Financial Performance - Revenue for 2023 decreased to RMB 46,260 million, down 5.0% from RMB 48,620 million in 2022[3] - Gross profit for 2023 was RMB 717 million, a significant decline of 59.1% compared to RMB 1,753 million in 2022[3] - EBITDA for 2023 dropped to RMB 1,279 million, down 45.7% from RMB 2,357 million in 2022[3] - The company reported a loss before income tax of RMB 315 million for 2023, compared to a profit of RMB 756 million in 2022[3] - Profit attributable to owners of the company for 2023 was a loss of RMB 160 million, a decrease from a profit of RMB 808 million in 2022[3] - The Group's overall net loss was approximately RMB 196 million, representing a decrease of approximately 124.2% compared to a net profit of RMB 811 million last year[39] - The adjusted profit for the year 2023 was approximately RMB 4.4 million, reflecting the company's resilient performance amid a challenging market environment[96] Sales and Production - Total sales volume of self-manufactured steel products in 2023 was 7,733,000 tonnes, an increase of 8.8% from 7,102,000 tonnes in 2022[12] - Revenue from self-manufactured steel products decreased by approximately 2.5% to RMB 27.51 billion in 2023, with export revenue contributing RMB 764 million[66][67] - The average selling price per tonne of self-manufactured steel products decreased to RMB 3,557 in 2023, down 10.5% from RMB 3,974 in 2022[17] - The average gross profit per tonne for self-manufactured steel products was RMB 50 in 2023, a decline of 70.1% from RMB 167 in 2022[20] - The Group sold approximately 3.60 million tonnes of self-manufactured H-section steel products, maintaining its leading position in the PRC H-section steel market since 2009[47] Cost Management and Efficiency - The Group has continued to reduce costs and improve efficiency, increase marketing promotion and investment in environmental protection, and strengthen product research and development[39] - The Group implemented a process cost reduction plan across procurement, logistics, and production to enhance cost efficiency amid a weak domestic steel market[47] Investments and Assets - The company made a provision of RMB 201 million for impairment of properties under development and held for sale, due to ongoing financial pressures in the real estate market[95] - The Group's net assets decreased slightly to RMB 24,978 million in 2023 from RMB 25,285 million in 2022[3] - As of December 31, 2023, the Group had unutilized banking facilities of approximately RMB13.9 billion, slightly up from RMB13.6 billion in 2022[104][106] Dividends and Shareholder Returns - The Group proposed a special dividend of HK$0.05 per ordinary share to celebrate its 20th anniversary of listing, considering the current challenges in the steel industry[43] - The Board proposed a special dividend of approximately HK$186 million (approximately RMB169 million), representing HK$0.05 per ordinary share for the year ended 31 December 2023[124] Market Outlook and Strategy - The Group anticipates that the business environment for the iron and steel industry will face uncertainties in 2024, but overall development trends are expected to gradually improve[83][85] - The Group plans to enhance core competitiveness by focusing on low carbon and energy consumption development, improving efficiency, and increasing the proportion of high value-added products[84][86] Financial Assets and Investments - The Group's financial strategy includes entering into futures or options contracts to mitigate price volatility of steel products and iron ore[127] - The financial assets at fair value through profit or loss reflect the Group's strategy in managing investment risks and returns effectively[146] - The overall performance of the financial investment products indicates a mixed outcome, with both realized and unrealized losses affecting the group's financial health[148]

Investment Rating - The report maintains a "Buy" rating for China Oriental Group (0581) [4] Core Views - The company's performance in Q4 2023 fell short of expectations due to weakened demand and significant cost pressures, leading to a decline in profitability for steel products. Additionally, the real estate business has been adversely affected by the ongoing downturn in the property market [2] - For 2023, the company reported revenue of 46.26 billion RMB, a year-on-year decrease of 4.85%, and a net profit (excluding minority interests) of -160 million RMB, a year-on-year decline of 119.78%. The net profit forecasts for 2024 and 2025 have been revised down to 312 million RMB and 415 million RMB, respectively, with a new forecast for 2026 set at 529 million RMB [2][3] - The steel production for 2023 was 7.73 million tons, an increase of 8.87% year-on-year, but the gross profit per ton of steel dropped to 50 RMB, a decrease of 70.06% year-on-year, primarily due to falling steel prices [2] - The real estate segment reported a loss, with a gross profit of -99 million RMB in 2023, a year-on-year decline of 198%, and a total operating loss of 149 million RMB [2] - The company maintains a relatively high dividend yield, with dividends per share of 0.10 and 0.05 HKD for 2022 and 2023, respectively, resulting in dividend yields of 8.70% and 4.81% [2] Financial Summary - For 2023, the company achieved a revenue of 46,260 million RMB, with a gross profit margin decline of 4.85% [3] - The net profit for 2023 was -160 million RMB, reflecting a significant year-on-year decrease of 119.78% [3] - The projected net profits for 2024, 2025, and 2026 are 312 million RMB, 415 million RMB, and 529 million RMB, respectively [3]

Financial Performance - Revenue rose by 7.2% to RMB 79.3 billion, with a decline in revenue from self-produced steel products by 2.5% to RMB 27.51 billion[2] - EBITDA decreased by 45.7% to RMB 1.279 billion, with an EBITDA margin dropping to 2.8% from 4.8%[3] - The company reported a net loss attributable to equity holders of RMB 1.60 billion, a decline of 119.8% compared to a profit of RMB 808 million in the previous year[3] - The total comprehensive loss for the year amounted to RMB (190,714) thousand, compared to a total comprehensive income of RMB 834,134 thousand in the previous year[7] - The company reported a loss before tax of RMB 314,571,000 for the year ended December 31, 2023, compared to a profit of RMB 755,731,000 for the year ended December 31, 2022, indicating a significant decline in performance[40] - The company reported a net loss for the year of RMB (196,212) thousand, compared to a profit of RMB 811,355 thousand in the previous year[20] - The adjusted annual profit for 2023 was approximately RMB 4.4 million, reflecting the group's resilience in a challenging market environment[86] - The company reported an adjusted annual profit of RMB 4.44 million for the year ended December 31, 2023, compared to RMB 512.56 million in 2022, reflecting a significant decline[87] Production and Sales - Steel production volume increased by 8.9% to 7.73 million tons, while trading volume decreased by 33.3% to 200,000 tons[2] - The total sales volume for 2023 was 7.733 million tons, an increase of approximately 8.9% compared to 2022[76] - The company sold approximately 3.6 million tons of self-produced H-beam products in 2023, maintaining its leadership position in the Chinese H-beam market since 2009[72] - Sales of H-beam products amounted to RMB 12,946,577 thousand, down from RMB 15,409,767 thousand in the previous year, reflecting a decrease of about 16.0%[18] - The steel segment generated revenue of RMB 46,013,691 thousand, while the real estate segment contributed RMB 246,047 thousand, resulting in a total operating loss of RMB 112,477 thousand for the year[20] Assets and Liabilities - The total assets increased by 4.2% to RMB 50.03 billion, while the debt-to-capital ratio rose to 63.0% from 56.7%[3] - Current assets increased to RMB 27,948,717 thousand from RMB 25,312,357 thousand year-on-year, indicating a growth of approximately 10%[8] - The company's cash and cash equivalents rose to RMB 3,618,030 thousand, up from RMB 2,124,697 thousand, reflecting a significant increase of 70%[8] - Total liabilities increased to RMB 25,052,387 thousand from RMB 22,738,943 thousand, representing an increase of approximately 10.2%[9] - The company's long-term borrowings rose to RMB 13,089,962 thousand from RMB 12,116,624 thousand, indicating an increase of about 8%[9] - The equity attributable to the company's equity holders decreased to RMB 24,977,785 thousand from RMB 25,284,647 thousand year-on-year[9] Dividends and Shareholder Returns - The company declared a special dividend of HKD 0.05 per share, an increase of 66.7% from the previous year[3] - The company proposed a special dividend of approximately RMB 168,815,000 for the year ended December 31, 2023, which is pending approval at the upcoming annual general meeting[44] - The company plans to distribute a special dividend of HKD 0.05 per ordinary share for the year 2023, celebrating its 20th anniversary of listing[72] Research and Development - Research and development expenses increased slightly to RMB 353.9 million, compared to RMB 345.9 million in the previous year[5] - The company incurred research and development expenses of RMB 51,516,000 for the year ended December 31, 2023, down from RMB 67,830,000 in 2022, reflecting a reduction in R&D investment[40] Market Conditions and Future Outlook - The steel industry in China is expected to maintain a dynamic balance in supply and demand, with fixed asset investment remaining stable and economic benefits significantly improving in 2023[71] - The company plans to continue focusing on the steel manufacturing and trading business while evaluating opportunities for market expansion and potential acquisitions[16] - The company aims to enhance operational efficiency and sustainability through cost reduction, marketing promotion, and increased investment in environmental protection and product R&D[71] - The steel industry is expected to face uncertainties in 2024, but the group anticipates a gradual improvement in the overall development trend[82] Financial Costs and Taxation - The total financial costs decreased to RMB (425,060) thousand in 2023 from RMB (559,673) thousand in 2022, showing a reduction of 24%[34] - The current income tax expense for the year was RMB 70,480 thousand, down from RMB 178,141 thousand in 2022, representing a decrease of 60.5%[35] - The effective tax rate for the group was calculated at 33.29% for the year ended December 31, 2023, compared to 18.63% in 2022, reflecting changes in tax regulations and profitability[39] Impairments and Provisions - The impairment provision for property, plant, and equipment was RMB (249,842) thousand in 2023, compared to RMB (166,893) thousand in 2022, reflecting a significant increase in impairment[33] - The group has made a provision of RMB 201 million for impairment of receivables related to properties under development and for sale in China's second-tier and lower cities due to ongoing financial pressures in the real estate market[85] Investment Strategy - The company is focusing on investments in emerging industries with high growth potential, such as new generation information technology and high-end equipment manufacturing[150] - The investment strategy includes a macro-hedging approach based on comprehensive economic analysis and evaluation of supply and demand conditions for various commodities[149] - The company aims to maximize expected returns while controlling risks through quantitative investment strategies, including statistical arbitrage and hedging[151]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 13,969 million, a decrease of 4.6% compared to RMB 14,644 million in the same period of 2022[16]. - Gross profit for the same period was RMB 22,059 million, down from RMB 24,999 million in 2022, reflecting a decline of 11.7%[16]. - Profit for the period attributable to owners of the Company was RMB 282 million, a significant decrease from RMB 1,199 million in 2022, representing a decline of 76.5%[16]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.08, compared to RMB 0.32 in the same period of 2022, a decrease of 75%[16]. - The Company reported an EBITDA of RMB 1,050 million for the six months ended June 30, 2023, down from RMB 2,273 million in 2022, a decline of 53.8%[16]. - The Group's net profit for the six months ended June 30, 2023, decreased by approximately 72.9% to around RMB 1.02 billion compared to RMB 3.74 billion for the same period in 2022[38]. - Revenue for the same period was approximately RMB 22.06 billion, representing a decrease of approximately 11.8% compared to the corresponding period last year[38]. - Gross profit decreased by approximately 58.5% to approximately RMB 562 million compared to the same period in 2022[38]. - Interim net profit was approximately RMB 276 million, a decrease of approximately 77.6% from RMB 1.23 billion in the previous year[38]. - EBITDA decreased from approximately RMB 2.27 billion for the corresponding period last year to approximately RMB 1.05 billion[38]. Sales and Production - Sales volume of self-manufactured steel products increased to 3,881,000 tonnes in 2023, up from 3,323,000 tonnes in 2022, an increase of 16.7%[25]. - The average selling price per tonne of self-manufactured steel products decreased to RMB 3,599 in 2023 from RMB 4,406 in 2022, a decline of 18.3%[21]. - The sales volume of H-section steel products was 1,945,000 tonnes, representing 50.1% of total sales volume, with a 6.5% increase compared to the previous year[50]. - The sales volume of strips and strip products increased by 20.8% to 1,442,000 tonnes, accounting for 37.2% of total sales volume[50]. - For the six months ended June 30, 2023, the Group's total sales volume was approximately 3.88 million tonnes, representing an increase of approximately 16.8% compared to 3.32 million tonnes in the same period of 2022[49]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 49,459 million, an increase from RMB 48,024 million in 2022[17]. - The net assets value per share increased slightly to RMB 6.12 in 2023 from RMB 6.07 in 2022[17]. - As of June 30, 2023, the Group had unutilized banking facilities of approximately RMB 15.2 billion, an increase from RMB 13.6 billion as of December 31, 2022[72]. - The current ratio as of June 30, 2023, was 1.3 times, up from 1.2 times on December 31, 2022, while the gearing ratio was 48.5%, compared to 47.3% at the end of 2022[72]. - Cash and cash equivalents amounted to approximately RMB 4,666 million as of June 30, 2023, significantly higher than RMB 2,125 million as of December 31, 2022[72]. - The debt-to-capital ratio was 57.6% as of June 30, 2023, compared to 56.7% on December 31, 2022[74]. - Capital commitments as of June 30, 2023, were approximately RMB 1,558 million, down from RMB 1,925 million as of December 31, 2022[75]. - Contingent liabilities amounted to approximately RMB 15 million as of June 30, 2023, a decrease from RMB 88 million at the end of 2022[78]. Market and Economic Conditions - National production volumes of pig iron, crude steel, and steel products in the first half of 2023 were 452 million tonnes, 536 million tonnes, and 677 million tonnes, representing increases of 2.7%, 1.3%, and 4.4% respectively compared to the same period in 2022[33]. - Infrastructure investment in China increased by 7.2% year-on-year, while the new construction area in the real estate sector saw a decline of 24.9%[33]. - The international environment remains complex and volatile, with economic growth slowing down and uncertainties affecting the global economy[66]. - The Group expects the business environment of the iron and steel industry to face various uncertainties in the second half of 2023, with fluctuations at a low level but an overall gradual improvement trend[66]. Strategic Initiatives - The Group continues to focus on cost reduction, efficiency improvement, and investment in marketing and environmental protection[37]. - The Group aims to achieve better cost efficiency and reduce emissions through investments in projects such as a 150MW mountainous centralized photovoltaic power station and comprehensive utilization of solid waste as new materials in the second half of 2023[67]. - The Group continues to explore horizontal and vertical merger and acquisition opportunities to broaden revenue sources and enhance profitability[68]. - The Group plans to strengthen upstream and downstream integration with its power transmission equipment business in the second half of 2023[67]. - The Group is committed to green and sustainable development, closely following policy developments and exploring carbon reduction technology solutions[67]. Investment and Financial Management - The Group's financial strategy includes a review and reallocation of its currency assets to reduce the impact of exchange rate changes[83]. - The Group utilized a combination of derivatives to manage the volatility of steel products and iron ore prices during the reporting period[84]. - The total amount of purchases made in money market funds during the six months ended June 30, 2023, was RMB 45,063 thousand, while total disposals amounted to RMB 59,878 thousand[87]. - The investment strategy for money market funds focuses on high liquidity and low risk, primarily investing in short-term money market instruments[91]. - The Group's financial assets at fair value through profit or loss include various money market funds, with specific funds showing different levels of investment performance[87]. Dividend and Shareholder Returns - The Group did not recommend the distribution of an interim dividend for 2023, considering the current challenges in the iron and steel industry[39]. - The Board proposed a special dividend of approximately HK$112 million, equivalent to approximately RMB102 million, which was approved by shareholders and paid on August 18, 2023[84]. - The Group will evaluate the possibility of increasing dividend distributions to reward shareholders under appropriate circumstances[68].

Financial Performance - Steel product sales volume increased by 16.8% to 3.88 million tons, while trading volume rose by 12.7% to 3.98 million tons compared to the same period last year[2]. - Revenue from self-produced steel products decreased by 4.6% to RMB 13.97 billion, while revenue from power equipment sales increased by 8.1% to RMB 1.62 billion[2]. - EBITDA dropped by 53.8% to RMB 1.05 billion, with an EBITDA margin of 4.8% compared to 9.1% in the previous year[3]. - Net profit for the period fell by 77.6% to RMB 276.14 million, with earnings per share decreasing by 75.0% to RMB 0.08[3]. - For the six months ended June 30, 2023, total sales amounted to RMB 22,058,731 thousand, a decrease from RMB 24,998,775 thousand for the same period in 2022, representing a decline of approximately 7.8%[20]. - The company reported a net profit of RMB 276,135 thousand for the six months ended June 30, 2023, compared to RMB 1,230,020 thousand for the same period in 2022, reflecting a significant decrease[22]. - The profit before tax for the six months ended June 30, 2023, was RMB 266,002 thousand, a significant decrease from RMB 1,490,097 thousand in the same period of 2022, representing a decline of approximately 82.1%[31]. - The basic earnings per share for the six months ended June 30, 2023, was RMB 0.08, down from RMB 0.32 in the same period of 2022, indicating a decrease of 75%[32]. - Revenue for the first half of 2023 was approximately RMB 22.06 billion, down about 11.8% year-on-year[58]. Assets and Liabilities - Total assets increased by 3.0% to RMB 49.46 billion as of June 30, 2023, compared to RMB 48.02 billion at the end of 2022[3]. - Total liabilities as of June 30, 2023, were RMB 24,011,717 thousand, up from RMB 22,738,943 thousand at the end of 2022, indicating an increase of about 5.6%[10]. - The company's equity attributable to owners increased to RMB 25,447,565 thousand from RMB 25,284,647 thousand, showing a growth of approximately 0.65%[10]. - Cash and cash equivalents at the end of the period increased to RMB 4,666,094 thousand from RMB 2,124,697 thousand, marking a significant rise of approximately 119.5%[11]. - The company's long-term bank deposits decreased to RMB 1,590,000 thousand from RMB 2,090,000 thousand, a decline of approximately 23.9%[9]. - The total borrowings as of June 30, 2023, reached RMB 14.60 billion, up from RMB 13.44 billion as of December 31, 2022, representing an increase of approximately 8.7%[48]. Revenue Breakdown - The total revenue from the steel division was RMB 21,975,108 thousand, while the real estate division contributed RMB 83,623 thousand to the total revenue[22]. - The revenue from H-beam steel products was RMB 7,055,205 thousand, down from RMB 8,422,123 thousand in the previous year, reflecting a decrease of about 16.2%[20]. - The iron ore revenue decreased to RMB 4,570,854 thousand from RMB 6,182,948 thousand, marking a decline of approximately 26.0%[20]. - The real estate segment generated revenue of RMB 83,623 thousand, significantly up from RMB 32,206 thousand, indicating an increase of approximately 159.0%[20]. Cost and Profitability - The gross profit margin for self-produced steel products decreased by 64.4% to RMB 145 per ton[2]. - The company reported a significant decline in gross profit from trading steel products and related materials, down 92.5% to RMB 0.19 billion[2]. - Gross profit for the first half of 2023 was approximately RMB 562 million, a decrease of about 58.5% from RMB 1.35 billion in the same period of 2022, with a gross margin of 4.0%[65]. - The average selling price of self-produced steel products fell by 18.3% to approximately RMB 3,599 per ton[58]. - The average cost per ton of steel products was RMB 3,454, leading to a gross profit per ton of RMB 145, a decrease of 64.4% from RMB 407 in the same period of 2022[66]. Dividends and Shareholder Returns - The company did not declare an interim dividend, compared to HKD 0.07 per share in the same period last year[3]. - The total dividend paid for the six months ended June 30, 2023, was RMB 101,521 thousand, compared to RMB 284,532 thousand in the same period of 2022, reflecting a reduction of approximately 64.3%[34]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2023, contrasting with the interim dividend of approximately RMB 2.29 billion paid in the same period of 2022[35]. Research and Development - Research and development expenses increased to RMB 167.24 million from RMB 156.17 million, reflecting a focus on innovation[6]. - The company’s research and development expenses remained relatively stable, with a slight decrease from RMB 35,067 thousand in 2022 to RMB 35,002 thousand in 2023[31]. Market Outlook and Strategy - The outlook for the second half of 2023 indicates a complex international environment with slowing economic growth and inflation pressures, but infrastructure construction is expected to continue to drive demand[69]. - The group anticipates a slight decline in both steel supply and demand in 2023, with a cautious optimism for gradual improvement in the overall development trend[70]. - The company is focusing on cost reduction and efficiency improvement through various measures, including procurement and logistics optimization[59]. - The company is currently evaluating the comprehensive impact of new accounting standards and interpretations that will take effect from January 1, 2024[18]. Cash Flow and Operating Activities - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 598,770 thousand, compared to RMB 563,267 thousand for the same period in 2022, reflecting an increase of about 6.5%[11]. - The company reported a net cash inflow from financing activities of RMB 1,370,715 thousand for the first half of 2023, compared to RMB 1,163,405 thousand in the same period of 2022, an increase of about 17.9%[11]. Inventory and Receivables - Inventory decreased to RMB 4,704,751 thousand from RMB 6,089,732 thousand, representing a decline of approximately 22.7%[9]. - Trade receivables increased to RMB 3,188,592 thousand from RMB 2,818,200 thousand, reflecting a growth of about 13.1%[9]. - The accounts receivable and contract assets as of June 30, 2023, totaled RMB 4,070,106 thousand, an increase from RMB 3,460,253 thousand as of December 31, 2022, indicating a growth of about 17.6%[37]. Investment and Financial Assets - The total fair value of financial assets measured at fair value through profit or loss is RMB 4,844,270 thousand as of June 30, 2023, slightly up from RMB 4,828,414 thousand as of December 31, 2022[40]. - The company has not disclosed any significant events affecting its operations since the balance sheet date[81]. - The company has reallocated its currency assets to reduce the impact of RMB/USD exchange rate fluctuations[78]. Corporate Governance - The company has complied with the corporate governance code during the six months ended June 30, 2023, with the exception of the separation of the roles of Chairman and CEO[189]. - The audit committee reviewed the group's financial information for the six months ended June 30, 2023, and confirmed compliance with applicable accounting standards and regulations[192].

Financial Performance - Revenue for 2022 was RMB 39,150 million, a decrease of 24.6% from RMB 51,958 million in 2021[3]. - Gross profit for 2022 was RMB 2,304 million, down 43.8% from RMB 4,092 million in 2021[3]. - Profit for the year attributable to owners of the Company was RMB 1,586 million, a decline of 36.3% compared to RMB 2,493 million in 2021[3]. - Basic earnings per share for 2022 was RMB 0.43, down from RMB 0.67 in 2021, representing a decrease of 36.4%[3]. - The Group's revenue for 2022 was approximately RMB 48.62 billion, a decrease of approximately 6.4% from the previous year[25]. - The Group's net profit for 2022 was approximately RMB 811 million, representing a decrease of approximately 68.1% compared to the previous year[25]. - EBITDA for the Group decreased to approximately RMB 2.36 billion, down from approximately RMB 4.34 billion in 2021[25]. - The Group's gross profit decreased by approximately 67.5% to approximately RMB 1,187 million compared to 2021[25]. - The Group's net profit (excluding non-recurring income) for the year ended December 31, 2022, decreased by approximately 89.6% to about RMB 8.11 billion compared to RMB 25.4 billion in 2021[27]. Sales and Production - Average selling price per tonne of self-manufactured steel products in 2022 was RMB 3,974, a decrease of 9.7% from RMB 4,401 in 2021[8]. - Sales volume of self-manufactured steel products in 2022 was 7,102,000 tonnes, down 10.9% from 7,973,000 tonnes in 2021[11]. - The total sales volume of self-manufactured steel products in 2022 was 7.1 million tonnes, representing a decrease of approximately 10.9% from 2021[52]. - The average selling price of self-manufactured steel products fell by 9.7% to approximately RMB 3,974 per tonne, while gross profit decreased by about 67.5% to approximately RMB 1.187 billion[27]. - National production volumes for pig iron, crude steel, and steel products in 2022 were 864 million tonnes, 1,018 million tonnes, and 1,340 million tonnes, representing decreases of 0.8% and 1.7%, and an increase of 0.3% respectively compared to 2021[19]. Industry Context - In 2022, the total profit of the iron and steel industry in China was RMB 36.55 billion, a decrease of 91.3% compared to 2021[19]. - The overall steel demand is expected to gradually improve in 2023, despite ongoing geopolitical tensions and economic uncertainties[65][66]. - The Group remains cautiously optimistic about the business environment for the iron and steel industry in 2023, anticipating a gradual recovery from the lows of the second half of 2022[66]. Environmental and Sustainability Goals - The Group aims to achieve carbon peaking by 2025 and carbon neutrality by 2050, in line with industry sustainability goals[18]. - The Ministry of Industry and Information Technology of the PRC set a target for electric furnaces to account for more than 15% of total crude steel production by 2025[22]. - The Group completed various projects in 2022, including a 135MW blast furnace gas self-generating unit and the upgrading of a 450 m² sintering machine, aimed at creating a green and low carbon factory[68]. Financial Position and Commitments - Total assets decreased to RMB 44,524 million in 2022 from RMB 52,119 million in 2021, a reduction of 14.6%[3]. - As of December 31, 2022, the Group had approximately 274,000 m² of projects under construction, with expected completion dates ranging from 2023 to 2029[63][64]. - As of December 31, 2022, the Group had unutilized banking facilities of approximately RMB 13.6 billion, up from approximately RMB 9.3 billion in 2021[73]. - The current ratio as of December 31, 2022, was 1.2 times, unchanged from 2021, while the gearing ratio improved to 47.3% from 55.6% in 2021[73]. - Cash and cash equivalents amounted to approximately RMB 2,125 million as of December 31, 2022, a decrease from approximately RMB 4,627 million in 2021[73]. Investment Activities - The Group recorded a non-recurring gain of approximately RMB 730 million during the year due to the disposal of Fangchenggang Jinxi Section Steel Technology Company Limited[25]. - The Group recognized a gain of approximately RMB 730 million from the disposal of Fangchenggang Jinxi in 2022[40]. - The Group completed a capacity transfer agreement with Tangshan Ganglu, transferring 475,800 tonnes per annum of iron production capacity and 284,200 tonnes per annum of steel production capacity for RMB 569.87 million, contributing a gain of approximately RMB 494 million[37]. - The Group's subsidiary HJT contributed approximately RMB 3.28 billion in revenue from sales of electrical equipment in 2022[36]. Dividend and Shareholder Returns - The Group proposed a special dividend of HK$0.03 per ordinary share based on the solid financial management results shared with shareholders[29]. - The Board proposed a special dividend of approximately HK$112 million (approximately RMB 98 million), representing HK$0.03 per ordinary share, subject to shareholder approval[80]. Risk Management - The Group's foreign exchange risk primarily arises from procurement of iron ore and related products from overseas suppliers, as well as foreign currency borrowings, both denominated in USD[78][79]. - During the year ended December 31, 2022, the Group entered into foreign currency forward contracts to mitigate the impact of RMB/USD exchange rate volatility[78][79]. - The significant fluctuation of steel products and iron ore prices during the year prompted the Group to enter into future or future option contracts[80]. Future Outlook and Strategy - The Group plans to continue exploring horizontal and vertical merger and acquisition opportunities to broaden revenue sources and enhance profitability[69]. - The Group's strategic development footprint will expand in Nanning, Guangxi, enhancing service capabilities in the South China region[38]. - The investment strategy emphasizes compliance with regulations set by the China Securities Regulatory Commission (CSRC) for allowable fixed-income products[138].

Financial Performance - Steel product sales volume reached 7.10 million tons, a decrease of 10.9% compared to 8.00 million tons in 2021[2]. - Revenue from self-produced steel products was RMB 282.2 billion, down 19.6% from RMB 350.9 billion in 2021[2]. - EBITDA for the year was RMB 2.357 billion, a decline of 45.7% from RMB 4.340 billion in 2021[3]. - Net profit attributable to equity holders was RMB 8.08 billion, down 67.6% from RMB 24.93 billion in 2021[3]. - Basic earnings per share decreased to RMB 0.22, a drop of 67.2% from RMB 0.67 in 2021[3]. - The annual profit for 2022 was RMB 811,355,000, a decrease of 68.1% compared to RMB 2,542,733,000 in 2021[7]. - The total revenue for 2022 was RMB 48,620,332,000, down from RMB 51,957,557,000 in 2021, representing a decline of 4.5%[6]. - The gross profit for 2022 was RMB 1,752,895,000, compared to RMB 4,091,606,000 in 2021, indicating a decrease of 57.2%[6]. - The company reported a gross profit margin of 4.8%, down from 8.4% in the previous year[3]. - The total operating profit before tax was RMB 755,731 thousand, down from RMB 3,051,412 thousand in 2021[20]. Assets and Liabilities - Total assets as of December 31, 2022, were RMB 48.02 billion, a decrease of 7.9% from RMB 52.12 billion in 2021[3]. - The total assets as of December 31, 2022, were RMB 48,023,590,000, down from RMB 52,119,178,000 in 2021, a decrease of 7.4%[10]. - The total liabilities as of December 31, 2022, were RMB 22,738,943,000, compared to RMB 28,004,320,000 in 2021, a decrease of 18.6%[10]. - Total debt decreased to 22,738,943 thousand RMB from 29,004,320 thousand RMB, representing a reduction of approximately 21.5%[11]. - Non-current liabilities totaled 1,584,950 thousand RMB, down from 2,446,046 thousand RMB, indicating a decline of about 35.1%[11]. - Current liabilities amounted to 21,153,993 thousand RMB, a decrease from 26,558,274 thousand RMB, reflecting a reduction of approximately 20.5%[11]. - The company reported trade payables of 3,667,664 thousand RMB, down from 6,902,573 thousand RMB, which is a decrease of around 46.8%[11]. Cash Flow and Financial Position - Cash and cash equivalents decreased to RMB 2,124,697,000 in 2022 from RMB 4,626,779,000 in 2021, a decline of 54.1%[10]. - The company reported a net financial income of RMB 236,530,000 in 2022, compared to RMB 226,145,000 in 2021, an increase of 4.3%[6]. - The company reported a current income tax expense of RMB 178,141 thousand for the year ended December 31, 2022, down from RMB 551,593 thousand in 2021, indicating a decrease of approximately 68%[34]. - The company incurred a loss of RMB 225,547 thousand from unrealized fair value changes in financial assets for the year ended December 31, 2022, compared to a gain of RMB 99,985 thousand in 2021[31]. Dividends and Shareholder Returns - Special dividend per share remained at HKD 0.03, unchanged from the previous year[3]. - The company proposed a final dividend of approximately HKD 223 million (around RMB 182 million), equating to HKD 0.06 per ordinary share, and a special dividend of approximately HKD 112 million (around RMB 91 million), equating to HKD 0.03 per ordinary share for the year ended December 31, 2021[44]. - For the year ended December 31, 2022, the company recommended a special dividend of approximately HKD 112 million (around RMB 98 million), equating to HKD 0.03 per ordinary share, pending shareholder approval[44]. Market and Operational Strategy - The company plans to focus on market expansion and new product development in the upcoming year[5]. - The company plans to focus on expanding its electrical equipment sales and improving operational efficiency in the steel segment[19]. - The company aims to enhance operational efficiency and sustainability through cost reduction, marketing efforts, and investment in environmental protection and product development[80]. - The company expects to continue to create greater value for its shareholders despite the challenging market conditions[87]. Research and Development - Research and development expenses increased to RMB 933,122,000 in 2022 from RMB 791,971,000 in 2021, reflecting a rise of 17.8%[6]. - The total expenses for research and development-related materials and energy surged to RMB 254,027 thousand in 2022 from RMB 113,341 thousand in 2021, an increase of 124.3%[28]. Environmental and Sustainability Initiatives - The group has invested heavily in environmental protection, achieving an A-level environmental performance rating from the Hebei Provincial Department of Ecology and Environment in January 2022[82]. - The group aims to achieve carbon peak by 2025 and carbon neutrality by 2050, investing in equipment upgrades and environmental projects[99]. - The group continues to invest in various environmental initiatives to reduce emissions of particulate matter, sulfur dioxide, and nitrogen oxides[82]. Industry Context - In 2022, China's steel industry faced significant challenges, with total profits dropping to RMB 36.55 billion, a decrease of 91.3% compared to 2021[77]. - The production volumes for pig iron, crude steel, and steel products in 2022 were 864 million tons, 1.018 billion tons, and 1.34 billion tons, representing decreases of 0.8% and 1.7%, and an increase of 0.3% respectively compared to 2021[77].

Financial Performance - Revenue for the six months ended June 30, 2021, reached RMB 17,247 million, a 48.5% increase from RMB 11,628 million in the same period of 2020[3] - Gross profit for the same period was RMB 24,985 million, up from RMB 17,021 million in 2020, reflecting a 46.3% increase[3] - Profit for the period attributable to owners of the Company was RMB 1,571 million, compared to RMB 775 million in 2020, marking a 102.6% increase[3] - Basic earnings per share for the period was RMB 0.42, compared to RMB 0.21 in the same period last year, representing a 100% increase[3] - EBITDA for the six months ended June 30, 2021, was RMB 2,641 million, compared to RMB 1,516 million in 2020, reflecting a 74.1% increase[3] - The Group's gross profit increased by approximately 85.6% to approximately RMB 1,960 million, and net profit for the interim period was approximately RMB 1,616 million, representing an increase of approximately 105.5% over the corresponding period last year[19] - EBITDA increased to approximately RMB 2.64 billion from approximately RMB 1.52 billion in the corresponding period last year, with basic earnings per share of RMB 0.42[19] Sales and Production - The average selling price per tonne of self-manufactured steel products increased to RMB 4,454 in 2021 from RMB 3,191 in 2020, a rise of 39.6%[7] - Total sales volume of self-manufactured steel products for the six months ended June 30, 2021, was 3,872,000 tonnes, compared to 3,644,000 tonnes in 2020, an increase of 6.2%[11] - The average unit price of self-manufactured steel products increased by 39.6% to approximately RMB 4,454 per tonne, while sales volume increased by 6.3% to approximately 3.87 million tonnes[19] - The sales volume of strips and strip products surged by 230.3% to 1,450 thousand tonnes, compared to 439 thousand tonnes in 2020[40] - The sales volume of H-section steel products increased by 9.8% to 1,595 thousand tonnes, up from 1,452 thousand tonnes in the previous year[40] Assets and Liabilities - The total assets of the company increased to RMB 49,169 million as of June 30, 2021, up from RMB 44,524 million at the end of 2020, a growth of 16.8%[4] - The net assets value per share (excluding non-controlling interests) increased to RMB 5.94 as of June 30, 2021, from RMB 5.56 at the end of 2020[4] - The Group's borrowings amounted to RMB 13.491 billion with fixed interest rates ranging from 0.24% to 7.50% per annum as of June 30, 2021[67] - The debt-to-capital ratio of the Group was 61.1% as of June 30, 2021, an increase from 48.4% on December 31, 2020[69] - The Group's capital commitments as of June 30, 2021, were approximately RMB 877 million, slightly down from RMB 886 million on December 31, 2020[69] Dividends - The Board declared an interim dividend of HK$0.10 per ordinary share and a special dividend of HK$0.05 per ordinary share[24] - The Group declared an interim dividend of HKD 0.10 per share and a special dividend of HKD 0.05 per share for the first half of 2021[25] - The proposed interim dividend is HK$372.3 million (approximately RMB309.3 million), representing HK$0.10 per ordinary share[76] Market Position and Strategy - The Group was ranked 278th in the top 2021 Fortune China 500 companies[21] - The Group's annual steel production capacity is maintained at approximately 10 million tonnes, with a focus on high added-value products[26] - The Group plans to enhance competitiveness by improving production efficiency, reducing costs, and developing high value-added products[57] - The Group is actively expanding its market-based steel products and raw materials trading business, as well as developing new materials using steel slag[58] Environmental and Operational Efficiency - The Group has implemented effective cost control mechanisms despite significant increases in raw material prices during the first half of the year[20] - The Group has ongoing projects under construction with a total gross floor area of approximately 390,000 m², expected to be completed in 2022 and 2023[52] - The Group continues to invest in environmental protection projects to achieve further emission reductions and improve environmental performance[59] - The completion of the Equipment Upsizing Project in 2020 has eliminated adverse impacts on operational efficiency, contributing to improved performance in the steel segment[44] Investment and Financial Management - As of June 30, 2021, the Group held financial assets at fair value through profit or loss of approximately RMB 4,293 million, accounting for 8.7% of total assets[78] - The Group's structured bank deposits were nil as of June 30, 2021, down from RMB 1,000 million as of December 31, 2020[71] - The Group's investment gains from iron ore and steel products future contracts amounted to approximately RMB 101 million, compared to investment losses of approximately RMB 29 million in the corresponding period of 2020[74] - The Group entered into foreign currency forward contracts to mitigate the impact of RMB/USD exchange rate fluctuations during the six months ended June 30, 2021[73] Economic Outlook - Demand for steel is expected to remain stable, with infrastructure investment anticipated to be more active in the second half of 2021[55] - The Chinese government is formulating a five-year plan for the steel industry (2021-2025) to achieve sustainable development and strict regulation of new steel production capacity[54]