Financial Performance - For the six months ended June 30, 2021, the revenue was HK$1,043,304,000, an increase from HK$966,788,000 for the same period in 2020, representing a growth of approximately 7.9%[11] - The profit for the period was HK$39,770,000, compared to HK$32,914,000 in the previous year, indicating a year-on-year increase of about 20.5%[11] - The total comprehensive income for the period was HK$55,077,000, significantly higher than HK$6,811,000 for the same period in 2020[14] - Basic and diluted earnings per share increased to 2.76 HK cents, up from 2.16 HK cents in the prior year, reflecting a growth of approximately 27.8%[14] - The total comprehensive income attributable to owners of the company was HK$51,284,000, compared to HK$2,415,000 in the same period last year[14] - The Group's consolidated revenue for the six months ended 30 June 2021 was HK$1,043,304,000, representing an increase of approximately 8% compared to HK$966,788,000 for the same period last year[176] - Profit for the period increased by approximately 21% to HK$39,770,000, up from HK$32,914,000 for the same period last year, primarily due to the operation of the wind power project in Suining County, Jiangsu Province[176] Assets and Liabilities - As of June 30, 2021, total assets amounted to HK$4,700,402,000, an increase from HK$4,402,151,000 as of December 31, 2020, representing a growth of approximately 6.8%[17] - The company’s total liabilities decreased to HK$4,403,492,000 from HK$4,258,534,000, reflecting a decrease of approximately 3.4%[17] - The company’s non-current liabilities decreased to HK$1,862,544,000 from HK$1,887,213,000, showing a reduction of approximately 1.3%[20] - Total equity increased to HK$1,181,902,000 from HK$1,126,825,000, marking an increase of about 4.9%[20] - The Group reported total liabilities of HK$5,247,284,000 as of June 30, 2021, consistent with the previous year[72] Cash Flow - The company reported net cash inflows from operating activities of HK$117,634,000, a recovery from a net outflow of HK$256,494,000 in the same period last year[27] - Cash and cash equivalents at the end of the period were HK$596,977,000, up from HK$583,026,000, indicating a growth of approximately 2.5%[27] - The Group reported a net increase in cash and cash equivalents of HK$226,542,000, compared to an increase of HK$124,679,000 in the previous year[27] Segment Performance - The Power generation segment reported a profit of HK$119,870, while the Manufacturing and trading segment incurred a loss of HK$3,888[62] - The EPC and consultancy and general construction segment recorded revenue of HK$816,476,000, an increase of approximately 7% from HK$762,408,000 in the previous year, but incurred a segment loss of HK$3,841,000 compared to a profit of HK$56,574,000 in the prior year[179] - The power generation segment recorded external revenue of HK$212,007,000 for the first half of 2021, a 137% increase from HK$89,293,000 in 2020, and a segment profit of HK$119,870,000, up 213% from HK$38,338,000 in 2020[187] - The Group's finance leasing business achieved segment revenue of HK$14,821,000, an 86% increase from HK$7,956,000 in 2020, while segment loss decreased by approximately 77% to HK$3,438,000 from HK$15,058,000[194] Costs and Expenses - The company reported finance costs of HK$67,435,000, which is an increase from HK$38,707,000 in the previous year[11] - Staff costs increased to HK$23,110,000 for the six months ended June 30, 2021, from HK$19,373,000 in the same period of 2020, reflecting a rise of about 19.0%[77] - Depreciation of property, plant, and equipment rose significantly to HK$76,760,000 in the first half of 2021, compared to HK$37,310,000 in the same period of 2020, indicating an increase of approximately 105.0%[79] - The Group's income tax expense for the six months ended June 30, 2021, was HK$12,205,000, up from HK$8,098,000 in the same period of 2020, marking a rise of approximately 50.0%[87] Business Operations - The company engaged in engineering, procurement, and construction (EPC) services related to photovoltaic power plants, indicating a focus on renewable energy projects[30] - The Group is actively studying the feasibility of decentralized power generation with energy storage facilities to enhance flexibility and stability in power supply[188] - The Group's safety policy emphasizes "safety first, prevention as principle," with comprehensive management measures in place to ensure production safety[199] Market and Industry - The Group's revenue growth was impacted by the COVID-19 pandemic, which affected project completion rates in the previous year[179] - The solar power plants and wind power stations are primarily located in the PRC, with a significant portion of revenue contributed by the State Grid Corporation of China, indicating minimal credit risk[192] - The Group is focusing on diversifying risks and enhancing project quality by developing external non-related projects in the new energy industry, new infrastructure, and healthcare sectors[197]

Financial Performance - Overall revenue decreased by approximately 24.9% to HK$2,171,194,000 for the year ended 31 December 2020, compared to HK$2,892,578,000 in 2019[34]. - The Group's profit for the year ended 31 December 2020 was HK$70,368,000, representing a decrease of approximately 32.4% compared to HK$104,021,000 in 2019[34]. - Profit attributable to owners of the Company amounted to HK$57,064,000 for 2020, representing a year-on-year decrease of 41.1%[94]. - Basic and diluted earnings per share for 2020 was HK4.35 cents, down from HK7.37 cents in 2019[94]. - The net profit margin decreased to 3.2% from 3.6% in 2019[122]. - Other income and gains rose by 131.8% from HK$10,904,000 in 2019 to HK$25,275,000 in 2020[102]. - The Group's construction costs increased by 29.9% to HK$962,849,000 in 2020 compared to HK$741,299,000 in 2019[104]. - Cost of sales decreased by 49.1% to HK$913,471,000, while construction costs increased by 29.9% to HK$962,849,000[127]. - Finance costs decreased by approximately 19.9% to HK$42,601,000, mainly due to the capitalization of interest expenses of HK$28,514,000 to wind power projects[135]. - Income tax expense decreased by approximately 20.7% to HK$19,443,000, with an effective tax rate of 21.6% for the year ended 31 December 2020[136]. Operational Efficiency - The Group achieved a year-on-year decrease of 20% in annual financial expenses, while the EBITDA to financial expense ratio increased by 8%[21]. - The Group improved operational efficiency and anti-risk capability by consolidating the management and control system[15]. - The cash flow of operating activities has improved significantly due to the implementation of zero-storage management[21]. - The Group's cash flow from operating activities showed significant improvement due to strict management of working capital and zero inventory practices[23]. - The Group has established a comprehensive reporting and analysis mechanism to flexibly resolve issues and prevent potential problems in construction projects[65]. - The Group implements a payment collection accountability system to minimize accounts receivable aging balance, linking performance and remuneration of responsible persons[75]. - Each power station implements a trinity management system for intelligent operation and maintenance, improving efficiency and ensuring standardization[76]. - The Group has achieved a goal of zero production safety accidents through rigorous safety management and inspections[71]. Market and Industry Trends - The new energy market was volatile, with demand gradually recovering in the second half of the year due to the impact of the COVID-19 pandemic and supply fluctuations[15]. - The Group aims to capitalize on investment opportunities in the clean energy sector, aligning with China's carbon neutrality goals by 2060[26]. - The Group plans to further tap into the market of energy storage and 5G projects, investing in scientific research for new profit drivers[17]. - The Group is actively monitoring the solar power generation industry trends in China[194]. - Continuous observation of competitors and innovative products is a priority for the Group[194]. - The Group acknowledges the importance of adapting to local and global market changes[199]. Project Development and Achievements - The Group successfully completed several projects, including a 100 MW solar thermal project in Inner Mongolia and an 85 MW wind power project in Suining, which were connected to the grid on schedule[43]. - The Group obtained 10 authorized patents and launched 3 new technology research and development projects in 2020[42]. - The Group's energy storage technology research progressed with a feasibility study completed for the Suining wind power project, setting the stage for future developments in 2021[56]. - The Group completed the feasibility study for the Suining wind power project’s supporting energy storage, laying the groundwork for energy storage project development in 2021[59]. - The Group actively diversified into wind power and other renewable energy segments, enhancing its business portfolio[46][48]. Financial Position and Assets - Total assets increased by approximately 27.9% to HK$7,272,572,000, driven by acquisitions of photovoltaic power stations and wind power project developments[156]. - Total liabilities increased by approximately 29.4% to HK$6,145,747,000, with non-current liabilities rising by approximately 139.8% to HK$1,887,213,000[157]. - Total equity attributable to owners of the Company increased by 19.2% to HK$1,106,844,000, primarily due to profit generation and foreign exchange differences[158]. - Current assets increased by approximately 4.7% to HK$4,402,151,000, while non-current assets surged by approximately 93.9% to HK$2,870,421,000[156]. - The Group's gearing ratio as of December 31, 2020, was 3.11, compared to 2.77 in 2019, calculated based on total debt over total equity[167]. Compliance and Risk Management - The Group has strengthened compliance management and internal audits to enhance corporate governance and risk resistance capabilities[24]. - There was no evidence of non-compliance with relevant laws and regulations that significantly impact the Group during the year ended December 31, 2020[77]. - The Group is preparing for potential risks arising from changes in regulations that could significantly impact its operations[198]. - Proactive measures are being taken to address possible adverse effects on the Group's business performance and development prospects[196]. - The Group will continue to monitor foreign exchange risks and implement necessary hedging arrangements if needed[174]. Future Strategies - The Group plans to expand its general contracting scope to include solar thermal power generation, wind power generation, and energy storage[88]. - The Group aims to deepen industry-university-research cooperation to enhance research on photovoltaic and wind power technologies[89]. - The Group will actively explore investment opportunities in new energy sectors both domestically and internationally[90]. - The Group's strategy includes differentiated competitive approaches to leverage growth in the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Port[93].

CORPORATE INFORMATION This section details the company's corporate governance and administrative structure, including board members, committee composition, principal bankers, auditors, share registrars, and registered office - This section details the company's corporate governance and administrative structure, including board members, committee composition, principal bankers, auditors, share registrars, and registered office[4](index=4&type=chunk)[7](index=7&type=chunk)[16](index=16&type=chunk) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2020, the Group's total revenue was **HK$967 million**, a 6.8% year-on-year decrease, with profit for the period at **HK$32.91 million**, down 19.9%, primarily due to slower EPC business progress and increased finance costs, resulting in basic earnings per share of **2.16 HK cents** compared to **2.94 HK cents** last year Key Profit or Loss Data for H1 2020 | Metric | H1 2020 (HK$ Thousand) | H1 2019 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | 966,788 | 1,037,388 | -6.8% | | **Profit before income tax expense** | 41,012 | 49,335 | -16.9% | | **Profit for the period** | 32,914 | 41,081 | -19.9% | | **Profit attributable to owners of the Company** | 28,337 | 38,609 | -26.6% | | **Total comprehensive income for the period** | 6,811 | 34,436 | -80.2% | | **Basic and diluted earnings per share (HK cents)** | 2.16 | 2.94 | -26.5% | [CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2020, the Group's total assets increased by 8.9% to **HK$6.191 billion**, mainly due to property, plant, and equipment additions from photovoltaic power station acquisitions, while total liabilities rose 10.5% to **HK$5.247 billion** due to increased bank and other borrowings, with net assets slightly up 0.7% to **HK$944 million** Financial Position Summary | Metric | June 30, 2020 (HK$ Thousand) | December 31, 2019 (HK$ Thousand) | Period Change | | :--- | :--- | :--- | :--- | | **Non-current assets** | 1,883,478 | 1,480,259 | +27.2% | | **Current assets** | 4,307,495 | 4,206,117 | +2.4% | | **Total assets** | 6,190,973 | 5,686,376 | +8.9% | | **Current liabilities** | 4,080,846 | 3,962,554 | +3.0% | | **Non-current liabilities** | 1,166,438 | 786,944 | +48.2% | | **Total liabilities** | 5,247,284 | 4,749,498 | +10.5% | | **Net assets** | 943,689 | 936,878 | +0.7% | | **Equity attributable to owners of the Company** | 931,177 | 928,762 | +0.3% | [CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2020, equity attributable to owners of the Company slightly increased from **HK$929 million** to **HK$931 million**, with a **HK$28.34 million** profit for the period partially offset by a **HK$25.92 million** exchange difference loss from translating overseas operations, resulting in total comprehensive income of only **HK$2.415 million** Changes in Equity Attributable to Owners of the Company (H1 2020) | Item | Amount (HK$ Thousand) | | :--- | :--- | | **As at January 1, 2020** | 928,762 | | Profit for the period | 28,337 | | Other comprehensive income for the period | (25,922) | | **Total comprehensive income for the period** | 2,415 | | **As at June 30, 2020** | 931,177 | [CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) In H1 2020, the Group reported a net cash outflow from operating activities of **HK$256 million** and from investing activities of **HK$340 million**, while financing activities generated a net cash inflow of **HK$721 million**, primarily from new borrowings, resulting in cash and cash equivalents of **HK$583 million** at period-end, an increase of **HK$125 million** from the beginning of the period Cash Flow Statement Summary | Item | H1 2020 (HK$ Thousand) | H1 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **Net cash outflow from operating activities** | (256,494) | (102,546) | | **Net cash outflow from investing activities** | (340,061) | (22,913) | | **Net cash inflow from financing activities** | 721,234 | 109,918 | | **Net increase in cash and cash equivalents** | 124,679 | (15,541) | | **Cash and cash equivalents at end of period** | 583,026 | 397,291 | NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS [CORPORATE INFORMATION AND PRINCIPAL ACTIVITIES](index=11&type=section&id=1.%20CORPORATE%20INFORMATION) This note outlines the company's registration details and primary business activities, which are categorized into five segments: Engineering, Procurement and Construction (EPC) and consultancy and general construction; Power Generation; Financing; Manufacturing and Trading of solar-related products; and Other corporate management, investment, and treasury services - The Group's core business revolves around renewable energy, particularly the construction (EPC), operation (power generation) of photovoltaic power stations, and related financing and product manufacturing[41](index=41&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk) [SEGMENT REPORTING](index=18&type=section&id=4.%20SEGMENT%20REPORTING) In H1 2020, the EPC and consultancy and general construction segment remained the largest revenue source, contributing **HK$762 million** or 78.9% of total revenue, while the power generation segment generated **HK$89.29 million** and manufacturing and trading **HK$107 million**, with financing segment revenue significantly declining, and EPC and power generation being the main profit contributors H1 2020 Revenue and Results by Business Segment | Business Segment | External Sales Revenue (HK$ Thousand) | Segment Results (HK$ Thousand) | | :--- | :--- | :--- | | **EPC and Consultancy and General Construction** | 762,408 | 56,574 | | **Power Generation** | 89,293 | 38,338 | | **Financing** | 7,956 | (15,058) | | **Manufacturing and Trading** | 107,131 | (6,714) | | **All Other Segments** | - | (14,381) | [BANK AND OTHER BORROWINGS](index=35&type=section&id=16.%20BANK%20AND%20OTHER%20BORROWINGS) As of June 30, 2020, the Group's total bank and other borrowings significantly increased by 34.8% to **HK$3.35 billion** from **HK$2.485 billion** at the end of 2019, comprising **HK$2.188 billion** in current borrowings and **HK$1.162 billion** in non-current borrowings, primarily to support business expansion and project investments Composition of Bank and Other Borrowings | Item | June 30, 2020 (HK$ Thousand) | December 31, 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **Current borrowings** | 2,188,405 | 1,699,801 | | **Non-current borrowings** | 1,162,088 | 784,719 | | **Total** | 3,350,493 | 2,484,520 | - Borrowings are secured by guarantees from the company's subsidiaries, finance lease receivables, trade receivables, pledged bank deposits, and shares in subsidiaries[172](index=172&type=chunk)[176](index=176&type=chunk) - All borrowings bear floating interest rates, with effective annual interest rates ranging from **3.3% to 6.7%**[176](index=176&type=chunk) [ACQUISITION OF SUBSIDIARIES](index=43&type=section&id=20.%20ACQUISITION%20OF%20SUBSIDIARIES) To expand its power generation business, the Group acquired three photovoltaic power generation companies in H1 2020: Danyang Jinyangguang Photovoltaic Power, Fuyang Hengming Solar Power, and Zhenjiang GCL New Energy, aiming to acquire quality assets and expand its power generation business scale, with the acquisitions of Fuyang and Zhenjiang companies yielding a total bargain purchase gain of approximately **HK$3.53 million** - The Group acquired three photovoltaic power station operating companies in H1 2020 for a total consideration of approximately **HK$97.07 million**, expanding its power generation asset portfolio[200](index=200&type=chunk)[201](index=201&type=chunk) - The acquisitions of Fuyang Solar Power and Zhenjiang GCL resulted in bargain purchase gains, primarily because the sellers intended to exit their investments due to their own business reasons[223](index=223&type=chunk)[234](index=234&type=chunk) MANAGEMENT DISCUSSION AND ANALYSIS [Business Review and Segment Performance](index=51&type=section&id=Business%20Review%20and%20Segment%20Performance) In H1 2020, the Group's overall revenue decreased by 6.8% to **HK$967 million**, and profit declined by 19.9% to **HK$32.91 million**, primarily due to slower EPC project progress caused by the COVID-19 pandemic and increased finance costs, though power generation and general construction engineering businesses still achieved growth - The two main reasons for the profit decline were: (i) slower EPC business progress due to the pandemic and compressed project costs and profit margins from grid parity policies; and (ii) a significant increase in finance costs due to higher average borrowings[241](index=241&type=chunk)[243](index=243&type=chunk) [EPC AND CONSULTANCY AND GENERAL CONSTRUCTION](index=52&type=section&id=EPC%20AND%20CONSULTANCY%20AND%20GENERAL%20CONSTRUCTION) As a core business, this segment's revenue decreased by 9.6% year-on-year to **HK$762 million**, and segment results declined by 8.0% to **HK$56.57 million**, primarily due to pandemic-induced delays in photovoltaic EPC projects, though strong performance in general construction engineering, with revenue up 65.4% to **HK$310 million**, partially offset the weakness in photovoltaic business EPC and Consultancy and General Construction Segment Performance | Metric | H1 2020 (HK$ Thousand) | H1 2019 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **External Sales Revenue** | 762,408 | 843,339 | -9.6% | | **Segment Results** | 56,574 | 61,494 | -8.0% | - General construction engineering business, including government affordable housing and municipal projects, became a significant growth driver for this segment, with revenue increasing by **65.4%** year-on-year[248](index=248&type=chunk)[249](index=249&type=chunk) [MANUFACTURING AND TRADING](index=54&type=section&id=MANUFACTURING%20AND%20TRADING) The component factory in Peixian, Xuzhou, recorded external sales revenue of **HK$107 million**, a 14.8% year-on-year increase, but despite revenue growth, the segment still reported a loss of **HK$6.71 million** due to intense market competition leading to fewer orders, though the loss narrowed from **HK$7.96 million** in the prior year Manufacturing and Trading Segment Performance | Metric | H1 2020 (HK$ Thousand) | H1 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **External Sales Revenue** | 107,131 | 94,177 | | **Segment Loss** | (6,714) | (7,964) | [POWER GENERATION](index=54&type=section&id=POWER%20GENERATION) The power generation business continued stable growth, with external sales revenue reaching **HK$89.29 million**, a 3.0% year-on-year increase, and segment results growing 4.0% to **HK$38.34 million**, primarily benefiting from contributions from acquired and operated photovoltaic power stations during the period, bringing the Group's total installed capacity owned and operated to **210.39 MW** at period-end - The Group completed the acquisitions of Fuyang Hengming and Zhenjiang GCL, two photovoltaic power generation companies, during the period, further expanding its power generation asset scale and contributing new revenue to this segment[253](index=253&type=chunk) - The Group is actively developing in the energy storage sector, having completed technical solution research for the Suining wind farm's supporting energy storage and exploring new business models for energy storage participation in power plant black starts, peak shaving, and frequency regulation[254](index=254&type=chunk)[255](index=255&type=chunk) [FINANCING](index=56&type=section&id=FINANCING) The finance lease business performed poorly, with external sales revenue decreasing by 39.5% year-on-year to **HK$7.96 million**, and segment loss widening by 47.4% to **HK$15.06 million**, primarily due to reduced interest and handling fee income and increased finance costs during the period Financing Segment Performance | Metric | H1 2020 (HK$ Thousand) | H1 2019 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **External Sales Revenue** | 7,956 | 13,157 | -39.5% | | **Segment Loss** | (15,058) | (10,218) | +47.4% | [BUSINESS PROSPECT](index=58&type=section&id=BUSINESS%20PROSPECT) Looking ahead, the Group will continue to strengthen its EPC capabilities in wind, photovoltaic, and concentrated solar power projects, expand its construction engineering market with Jiangsu Province as a hub, actively participate in bidding for new energy projects, seek suitable projects in North and Northwest China, and leverage capital advantages to explore emerging industries around the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Port, promoting supply chain finance and other synergistic businesses to create new profit growth points - Strategic priorities include: consolidating and expanding EPC business, especially general construction engineering; accelerating investment and development of new energy projects, including wind power; exploring emerging industry opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Port; and developing synergistic businesses such as supply chain finance[266](index=266&type=chunk)[267](index=267&type=chunk)[270](index=270&type=chunk) [FINANCIAL REVIEW](index=60&type=section&id=FINANCIAL%20REVIEW) This section details the Group's financial performance, position, and resources, noting a decline in H1 2020 revenue and profit primarily due to EPC business impacts, while total assets and liabilities increased in line with business expansion and project acquisitions, leading to a higher gearing ratio reflecting increased debt financing for development [Financial Results](index=61&type=section&id=Financial%20Results) The Group's H1 revenue decreased by 6.8% year-on-year, and profit attributable to owners of the Company declined by 26.6%, with a 9.6% decrease in EPC business revenue being the main driver of overall revenue decline, while power generation and manufacturing revenues grew by 3.0% and 13.8% respectively, and finance costs significantly increased by 30.7% to **HK$38.71 million**, putting considerable pressure on profit - Construction costs significantly increased by **64.8%** year-on-year, while cost of inventories used decreased by **31.9%**, reflecting a shift in business structure with an increase in general construction engineering projects and a decrease in new energy EPC projects[285](index=285&type=chunk) - Finance costs significantly increased by **30.7%**, primarily due to increased bank and other borrowings to support power station investments and EPC project advance payments[287](index=287&type=chunk) [Financial Position](index=66&type=section&id=Financial%20Position) As of June 30, 2020, total assets increased to **HK$6.191 billion**, driven primarily by non-current assets (up 27.2% year-on-year), reflecting acquisitions of photovoltaic power stations, while total liabilities rose to **HK$5.247 billion**, with non-current liabilities increasing by 48.2%, mainly due to higher long-term bank borrowings - The growth in total assets and total liabilities aligns with the Group's strategy to expand its power generation business scale through acquisitions and increased borrowings[289](index=289&type=chunk) [Liquidity, Financial Resources and Gearing](index=67&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing) As of June 30, 2020, the Group held cash and cash equivalents of **HK$583 million** and net current assets of **HK$227 million**, with the gearing ratio (total liabilities/total equity) increasing from 2.77 at the end of 2019 to **3.67**, reflecting higher debt levels, and the Group's borrowings are primarily at floating rates, secured by assets such as receivables and bank deposits Liquidity and Gearing Ratios | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Cash and cash equivalents (HK$ Thousand)** | 583,026 | 448,553 | | **Net current assets (HK$ Thousand)** | 226,649 | 243,563 | | **Total bank and other borrowings (HK$ Thousand)** | 3,350,493 | 2,484,520 | | **Gearing ratio** | 3.67 | 2.77 | CORPORATE GOVERNANCE AND OTHER INFORMATION [Directors' and Substantial Shareholders' Interests](index=77&type=section&id=Directors%27%20and%20Substantial%20Shareholders%27%20Interests) This section discloses the shareholdings of directors and substantial shareholders, noting that as of June 30, 2020, controlling shareholder China National Nuclear Corporation (CNNC) indirectly held **30.46%** of the company's shares through its subsidiary, and certain loan agreements require CNNC to maintain its status as the single largest shareholder with a stake of no less than **30%** - Controlling shareholder China National Nuclear Corporation (CNNC), through CNNC Investment (Hong Kong) Company Limited, holds **400 million shares** in the company, representing **30.46%** of the issued shares[348](index=348&type=chunk)[352](index=352&type=chunk) - The Group has **HK$871 million** in outstanding loans subject to specific performance obligations by the controlling shareholder, requiring CNNC to maintain its status as the single largest shareholder and a shareholding of no less than **30%**[322](index=322&type=chunk)[323](index=323&type=chunk)

Financial Performance - For the year ended December 31, 2019, the Group's overall revenue increased by approximately 28.2% to HK$2,892,578,000 compared to HK$2,256,268,000 in 2018[8] - Profit for the year ended December 31, 2019, rose by approximately 10.2% to HK$104,021,000, up from HK$94,415,000 in 2018[8] - Basic earnings per share for the year ended December 31, 2019, was HK7.37 cents, compared to HK6.93 cents in 2018[8] - The Group did not recommend the payment of any final dividend for the year ended December 31, 2019[9] - Profit attributable to owners of the Company amounted to HK$96,820,000 for 2019, representing a year-on-year increase of 6.4%[65] - The net profit margin for 2019 was 3.6%, a decrease from 4% in 2018[179] - The return on assets for 2019 was 1.8%, down from 2% in 2018[179] Revenue Segments - Revenue from the EPC and consultancy and general construction segment increased by approximately 33.3% to HK$2,306,824,000 in 2019, up from HK$1,731,036,000 in 2018[38] - The power generation segment recorded a net profit increase of 39.0% compared to the previous year, driven by contributions from self-owned photovoltaic power stations[33] - The power generation segment achieved a year-on-year revenue growth of approximately 42.4%, contributing HK$169,803,000 for the year ended December 31, 2019, compared to HK$119,206,000 in 2018[45] - Revenue from the power generation segment grew approximately 42.4% to HK$169,803,000, up from HK$119,206,000 in 2018, due to the addition of 7.39MW solar power facilities[88] - The manufacturing and trading segment achieved revenue of HK$388,658,000, contributing 13.4% to the Group's overall revenue, a decrease from 16.7% in 2018[88] Operating Expenses and Costs - Total operating expenses increased by approximately 31.8% to HK$2,649,213,000[8] - Construction costs surged by 269.0% to HK$741,299,000 in 2019[75] - Cost of sales and construction costs amounted to HK$1,795,521,000, a 6.1% increase, while construction costs surged 269.0% to HK$741,299,000 due to larger scale projects[98] - Staff costs decreased by approximately 9.6% to HK$48,651,000, attributed to cost control measures[100] Assets and Liabilities - As of December 31, 2019, total assets increased by approximately 31.1% to HK$5,686,376,000 compared to HK$4,338,666,000 in 2018[123] - Total liabilities increased by approximately 37.4% to HK$4,749,498,000, with current liabilities rising by approximately 35.4% to HK$3,962,554,000[124] - Non-current liabilities increased by approximately 48.6% to HK$786,944,000 due to an increase in long-term bank and other borrowings[124] - The Group's net current assets amounted to HK$243,563,000, a significant improvement from net current liabilities of HK$189,997,000 in 2018[130] Financing and Borrowings - Outstanding bank and other borrowings amounted to HK$2,484,520,000, with approximately 72% in Renminbi[130] - The effective interest rates on borrowings ranged from 2.0% to 6.3% per annum[130] - The group’s gearing ratio increased to 2.77 in 2019 from 2.09 in 2018, indicating higher leverage[179] - The Company entered into a general banking facility with a licensed bank in Hong Kong for a total notional amount of USD 20,000,000, with a term loan interest rate of 1.3% per annum over the London Interbank Offered Rate[164] Strategic Developments - The Group aims to leverage industry chain advantages to enhance technology innovation and cost reduction in response to "grid parity" pressures[27] - The Group secured and implemented several major solar photovoltaic power projects and is exploring potential wind power projects to enhance competitiveness[64] - The Group is closely monitoring the impact of the COVID-19 outbreak on its operations and revenue[184][185] - The Group actively monitors trends in the PRC solar power industry, competitors, and innovations to mitigate business and strategic risks[200] Certifications and Quality - The Group has obtained various certifications for module production, enhancing factory management and product quality[19] - The Group established a nationwide intelligent operation maintenance system, significantly improving equipment operational rates through remote monitoring[18] Shareholder and Corporate Governance - The controlling shareholder of the company changed from CNECC to CNNC on 17 May 2019[156] - CNNC holds approximately 30.46% of the issued shares, remaining the single largest shareholder of the company[177][178] - The Company is required to ensure CNNC remains the single largest beneficial shareholder with at least 30% shareholding while the Facility Two is outstanding[167]

Financial Performance - The company reported revenue of HKD 1,037,388,000 for the six months ended June 30, 2019, representing a slight increase of 1.3% compared to HKD 1,026,496,000 for the same period in 2018[9]. - The net profit for the period was HKD 41,081,000, which is a significant increase of 45.4% from HKD 28,217,000 in the previous year[9]. - Basic and diluted earnings per share increased to HKD 2.94, up from HKD 2.05, reflecting a growth of 43.9%[10]. - Total comprehensive income for the period amounted to HKD 34,436,000, compared to HKD 8,482,000 in the same period last year, indicating a substantial increase[10]. - The company reported a total comprehensive income of HKD 34,436 for the six months ended June 30, 2019, compared to HKD 32,001 for the same period in 2018, representing an increase of approximately 7.63%[14]. - The net profit rose by 45.59% to HKD 41,081,000, compared to HKD 28,217,000 in the same period last year[126]. Assets and Liabilities - The company's non-current assets were valued at HKD 1,554,342,000 as of June 30, 2019, a decrease from HKD 1,601,129,000 at the end of 2018[11]. - Current assets increased to HKD 3,482,533,000 from HKD 2,737,537,000, showing a growth of 27.2%[11]. - The total assets as of June 30, 2019, amounted to HKD 5,036,875,000, up from HKD 4,361,326,000 as of June 30, 2018, reflecting a growth of about 15.5%[68]. - The total liabilities were HKD 4,143,114,000, compared to HKD 3,478,131,000 in the previous year, which is an increase of approximately 19.1%[66]. - As of June 30, 2019, the total assets minus current liabilities amounted to HKD 1,580,443, an increase from HKD 1,411,132 as of December 31, 2018, representing a growth of approximately 11.97%[12]. Cash Flow and Financing - The net cash outflow from operating activities for the six months ended June 30, 2019, was HKD (102,546), a significant improvement compared to HKD (280,667) for the same period in 2018[15]. - The net cash inflow from financing activities for the six months ended June 30, 2019, was HKD 109,918, a decrease from HKD 538,843 in the same period of 2018[15]. - The company's cash and cash equivalents decreased to HKD 397,291 as of June 30, 2019, down from HKD 446,173 as of June 30, 2018, indicating a decline of approximately 10.95%[15]. - The cash outflow from financing activities for the six months ended June 30, 2019, was HKD 113,079,000[53]. - The outstanding bank and other borrowings amounted to HKD 2,206,829,000 as of June 30, 2019, compared to HKD 1,676,470,000 at the end of 2018[133]. Business Segments and Operations - The company engaged in various business segments, including engineering, procurement, and construction (EPC) services related to photovoltaic power plants, indicating a focus on renewable energy[17]. - The EPC and consulting segment recorded external sales of HKD 843,339,000, an increase of 9.71% from HKD 768,717,000 in the previous year[107]. - The manufacturing segment reported external sales of HKD 94,177,000, a decrease from HKD 200,003,000 in 2018, resulting in a segment loss of HKD 7,964,000[113]. - The company operates solar power stations with a total installed capacity of 163.38 MW, generating external sales of HKD 86,715,000, up from HKD 45,708,000 in 2018[114]. - The company plans to explore opportunities in other renewable energy sectors, such as wind power, to diversify its portfolio[107]. Corporate Governance and Shareholding - China Nuclear Technology Group holds approximately 30.46% of the issued shares and remains the largest single shareholder of the company[150]. - The company has committed to maintaining a direct or indirect equity stake of no less than 30% by China Nuclear Group as a condition of the financing agreement[149]. - The company has adopted the corporate governance code principles and complied with all applicable provisions during the reporting period, except for a specific deviation[155]. - The Audit Committee, consisting of four independent non-executive directors, has been established to review and supervise the financial reporting process[164]. Employee and Cost Management - Employee costs totaled HKD 18,601,000, slightly down from HKD 19,555,000 in the previous year, indicating a reduction in overall employee expenses[71]. - The total number of employees as of June 30, 2019, was 390, down from 406 as of December 31, 2018[154]. - Employee costs, including directors' remuneration, amounted to HKD 18,601,000 for the six months ended June 30, 2019, compared to HKD 53,833,000 for the year ended December 31, 2018[154].

Financial Performance - The company recorded a total revenue increase of approximately 14.9% to HKD 2,256,268,000 in 2018, compared to HKD 1,963,381,000 in 2017[11] - Profit decreased by about 21.6% to HKD 94,415,000 in 2018, down from HKD 120,402,000 in 2017, with basic earnings per share at HKD 0.0693[11] - Operating expenses rose by approximately 12.3% to HKD 2,009,971,000, driven by higher sales costs and other operational expenditures[11] - Financial costs surged by about 172.6% to HKD 62,244,000, compared to HKD 22,832,000 in 2017[11] - The profit for the year was HKD 94,415,000, a decrease of about 21.6% from HKD 120,402,000 in 2017, primarily due to an increase in corporate tax rate from 15% to 25%[23] - The company's net profit margin decreased to 4.2% in 2018 from 6.1% in 2017[42] - The net profit margin for the year ended December 31, 2018, was 4%, a decrease from 6% in 2017[79] - The return on assets for 2018 was 2%, down from 3% in 2017[79] Revenue Segments - The engineering, procurement, and construction segment achieved a growth of approximately 9.8% in segment performance, despite external uncertainties[14] - The company’s revenue from its component factory in Xuzhou contributed approximately 16.7% to total revenue[14] - The power generation business saw significant growth, with external customer sales and segment performance increasing by approximately 129.1% and 89.1%, respectively[14] - The EPC and consulting segment recorded a performance of HKD 166,307,000, an increase of approximately 9.8% compared to HKD 151,524,000 in 2017, despite a decline in sales to external customers by about 7.9% to HKD 1,731,036,000[24] - The solar power generation segment contributed HKD 119,206,000 in revenue, representing a year-on-year growth of approximately 129.1%, with segment performance increasing by about 89.1% to HKD 58,001,000[28] - Revenue from solar power generation increased by approximately 129.1% to HKD 119,206,000, up from HKD 52,037,000 in 2017[39] Operational Challenges - The company faced challenges in the solar photovoltaic industry due to policy changes, leading to the suspension or delay of several solar projects[13] - The company's net profit margin decreased due to sudden policy changes in the solar photovoltaic industry by the Chinese government[76] Strategic Plans - The company aims to expand its market share in solar energy and diversify into other renewable energy sectors, including thermal and wind energy[16] - The company plans to continue exploring opportunities to enhance profitability and control operating costs amid a challenging business environment[23] - The company plans to explore investment opportunities in other renewable energy sectors both domestically and internationally to ensure sustainable development[35] - The company aims to enhance market competitiveness through precise management and risk reduction measures[35] Financial Position - Total assets as of December 31, 2018, were HKD 4,338,666,000, a slight increase of 0.4% from HKD 4,322,308,000 in 2017[56] - Current liabilities increased by approximately 1.5% to HKD 2,927,534,000 as of December 31, 2018, compared to HKD 2,883,447,000 in 2017[56] - Total liabilities amounted to HKD 3,456,997,000 as of December 31, 2018, reflecting a 0.3% increase from HKD 3,447,595,000 in 2017[56] - Net assets attributable to equity holders were HKD 866,872,000 as of December 31, 2018, an increase of 0.5% from HKD 862,969,000 in 2017[57] - The group's total borrowings as of December 31, 2018, were HKD 1,676,470,000, an increase from HKD 1,032,105,000 in 2017[59] - The leverage ratio was 2.09 as of December 31, 2018, compared to 1.54 in 2017[62] Corporate Governance - The board consists of eight executive directors and four independent non-executive directors, ensuring a balance of expertise and experience to meet the company's business needs[160] - The company emphasizes board diversity, considering factors such as gender, age, cultural background, and professional experience to enhance decision-making[161] - The board is responsible for setting overall strategy, monitoring operational and financial performance, and making significant decisions for the company[162] - Independent non-executive directors have confirmed their independence according to listing rules, ensuring unbiased oversight[165] - The company has implemented a continuous professional development program for directors, focusing on their roles and responsibilities as listed company directors[170] Employee and Operational Metrics - Employee costs rose by approximately 38.0% to HKD 53,833,000, compared to HKD 39,002,000 in 2017[45] - The total number of employees as of December 31, 2018, was 406, an increase from 274 in 2017[137] - The company has established appropriate insurance for directors and senior officers to mitigate risks arising from business operations[171] Shareholder Information - Major shareholders include China Nuclear Engineering with a 30.46% stake, holding 400,000,000 shares as of December 31, 2018[112] - The largest customer accounted for 20% of total revenue in both 2018 and 2017[87] - The combined revenue from the top five customers was 45% in 2018, down from 67% in 2017[87] Risk Management - The company identified several areas for improvement in its risk management and internal control systems, which will continue to be enhanced[193] - The board of directors is responsible for maintaining effective risk management and internal control systems to manage risks associated with achieving business objectives[193] - The company has implemented appropriate measures to manage identified risks as part of its ongoing risk management efforts[193]