Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 42.96 billion, a decrease of 7.4% from RMB 46.26 billion in 2023[5] - Gross profit increased significantly to RMB 1.77 billion, up 147.1% from RMB 717.29 million in the previous year[5] - EBITDA for 2024 was RMB 1.50 billion, representing a 17.3% increase from RMB 1.28 billion in 2023[4] - The company reported a net profit of RMB 224.62 million, a turnaround from a net loss of RMB 196.21 million in 2023, marking a 214.5% improvement[7] - Basic earnings per share improved to RMB 0.04 from a loss of RMB 0.04 in 2023, reflecting a significant recovery in profitability[4] - The company achieved a revenue of approximately RMB 43 billion in 2024, a decrease of about 7.1% compared to the previous year, while gross profit increased by approximately 147.1% to about RMB 1.77 billion[79] - The net profit for the year 2024 was approximately RMB 225 million, marking a substantial increase of about 214.5% compared to a net loss of RMB 196 million in 2023[79] - The company’s EBITDA rose from approximately RMB 1.28 billion in 2023 to about RMB 1.50 billion in 2024, indicating improved operational efficiency[79] Revenue Breakdown - The sales volume of self-produced steel products decreased by 7.3% to 7.17 million tons, while trading of steel products fell by 45.0% to 110,000 tons[3] - Total sales for the year ended December 31, 2024, amounted to RMB 42,957,307 thousand, a decrease of 7.5% compared to RMB 46,259,738 thousand for the year ended December 31, 2023[20][26] - The sales of H-beam products decreased from RMB 12,946,577 thousand in 2023 to RMB 11,737,216 thousand in 2024, representing a decline of 9.3%[20] - The sales of iron ore decreased from RMB 11,361,275 thousand in 2023 to RMB 9,934,620 thousand in 2024, a decline of 11.8%[20] - The steel segment reported a revenue of RMB 42,860,478 thousand for the year ended December 31, 2024, compared to RMB 46,013,691 thousand in 2023, reflecting a decrease of 6.5%[23][26] - The real estate segment recorded a revenue of RMB 96,829 thousand for the year ended December 31, 2024, down from RMB 246,047 thousand in 2023, a decline of 60.7%[23][26] Asset and Liability Management - The company’s total assets as of December 31, 2024, were RMB 50.08 billion, a slight increase of 0.1% from RMB 50.03 billion in 2023[4] - Total assets increased slightly to RMB 50,076,936 thousand in 2024 from RMB 50,030,172 thousand in 2023, representing a growth of 0.09%[8] - Total liabilities increased to RMB 25,121,663 thousand in 2024 from RMB 25,052,387 thousand in 2023, reflecting a rise of 0.28%[9] - The debt-to-capital ratio increased to 65.8% from 63.0% in the previous year, indicating a higher leverage position[4] - The company's borrowings increased to RMB 13,593,786 thousand in 2024 from RMB 13,089,962 thousand in 2023, an increase of 3.85%[9] - The total borrowings as of December 31, 2024, amount to RMB 16,388,169 thousand, an increase from RMB 15,473,895 thousand in 2023, representing a growth of approximately 6%[69] Cash Flow and Investments - The company's cash and cash equivalents decreased to RMB 3,516,253 thousand in 2024 from RMB 3,618,030 thousand in 2023, a decline of 2.82%[8] - The company confirmed receivables from local government departments amounting to approximately RMB 1.528 billion related to lease land and land use rights[52] - The company has secured approximately RMB 10.15 billion in collateralized bank loans as of December 31, 2024, compared to RMB 5.17 billion in 2023, indicating a significant increase of about 96%[69] - The company has RMB 460,931 thousand in structured bank deposits as of December 31, 2024, compared to RMB 127,543 thousand in 2023, reflecting a growth of approximately 262%[68] Operational Efficiency and Cost Management - The average selling price of steel products decreased during the year due to continued low demand in downstream markets[79] - The cost of raw materials and sold goods decreased to RMB 36,891,701 thousand in 2024 from RMB 39,914,996 thousand in 2023, indicating a decline of about 7.58%[31] - Employee benefit expenses increased to RMB 1,464,443 thousand in 2024 from RMB 1,354,273 thousand in 2023, representing a rise of approximately 8.14%[31] - The company plans to enhance its operational strategies focusing on cost reduction, efficiency improvement, and procurement optimization to navigate macroeconomic challenges[79] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.01 per share and a special dividend of HKD 0.05 per share, with a total annual dividend of HKD 0.06, up 20.0% from HKD 0.05 in 2023[4] - The company plans to distribute a final dividend of approximately HKD 37 million (about RMB 34 million) and a special dividend of approximately HKD 186 million (about RMB 172 million) for the year ending December 31, 2024, pending shareholder approval[48] Environmental Initiatives - The company’s subsidiary, Jinxin Steel, achieved a reduction in carbon dioxide emissions by approximately 1.1 million tons in 2024, contributing to its green energy initiatives[78] - The company reduced carbon dioxide emissions by approximately 1.1 million tons and nitrogen oxides by 53 tons annually through various green initiatives[83] - The company plans to complete multiple projects to create green low-carbon factories by 2024 and initiate new energy soft magnetic materials projects by 2025[90] Future Outlook - The company expects a gradual improvement in the steel industry environment in 2025, driven by a recovery in downstream demand and stable infrastructure investment growth[89] - The company will focus on high-end, differentiated products and extend its industrial chain into new materials and high-end equipment manufacturing[93]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 22,565 million, a slight increase of 2.3% compared to RMB 22,059 million in the same period of 2023[5]. - Gross profit for the same period was RMB 900 million, up from RMB 719 million in 2023, reflecting a gross margin improvement[5]. - Profit for the period attributable to owners of the Company was RMB 94 million, a significant decrease of 66.7% from RMB 282 million in 2023[5]. - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.03, down from RMB 0.08 in 2023[5]. - The Group recorded a revenue of approximately RMB 22.57 billion for the six months ended June 30, 2024, representing an increase of approximately 2.3% compared to the same period last year[40]. - The overall gross profit increased by approximately 14.4% to approximately RMB 6.43 billion for the same period[40]. - The interim net profit was approximately RMB 123 million, a decrease of approximately 55.4% compared to RMB 276 million for the corresponding period last year[41]. - The Group's EBITDA for the period decreased from approximately RMB 1.05 billion to approximately RMB 815 million[41]. - For the six months ended June 30, 2024, the profit for the period was approximately RMB 123,029,000, a decrease of 55.5% compared to RMB 276,135,000 for the same period in 2023[102]. - The adjusted profit for the period was RMB 123,029,000, down 43.7% from RMB 218,430,000 in the previous year[102]. Sales and Production - Average selling price per tonne of self-manufactured steel products decreased to RMB 3,505 in 2024 from RMB 3,599 in 2023, indicating a decline of 2.6%[12]. - Total sales volume of self-manufactured steel products for the six months ended June 30, 2024, was 3,762,000 tonnes, a decrease of 3.1% compared to 3,881,000 tonnes in 2023[18]. - The sales volume of H-section steel products decreased to 1,614,000 tonnes in 2024 from 1,945,000 tonnes in 2023, a decline of 17.0%[18]. - In the first half of 2024, the Group's total sales volume of self-manufactured steel products was approximately 3.76 million tonnes, a decrease of approximately 3.1% compared to 3.88 million tonnes in the corresponding period of 2023[63][64]. - The sales of H-section steel products amounted to approximately 1.61 million tonnes, accounting for 42.9% of total sales volume, which represents a decrease of 17.0% compared to the previous year[66]. Market Conditions - The overall business environment of China's iron and steel industry in the first half of 2024 improved compared to the second half of 2023, but still maintained a pattern of "strong supply, weak demand, low prices, and high costs"[32]. - The demand for steel used in engineering machinery decreased due to the drag from the real estate sector, contributing to the overall weakness in downstream demand for steel products[31]. - The outlook for the iron and steel industry indicates that downstream demand will remain low, but infrastructure investment growth is expected to rebound in the second half of 2024[83]. - The overall business environment for the iron and steel industry is expected to face uncertainties in the second half of 2024, but the development trend is anticipated to gradually improve[83]. Strategic Initiatives - The Group aims to adopt a "specialisation, industry chain extension, high-tech and high-end" strategy for transformation and upgrading, focusing on innovation-driven high-quality development[31]. - The Group plans to enhance its core competitiveness by improving efficiency, reducing costs, and increasing the proportion of high value-added products[84]. - The Group will continue to promote the development of various steel products, including H-section steel and marine steel, while expanding its trading business in steel products and raw materials[84]. - The Group is exploring technology solutions for carbon reduction and investing in equipment upgrades to achieve better cost efficiency and reduce emissions[89]. - The Group aims to enhance energy efficiency and low-carbon transformation capabilities in the iron and steel industry, with policies focusing on energy efficiency improvement and carbon peaking[39]. Financial Position - The Company reported a net asset value of RMB 24,933 million as of June 30, 2024, a slight decrease from RMB 24,978 million as of December 31, 2023[9]. - Total assets increased to RMB 52,215 million as of June 30, 2024, up from RMB 50,030 million as of December 31, 2023[9]. - The Group's financial position remains sound, and it will strive to make effective use of its resources for future growth[31]. - As of June 30, 2024, the Group had unutilised banking facilities of approximately RMB 15.1 billion, an increase from RMB 13.9 billion as of December 31, 2023[104]. - The current ratio as of June 30, 2024 was approximately 1.4 times, up from 1.2 times as of December 31, 2023[109]. - The cash and cash equivalents of the Group amounted to approximately RMB 5,347 million as of June 30, 2024, compared to RMB 3,618 million as of December 31, 2023[110]. - The debt-to-capital ratio as of June 30, 2024 was approximately 71.0%, an increase from 63.0% as of December 31, 2023[112]. - Consolidated interest expenses for the six months ended June 30, 2024 were approximately RMB 280 million, compared to RMB 241 million for the same period in 2023[113]. Investment and Dividends - The Group did not recommend the distribution of an interim dividend for 2024 due to current challenges in the iron and steel industry[44]. - The Group will evaluate the possibility of increasing dividend distributions to reward shareholders under appropriate circumstances[90]. - The Board proposed a special dividend of approximately HK$ 186 million (equivalent to approximately RMB 170 million) for the year ended December 31, 2023, which was approved by shareholders[127]. - The Group's strategy includes specialization, industry chain extension, and high-tech development to drive transformation and upgrading[93]. Real Estate and Construction - The Group recorded revenue and operating profit from its real estate business of approximately RMB 23 million and RMB 4 million, respectively, in the first half of 2024[58][61]. - A provision of approximately RMB 201 million was made for impairment of properties under development and held for sale related to the real estate industry in second-and-lower-tier cities in the PRC for the financial year ended December 31, 2023[97]. - The Group expects the real estate market in the PRC to gradually stabilize due to various market stabilization measures introduced by the government[98]. - The Group has a project under construction with a gross floor area of approximately 248,000 m², expected to be completed in 2029[81]. Environmental and Regulatory Compliance - The NDRC and other ministries issued a "Special Action Plan for Energy Conservation and Carbon Reduction in the Iron and Steel Industry" in May 2024, aiming to regulate crude steel production and reduce energy consumption intensity[34]. - By the end of 2025, the target is to increase the proportion of electric arc furnace steel production to 15% of total crude steel production and achieve 30% of production at or above benchmark energy efficiency levels[34]. - The Group will actively explore new models and paths that align with green development concepts to promote sustainable development[31]. - The Group is committed to green, low-carbon, and sustainable development through effective capital and asset allocation[95].

[Supplemental Announcement Regarding 2023 Annual Report](index=1&type=section&id=Supplemental%20Announcement%20Regarding%202023%20Annual%20Report) [Announcement Overview](index=1&type=section&id=Announcement%20Overview) This announcement supplements the 2023 annual report, providing additional details on the 2013 Share Option Scheme without affecting other report contents - This announcement aims to supplement information regarding the Share Option Scheme in the 2023 annual report[1](index=1&type=chunk) [Supplemental Details of Share Option Scheme](index=1&type=section&id=Supplemental%20Details%20of%20Share%20Option%20Scheme) The announcement details key quantitative metrics and terms of the 2013 Share Option Scheme, including shares available and acceptance price Share Option Scheme Key Metrics | Metric | Value/Term | | :--- | :--- | | **Issuable Share Scale (as % of 2023 FY weighted average shares)** | Approximately 0.56% | | **Total Shares Available for Issuance as of Annual Report Date** | 21,000,000 shares | | **Percentage of Issuable Shares (as % of Issued Shares) as of Annual Report Date** | Approximately 0.56% | | **Offer Acceptance Period** | 14 days | | **Acceptance Consideration** | HKD 1.00 | [Remuneration Committee's Review and Rationale](index=2&type=section&id=Remuneration%20Committee%20Review%20and%20Approval%20of%20Share%20Options%20Granted%20Under%202013%20Scheme%20in%20FY2023) The Remuneration Committee approved share options under the 2013 scheme in FY2023, without performance targets, citing alignment with future share price and individual performance - The Remuneration Committee confirmed that all share options granted to directors and employees under the 2013 Share Option Scheme in FY2023 **did not include performance targets**[2](index=2&type=chunk) - The Committee provided reasons for not setting performance targets: - **Interest Alignment**: Share options are time-vested, directly linking their value to future share price performance, aligning grantees' interests with the Group's - **Contribution Incentive**: Granting options to directors and employees encourages their continuous efforts for the Group's development - **Individualized Consideration**: The number of options granted was determined based on grantees' past performance and potential future contributions[2](index=2&type=chunk)

Revenue and Profitability - For the six months ended June 30, 2024, total revenue reached RMB 22.57 billion, an increase of 2.3% compared to RMB 22.06 billion in the same period of 2023[5]. - Revenue from power equipment sales rose by 18.4% to RMB 1.92 billion, compared to RMB 1.62 billion in the same period last year[2]. - The total comprehensive income for the period amounted to RMB 124,919 million, a decrease from RMB 280,047 million in the previous period, representing a decline of approximately 55.4%[7]. - Profit attributable to equity holders of the company was RMB 94,063 million, down from RMB 282,255 million, indicating a decrease of about 66.7%[7]. - The net profit for the six months ended June 30, 2024, was RMB 123,029 thousand, compared to RMB 276,135 thousand for the same period in 2023, showing a significant decline[21]. - The company reported a net profit of approximately RMB 400 million from its real estate business in the first half of 2024[57]. - The group recorded revenue of approximately RMB 13.19 billion for the first half of 2024, a decrease of about 5.6% from RMB 13.97 billion in the same period of 2023[60]. Costs and Expenses - EBITDA for the six months ended June 30, 2024, was RMB 815 million, a decrease of 22.4% from RMB 1.05 billion in the previous year[3]. - The average selling price of steel products decreased due to weak downstream demand, impacting overall profitability[55]. - The production costs remained relatively high due to a greater decline in steel product prices compared to raw material prices[55]. - The total financial costs for the six months ended June 30, 2024, were RMB 272,819 thousand, slightly higher than RMB 269,682 thousand in the previous year[27]. Assets and Liabilities - The total assets as of June 30, 2024, amounted to RMB 52.21 billion, reflecting a 4.4% increase from RMB 50.03 billion at the end of 2023[3]. - The total liabilities increased to RMB 27,281,777 million from RMB 25,052,387 million, reflecting an increase of approximately 8.9%[9]. - The equity attributable to equity holders of the company was RMB 24,933,102 million, a slight decrease from RMB 24,977,785 million, indicating a decline of about 0.2%[9]. - The debt-to-capital ratio increased to 71.0% from 63.0% in the previous year, indicating a higher leverage position[3]. Cash Flow and Financing - Cash and cash equivalents at the end of the period were RMB 5,347,021 million, up from RMB 4,666,094 million, indicating an increase of approximately 14.6%[10]. - Net cash generated from operating activities was RMB 1,253,428 million, compared to RMB 598,770 million in the previous period, representing an increase of about 109.5%[10]. - The company reported a net cash inflow from financing activities of RMB 883,641 million, down from RMB 1,370,715 million, representing a decrease of approximately 35.7%[10]. Research and Development - Research and development expenses increased to RMB 192.68 million, up from RMB 167.24 million in the same period last year[5]. - The company plans to continue developing high-value-added products and expanding sales channels, focusing on H-beams, marine angle steel, and other products[67]. Market and Industry Outlook - The outlook for the steel industry indicates that downstream demand is expected to gradually improve in the second half of 2024, with no significant risk of a decline in overall steel consumption[66]. - The steel industry in China saw a 5.4% year-on-year increase in infrastructure investment, while real estate new construction area decreased by about 23.7%[54]. Corporate Governance and Compliance - The company acknowledges the importance of good corporate governance practices and has complied with the relevant codes during the reporting period[189]. - The audit committee, consisting of three independent non-executive directors, reviewed the group's interim consolidated financial statements for the six months ending June 30, 2024[192]. Employee and Operational Metrics - As of June 30, 2024, the group employed approximately 11,700 long-term employees and about 100 temporary workers[185]. - Employee costs include basic salaries and benefits, with a contribution of approximately 2.09% of employee wages to work injury insurance[186]. Investment Strategy and Performance - The company is focusing on expanding its private equity fund offerings, with several funds showing positive returns and fair value increases[120]. - The investment strategy includes a focus on companies with competitive advantages in their respective industries, such as real estate and steel[171][172].

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].