and cost of sales, with total staff costs at HK$32.02 million and cost of sales at HK$139.08 million Items Deducted from Loss Before Tax (HK$'000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 34,754 | 34,500 | | Depreciation of Right-of-Use Assets | 1,460 | 1,619 | | Operating Lease Expenses | 594 | 594 | | Other Operating Expenses | 2,695 | 3,031 | | Total Staff Costs | 32,024 | 38,398 | | Cost of Sales | 139,075 | 146,139 | [Income Tax](index=14&type=section&id=Income%20Tax) Income tax for H1 2025 was HK$5.76 million, an 18.5% year-on-year increase, mainly due to the payment of China dividend withholding tax, with China's corporate income tax rate at 25%, 15% for high-tech enterprises, and 5% for dividend withholding tax Income Tax Components (HK$'000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current Tax | 5,918 | 4,626 | | Deferred Tax | (158) | 233 | | **Total Income Tax** | **5,760** | **4,859** | - Income tax increased by **HK$901,000**, primarily due to the payment of **China dividend withholding tax** in H1 2025[62](index=62&type=chunk) - China's corporate income tax rate is **25%**, with **15%** for high-tech enterprises; dividends distributed by Chinese subsidiaries to Hong Kong holding companies are subject to a reduced **5% withholding tax rate**[23](index=23&type=chunk) [Loss Per Share and Dividends](index=15&type=section&id=Loss%20Per%20Share%20and%20Dividends) For H1 2025, both basic and diluted loss per share were HK$0.35 cents, a 47.8% year-on-year decrease, and the Board does not recommend an interim dividend Loss Per Share (HK Cents) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Basic Loss Per Share | (0.35) | (0.67) | | Diluted Loss Per Share | (0.35) | (0.67) | - The Directors do not recommend the payment of any **interim dividend** for the six months ended June 30, 2025[26](index=26&type=chunk) [Trade and Bills Receivables](index=15&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables were HK$73.77 million, an 8.5% increase from end-2024, with credit loss allowance at HK$17.83 million, and ageing analysis showing the 0-30 day category as the largest Trade and Bills Receivables (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Receivables | 60,611 | 63,639 | | Lease Receivables | 19,566 | 11,809 | | Bills Receivables | 11,424 | 10,194 | | Less: Allowance for Credit Losses | (17,832) | (17,669) | | **Total** | **73,769** | **67,973** | Ageing Analysis of Trade and Bills Receivables (HK$'000) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 30 days | 36,506 | 35,782 | | 31 to 60 days | 16,026 | 9,449 | | 61 to 90 days | 6,982 | 6,511 | | 91 to 180 days | 8,335 | 6,761 | | 181 to 360 days | 3,493 | 2,271 | | Over one year | 2,427 | 7,199 | | **Total** | **73,769** | **67,973** | - The average credit period for industrial waste, wastewater, and sludge treatment service customers is **60 days**, while for medical waste disposal service customers, it extends to **180 days**[28](index=28&type=chunk) [Prepayments, Deposits, and Other Receivables](index=16&type=section&id=Prepayments%2C%20Deposits%2C%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables were HK$49.78 million, a 14.9% increase from end-2024, mainly including amounts due from a joint venture of HK$29.70 million and consideration receivable from the disposal of a subsidiary of HK$10.63 million Prepayments, Deposits, and Other Receivables (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Other Receivables | 379 | 327 | | Prepayments | 5,641 | 4,456 | | Dividends Receivable from Equity Investments | 3,426 | – | | Amounts Due from a Joint Venture | 29,699 | 28,213 | | Consideration Receivable from Disposal of a Subsidiary | 10,631 | 10,321 | | **Total** | **49,776** | **43,317** | - Amounts due from a joint venture are **unsecured** and bear interest at annual rates ranging from **3.20% to 4.05%**[29](index=29&type=chunk) [Trade and Bills Payables](index=17&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables were HK$32.13 million, a 16.8% decrease from end-2024, with trade payables being interest-free and generally settled within 90 to 180 days Trade and Bills Payables (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Payables | 25,338 | 33,612 | | Bills Payables | 6,795 | 5,001 | | **Total** | **32,133** | **38,613** | Ageing Analysis of Trade Payables (HK$'000) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 30 days | 6,344 | 9,485 | | 31 to 60 days | 3,981 | 4,344 | | 61 to 90 days | 2,947 | 3,384 | | Over 90 days | 12,066 | 16,399 | | **Total** | **25,338** | **33,612** | [Accruals and Other Payables](index=18&type=section&id=Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables were HK$170.48 million, a 9.9% increase from end-2024, mainly comprising dividends payable to non-controlling interests of a subsidiary of HK$57.34 million and other payables of HK$55.43 million Accruals and Other Payables (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Salaries and Bonuses Payable | 4,224 | 5,893 | | Trade Payables for Acquisition of Property, Plant and Equipment | 22,356 | 19,999 | | Accrued Costs for Land Restoration and Soil Remediation | 26,281 | 25,514 | | Dividends Payable to Shareholders of the Company | 4,857 | – | | Dividends Payable to Non-controlling Interests of a Subsidiary | 57,336 | 57,336 | | Other Payables | 55,429 | 46,425 | | **Total** | **170,483** | **155,167** | - Dividends payable to non-controlling interests of a subsidiary primarily include amounts due to **Mr. Yin Yongxiang, Mr. Sun Jiaqing, and Mr. Liu Laigen**[31](index=31&type=chunk) [Industrial and Medical Waste Environmental Treatment and Disposal Services](index=21&type=section&id=Industrial%20and%20Medical%20Waste%20Environmental%20Treatment%20and%20Disposal%20Services) In H1 2025, the Group collected, treated, and disposed of approximately 81,145 tonnes of hazardous waste in Jiangsu Province, China, with total segment revenue of HK$108.44 million, a 3.0% year-on-year increase, and this segment recorded a pre-tax loss of HK$17.16 million, which narrowed from the prior year Industrial and Medical Waste Treatment Service Volume and Revenue (HK$'000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Waste Collected and Disposed (Tonnes) | 81,145 | 45,591 | | Segment Revenue (HK$'000) | 108,444 | 105,297 | | Revenue from Hazardous Industrial Waste | 83,844 | 83,318 | | Revenue from Regulated Medical Waste | 18,560 | 17,521 | | Revenue from General Industrial Waste and Others | 6,040 | 4,458 | - The Group's share of profit from associate Zhenjiang New Area was approximately **HK$0.36 million**, net loss from Nanjing Tianyu was approximately **HK$4.02 million**, and net loss from joint venture Xinyu Rongkai was approximately **HK$4.46 million**[39](index=39&type=chunk) - This segment recorded a pre-tax loss of approximately **HK$17.16 million**, a reduction from **HK$27.40 million** in the same period of 2024[40](index=40&type=chunk) [Eco-Electroplating Zone Wastewater Treatment Services](index=24&type=section&id=Eco-Electroplating%20Zone%20Wastewater%20Treatment%20Services) In H1 2025, revenue from eco-electroplating zone services was HK$56.68 million, a 6.7% year-on-year decrease, while pre-tax segment profit margin improved to 24.2%, average utilization rate of factory buildings decreased to 80.1%, and average utilization rate of wastewater treatment volume remained at 22.0% Eco-Electroplating Zone Service Data (HK$'000) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Segment Revenue | 56,675 | 60,773 | | Pre-tax Segment Profit Margin | 24.2% | 20.9% | | Average Utilization Rate of Factory Buildings and Facilities | 80.1% | 86.2% | | Electroplating Wastewater Treated by Centralized Wastewater Treatment Plant (Tonnes) | 181,621 | 182,526 | | Average Utilization Rate of Wastewater Treatment Volume | 22.0% | 22.1% | - The eco-electroplating zone is owned, constructed, and operated by **Zhenjiang Huake Eco-Electroplating Technology Development Co. Ltd.**, a wholly-owned subsidiary of the Group[44](index=44&type=chunk) - As of June 30, 2025, **32 manufacturing customers** leased **22 factory buildings** within the zone[44](index=44&type=chunk) [Strategic Investment in Plastic Dyeing Businesses](index=25&type=section&id=Strategic%20Investment%20in%20Plastic%20Dyeing%20Businesses) The Group holds equity interests in three plastic dyeing manufacturing entities, with pre-tax profit margins for these investments ranging from 1.3% to 5.3% in H1 2025, and dividends of HK$3.70 million declared and expected to be distributed in Q4 of this year - The Group holds equity interests in three plastic dyeing manufacturing entities: **Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei**[45](index=45&type=chunk) Pre-tax Profit Margins of Plastic Dyeing Businesses | Company | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Suzhou Xinhua Mei | 1.3% | 2.6% | | Danyang Xinhua Mei | 1.7% | 2.7% | | Qingdao Huamei | 5.3% | 5.9% | - Dividends totaling approximately **HK$3.70 million** were declared for 2024 results, expected to be distributed in **Q4 of this year**[45](index=45&type=chunk) [Outlook](index=25&type=section&id=Outlook) Facing a weak hazardous waste treatment market and overcapacity, the Group will continue to optimize operations, enhance cost-effectiveness, improve service quality, and ensure timely renewal of operating permits, while actively exploring business restructuring and industrial upgrading to strengthen long-term competitiveness and uphold environmental commitments - The Group's hazardous waste treatment and incineration services market in Jiangsu Province continues to face **weakness**, with severe **industry overcapacity and pricing pressure**[46](index=46&type=chunk) - The Group will continue to drive **business optimization, enhance cost-effectiveness, and improve service quality**, ensuring timely renewal of hazardous waste operating permits for its subsidiaries and strategically adjusting incineration facilities to minimize downtime[46](index=46&type=chunk) - The Group will actively explore **business restructuring and industrial upgrading** to enhance long-term competitiveness and uphold its commitment to **environmental protection and sustainable development**[47](index=47&type=chunk) [Financial Review and Analysis](index=27&type=section&id=Financial%20Review%20and%20Analysis) [Financial Performance Overview](index=27&type=section&id=Financial%20Performance%20Overview) In H1 2025, total Group revenue slightly decreased by 0.6% to HK$165.1 million, but the average gross profit margin significantly improved by 31.7% to 15.8%, with loss for the period narrowing substantially by 43.0% to HK$13.51 million, and adjusted EBITDA increasing by 28.1% to HK$37.42 million Financial Performance Overview (HK$'000) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 165,119 | 166,070 | -0.6 | | Average Gross Profit Margin (%) | 15.8 | 12.0 | +31.7 | | Loss for the Period | (13,509) | (23,706) | -43.0 | | Loss Attributable to Owners of the Company | (10,619) | (20,248) | -47.6 | | Basic Loss Per Share (HK Cents) | (0.35) | (0.67) | -47.8 | | Adjusted EBITDA | 37,420 | 29,221 | +28.1 | [Analysis of Key Financial Metric Changes](index=28&type=section&id=Analysis%20of%20Key%20Financial%20Metric%20Changes) Revenue declined mainly due to lower utilization of the eco-electroplating zone, while gross margin improved from higher average unit prices for hazardous waste treatment and reduced direct costs, with operating expenses decreasing, impairment loss reversal for trade receivables reducing, finance income and costs decreasing, loss contribution from associates and joint ventures decreasing, and income tax increasing primarily due to China dividend withholding tax - Total business revenue decreased by **HK$951,000**, primarily due to lower utilization of factory buildings and facilities in the eco-electroplating zone[49](index=49&type=chunk) - Gross profit margin increased mainly due to higher **average unit treatment prices for hazardous waste services** and **reduced direct costs** in both operating segments[50](index=50&type=chunk)[56](index=56&type=chunk) - Distribution costs decreased by **HK$2.42 million**, primarily due to reduced market intermediary agency fees during the period[52](index=52&type=chunk) - Administrative expenses decreased by **HK$2.08 million**, primarily due to a reduction in staff headcount during the period[53](index=53&type=chunk) - Total reversal of impairment loss for trade receivables was **HK$278,000**, mainly due to improved debt recovery[57](index=57&type=chunk) - Losses from associates decreased by **HK$1.48 million**, primarily due to improved business performance of Nanjing Tianyu during the period[60](index=60&type=chunk) - Losses from joint venture Xinyu Rongkai decreased by **HK$1.44 million**, primarily due to lower operating costs during its temporary suspension period[61](index=61&type=chunk) - Adjusted EBITDA increased by **HK$8.20 million**, mainly due to the narrowed losses in core business segments during the period[63](index=63&type=chunk) [Operating Seasonality](index=30&type=section&id=Operating%20Seasonality) Demand for environmental hazardous waste treatment services in Jiangsu Province typically increases in the first half of the year, with hazardous waste treatment service revenue for the twelve months ended June 30, 2025, at approximately HK$227 million, 203,518 tonnes treated, and a pre-tax loss of approximately HK$26.03 million - Demand for environmental hazardous waste treatment and disposal services in Jiangsu Province generally **increases in the first half of the year**[65](index=65&type=chunk) [Capital Expenditure and Commitments](index=30&type=section&id=Capital%20Expenditure%20and%20Commitments) In H1 2025, the Group's capital expenditure was primarily for industrial wastewater and sludge treatment services in the eco-electroplating zone, amounting to approximately HK$15.36 million, with contracted but unprovided capital expenditure at HK$7.99 million and commitment to equity investments at HK$15.98 million as of the reporting period end Capital Expenditure (HK$'000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Hazardous Waste Treatment Service Operating Segment | 568 | 1,220 | | Eco-Electroplating Zone Service Operating Segment | 15,362 | 10,515 | Capital Commitments (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Capital Expenditure for Property, Plant and Equipment | 7,999 | 19,198 | | Contribution to an Equity Investment | 15,976 | 15,915 | - Zhenjiang Xinyu's expansion plan has been **suspended since April 2023**, and alternative solutions are being sought[68](index=68&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a sound financial position, with equity attributable to owners of approximately HK$862.78 million and total consolidated assets of approximately HK$1.25 billion as of June 30, 2025, while cash and bank balances increased to HK$234.20 million, but available unutilized bank financing facilities decreased, with a current ratio of 1.46 times and a gearing ratio of 5.2% - Equity attributable to owners of the Company was approximately **HK$862.78 million**, and total consolidated assets were approximately **HK$1.25 billion**[69](index=69&type=chunk) Cash and Bank Balances and Bank Financing (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Cash and Bank Balances | 234,196 | 220,823 | | Available Unutilized Unsecured Bank Financing Facilities | 25,480 | 51,920 | Liquidity and Gearing Ratios | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Current Ratio | 1.46 times | 1.43 times | | Gearing Ratio | 5.2% | 4.6% | Interest-Bearing Borrowings (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured RMB Bank Borrowings | 21,920 | 21,280 | | Unsecured RMB Bank Borrowings | 28,123 | 23,472 | | **Total** | **50,043** | **44,752** | [Capital Structure](index=35&type=section&id=Capital%20Structure) As of June 30, 2025, there were no significant changes in the Company's capital structure compared to December 31, 2024 - The Company's capital structure as of **June 30, 2025**, showed no significant changes compared to **December 31, 2024**[75](index=75&type=chunk) [Significant Investments and Their Performance](index=35&type=section&id=Significant%20Investments%20and%20Their%20Performance) As of June 30, 2025, the Group's total fair value of equity investments in Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei was HK$85.10 million, a decrease from end-2024, with these investments representing 6.8% of the Group's total assets Fair Value of Significant Equity Investments (HK$'000) | Company | Group's Interest | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | :--- | | Suzhou Xinhua Mei | 18.62% | 9,500 | 12,600 | | Danyang Xinhua Mei | 24.50% | 6,200 | 10,300 | | Qingdao Huamei | 28.67% | 69,400 | 75,500 | | **Total** | | **85,100** | **98,400** | - As of June 30, 2025, the fair value of unlisted equity investments in Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei represented **0.8%, 0.5%, and 5.5%** of the Group's total assets, respectively[78](index=78&type=chunk) [Asset Impairment Testing](index=36&type=section&id=Asset%20Impairment%20Testing) As of June 30, 2025, the Group performed impairment tests on goodwill and its interests in associate Nanjing Tianyu and joint venture Xinyu Rongkai, concluding that no impairment losses were necessary - No impairment loss was deemed necessary for **goodwill** for the six months ended June 30, 2025[79](index=79&type=chunk) - The Group deemed no impairment loss necessary for its interest in **Nanjing Tianyu** for the six months ended June 30, 2025[80](index=80&type=chunk) - The Group deemed no impairment loss necessary for its interest in **Xinyu Rongkai** for the six months ended June 30, 2025[81](index=81&type=chunk) [Pledged Assets](index=37&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged property, plant and equipment, land use rights, and restricted bank deposits with a total carrying value of HK$55.51 million as collateral for bank credit Carrying Value of Pledged Assets (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Property, Plant and Equipment | 44,590 | 47,392 | | Land Use Rights | 7,394 | 7,266 | | Restricted Bank Deposits | 3,523 | 3,309 | | **Total** | **55,507** | **57,967** | Secured Liabilities (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured Bank Borrowings | 21,920 | 21,280 | | Bills Payable | 6,795 | 5,001 | | **Total** | **28,715** | **26,281** | [Risk Management and Corporate Governance](index=19&type=section&id=Risk%20Management%20and%20Corporate%20Governance) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) The Group faces contingent liabilities including legal proceedings, bank loan guarantees for a joint venture, and environmental business permit renewals, with legal proceedings involving dividend disputes with non-controlling interests of a subsidiary, guarantees relating to overdue joint venture loans, and environmental operations requiring continuous validity of operating permits - Subsidiary NUET(JS) faces legal proceedings from two non-controlling shareholders demanding payment of approximately **HK$26.58 million (RMB22.48 million)** in accrued unpaid dividends and interest[32](index=32&type=chunk) - The Company provided a joint and several guarantee for a **RMB120 million** bank loan facility to joint venture Xinyu Rongkai, of which **RMB47.05 million** principal was due and unpaid on June 21, 2025[34](index=34&type=chunk)[35](index=35&type=chunk) - The Group's environmental businesses require valid operating permits from the **Jiangsu Provincial Environmental Protection Department in China** for specific categories of hazardous and/or regulated medical waste and industrial wastewater treatment services[36](index=36&type=chunk) [Foreign Currency Risk](index=38&type=section&id=Foreign%20Currency%20Risk) The Group primarily operates in China, with transactions, assets, and liabilities denominated in RMB, exposing it to RMB-HKD exchange rate fluctuations, and in H1 2025, the average appreciation of RMB against HKD resulted in a positive exchange difference of HK$24.54 million - The Group primarily operates in **China**, with most transactions, assets, and liabilities denominated in **RMB**[85](index=85&type=chunk) - For the six months ended June 30, 2025, the average appreciation of **RMB against HKD** resulted in an overall positive exchange difference of approximately **HK$24.54 million** from the translation of financial statements of subsidiaries, associates, and joint ventures in China[85](index=85&type=chunk) [Interest Rate Risk](index=39&type=section&id=Interest%20Rate%20Risk) The Group manages bank borrowings using fixed interest rates to mitigate risk, with RMB-denominated bank borrowings bearing annual interest rates ranging from 3.08% to 3.50% - The Group's bank borrowings are managed using a mix of fixed and floating interest rates, with **no floating rate bank borrowings**[86](index=86&type=chunk) - RMB-denominated bank borrowings bear different **fixed annual interest rates ranging from 3.08% to 3.50%**[86](index=86&type=chunk) [Credit Risk](index=39&type=section&id=Credit%20Risk) The Group's credit risk primarily arises from trade receivables, lease receivables, and other receivables, with limited credit risk from banks and financial institutions, and as of June 30, 2025, the full-term expected credit loss allowance was HK$17.83 million, representing 19.47% of total trade, lease, and bills receivables - The Group's credit risk primarily arises from **trade receivables, lease receivables, and other receivables**[87](index=87&type=chunk) - As of June 30, 2025, the full-term **ECL allowance** was approximately **HK$17.83 million**, representing approximately **19.47%** of the total carrying amount of trade, lease, and bills receivables of approximately **HK$91.60 million**[88](index=88&type=chunk) [Key Risks and Uncertainties](index=40&type=section&id=Key%20Risks%20and%20Uncertainties) The Group's hazardous waste treatment services business in China continues to incur losses, facing persistent pricing pressure due to local economic adjustments and market uncertainties, and the Group will reduce reliance on specific markets through enhanced market penetration, business restructuring, and industrial upgrading - The Group's business segment providing integrated industrial hazardous waste treatment and disposal services in China continues to incur **losses**[89](index=89&type=chunk) - Uncertainties and challenges faced by the local manufacturing and chemical industries may exert **continuous pricing pressure** on hazardous waste disposal services provided to the Group's specific customer base[89](index=89&type=chunk) - The Group will continue its environmental-related businesses, strengthen business strategies for **market penetration across different regions**, and prudently explore **business restructuring and industrial upgrading** to reduce reliance on and investment in specific markets[89](index=89&type=chunk) [Corporate Governance Practices](index=41&type=section&id=Corporate%20Governance%20Practices) The Company is committed to good corporate governance and complies with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, except for one deviation where Mr. Xi Yu serves as both Chairman and CEO, which the Board believes is currently in the Company's best interest - The Company has complied with all code provisions of the **Corporate Governance Code** in Part 2 of Appendix C1 of the Listing Rules, except for code provision **C.2.1**[96](index=96&type=chunk) - Mr. Xi Yu concurrently holds the roles of **Chairman of the Board and Chief Executive Officer**, constituting a deviation from code provision C.2.1 of the Corporate Governance Code[97](index=97&type=chunk) - The Board believes that combining the roles of Chairman and CEO facilitates the **execution of business strategies** and **maximizes operational efficiency**, with sufficient internal controls in place[97](index=97&type=chunk) [Connected Transactions and Financial Assistance](index=42&type=section&id=Connected%20Transactions%20and%20Financial%20Assistance) There were no disclosable connected transactions during the period, but the Company provided a bank loan guarantee for joint venture Xinyu Rongkai, with part of the loan overdue, and the Group also provided unsecured advances to Xinyu Rongkai, while Executive Directors Mr. Xi Yu and Ms. Zhang Xiaoling have interests in office lease agreements with the Group, and Director Ms. Liu Yujie has investments in other hazardous waste project companies, which the Board deems not to constitute competition - The Group had **no disclosable connected transactions** during the announcement period or for the six months ended June 30, 2025[99](index=99&type=chunk) - The Company provided a bank loan guarantee for joint venture Xinyu Rongkai, with an outstanding loan of approximately **RMB47.05 million** that matured on June 21, 2025[101](index=101&type=chunk) - Advances from Xinyu Rongkai to the Group of approximately **HK$29.70 million** are **unsecured** and bear fixed annual interest rates ranging from **3.20% to 4.05%**[104](index=104&type=chunk) - Executive Directors **Mr. Xi Yu and Ms. Zhang Xiaoling** have interests in office lease agreements with the Group, conducted on terms no less favorable than those available to independent third parties[107](index=107&type=chunk) - Director **Ms. Liu Yujie** holds investments in four companies operating hazardous waste projects, which the Board believes **do not constitute competition** with the Group[109](index=109&type=chunk) [Compliance with Relevant Laws and Regulations](index=45&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) The Group prioritizes legal and regulatory compliance, engaging financial and legal advisors for guidance, and as of June 30, 2025, no significant breaches of relevant laws and regulations materially impacting the Group's business and operations were identified - The Group prioritizes **legal and regulatory compliance** in formulating its policies and practices[111](index=111&type=chunk) - For the six months ended June 30, 2025, the Group was unaware of any **material breaches of relevant laws and regulations** that significantly impacted its business and operations[111](index=111&type=chunk) [Other Information](index=40&type=section&id=Other%20Information) [Dividends](index=40&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, and the final dividend for the 2024 financial year was paid on July 31, 2025 - The Board does not recommend the payment of an **interim dividend** for the six months ended June 30, 2025[90](index=90&type=chunk) - The **final dividend for FY2024** of **HK$0.0016 per share**, totaling approximately **HK$4.86 million**, was paid on July 31, 2025[90](index=90&type=chunk) [Changes in Directors' and Management's Information](index=40&type=section&id=Changes%20in%20Directors%27%20and%20Management%27s%20Information) There have been no significant changes in the information of the directors and management team members for the six months ended June 30, 2025, and since the date of the most recent annual report - There were **no significant changes** in directors' information for the six months ended June 30, 2025[91](index=91&type=chunk) - There were **no significant changes** in the information of the Company's management team members[92](index=92&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=41&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's **listed securities** during the six months ended June 30, 2025[93](index=93&type=chunk) [Events After Reporting Period](index=41&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the six months ended June 30, 2025, and up to the date of this announcement, for either the Company or the Group - Neither the Company nor the Group undertook any **significant events after the reporting period** up to the date of this announcement[94](index=94&type=chunk) [Public Float](index=45&type=section&id=Public%20Float) For the six months ended June 30, 2025, the Company maintained an adequate public float of not less than 25% of its issued shares as required by the Listing Rules - For the six months ended June 30, 2025, the Company maintained an **adequate public float of not less than 25%** of its issued shares as required by the Listing Rules[110](index=110&type=chunk) [Review and Publication](index=46&type=section&id=Review%20and%20Publication) The Company's Audit Committee reviewed the interim financial results, and the independent auditor reviewed the interim financial report in accordance with HKSRS 2410, finding no material issues, with the interim results announcement published on the Company's and HKEX websites - The Audit Committee reviewed the Company's **unaudited condensed consolidated financial results and information** for the six months ended June 30, 2025, with management[112](index=112&type=chunk) - The Company's independent auditor, **Crowe (HK) CPA Limited**, conducted a review in accordance with **HKSRS 2410**, finding no matters to suggest that the interim financial report was not prepared in all material respects in accordance with **HKAS 34 'Interim Financial Reporting'**[113](index=113&type=chunk) - This interim results announcement is available on the Company's website (**www.nuigl.com**) and the HKEX website (**www.hkexnews.hk**)[114](index=114&type=chunk)

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 FF301 II. 已發行股份及/或庫存股份變動 致：香港交易及結算所有限公司 公司名稱: 新宇環保集團有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00436 | 說明 | 新宇環保 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 100,000,000,000 | HKD | | 0.01 | HKD | | 1,000,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 100,000,000,000 | HKD | | 0 ...

6月4日，截至港股收盘，恒生指数上涨0.6%，报23654.03点。新宇环保（00436.HK）收报0.066港元/ 股，上涨34.69%，成交量70万股，成交额4.19万港元，振幅44.9%。 资料显示，新宇环保集团有限公司(「新宇环保」)自2000年成为香港创业板的上市公司(股份编号:8068), 并於2016年8月1日正式於香港主板上市(股份编号:436)。新宇环保自1996年以「汇科」作为品牌在香港 创立注塑精密模具的生产研发基地。累积了多年制造模具及生产无瑕疵塑胶产品的经验,新宇环保一直 知悉在生产过程中环保管理的重要性。於2006年,新宇环保开始进行多元化业务发展,并计划投入环保及 资源化再生业务。於2007年10月,新宇环保收购了以镇江新宇固体废物处置有限公司为首,分别位於江苏 省镇江市、盐城市及泰州市三家环保固体废物处置中心的绝对控股权及管理权,该三家外商独资企业,现 时合计已缴注册资本为1,225万美元,自2003年已经在江苏省内从事工业及医疗危险固体废物的环保处置 及研发综合资源化,该三家环保公司拥有的土地总面积为44,964平方米(共68亩)、设有厂房、焚烧设备、 合营危险废物填埋场设施 ...

Financial Performance - For the year ended December 31, 2024, the Group's revenue from continuing operations decreased by 13.9% to HK$349,416,000 compared to the previous year[16]. - The Group recorded a post-tax loss of HK$31,605,000, an improvement from a net loss of HK$35,767,000 in the previous year[16]. - Adjusted EBITDA in 2024 decreased by 11.7% to HK$72,783,000, down from HK$82,450,000 in 2023[16]. - The loss attributable to owners of the Company was HK$26,335,000, compared to a loss of HK$28,582,000 in 2023[19]. - Total revenue for 2024 decreased by 13.9% to HK$349,416,000 compared to HK$405,612,000 in 2023[77]. - Revenue from environmental treatment and disposal services for industrial and medical wastes fell by 17.8% to HK$224,254,000[77]. - Average gross profit margin decreased from 16.1% in 2023 to 15.7% in 2024, reflecting a decline of 2.5%[77]. - Net loss for the year improved by 11.6% to HK$31,605,000 from HK$35,767,000 in the previous year[77]. - Basic and diluted loss per share improved to HK$0.87 from HK$1.09, a reduction of 20.2%[77]. Assets and Liabilities - Equity attributable to owners of the Company as of December 31, 2024, was HK$869,053,000, down from HK$908,251,000 in 2023[19]. - Total assets as of December 31, 2024, were HK$1,247,615,000, a decrease from HK$1,301,424,000 in 2023[162]. - Non-current assets decreased to HK$893,426,000 in 2024 from HK$969,911,000 in 2023, reflecting a decline of 7.8%[162]. - Total liabilities decreased to HK$283,165,000 from HK$288,065,000 in 2023, representing a decline of 0.3%[163]. - Current liabilities amounted to HK$246,862,000, down from HK$249,980,000 in 2023, indicating a reduction of 1%[163]. - Net current assets improved to HK$107,327,000, compared to HK$81,533,000 in 2023, reflecting an increase of 31.6%[163]. Cash Flow and Capital Expenditure - Cash and cash equivalents of the Group as of December 31, 2024, increased to HK$220,823,000 from HK$186,365,000 in 2023[19]. - The Group's cash and bank balances as of December 31, 2024, totaled HK$220,823,000, an increase from HK$186,365,000 in 2023[105]. - For the year ended December 31, 2024, the Group's capital expenditure for environmental treatment and disposal services for industrial and medical wastes was approximately HK$2,986,000, a decrease of 78.9% from HK$14,152,000 in 2023[98]. - The capital expenditure for industrial sewage and sludge treatment services in the Eco-plating Specialised Zone increased to approximately HK$23,149,000, up 287.5% from HK$5,974,000 in 2023[98]. Operational Highlights - The Company collected approximately 167,964 metric tonnes of waste for treatment and disposal in 2024, significantly up from 96,686 metric tonnes in 2023[46]. - Segment revenue from environmental treatment and disposal services for industrial and medical wastes was approximately HK$224,254,000 in 2024, down from HK$272,671,000 in 2023[46]. - The centralized sewage treatment plant handled 315,038 metric tonnes of plating sewage in 2024, down from 330,615 metric tonnes in 2023, indicating a decline of 4.7%[61]. - The Group's four subsidiaries maintained a licensed annual incineration capacity of 135,400 metric tonnes of hazardous waste and 11,800 metric tonnes of regulated medical waste as of December 31, 2024[70]. Strategic Initiatives - The Company plans to explore business restructuring opportunities in 2025 to enhance operational efficiency and financial performance[22]. - The Company aims to adapt its business strategies in response to ongoing market challenges and uncertainties[21]. - The Group is committed to exploring opportunities for business restructuring and industrial upgrading to enhance the sustainability of its environmental operations[71]. - The Group will strengthen marketing functions and contractual relationships with clients to ensure stable operations amid market transitions[150]. Human Resources - The Group had 401 full-time employees as of December 31, 2024, a reduction of 16.8% from 482 in 2023[136]. - Staff costs for the year ended December 31, 2024, were HK$71,574,000, a decrease of 19.8% from HK$89,272,000 in 2023[136]. - Employee compensation and benefits are aligned with current market levels, including bonuses and medical insurance[140]. Risks and Challenges - The Group faces significant competition in the hazardous waste treatment market, necessitating continuous upgrades to facilities and staff development to maintain competitiveness[149]. - The Group is dependent on the renewal of hazardous waste operating permission licenses from the PRC Government, which poses a risk of temporary suspension or delays in renewal[146]. - The Group faces credit risk from underperforming accounts receivable due to distressed clients amid increased economic uncertainties, necessitating regular assessments of recoverability[158]. - The economic conditions in Mainland China may affect hazardous waste discharge quantities and treatment service pricing, impacting the Group's operations[156].

Financial Performance - Total revenue from continuing operations decreased to HKD 349,416,000 in 2024 from HKD 405,612,000 in 2023, representing a decline of approximately 13.8%[2] - Adjusted EBITDA for 2024 was HKD 72,783,000, down from HKD 82,450,000 in 2023, a decrease of about 11.7%[2] - The loss attributable to shareholders improved to HKD 26,335,000 in 2024 from HKD 33,118,000 in 2023, reflecting a reduction of approximately 20.7%[5] - Basic and diluted loss per share improved to HKD 0.87 in 2024 from HKD 1.09 in 2023[5] - The net loss for the year was HKD 31,605,000, an improvement of 11.6% compared to a loss of HKD 35,767,000 in 2023[66] Revenue Breakdown - Revenue from hazardous waste incineration and landfill services was HKD 224,254,000, down 17.7% from HKD 272,671,000 in the previous year[24] - Revenue from industrial wastewater treatment and related management services was HKD 95,865,000, a decrease of 4.1% compared to HKD 100,481,000 in 2023[24] - Revenue from industrial and medical waste treatment services decreased by 17.8% to HKD 224,254,000 from HKD 272,671,000[66] Assets and Liabilities - Total assets decreased to HKD 1,247,615,000 in 2024 from HKD 1,301,424,000 in 2023, a decline of approximately 4.1%[8] - Total liabilities decreased to HKD 283,165,000 in 2024 from HKD 288,065,000 in 2023, a reduction of about 1.3%[9] - The total reportable segment assets decreased to HKD 1,220,984,000 in 2024 from HKD 1,278,479,000 in 2023, reflecting a reduction of approximately 4.5%[30] Cash Flow and Equities - Cash and cash equivalents increased to HKD 220,823,000 in 2024 from HKD 186,365,000 in 2023, an increase of about 18.4%[2] - The group’s equity attributable to shareholders was approximately HKD 869,053,000, a decrease from HKD 908,251,000 in the previous year[83] Expenses and Costs - Total employee costs decreased to HKD 71,574,000 in 2024, down 19.8% from HKD 89,272,000 in 2023[35] - Sales costs for 2024 were HKD 294,585,000, a reduction of 13.4% compared to HKD 340,195,000 in 2023[35] - Administrative expenses decreased by 12.2% to HKD 43,699,000 from HKD 49,771,000, primarily due to a reduction in workforce[66] Impairment and Recovery - The company reported a net impairment reversal of accounts receivable amounting to HKD 5,009,000 in 2024, compared to a net impairment loss of HKD 15,672,000 in 2023[30] - The company experienced a significant reduction in impairment losses on receivables, which decreased by 68.0% to HKD 5,009,000 from HKD 15,672,000[66] Market Conditions and Risks - The company faces a decline in operating revenue due to intense competition and oversupply in the hazardous waste incineration market, prompting a temporary suspension of some loss-making business units[63] - Increased competition in the hazardous waste disposal market has led to a significant rise in bargaining power for intermediaries, affecting profitability[104] - The economic conditions in mainland China may influence the volume of hazardous waste generated and the pricing for specific waste management services[106] Future Outlook and Strategy - The company plans to focus on improving operational efficiency and exploring new market opportunities to enhance revenue growth in the upcoming year[71] - The company aims to enhance its marketing capabilities and strengthen contracts with existing clients to stabilize operations during market transitions[104] - The company remains optimistic about the future despite uncertainties and challenges, focusing on improving operational conditions and restoring profitability[64] Corporate Governance - The board has proposed a final dividend of HKD 0.0016 per share from retained earnings for the year ending December 31, 2024, subject to shareholder approval[140] - The audit committee, composed of three independent non-executive directors, has reviewed the consolidated financial statements for the year ending December 31, 2024[137] - The company has confirmed compliance with the corporate governance code, except for the separation of the roles of chairman and CEO, which is currently held by the same individual[133]

Group 1 - A total of 220 stocks were investigated by institutions in the past week, with YHLO being the most researched stock [1] - YHLO had 123 institutions participating in the research, including 39 fund companies, 32 securities companies, and 15 insurance companies [2] - For 2024, YHLO reported a revenue of 1.992 billion yuan, a decrease of 2.99% year-on-year, and a net profit attributable to shareholders of 302 million yuan, down 15.03% [2] - YHLO's non-recurring net profit attributable to shareholders was 288 million yuan, an increase of 31.16% year-on-year [2] - YHLO expressed confidence in its growth potential, driven by the large-scale promotion of its iTLA MAX domestic production line and the commercialization of its fully automated biochemical analyzer [2] Group 2 - ZSL Pharma plans to strengthen its market presence through core products like Wuling Capsules and Bailin Tablets, targeting broader coverage in lower-tier cities and community health centers [3] - ZSL Pharma aims to enhance its OTC market presence and improve brand awareness through various promotional activities [3] - ZSL Pharma is focusing on internet marketing and strengthening its sales team to improve market expansion capabilities [3] Group 3 - Guangshengtang's clinical project for its hepatitis B treatment has been included in an innovative drug clinical trial optimization project, indicating recognition from drug regulatory authorities [3] - The inclusion in the trial optimization project is expected to accelerate the drug approval process, benefiting hepatitis B patients [4] - Guangshengtang's hepatitis B plan features unique innovations, including an all-oral regimen and potential suppression of cccDNA [4] Group 4 - The A-share market saw a strong rise, with the Shanghai Composite Index increasing by 1.39%, surpassing the 3400-point mark [4] - The average increase for stocks under institutional research was 1.32%, with Shenghong Technology experiencing the largest gain of nearly 38% [4] - Shenghong Technology's projected net profit for Q1 2025 is between 780 million and 980 million yuan, reflecting significant year-on-year and quarter-on-quarter growth [4] - Shenghong Technology attributes its performance to its strategy of embracing AI and collaborating with leading international clients [4] Group 5 - Xingtum Control, Chaohongji, Buke Co., and Litong Technology all saw stock price increases exceeding 15% in the past week [5] - Xingtum Control is focused on aerospace measurement and control management, indicating a clear demand in specialized fields [5] - The company also sees significant potential in aerospace digital simulation for future industry development [5]

Financial Performance - Revenue from continuing operations for the six months ended June 30, 2024, decreased by 17.2% to approximately HK$166,070,000 compared to approximately HK$200,638,000 for the corresponding period in 2023[7]. - Net loss for the six months ended June 30, 2024, was approximately HK$23,706,000, a decrease of 36.4% compared to approximately HK$37,247,000 for the corresponding period in 2023[7]. - Loss attributable to the owners of the Company for the six months ended June 30, 2024, was approximately HK$20,248,000, decreased by 38.9% compared to approximately HK$33,165,000 for the corresponding period in 2023[7]. - For the six months ended June 30, 2024, total revenue decreased by 17.2% to HK$166,070,000 compared to HK$200,638,000 in the same period of 2023[29]. - The net loss for the same period was approximately HK$23,706,000, a reduction of 36.4% from HK$37,247,000 in 2023[9]. - The loss attributable to owners of the company was approximately HK$20,248,000, down 38.9% from HK$33,165,000 in the previous year[9]. - Adjusted EBITDA increased by 9.1% to HK$29,221,000 compared to HK$26,794,000 in the same period of 2023[29]. - The gross profit margin for the Group decreased, mainly attributed to the decline in unit handling price of hazardous waste treatment services[30]. - The total comprehensive loss for the period attributable to owners of the Company was HK$15,019,000, compared to HK$66,498,000 in the prior year, indicating a significant reduction of 77.6%[150]. Cash and Liquidity - Cash and cash equivalents of the Group at June 30, 2024, was approximately HK$212,302,000, an increase of 13.9% compared to approximately HK$186,365,000 at December 31, 2023[7]. - The Group's cash and bank balances totaled HK$212,302,000 as of June 30, 2024, an increase from HK$186,365,000 as of December 31, 2023[37]. - The net cash generated from operating activities was HK$31,886, compared to a net cash used of HK$6,734 in the same period of 2023[159]. - The company reported a net cash used in investing activities of HK$11,682 for the six months ended June 30, 2024, compared to HK$26,737 in the same period of 2023[159]. - The Group's current ratio as of June 30, 2024, was 1.34 times, slightly up from 1.33 times on December 31, 2023[41]. Debt and Borrowings - Bank borrowings of the Group at June 30, 2024, was approximately HK$53,700,000, an increase of 22.0% compared to approximately HK$44,000,000 at December 31, 2023[8]. - The total interest-bearing borrowings increased to HK$53,864,000 as of June 30, 2024, compared to HK$44,332,000 on December 31, 2023, resulting in a gearing ratio of 5.5%, up from 4.4%[41]. - The secured RMB bank borrowings were HK$21,480,000 as of June 30, 2024, down from HK$22,000,000 on December 31, 2023[44]. Operational Highlights - The total segment revenue from environmental treatment and disposal services for industrial and medical wastes was approximately HK$105,297,000, compared to HK$138,808,000 in 2023[10]. - The Group collected approximately 45,591 metric tonnes of hazardous waste, slightly down from 45,792 metric tonnes in the same period last year[11]. - The average utilization rate of the centralized sewage treatment plant was 86.2%, down from 91.8% in 2023, while the average treatment capacity utilization increased to 20.3% from 15.7%[21]. - The Group's long-term equity investments in three plastic materials dyeing entities reported pre-tax profit margins of 2.6%, 2.7%, and 5.9% for Suzhou New Huamei, Danyang New Huamei, and Qingdao Huamei, respectively, compared to lower margins in 2023[23]. - The Group's revenue from integrated treatment and disposal services for hazardous waste was approximately HK$239,160,000 for 96,485 metric tonnes of waste collected and disposed, compared to HK$325,479,000 for 96,274 metric tonnes in the previous period[31]. Dividends and Shareholder Returns - The Board resolved not to declare a dividend for the six months ended June 30, 2024[8]. - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024, while a final dividend of HK$0.0016 per ordinary share, totaling approximately HK$4,857,000, has been recognized as a liability[76]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the six months ended June 30, 2024, except for code provision C.2.1 regarding the separation of roles of Chairman and CEO[87]. - The roles of Chairman and CEO are currently held by the same individual, Mr. XI Yu, which the Board believes is appropriate for facilitating business strategy execution[88]. - The Company has adopted the Model Code for Securities Transactions by Directors, confirming compliance with the required standards throughout the six months ended June 30, 2024[91]. Legal and Regulatory Matters - The asset preservation order related to ongoing legal proceedings will remain in effect until March 17, 2025, unless extended or lifted by the court[60]. - The Group has not encountered any material non-compliance with relevant laws and regulations during the six months ended June 30, 2024, that significantly impacts its business operations[135]. Future Outlook - The Group remains optimistic about future operations and aims to return to profitability while maintaining a strong focus on environmental protection and waste management[27]. - The Group plans to explore business restructuring and industrial upgrading opportunities to enhance the sustainability of its environmental operations[26]. - The Group plans to strengthen its business strategy for geographical market penetration and explore business restructuring to reduce dependency on specific markets[74].

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Overview of Financial Highlights](index=1&type=section&id=Overview%20of%20Financial%20Highlights) For H1 2024, New Universe Environmental Group's revenue from continuing operations decreased by 17.2%, while net loss and loss attributable to owners of the Company significantly narrowed | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 166,070 | 200,638 | -17.2% | | Net loss | (23,706) | (37,247) | -36.4% | | Loss attributable to owners of the Company | (20,248) | (33,165) | -38.9% | | Basic loss per share (HK cents) | (0.67) | (1.09) | -38.5% | | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 888,574 | 908,251 | -2.2% | | Cash and cash equivalents | 212,302 | 186,365 | +13.9% | | Bank borrowings | 53,700 | 44,000 | +22.0% | - The Board resolved not to declare a dividend for the six months ended June 30, 2024[1](index=1&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2024, the Group's continuing operations generated HKD 166,070 thousand revenue, with a net loss of HKD 23,706 thousand, significantly narrowed by the absence of discontinued operations losses | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Revenue (continuing operations) | 166,070 | 200,638 | | Cost of sales | (146,139) | (175,372) | | Gross profit | 19,931 | 25,266 | | Operating loss | (8,725) | (14,529) | | Loss before tax | (18,847) | (23,577) | | Loss from continuing operations | (23,706) | (29,978) | | Loss from discontinued operations | – | (7,269) | | Loss for the period | (23,706) | (37,247) | | Loss attributable to owners of the Company | (20,248) | (33,165) | - Basic and diluted loss per share improved from **0.85 HK cents** (continuing operations) and **1.09 HK cents** (continuing and discontinued operations) in H1 2023 to **0.67 HK cents** in H1 2024[3](index=3&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2024, the Group's total comprehensive loss significantly narrowed to HKD 20,895 thousand, driven by a positive fair value change in equity investments and reduced negative exchange differences | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Loss for the period | (23,706) | (37,247) | | Exchange differences (translation of overseas subsidiaries) | (15,892) | (29,219) | | Fair value change of equity investments at fair value through other comprehensive income | 24,200 | (500) | | Other comprehensive income for the period, net of tax | 2,811 | (38,259) | | Total comprehensive loss for the period | (20,895) | (75,506) | | Total comprehensive loss attributable to owners of the Company | (15,019) | (66,498) | - Fair value change of equity investments turned from a **loss of HKD 500 thousand** in H1 2023 to a **gain of HKD 24,200 thousand** in H1 2024, positively impacting comprehensive income[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets slightly decreased to HKD 1,279,187 thousand, but net current assets increased, driven by significant growth in equity investment fair value and reduced accounts payable | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Non-current assets | 939,650 | 969,911 | | Current assets | 339,537 | 331,513 | | Current liabilities | 252,771 | 249,980 | | Net current assets | 86,766 | 81,533 | | Total assets | 1,279,187 | 1,301,424 | | Total liabilities | 291,381 | 288,065 | | Net assets | 987,806 | 1,013,359 | | Equity attributable to owners of the Company | 888,574 | 908,251 | - Equity investments at fair value through other comprehensive income increased from **HKD 81,500 thousand** as of December 31, 2023, to **HKD 105,700 thousand** as of June 30, 2024[5](index=5&type=chunk) - Accounts and notes receivable decreased from **HKD 92,617 thousand** as of December 31, 2023, to **HKD 67,799 thousand** as of June 30, 2024, and accounts payable decreased from **HKD 59,392 thousand** to **HKD 39,409 thousand**[5](index=5&type=chunk) [Notes to the Unaudited Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements) [1. Basis of Preparation](index=7&type=section&id=1.%20Basis%20of%20Preparation) These condensed consolidated interim financial statements are prepared in accordance with the HKEX Listing Rules and HKAS 34 "Interim Financial Reporting" and were approved by the Board on August 21, 2024 - Financial statements prepared in accordance with Appendix D2 of the HKEX Listing Rules and HKAS 34 "Interim Financial Reporting"[7](index=7&type=chunk) [2. Changes in Accounting Policies](index=7&type=section&id=2.%20Changes%20in%20Accounting%20Policies) The Group has applied revised HKFRSs issued by the HKICPA, but these changes have no significant impact on the results and financial position of the current or prior periods - Several revised HKFRSs applied, including liability classification, leases, and supplier finance arrangement disclosures[8](index=8&type=chunk) - Accounting policy changes have no significant impact on the Group's results and financial position for the current or prior periods[8](index=8&type=chunk) [3. Revenue and Segment Information](index=8&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's H1 2024 revenue of HKD 166,070 thousand primarily came from hazardous waste, industrial wastewater treatment, and factory leasing, with the waste treatment segment showing a revenue decrease - Revenue from continuing operations refers to revenue generated from hazardous waste incineration and landfill services, industrial wastewater treatment services, provision of related supporting and management services, and provision of factory facilities[11](index=11&type=chunk) | Service Type | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Hazardous waste incineration and landfill services | 105,297 | 138,808 | | Industrial wastewater treatment and related services | 46,282 | 45,533 | | Rental income from factory facilities | 14,491 | 16,297 | | **Total Revenue** | **166,070** | **200,638** | - The Group has three reportable segments: industrial and medical waste environmental treatment and disposal services; environmental electroplating wastewater treatment and related services in environmental electroplating zones; and investment in plastic dyeing business[13](index=13&type=chunk) [3(c) Segment Results, Assets and Liabilities](index=10&type=section&id=3(c)%20Segment%20Results,%20Assets%20and%20Liabilities) The waste environmental treatment and disposal segment recorded a pre-tax loss of HKD 27,403 thousand in H1 2024, while the wastewater environmental treatment segment recorded a profit of HKD 12,677 thousand, and the plastic dyeing investment segment contributed a profit of HKD 3,425 thousand | Segment | H1 2024 Revenue (HKD thousands) | H1 2024 Result (HKD thousands) | | :--- | :--- | :--- | | Waste environmental treatment and disposal | 105,297 | (27,403) | | Wastewater environmental treatment, management services, utilities and facilities | 60,773 | 12,677 | | Plastic dyeing investment | 3,745 | 3,425 | | **Segment Subtotal** | **169,815** | **(11,301)** | - As of the end of the reporting period, assets for the waste environmental treatment and disposal segment were **HKD 848,644 thousand**, for the wastewater environmental treatment segment were **HKD 305,495 thousand**, and for the plastic dyeing investment segment were **HKD 109,417 thousand**[14](index=14&type=chunk) [3(d) Reconciliation of Reportable Segment Revenue, Profit or Loss, Assets and Liabilities](index=12&type=section&id=3(d)%20Reconciliation%20of%20Reportable%20Segment%20Revenue,%20Profit%20or%20Loss,%20Assets%20and%20Liabilities) This section provides a reconciliation between the segments and the consolidated financial statements, showing the sources of consolidated revenue from continuing operations, loss before tax, total assets, and total liabilities | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Consolidated revenue | 166,070 | 200,638 | | Reportable segment loss | (11,301) | (14,852) | | Unallocated head office and corporate expenses, net | (7,546) | (8,725) | | Consolidated loss before tax | (18,847) | (23,577) | | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Reportable segment assets | 1,263,556 | 1,278,479 | | Unallocated head office and corporate assets | 15,631 | 22,945 | | Consolidated total assets | 1,279,187 | 1,301,424 | | Consolidated total liabilities | 291,381 | 288,065 | [3(e) Geographical Information](index=12&type=section&id=3(e)%20Geographical%20Information) All the Group's revenue and non-current assets are generated from and located in China, thus no geographical analysis is presented - All the Group's revenue and non-current assets are generated from and located in China[17](index=17&type=chunk) [3(f) Major Customers](index=12&type=section&id=3(f)%20Major%20Customers) For the six months ended June 30, 2024, the Group had no major customers whose transactions exceeded 10% or more of total revenue - For the six months ended June 30, 2024, there were no major customers whose transactions exceeded **10% or more** of the Group's total revenue[18](index=18&type=chunk) [4. Other Income](index=13&type=section&id=4.%20Other%20Income) For H1 2024, other income primarily comprised dividend income from equity investments at fair value through other comprehensive income, totaling HKD 3,745 thousand, a slight decrease from the prior year | Source | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Dividend income from equity investments at fair value through other comprehensive income | 3,745 | 3,945 | [5. Other Revenue](index=13&type=section&id=5.%20Other%20Revenue) For H1 2024, total other revenue was HKD 3,564 thousand, a significant increase from the prior year, mainly due to waivers and discounts received from service providers | Source | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Waivers and discounts received from service providers | 2,515 | – | | VAT refunds | 62 | 1,031 | | Government grants | – | 41 | | Release of deferred government grants | 816 | 1,054 | | Miscellaneous income | 171 | 392 | | **Total** | **3,564** | **2,518** | - The net increase in other revenue for the period was mainly due to waivers and discounts received from various service providers[19](index=19&type=chunk) [6. Finance Income and Costs](index=14&type=section&id=6.%20Finance%20Income%20and%20Costs) For H1 2024, net finance income was HKD 913 thousand, a decrease from the prior year, mainly due to lower interest income from short-term bank deposits and foreign exchange losses, while total finance costs also decreased | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Interest income from short-term bank deposits | 2,052 | 2,655 | | Net foreign exchange (loss)/gain | (225) | 882 | | **Total finance income** | **1,827** | **3,537** | | Interest expense on bank borrowings | 908 | 2,037 | | Interest expense on lease liabilities | 6 | 14 | | **Total finance costs** | **914** | **2,051** | | **Net finance income** | **913** | **1,486** | - The net decrease in finance income was mainly due to a decrease in interest income from free cash flow funds during the period[21](index=21&type=chunk) - The net decrease in finance costs was mainly due to the Group's reduction of higher-interest borrowings during the period[21](index=21&type=chunk) [7. Loss Before Tax](index=15&type=section&id=7.%20Loss%20Before%20Tax) For H1 2024, loss before tax from continuing operations was net of various expenses, with decreases in depreciation of property, plant and equipment and total staff costs, and a significant reduction in other operating expenses due to the absence of site clearance costs | Expense Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 34,500 | 36,154 | | Depreciation of right-of-use assets | 1,619 | 1,632 | | Other operating expenses | 5,738 | 13,291 | | Total staff costs | 38,398 | 43,436 | | Cost of sales | 146,139 | 175,372 | - The net decrease in other operating expenses was mainly due to the absence of site clearance costs for development land in the current period[22](index=22&type=chunk) - Incident expenses significantly increased from **HKD 20 thousand** in H1 2023 to **HKD 710 thousand** in H1 2024[22](index=22&type=chunk) [8. Income Tax](index=16&type=section&id=8.%20Income%20Tax) For H1 2024, total income tax was HKD 4,859 thousand, a decrease from the prior year, mainly due to lower taxable profits from China operations and changes in China dividend withholding tax | Tax Type | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | China corporate income tax | 4,359 | 4,556 | | Under-provision in prior periods | 267 | 210 | | China dividend withholding tax | – | 1,884 | | Deferred tax (China dividend withholding tax) | – | (1,884) | | Origination and reversal of other temporary differences | 233 | 1,635 | | **Total income tax** | **4,859** | **6,401** | - The net decrease in income tax was mainly due to lower taxable profits from China operations during the period[24](index=24&type=chunk) - China subsidiaries are subject to a corporate income tax rate of **25%**, with high-tech enterprises enjoying a preferential rate of **15%**[24](index=24&type=chunk) [9. Discontinued Operations](index=17&type=section&id=9.%20Discontinued%20Operations) The Group completed the disposal of its entire interest in subsidiary Jiangsu Yuxin Environmental Engineering Management Co., Ltd. on August 3, 2023, resulting in no losses from discontinued operations in H1 2024, compared to a loss of HKD 7,269 thousand in H1 2023 - The Group completed the disposal of its entire interest in Jiangsu Yuxin Environmental Engineering Management Co., Ltd. on August 3, 2023[25](index=25&type=chunk) | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Loss for the period from discontinued operations | – | (7,269) | | Basic and diluted loss per share | – | (0.24) HK cents | [10. Loss Per Share](index=18&type=section&id=10.%20Loss%20Per%20Share) For H1 2024, both basic and diluted loss per share were 0.67 HK cents, an improvement from 1.09 HK cents in the prior year, mainly due to a reduction in loss attributable to owners of the Company | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss attributable to owners of the Company | HKD 20,248,000 | HKD 33,165,000 | | Weighted average number of ordinary shares in issue | 3,035,697,018 shares | 3,035,697,018 shares | | Basic and diluted loss per share | (0.67) HK cents | (1.09) HK cents | [11. Dividends](index=18&type=section&id=11.%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2024[28](index=28&type=chunk) [12. Accounts and Notes Receivable](index=18&type=section&id=12.%20Accounts%20and%20Notes%20Receivable) As of June 30, 2024, total accounts and notes receivable (net of provision for credit losses) were HKD 67,799 thousand, a significant decrease from December 31, 2023, with a corresponding reduction in credit loss provision | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Accounts receivable | 63,213 | 73,337 | | Lease receivables | 21,376 | 15,853 | | Notes receivable | 4,149 | 26,823 | | Provision for credit losses | (20,939) | (23,396) | | **Total (net)** | **67,799** | **92,617** | | Aging | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 29,785 | 57,669 | | 31 to 60 days | 14,291 | 9,236 | | 61 to 90 days | 7,831 | 10,694 | | 91 to 180 days | 6,578 | 6,305 | | 181 to 360 days | 6,026 | 3,738 | | Over one year | 3,288 | 4,975 | | **Total (net)** | **67,799** | **92,617** | - The average credit period for customers of industrial waste, wastewater, and sludge treatment services is generally **60 days**, while for customers of regulated medical waste disposal services, it is extended to **180 days**[31](index=31&type=chunk) [13. Prepayments, Deposits and Other Receivables](index=19&type=section&id=13.%20Prepayments,%20Deposits%20and%20Other%20Receivables) As of June 30, 2024, total prepayments, deposits, and other receivables were HKD 38,930 thousand, an increase from December 31, 2023, mainly due to an increase in amounts due from a joint venture | Item | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Other receivables | 295 | 402 | | Prepayments | 7,930 | 7,990 | | Dividend receivable from equity investments | 3,464 | – | | Amounts due from a joint venture | 16,823 | 13,435 | | Consideration receivable from disposal of a subsidiary | 10,418 | 10,670 | | **Total** | **38,930** | **32,497** | - Amounts due from a joint venture are unsecured, bear interest at **3.55% to 4.05%** per annum, and are subject to agreements with repayment on demand clauses[32](index=32&type=chunk) - The outstanding consideration receivable from the disposal of the entire equity interest in Jiangsu Yuxin is due by **December 29, 2024**, and the Group has urged the buyer to settle the overdue portion[33](index=33&type=chunk) [14. Accounts Payable](index=20&type=section&id=14.%20Accounts%20Payable) As of June 30, 2024, total accounts payable were HKD 39,409 thousand, a significant decrease from December 31, 2023, and are generally settled within 90 to 180 days | Aging | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 9,631 | 12,740 | | 31 to 60 days | 4,278 | 5,422 | | 61 to 90 days | 3,342 | 3,022 | | Over 90 days | 22,158 | 38,208 | | **Total** | **39,409** | **59,392** | - Accounts payable are interest-free and generally settled within **90 to 180 days**[34](index=34&type=chunk) [15. Accruals and Other Payables](index=21&type=section&id=15.%20Accruals%20and%20Other%20Payables) As of June 30, 2024, total accruals and other payables were HKD 153,052 thousand, an increase from December 31, 2023, mainly due to increased payables for property, plant and equipment acquisitions and the recognition of dividends payable to the Company's shareholders | Item | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Wages and bonuses payable | 4,834 | 6,627 | | Accounts payable for acquisition of property, plant and equipment | 14,928 | 9,521 | | Accrued costs for land restoration and soil remediation of abandoned plants | 25,753 | 26,377 | | Dividends payable to shareholders of the Company | 4,857 | – | | Dividends payable to non-controlling interests of a subsidiary | 57,336 | 57,466 | | Other payables | 45,344 | 37,383 | | **Total** | **153,052** | **137,374** | - Dividends payable to non-controlling interests of a subsidiary mainly include amounts attributable to Mr. Xi Yongxiang, Mr. Sun Jiaqing, and Mr. Liu Laigen[35](index=35&type=chunk) - Other payables mainly include deposits received, accrued sales expenses, wastewater treatment costs, and maintenance costs[36](index=36&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=22&type=section&id=Business%20Review) The Group's business review covers industrial and medical waste environmental treatment and disposal services, wastewater treatment services in environmental electroplating zones, and strategic investment in plastic dyeing business, with waste treatment service revenue decreasing but profit margins in environmental electroplating zones and plastic dyeing business generally improving [Industrial and Medical Waste Environmental Treatment and Disposal Services](index=22&type=section&id=Industrial%20and%20Medical%20Waste%20Environmental%20Treatment%20and%20Disposal%20Services) For H1 2024, revenue from industrial and medical waste environmental treatment and disposal services decreased by 24.1% to HKD 105,297 thousand, leading to an expanded pre-tax loss due to reduced revenue and increased costs | Waste Type | H1 2024 Collected & Disposed Waste (tonnes) | H1 2024 Segment Revenue (HKD thousands) | H1 2023 Collected & Disposed Waste (tonnes) | H1 2023 Segment Revenue (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Hazardous industrial waste | 41,946 | 83,318 | 40,623 | 115,910 | | Regulated medical waste | 3,645 | 17,521 | 4,237 | 21,678 | | General industrial waste and others | – | 4,458 | 932 | 1,220 | | **Total** | **45,591** | **105,297** | **45,792** | **138,808** | - The Group's share of net profit from associate Zhenjiang Xinqu increased, but its share of net losses from Nanjing Tianyu and joint venture Xinyu Rongkai persisted[38](index=38&type=chunk)[39](index=39&type=chunk) - Xinyu Rongkai's hazardous industrial waste operating license expired in **October 2023**, pending renewal approval, and facilities are temporarily suspended[40](index=40&type=chunk) [Environmental Electroplating Wastewater Treatment Services in Environmental Electroplating Zones](index=24&type=section&id=Environmental%20Electroplating%20Wastewater%20Treatment%20Services%20in%20Environmental%20Electroplating%20Zones) For H1 2024, revenue from environmental electroplating wastewater treatment services slightly decreased to HKD 60,773 thousand, but the pre-tax segment profit margin significantly improved to 20.9%, with increased wastewater treatment volume and average utilization | Service Type | H1 2024 Segment Revenue (HKD thousands) | H1 2023 Segment Revenue (HKD thousands) | | :--- | :--- | :--- | | Industrial wastewater treatment and provision of utility support and management services | 46,282 | 45,533 | | Rental of plants and facilities | 14,491 | 16,297 | | **Total** | **60,773** | **61,830** | | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Pre-tax segment profit margin | 20.9% | 13.0% | | Average utilization rate of plant buildings and facilities | 86.2% | 91.8% | | Electroplating wastewater treated by centralized wastewater treatment plant (tonnes) | 182,526 | 141,559 | | Average utilization rate of wastewater treatment volume | 20.3% | 15.7% | - The environmental electroplating zone currently has **22 factory buildings** leased by **33 manufacturing customers**, a slight decrease from 35 at the end of last year[44](index=44&type=chunk) [Strategic Investment in Plastic Dyeing Business](index=25&type=section&id=Strategic%20Investment%20in%20Plastic%20Dyeing%20Business) The Group's equity investments in three plastic dyeing entities saw improved pre-tax profit margins for Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei in H1 2024, with HKD 3,745 thousand in dividends declared | Company | H1 2024 Pre-tax Profit Margin | H1 2023 Pre-tax Profit Margin | | :--- | :--- | :--- | | Suzhou Xinhua Mei | 2.6% | 0.3% | | Danyang Xinhua Mei | 2.7% | 1.8% | | Qingdao Huamei | 5.9% | 4.2% | - For H1 2024, Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei declared total dividends of approximately **HKD 3,745 thousand** for their 2023 performance, expected to be distributed in Q4 of this year[45](index=45&type=chunk) [Outlook](index=26&type=section&id=Outlook) The Group continues to face revenue challenges from declining market prices for hazardous waste incineration treatment services in Jiangsu Province, China, and will focus on environmental businesses, explore restructuring, and consider restarting loss-making units to improve profitability - The Group continues to face revenue reduction due to declining market prices for hazardous waste incineration treatment services in Jiangsu Province, China[46](index=46&type=chunk) - The Group will continue to focus on environmental-related businesses, prudently explore business restructuring and industrial upgrading opportunities to enhance the sustainable performance of its environmental businesses[46](index=46&type=chunk) - The Group will also consider restarting certain temporarily suspended loss-making units once market conditions regain vitality[46](index=46&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) The Group's H1 2024 total revenue decreased by 17.2%, with a slight gross margin decline, but significant other revenue growth and improved impairment loss reversal led to a substantial reduction in period loss and loss attributable to owners | Indicator | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 166,070 | 200,638 | -17.2 | | Average gross profit margin | 12.0% | 12.6% | -4.8 | | Other income | 3,745 | 3,945 | -5.1 | | Other revenue | 3,564 | 2,518 | +41.5 | | Impairment loss reversal/(impairment loss) on accounts receivable, net | 1,927 | (13) | – | | Loss for the period | (23,706) | (37,247) | -36.4 | | Loss attributable to owners of the Company | (20,248) | (33,165) | -38.9 | | Adjusted EBITDA | 29,221 | 26,794 | +9.1 | - The net decrease in total revenue was mainly due to the continuous decline in average unit treatment prices for industrial and medical waste environmental treatment and disposal services in Jiangsu Province, China[48](index=48&type=chunk) - The reduction in the Group's loss, net loss attributable to owners of the Company, and loss per share was mainly attributable to improved performance of industrial wastewater environmental treatment services in the environmental electroplating zone, and the absence of losses from discontinued operations in the current period[49](index=49&type=chunk) [Operating Seasonality](index=29&type=section&id=Operating%20Seasonality) The demand for environmental hazardous waste treatment and disposal services in Jiangsu Province generally increases in the first half of the year, with the business generating approximately HKD 239,160 thousand in revenue and a pre-tax loss of HKD 21,228 thousand for the twelve months ended June 30, 2024 - Demand for environmental hazardous waste treatment and disposal services in Jiangsu Province generally increases in the first half of the year[50](index=50&type=chunk) | Indicator | 12 months ended June 30, 2024 | 12 months ended June 30, 2023 | | :--- | :--- | :--- | | Revenue from integrated hazardous waste treatment and disposal services | HKD 239,160 thousand | HKD 325,479 thousand | | Waste collected and disposed | 96,485 tonnes | 96,274 tonnes | | Loss before tax | HKD 21,228 thousand | HKD 23,130 thousand | [Capital Expenditure](index=29&type=section&id=Capital%20Expenditure) For H1 2024, the Group's capital expenditure for the environmental hazardous waste treatment and disposal services operating segment was approximately HKD 1,220 thousand, while for industrial wastewater and sludge treatment services in the environmental electroplating zone, it was approximately HKD 10,515 thousand | Item | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | | :--- | :--- | :--- | | Property, plant and equipment for environmental hazardous waste treatment and disposal services operating segment | 1,220 | 7,041 | | Property, plant and equipment for industrial wastewater and sludge treatment services and provision of facilities and support in environmental electroplating zone operating segment | 10,515 | 9,078 | [Capital Commitments](index=30&type=section&id=Capital%20Commitments) As of the reporting period end, the Group's total contracted but unprovided capital commitments amounted to HKD 31,455 thousand, primarily for capital expenditure on property, plant and equipment, and contributions to an equity investment | Item | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Capital expenditure on property, plant and equipment | 31,455 | 44,084 | | Contribution to an equity investment | 15,976 | 15,976 | - Zhenjiang Xinyu will further invest **USD 15,000,000** for expansion plans, including new incinerators, technological upgrades, and optimization of other facilities, with an additional capital injection of **USD 5,000,000** pending approval from relevant Chinese government authorities[53](index=53&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a moderately sound financial position, with cash and cash equivalents increasing to HKD 212,302 thousand as of June 30, 2024, and a current ratio of 1.34 times and gearing ratio of 5.5%, indicating good liquidity and a stable capital structure - The Group utilizes its internally generated cash flows and bank financing to fund its operations, settle its debts and liabilities as they fall due, and will fund its contracted capital commitments[54](index=54&type=chunk) | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 212,302 | 186,365 | | Available unutilized unsecured bank facilities | 139,778 | 153,300 | | Current ratio | 1.34 times | 1.33 times | | Gearing ratio | 5.5% | 4.4% | | Borrowing Type | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Secured RMB bank borrowings | 21,480 | 22,000 | | Unsecured RMB bank borrowings | 32,220 | 22,000 | | **Total bank borrowings** | **53,700** | **44,000** | | Lease liabilities | 164 | 332 | | **Total interest-bearing borrowings** | **53,864** | **44,332** | [Capital Structure](index=34&type=section&id=Capital%20Structure) There were no significant changes in the Company's capital structure as of June 30, 2024, compared to December 31, 2023 - There were no significant changes in the Company's capital structure as of June 30, 2024, compared to December 31, 2023[62](index=62&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=34&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) The Company had no other significant investments or significant acquisitions and disposals of subsidiaries, associates, and joint ventures during the six months ended June 30, 2024 - The Company had no other significant investments or significant acquisitions and disposals of subsidiaries, associates, and joint ventures during the six months ended June 30, 2024[63](index=63&type=chunk) [Significant Investments Held and Their Performance](index=34&type=section&id=Significant%20Investments%20Held%20and%20Their%20Performance) As of June 30, 2024, the Group's total fair value of equity investments in Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei was HKD 105,700 thousand, an increase from December 31, 2023, with improved operating profit before tax for each company | Company | Group's Interest | H1 2024 Operating Profit Before Tax (HKD thousands) | H1 2023 Operating Profit Before Tax (HKD thousands) | Group's Share of Fair Value as of June 30, 2024 (HKD thousands) | Group's Share of Fair Value as of December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Suzhou Xinhua Mei | 18.62% | 3,347 | 2,561 | 12,200 | 7,000 | | Danyang Xinhua Mei | 24.50% | 4,286 | 3,644 | 11,100 | 7,600 | | Qingdao Huamei | 28.67% | 18,538 | 10,812 | 82,400 | 66,900 | | **Total** | | **26,171** | **17,017** | **105,700** | **81,500** | - As of June 30, 2024, the fair values of unlisted equity investments in Suzhou Xinhua Mei, Danyang Xinhua Mei, and Qingdao Huamei accounted for **1.0%**, **0.9%**, and **6.4%** of the Group's total assets, respectively (December 31, 2023: 0.5%, 0.6%, and 5.1%)[65](index=65&type=chunk) [Impairment Test on Goodwill](index=35&type=section&id=Impairment%20Test%20on%20Goodwill) For H1 2024, the Group conducted an impairment test on goodwill and determined that no impairment loss was necessary, based on cash flow forecasts for Zhenjiang Xinyu and Yancheng Yuxin Solid Waste Disposal Co., Ltd., using a pre-tax discount rate of 15.75% - Goodwill impairment test based on cash flow forecasts for cash-generating units (Zhenjiang Xinyu and Yancheng Yuxin) operating at licensed incineration and disposal capacity with a **2% growth rate**[66](index=66&type=chunk) - The assessment used a pre-tax discount rate of **15.75%** (December 31, 2023: 16.12%)[66](index=66&type=chunk) - For the six months ended June 30, 2024, no impairment loss on goodwill was deemed necessary[66](index=66&type=chunk) [Impairment Test on Interest in an Associate (Nanjing Tianyu)](index=35&type=section&id=Impairment%20Test%20on%20Interest%20in%20an%20Associate%20(Nanjing%20Tianyu)) As of June 30, 2024, the Group conducted an impairment test on its interest in Nanjing Tianyu and determined that no impairment loss was necessary, based on cash flow forecasts using a pre-tax discount rate of 13.46% - The recoverable amount of the interest in Nanjing Tianyu was assessed based on its cash flow forecasts operating at licensed incineration and disposal capacity (**38,000 tonnes** of hazardous industrial waste per annum) with a **2% growth rate**[67](index=67&type=chunk) - The assessment used a pre-tax discount rate of **13.46%** (December 31, 2023: 15.57%)[67](index=67&type=chunk) - For the six months ended June 30, 2024, the Group determined that no impairment loss on its interest in Nanjing Tianyu was necessary[67](index=67&type=chunk) [Pledged Assets](index=36&type=section&id=Pledged%20Assets) As of June 30, 2024, the Group pledged certain property, plant and equipment and land use rights as collateral for bank credit, with a total carrying value of HKD 59,403 thousand and secured bank borrowings of HKD 21,480 thousand | Collateral Type | June 30, 2024 Carrying Value (HKD thousands) | December 31, 2023 Carrying Value (HKD thousands) | | :--- | :--- | :--- | | Property, plant and equipment | 51,981 | 57,483 | | Land use rights | 7,422 | 7,692 | | **Total** | **59,403** | **65,175** | | Secured bank borrowings | 21,480 | 22,000 | [Contingent Liabilities](index=36&type=section&id=Contingent%20Liabilities) The Group faces legal proceedings against subsidiary NUET(JS) involving unpaid dividends and related interest, with a property preservation order granted for 38.54% equity interest in Zhenjiang Xinyu, though directors believe it will not adversely affect normal operations - NUET(JS) faces legal proceedings from two shareholders demanding payment of declared and unpaid dividends of **HKD 26,579,113.60** and related interest[70](index=70&type=chunk) - The court granted a property preservation order for each plaintiff's application, preserving **38.54%** of Zhenjiang Xinyu's equity interest, valid until **March 17, 2025**[70](index=70&type=chunk) - The first-instance judgment dismissed the plaintiff's claims, but the plaintiff has appealed, and the case has been heard, awaiting further judgment[71](index=71&type=chunk) [Employee Information](index=38&type=section&id=Employee%20Information) As of June 30, 2024, the Group's continuing operations employed 425 full-time employees, a decrease from 2023, with staff costs amounting to HKD 38,398 thousand, and a remuneration policy emphasizing motivation and performance with various benefits | Indicator | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Total full-time employees | 425 | 584 | | Hong Kong employees | 16 | 17 | | China employees | 409 | 567 | | Staff costs (including directors' emoluments) | HKD 38,398 thousand | HKD 43,436 thousand | - The Group's remuneration policy emphasizes employee motivation and performance, offering share option schemes, bonuses, medical insurance, MPF contributions (Hong Kong), and China statutory social insurance benefits[72](index=72&type=chunk) [Foreign Currency Risk](index=38&type=section&id=Foreign%20Currency%20Risk) The Group primarily operates in China, facing foreign currency risk from RMB exchange rate fluctuations against HKD, which resulted in a negative exchange difference of approximately HKD 19,839 thousand recognized in other comprehensive income for H1 2024 - The Group primarily operates in China, with most transactions, assets, and liabilities denominated in RMB, facing exchange rate fluctuation risk between RMB and HKD[73](index=73&type=chunk) - For the six months ended June 30, 2024, the average depreciation of RMB against HKD resulted in an overall negative exchange difference of approximately **HKD 19,839 thousand** (2023: HKD 37,329 thousand), recognized in other comprehensive income[73](index=73&type=chunk) [Interest Rate Risk](index=39&type=section&id=Interest%20Rate%20Risk) As of June 30, 2024, the Group's bank borrowings are managed with a mix of fixed and floating interest rates, with RMB-denominated bank borrowings bearing fixed interest rates ranging from 3.20% to 3.50% per annum - The Group's bank borrowings are managed using a mix of fixed and floating interest rates to minimize risk[74](index=74&type=chunk) - RMB-denominated bank borrowings bear different fixed interest rates ranging from **3.20% to 3.50%** per annum (December 31, 2023: 3.20% to 4.00%)[74](index=74&type=chunk) [Credit Risk](index=39&type=section&id=Credit%20Risk) The Group's credit risk primarily arises from accounts receivable, lease receivables, and other receivables, with a provision for credit losses of approximately HKD 20,939 thousand as of June 30, 2024, representing 23.6% of the gross carrying amount - The Group's credit risk primarily arises from accounts receivable, lease receivables, and other receivables, with limited credit risk from cash and cash equivalents and notes receivable from banks and financial institutions[75](index=75&type=chunk) - As of June 30, 2024, **4.6%** and **10.7%** of the gross amounts of accounts receivable and lease receivables were due from the Group's largest customer and top five customers, respectively[75](index=75&type=chunk) | Indicator | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Amount of provision for credit losses | 20,939 | 23,396 | | Gross carrying amount of accounts receivable, lease receivables and notes receivable | 88,738 | 116,013 | | Provision ratio | 23.6% | 20.17% | [Key Risks and Uncertainties Related to the Company's Business Operations](index=40&type=section&id=Key%20Risks%20and%20Uncertainties%20Related%20to%20the%20Company's%20Business%20Operations) The Group faces continuous revenue decline and losses in its industrial hazardous waste integrated treatment and disposal services business segment in China due to market price drops and manufacturing uncertainties, and will mitigate this through market penetration, business restructuring, and industrial upgrading - The Group's business segment providing integrated industrial hazardous waste treatment and disposal services in China faces continuous revenue decline and losses[76](index=76&type=chunk) - Uncertainties and challenges faced by local manufacturing and chemical industries may exert pressure on hazardous waste disposal pricing for the Group's specific customer base[76](index=76&type=chunk) - The Group will continue to engage in environmental-related businesses, strengthen business strategies for market penetration in different geographical areas, prudently explore business restructuring and industrial upgrading to reduce reliance on specific markets and further investments[76](index=76&type=chunk) [Dividends](index=40&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024, while the final dividend for the fiscal year ended 2023 was paid on July 31, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[77](index=77&type=chunk) - The final dividend for the fiscal year ended December 31, 2023, was **HKD 0.0016 per ordinary share**, totaling approximately **HKD 4,857 thousand**, paid on July 31, 2024[77](index=77&type=chunk) [Other Information](index=40&type=section&id=Other%20Information) [Changes in Directors' Information](index=40&type=section&id=Changes%20in%20Directors'%20Information) There were no significant changes in directors' information during the six months ended June 30, 2024 - There were no significant changes in directors' information during the six months ended June 30, 2024[78](index=78&type=chunk) [Management Information](index=41&type=section&id=Management%20Information) There were no significant changes in the Company's management team members' information during the six months ended June 30, 2024 - There were no significant changes in the Company's management team members' information during the six months ended June 30, 2024[80](index=80&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=41&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2024 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2024[81](index=81&type=chunk) [Changes to Constitutional Documents](index=41&type=section&id=Changes%20to%20Constitutional%20Documents) Amendments to the Company's articles of association were approved by shareholders at the Annual General Meeting on May 24, 2024, primarily to comply with Listing Rules requirements for electronic dissemination of corporate communications - Amendments to the Company's articles of association were approved by shareholders at the Company's Annual General Meeting held on May 24, 2024[82](index=82&type=chunk) - The relevant amendments primarily updated the Company's articles to comply with the Listing Rules' amendments regarding electronic dissemination of corporate communications to shareholders[82](index=82&type=chunk) [Events After Reporting Period](index=41&type=section&id=Events%20After%20Reporting%20Period) There were no significant events after the six months ended June 30, 2024, and up to the date of this announcement, for the Company or the Group - There were no significant events after the six months ended June 30, 2024, and up to the date of this announcement, for the Company or the Group[83](index=83&type=chunk) [Corporate Governance Practices](index=41&type=section&id=Corporate%20Governance%20Practices) The Company is committed to establishing good corporate governance practices and complied with all code provisions of the Corporate Governance Code for the six months ended June 30, 2024, except for code provision C.2.1 regarding the separation of Chairman and CEO roles - The Company complied with all code provisions of the Corporate Governance Code set out in Part 2 of Appendix C1 of the Listing Rules, except for code provision C.2.1[85](index=85&type=chunk) - Mr. Xi Yu serves concurrently as Chairman of the Board and Chief Executive Officer of the Company, constituting a deviation from code provision C.2.1 of the Corporate Governance Code[86](index=86&type=chunk) - The Board believes that the combined roles of Chairman and Chief Executive Officer facilitate the execution of the Group's business strategies and maximize operational efficiency, but will continue to review and consider separating the roles when appropriate[86](index=86&type=chunk) [Standard Code for Securities Transactions by Directors](index=42&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and directors confirmed full compliance during the six months ended June 30, 2024 - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[87](index=87&type=chunk) - Directors confirmed their full compliance with the required dealing standards set out in the Standard Code during the six months ended June 30, 2024[87](index=87&type=chunk) [Connected Transactions](index=42&type=section&id=Connected%20Transactions) The Group had no discloseable connected transactions during the reporting period or at any time during the six months ended June 30, 2024 - The Group had no discloseable connected transactions during the reporting period or at any time during the six months ended June 30, 2024[88](index=88&type=chunk) [Financial Assistance and Guarantees to an Affiliate](index=42&type=section&id=Financial%20Assistance%20and%20Guarantees%20to%20an%20Affiliate) The Company provided bank loan guarantees for joint venture Xinyu Rongkai, totaling RMB 120,000,000 and RMB 9,000,000, and also provided unsecured loans and advances for its construction and general operating purposes - The Company and its joint venture partner jointly guaranteed bank loan facilities for Xinyu Rongkai totaling **RMB 120,000,000** (approximately **HKD 128,880,000**), effective until **December 31, 2027**[89](index=89&type=chunk) - The Company provided a guarantee for Xinyu Rongkai's short-term bank facility totaling **RMB 9,000,000** (approximately **HKD 9,666,000**), with a guaranteed amount of **RMB 5,850,000** (approximately **HKD 6,283,000**), effective until **December 4, 2027**[90](index=90&type=chunk) - The Group provided an unsecured loan of **RMB 10,075,000** (approximately **HKD 10,821,000**) to Xinyu Rongkai under a JV loan agreement, bearing interest at **4.05%** per annum, and provided unsecured advances of approximately **HKD 16,823,000**[91](index=91&type=chunk) [Directors' Service Contracts](index=44&type=section&id=Directors'%20Service%20Contracts) No director has entered into a service contract with the Company that is not terminable within one year without payment of compensation (other than statutory compensation) - No director has entered into a service contract with the Company that is not terminable within one year without payment of compensation (other than statutory compensation)[93](index=93&type=chunk) [Directors' Interests in Material Contracts](index=44&type=section&id=Directors'%20Interests%20in%20Material%20Contracts) Executive Directors Mr. Xi Yu and Ms. Zhang Xiaoling have interests in a transaction involving the Group's lease of office property, conducted on terms no less favorable than those available from independent third parties and falling within the Listing Rules' exemption level - Executive Directors Mr. Xi Yu and Ms. Zhang Xiaoling are also directors of the landlord, New Art International Investment Limited[94](index=94&type=chunk) - The Company's indirect wholly-owned subsidiary, Huike Resources Limited, entered into a lease agreement with New Art International Investment Limited for office property in Hong Kong, with a monthly rent of **HKD 80,000**[94](index=94&type=chunk)[95](index=95&type=chunk) - The above transaction was conducted in the ordinary course of the Group's business on terms no less favorable than those available from independent third parties and falls within the de minimis exemption under Rule 14A.76(1)(a) of the Listing Rules[95](index=95&type=chunk) [Directors' Interests in Competing Interests](index=45&type=section&id=Directors'%20Interests%20in%20Competing%20Interests) Executive Director Ms. Liu Yujie holds investments in companies operating hazardous waste projects in four cities in China, but due to the exclusivity of operating licenses and the Group's lack of relevant operations, her investments do not constitute competition with the Group - Executive Director Ms. Liu Yujie holds investments in four companies operating hazardous waste projects in four cities in China, with a controlling interest in one of them[96](index=96&type=chunk) - Due to the exclusivity of operating licenses for hazardous waste operations in each of the aforementioned four cities, and the Group having no relevant operations in those cities, the Board believes Ms. Liu Yujie's investments do not compete with the Group's interests[96](index=96&type=chunk) [Public Float](index=45&type=section&id=Public%20Float) Based on publicly available information and to the best of the directors' knowledge, the Company maintained a sufficient public float of not less than 25% of its issued shares as required by the Listing Rules during the six months ended June 30, 2024 - For the six months ended June 30, 2024, the Company maintained a sufficient public float of not less than **25%** of its issued shares as required by the Listing Rules[97](index=97&type=chunk) [Compliance with Relevant Laws and Regulations](index=45&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) The Group prioritizes legal and regulatory compliance and has engaged financial and legal advisors, and for the six months ended June 30, 2024, was not aware of any material non-compliance with relevant laws and regulations - The Group prioritizes legal and regulatory requirements in formulating its policies and practices and has engaged financial and legal advisors[98](index=98&type=chunk) - For the six months ended June 30, 2024, the Group was not aware of any material non-compliance with relevant laws and regulations that would significantly impact the Group's business and operations[99](index=99&type=chunk) [Audit Committee Review](index=46&type=section&id=Audit%20Committee%20Review) The Company's Audit Committee has reviewed the Company's unaudited consolidated financial results and financial information for the six months ended June 30, 2024, with management - The Audit Committee, comprising three independent non-executive directors, has reviewed the Company's unaudited consolidated financial results and financial information for the six months ended June 30, 2024, with management[100](index=100&type=chunk) [Independent Review of Interim Financial Results](index=46&type=section&id=Independent%20Review%20of%20Interim%20Financial%20Results) The Company's condensed consolidated financial statements for the six months ended June 30, 2024, have been reviewed by independent auditor Crowe (HK) CPA Limited, with no material discrepancies found - The Company's condensed consolidated financial statements for the six months ended June 30, 2024, have been reviewed by independent auditor Crowe (HK) CPA Limited in accordance with Hong Kong Standard on Review Engagements 2410[101](index=101&type=chunk) - The auditor did not identify any matters that caused them to believe that the interim financial report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[101](index=101&type=chunk) [Publication of Interim Results on HKEX and Company Website](index=46&type=section&id=Publication%20of%20Interim%20Results%20on%20HKEX%20and%20Company%20Website) This interim results announcement has been published on the Company's website and the HKEX website, and the interim results report will be published for review in due course - This interim results announcement is published on the Company's website (www.nuigl.com) and the HKEX website (www.hkexnews.hk)[102](index=102&type=chunk)

Financial Performance - For the year ended December 31, 2023, the Group's revenue from continuing operations decreased by 21.4% to HK$405,612,000 compared to the previous year[17]. - The Group recorded a post-tax loss of HK$35,767,000, a decline from a net profit of HK$4,564,000 in the previous year[17]. - Adjusted EBITDA in 2023 decreased by 28.2% to HK$82,450,000, down from HK$114,899,000 in 2022[17]. - Loss attributable to owners of the Company was HK$33,118,000 in 2023, a decline from a profit of HK$7,273,000 in 2022[35]. - Total revenue for 2023 was HK$405,612,000, with 1H 2023 revenue at HK$200,638,000 and 2H 2023 revenue at HK$204,974,000, reflecting a decrease of 21.5% compared to total revenue of HK$516,141,000 in 2022[92]. - The net loss for the year was HK$35,767,000, a significant decrease from a profit of HK$4,564,000 in 2022, representing an 883.7% decline[91]. - Basic loss per share was HK$1.09, compared to earnings per share of HK$0.24 in the previous year, marking a 554.2% decrease[91]. - Gross profit for 2023 was HK$65,417,000, down 44.8% from HK$118,828,000 in 2022[186]. - Operating profit significantly declined to HK$1,275,000 in 2023 from HK$57,827,000 in 2022, representing a decrease of 97.8%[186]. Assets and Liabilities - As of December 31, 2023, the Group's total assets were approximately HK$1,301,424,000, a decrease of about 14% from HK$1,514,046,000 in 2022[114]. - The Group's equity attributable to owners decreased to approximately HK$908,251,000 in 2023 from HK$961,677,000 in 2022, representing a decline of about 5.5%[114]. - Cash and bank balances decreased to HK$186,365,000 in 2023 from HK$270,279,000 in 2022, a reduction of approximately 31%[118]. - Current liabilities decreased to HK$249,980,000 in 2023 from HK$397,336,000 in 2022, representing a reduction of 37.2%[190]. - Total liabilities reduced to HK$288,065,000 in 2023, down 34.3% from HK$438,539,000 in 2022[190]. - Net assets decreased to HK$1,013,359,000 in 2023 from HK$1,075,507,000 in 2022, a decline of 5.8%[190]. - Non-current assets decreased to HK$969,911,000 in 2023 from HK$1,056,515,000 in 2022, a reduction of 8.2%[187]. Cash Flow and Investments - Cash and cash equivalents of the Group as of December 31, 2023, were HK$186,365,000, down from HK$270,279,000 in 2022[19]. - The Group's employee costs for the year ended December 31, 2023, were HK$89,272,000, compared to HK$101,329,000 in 2022[157]. - The Group received total dividends of approximately HK$3,945,000 from equity investments in three plastic dyeing companies, a decrease from HK$4,249,000 in 2022[70]. - The Group recognized a gain of approximately HK$4,945,000 from the disposal of Jiangsu Yu Xin Environmental Engineering Management Company Limited on August 3, 2023[136]. - The Group has contracted capital expenditure of HK$44,084,000 for property, plant, and equipment, up from HK$22,464,000 in 2022, an increase of approximately 96%[108]. Operational Changes and Future Plans - The Company plans to dispose of the operating segment of environmental equipment construction and installation services and temporarily halt operations in certain loss-making units[25]. - In 2024, the Company will explore opportunities for business restructuring to enhance operational efficiency and financial performance[25]. - The Group plans to ensure timely renewal of hazardous waste operating licenses for its subsidiaries with minimal downtime in 2024[81]. - The Group is exploring business restructuring and industrial upgrading opportunities to enhance sustainability in its environmental operations[83]. - The Group aims to strengthen its marketing function and contractual relationships with existing clients to ensure stable operations amid market competition[169]. Market and Competition - The Group faces increased competition in the hazardous waste treatment market, with a growing number of licensed operators and no significant increase in hazardous waste production from upstream manufacturers[169]. - The Group's hazardous waste operating permission licenses are critical and may face risks of suspension or delays in renewal due to compliance with PRC Government regulations[166]. - The Group is committed to maintaining high operational standards and compliance with environmental policies to ensure the renewal of necessary licenses[166]. Environmental and Compliance - The Group has implemented stringent controls over new project construction and continuously upgrades the efficiency of existing plants to mitigate environmental risks[173]. - The Group has appointed independent professionals to monitor environmental emissions and assess potential impacts on society[173]. - The Group's internal control risks have increased due to moderate changes in operational scale, necessitating continuous monitoring and review of risk management systems[173].

Financial Performance - Total revenue from continuing operations for the year ended December 31, 2023, was HKD 405,612, a decrease of 21.5% from HKD 516,141 in 2022[3] - Adjusted EBITDA for 2023 was HKD 82,450, down 28.3% from HKD 114,899 in 2022[3] - The company reported a loss attributable to shareholders of HKD 33,118 for 2023, compared to a profit of HKD 7,273 in 2022[3] - Basic and diluted loss per share for 2023 was HKD 1.09, compared to earnings of HKD 0.24 per share in 2022[3] - The company experienced a net loss of HKD 35,767 for the year, compared to a profit of HKD 4,564 in 2022[8] - The reported segment loss for the year was HKD (1,264,000), compared to a profit of HKD 54,736,000 in the previous year, indicating a significant decline in performance[28] - The company reported a revenue of HKD 1,803,000 in 2023, a significant decrease from HKD 72,810,000 in 2022, reflecting a decline of approximately 97.5%[32] - The net loss after tax for 2023 was HKD 9,481,000, an improvement from a loss of HKD 12,673,000 in 2022, representing a decrease in loss of approximately 25.5%[32] - The net loss from continuing operations was HKD 31,231,000 in 2023, compared to a profit of HKD 17,237,000 in 2022[57] - The attributable loss to equity holders was HKD 33,118,000 in 2023, down from a profit of HKD 7,273,000 in 2022[57] Revenue Breakdown - Revenue from hazardous waste incineration and landfill services was HKD 272,671,000, down 27% from HKD 373,494,000 in the previous year[23] - Revenue from industrial wastewater treatment and related management services was HKD 100,481,000, a decrease of 7.7% compared to HKD 108,323,000 in 2022[23] - Total revenue for the year was HKD 405,612,000, reflecting a decline of 21.4% from HKD 516,141,000 in the previous year[77] - The company's revenue from industrial and medical waste treatment services decreased by 27.0% to HKD 272,671,000 for the year ended December 31, 2023, compared to HKD 373,494,000 in 2022[77] Assets and Liabilities - Cash and cash equivalents as of December 31, 2023, were HKD 186,365, down 30.9% from HKD 270,279 in 2022[3] - Total assets decreased to HKD 1,301,424 in 2023 from HKD 1,514,046 in 2022, reflecting a decline of 14.0%[9] - Total liabilities decreased to HKD 288,065 in 2023 from HKD 438,539 in 2022, a reduction of 34.3%[10] - The total reportable segment assets decreased to HKD 1,278,479,000 from HKD 1,406,098,000, reflecting a reduction of approximately 9.1%[28] - The reportable segment liabilities also decreased to HKD 285,434,000 from HKD 347,466,000, a decline of about 17.9%[28] Dividends - The company declared a final dividend of HKD 0.16 per share for 2023, down from HKD 0.38 in 2022[3] - The company proposed a final dividend of HKD 0.0016 per share for 2023, down from HKD 0.0038 per share in 2022, reflecting a decrease of approximately 57.9%[42] Employee Costs - The total employee costs for 2023 were HKD 89,272,000, a decrease from HKD 101,329,000 in 2022, indicating a reduction of about 11.9%[36] - The group employs 482 full-time employees as of December 31, 2023, down from 614 in 2022, with employee costs totaling HKD 89.27 million, a decrease from HKD 101.33 million in 2022[120] Financing and Investments - The company’s financing income was HKD 5,469,000, while financing costs totaled HKD 3,780,000, resulting in a net financing income of HKD 1,689,000[28] - Total financing income for 2023 was HKD 5,469,000, slightly up from HKD 5,420,000 in 2022, marking an increase of approximately 0.9%[34] - The group has committed capital expenditures of HKD 44,084,000 for property, plant, and equipment, an increase of 96.3% from HKD 22,464,000 in 2022[86] - The group plans to invest an additional USD 15,000,000 in the expansion of its subsidiary in Zhenjiang, which includes the construction of a new hazardous waste incinerator[86] Market Conditions and Risks - The group faces increasing competition in the hazardous waste disposal industry, with more licensed companies entering the market while the volume of hazardous waste generated by upstream manufacturers has not increased proportionately[116] - The economic conditions in mainland China may impact the volume of hazardous waste and pricing for specific waste treatment services offered by the group[116] - The group is addressing credit risk from underperforming accounts receivable due to economic uncertainty, with assessments based on the location of clients in Jiangsu Province[118] - The company relies on the continuous renewal of hazardous waste operating permits from the Chinese government, which poses a risk of temporary suspension or revocation of these permits[112] Corporate Governance - The board of directors believes that having the same person serve as both chairman and CEO is beneficial for executing the company's business strategy[145] - The independent non-executive directors have confirmed their independence in accordance with listing rules[148] - The audit committee, composed of three independent non-executive directors, has reviewed the consolidated financial statements for the year ended December 31, 2023[149] - The company has confirmed compliance with the standards set forth in the listing rules regarding securities transactions by directors[152] Future Outlook - The company remains optimistic about future operations and aims to improve profitability while continuing to prioritize environmental protection and waste management[75] - The company aims to reallocate resources to develop environmental treatment services for hazardous industrial waste and medical waste in Jiangsu Province following the divestment of the loss-making business[71]