遵守企業管治守則 本公司力求達到並保持高標準的企業管治。董事會相信，有效的企業管治及披露常 規不僅對增強本公司的問責性及透明度以及投資者的信心起關鍵作用，亦對本集團 的長遠成功至關重要。本公司已採納上市規則附錄十四所載的企業管治守則（「守 則」）的守則條文作為其自身的企業管治守則。 報告期內及截至本公告日期，除下列偏離者外，本公司已遵守上市規則。 守則條文第C.5.1條訂明，董事會會議應每年召開至少四次，大約每季一次。在報告 期內，董事會舉行了兩次定期會議，所有董事均已出席有關會議。董事會認為在報 告期內，本集團並無其他重要事項需要召開正式董事會會議商討。然而，董事會會 通過其他非正式的方式與各董事保持良好的溝通與交流，並確保各董事及時知悉本 集團的最新發展情況。董事會亦根據需要召開臨時董事會會議，以審議、討論及決 定有關本集團發展及策略的特定事宜。報告期內，董事會已舉行合共4次臨時會議， 審批（其中包括）自願性公告，盈利警告的發佈和信託協議的訂立。 遵守標準守則 本公司已採納上市規則附錄十所載的標準守則作為董事進行證券交易的行為準則。 本公司向全體董事作出具體查詢後，彼等已確認於報告期內彼等均遵守標準守則所 ...

Economic Performance - In the first half of 2022, China's GDP increased by 2.5%, compared to a 7.8% increase in the same period last year[26]. - Fixed asset investment in China rose by 6.1% year-on-year in the first half of 2022, down from a 12.6% increase in the same period last year[26]. - The overall market demand for cement remained sluggish in the first half of 2022, exacerbated by the ongoing downturn in the real estate sector[26]. Cement Industry Trends - Cement production in China for the first half of 2022 was 977 million tons, a 15% decrease year-on-year, marking the lowest production level for the same period in 11 years[26]. - The first quarter of 2022 saw a significant decline in national cement production, with a double-digit year-on-year drop due to multiple adverse factors including pandemic control measures[26]. - In April and May 2022, the year-on-year growth rate of cement production fell to -18.9% and -17% respectively, marking historical lows for those months[26]. - The cement industry is entering a high-cost period due to rising production costs influenced by high coal prices and increased logistics costs[26]. Financial Performance - The group's revenue for the six months ended June 30, 2022, was approximately HKD 203,321,000, a decrease of about HKD 70,184,000 or 26% compared to HKD 273,505,000 in the same period of 2021[31]. - Cement product sales volume decreased by approximately 19% to about 478,000 tons, with sales revenue also declining by approximately 26%[32]. - The gross loss for the cement segment was approximately HKD 15,474,000, a decrease of about HKD 75,135,000 or 126% compared to a gross profit of HKD 59,661,000 in the previous year, resulting in a gross margin of approximately -7.6%[34]. - The net profit margin for the group was approximately -9.8%, a decrease of 20.6% compared to 10.8% in the same period last year[41]. - The company reported a basic loss attributable to owners of HKD 18,661,000 for the six months ended June 30, 2022, compared to a profit of HKD 30,731,000 for the same period in 2021[149]. Cost Management and Efficiency - The management remains focused on cost control and efficiency improvements to mitigate the impact of rising production costs[26]. - The company plans to enhance internal management and reduce costs while upgrading existing facilities to improve production efficiency and reduce maintenance costs[60]. Cash Flow and Financing - As of June 30, 2022, the company's cash and cash equivalents increased by approximately 39% to HKD 125,563,000 from HKD 90,262,000 as of December 31, 2021, primarily due to a decrease in receivables[44]. - The company plans to meet its working capital needs primarily through cash flows from operating activities, bank loans, and proceeds from its initial public offering[42]. - The company maintained sufficient cash and credit lines to meet its working capital requirements, supported by operational cash generation and short-term bank borrowings[106]. Shareholder Information - Major shareholders include Goldview, which holds 53.89% of the shares, and Mr. Huang Yingbiao, who holds 12.16%[65]. - The board does not recommend any interim dividend for the six months ending June 30, 2022[57]. - No dividends were declared or proposed for the six months ended June 30, 2022, consistent with the previous year[150]. Research and Development - The group is focusing on the development of next-generation cell immunotherapy, with ongoing clinical studies for ROR1 CAR-T cell therapy targeting advanced ovarian cancer[30]. - The group has applied for a national invention patent for the redesigned CAR-T cell antibody structure[30]. Asset Management - As of June 30, 2022, total assets amounted to HKD 1,012,862 thousand, a slight increase from HKD 1,013,658 thousand as of December 31, 2021[87]. - Current assets decreased to HKD 713,545 thousand from HKD 822,780 thousand, with a notable decline in trade and other receivables from HKD 196,714 thousand to HKD 51,002 thousand[87]. - The company’s inventory decreased from HKD 67,868 thousand to HKD 60,086 thousand, indicating improved inventory management[87]. Liabilities and Debt - The company's total borrowings decreased by 4% to HKD 131,254,000 as of June 30, 2022, down from HKD 136,675,000 as of December 31, 2021, with bank borrowings at HKD 115,914,000[45]. - The capital debt ratio increased to 20.86% as of June 30, 2022, compared to 20.05% as of December 31, 2021[50]. - Non-current liabilities decreased to HKD 38,374 thousand from HKD 43,006 thousand, mainly due to a reduction in deferred tax liabilities[89]. Compliance and Governance - The company has complied with the corporate governance code throughout the reporting period[71]. - The company did not recognize any impairment for the six months ended June 30, 2022, as the recoverable amount of cash-generating units exceeded their carrying amounts[99].

Financial Performance - Total revenue for 2021 was HKD 589,461,000, an increase of 5% from HKD 558,345,000 in 2020[10] - Operating profit decreased to HKD 44,006,000, down 27.7% from HKD 60,743,000 in the previous year[10] - Profit attributable to owners of the company was HKD 46,541,000, a decline of 23.6% compared to HKD 60,879,000 in 2020[10] - Basic and diluted earnings per share were HKD 0.084, down from HKD 0.110 in 2020[10] - The gross profit for 2021 was HKD 111,231,000, down from HKD 122,404,000 in 2020 and HKD 157,868,000 in 2019, indicating a decline in profitability[12] - The group's net profit decreased from approximately HKD 60.8 million in 2020 to about HKD 44.0 million in 2021, resulting in a net profit margin of 18.9%, down from 21.9%[51] - The group's gross profit for the reporting period was approximately HKD 111.2 million, a decrease of about HKD 11.2 million or 9% from HKD 122.4 million in 2020, with a gross margin of 18.9%, down from 21.9% in 2020[44] Assets and Liabilities - Total assets increased to HKD 1,113,674,000, up from HKD 969,408,000 in 2020, representing a growth of 14.8%[10] - Current assets rose to HKD 822,780,000, compared to HKD 685,443,000 in the previous year, marking an increase of 20%[10] - Total liabilities increased to HKD 431,948,000 from HKD 331,010,000, reflecting a rise of 30.5%[10] - The company reported a total equity of HKD 681,726,000, up from HKD 638,398,000 in 2020, indicating a growth of 6.8%[10] Cash Flow - Net cash flow from operating activities was HKD 25,024,000, significantly lower than HKD 159,650,000 in 2020[10] - Cash flow from investing activities showed a net outflow of HKD 81,725,000, compared to a net outflow of HKD 131,530,000 in 2020[10] - As of December 31, 2021, the group's cash and cash equivalents were approximately HKD 90,292,000, a decrease of about 19.1% from HKD 111,637,000 on December 31, 2020, primarily due to an increase in receivables during the reporting period[55] Production and Sales - The company produced approximately 767,400 tons of clinker and 1,238,000 tons of cement in 2021, with significant increases in production costs compared to 2020[16] - The sales volume for the year was about 1,247,000 tons, with revenue from the cement segment reaching approximately HKD 588,553,000, reflecting an increase due to rising cement prices[17] - In 2021, the group's cement product sales were approximately 1,247,000 tons, a decrease of about 3.3% compared to 2020[24] - The cement product sales volume for 2021 was approximately 1,247 thousand tons, a decrease of about 3.3% compared to 2020, while sales revenue for cement products increased to approximately HKD 588.6 million, up about 5.8% from HKD 556.4 million in 2020[40] Strategic Initiatives - The company is focusing on technological innovation and reform to enhance production efficiency and reduce costs, with significant investments in various technical upgrades[17] - The board is actively exploring investment opportunities in emerging industries, particularly in the fields of new energy and biopharmaceuticals, to diversify business and enhance shareholder value[20] - The company aims to upgrade its production facilities to comply with stricter environmental regulations, which may limit its ability to expand cement production in certain regions[19] - The company has completed the acquisition of Dongfang Hengkang, which holds a 65% stake in Suzhou Hengkang, to expand into the biopharmaceutical sector[20] - The group plans to enhance its production facilities and explore opportunities in emerging sectors, particularly in new energy and biomedicine[28] Research and Development - In 2021, three new R&D projects were initiated, including oncolytic herpes simplex virus (HSV) drugs and antibody-drug conjugates (ADC)[28] - The group has made progress in the development of PD-L1 inhibitory antibody drugs and has initiated three new R&D projects in 2021, including oncolytic herpes simplex virus drugs and new CAR designs[38] - The company has a focus on innovative drug development and commercialization for cancer and autoimmune diseases[100] Corporate Governance - The company has maintained a high standard of corporate governance, adopting the corporate governance code as its own[161] - The board of directors consists of a mix of executive and independent non-executive directors, ensuring compliance with independence guidelines[118] - The company has established an ESG working group to oversee environmental, social, and governance strategies and ensure alignment with operational strategies[104] - The company emphasizes the importance of compliance with laws and regulations, maintaining good relationships with regulatory authorities[108] Employee Management - The total employee compensation during the reporting period was approximately HKD 29,614,000, with a total of 234 employees as of December 31, 2021[71] - Employee management focuses on providing competitive compensation and benefits, along with comprehensive performance evaluation plans to reward outstanding employees[108] - The company has implemented various incentive mechanisms to foster a culture of competition, unity, and innovation among employees[108] Shareholder Information - The group did not recommend a final dividend for the year ending December 31, 2021[24] - The company recognizes the importance of shareholder rights and has established procedures for shareholders to request special meetings and submit inquiries[192][193] - As of December 31, 2021, the distributable reserves available for shareholders amount to approximately HKD 216,159,000, compared to HKD 216,514,000 as of December 31, 2020[112] Risk Management - The company aims to identify and monitor key ESG risks and opportunities that significantly impact its business[105] - The internal control system is designed to minimize risks and serve as a management tool for daily operations[199] - The company has adopted a set of internal control guidelines and policies to enhance existing systems, covering governance, risk management, operations, legal matters, finance, and auditing[199]

Economic Performance - In the first half of 2021, China's GDP increased by 7.8% compared to the same period last year, while fixed asset investment rose by 12.6%[11] - China's cement production reached 1.147 billion tons in the first half of 2021, marking a 14% year-on-year increase[11] - The national cement industry achieved sales revenue of RMB 483.6 billion in the first half of 2021, a year-on-year increase of 13.2%, while profits decreased by 7.2% to RMB 73 billion[11] Cement Market Insights - The average price of PO42.5 cement in Nanjing, Hangzhou, and Shanghai was RMB 465/ton, RMB 490/ton, and RMB 475/ton respectively, reflecting increases of 8.1%, 0%, and 5.6% year-on-year[11] - Cement product sales volume reached approximately 592,000 tons, a year-on-year increase of about 25%, with sales revenue from cement products also increasing by approximately 30%[20] Financial Performance - The company's revenue for the reporting period was approximately RMB 227,802,000, an increase of about RMB 52,997,000 or 30% compared to RMB 174,805,000 in the same period of 2020, primarily due to increased cement demand following economic recovery[19] - The gross profit for the cement segment was approximately RMB 49,699,000, a significant increase of about RMB 20,457,000 or 70% compared to RMB 29,234,000 in the previous year, with a gross margin of approximately 21.8%, up from 16.7%[22] - The company's net profit margin increased to approximately 10.8%, up 4.6% from about 6.2% in the previous year, driven by the increase in revenue[28] Cash and Debt Management - As of June 30, 2021, the company's cash and cash equivalents were approximately RMB 157,859,000, a 70% increase from RMB 93,015,000 as of December 31, 2020[31] - The company's bank borrowings increased by 22% to approximately RMB 79,712,000 as of June 30, 2021, compared to RMB 65,187,000 as of December 31, 2020[32] - The company's capital debt ratio was 14.32% as of June 30, 2021, compared to 12.26% as of December 31, 2020[36] Investments and Acquisitions - The acquisition of Dongfang Hengkang Life Sciences Co., Ltd. was completed on December 31, 2020, providing opportunities for expansion into the health and biopharmaceutical sectors[13] - Suzhou Hengkang, a subsidiary focused on innovative drugs and therapies for cancer and autoimmune diseases, was acquired as part of the group's diversification strategy[13] - The group aims to enhance its market value and diversify its business through the acquisition of Suzhou Hengkang, which specializes in cell immunotherapy[14] Operational Efficiency - The company plans to enhance internal management and reduce costs in the second half of 2021, alongside upgrading existing facilities to increase production efficiency[46] - The company is advancing its non-registered clinical trial plan for CAR-T cell therapy in the biopharmaceutical sector, specifically the ROR1 program in Suzhou[46] Shareholder Information - The company declared an interim dividend of HKD 0.0725 per share for the six months ending June 30, 2021, to be distributed on October 15, 2021[43] - Major shareholder Goldview holds 297,500,000 shares, representing 53.89% of the company's total shares[50] Employee and Management Insights - As of June 30, 2021, the company had a total of 232 employees, with total employee compensation amounting to approximately RMB 6,712,000[45] - The company's management compensation for the six months ended June 30, 2021, was RMB 2,413,000, down from RMB 3,305,000 for the same period in 2020, indicating a decrease of about 27%[141] Tax and Regulatory Compliance - For the six months ended June 30, 2021, the company's income tax expense was RMB 14,315,000, compared to RMB 7,490,000 for the same period in 2020, representing an increase of approximately 91%[100] - The company has complied with the corporate governance code and listing rules throughout the reporting period[56][58] Risk Management - The company continues to manage various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since the end of the previous year[89] - The company has maintained sufficient cash and credit lines to meet its working capital requirements, combining operational cash flow, short-term bank borrowings, and financial support from equity holders[89]

Financial Performance - Total revenue for 2020 was RMB 460,970 thousand, a decrease of 19.4% from RMB 571,150 thousand in 2019[33] - Net profit for the year was RMB 50,236 thousand, down 17.2% from RMB 60,702 thousand in 2019[33] - Basic and diluted earnings per share were RMB 0.091, compared to RMB 0.121 in 2019, reflecting a decline of 25%[33] - The gross profit margin for 2020 was approximately 21.9%, down by about 2.3% from the previous year[47] - Gross profit for the reporting period was approximately RMB 101,057,000, a decrease of about RMB 37,267,000 or approximately 26.9% from RMB 138,324,000 in 2019[72] - The net profit margin for the reporting period was approximately 10.9%, down 2.5% from 13.4% in 2019, with net profit decreasing from RMB 76,513,000 in 2019 to RMB 50,149,000 in 2020[79] - Other income and gains for the reporting period were approximately RMB 9,099,000, a decrease of about RMB 3,321,000 or approximately 26.7% from RMB 12,420,000 in 2019[74] Assets and Liabilities - Non-current assets decreased to RMB 236,598 thousand in 2020 from RMB 309,692 thousand in 2019, a reduction of 23.6%[33] - Total assets increased slightly to RMB 807,705 thousand in 2020 from RMB 803,913 thousand in 2019[33] - The total liabilities as of December 31, 2020, were RMB 275,795,000, a slight decrease from RMB 277,384,000 in 2019[35] - As of December 31, 2020, the group's cash and cash equivalents amounted to RMB 93,015,000, an increase of approximately 13.6% from RMB 81,849,000 as of December 31, 2019, primarily due to a decrease in payables during the reporting period[83] - The group's bank borrowings as of December 31, 2020, were approximately RMB 65,187,000, representing an increase of about 62.85% from RMB 40,028,000 as of December 31, 2019[85] - The capital debt ratio as of December 31, 2020, was 12.09%, up from 7.6% in the previous year[88] Cash Flow - Cash generated from operating activities was RMB 131,807 thousand, down from RMB 231,956 thousand in 2019, a decline of 43.2%[33] - Cash used in investing activities was RMB (108,884) thousand, compared to RMB (116,280) thousand in 2019, showing a slight improvement[33] - Cash used in financing activities was RMB (11,757) thousand, significantly lower than RMB (69,553) thousand in 2019, indicating better cash management[33] - The net increase in cash and cash equivalents was RMB 11,166 thousand, down from RMB 46,123 thousand in 2019[33] Cement Production and Sales - In 2020, the company's cement product sales volume was approximately 1,290.5 thousand tons, a decrease of about 16.0% compared to 2019[47] - The company achieved a clinker production of approximately 771,300 tons and cement production of approximately 1,297,900 tons in 2020[38] - The sales volume of 32.5R grade cement was approximately 439,200 tons, while 42.5R grade cement sales volume was approximately 851,300 tons[39] Strategic Acquisitions and Business Diversification - The company completed the acquisition of Dongfang Hengkang, which holds 65% of the issued share capital of Suzhou Hengkang, focusing on innovative drugs for cancer and autoimmune diseases[43] - The company plans to explore investment opportunities in emerging industries, particularly in the biopharmaceutical sector, to diversify its business and enhance shareholder value[43] - The company completed the acquisition of Dongfang Hengkang for a total consideration of RMB 32,500,000, which holds 65% of Suzhou Hengkang, focusing on innovative drugs and treatment technologies for cancer and autoimmune diseases[97] Compliance and Governance - The company has adopted the code of conduct for securities trading as per the listing rules, confirming compliance by all directors during the reporting period[106] - The audit committee has reviewed the financial statements for the year ended December 31, 2020, and confirmed that they comply with applicable accounting standards[108] - The company maintains compliance with securities and futures regulations, ensuring good relationships with regulatory bodies[140] Employee and Management - The total employee compensation for the group during the reporting period was approximately RMB 23,142,000, with a total of 226 employees as of December 31, 2020[99] - The total number of senior management personnel remained stable at 7 for both 2020 and 2019[171] - The remuneration for directors and the five highest-paid individuals in the company is determined based on current market conditions and the group's performance[169] Environmental Initiatives - The company invested approximately RMB 4,500,000 in environmental protection facilities and energy-saving projects during 2020[137] - The company aims to transform into a green and circular economy enterprise, focusing on clean production and resource utilization[139] Future Outlook - In 2021, the company plans to enhance internal management, reduce costs, upgrade existing facilities, and explore investment opportunities in emerging industries, particularly in the biopharmaceutical sector[100] - Future prospects and major risks faced by the group are discussed in the management discussion and analysis section, pages 11 to 22 of the annual report[136]

Economic Performance - In the first half of 2020, China's GDP decreased by 1.6% compared to the same period last year, which had a growth of 6.3%[10] - Fixed asset investment in China nominally decreased by 3.1% year-on-year in the first half of 2020, compared to a growth of 5.8% in the previous year[10] - The infrastructure investment in the first half of 2020 decreased by 2.7%, with a narrowing decline of 3.6 percentage points compared to January-May 2020[10] Cement Industry Performance - The domestic cement production in China for the first half of 2020 was 998 million tons, a year-on-year decrease of 4.8% compared to a growth of 6.8% in the previous year[10] - In Q1 2020, the national cement sales volume dropped significantly by 23.93%, marking the largest decline since the beginning of the century[11] - In Q2 2020, cement production increased by 6.9% year-on-year due to the recovery of downstream infrastructure and real estate sectors[11] - The average cement prices in major sales regions (Nanjing, Hangzhou, and Shanghai) as of June 2020 were RMB 430/ton, RMB 490/ton, and RMB 450/ton, representing declines of 18.9%, 7.5%, and 12.6% respectively compared to the same period last year[11] Company Financial Performance - The group's revenue for the reporting period was approximately RMB 174,805,000, a decrease of about RMB 76,934,000 or 30.6% compared to RMB 251,739,000 in the same period of 2019[15] - Cement product sales volume was approximately 472,000 tons, a year-on-year decrease of about 31.2%, with sales revenue also decreasing by approximately 30.6%[16] - The gross profit for the cement segment was approximately RMB 29,234,000, down about RMB 22,890,000 or 43.9% from RMB 52,124,000 in the previous year, resulting in a gross margin of approximately 16.7%[19] - Other income for the group was approximately RMB 7,322,000, a decrease of about RMB 2,676,000 or 26.8% compared to RMB 9,998,000 in the previous year[20] - Distribution expenses increased by approximately 23.4% to RMB 2,122,000, primarily due to increased transportation costs during the reporting period[21] - General and administrative expenses rose by approximately RMB 3,658,000 or 27.0% to RMB 17,213,000, attributed to expected credit losses and depreciation from information security systems[22] - The group's net profit margin for the reporting period was approximately 6.2%, a decrease of 9.1% from 15.3% in the previous year[25] Cash and Debt Management - As of June 30, 2020, the group's cash and cash equivalents amounted to approximately RMB 187,194,000, an increase of about 131.7% from RMB 80,161,000 as of December 31, 2019[28] - The capital debt ratio improved to 44.7% from 52.7% in the previous year, while the asset-liability ratio decreased to 30.9% from 34.5%[27] - The group plans to meet its working capital needs primarily through cash flows from operating activities, bank loans, and proceeds from its initial public offering[26] - As of June 30, 2020, the group's bank borrowings increased by 51.5% from approximately RMB 37,028,000 on December 31, 2019, to approximately RMB 56,114,000[142] Operational Challenges - The company faced high inventory levels and significant pressure due to the dual impact of COVID-19 and prolonged rainy weather during the first half of 2020[10] - The company implemented a price reduction strategy in response to market pressures from imports and external supply sources[11] - The company anticipates a gradual recovery in demand as government policies support economic activities post-COVID-19[10] Shareholder Information - Major shareholders include Goldview, holding 53.89% of shares, and Inventive Star Limited, holding 6.79%[49] Dividend and Earnings - The board declared an interim dividend of HKD 0.0725 per share for the six months ended June 30, 2020, to be distributed on September 30, 2020[42] - Basic and diluted earnings per share for continuing operations were RMB 0.019, a decrease of 67.2% from RMB 0.058 in 2019[68] Asset and Liability Overview - As of June 30, 2020, total assets amounted to RMB 766,377 thousand, an increase from RMB 824,913 thousand as of December 31, 2019, reflecting a decrease of approximately 7.1%[70] - Current assets increased to RMB 556,603 thousand from RMB 494,221 thousand, representing a growth of about 12.6%[70] - Non-current assets decreased to RMB 209,774 thousand from RMB 309,692 thousand, a decline of approximately 32.3%[70] - Total liabilities decreased to RMB 236,760 thousand from RMB 277,736 thousand, a reduction of approximately 14.8%[71] Investment and Future Plans - The company plans to enhance internal management and reduce costs while exploring investment opportunities in emerging industries in the second half of 2020[44] - The company has reported a significant increase in short-term bank deposits to RMB 94,200 thousand from RMB 49,180 thousand, an increase of approximately 91.5%[70] Compliance and Governance - The company complied with the corporate governance code during the reporting period[55] - The company has sufficient independent non-executive directors to comply with relevant rules as of the end of the reporting period[58] Discontinued Operations - The company completed the sale of its subsidiary, Shanghai Baifite Environmental Technology Co., Ltd., on March 2020, classifying it as a discontinued operation[115] - The company has ceased operations in the wastewater and sludge treatment services sector, with all revenue now derived from customer contracts[105]

Financial Performance - Total revenue for 2019 was RMB 571,150,000, an increase of 9.9% from RMB 519,403,000 in 2018[24] - Operating profit for 2019 was RMB 76,513,000, up 6.5% from RMB 71,931,000 in 2018[24] - Profit attributable to owners of the company for 2019 was RMB 66,669,000, a decrease of 26.3% from RMB 90,334,000 in 2018[24] - Basic and diluted earnings per share for 2019 were RMB 0.121, down from RMB 0.164 in 2018[24] - The company's revenue for 2019 was approximately RMB 571,150,000, representing a 10.5% increase compared to 2018[36] - The cement segment generated revenue of approximately RMB 571,150,000, up about RMB 55,113,000 or 11% from RMB 516,037,000 in 2018, primarily due to rising cement prices[52] - The cement product sales volume in 2019 was approximately 1,536.6 thousand tons, an increase of about 6.3% compared to 2018, with sales revenue of approximately RMB 569,144,000, up about 10.5%[53] - The gross profit for the reporting period was approximately RMB 138,324,000, with a gross margin of about 24.2%, down from 26.6% in 2018, mainly due to rising limestone prices[60] - Other income for the reporting period was approximately RMB 12,948,000, a decrease of about RMB 32,532,000 or 71.5% compared to RMB 45,480,000 in 2018[61] - Selling and distribution expenses were approximately RMB 4,219,000, an increase of about RMB 154,000 or 3.79% compared to RMB 4,065,000 in 2018, consistent at about 0.8% of the cement segment's total revenue[62] - General and administrative expenses were approximately RMB 32,747,000, with a significant decrease in the cement segment's expenses to RMB 30,229,000, down about 24% from RMB 39,801,000 in 2018[63] - The income tax expense for the reporting period was approximately RMB 41,836,000, an increase of about RMB 3,513,000 or 9.16% compared to RMB 38,340,000 in 2018, primarily due to improved performance in the cement segment[65] - The group's net profit margin for the reporting period was approximately 10.6%[67] - The cement segment's net profit margin was about 13.4%, a decrease of 0.5% from 2018's 13.9%, with net profit rising from approximately RMB 71,931,000 in 2018 to RMB 76,513,000 in 2019[67] Assets and Liabilities - Total assets increased to RMB 803,913,000 in 2019 from RMB 709,065,000 in 2018[24] - Total equity rose to RMB 526,529,000 in 2019 compared to RMB 497,416,000 in 2018[24] - The total liabilities as of December 31, 2019, were RMB 277,384,000, compared to RMB 211,649,000 in 2018[26] - Current liabilities increased to RMB 250,825,000 in 2019 from RMB 194,631,000 in 2018[24] - Cash and cash equivalents as of December 31, 2019, were approximately RMB 81,849,000, an increase of about 134.2% from RMB 35,726,000 in 2018[71] - Total bank borrowings as of December 31, 2019, were approximately RMB 40,028,000, a decrease of about 44.06% from RMB 71,553,000 in 2018[73] - The capital debt ratio for the group was 7.6% as of December 31, 2019, down from 14.4% in 2018[75] - As of December 31, 2019, the group's distributable reserves for shareholders amounted to approximately RMB 167,841,000, an increase from RMB 144,759,000 as of December 31, 2018[136] Cash Flow - Net cash flow from operating activities for 2019 was RMB 228,711,000, an increase from RMB 146,713,000 in 2018[24] - Cash and cash equivalents increased by RMB 46,123,000 in 2019, compared to an increase of RMB 7,129,000 in 2018[24] Production and Sales - The cement sales volume for 2019 was about 1,536.6 thousand tons, which is an increase of approximately 6.3% from the previous year[36] - The company produced approximately 861,000 tons of clinker and 1,532,000 tons of cement in 2019[29] - The company sold approximately 1,537,000 tons of products in 2019, with significant sales in both 32.5R and 42.5R grade cement[29] - In 2019, the company's cement segment achieved a profit of approximately RMB 92.85 million, reflecting stable growth compared to the previous year[44] Market and Industry Trends - The national cement production in China reached 2.33 billion tons in 2019, with a year-on-year growth of 6.1%[43] - The average price of PO42.5 cement in China was RMB 439 per ton in 2019, an increase of 2.67% from RMB 427 per ton in 2018[43] - The average cement price in the East China region was RMB 479 per ton in 2019, maintaining the highest price among six major regions[44] - The national fixed asset investment in China was RMB 55.15 trillion in 2019, with a year-on-year growth of 5.4%[43] Strategic Plans and Initiatives - The company plans to explore investment opportunities in the environmental sector and emerging industries to diversify revenue sources[32] - The company aims to enhance production efficiency and reduce costs through technological innovation and reform[30] - The company plans to deepen the transformation of existing production facilities and actively promote the beneficial attempts of urban sludge and municipal waste co-disposal in 2020[40] - The company aims to transform into a green and environmentally friendly cement production enterprise, enhancing its competitiveness and market position[40] - The company is exploring development opportunities in the environmental protection sector, which is expected to see increased investment due to government focus[46] - The company is committed to diversifying its business and achieving synergies in the environmental sector[40] - The group plans to enhance internal management and reduce costs while expanding market share and improving product profitability in 2020[92] Corporate Governance - The company has adopted the corporate governance code as per the listing rules, ensuring accountability and transparency[94] - The board held a total of five meetings during the reporting period, including two regular meetings and three ad-hoc meetings to discuss significant matters[96] - The audit committee reviewed the annual financial statements for the year ended December 31, 2019, confirming compliance with applicable accounting standards[99] - The management team includes experienced professionals with backgrounds in finance, investment, and corporate governance, enhancing the company's strategic capabilities[102][103][104][106] - The company has a strong management team with extensive banking experience, including leadership roles in major banks and financial institutions[110] - The independent non-executive director has rich experience in auditing, accounting, and financial management, previously serving as an assistant finance director in a multinational brand group[111] - The company is focused on maintaining strong corporate governance through its independent non-executive directors[111] Employee Relations - The group had a total employee compensation of approximately RMB 28,122,000 for 240 employees during the reporting period[91] - The group encourages employee participation in management and adopts reasonable suggestions to enhance overall employee engagement[128] - As of December 31, 2019, the company made contributions of approximately RMB 3,818,000 to employee welfare plans[165] Shareholder Information - The company has not proposed a final dividend for the year ended December 31, 2019[123] - The company's issued share capital as of December 31, 2019, was HKD 5,520,000, representing 552,000,000 shares, with a nominal value of HKD 0.01 per share[134] - The largest shareholder, Goldview, holds 297,500,000 shares, accounting for 53.89% of the company's equity[167] - Inventive Star Limited, fully owned by Mr. Cui Lijie, holds 77,500,000 shares, representing 14.04% of the company's equity[172] Risk Management - The company has faced major risks and uncertainties, which are discussed in the management discussion and analysis section of the annual report[124] - The group has not incurred any significant contingent liabilities or guarantees as of December 31, 2019[141] - There were no significant lawsuits, arbitrations, or claims involving the group during the reporting period[187]

Economic Overview - In the first half of 2019, China's GDP grew by 6.3%, down from 6.8% in the same period last year[10] - Fixed asset investment in China nominally grew by 5.8% year-on-year in the first half of 2019, compared to 6.0% in the previous year[10] - Real estate investment maintained a rapid growth rate of 10.9% year-on-year, contributing to improved demand for cement[11] - Infrastructure investment, as a counter-cyclical adjustment tool, has been gradually increasing, with significant improvements in transportation investment growth rates[11] Cement Industry Performance - China's cement production reached 1.045 billion tons in the first half of 2019, a year-on-year increase of 6.8%, compared to a decline of 0.6% in the previous year[10] - The average price of PO42.5 cement in China was RMB 435 per ton in the first half of 2019, an increase of RMB 17 per ton or 4% year-on-year, marking a historical high for the same period[11] - The overall performance of the national cement industry showed a trend of simultaneous increase in both volume and price, benefiting the company's market position[11] - The company anticipates continued demand growth in the cement market, supported by ongoing infrastructure projects and real estate investments[11] Financial Performance - The company reported a revenue of approximately RMB 251.74 million for the reporting period, an increase of about RMB 32.24 million or 14.7% compared to RMB 219.50 million in the same period of 2018, primarily due to an increase in average cement prices[18] - The cement segment achieved a gross profit of approximately RMB 52.12 million, an increase of about RMB 2.06 million or 4.1% from RMB 50.06 million in the previous year, with a gross margin of approximately 20.7%, down from 22.8% due to rising raw material costs[24] - The company reported a net profit of RMB 32,028 thousand for the six months ended June 30, 2019, compared to RMB 28,593 thousand for the same period in 2018, reflecting an increase of approximately 12.7%[141] - The company's net profit attributable to shareholders for the six months ended June 30, 2019, was RMB 32,219,000, up from RMB 28,671,000 for the same period in 2018, indicating an increase of about 9%[189] Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2019, were approximately RMB 134,550,000, compared to RMB 80,126,000 as of December 31, 2018[36] - The net increase in cash and cash equivalents was RMB 49,644 thousand, compared to a decrease of RMB 9,703 thousand in the same period last year[100] - Operating cash flow for the six months ended June 30, 2019, was RMB 63,195 thousand, a decrease of 6.7% from RMB 67,466 thousand in the same period of 2018[100] - The company maintained a cash and credit line sufficient to meet its working capital requirements, combining operational cash flow, short-term bank borrowings, and financial support from equity holders[136] Investment and Capital Expenditure - The company has completed or is executing a total of 4 projects as of June 30, 2019, with no new projects added since December 31, 2018[22] - Capital expenditure for the group was approximately RMB 19,469,000, an increase from RMB 18,370,000 in the same period last year[47] - The company has paid a deposit of RMB 20,500,000 for the acquisition of a property, with a total purchase price of RMB 23,000,000, and the remaining balance of RMB 2,500,000 is expected to be settled by the end of 2019[176] Shareholder Information - As of June 30, 2019, the issued share capital of the company was HKD 5,520,000, divided into 552,000,000 shares with a par value of HKD 0.01 each[56] - Major shareholder Goldview held 297,500,000 shares, representing 53.89% of the company's total shares[61] - No share options were granted or exercised during the reporting period[63] - The company did not declare or recommend any dividends for the six months ended June 30, 2019, consistent with the same period in 2018[191] Compliance and Governance - The company adhered to the corporate governance code during the reporting period[67] - The audit committee reviewed the interim financial report for the six months ended June 30, 2019, and found it compliant with applicable accounting standards[71] - The company did not comply with the rule regarding the appointment of independent non-executive directors during the reporting period but currently has sufficient independent directors[70] Environmental Sector - The environmental sector is a strategic industry for long-term development, with an investment of up to RMB 6 trillion planned for air, water, and soil protection during the 13th Five-Year Plan, an increase of RMB 1 trillion compared to the 12th Five-Year Plan[13] - The environmental sector reported zero revenue for the reporting period, consistent with the previous year[22] - The company is actively exploring other areas in the environmental sector, including steel dust treatment and non-ferrous solid waste treatment[15] Accounting Standards and Financial Reporting - The company has adopted the new Hong Kong Financial Reporting Standard 16 for leases, which may impact future financial reporting[111] - The financial impact of HKFRS 16 on the consolidated interim financial position and comprehensive income statement was significant, affecting both assets and liabilities[119] - The company did not adopt any new accounting standards or amendments that were not yet effective during the reporting period[132] Employee and Compensation - The total employee compensation for the period was approximately RMB 11,656,000, with a total of 242 employees[55] - The group’s employee expenses, including directors' remuneration, totaled RMB 11,955,000 for the six months ended June 30, 2019, up from RMB 10,972,000 in 2018, indicating an increase of approximately 8.9%[152]

Financial Performance - Total revenue for 2018 reached RMB 519,403 thousand, a significant increase of 45.2% compared to RMB 357,563 thousand in 2017[24] - Operating profit for 2018 was RMB 132,764 thousand, up 186.6% from RMB 46,366 thousand in 2017[24] - Profit attributable to owners of the company for 2018 was RMB 90,334 thousand, representing a 248.5% increase from RMB 25,899 thousand in 2017[24] - Basic and diluted earnings per share for 2018 were RMB 0.164, compared to RMB 0.047 in 2017[24] - The company's revenue for the year ended December 31, 2018, was RMB 519,403,000, representing a 45.3% increase compared to 2017[35] - The net profit attributable to shareholders for 2018 was RMB 90,334,000, significantly higher than RMB 25,899,000 in 2017[26] - The gross profit for the group was approximately RMB 137,502,000, with the cement segment contributing RMB 137,375,000, an increase of about RMB 69,061,000 or 101.1% from RMB 68,314,000 in 2017[59] - The group's net profit margin for the reporting period was approximately 17.3%[67] - The cement segment's net profit increased from approximately RMB 44.65 million in 2017 to approximately RMB 98.57 million in 2018, with a net profit margin of about 19.1%[67] Assets and Liabilities - Total assets increased to RMB 709,065 thousand in 2018, up from RMB 597,700 thousand in 2017, reflecting a growth of 18.6%[24] - The total liabilities as of December 31, 2018, were RMB 211,649,000, compared to RMB 184,572,000 in 2017[26] - Cash and cash equivalents as of December 31, 2018, were approximately RMB 35.73 million, up about 25% from RMB 28.60 million in 2017[69][71] - Bank borrowings increased by approximately 10.2% from RMB 64.91 million in 2017 to RMB 71.55 million in 2018[72] - The capital debt ratio as of December 31, 2018, was 14.4%, down from 15.7% in 2017[75] Operational Highlights - The cement sales volume for 2018 was approximately 1,445.5 thousand tons, an increase of about 5.1% from 2017[35] - The gross profit margin for 2018 was approximately 26.6%, up by 7.5% compared to the previous year[35] - The cement segment achieved revenue of approximately RMB 516,037,000, up about RMB 159,055,000 or 44.6% from RMB 356,982,000 in 2017, primarily due to a significant increase in cement prices during the reporting period[53] - Cement product sales volume for 2018 was approximately 1,445.5 thousand tons, an increase of about 5.1% compared to 2017[55] - The environmental segment reported revenue of approximately RMB 3,366,000, a significant increase of RMB 2,785,000 or 479% compared to RMB 581,000 in 2017[58] Future Plans and Strategies - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[24] - The company plans to explore investment opportunities in the environmental sector to diversify revenue sources[30] - The company aims to enhance production efficiency and reduce costs through technological innovation and reform[30] - The company plans to enhance internal management and reduce costs while expanding market share and improving product profitability in 2019[92] - The company is investing in R&D, allocating $H million towards developing sustainable practices and technologies[98] - The company is considering strategic acquisitions to enhance its product offerings and market presence[113] Corporate Governance - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with high standards of corporate governance[191] - The board consists of 9 members, including 5 executive directors, 1 non-executive director, and 3 independent non-executive directors[199] - The company has established three board committees: audit committee, remuneration committee, and nomination committee, to oversee specific aspects of governance[194] - The board believes that effective corporate governance is crucial for enhancing accountability and investor confidence, contributing to the long-term success of the group[191] Employee and Compensation - The total employee compensation for the reporting period was approximately RMB 25.03 million, with a total of 238 employees as of December 31, 2018[91] - The executive directors' performance-based compensation is linked to company performance indicators such as stock price and net profit[142] - The company has a long-term incentive plan that rewards outstanding performance in proportion to achieved performance indicators[144] Environmental Initiatives - The company invested approximately RMB 6,602,000 in environmental protection facilities and energy-saving projects during 2018[118] - The company aims to transform into a green and circular economy enterprise, focusing on clean production and resource utilization[118] - The environmental sector is expected to see rapid investment growth, with the government planning to invest RMB 6 trillion in environmental protection during the 13th Five-Year Plan, up from RMB 5 trillion in the previous plan[48]