：能源与ESG周报 ...

：印度研究总结 ...

Equity – Asia Research 日本老龄化下医药市场机遇 Opportunities in the Pharmaceutical Market Amidst Japan's Aging Society 孟科含 Kehan Meng kh.meng@htisec.com 孙旭东 Xudong Sun xd.sun@htisec.com 2024年6月12日 本研究报告由海通国际分销，海通国际是由海通国际研究有限公司，海通证券印度私人有限公司，海通国际株式会社和海通国际证券集团其他各成员单位的证券 研究团队所组成的全球品牌，海通国际证券集团各成员分别在其许可的司法管辖区内从事证券活动。关于海通国际的分析师证明，重要披露声明和免责声明，请 参阅附录。(PleaseseeappendixforEnglishtranslationofthedisclaimer) 东证医药股市值集中，大药企主导 ...

Financial Data and Key Metrics - The Tokyo Stock Exchange's pharmaceutical sector has a market capitalization of $4,247 billion, accounting for 6.5% of the total market capitalization [3] - The A-share pharmaceutical market has a total market capitalization of $847.7 billion, accounting for 7.1% of the total A-share market capitalization, slightly higher than the Tokyo Stock Exchange [3] - The total market capitalization of the Tokyo Stock Exchange is $6.5 trillion [4] Business Line Data and Key Metrics - The Japanese pharmaceutical market is highly concentrated, with major pharmaceutical companies dominating. The top 10 companies account for 74.8% of the market capitalization [6] - In contrast, the Chinese pharmaceutical market is less concentrated, with the top 10 companies accounting for only 19.5% of the market capitalization [6] - The market capitalization of Japanese pharmaceutical companies has increased significantly over the years, with companies like Daiichi Sankyo and Takeda Pharmaceutical showing substantial growth [6] Market Data and Key Metrics - Japan's aging society presents significant opportunities for the pharmaceutical market. The proportion of the population aged 65 and above is 29%, compared to 15% in China [9] - Japan entered a moderately aging society in 1994, while China entered this phase in 2021, indicating a similar trajectory to Japan's 1990s [8] - The healthcare expenditure growth rate in Japan during its aging period (70s-90s) was 10.2%, significantly higher than the GDP growth rate of 7.5% [10] Company Strategy and Industry Competition - Japanese pharmaceutical companies have successfully expanded overseas, leveraging partnerships with multinational corporations (MNCs) and technological advancements. For example, Takeda Pharmaceutical's overseas revenue accounted for 87% of its total revenue in 2022 [15] - Japanese medical device companies, such as Terumo, have also seen significant growth through overseas expansion, with overseas revenue accounting for 75% of total revenue in 2022 [15] - The Chinese pharmaceutical market, while larger in size, has not yet seen companies of the same scale as Japanese pharmaceutical giants. However, the market is expected to grow significantly due to the aging population [25] Management Commentary on Operating Environment and Future Prospects - The aging population in Japan has driven demand for healthcare products and services, particularly in areas such as mental health, respiratory diseases, and cancer [18] - Companies like Hisamitsu Pharmaceutical have benefited from the growing demand for pain relief products, driven by an aging workforce and increased prevalence of chronic pain [18] - The Japanese government has implemented policies to control healthcare costs, but the proportion of healthcare expenditure to GDP continues to rise [10] Other Important Information - The Japanese pharmaceutical market is expected to remain resilient and show growth potential during the moderate aging period [7] - The Chinese pharmaceutical market is expected to benefit from the aging population, with healthcare expenditure growing at a rate of 24.7% from 2000 to 2021, compared to a GDP growth rate of 14.2% [10] - The Chinese market offers significant opportunities for pharmaceutical companies due to its large population and growing healthcare needs, with the market size being twice that of Japan [25] Summary of Q&A Session - No specific Q&A session content was provided in the documents

[Company Profile and Key Financial Indicators](index=6&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information and presents its key financial performance metrics for the reporting period [Company Information](index=6&type=section&id=Company%20Information) Huaxin Cement Co., Ltd. is dual-listed on the Shanghai Stock Exchange (A-shares) and Hong Kong Stock Exchange (H-shares), with Li Yeqing as its legal representative | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | SSE | Huaxin Cement | 600801 | | H-share | HKEX | Huaxin Cement | 06655 | [Key Financial Data and Indicators](index=7&type=section&id=Key%20Financial%20Data%20and%20Indicators) In 2023, the company achieved a 10.79% revenue growth to 33.76 billion yuan and a 2.34% net profit increase to 2.76 billion yuan Near Three-Year Key Accounting Data (Unit: Yuan) | Indicator | 2023 | 2022 | YoY Change (%) | 2021 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 33,757,087,272 | 30,470,382,363 | 10.79 | 32,464,083,379 | | **Net Profit Attributable to Shareholders of Listed Company** | 2,762,116,715 | 2,698,868,510 | 2.34 | 5,363,525,692 | | **Net Profit Attributable to Shareholders (Excluding Non-recurring Items)** | 2,322,113,737 | 2,578,634,452 | -9.95 | 5,304,878,118 | | **Net Cash Flow from Operating Activities** | 6,235,555,071 | 4,567,694,220 | 36.51 | 7,594,957,122 | | **Net Assets Attributable to Shareholders of Listed Company** | 28,932,949,847 | 27,446,305,028 | 5.42 | 26,729,911,468 | | **Total Assets** | 68,800,268,263 | 64,241,676,265 | 7.10 | 52,549,618,050 | Near Three-Year Key Financial Indicators | Key Financial Indicator | 2023 | 2022 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 1.33 | 1.30 | 2.31 | | Diluted Earnings Per Share (Yuan/share) | 1.32 | 1.28 | 3.13 | | Weighted Average Return on Net Assets (%) | 9.82 | 10.03 | Decreased by 0.21 percentage points | 2023 Quarterly Key Financial Data (Unit: Yuan) | Item | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 6,628,435,263 | 9,203,137,237 | 8,333,304,379 | 9,592,210,393 | | Net Profit Attributable to Shareholders of Listed Company | 247,979,284 | 944,581,111 | 681,763,299 | 887,793,021 | | Net Cash Flow from Operating Activities | 331,923,337 | 1,795,243,944 | 1,375,754,217 | 2,732,633,573 | - In 2023, non-recurring gains and losses totaled **440 million yuan**, primarily from non-current asset disposal gains (**418 million yuan**) and government subsidies (**130 million yuan**)[18](index=18&type=chunk) [Company Business Overview](index=10&type=section&id=Company%20Business%20Overview) This section details the company's industry position, main business segments, operating model, and core competitive advantages [Industry Overview and Company Position](index=10&type=section&id=Industry%20Overview%20and%20Company%20Position) In 2023, China's cement industry faced challenges from real estate adjustments and declining demand, with company clinker capacity ranking fourth nationally - In 2023, China's cement industry experienced a decline in total demand, with annual cement output reaching **2.023 billion tons**, a **5% year-on-year decrease**, leading to the lowest industry profit in nearly sixteen years[21](index=21&type=chunk) - Severe overcapacity is a major issue in the current cement industry, with the estimated clinker capacity utilization rate for 2023 at **59%**, a **7 percentage point decrease** from 2022[21](index=21&type=chunk) - As of the end of 2023, the company's total clinker capacity ranked **fourth nationally**, with domestic clinker capacity ranking **sixth** and overseas clinker capacity ranking **second**[22](index=22&type=chunk) [Main Business and Operating Model](index=11&type=section&id=Main%20Business%20and%20Operating%20Model) The company has evolved into a global building materials group with a full industry chain, including cement, concrete, and aggregates, with cement business contributing 57% of revenue - The company's business has expanded to include cement, concrete, aggregates, environmental protection, equipment manufacturing and engineering, and new building materials, becoming a global building materials group with integrated full industry chain development[23](index=23&type=chunk) Key Capacities as of End of 2023 | Business Segment | Capacity | | :--- | :--- | | Cement | 127 million tons/year | | Ready-mix Concrete | 122 million cubic meters/year | | Aggregates | 277 million tons/year | | Waste Disposal | 16.32 million tons/year | - At the end of 2023, cement business revenue accounted for **57%** of the company's total operating revenue, maintaining its dominant position, while non-cement businesses have become significant profit contributors[23](index=23&type=chunk) [Core Competencies](index=12&type=section&id=Core%20Competencies) The company's core competencies include scale, green development, technological innovation, brand strength, and strategic global layout - The company has a presence in **14 provinces and cities domestically** and **11 countries overseas**, boasting **127 million tons of cement capacity**, making it one of the few industry players with a complete and vertically integrated industrial chain[26](index=26&type=chunk) - The company demonstrates significant advantages in green and low-carbon development; as of the end of 2023, the thermal substitution rate for domestic kiln lines using alternative fuels reached **23%**, with **63%** of kiln lines achieving benchmark comprehensive energy consumption levels[27](index=27&type=chunk) - The company has achieved breakthroughs in ultra-high performance concrete (UHPC) products, successfully developing the Super Klong® series and achieving commercial application in four major engineering fields[28](index=28&type=chunk) - The company's brand value continues to increase, reaching **87.856 billion yuan** in 2023, ranking **79th** on the "China's 500 Most Valuable Brands" list, and has been listed on "Fortune China 500" for **14 consecutive years**[29](index=29&type=chunk) [Board of Directors' Report](index=14&type=section&id=Board%20of%20Directors%27%20Report) This section covers the company's investment activities, profit distribution, key customer and supplier relationships, and research and development expenditures [Investment Status](index=14&type=section&id=Investment%20Status) Long-term equity investments increased by 16.86% to 513 million yuan, with major subsidiaries achieving significant net profits Operating Performance of Major Holding Subsidiaries (Unit: Yuan) | Company Name | Total Assets | Net Assets | Net Profit | Operating Revenue | | :--- | :--- | :--- | :--- | :--- | | Huaxin Cement (Wuxue) Co., Ltd. | 2,818,741,684 | 1,966,011,264 | 464,960,252 | 2,415,036,770 | | Huaxin Green Building Materials (Wuxue) Co., Ltd. | 1,426,862,899 | 845,421,805 | 312,238,245 | 1,080,618,963 | | Huaxin Cement Jizzakh LLC | 680,611,904 | 628,475,459 | 229,784,396 | 682,228,912 | [Profit Distribution](index=15&type=section&id=Profit%20Distribution) The company distributed a cash dividend of 0.51 yuan per share for 2022 and proposes 0.53 yuan per share for 2023 - The 2022 profit distribution plan was completed on July 21, 2023, with a cash dividend of **0.51 yuan per share** (tax inclusive)[39](index=39&type=chunk) - The Board of Directors proposes a 2023 profit distribution plan of a cash dividend of **0.53 yuan per share** (tax inclusive) to all shareholders based on the total share capital at the end of 2023[40](index=40&type=chunk)[41](index=41&type=chunk) [Major Customers and Suppliers](index=16&type=section&id=Major%20Customers%20and%20Suppliers) The company maintains low customer and supplier concentration, with the top five customers accounting for 3.8% of sales and top five suppliers for 12.2% of purchases - Sales to the top five customers totaled **1.284 billion yuan**, accounting for **3.8%** of the annual sales, with the largest customer's sales accounting for **1.9%**[44](index=44&type=chunk)[45](index=45&type=chunk) - Purchases from the top five suppliers totaled **2.588 billion yuan**, accounting for **12.2%** of the annual procurement, with the largest supplier's purchases accounting for **6.5%**[46](index=46&type=chunk)[47](index=47&type=chunk) [R&D Investment](index=17&type=section&id=R%26D%20Investment) In 2023, total R&D investment was 325 million yuan, representing 0.96% of operating revenue, with 7.3% capitalized 2023 R&D Investment (Unit: Yuan) | Item | Amount | | :--- | :--- | | Expensed R&D Investment for the Period | 301,098,955 | | Capitalized R&D Investment for the Period | 23,795,650 | | **Total R&D Investment** | **324,894,605** | | Total R&D Investment as % of Operating Revenue | 0.96 | | Capitalized R&D Investment as % | 7.3 | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational performance, key financial analysis, 2024 outlook, and risk management strategies [Overview of Business Development](index=19&type=section&id=Overview%20of%20Business%20Development) In 2023, the company achieved resilient growth by advancing its four key strategies, expanding aggregates and concrete businesses, and acquiring overseas assets - Annual cement cost decreased by **10.29%**, with domestic cement cost decreasing by **12.79%** year-on-year[56](index=56&type=chunk) - Aggregates business added **67 million tons** of new capacity, reaching an annual capacity of **277 million tons**, with third-party sales of **131 million tons**, a **100% year-on-year increase**[56](index=56&type=chunk) - Concrete business sales reached **27.27 million cubic meters**, a **66% year-on-year increase**[56](index=56&type=chunk) - Successfully completed the acquisitions of Oman Cement and South Africa's Natal Portland Cement, bringing overseas effective cement grinding capacity to **20.91 million tons/year**[56](index=56&type=chunk) [Analysis of Key Operating Performance](index=20&type=section&id=Analysis%20of%20Key%20Operating%20Performance) Operating revenue grew 10.79% in 2023, driven by strong concrete and aggregates sales, while overseas revenue increased by nearly 30% Main Business by Product (Unit: Yuan) | Product | Operating Revenue | Operating Cost | Gross Margin (%) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Cement | 18,331,734,881 | 13,425,727,572 | 26.76 | -2.64 | | Concrete | 7,652,223,198 | 6,467,900,216 | 15.48 | 49.08 | | Aggregates | 5,363,828,939 | 2,902,999,002 | 45.88 | 75.01 | | Clinker | 947,002,919 | 843,819,065 | 10.90 | -46.14 | | **Total** | **33,757,087,272** | **24,741,414,727** | **26.71** | **10.79** | Key Product Production and Sales Volume | Main Product | Unit | Production Volume | Sales Volume | YoY Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | :--- | | Cement | 10,000 tons | 6,526 | 5,818 | 6.38 | | Clinker | 10,000 tons | 5,243 | 372 | -34.85 | | Aggregates | 10,000 tons | 17,779 | 13,137 | 99.69 | | Concrete | 10,000 cubic meters | 2,727 | 2,727 | 66.39 | - By region, overseas revenue grew by **29.99%**, with revenue in East China, Central China, South China, and Southwest China all increasing, primarily due to significant growth in concrete and aggregates sales[60](index=60&type=chunk)[62](index=62&type=chunk) - Financial expenses increased by **52.35%** year-on-year, mainly due to increased interest payments[64](index=64&type=chunk) - As of the end of the reporting period, the company's asset-liability ratio was **51.60%**, a **0.39 percentage point decrease** from the end of the previous year[71](index=71&type=chunk) [2024 Outlook and Strategy](index=25&type=section&id=2024%20Outlook%20and%20Strategy) The company anticipates continued challenges in domestic demand for 2024 and will advance its four core strategies, targeting 37.1 billion yuan in total revenue - Domestic demand for cement, aggregates, and concrete is expected to remain subdued in 2024, while global cement demand (excluding China) is projected to increase by **2.4%** year-on-year, driven by markets in India, the Middle East, and Africa[74](index=74&type=chunk)[76](index=76&type=chunk) 2024 Operating Plan | Item | Target | | :--- | :--- | | Cement and Clinker Sales | Approx. 63 million tons | | Aggregates Sales | 156 million tons | | Concrete Sales | 30.52 million cubic meters | | Total Revenue Forecast | 37.1 billion yuan | | Capital Expenditure | Approx. 6.9 billion yuan | - The company will continue to advance its "integrated transformation, overseas development, new materials business expansion, and traditional industry + digital innovation" strategies, accelerating its green, intelligent, and international transformation[77](index=77&type=chunk) [Risk Analysis and Response](index=27&type=section&id=Risk%20Analysis%20and%20Response) The company faces risks from declining domestic demand, overcapacity, environmental compliance, and international operations, addressed through supply-side reform and technological innovation - Major risks include: declining domestic demand and overcapacity, safety and environmental compliance (especially ultra-low emission policies), rising production costs due to energy market uncertainties and increased technological transformation investments, and geopolitical and financial market volatility in international operations[81](index=81&type=chunk) - Response measures include: promoting supply-side reform, increasing investment in safety and environmental protection, cost reduction through technological transformation and digital innovation, strengthening refined marketing, and implementing risk hedging strategies[82](index=82&type=chunk) [Significant Matters](index=29&type=section&id=Significant%20Matters) This section highlights key events and transactions during the reporting period, including guarantees and major corporate actions [Guarantees](index=31&type=section&id=Guarantees) At the end of the reporting period, external guarantees totaled 10.02 billion yuan, all for subsidiaries, representing 30.08% of net assets Summary of Guarantees (Unit: Yuan) | Item | Amount | | :--- | :--- | | Total Guarantees for Subsidiaries at End of Reporting Period | 10,016,014,939 | | Total Guarantees as % of Company's Net Assets | 30.08 | | Debt Guarantees Provided for Guaranteed Parties with Asset-Liability Ratio Exceeding 70% | 7,297,637,010 | [Major Impact Events](index=32&type=section&id=Major%20Impact%20Events) The company completed several significant events, including bond issuance, share repurchases, employee stock plans, and two major overseas acquisitions - The company was approved to issue corporate bonds not exceeding **3 billion yuan**, with the first tranche of **800 million yuan** completed on December 5, 2023, at a coupon rate of **3.12%**[101](index=101&type=chunk) - Completed the acquisition of **64.66%** equity in Oman Cement Company SAOG for a total consideration of **210.8 million USD**[104](index=104&type=chunk) - Completed the acquisition of **100%** equity in Natal Portland Cement Company (Pty) Ltd. for a total consideration of **231.6 million USD**[105](index=105&type=chunk) [Share Changes and Shareholder Information](index=34&type=section&id=Share%20Changes%20and%20Shareholder%20Information) This section details the company's shareholding structure, including major shareholders and the ultimate controlling party [Shareholder Information](index=34&type=section&id=Shareholder%20Information) As of December 31, 2023, the company had 54,007 shareholders, with Holcim Limited as the ultimate controlling shareholder holding 41.81% of shares Top Three Shareholders as of December 31, 2023 | Shareholder Name | Number of Shares Held | Percentage (%) | Share Type | | :--- | :--- | :--- | :--- | | HKSCC Nominees Limited | 734,719,919 | 35.34 | H-share | | HOLCHIN B.V. | 451,333,201 | 21.71 | A-share | | Huaxin Group Co., Ltd. | 338,060,739 | 16.26 | A-share | - The company's controlling shareholder and ultimate actual controller is Holcim Limited, which indirectly holds a total of **41.81%** of the company's shares through its wholly-owned subsidiaries Holderfin B.V. and Holchin B.V.[110](index=110&type=chunk)[113](index=113&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=38&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides details on the company's board, supervisory board, senior management, and overall employee structure, including compensation and equity incentive plans [Basic Information and Shareholding of Directors, Supervisors, and Senior Management](index=38&type=section&id=Basic%20Information%20and%20Shareholding%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The report details the tenure, shareholdings, and annual remuneration of the company's directors, supervisors, and senior management, with many increasing their holdings - During the reporting period, several directors, supervisors, and senior management increased their shareholdings through secondary market purchases, including Director and President Li Yeqing, who acquired **185,900 shares**[117](index=117&type=chunk) [Employee Information](index=49&type=section&id=Employee%20Information) As of the end of 2023, the group had 20,804 employees, with production and technical personnel forming the largest groups, and approximately 47% holding college degrees or higher Employee Professional Composition | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 7,735 | | Sales Personnel | 1,367 | | Technical Personnel | 7,743 | | Financial Personnel | 868 | | Administrative Personnel | 3,091 | | **Total** | **20,804** | Employee Education Level | Education Level Category | Number of People | | :--- | :--- | | Master's Degree and Above | 585 | | Bachelor's Degree | 3,920 | | Associate Degree | 5,508 | | Other | 10,791 | | **Total** | **20,804** | [Equity Incentive Plan](index=50&type=section&id=Equity%20Incentive%20Plan) The company settled its 2020-2022 employee stock ownership plan, repurchasing and canceling some shares, and launched a new 2023-2025 plan, purchasing 2.92 million A-shares for its first phase - The 2020–2022 core employee stock ownership plan resulted in the repurchase and cancellation of some shares due to unmet performance targets, with the first lock-up period expiring on October 28, 2023[139](index=139&type=chunk)[140](index=140&type=chunk) - The company launched the 2023–2025 core employee stock ownership plan, with the first phase completing the purchase of **2,917,577 A-shares** on September 27, 2023[144](index=144&type=chunk)[145](index=145&type=chunk) [Corporate Governance Report](index=54&type=section&id=Corporate%20Governance%20Report) This section outlines the company's corporate governance structure, specialized board committees, and internal control and risk management systems [Overview of Corporate Governance](index=54&type=section&id=Overview%20of%20Corporate%20Governance) The company maintains a robust corporate governance structure compliant with dual-listing regulations, ensuring independence and equitable shareholder rights - The company's corporate governance structure complies with the "Company Law," "Guidelines for Corporate Governance of Listed Companies," and the HKEX "Corporate Governance Code," with adherence to code provisions during the reporting period[148](index=148&type=chunk)[149](index=149&type=chunk) - The company maintains strict "five separations" from its controlling shareholder in terms of personnel, assets, finance, organization, and business, ensuring independent operation[148](index=148&type=chunk) [Board Committees](index=62&type=section&id=Board%20Committees) The Board of Directors has five specialized committees—Audit, Nomination, Remuneration and Appraisal, Strategy, and Governance and Compliance—all actively fulfilling their responsibilities - The Board of Directors has five specialized committees: Audit Committee, Nomination Committee, Remuneration and Appraisal Committee, Strategy Committee, and Governance and Compliance Committee[165](index=165&type=chunk) - During the reporting period, the Audit Committee held **4 meetings**, the Nomination Committee **1**, the Remuneration and Appraisal Committee **3**, the Strategy Committee **2**, and the Governance and Compliance Committee **2**, with all committee members personally attending[169](index=169&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Internal Control and Risk Management](index=66&type=section&id=Internal%20Control%20and%20Risk%20Management) The company maintains a risk-oriented internal control system with a "three lines of defense" mechanism, confirmed effective by the Board and external auditors - The company's Board of Directors is responsible for establishing and effectively implementing the internal control system, and has built a "three lines of defense" risk management mechanism involving business departments, internal audit, and external audit[180](index=180&type=chunk)[181](index=181&type=chunk) - Ernst & Young Hua Ming audited the effectiveness of the company's internal controls related to financial reporting and issued a standard unqualified audit opinion[182](index=182&type=chunk)[185](index=185&type=chunk) - The Board of Directors has assessed and confirmed that the company's internal control system was effective and sufficient during the reporting period[182](index=182&type=chunk) [Corporate Bonds Information](index=70&type=section&id=Corporate%20Bonds%20Information) This section provides an overview of the company's outstanding domestic and overseas corporate bonds, including credit ratings and fund utilization [Overview of Corporate Bonds](index=70&type=section&id=Overview%20of%20Corporate%20Bonds) The company has multiple outstanding domestic and overseas bonds, with Moody's Baa1 rating for overseas bonds and AAA for domestic bonds, all funds used as committed Credit Ratings of Major Outstanding Bonds | Bond Name | Credit Rating Agency | Credit Rating Level | Rating Outlook | | :--- | :--- | :--- | :--- | | Overseas Bonds Issued in 2020 | MOODY'S INVESTORS SERVICE | Baa1 | Negative | | Domestically Publicly Issued Bonds | China Chengxin International Credit Rating Co., Ltd. | AAA | Stable | - All bond proceeds were used consistently with the committed purposes and plans in the offering circulars, primarily for overseas M&A projects and Belt and Road investment projects[192](index=192&type=chunk)[193](index=193&type=chunk) Debt Repayment Capacity Indicators for the Past Two Years | Key Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 51.6% | 52.0% | | EBITDA to Total Debt | 0.12 | 0.11 | | Interest Coverage Ratio | 7.51 | 9.93 | | Loan Repayment Rate (%) | 100% | 100% | | Interest Payment Rate (%) | 100% | 100% | [Five-Year Financial Summary](index=72&type=section&id=Five-Year%20Financial%20Summary) This section presents a five-year overview of the company's financial performance, highlighting trends in revenue, profit, and asset growth [Five-Year Financial Summary](index=72&type=section&id=Five-Year%20Financial%20Summary) Over the past five years, operating revenue fluctuated, while total profit and net profit attributable to the parent company significantly declined after 2021, despite continuous asset expansion Five-Year Financial Summary (Unit: Million RMB) | Item | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,757 | 30,470 | 32,464 | 29,357 | 31,439 | | Total Profit | 4,326 | 3,988 | 7,373 | 7,664 | 8,716 | | Net Profit Attributable to Parent Company Owners | 2,762 | 2,699 | 5,364 | 5,631 | 6,342 | | Total Assets | 68,800 | 64,242 | 52,550 | 43,929 | 36,646 | | Total Liabilities | 35,505 | 33,403 | 23,172 | 18,189 | 13,278 | [Independent Auditor's Report](index=73&type=section&id=Independent%20Auditor%27s%20Report) This section presents the independent auditor's opinion on the financial statements and highlights key audit matters [Audit Opinion and Key Audit Matters](index=74&type=section&id=Audit%20Opinion%20and%20Key%20Audit%20Matters) Ernst & Young Hua Ming issued an unqualified audit opinion on the 2023 financial statements, with "Expected Credit Losses on Accounts Receivable" identified as a key audit matter - Auditor Ernst & Young Hua Ming issued a standard unqualified audit opinion, stating that the financial statements fairly present the company's financial position as of December 31, 2023, and its operating results and cash flows for 2023[199](index=199&type=chunk) - The key audit matter is "Expected Credit Losses on Accounts Receivable." As of the end of 2023, the carrying amount of accounts receivable in the consolidated financial statements was **2.26 billion yuan**, with **236 million yuan** provided for impairment. The auditor performed procedures including internal control testing, model review, and sample review[201](index=201&type=chunk)[202](index=202&type=chunk) [Financial Statements](index=78&type=section&id=Financial%20Statements) This section presents the company's consolidated balance sheet, income statement, and cash flow statement for the reporting period [Consolidated Balance Sheet](index=79&type=section&id=Consolidated%20Balance%20Sheet) As of year-end 2023, total assets reached 68.80 billion yuan, a 7.10% increase, with total liabilities at 35.51 billion yuan, resulting in a 51.6% asset-liability ratio Consolidated Balance Sheet Summary (Unit: Yuan) | Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | 15,219,588,022 | 14,450,298,165 | | **Total Non-current Assets** | 53,580,680,241 | 49,791,378,100 | | **Total Assets** | **68,800,268,263** | **64,241,676,265** | | **Total Current Liabilities** | 18,934,215,066 | 16,624,884,300 | | **Total Non-current Liabilities** | 16,571,170,755 | 16,778,611,504 | | **Total Liabilities** | **35,505,385,821** | **33,403,495,804** | | **Total Equity Attributable to Parent Company Shareholders** | 28,932,949,847 | 27,446,305,028 | | **Total Shareholders' Equity** | **33,294,882,442** | **30,838,180,461** | [Consolidated Income Statement](index=82&type=section&id=Consolidated%20Income%20Statement) In 2023, operating revenue increased by 10.79% to 33.76 billion yuan, with net profit attributable to parent company shareholders rising 2.34% to 2.76 billion yuan Consolidated Income Statement Summary (Unit: Yuan) | Item | 2023 | 2022 | | :--- | :--- | :--- | | **Operating Revenue** | 33,757,087,272 | 30,470,382,363 | | **Operating Cost** | 24,741,414,727 | 22,481,901,607 | | **Operating Profit** | 4,351,500,618 | 4,022,570,540 | | **Total Profit** | 4,326,247,137 | 3,988,085,596 | | **Net Profit** | 3,218,098,102 | 3,023,554,873 | | **Net Profit Attributable to Parent Company Shareholders** | 2,762,116,715 | 2,698,868,510 | | **Basic Earnings Per Share** | 1.33 | 1.30 | [Consolidated Cash Flow Statement](index=86&type=section&id=Consolidated%20Cash%20Flow%20Statement) Net cash flow from operating activities increased by 36.51% to 6.24 billion yuan in 2023, while investment and financing activities resulted in net outflows Consolidated Cash Flow Statement Summary (Unit: Yuan) | Item | 2023 | 2022 | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 6,235,555,071 | 4,567,694,220 | | **Net Cash Flow from Investing Activities** | (6,453,904,653) | (8,383,336,829) | | **Net Cash Flow from Financing Activities** | (951,747,856) | 1,771,835,223 | | **Net Increase in Cash and Cash Equivalents** | (1,245,905,793) | (1,934,453,363) | | **Cash and Cash Equivalents at Year-End** | 5,370,115,985 | 6,616,021,778 |

[Report Overview](index=1&type=section&id=%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88) This section provides an overview of the Q1 2024 report, including basic information and management's assurances [Basic Report Information](index=1&type=section&id=%E6%8A%A5%E5%91%8A%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides basic information on Huaxin Cement Co., Ltd.'s Q1 2024 report, including its unaudited nature, preparation basis, and management's assurance of report authenticity - Huaxin Cement Co., Ltd. (Stock Code: 6655) released its Q1 2024 report[1](index=1&type=chunk) - The reporting period is from January 1 to March 31, 2024; financial statements are prepared under Chinese accounting standards and are unaudited[2](index=2&type=chunk) - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content[3](index=3&type=chunk) [Key Financial Data and Indicators](index=2&type=section&id=%E4%B8%80%E3%80%81%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E8%B3%87%E6%96%99%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) This section presents the company's key financial performance and position indicators for Q1 2024, highlighting significant changes and their underlying reasons [Key Accounting Data and Financial Indicators](index=2&type=section&id=(%E4%B8%80)%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E8%B3%87%E6%96%99%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) Huaxin Cement's Q1 2024 operating revenue grew by 6.87% year-on-year, but net profit attributable to shareholders and net profit excluding non-recurring items both declined, with a significant decrease in net cash flow from operating activities Q1 2024 Key Financial Indicators Overview | Indicator | Current Period (Yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | | Operating Revenue | 7,083,601,678 | 6.87 | | Net Profit | 291,984,821 | 3.28 | | Net Profit Attributable to Shareholders of the Listed Company | 177,469,351 | -28.43 | | Net Profit Attributable to Shareholders of the Listed Company, Excluding Non-recurring Gains and Losses | 151,703,644 | -35.09 | | Net Cash Flow from Operating Activities | 106,994,109 | -67.77 | | Basic Earnings Per Share (Yuan/share) | 0.09 | -25.00 | | Diluted Earnings Per Share (Yuan/share) | 0.08 | -33.33 | | Weighted Average Return on Net Assets (%) | 0.61 | decreased by 0.29 percentage points | Q1 2024 End-of-Period Balance Sheet Indicators Overview | Indicator | End of Current Period (Yuan) | End of Previous Year (Yuan) | Change from End of Previous Year (%) | | :--- | :--- | :--- | :--- | | Total Assets | 69,240,660,681 | 68,800,268,263 | 0.64 | | Total Equity Attributable to Shareholders of the Listed Company | 29,164,435,662 | 28,932,949,847 | 0.80 | [Non-recurring Gains and Losses Items and Amounts](index=3&type=section&id=(%E4%BA%8C)%E9%9D%9E%E7%B6%93%E5%B8%B8%E6%80%A7%E6%90%8D%E7%9B%8A%E9%A0%85%E7%9B%AE%E5%92%8C%E9%87%91%E9%A1%8D) Total non-recurring gains and losses for the quarter amounted to **25.77 million Yuan**, primarily including government subsidies, fair value changes of financial assets, and disposal gains/losses of non-current assets Q1 2024 Non-recurring Gains and Losses Items and Amounts | Item | Amount for Current Period (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -534,441 | | Government Subsidies Recognized in Current Profit/Loss | 36,801,166 | | Gains/Losses from Fair Value Changes of Financial Assets and Liabilities Held by Non-financial Enterprises, and from Disposal of Financial Assets and Liabilities | 2,187,279 | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | 15,000 | | Other Non-operating Income and Expenses Apart from the Above | -2,202,103 | | Less: Income Tax Impact | 7,980,388 | | Impact on Minority Interests (After Tax) | 2,520,806 | | **Total** | **25,765,707** | [Changes and Reasons for Key Accounting Data and Financial Indicators](index=3&type=section&id=(%E4%B8%89)%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%95%B8%E6%93%9A%E3%80%81%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99%E7%99%BC%E7%94%9F%E8%AE%8A%E5%8B%95%E7%9A%84%E6%83%85%E6%B3%81%E3%80%81%E5%8E%9F%E5%9B%A0) Net profit attributable to shareholders, excluding non-recurring items, decreased by **35.09%** due to declining profitability in some wholly-owned subsidiaries and increased share of profits from joint ventures; net cash flow from operating activities fell by **67.77%** mainly due to increased working capital investment in inventory Changes and Reasons for Key Financial Indicators | Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | Net Profit Attributable to Shareholders of the Listed Company, Excluding Non-recurring Gains and Losses | -35.09 | Declining profitability in some wholly-owned subsidiaries, increased share of profits from joint ventures | | Net Cash Flow from Operating Activities | -67.77 | Increased working capital investment in inventory | [Shareholder Information](index=4&type=section&id=%E4%BA%8C%E3%80%81%E8%82%A1%E4%B8%9C%E4%BF%A1%E6%81%AF) This section details the company's shareholder structure, including the total number of ordinary shareholders and the shareholding of the top ten shareholders [Total Number of Ordinary Shareholders and Top Ten Shareholders' Shareholding](index=4&type=section&id=(%E4%B8%80)%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%9D%B1%E7%B8%BD%E6%95%B8%E5%92%8C%E8%A1%A8%E6%B1%BA%E6%AC%8A%E6%81%A2%E5%BE%A9%E7%9A%84%E5%84%AA%E5%85%88%E8%82%A1%E8%82%A1%E6%9D%B1%E6%95%B8%E9%87%8F%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E6%9D%B1%E6%8C%81%E8%82%A1%E6%83%85%E6%B3%81%E8%A1%A8) As of March 31, 2024, the company had **49,123 ordinary shareholders**, with Hong Kong Securities Clearing Company Nominees Limited, HOLCHIN B.V., and Huaxin Group Co., Ltd. as the top three shareholders - As of March 31, 2024, the company had 49,115 A-share shareholders and 8 H-share registered shareholders, totaling **49,123 ordinary shareholders**[7](index=7&type=chunk) Top Ten Shareholders' Shareholding at End of Reporting Period | Shareholder Name | Shareholder Type | Number of Shares Held (shares) | Shareholding Percentage (%) | | :--- | :--- | :--- | :--- | | Hong Kong Securities Clearing Company Nominees Limited | Overseas Legal Person | 734,719,919 | 35.34 | | HOLCHIN B.V. | Overseas Legal Person | 451,333,201 | 21.71 | | Huaxin Group Co., Ltd. | State-owned Legal Person | 338,060,739 | 16.26 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 23,624,862 | 1.14 | | China Merchants Bank Co., Ltd. - SSE Dividend ETF | Other | 19,081,692 | 0.92 | | National Social Security Fund 413 Portfolio | Other | 15,900,000 | 0.76 | | National Social Security Fund 601 Portfolio | Other | 13,527,856 | 0.65 | | Agricultural Bank of China Co., Ltd. - ICBC Credit Suisse Innovation Power Stock Fund | Other | 12,900,000 | 0.62 | | ICBC Credit Suisse Fund - China Life Insurance Co., Ltd. - Dividend - ICBC Credit Suisse Fund China Life Equity Balanced Stock Portfolio Single Asset Management Plan (Available for Sale) | Other | 11,335,516 | 0.55 | | China Railway Wuhan Bureau Group Co., Ltd. | Unknown | 11,289,600 | 0.54 | - The company is unaware of any related party relationships or concerted actions among the aforementioned shareholders[9](index=9&type=chunk) [Other Reminders](index=5&type=section&id=%E4%B8%89%E3%80%81%E5%85%B6%E4%BB%96%E6%8F%90%E9%86%92%E4%BA%8B%E9%A0%85) This section addresses any other important operational information during the reporting period that investors should be aware of [Other Important Information Regarding the Company's Operating Performance During the Reporting Period Requiring Investor Attention](index=5&type=section&id=%E9%9C%80%E6%8F%90%E9%86%92%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E6%B3%A8%E7%9A%84%E9%97%9C%E6%96%BC%E5%85%AC%E5%8F%B8%E5%A0%B1%E5%91%8A%E6%9C%9F%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81%E7%9A%84%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BF%A1%E6%81%AF) During the reporting period, the company had no other significant operating information requiring special attention from investors - The company states there is no other significant operating information during the reporting period requiring investor attention[10](index=10&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=%E5%9B%9B%E3%80%81%E5%AD%A3%E5%BA%A6%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section contains the company's unaudited consolidated quarterly financial statements, including the balance sheet, income statement, and cash flow statement [Type of Audit Opinion](index=6&type=section&id=(%E4%B8%80)%E5%AF%A9%E8%A8%88%E6%84%8F%E8%A6%8B%E9%A1%9E%E5%9E%8B) The quarterly financial statements for this period are unaudited - The quarterly financial statements for this reporting period are unaudited[11](index=11&type=chunk) [Financial Statements](index=6&type=section&id=(%E4%BA%8C)%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents Huaxin Cement Co., Ltd.'s unaudited consolidated financial statements for Q1 2024, including the balance sheet, income statement, and cash flow statement, detailing the company's financial position, operating results, and cash flows [Consolidated Balance Sheet](index=6&type=section&id=%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of March 31, 2024, total assets were **69.24 billion Yuan**, a slight increase from the end of the previous year; total current assets were **15.73 billion Yuan**, total non-current assets were **53.51 billion Yuan**, total liabilities were **35.87 billion Yuan**, and total owners' equity was **33.37 billion Yuan** Consolidated Balance Sheet Key Data (As of March 31, 2024) | Item | March 31, 2024 (Yuan) | December 31, 2023 (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 69,240,660,681 | 68,800,268,263 | 0.64 | | Total Current Assets | 15,731,204,056 | 15,219,588,022 | 3.36 | | Total Non-current Assets | 53,509,456,625 | 53,580,680,241 | -0.13 | | Total Liabilities | 35,873,699,115 | 35,505,385,821 | 1.04 | | Total Owners' Equity | 33,366,961,566 | 33,294,882,442 | 0.22 | - Cash and cash equivalents increased by **8.26%** from **5.85 billion Yuan** at the end of 2023 to **6.33 billion Yuan** as of March 31, 2024[12](index=12&type=chunk) - Accounts receivable increased by **34.22%** from **2.26 billion Yuan** at the end of 2023 to **3.03 billion Yuan** as of March 31, 2024[12](index=12&type=chunk) [Consolidated Income Statement](index=8&type=section&id=%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8) In Q1 2024, total operating revenue increased by **6.87%** year-on-year to **7.08 billion Yuan**, but net profit attributable to parent company shareholders decreased by **28.43%** to **177 million Yuan**, mainly due to a significant increase in financial expenses and reduced investment income Consolidated Income Statement Key Data (Q1 2024 vs. Q1 2023) | Item | Q1 2024 (Yuan) | Q1 2023 (Yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 7,083,601,678 | 6,628,435,263 | 6.87 | | Total Operating Costs | 6,770,044,998 | 6,273,661,701 | 7.91 | | Financial Expenses | 182,064,693 | 68,572,821 | 165.52 | | Investment Income | -6,941,845 | 30,821,370 | -122.52 | | Net Profit | 291,984,821 | 282,721,516 | 3.28 | | Net Profit Attributable to Parent Company Shareholders | 177,469,351 | 247,979,284 | -28.43 | | Basic Earnings Per Share (Yuan/share) | 0.09 | 0.12 | -25.00 | - Financial expenses significantly increased by **165.52%** year-on-year, primarily due to higher interest expenses[14](index=14&type=chunk) - R&D expenses significantly increased by **191.70%** year-on-year, from **11.65 million Yuan** to **33.98 million Yuan**[14](index=14&type=chunk) [Consolidated Cash Flow Statement](index=10&type=section&id=%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In Q1 2024, net cash flow from operating activities significantly decreased by **67.77%** year-on-year to **107 million Yuan**; net cash flow from investing activities was **-269 million Yuan**, a reduced outflow compared to the prior year; net cash flow from financing activities was **678 million Yuan**, a year-on-year decrease Consolidated Cash Flow Statement Key Data (Q1 2024 vs. Q1 2023) | Item | Q1 2024 (Yuan) | Q1 2023 (Yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 106,994,109 | 331,923,337 | -67.77 | | Net Cash Flow from Investing Activities | -268,956,676 | -1,121,597,464 | 76.02 (Reduced Outflow) | | Net Cash Flow from Financing Activities | 678,111,238 | 1,084,213,674 | -37.45 | | Net Increase in Cash and Cash Equivalents | 511,231,525 | 266,787,755 | 91.63 | - Cash paid for goods and services increased by **2.80%** year-on-year, reaching **4.42 billion Yuan**[16](index=16&type=chunk) - Cash paid for the acquisition of fixed assets, intangible assets, and other long-term assets decreased by **49.48%** year-on-year, indicating a slowdown in capital expenditure[17](index=17&type=chunk) [Review and Corporate Governance](index=12&type=section&id=%E5%AF%A9%E9%96%B1%E8%88%87%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) This section covers the review of unaudited quarterly results by the Audit Committee and the company's adherence to corporate governance codes [V. Review of Unaudited Quarterly Results](index=12&type=section&id=%E4%BA%94%E3%80%81%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E5%AD%A3%E5%BA%A6%E6%A5%AD%E7%B8%BE%E4%B9%8B%E5%AF%A9%E9%96%B1) The company's audit committee has reviewed the quarterly results for the three months ended March 31, 2024, and is responsible for overseeing financial reporting, risk management, and internal control systems - The Audit Committee has reviewed the quarterly results for the three months ended March 31, 2024, as contained in this announcement[20](index=20&type=chunk) - The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[20](index=20&type=chunk) [VI. Corporate Governance Code](index=12&type=section&id=%E5%85%AD%E3%80%81%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) During the reporting period, the company consistently complied with the principles and code provisions of the Corporate Governance Code in Appendix C1 of the SEHK Listing Rules - During the reporting period, the company consistently adhered to the principles and code provisions of the Corporate Governance Code in Appendix C1 of the SEHK Listing Rules[21](index=21&type=chunk) - As of the announcement date, the Board of Directors includes executive directors, non-executive directors, and independent non-executive directors[21](index=21&type=chunk)

[Annual Performance Summary](index=1&type=section&id=Summary) The company reported **RMB 33.76 billion** in operating revenue and **RMB 2.76 billion** in net profit attributable to shareholders in 2023, showing **10.79%** and **2.34%** year-on-year growth respectively Key Financial Highlights for 2023 | Metric | 2023 (RMB) | 2022 (RMB) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33.757 billion yuan | 30.470 billion yuan | 10.79% | | Net Profit Attributable to Shareholders | 2.762 billion yuan | 2.699 billion yuan | 2.34% | | Earnings Per Share | 1.33 yuan | 1.30 yuan | 2.31% | [Company Profile](index=2&type=section&id=I.%20Company%20Profile) Huaxin Cement Co., Ltd. is listed on both the Shanghai Stock Exchange (A-shares) and the Hong Kong Stock Exchange (H-shares), with its contact office in Wuhan, Hubei - Huaxin Cement Co., Ltd. (the Company or the Group) and its subsidiaries (the Group) are listed on the Shanghai Stock Exchange (A-share code: 600801) and The Stock Exchange of Hong Kong Limited (H-share code: 06655)[3](index=3&type=chunk) - Mr. Ye Jiaxing serves as the Company Secretary, and Ms. Wang Xiaoqiong as the Securities Affairs Representative, both located at Huaxin Building B, No. 426 Gaoxin Avenue, East Lake New Technology Development Zone, Wuhan, Hubei Province[4](index=4&type=chunk) [Summary of Accounting and Business Data](index=3&type=section&id=II.%20Summary%20of%20Accounting%20and%20Business%20Data) The company's key financial metrics for the past three years, prepared under Chinese accounting standards, show revenue growth and stable profitability Key Accounting Data and Financial Indicators for the Past Three Years (Prepared under Chinese Accounting Standards) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | Year-on-Year Change (%) | 2021 (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,757,087,272 | 30,470,382,363 | 10.79 | 32,464,083,379 | | Net Profit Attributable to Shareholders of Listed Company | 2,762,116,715 | 2,698,868,510 | 2.34 | 5,363,525,692 | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | 2,322,113,737 | 2,578,634,452 | -9.95 | 5,304,878,118 | | Basic Earnings Per Share (yuan/share) | 1.33 | 1.30 | 2.31 | 2.58 | | Diluted Earnings Per Share (yuan/share) | 1.32 | 1.28 | 3.13 | 2.58 | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (yuan/share) | 1.12 | 1.24 | -9.68 | 2.55 | | Weighted Average Return on Net Assets (%) | 9.82 | 10.03 | Decrease by 0.21 percentage points | 21.30 | | Return on Net Assets After Deducting Non-Recurring Gains and Losses (Fully Diluted) (%) | 8.26 | 9.58 | Decrease by 1.32 percentage points | 21.07 | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | 36.51 | 7,594,957,122 | [Shareholder Information](index=4&type=section&id=III.%20Shareholder%20Information) The company's shareholder structure and control remain stable, with no changes to the controlling shareholder or actual controller during the reporting period [Shareholder Details](index=4&type=section&id=1.%20Shareholder%20Details) As of December 31, 2023, the company had 54,007 registered shareholders, with the top ten shareholders holding a concentrated proportion of shares - As of December 31, 2023, the total number of registered shareholders was **54,007**, decreasing to **49,549** as of February 29, 2024[7](index=7&type=chunk) Shareholding of Top Ten Registered Shareholders as of December 31, 2023 | No. | Shareholder Name | Number of Shares Held | Proportion (%) | Share Type | Pledge, Mark or Freeze Status | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | HKSCC Nominees Limited | 734,719,919 | 35.34 | H-share | Unknown | Overseas Legal Person | | 2 | HOLCHIN B.V. | 451,333,201 | 21.71 | A-share | None | Overseas Legal Person | | 3 | Huaxin Group Co., Ltd. | 338,060,739 | 16.26 | A-share | None | State-owned Legal Person | | 4 | Hong Kong Securities Clearing Company Limited | 21,596,305 | 1.04 | A-share | None | Overseas Legal Person | | 5 | China Merchants Bank Co., Ltd. - SSE Dividend ETF | 19,910,110 | 0.96 | A-share | None | Other | | 6 | National Council for Social Security Fund 413 Portfolio | 16,050,000 | 0.77 | A-share | None | Other | | 7 | Agricultural Bank of China Co., Ltd. - ICBC Credit Suisse Innovative Power Stock Fund | 14,580,000 | 0.70 | A-share | None | Other | | 8 | ICBC Credit Suisse Fund - China Life Insurance Co., Ltd. - Participating Insurance - ICBC Credit Suisse Fund China Life Balanced Stock Portfolio Single Asset Management Plan (Available for Sale) | 11,335,516 | 0.55 | A-share | None | Other | | 9 | China Railway Wuhan Group Co., Ltd. | 11,289,600 | 0.54 | A-share | None | Unknown | | 10 | Bank of China Co., Ltd. - ICBC Credit Suisse Core Value Mixed Securities Investment Fund | 7,769,985 | 0.37 | A-share | None | Other | [Controlling Shareholder and Actual Controller](index=5&type=section&id=2.%20Controlling%20Shareholder%20and%20Actual%20Controller) During the reporting period, there were no changes in the company's controlling shareholder or actual controller, which remained Holcim Limited - During the reporting period, there were no changes in the Company's controlling shareholder or actual controller[10](index=10&type=chunk) - As of December 31, 2023, Holcim Limited was the Company's controlling shareholder and actual controller[10](index=10&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=5&type=section&id=3.%20Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) The company and its subsidiaries did not engage in any purchase, sale, or redemption of listed securities during the reporting period - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[12](index=12&type=chunk) [Corporate Governance](index=5&type=section&id=IV.%20Corporate%20Governance) The company consistently complied with all applicable principles and code provisions of the Corporate Governance Code during the reporting period - The Company has consistently complied with all applicable principles and code provisions of the Corporate Governance Code as set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the reporting period[12](index=12&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=5&type=section&id=V.%20Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) All directors and supervisors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance with its provisions during the reporting period[13](index=13&type=chunk) [Review of Results by Audit Committee](index=5&type=section&id=VI.%20Review%20of%20Results%20by%20Audit%20Committee) The Audit Committee, comprising five directors, reviewed the 2023 financial report and results announcement, confirming the Board's responsibility for account preparation - The Company's Audit Committee, composed of five directors, reviewed the 2023 annual financial report and results announcement, confirming the Board's responsibility for preparing the accounts[14](index=14&type=chunk) - Ernst & Young Hua Ming LLP (a special general partnership) has reconciled the financial figures in the preliminary announcement with the audited consolidated financial statements but has not expressed any opinion or assurance conclusion on the preliminary announcement[15](index=15&type=chunk)[16](index=16&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=VII.%20Management%20Discussion%20and%20Analysis) This section discusses the company's operational performance, financial results, strategic initiatives, and future outlook for the reporting period [Overview of Business Development](index=7&type=section&id=%28I%29%20Overview%20of%20Business%20Development) In 2023, Huaxin Cement achieved revenue and net profit growth amidst a challenging industry, driven by strategic transformations, overseas expansion, and new building materials 2023 Operating Highlights | Metric | 2023 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 33.757 billion yuan | 10.79% | | Net Profit Attributable to Parent Company Shareholders | 2.762 billion yuan | 2.34% | | Aggregate Sales Volume | 131.37 million tons | 100% | | Concrete Sales Volume | 27.27 million cubic meters | 66% | | Aggregate Production Capacity | 277 million tons/year | 32% | | Concrete Production Capacity | 122 million cubic meters/year | 77% | | Overseas Production Capacity | 20.91 million tons/year | 69% | | Overseas Operating Revenue | 5.439 billion yuan | 30% | | Group Consolidated Heat Value Substitution Rate | 20% | Increased by 6 percentage points | | Domestic Kiln Line Comprehensive Energy Consumption | 94.7kg/tcl | 63% Reached Benchmark Level | | Domestic Ton Cement Direct CO2 Emission Intensity | 576.47 kilograms | Decreased | - The Company firmly implemented its integrated strategy, prioritized cash flow, strictly controlled financial risks, and maintained a leading accounts receivable ratio in the industry[18](index=18&type=chunk) - Cost benchmarking management was strengthened, leading to a **10.29%** decrease in annual cement costs, with domestic cement costs decreasing by **12.79%** year-on-year[18](index=18&type=chunk) - Breakthroughs in overseas development included the successful acquisition of **64.66%** equity in Oman Cement Company SAOG and **100%** equity in Natal Portland Cement Company (Pty) Ltd., expanding overseas business to the Middle East and Southern Africa[18](index=18&type=chunk) - Digitalization progressed steadily, successfully implementing an intelligent system for low-carbon cement manufacturing and establishing basic digital systems in overseas factories[19](index=19&type=chunk) - Credit ratings remained stable (CCXI AAA, Moody's Baa1), financing costs stayed low, with new financing costs decreasing to **3.21%**[19](index=19&type=chunk) [Key Operating Performance During the Reporting Period](index=10&type=section&id=%28II%29%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) The company's operating revenue grew by **10.79%** year-on-year, driven by significant increases in concrete and aggregate sales, offsetting the impact of lower cement prices [Revenue and Cost Analysis](index=10&type=section&id=1.%20Revenue%20and%20Cost%20Analysis) In 2023, the company's operating revenue increased by **10.79%**, primarily due to higher concrete and aggregate sales, despite a decline in cement and clinker prices Main Business by Product (2023 vs 2022) | Product Type | Operating Revenue (2023) | Operating Cost (2023) | Gross Profit Margin (%) (2023) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | YoY Change in Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 18,331,734,881 | 13,425,727,572 | 26.76 | -2.64 | -3.72 | Increase by 0.82 percentage points | | Concrete | 7,652,223,198 | 6,467,900,216 | 15.48 | 49.08 | 49.68 | Decrease by 0.33 percentage points | | Aggregate | 5,363,828,939 | 2,902,999,002 | 45.88 | 75.01 | 111.76 | Decrease by 9.39 percentage points | | Commercial Clinker | 947,002,919 | 843,819,065 | 10.90 | -46.14 | -46.5 | Increase by 0.60 percentage points | | Other | 1,462,297,335 | 1,100,968,872 | 24.71 | -13.2 | -13.17 | Decrease by 0.02 percentage points | | Total | 33,757,087,272 | 24,741,414,727 | 26.71 | 10.79 | 10.05 | Increase by 0.49 percentage points | Main Business by Region (2023 vs 2022) | Region | Operating Revenue (RMB yuan) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | | East China | 6,816,096,064 | 25.46 | | Central China | 11,694,525,821 | 1.40 | | South China | 726,857,232 | 24.24 | | Southwest China | 9,030,192,677 | 3.84 | | Overseas | 5,489,415,478 | 29.99 | | Total | 33,757,087,272 | 10.79 | - Operating revenue increased by **RMB 3.287 billion** year-on-year, with concrete sales growing by **10.88 million cubic meters (66%)** and aggregate sales by **65.58 million tons (100%)**, offsetting the impact of declining cement and clinker prices[22](index=22&type=chunk) - Operating costs increased by **RMB 2.259 billion** year-on-year, primarily due to a significant rise in concrete and aggregate sales volumes, while cement and clinker costs decreased due to lower energy costs[22](index=22&type=chunk) - The gross profit margin for cement and clinker increased by **1.37 percentage points**, leading to an overall increase of **0.49 percentage points** in the Company's sales gross profit margin for 2023 compared to the previous year[23](index=23&type=chunk) [Cost and Expense Analysis](index=12&type=section&id=2.%20Cost%20and%20Expense%20Analysis) The company's financial expenses significantly increased by **52.35%** year-on-year, primarily due to higher interest payments, while sales and administrative expenses also rose Changes in Major Expense Items (Prepared under Chinese Accounting Standards) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Selling Expenses | 1,518,891,019 | 1,371,820,965 | 10.72 | | Administrative Expenses | 1,819,305,056 | 1,582,539,460 | 14.96 | | Financial Expenses | 698,520,798 | 458,488,171 | 52.35 | - Financial expenses for the current period increased by **52.35%** year-on-year, primarily due to higher interest payments[25](index=25&type=chunk) [Profitability Analysis](index=12&type=section&id=3.%20Profitability%20Analysis) Despite a decline in domestic cement demand, the company achieved year-on-year growth in total profit and net profit attributable to shareholders through overseas expansion and an integrated strategy Profitability (2023 vs 2022) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit | 4,351,500,618 | 4,022,570,540 | 8.18 | | Total Profit | 4,326,247,137 | 3,988,085,596 | 8.48 | | Net Profit Attributable to Shareholders of Listed Company | 2,762,116,715 | 2,698,868,510 | 2.34 | - The Group's total profit increased by **RMB 338 million** compared to the previous year, with net profit attributable to Company shareholders increasing by **RMB 63 million**[27](index=27&type=chunk) [Financial Position](index=13&type=section&id=4.%20Financial%20Position) The company's total assets grew to **RMB 68.8 billion**, with an optimized asset-liability ratio, and net cash flow from operating activities significantly increased by **36.51%** Major Changes in Asset and Liability Position (Prepared under Chinese Accounting Standards) | Item | Current Period End (RMB yuan) | Proportion of Total Assets (%) | Prior Period End (RMB yuan) | Proportion of Total Assets (%) | YoY Change in Amount (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable | 2,259,496,157 | 3.28 | 1,382,631,200 | 2.15 | 63.42 | Expansion of concrete business | | Other Current Assets | 1,459,951,396 | 2.12 | 677,454,529 | 1.05 | 115.51 | Increase in time deposits | | Construction in Progress | 3,614,814,430 | 5.25 | 6,575,465,631 | 10.24 | -45.03 | Transferred to fixed assets after commissioning of projects like billion-ton sand | | Right-of-Use Assets | 1,680,707,457 | 2.44 | 979,311,070 | 1.52 | 71.62 | Expansion of concrete business operations, increase in asset leases | | Employee Benefits Payable | 312,414,840 | 0.45 | 131,081,719 | 0.20 | 138.34 | Expansion of business scale and employee numbers, increase in short-term incentives | | Non-current Liabilities Due Within One Year | 6,720,902,895 | 9.77 | 4,427,049,341 | 6.89 | 51.81 | Some corporate bonds nearing maturity | | Lease Liabilities | 1,348,727,671 | 1.96 | 759,905,754 | 1.18 | 77.49 | Expansion of concrete business operations, increase in asset leases | | Long-term Payables | 330,821,706 | 0.48 | 2,837,076,467 | 4.42 | -88.34 | Repayment of mining rights concession fees due | | Deferred Income Tax Liabilities | 1,123,626,046 | 1.63 | 586,568,845 | 0.91 | 91.56 | Increase due to overseas M&A | | Other Comprehensive Income | -548,746,925 | -0.80 | -175,257,484 | -0.27 | 213.11 | Depreciation of overseas subsidiary currencies against RMB | Comparison of Net Cash Flows (Prepared under Chinese Accounting Standards) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | 36.51 | | Net Cash Flow from Investing Activities | -6,453,904,653 | -8,383,336,829 | 23.02 | | Net Cash Flow from Financing Activities | -951,747,856 | 1,771,835,223 | -153.72 | - Net cash flow from operating activities increased by **RMB 1.668 billion**, primarily due to increased profitability for the year[29](index=29&type=chunk) - Net cash outflow from investing activities decreased by **RMB 1.929 billion**, mainly due to a year-on-year reduction in investment activities such as asset purchases and construction expenditures[29](index=29&type=chunk) - Net cash flow from financing activities decreased by **RMB 2.724 billion**, primarily due to increased repayment of maturing borrowings[29](index=29&type=chunk) Liquidity Analysis | Item | Current Period End (RMB yuan) | Prior Period End (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Interest-Bearing Debt | 16,957,076,310 | 14,494,878,839 | 16.99% | | Asset-Liability Ratio | 51.60% | 52.00% | Decrease by 0.39 percentage points | - Interest-bearing debt increased by **16.99%**, mainly due to increased project-related long-term borrowings and corporate bonds; the asset-liability ratio decreased by **0.39 percentage points**[30](index=30&type=chunk) [Major Acquisitions and Disposals of Subsidiaries and Associates](index=15&type=section&id=%28III%29%20Major%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) The company completed two significant overseas acquisitions in 2023, expanding its global business footprint into the Middle East and Southern Africa - On March 13, 2023, the Company's wholly-owned subsidiary, Huaxin (Hong Kong) International Holdings Limited, signed an agreement to acquire **59.58%** equity in Oman Cement Company SAOG for a total consideration of **USD 193.1 million**, completing a tender offer on July 2, 2023, to ultimately hold **64.66%** equity for a total consideration of **USD 210.8 million**[31](index=31&type=chunk) - On June 27, 2023, Huaxin (Hong Kong) International Holdings Limited signed an agreement to acquire **100%** equity in Natal Portland Cement Company (Pty) Ltd. for a total consideration of **USD 231.6 million**, with the transaction completed on December 26, 2023[32](index=32&type=chunk) [Connected Transactions](index=16&type=section&id=%28IV%29%20Connected%20Transactions) During the reporting period, the Group had no connected transactions requiring disclosure under the Listing Rules - During the reporting period, the Group had no connected transactions requiring disclosure under the Listing Rules[32](index=32&type=chunk) [2024 Outlook](index=17&type=section&id=%28V%29%202024%20Outlook) In 2024, the company anticipates continued challenges in domestic demand and overcapacity but will focus on its four core strategies, green and intelligent transformation, and increased capital expenditure [Industry Landscape and Trends](index=17&type=section&id=1.%20Industry%20Landscape%20and%20Trends) In 2024, China's building materials industry faces challenges from weak demand and overcapacity, while green, digital, and extended industrial chains drive high-quality development - In 2024, overall domestic building materials demand is unlikely to recover, with the real estate market remaining in a deep adjustment phase, and infrastructure investment serving as a key driver for stable growth[33](index=33&type=chunk) - Cement industry overcapacity is intensifying, urgently requiring new approaches like dual control of energy consumption and carbon emissions to accelerate the elimination of inefficient and excess capacity[33](index=33&type=chunk) - Energy saving and emission reduction, green low-carbon development, digital intelligence, and industrial chain extension have become the leading directions for high-quality industry development[33](index=33&type=chunk) - The global economy is expected to see a weak recovery in 2024, with emerging and developing Asia, the Middle East and East Asia, and Sub-Saharan Africa regions projected to show strong economic growth[34](index=34&type=chunk) - Global cement demand, excluding China, is projected to increase by **2.4%** year-on-year in 2024, primarily driven by growth in India, the Middle East, and Africa[35](index=35&type=chunk) [Company Development Strategy](index=18&type=section&id=2.%20Company%20Development%20Strategy) In 2024, the company will continue to advance its four major strategies, accelerating green, intelligent, and international transformation to become a leader in low-carbon sustainable development - The Company will uphold its values of "safety first, customer-centricity, results-orientation, integrity, innovative development, and people-first," and its mission to "clean our living environment and provide reliable building materials"[36](index=36&type=chunk) - The Company will solidly advance its four major strategies: "integrated transformation and development, overseas expansion, new building materials business development, and traditional industry + digital innovation"[36](index=36&type=chunk) - Accelerate green, intelligent, and international transformation, bravely leading as a pioneer in low-carbon sustainable development, and driving century-old Huaxin from a domestic industry leader towards a world-class multinational enterprise[36](index=36&type=chunk) [Operating Plan](index=18&type=section&id=3.%20Operating%20Plan) In 2023, the company exceeded sales targets for cement, concrete, and aggregate, and for 2024, it plans to achieve **RMB 37.1 billion** in total revenue with **RMB 6.9 billion** in capital expenditures 2023 Operating Plan Completion Status | Item | Budget Completion Rate | | :--- | :--- | | Cement and Clinker Sales Volume | 109% | | Concrete Sales Volume | 109% | | Aggregate Sales Volume | 101% | | Total Disposal Volume of Environmental Business | 78% | | Operating Revenue | 97.39% (33.757 billion yuan) | | Total Investment | 62.88% | | Total Asset Scale | 68.8 billion yuan | | Asset-Liability Ratio | 51.6% | 2024 Operating Plan | Item | Planned Target | | :--- | :--- | | Cement and Clinker Sales | Approx. 63 million tons | | Aggregate Sales | 156 million tons | | Concrete Sales | 30.52 million cubic meters | | Total Disposal Volume of Environmental Business | 4.28 million tons | | Total Revenue | Estimated 37.1 billion yuan | | Capital Expenditure | Approx. 6.9 billion yuan | | Total Assets | Estimated approx. 73.7 billion yuan | | Asset-Liability Ratio | Expected to remain around 51% | - To achieve its operating goals, the Company will adhere to the "safety and environmental protection" lifeline, strengthen compliance oversight, deeply research the market, focus on cost optimization and energy consumption reduction, firmly implement its four major strategies, and establish a sound talent management mechanism[37](index=37&type=chunk)[38](index=38&type=chunk) [Potential Risks](index=19&type=section&id=4.%20Potential%20Risks) The company faces risks from declining domestic cement demand, intensifying market competition, rising production costs, and complexities in international operations - Persistent decline in domestic cement demand and severe overcapacity will intensify market competition, adversely affecting the Company's operating performance[39](index=39&type=chunk) - Risks related to safe production and low-carbon environmental compliance, especially with the release of ultra-low emission policies for the cement industry, could lead to reputational and financial losses[39](index=39&type=chunk) - Production costs are continuously rising, influenced by energy market uncertainties and increased investment in technological upgrades under "dual carbon" goals[39](index=39&type=chunk) - International operating risks include uncertainties such as geopolitical conflicts, trade disputes, financial market volatility, differences in legal systems, and exchange rate fluctuations[39](index=39&type=chunk) - The Company will address these risks by promoting supply-side reform, increasing safety and environmental protection investments, implementing technological upgrades to optimize energy consumption, strengthening marketing, reducing procurement costs, improving talent mechanisms, and implementing risk hedging strategies[40](index=40&type=chunk) [Events After the Reporting Period](index=20&type=section&id=VIII.%20Events%20After%20the%20Reporting%20Period) No significant events occurred between the end of the reporting period and the date of this announcement - No significant events occurred between the end of the reporting period and the date of this announcement[41](index=41&type=chunk) [Proposed Dividend Distribution](index=20&type=section&id=IX.%20Proposed%20Dividend%20Distribution) The Board proposes a cash dividend of **RMB 0.53 per share** (tax inclusive) based on the total share capital at the end of 2023, subject to shareholder approval - The Board proposes a cash dividend of **RMB 0.53 per share** (tax inclusive) to all shareholders, based on the Company's total share capital of **2,078,995,649 shares** at the end of 2023[41](index=41&type=chunk) - No capitalization of capital reserves to increase share capital will be implemented for the year 2023[41](index=41&type=chunk) - This profit distribution plan is subject to approval at the 2023 Annual General Meeting of Shareholders[41](index=41&type=chunk) [Financial Information](index=20&type=section&id=X.%20Financial%20Information) This section presents the consolidated financial statements, including the balance sheet, income statement, and cash flow statement, along with detailed financial notes [Consolidated Balance Sheet](index=21&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of December 31, 2023, the company's total assets were **RMB 68.80 billion**, total liabilities **RMB 35.50 billion**, and total shareholders' equity **RMB 33.29 billion** Consolidated Balance Sheet Summary (As of December 31, 2023) | Item | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and Cash Equivalents | 5,849,465,351 | 7,038,341,792 | | Accounts Receivable | 2,259,496,157 | 1,382,631,200 | | Inventories | 3,462,938,165 | 3,405,122,012 | | Total Current Assets | 15,219,588,022 | 14,450,298,165 | | **Non-current Assets** | | | | Fixed Assets | 27,752,373,906 | 22,720,804,975 | | Construction in Progress | 3,614,814,430 | 6,575,465,631 | | Intangible Assets | 15,957,837,101 | 15,182,751,513 | | Total Non-current Assets | 53,580,680,241 | 49,791,378,100 | | **Total Assets** | 68,800,268,263 | 64,241,676,265 | | **Current Liabilities** | | | | Accounts Payable | 7,827,004,238 | 8,366,283,316 | | Non-current Liabilities Due Within One Year | 6,720,902,895 | 4,427,049,341 | | Total Current Liabilities | 18,934,215,066 | 16,624,884,300 | | **Non-current Liabilities** | | | | Long-term Borrowings | 8,623,019,715 | 7,282,088,824 | | Bonds Payable | 3,964,479,030 | 4,426,286,852 | | Total Non-current Liabilities | 16,571,170,755 | 16,778,611,504 | | **Total Liabilities** | 35,505,385,821 | 33,403,495,804 | | **Shareholders' Equity** | | | | Total Equity Attributable to Parent Company Shareholders | 28,932,949,847 | 27,446,305,028 | | Non-controlling Interests | 4,361,932,595 | 3,391,875,433 | | Total Shareholders' Equity | 33,294,882,442 | 30,838,180,461 | | **Total Liabilities and Shareholders' Equity** | 68,800,268,263 | 64,241,676,265 | [Consolidated Income Statement](index=23&type=section&id=2.%20Consolidated%20Income%20Statement) In 2023, the company achieved **RMB 33.76 billion** in total operating revenue, a **10.79%** increase, with net profit attributable to parent company shareholders rising by **2.34%** to **RMB 2.76 billion** Consolidated Income Statement Summary (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 33,757,087,272 | 30,470,382,363 | | Total Operating Costs | 29,824,159,526 | 26,558,704,977 | | Selling Expenses | 1,518,891,019 | 1,371,820,965 | | Administrative Expenses | 1,819,305,056 | 1,582,539,460 | | Research and Development Expenses | 301,098,955 | 78,162,783 | | Financial Expenses | 698,520,798 | 458,488,171 | | Operating Profit | 4,351,500,618 | 4,022,570,540 | | Total Profit | 4,326,247,137 | 3,988,085,596 | | Income Tax Expense | 1,108,149,035 | 964,530,723 | | Net Profit | 3,218,098,102 | 3,023,554,873 | | Net Profit Attributable to Parent Company Shareholders | 2,762,116,715 | 2,698,868,510 | | Non-controlling Interests' Share of Profit or Loss | 455,981,387 | 324,686,363 | | Net Other Comprehensive Income After Tax | (422,303,449) | 239,446,671 | | Total Comprehensive Income | 2,795,794,653 | 3,263,001,544 | | Basic Earnings Per Share (yuan/share) | 1.33 | 1.30 | | Diluted Earnings Per Share (yuan/share) | 1.32 | 1.28 | [Consolidated Cash Flow Statement](index=25&type=section&id=3.%20Consolidated%20Cash%20Flow%20Statement) In 2023, net cash flow from operating activities significantly increased by **36.51%** to **RMB 6.24 billion**, while net cash flow from financing activities turned into a net outflow due to increased debt repayments Consolidated Cash Flow Statement Summary (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | | Net Cash Flow from Investing Activities | (6,453,904,653) | (8,383,336,829) | | Net Cash Flow from Financing Activities | (951,747,856) | 1,771,835,223 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | (75,808,355) | 109,354,023 | | Net Increase in Cash and Cash Equivalents | (1,245,905,793) | (1,934,453,363) | | Cash and Cash Equivalents at End of Period | 5,370,115,985 | 6,616,021,778 | [Financial Notes](index=27&type=section&id=4.%20Financial%20Notes) The financial notes provide detailed disclosures on accounts receivable, financing for accounts receivable, accounts payable, operating revenue and costs, financial expenses, income tax expenses, and earnings per share [Accounts Receivable](index=27&type=section&id=%281%29%2C%20Accounts%20Receivable) As of December 31, 2023, total accounts receivable increased significantly to **RMB 2.495 billion**, primarily due to the expansion of the concrete business, with a corresponding rise in bad debt provisions Accounts Receivable Aging Analysis (As of December 31, 2023) | Aging | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Within 6 months | 1,774,340,469 | 1,130,096,842 | | 6-12 months | 327,137,999 | 164,377,772 | | 1 to 2 years | 228,421,668 | 129,150,787 | | 2 to 3 years | 41,812,808 | 34,853,374 | | Over 3 years | 123,484,774 | 102,009,512 | | Subtotal | 2,495,197,718 | 1,560,488,287 | | Less: Provision for Bad Debts of Accounts Receivable | 235,701,561 | 177,857,087 | | Total | 2,259,496,157 | 1,382,631,200 | Changes in Provision for Bad Debts of Accounts Receivable (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Balance at Beginning of Year | 177,857,087 | 164,229,940 | | Provision for the Year | 72,853,044 | 32,215,778 | | Recovered or Reversed During the Year | 10,566,896 | 15,619,947 | | Written Off During the Year | 4,441,674 | 2,968,684 | | Balance at End of Year | 235,701,561 | 177,857,087 | - As of December 31, 2023, individually impaired accounts receivable amounted to **RMB 134 million**, with a bad debt provision of **RMB 110 million**, representing an expected credit loss rate of **82%**[52](index=52&type=chunk) - Among accounts receivable for which bad debt provisions are made based on credit risk characteristics, concrete-related receivables constitute the largest proportion, with an expected credit loss rate of **2%** for those aged within 6 months[56](index=56&type=chunk) [Financing for Accounts Receivable](index=33&type=section&id=%282%29%2C%20Financing%20for%20Accounts%20Receivable) As of December 31, 2023, financing for accounts receivable primarily consisted of bank acceptance bills totaling **RMB 746 million**, an increase from the previous year Financing for Accounts Receivable (As of December 31, 2023) | Item | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Bank Acceptance Bills | 746,018,692 | 527,248,935 | - As of December 31, 2023, there were no pledged and unmatured bank acceptance bills used for issuing bank acceptance bills (December 31, 2022: **RMB 26,413,178**)[62](index=62&type=chunk) Endorsed and Discounted Bills Not Yet Due (As of December 31, 2023) | Item | Derecognized as of December 31, 2023 (RMB yuan) | Derecognized as of December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Bank Acceptance Bills | 2,036,671,648 | 1,931,042,708 | [Accounts Payable](index=34&type=section&id=%283%29%2C%20Accounts%20Payable) As of December 31, 2023, total accounts payable decreased to **RMB 7.83 billion**, with the majority due within one year and no significant overdue amounts Accounts Payable Aging Analysis (As of December 31, 2023) | Aging | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Within 1 year (inclusive) | 6,279,191,709 | 7,234,349,975 | | 1 to 2 years (inclusive) | 747,849,708 | 631,936,804 | | 2 to 3 years (inclusive) | 481,044,971 | 238,643,172 | | Over 3 years | 318,917,850 | 261,353,365 | | Total | 7,827,004,238 | 8,366,283,316 | - Accounts payable are non-interest bearing and typically settled within **30-360 days**[64](index=64&type=chunk) - As of December 31, 2023, the Group had no significant overdue accounts payable[64](index=64&type=chunk) [Operating Revenue and Operating Costs](index=35&type=section&id=%284%29%2C%20Operating%20Revenue%20and%20Operating%20Costs) In 2023, the company's operating revenue reached **RMB 33.76 billion** and operating costs **RMB 24.74 billion**, primarily driven by main business activities, with significant growth in concrete and aggregate sales Operating Revenue and Operating Costs (2023 vs 2022) | Item | 2023 Revenue (RMB yuan) | 2023 Cost (RMB yuan) | 2022 Revenue (RMB yuan) | 2022 Cost (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 33,460,262,641 | 24,528,047,754 | 30,168,692,817 | 22,332,075,543 | | Other Businesses | 296,824,631 | 213,366,973 | 301,689,546 | 149,826,064 | | Total | 33,757,087,272 | 24,741,414,727 | 30,470,382,363 | 22,481,901,607 | Revenue by Major Product Type (2023 vs 2022) | Major Product Type | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Cement Sales | 18,331,734,881 | 18,829,682,529 | | Concrete Sales | 7,652,223,198 | 5,132,828,829 | | Aggregate Sales | 5,363,828,939 | 3,064,928,809 | | Clinker Sales | 947,002,919 | 1,758,355,585 | | Other | 1,462,297,335 | 1,684,586,611 | | Total | 33,757,087,272 | 30,470,382,363 | [Financial Expenses](index=36&type=section&id=%285%29%2C%20Financial%20Expenses) In 2023, financial expenses increased significantly by **52.35%** to **RMB 699 million**, mainly due to higher interest expenses and interest on lease liabilities Composition of Financial Expenses (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Interest Expense | 664,197,382 | 446,819,553 | | Interest Expense on Lease Liabilities | 72,347,746 | 29,299,022 | | Less: Interest Income | 132,479,213 | 84,844,797 | | Less: Amount of Interest Capitalized | 14,477,432 | 69,563,929 | | Exchange Gains and Losses | 89,704,059 | 126,424,800 | | Other | 19,228,256 | 10,353,522 | | Total | 698,520,798 | 458,488,171 | - Borrowing costs capitalized in 2023 amounted to **RMB 14,477,432** (2022: **RMB 69,563,929**) and were included in construction in progress[68](index=68&type=chunk) [Income Tax Expense](index=37&type=section&id=%286%29%2C%20Income%20Tax%20Expense) In 2023, income tax expense increased to **RMB 1.108 billion**, influenced by current and deferred tax components, as well as varying tax rates for subsidiaries Income Tax Expense (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Current Income Tax Expense | 1,180,013,990 | 905,849,286 | | Deferred Income Tax Expense | (71,864,955) | 58,681,437 | | Total | 1,108,149,035 | 964,530,723 | Relationship Between Income Tax Expense and Total Profit (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Total Profit | 4,326,247,137 | 3,988,085,596 | | Income Tax Expense Calculated at 25% Tax Rate | 1,081,561,784 | 997,021,399 | | Impact of Different Tax Rates Applicable to Certain Subsidiaries | (166,616,118) | (161,780,637) | | Impact of Unrecognized Deductible Temporary Differences and Deductible Losses | 152,676,943 | 136,768,254 | | Withholding Tax on Expected Distributed Profits from Overseas Subsidiaries | 56,289,852 | - | | Income Tax Expense Calculated at the Group's Actual Tax Rate | 1,108,149,035 | 964,530,723 | [Earnings Per Share](index=38&type=section&id=%287%29%2C%20Earnings%20Per%20Share) Basic earnings per share for 2023 was **RMB 1.33**, and diluted earnings per share was **RMB 1.32**, both showing an increase from 2022 Earnings Per Share (2023 vs 2022) | Item | 2023 (yuan/share) | 2022 (yuan/share) | | :--- | :--- | :--- | | Basic Earnings Per Share (Continuing Operations) | 1.33 | 1.30 | | Diluted Earnings Per Share (Continuing Operations) | 1.32 | 1.28 | Earnings Per Share Calculation Details (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Company for the Current Period | 2,762,116,715 | 2,698,868,510 | | Adjusted Net Profit Attributable to Ordinary Shareholders of the Company for the Current Period | 2,735,421,892 | 2,651,945,423 | | Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,074,039,458 | 2,073,910,517 | | Adjusted Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,074,887,551 | 2,076,299,982 | [Publication of Annual Results and Annual Report on HKEX and Company Websites](index=40&type=section&id=XI.%20Publication%20of%20Annual%20Results%20and%20Annual%20Report%20on%20HKEX%20and%20Company%20Websites) This announcement has been published on the HKEX and Company websites, with the annual report to be dispatched to shareholders and published online in due course - This announcement has been published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.huaxincem.com)[73](index=73&type=chunk) - The Company's annual report for the year ended December 31, 2023, will be dispatched to shareholders who requested printed copies and published on the aforementioned websites in due course[73](index=73&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 HUAXIN CEMENT CO., LTD.* (於中華人民共和國註冊成立的股份有限公司) (股份代號： 6655) 本公告乃根據《香港聯合交易所有限公司證券上市規則》第13.09條和第13.10B條及《證券及期 貨條例》(香港法例第571章)第XIVA部刊發。 | --- | |--------------------------------------------------------------------------------| | | | 根據中華人民共和國(「 」)上海證券交易所的適用規則，華新水泥股份有限公司(「 | | 」或「 」 ) 及其附屬公司(與本公司合稱為「 」) 由二零二三年七月一日至 | | 二零二三年九月三十日 (「 」) 第三季度報告 (「 」) 將於二零二三年十月二 | | 十八日刊登於中國報章，其所載財務報告乃根據中國會計準則編製，且未經審計。 | 季度報告以中 ...

[Supplemental Announcement Regarding 2022 Annual Report](index=1&type=section&id=Supplemental%20Announcement%20Regarding%202022%20Annual%20Report) This announcement supplements Huaxin Cement Co., Ltd.'s 2022 annual report, detailing the 2020-2022 core employee stock ownership plan, including granted shares, pricing, fair value, and duration [Details of Shares Granted under 2020-2022 Core Employee Stock Ownership Plan](index=1&type=section&id=Details%20of%20Shares%20Granted%20under%202020-2022%20Core%20Employee%20Stock%20Ownership%20Plan) This section details 2022 share movements for participants in the 2020-2022 core employee stock ownership plan, including holdings, grants, forfeitures, and key pricing information Overview of 2022 Core Employee Stock Ownership Plan Share Movements | Metric | Executive Director, President Li Yeqing | Executive Director Liu Fengshan | Chairman of Supervisory Board Ming Jinhua | Other Core Employees (Total) | | :--- | :--- | :--- | :--- | :--- | | Holdings as of Jan 1, 2022 (shares) | 1,731,532 | 354,000 | 0 | 18,541,070 | | Granted during the year (shares) | 0 | 0 | 36,071 | 42,087 | | Forfeited during the year (shares) | 39,214 | 17,555 | 0 | 811,749 | | Holdings as of Dec 31, 2022 (shares) | 1,692,318 | 336,443 | 36,071 | 17,771,408 | | Grant Price (RMB) | 24.00 / 26.88 / 20.14 | 24.00 / 26.88 / 20.14 | 22.40 | 24.00 / 26.88 / 20.14 / 22.40 | | Fair Value at Grant Date (RMB) | 24.85 / 19.83 | 24.85 / 19.83 | 21.50 | 24.85 / 19.83 / 21.50 | - During 2022, Chairman of the Supervisory Board Ming Jinhua and some other core employees received newly granted shares, with a grant price of **RMB 22.40** and a fair value at grant date of **RMB 21.50**[2](index=2&type=chunk) - Some employee stock holdings were forfeited in 2022, including **39,214 shares** for Executive Director Li Yeqing, **17,555 shares** for Executive Director Liu Fengshan, and **811,749 shares** for other core employees[2](index=2&type=chunk) - Grant prices are determined based on the pricing principles of the employee stock ownership plan, referencing the A-share closing price on the trading day prior to the grant date; for example, shares granted on May 6, 2022, had a closing price of **RMB 22.30** on the preceding trading day[2](index=2&type=chunk)[3](index=3&type=chunk) - Accounting standards and policies used to estimate the fair value of employee stock ownership plan shares are detailed in Note XI, Share-based Payments, of the 2022 annual report financial statements[4](index=4&type=chunk) - The maximum number of shares granted to each executive director and supervisor does not exceed their total previously granted shares; any other core employee's total maximum shares across all batches does not exceed **345,193 shares**[4](index=4&type=chunk) [Remaining Validity Period of 2020-2022 Core Employee Stock Ownership Plan](index=3&type=section&id=Remaining%20Validity%20Period%20of%202020-2022%20Core%20Employee%20Stock%20Ownership%20Plan) This section outlines the 2020-2022 core employee stock ownership plan's 72-month duration from the first grant, including conditions for termination or extension - The employee stock ownership plan was approved on **September 25, 2020**, by the company's second extraordinary general meeting of shareholders in 2020[5](index=5&type=chunk) - The plan (including Plan A and Plan B) has a duration of **72 months** from the month of the first grant[5](index=5&type=chunk) - The plan terminates upon expiration of its duration but may be extended if proposed by the Employee Stock Ownership Plan Management Committee and approved by the Board of Directors[5](index=5&type=chunk)

HUAXIN CEMENT CO., LTD.* 華新水泥股份有限公司 (a joint stock company incorporated in the People's Republic of China with limited liability) Stock code : 6655 2023 INTERIM REPORT INTERIM REPORT 2023 中期報告 * For identification purposes only 室新水泥股份育限公司 HUAXIN CEMENT CO.,LTD. HUAXIN CEMENT CO., LTD.* 華新水泥股份有限公司 （於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司） 股份代號 : 6655 2023 中期報告 * 僅供識別 目錄 | --- | --- | --- | --- | |-----------|-------|---------------------------|-------| | | | | | | | | | 頁碼 | | | | | | | 一、 | | 釋義 | 2 3 | | 二、 ...