消息面上，7月1日，水泥协会发布响应反内卷政策文件。中邮证券认为会推动限制超产政策更好的执 行。从中期维度来看，水泥行业产能有望在限制超产政策下产能持续下降，产能利用率从而大幅提升， 目前水泥行业处于淡季需求低点及价格低点，该行判断行业有望在8月份需求回暖后逐步价格提升。 智通财经APP获悉，水泥股涨幅居前，截至发稿，华新水泥(06655)涨4.02%，报13.99港元；海螺水泥 (00914)涨3.47%，报23.86港元；东吴水泥(00695)涨3.07%，报4.03港元；华润建材科技(01313)涨1.6%， 报1.91港元。 东吴证券指出，水泥行业供给自律共识有望进一步强化，全年盈利中枢有望好于去年。尽管Q2因需求 波动或错峰执行问题供需阶段性失衡、价格出现回落，但今年行业在主导企业引领下维护利润的意愿显 著增强，该行认为供需再平衡时间仍然会明显好于去年，后续旺季提价时点有望较去年提前，全年盈利 中枢有望高于去年。 ...

52周新高排行 智通财经APP获悉，截止8月7日收盘，有102只股票创52周新高，其中世大控股(08003)、全达电器集团 控股(01750)、东吴水泥(00695)创高率位于前3位，分别为30.00%、25.58%、21.62%。 | 六福集团(00590) | 22.420 | 22.500 | 0.67% | | --- | --- | --- | --- | | 中国飞机租赁(01848) | 4.630 | 4.820 | 0.63% | | 隽思集团(01412) | 1.650 | 1.680 | 0.60% | | 周大福(01929) | 13.790 | 14.070 | 0.50% | | Ａ三星亚太元宇宙 | 21.100 | 21.100 | 0.48% | | (03172) | | | | | Ａ博时人民币－Ｒ | 1,064.000 | 1,064 | 0.47% | | (83192) | | | | | 渣打集团(02888) | 145.800 | 148.200 | 0.45% | | 西部水泥(02233) | 2.220 | 2.260 | 0.44% | | CW ...

Group 1 - Dongwu Cement (00695.HK) increased by 17.30% [1] - Western Cement (02233.HK) rose by 3.25% [1] - Conch Cement (00914.HK) saw a rise of 1.06% [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 東吳水泥國際有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00695 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | 本月 ...

Group 1 - The core viewpoint of the article highlights the continued upward trend of certain Hong Kong cement stocks, with notable gains reported [1] - Western Cement (02233.HK) experienced a significant increase of 16.48% [1] - Other cement companies also saw positive movements, including Shanshui Cement (00691.HK) with a rise of 5.08%, Huaxin Cement (06655.HK) up by 2.51%, and Dongwu Cement (00695.HK) increasing by 2.33% [1]

中国2025年6月重磅宏观经济数据公布，其中Q2GDP同比5.2%超预期。港股三大指数午后持续拉升走 强，一扫早盘冲高回落行情。截止收盘，恒生科技指数一马当先，最终收涨2.8%，恒生指数、国企指 数分别上涨1.6%及1.65%。 | 代码 | 名称 | 最新价 | 涨跌额 | 涨跌幅 | | --- | --- | --- | --- | --- | | 800000 | 恒生指数 | ○ 24590.12 | +386.80 | 1:60% | | 800100 | 国企指数 | 8877.10 | +144.36 | 1.65% | | 800700 | 恒生科技指数 | 5431.29 | +147.79 | 2.80% | 盘面上，作为市场风向标的大型科技股午后持续攀升助力大市上涨，其中，阿里巴巴大涨近7%，美 团、百度涨超4%，腾讯涨3.5%，京东涨超2%；行业利好不断，稳定币概念股普遍走高，云锋金融大涨 19.5%；生物医药股全天维持强势行情；苹果概念股、软件类股、汽车股、电信股、海运股午后涨幅持 续扩大。另一方面，比特币下破11.7万美元，加密货币概念股低迷，上半年全国房地产开发投资同比跌 11 ...

Financial Performance - Total revenue for 2024 was HKD 223,604,000, a decrease of 27.3% compared to HKD 307,263,000 in 2023[6] - Operating loss for 2024 was HKD 51,672,000, compared to a loss of HKD 39,339,000 in 2023, indicating a worsening performance[10] - The total assets decreased to HKD 1,042,235,000 in 2024 from HKD 1,153,702,000 in 2023, reflecting a decline of 9.7%[11] - Total liabilities increased to HKD 565,390,000 in 2024, up from HKD 516,963,000 in 2023, marking an increase of 9.4%[11] - The net cash flow from operating activities was a negative HKD 71,565,000 in 2024, an improvement from a negative HKD 112,295,000 in 2023[9] - The company reported a basic and diluted loss per share of HKD 0.106 for 2024, compared to HKD 0.066 in 2023[6] - The total equity decreased to HKD 476,845,000 in 2024 from HKD 636,739,000 in 2023, a decline of 25.1%[11] - The group recorded a gross loss of approximately HKD 13,920,000 for the reporting period, with the cement segment contributing a gross loss of about HKD 5,570,000, an increase of approximately 129.1% compared to 2023[41] - The rare earth segment reported a gross loss of approximately HKD 8,408,000, which is an increase of about 303.1% compared to the same period in 2023, resulting in a gross margin of -21.7%[41] - The group’s net profit margin for the reporting period was approximately -30.9%, a decline of about 17.5% compared to -13.4% in 2023[48] Cement Segment Performance - The cement production for 2024 reached 775,000 tons, with a significant decline in output compared to the previous year, marking the lowest production level in 15 years[12] - The cement sales volume for the year was approximately 778,000 tons, resulting in a revenue of about HKD 184,712,000, a decrease of approximately 30.5% compared to the previous year[13][20] - The group recorded total revenue of approximately HKD 223,604,000 for the reporting period, with the cement segment contributing about HKD 184,782,000, down by HKD 81,347,000 or 30.6% from the previous year[17] - The cement segment recorded total revenue of approximately HKD 184,712,000, a decrease of about 30.5% compared to HKD 265,908,000 in 2023, primarily due to intensified market competition and a downturn in the real estate sector[36] - The average sales price of PO 32.5 cement was HKD 217 per ton, while PO 42.5 cement was HKD 223 per ton, contributing to a total cement sales volume of approximately 777,000 tons in 2024, down 17.3% from 2023[36] - The company plans to enhance internal management and cost control in the cement segment to improve profitability amidst a challenging market environment[22] Rare Earth Segment Performance - The rare earth segment generated revenue of approximately HKD 38,764,000, with magnetic material sales accounting for about 47.0% of this revenue[14][20] - The average price of metal neodymium decreased by approximately 25% in 2024, impacting the overall profitability of the rare earth segment[14] - The company has implemented a series of technological upgrades in the rare earth materials production workshop, which commenced production in February 2024[15] - The rare earth segment is expected to grow, driven by technological innovation and market orientation, with a focus on cost reduction and efficiency improvement[23] - The company aims to innovate and improve product quality in the rare earth segment, responding to increasing customer expectations[67] Market Conditions - In 2024, the cement industry faced a nearly double-digit decline in demand due to ongoing adjustments in the real estate sector, leading to significant price drops and profit declines[25] - The national cement production in 2024 was 1.825 billion tons, a year-on-year decrease of 9.5%, marking the lowest production level in 15 years[26] - The average national cement market price in 2024 was 384 RMB/ton, a year-on-year decline of 2.6%[27] - The real estate development investment in 2024 was 1,002.8 billion RMB, a decline of 10.6% compared to the previous year[26] - The real estate market is expected to stabilize in 2025, with policies aimed at boosting market confidence, although cement demand indicators have not yet improved[65] Cash Flow and Investments - Investment activities generated a net cash flow of HKD 149,505,000 in 2024, an increase from HKD 125,533,000 in 2023[9] - As of December 31, 2024, the group’s cash and cash equivalents were approximately HKD 135,495,000, an increase of about 518.8% from HKD 21,895,000 in 2023[51] - The group’s total borrowings increased by approximately 14.7% to HKD 299,755,000 as of December 31, 2024, compared to HKD 262,641,000 in 2023[52] - The capital expenditure for the group in 2024 was approximately HKD 33,963,000, an increase from HKD 15,210,000 in 2023, primarily due to increased construction in the cement segment[56] Corporate Governance and Management - The company has established an ESG working group to oversee and align ESG strategies with operational strategies[98] - The company has adopted a long-term incentive plan linking part of the executive directors' remuneration to corporate and individual performance[119] - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring compliance with the independence guidelines[115] - The company has established a risk prevention strategy by purchasing liability insurance for all directors[167] - The board of directors is responsible for maintaining an effective internal control system to safeguard the group's assets and shareholders' interests, ensuring the system is adequate and effective as of December 31, 2024[185] Shareholder Information - The company declared a special dividend of HKD 0.136 per share, which will be distributed on March 31, 2025, due to tax processing delays[94] - As of December 31, 2024, the company's distributable reserves amounted to approximately HKD 5,437,000, a significant decrease from HKD 139,144,000 on December 31, 2023[108] - The company has not proposed a final dividend for the year ending December 31, 2024[95] - The largest customer accounted for 4.60% of total sales, while the top five customers combined represented 18.12%[144] - The largest supplier contributed 32.96% of total procurement, with the top five suppliers together accounting for 51.47%[144] Management Team - Liu Dong has over 10 years of experience in the Hong Kong capital market and investor relations[77] - Wu Junxian has been with the group since March 2009, holding various management positions[78] - Jiang Xueming has served as chairman of Dongfang Holdings International Group since 1995[79] - Xie Yingxia has held multiple roles including financial director and vice president at Dongfang Holdings Group[80] - Cao Guanyu has extensive banking and financial experience, previously serving as deputy general manager at Bank of China Singapore Branch[81] - Yu Xiaoying has over 20 years of accounting and finance experience, previously working at Deloitte and Visa[82] - Suo Suo has over 25 years of experience in banking, private equity, and asset management[83] - Yu Liwen has over 20 years of accounting, finance, and investment experience, previously working at PwC and Citigroup[84] Audit and Compliance - The company’s financial statements for the year ending December 31, 2024, were audited by Hong Kong Lixin Dehao CPA Limited[145] - The independent auditor, Hong Kong Li Xin De Hao CPA Limited, received a total remuneration of HKD 1,512,000 for the fiscal year ending December 31, 2024, which includes HKD 1,362,000 for audit services and HKD 150,000 for non-audit services[199] - The audit committee ensures that internal and external auditors' work is coordinated and that the internal audit function has sufficient resources and appropriate status[190] Future Outlook - The company expects to continue facing challenges in the upcoming year, with a focus on cost management and operational efficiency[10] - The group anticipates that stimulus policies for equipment updates and recycling will drive new demand in consumption and industrial sectors by 2027[23] - The company plans to achieve breakthroughs in oil pump motors, water pump motors, and elevators by 2025, expanding its product offerings in the direct current brushless permanent magnet synchronous motor sector[33]

Financial Performance - The group's revenue for the year ended December 31, 2024, was approximately HKD 223,604,000, a decrease of about HKD 83,659,000 or 27.2% compared to HKD 307,263,000 for the year ended December 31, 2023[6] - The gross margin declined from approximately -1.5% for the year ended December 31, 2023, to about -6.2% in the reporting period[6] - The loss attributable to the company's owners increased from approximately HKD 36,525,000 for the year ended December 31, 2023, to about HKD 58,630,000 in the reporting period[6] - Operating loss for the reporting period was HKD 51,672,000, compared to HKD 39,339,000 for the previous year[7] - The total comprehensive loss for the year was HKD 89,791,000, compared to HKD 55,661,000 for the previous year[8] - The company reported a total comprehensive loss of HKD 76,056,000 for the year ended December 31, 2024, compared to a loss of HKD 52,358,000 in 2023, representing an increase of 45.2%[11] Assets and Liabilities - Non-current assets totaled HKD 430,227,000 as of December 31, 2024, an increase from HKD 370,899,000 in 2023[9] - Current assets decreased to HKD 612,008,000 from HKD 782,803,000 in the previous year[9] - Current liabilities increased to HKD 383,353,000 from HKD 337,310,000 in 2023[10] - The company's net assets decreased to HKD 476,845,000 from HKD 636,739,000 in the previous year[10] - The company’s total equity attributable to owners decreased to HKD 387,315,000 as of December 31, 2024, from HKD 534,855,000 at the beginning of the year, reflecting the impact of losses and currency translation adjustments[11] Cash Flow and Liquidity - The cash and cash equivalents increased by HKD 116,488,000 in 2024, compared to an increase of HKD 12,455,000 in 2023, indicating a significant improvement in liquidity[14] - The company incurred a net cash outflow from operating activities of HKD 71,565,000 in 2024, compared to HKD 112,295,000 in 2023, showing a reduction in cash burn[12] - The company’s cash flow from financing activities generated a net inflow of HKD 38,548,000 in 2024, compared to a net outflow of HKD 783,000 in 2023, indicating improved financing conditions[13] - The company’s cash and cash equivalents at the end of 2024 stood at HKD 135,525,000, a substantial increase from HKD 21,895,000 at the end of 2023, reflecting enhanced liquidity management[14] Revenue Segmentation - Total revenue for the year ended December 31, 2024, was HKD 223.6 million, with segment revenues from cement production and sales at HKD 184.8 million, magnetic materials at HKD 38.8 million, and biotechnology research and development at HKD 58,000[26] - The cement production and sales segment generated revenue of HKD 266,129,000, while the magnetic materials and other applications segment contributed HKD 10,823,000[29] - The company reported a total loss of HKD 69.1 million for the year, with unallocated expenses amounting to HKD 8.7 million and a tax credit of HKD 3.1 million[26] Operational Efficiency - The company reported a decrease in trade and other payables by HKD 48,621,000 in 2024, compared to a decrease of HKD 100,949,000 in 2023, reflecting changes in operational efficiency[12] - The company reported a cost of goods sold of HKD 234,841,000 for the year ended December 31, 2024[35] - The company plans to continue expanding its market presence and developing new products in the cement and magnetic materials sectors[29] Discontinued Operations - For the year ending December 31, 2024, the group reported a net loss from discontinued operations of approximately HKD 16,814,000, compared to HKD 4,652,000 in 2023, representing a year-over-year increase of 261%[37] - The basic and diluted loss per share from discontinued operations was approximately HKD 0.028 for 2024, compared to HKD 0.005 for 2023, indicating a significant increase in losses per share[40] Corporate Governance - The company has adopted the corporate governance code as per the listing rules, ensuring accountability and transparency[119] - The audit committee has reviewed the consolidated financial statements for the year ending December 31, 2024, confirming compliance with applicable accounting standards[122] - The company has complied with all applicable provisions of the corporate governance code during the reporting period[120] Market Conditions - The average national cement market price was HKD 384 per ton in 2024, a decrease of 2.6% compared to the previous year[73] - The total cement production in China for 2024 was 1.825 billion tons, a decline of 9.5% year-on-year, marking the lowest production in fifteen years[72] - The company's management reported a significant decline in cement demand due to ongoing adjustments in the real estate sector, leading to intensified price competition[71] Future Outlook - The company anticipates improvements in cement demand due to government policies aimed at stabilizing the real estate market, despite ongoing declines in national real estate development investment and new construction area[113] - The rare earth sector is expected to grow, driven by policies promoting equipment upgrades and recycling, with a focus on energy-saving and green materials[114] - The company aims to enhance product innovation and quality in the rare earth sector, responding to increasing customer expectations and market demands[115]

DONGWU CEMENT INTERNATIONAL LIMITED 東吳水泥國際有限公司 (於開曼群島註冊成立的有限公司) 股份代號: 695 東吳水泥國際有限公司 中期報告2024 目錄 釋義 2 公司資料 5 管理層討論與分析 7 其他資料 22 財務報告 26 1 東吳水泥國際有限公司 中期報告2024 釋義 於本報告內，除非文義另有所指，下列詞語具有以下涵義： | --- | --- | --- | |--------------|-------|----------------------------------------------------------------------------------------------| | | | | | 相聯法團 | 指 | 具有《證券及期貨條例》所賦予此詞彙之相同涵義 | | 聯繫人 | 指 | 具有上市規則所賦予此詞彙之相同涵義 | | 審核委員會 | 指 | 本公司的審核委員會 | | 董事會 | 指 | 本公司的董事會 | | 本公司 | 指 | 東吳水泥國際有限公司，於開曼群島註冊成立之有 | | | | 限公司，於聯交所主板上市 | ...

[I. Corporate Information and Financial Summary](index=1&type=section&id=I.%20Corporate%20Information%20and%20Financial%20Summary) [Company Profile](index=1&type=section&id=1.1%20Company%20Profile) This is the unaudited interim results announcement of Dongwu Cement International Limited for the six months ended June 30, 2024, prepared by the Board of Directors - This is the unaudited consolidated results announcement of Dongwu Cement International Limited (Stock Code: 695) for the six months ended June 30, 2024[1](index=1&type=chunk)[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=1.2%20Financial%20Summary) The Group's revenue decreased by 24.2% year-on-year to HK$106.6 million, gross profit margin turned negative to -7.3%, and loss attributable to owners of the Company widened to HK$35.9 million Key Financial Indicators Comparison for H1 2024 | Indicator | H1 2024 (HK$'000) | H1 2023 (HK$'000) | Change (HK$'000) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 106,613 | 140,576 | (33,963) | -24.2% | | Gross Profit Margin | -7.3% | 1.8% | -9.1% | - | | Loss attributable to owners of the Company | (35,874) | (17,433) | (18,441) | 105.8% | [II. Condensed Consolidated Interim Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's H1 2024 revenue decreased by 24.2% year-on-year, gross profit turned to a loss, operating loss widened, and loss for the period increased to HK$40.0 million Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income (Summary) | Indicator | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Revenue | 106,613 | 140,576 | | (Gross loss)/gross profit | (7,813) | 2,517 | | Operating loss | (28,903) | (20,179) | | Loss before income tax | (27,841) | (15,826) | | Loss for the period | (39,981) | (18,418) | | Loss for the period attributable to owners of the Company | (35,874) | (17,433) | | Loss per share from continuing and discontinued operations (basic and diluted) | (0.065) | (0.032) | [Condensed Consolidated Interim Financial Position Statement](index=5&type=section&id=2.2%20Condensed%20Consolidated%20Interim%20Financial%20Position%20Statement) As of June 30, 2024, the Group's total assets slightly decreased, with an increase in non-current assets and a decrease in current assets, while total liabilities increased, leading to a reduction in net assets Condensed Consolidated Interim Financial Position Statement (Summary) | Indicator | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Total non-current assets | 388,227 | 370,899 | | Total current assets | 728,574 | 782,803 | | Total current liabilities | 336,156 | 337,310 | | Total non-current liabilities | 200,460 | 179,653 | | Net assets | 580,185 | 636,739 | | Total equity | 580,185 | 636,739 | - Financial assets at fair value through profit or loss under non-current assets **increased from zero at the end of 2023 to HK$53,470 thousand**[7](index=7&type=chunk) - Short-term bank deposits under current assets **decreased from HK$450,385 thousand at the end of 2023 to HK$315,473 thousand**[7](index=7&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=7&type=section&id=2.3%20Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total equity attributable to owners of the Company decreased from HK$534,855 thousand at the beginning of the year to HK$485,065 thousand, mainly due to the loss for the period and exchange differences Changes in Equity Attributable to Owners of the Company (Summary) | Indicator | January 1, 2024 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 534,855 | 485,065 | | Loss for the period | (35,874) | (35,874) | | Exchange differences | - | (13,916) | [Condensed Consolidated Interim Statement of Cash Flows](index=8&type=section&id=2.4%20Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) In H1 2024, the Group's net cash used in operating activities increased significantly, net cash from investing activities slightly decreased, and net cash from financing activities turned from negative to positive, resulting in an increase in cash and cash equivalents at the end of the period Condensed Consolidated Interim Statement of Cash Flows (Summary) | Indicator | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (57,479) | (16,117) | | Net cash generated from investing activities | 23,635 | 25,616 | | Net cash generated from financing activities | 37,715 | (11,357) | | Net increase/(decrease) in cash and cash equivalents | 3,871 | (1,858) | | Cash and cash equivalents at end of period | 25,676 | 5,630 | - **Net cash used in operating activities increased significantly** from (HK$16,117) thousand in H1 2023 to (HK$57,479) thousand in H1 2024[10](index=10&type=chunk) - **Net cash generated from financing activities turned from (HK$11,357) thousand in H1 2023 to HK$37,715 thousand in H1 2024**, mainly due to increased proceeds from borrowings[10](index=10&type=chunk) [III. Notes to the Financial Statements](index=10&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) [General Information](index=10&type=section&id=3.1%20General%20Information) Dongwu Cement International Limited, incorporated in the Cayman Islands, is primarily engaged in cement production and sales, magnetic materials production and sales, and trading businesses, with its principal place of business in Wujiang City, Jiangsu Province, China - The Company is an investment holding company, with principal businesses including cement production and sales, production and sales of magnetic materials and other application products, and trading business[12](index=12&type=chunk) - The Group's principal place of business is located in the Fenhu Economic Development Zone, Wujiang City, Jiangsu Province, China[12](index=12&type=chunk) [Basis of Preparation and Significant Accounting Policies](index=10&type=section&id=3.2%20Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, using the historical cost method, and has adopted amendments to HKFRSs effective January 1, 2024, with no material impact on financial performance - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the Listing Rules of the Stock Exchange of Hong Kong[13](index=13&type=chunk) - The financial information has been prepared under the historical cost convention, except for certain financial instruments which are measured at fair value[14](index=14&type=chunk) - The amendments to Hong Kong Financial Reporting Standards effective January 1, 2024, had no material impact on the Group's financial performance and position[15](index=15&type=chunk) [Use of Judgements and Estimates](index=13&type=section&id=3.3%20Use%20of%20Judgements%20and%20Estimates) Management is required to make significant judgements, estimates, and assumptions in preparing the financial information, and actual results may differ from these estimates, with key sources of estimation uncertainty remaining the same as in the 2023 annual consolidated financial statements - In preparing the financial information, management is required to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses[20](index=20&type=chunk) [Financial Risk Management](index=13&type=section&id=3.4%20Financial%20Risk%20Management) The Group is exposed to foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk, managing its liquidity needs through working capital, bank borrowings, and shareholder support, with no significant changes in contractual cash outflows for financial liabilities - The Group's activities expose it to foreign exchange risk, cash flow interest rate risk, credit risk and liquidity risk[21](index=21&type=chunk) - The Group manages its liquidity needs through working capital, bank borrowings and financial support from its equity holders[22](index=22&type=chunk) [Segment Reporting](index=14&type=section&id=3.5%20Segment%20Reporting) The Group's continuing operations include cement production and sales, magnetic materials production and sales, and trading, while the biotechnology R&D segment has been discontinued; in H1 2024, the cement segment revenue was HK$92.7 million, the magnetic materials segment revenue was HK$13.9 million, and the trading business revenue was HK$58 thousand - The Group's reportable operating segments include cement production and sales, production and sales of magnetic materials and other application products, trading business (continuing operations), and biotechnology research and development (discontinued operation)[23](index=23&type=chunk) Segment Revenue and Results for H1 2024 | Segment | Revenue (HK$'000) | Results (HK$'000) | | :--- | :--- | :--- | | Cement production and sales | 92,689 | (12,353) | | Magnetic materials and other application products | 13,866 | (11,784) | | Trading business | 58 | (287) | | Biotechnology research and development (discontinued operation) | – | (13,439) | [Revenue](index=17&type=section&id=3.6%20Revenue) In H1 2024, the Group's total revenue from continuing operations was HK$106,613 thousand, with cement production and sales contributing HK$92,689 thousand, magnetic materials contributing HK$13,866 thousand, and trading contributing HK$58 thousand, with revenue primarily recognized at a point in time Revenue Analysis from Continuing Operations for H1 2024 | Revenue Source | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Cement production and sales | 92,689 | 140,576 | | Production and sales of magnetic materials and other application products | 13,866 | – | | Trading business | 58 | – | | **Total** | **106,613** | **140,576** | - In H1 2024, revenue from contracts with customers was primarily recognized from the transfer of goods at a point in time, amounting to **HK$102,895 thousand**[27](index=27&type=chunk) - Contract liabilities, mainly related to advance payments from customers, **increased to HK$25,504 thousand as of June 30, 2024**, from HK$17,206 thousand as of December 31, 2023[29](index=29&type=chunk) [Other Income and Other Net Gains](index=18&type=section&id=3.7%20Other%20Income%20and%20Other%20Net%20Gains) In H1 2024, the Group's other income and other net gains were HK$2,668 thousand, a significant increase from the same period last year, mainly due to a substantial rise in government grants Other Income and Other Net Gains Comparison | Item | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Government grants | 1,950 | 61 | | Net exchange loss | (69) | – | | Others | 737 | 325 | | Gain on disposal of property, plant and equipment | 50 | – | | **Total** | **2,668** | **386** | - The significant increase in government grants was mainly for encouraging biotechnology development, energy conservation, emission reduction, and R&D of magnetic application products[30](index=30&type=chunk) [Income Tax Credit](index=19&type=section&id=3.8%20Income%20Tax%20Credit) In H1 2024, the Group received an income tax credit of HK$1,299 thousand, primarily due to an increase in deferred tax credit; Chinese subsidiaries are subject to a 25% corporate income tax rate, with high-tech enterprises enjoying a preferential rate of 15% Income Tax Credit Comparison | Item | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Current tax | 38 | – | | Deferred tax | (1,337) | (224) | | **Income tax credit** | **(1,299)** | **(224)** | - The corporate income tax rate for Chinese subsidiaries is generally 25%, while high-tech enterprises enjoy a preferential rate of 15%[32](index=32&type=chunk) [Loss Before Income Tax](index=20&type=section&id=3.9%20Loss%20Before%20Income%20Tax) The Group's loss before income tax for H1 2024 was HK$27,841 thousand, mainly affected by the cost of inventories sold, depreciation and amortization, employee expenses, and loss from discontinued operations; the biotechnology R&D business (Hengkang Group) has been classified as a disposal group held for sale, and a provision for goodwill impairment has been recognized [Loss Before Income Tax from Continuing Operations](index=20&type=section&id=3.9.1%20Loss%20Before%20Income%20Tax%20from%20Continuing%20Operations) The loss before income tax from continuing operations was mainly composed of the cost of inventories sold, depreciation of property, plant and equipment, and employee expenses; in H1 2024, the cost of inventories sold was HK$107,426 thousand, and total employee expenses were HK$15,906 thousand Major Expense Components of Continuing Operations | Item | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Cost of inventories sold | 107,426 | 137,788 | | Depreciation of property, plant and equipment | 12,574 | 12,451 | | Employee expenses (Total) | 15,906 | 12,617 | [Discontinued Operation / Disposal Group Classified as Held for Sale](index=20&type=section&id=3.9.2%20Discontinued%20Operation%20%2F%20Disposal%20Group%20Classified%20as%20Held%20for%20Sale) The Group has decided to dispose of its biotechnology R&D business (Hengkang Group) and has classified it as a disposal group held for sale; in H1 2024, this discontinued operation generated a loss of HK$13,439 thousand, which included a goodwill impairment provision of HK$12,411 thousand - On May 22, 2024, the Group decided to dispose of the Hengkang Group (biotechnology R&D business) and classified it as a disposal group held for sale[34](index=34&type=chunk) Loss for the Period from Discontinued Operation | Item | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Administrative expenses | (1,056) | (2,989) | | Provision for impairment of goodwill | (12,411) | – | | **Loss for the period from discontinued operation** | **(13,439)** | **(2,816)** | - As of June 30, 2024, the total assets of Hengkang Group classified as held for sale were HK$5,424 thousand, and total liabilities were HK$1,754 thousand[37](index=37&type=chunk) [Property, Plant and Equipment](index=22&type=section&id=3.10%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2024, the carrying amount of the Group's property, plant and equipment was HK$234,110 thousand, with additions of HK$32,713 thousand and depreciation of HK$13,065 thousand during the period; certain land use rights and property, plant and equipment were pledged to secure bank borrowings Changes in Carrying Amount of Property, Plant and Equipment | Item | H1 2024 (HK$'000) | | :--- | :--- | | Carrying amount at January 1, 2024 | 220,625 | | Additions | 32,713 | | Depreciation | (13,065) | | Carrying amount at June 30, 2024 | 234,110 | - As of June 30, 2024, certain land use rights and property, plant and equipment were pledged to secure the Group's bank borrowings of **HK$156,346 thousand**[39](index=39&type=chunk) [Goodwill](index=24&type=section&id=3.11%20Goodwill) As of June 30, 2024, the carrying amount of the Group's goodwill was HK$47,563 thousand, with an impairment loss of HK$12,411 thousand recognized during the period due to the classification of the Hengkang cash-generating unit as held for sale Changes in Carrying Amount of Goodwill | Item | H1 2024 (HK$'000) | | :--- | :--- | | Carrying amount at January 1, 2024 | 61,589 | | Impairment loss | (12,411) | | Classified as held for sale | (103) | | Exchange differences | (1,512) | | Carrying amount at June 30, 2024 | 47,563 | - The goodwill attributable to the Hengkang cash-generating unit has been classified as an asset held for sale, resulting in a goodwill impairment loss[42](index=42&type=chunk) [Intangible Assets](index=25&type=section&id=3.12%20Intangible%20Assets) As of June 30, 2024, the carrying amount of the Group's intangible assets was HK$14,420 thousand, with amortization of HK$1,842 thousand during the period and a reduction of HK$5,219 thousand due to classification as held for sale Changes in Carrying Amount of Intangible Assets | Item | H1 2024 (HK$'000) | | :--- | :--- | | Carrying amount at January 1, 2024 | 22,046 | | Amortisation | (1,842) | | Classified as held for sale | (5,219) | | Exchange differences | (565) | | Carrying amount at June 30, 2024 | 14,420 | - Intangible assets mainly refer to technical knowledge, which is amortized on a straight-line basis over an estimated useful life of 10 years[45](index=45&type=chunk) [Investment in Associates](index=26&type=section&id=3.13%20Investment%20in%20Associates) As of June 30, 2024, the carrying amount of the Group's investment in associates was HK$33,003 thousand, primarily including investments in Dongtong Environmental Technology (43.2% interest) and Zhuhai Huiyin Huiheng Equity Investment Fund Management Co, Ltd (30% interest); Dongtong Environmental Technology recorded a loss of HK$2,208 thousand in H1 2024 Carrying Amount of Investment in Associates | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Cost of investment | 30,964 | 30,964 | | Share of post-acquisition results of associates, net of dividends received | 2,039 | 3,834 | | **At end of period/year** | **33,003** | **34,798** | - The Group holds a **43.2% interest in Dongtong Environmental Technology**, which is principally engaged in environmental technology R&D and services[46](index=46&type=chunk) Financial Summary of Dongtong Environmental Technology (Group's Share) | Indicator | H1 2024 (HK$'000) | | :--- | :--- | | Revenue | 1,325 | | (Loss)/profit for the period | (2,208) | | Total comprehensive income for the period | (4,119) | [Financial Assets at Fair Value Through Profit or Loss](index=29&type=section&id=3.14%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2024, the Group held unlisted fund investments of HK$53,470 thousand, which are classified as non-current assets and are expected to be realized more than twelve months after the reporting period Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Unlisted fund investments | 53,470 | – | - During the period, the Group invested in a trust under a trust agreement with Guomin Trust, a non-listed fund in China, which is classified as a non-current asset[50](index=50&type=chunk) [Inventories](index=29&type=section&id=3.15%20Inventories) As of June 30, 2024, the Group's total inventories amounted to HK$214,901 thousand, a slight increase from the end of 2023, primarily consisting of raw materials Composition of Inventories | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Raw materials | 178,460 | 179,623 | | Work in progress | 19,263 | 15,149 | | Finished goods | 17,178 | 16,808 | | **Total** | **214,901** | **211,580** | [Trade and Other Receivables](index=30&type=section&id=3.16%20Trade%20and%20Other%20Receivables) As of June 30, 2024, the Group's total trade and other receivables amounted to HK$135,577 thousand, with the current portion being HK$135,088 thousand, a significant increase from the end of 2023 mainly due to a substantial rise in other receivables Composition of Trade and Other Receivables | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Net trade receivables and bills receivable | 27,943 | 30,851 | | Prepayments and deposits | 46,272 | 48,140 | | Other receivables | 61,506 | 8,872 | | **Total trade and other receivables** | **135,577** | **87,686** | - Approximately **HK$53,470 thousand of other receivables were advanced to raw material suppliers**, which are unsecured, interest-free, and repayable within three months[57](index=57&type=chunk) - The provision for impairment of trade receivables **decreased from HK$330 thousand at the end of 2023 to HK$196 thousand** as of June 30, 2024[58](index=58&type=chunk) [Trade and Other Payables](index=33&type=section&id=3.17%20Trade%20and%20Other%20Payables) As of June 30, 2024, the Group's total trade and other payables amounted to HK$154,096 thousand, a decrease from the end of 2023, primarily consisting of trade payables and bills payable Composition of Trade and Other Payables | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Trade payables | 31,819 | 43,611 | | Bills payable | 64,057 | 70,715 | | Accrued payroll and bonus | 2,554 | 5,215 | | Amounts due to related parties | 5,989 | 8,222 | | **Total** | **154,096** | **178,210** | - The credit period granted by the Group's major suppliers is 30 to 90 days, and most trade and other payables are denominated in Renminbi[59](index=59&type=chunk) [Borrowings](index=34&type=section&id=3.18%20Borrowings) As of June 30, 2024, the Group's total borrowings were HK$299,652 thousand, an increase from the end of 2023, with secured bank borrowings of HK$156,346 thousand pledged by subsidiary equity, land use rights, and property, plant and equipment Composition of Borrowings | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Bank borrowings (unsecured) | 116,565 | 114,025 | | Bank borrowings (secured) | 156,346 | 137,916 | | Other loans (unsecured) | 26,741 | 10,700 | | **Total** | **299,652** | **262,641** | - Secured bank borrowings are pledged by the equity of the Company's subsidiaries, land use rights, and property, plant and equipment[63](index=63&type=chunk) - Other loans include loans from third parties bearing fixed annual interest rates of 4% to 9%[64](index=64&type=chunk) [Deferred Income](index=35&type=section&id=3.19%20Deferred%20Income) As of June 30, 2024, the Group's deferred income was HK$21,305 thousand, mainly consisting of government grants received from local government authorities in China to support the R&D activities of its subsidiaries Changes in Deferred Income | Item | H1 2024 (HK$'000) | | :--- | :--- | | Carrying amount at January 1, 2024 | 23,278 | | Refund to government | (254) | | Credited to profit or loss | (1,115) | | Exchange differences | (604) | | Carrying amount at June 30, 2024 | 21,305 | - Deferred income represents government grants received from local government authorities in China to support the R&D activities of subsidiaries[64](index=64&type=chunk) [Deferred Tax](index=35&type=section&id=3.20%20Deferred%20Tax) As of June 30, 2024, the Group's net deferred tax liabilities amounted to HK$28,102 thousand; unused tax losses were approximately HK$41,807 thousand, of which HK$20,689 thousand has been recognized as a deferred tax asset Net Deferred Tax | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Deferred tax assets | 5,172 | 5,313 | | Deferred tax liabilities | (33,274) | (35,540) | | **Net** | **(28,102)** | **(30,227)** | - The Group had unused tax losses of approximately **HK$41,807 thousand**, of which approximately **HK$20,689 thousand** has been recognized in deferred tax assets[67](index=67&type=chunk) [Share Capital](index=37&type=section&id=3.21%20Share%20Capital) As of June 30, 2024, the Company's issued and fully paid-up share capital was HK$5,520 thousand, divided into 552,000,000 ordinary shares with a par value of HK$0.01 each Share Capital Information | Item | June 30, 2024 | | :--- | :--- | | Number of ordinary shares ('000) | 552,000 | | Par value of ordinary shares (HK$'000) | 5,520 | [Loss Per Share](index=37&type=section&id=3.22%20Loss%20Per%20Share) In H1 2024, the basic and diluted loss per share attributable to owners of the Company was HK$0.065, comprising a loss per share of HK$0.041 from continuing operations and HK$0.024 from discontinued operations Loss Per Share Comparison | Item | H1 2024 (HK$ per share) | H1 2023 (HK$ per share) | | :--- | :--- | :--- | | Continuing and discontinued operations | (0.065) | (0.032) | | Continuing operations | (0.041) | (0.028) | | Discontinued operations | (0.024) | (0.004) | - Diluted loss per share was the same as basic loss per share as there were no dilutive share options or other dilutive potential ordinary shares outstanding during the period[69](index=69&type=chunk) [Dividend](index=38&type=section&id=3.23%20Dividend) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - No dividend was paid or proposed by the Company for the six months ended June 30, 2024[72](index=72&type=chunk) [Lease Liabilities](index=38&type=section&id=3.24%20Lease%20Liabilities) As of June 30, 2024, the Group's total lease liabilities amounted to HK$1,031 thousand, with a current portion of HK$375 thousand and a non-current portion of HK$656 thousand, mainly related to leased land and buildings Composition of Lease Liabilities | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Current portion | 375 | 83 | | Non-current portion | 656 | – | | **Total** | **1,031** | **83** | - Lease liabilities increased significantly during the period due to additions of HK$1,153 thousand[72](index=72&type=chunk) [Related Party Transactions](index=39&type=section&id=3.25%20Related%20Party%20Transactions) In H1 2024, the remuneration of the Group's key management personnel was HK$2,419 thousand; other payables included an amount of HK$5,989 thousand due to a company controlled by Mr. Jiang; solid waste disposal income from an associate was HK$28 thousand Key Management Personnel Remuneration | Item | H1 2024 (HK$'000) | H1 2023 (HK$'000) | | :--- | :--- | :--- | | Basic salaries and benefits in kind | 2,419 | 2,331 | - Other payables include an amount of **HK$5,989 thousand due to a company controlled by Mr. Jiang**, which is unsecured, interest-free, and repayable on demand[75](index=75&type=chunk) - Solid waste disposal income from an associate amounted to **HK$28 thousand**[76](index=76&type=chunk) [Capital Commitments](index=41&type=section&id=3.26%20Capital%20Commitments) As of June 30, 2024, the Group's capital commitments were HK$151 thousand, mainly for the acquisition of property, plant and equipment, a significant decrease from HK$1,562 thousand at the end of 2023 Capital Commitments | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 151 | 1,562 | [Financial Instruments](index=41&type=section&id=3.27%20Financial%20Instruments) As of June 30, 2024, the Group's total financial assets were HK$520,545 thousand and total financial liabilities were HK$455,816 thousand; financial assets at fair value through profit or loss (unlisted fund investment) were HK$53,470 thousand, classified as Level 3 fair value measurement Carrying Amounts of Financial Assets and Liabilities | Item | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Total financial assets | 520,545 | 549,371 | | Total financial liabilities | 455,816 | 440,357 | - Financial assets at fair value through profit or loss (unlisted fund investment) amounted to **HK$53,470 thousand**, with its fair value measurement classified as **Level 3**, using unobservable inputs[81](index=81&type=chunk) - The carrying amounts of cash and bank balances, trade and other receivables, short-term bank deposits, pledged bank deposits, trade and other payables, and borrowings approximate their fair values due to their short-term nature[79](index=79&type=chunk) [IV. Management Discussion and Analysis](index=44&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) [Industry Overview](index=44&type=section&id=4.1%20Industry%20Overview) In H1 2024, the cement industry faced declining demand, low price volatility, and continued losses; investment in the biopharmaceutical segment was suspended; the rare earth segment benefited from the new energy transition with long-term demand growth but faced short-term price fluctuations due to supply-demand dynamics [Cement Segment](index=44&type=section&id=4.1.1%20Cement%20Segment) In H1 2024, the cement industry faced challenges of continuously declining demand, low price volatility, and persistent losses, mainly due to adjustments in the real estate sector and a slowdown in infrastructure investment; national cement production decreased by 10% year-on-year - In H1 2024, the cement industry was characterized by **"continuously declining demand, low price volatility, and persistent industry-wide losses"**[82](index=82&type=chunk) - The national cumulative cement production was **850 million tons**, a **year-on-year decrease of 10%**, marking the lowest level since 2011[82](index=82&type=chunk) - The average price of PO42.5 bulk cement in the Group's main sales regions (Jiangsu, Zhejiang, and Shanghai) **decreased by 4.3% to 6.9% year-on-year**[83](index=83&type=chunk) [Biopharmaceutical Segment](index=45&type=section&id=4.1.2%20Biopharmaceutical%20Segment) The Group believes that the R&D difficulty of CAR-T drugs is much higher than expected, and its development focus has shifted to rare earth and other rare metals, thus investment in the biopharmaceutical segment has been suspended - The Group believes the R&D difficulty of CAR-T drugs is much higher than expected, and its development focus has shifted to the rare earth and other rare metals segment, so **investment in biopharmaceuticals has been suspended**[83](index=83&type=chunk) [Rare Earth Segment](index=45&type=section&id=4.1.3%20Rare%20Earth%20Segment) Rare earths are widely used in new energy and energy-saving fields, with China being the world's largest producer; in H1 2024, increased supply and weak demand growth led to a downward trend in major rare earth product prices; the Group is actively developing its rare earth permanent magnet material business through the acquisition of Ganzhou Chengzheng Rare Earth New Material Co, Ltd - Rare earths are widely used in fields such as new energy vehicles, energy-saving home appliances, and wind power, with **long-term demand showing a growth trend**[84](index=84&type=chunk)[85](index=85&type=chunk) - In H1 2024, the prices of major rare earth products fluctuated downwards, with the average selling price of **praseodymium-neodymium oxide falling by approximately 26.4% year-on-year**[85](index=85&type=chunk) - The Group acquired a **62.5% equity interest in Ganzhou Chengzheng Rare Earth New Material Co, Ltd in July 2023**, aiming to transition towards the new energy and energy-saving industries to enhance shareholder value[86](index=86&type=chunk) - Ganzhou Chengzheng has completed the equipment and technical transformation of its permanent magnet material workshop, achieving full product production capacity and holding **35 patents**[86](index=86&type=chunk)[89](index=89&type=chunk) [International Trade Segment](index=50&type=section&id=4.2%20International%20Trade%20Segment) In H1 2024, the Group launched an international trade business, primarily engaged in the international trade of products such as electrolytic copper - In H1 2024, the Group launched an international trade business, currently engaged in the international trade of products such as electrolytic copper[91](index=91&type=chunk) [Revenue Analysis](index=50&type=section&id=4.3%20Revenue%20Analysis) In H1 2024, the Group's total revenue was HK$106,613 thousand, a year-on-year decrease of 24.2%; cement segment revenue fell by 34.1% due to intensified market competition, a real estate downturn, and environmental restrictions; the rare earth segment contributed HK$13,866 thousand in revenue, and the international trade segment contributed HK$58 thousand Cement Segment Revenue Analysis by Product Category | Product Category | H1 2024 Sales Volume ('000 tons) | H1 2024 Revenue (HK$'000) | H1 2023 Sales Volume ('000 tons) | H1 2023 Revenue (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | PO 42.5 Cement | 293 | 66,003 | 326 | 105,706 | | PC 42.5 Cement | 91 | 21,897 | – | – | | PC 32.5 Cement | 19 | 4,761 | 118 | 34,703 | | **Total Cement** | **403** | **92,689** | **444** | **140,576** | - Revenue from cement product sales **decreased by approximately 34.0% year-on-year**, while sales volume **decreased by approximately 9.2% year-on-year**[92](index=92&type=chunk) - The rare earth segment recorded revenue of approximately **HK$13,866 thousand**, mainly from motor sales, magnetic material sales, anode material and oxide sales, electroplating processing, and calcination services[94](index=94&type=chunk) [Gross Profit and Gross Profit Margin](index=52&type=section&id=4.4%20Gross%20Profit%20and%20Gross%20Profit%20Margin) In H1 2024, the cement segment recorded a gross loss of HK$5,192 thousand with a gross margin of -5.6%, mainly due to declining market demand and falling prices; the rare earth segment recorded a gross loss of HK$2,679 thousand with a gross margin of -19.3%, due to high unit fixed costs as production and sales have not yet reached scale shortly after the acquisition; the international trade segment recorded a gross profit of HK$58 thousand with a 100% gross margin - The cement segment recorded a **gross loss of approximately HK$5,192 thousand** and a **gross margin of approximately -5.6%**, a decrease of 7.4 percentage points from the same period last year[95](index=95&type=chunk) - The rare earth segment recorded a **gross loss of approximately HK$2,679 thousand** and a **gross margin of approximately -19.3%**, mainly because the short time since the acquisition meant production and sales had not yet reached scale, resulting in high unit fixed costs[95](index=95&type=chunk) - The international trade segment recorded a **gross profit of HK$58 thousand** and a **gross margin of approximately 100%**[96](index=96&type=chunk) [Other Income and Other Net Gains](index=53&type=section&id=4.5%20Other%20Income%20and%20Other%20Net%20Gains) In H1 2024, the Group's other income and other net gains were HK$2,668 thousand, a significant year-on-year increase of 591%, mainly due to an increase in government grants - The Group's other income and other gains for the reporting period were approximately **HK$2,668 thousand**, an **increase of about 591%** from the same period last year, mainly due to an increase in government grants[97](index=97&type=chunk) [Distribution Expenses](index=53&type=section&id=4.6%20Distribution%20Expenses) In H1 2024, the Group's distribution expenses were HK$1,695 thousand, with the cement segment's expenses increasing by 14.7% to HK$1,312 thousand, mainly due to higher transportation costs; the rare earth segment's distribution expenses were HK$383 thousand - The Group's distribution expenses were approximately **HK$1,695 thousand**, with the cement segment's expenses at **HK$1,312 thousand**, an **increase of 14.7%** year-on-year, mainly due to higher transportation costs[98](index=98&type=chunk) - The rare earth segment's sales and distribution expenses were approximately **HK$383 thousand**, accounting for about 2.8% of the segment's revenue[98](index=98&type=chunk) [Administrative Expenses](index=53&type=section&id=4.7%20Administrative%20Expenses) In H1 2024, the Group's general and administrative expenses were HK$22,063 thousand, remaining stable compared to the same period last year, with the cement and rare earth segments accounting for HK$11,891 thousand and HK$7,020 thousand, respectively - The Group's general and administrative expenses were approximately **HK$22,063 thousand**, an **increase of 0.6%** year-on-year, remaining stable compared to the same period last year[99](index=99&type=chunk) [Income Tax Expense](index=54&type=section&id=4.8%20Income%20Tax%20Expense) In H1 2024, the Group had an income tax credit of HK$1,299 thousand, a significant increase from the same period last year, mainly due to the net loss before tax incurred during the period - The Group's income tax credit for the reporting period was approximately **HK$1,299 thousand**, a significant increase from the same period last year, mainly due to the net loss before tax incurred during the period[100](index=100&type=chunk) [Net Profit Margin](index=54&type=section&id=4.9%20Net%20Profit%20Margin) In H1 2024, the Group's net profit margin was -37.5%, a decrease of 24.4 percentage points from -13.1% in the same period last year, mainly due to reduced revenue and the provision for goodwill impairment on assets classified as held for sale - The Group's net profit margin for the reporting period was approximately **-37.5%**, a **decrease of 24.4 percentage points** from the same period last year, mainly due to reduced revenue and the provision for goodwill impairment on assets classified as held for sale[101](index=101&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=4.10%20Liquidity%20and%20Capital%20Resources) The Group plans to meet its working capital needs through cash flow from operating activities, bank loans, trade and other payables, and proceeds from its initial public offering; as of June 30, 2024, cash and cash equivalents were HK$25,659 thousand, and borrowings were HK$299,652 thousand - The Group plans to meet its working capital needs through cash flow from operating activities, bank loans, utilization of trade and other payables, and proceeds from its initial public offering[102](index=102&type=chunk) Key Liquidity Indicators | Indicator | June 30, 2024 (HK$'000) | December 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Cash and cash equivalents | 25,659 | 21,895 | | Borrowings | 299,652 | 262,641 | [Cash Flow](index=55&type=section&id=4.11%20Cash%20Flow) As of June 30, 2024, the Group's cash and cash equivalents were HK$25,659 thousand, an increase of 17.2% from the end of 2023, mainly due to new borrowings - The Group's cash and cash equivalents were approximately **HK$25,659 thousand**, an **increase of about 17.2%** from December 31, 2023, mainly due to new borrowings[104](index=104&type=chunk) [Borrowings](index=55&type=section&id=4.12%20Borrowings) As of June 30, 2024, the Group's bank borrowings increased by 8.3% to HK$272,911 thousand, primarily for financing the rare earth segment; borrowings of HK$156,346 thousand were secured by property, plant and equipment, land use rights, and subsidiary equity - The Group's bank borrowings **increased by 8.3% to HK$272,911 thousand** compared to December 31, 2023, mainly for financing the rare earth segment during the reporting period[104](index=104&type=chunk) - Borrowings of **HK$156,346 thousand** were secured by the Group's property, plant and equipment, land use rights, and the equity of the Company's subsidiaries[104](index=104&type=chunk) [Gearing Ratio](index=56&type=section&id=4.13%20Gearing%20Ratio) As of June 30, 2024, the Group's gearing ratio was 92.2%, calculated as debt divided by the difference between total assets and total liabilities - As of June 30, 2024, the Group's gearing ratio was **92.2%**[105](index=105&type=chunk) [Capital Expenditure and Capital Commitments](index=56&type=section&id=4.14%20Capital%20Expenditure%20and%20Capital%20Commitments) In H1 2024, the Group's capital expenditure was approximately HK$32,713 thousand, a significant increase from the same period last year; capital commitments were HK$151 thousand, mainly for the acquisition of property, plant and equipment - The Group's capital expenditure was approximately **HK$32,713 thousand**, with HK$966 thousand and HK$5,736 thousand incurred by the cement and rare earth segments respectively, a significant increase from the same period last year[105](index=105&type=chunk) - The Group incurred capital commitments of approximately **HK$151 thousand**, mainly for the acquisition of property, plant and equipment[105](index=105&type=chunk) [Pledge of Assets](index=56&type=section&id=4.15%20Pledge%20of%20Assets) As of June 30, 2024, certain property, plant and equipment, land use rights, and subsidiary equity of the Group's rare earth segment were pledged to secure bank borrowings - Certain property, plant and equipment with a carrying value of approximately **HK$22,843 thousand**, land use rights of **HK$2,296 thousand**, and subsidiary equity of the Group's rare earth segment were pledged to secure bank borrowings[106](index=106&type=chunk) [Contingent Liabilities](index=56&type=section&id=4.16%20Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[107](index=107&type=chunk) [Foreign Exchange Risk](index=56&type=section&id=4.17%20Foreign%20Exchange%20Risk) The Group's operations are mainly in mainland China and denominated in Renminbi, with no significant impact from exchange rate fluctuations, and no hedging measures have been implemented; management will closely monitor foreign exchange risk - The Group's operations are mainly in mainland China, with operating expenses and capital expenditures primarily denominated in Renminbi, and it has not been significantly affected by exchange rate fluctuations[108](index=108&type=chunk) - The Group has no significant currency exchange risk and therefore has not implemented any hedging measures[109](index=109&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=57&type=section&id=4.18%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) In H1 2024, the Group did not make any material acquisitions or disposals of its subsidiaries or associates - During the reporting period, the Group did not make any material acquisitions or disposals of its subsidiaries or associates[110](index=110&type=chunk) [Interim Dividend and Closure of Register of Members](index=57&type=section&id=4.19%20Interim%20Dividend%20and%20Closure%20of%20Register%20of%20Members) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2024[110](index=110&type=chunk) [Employees and Remuneration Policy](index=57&type=section&id=4.20%20Employees%20and%20Remuneration%20Policy) As of June 30, 2024, the Group had 316 employees, with total remuneration of approximately HK$15,906 thousand for the period; remuneration levels are determined based on duties, performance, contribution, merit, qualifications, and competence - As of June 30, 2024, the Group had **316 employees**, with total remuneration for the period amounting to approximately **HK$15,906 thousand**[111](index=111&type=chunk) - Employee remuneration levels are determined based on duties, performance, contribution, merit, qualifications, and competence[111](index=111&type=chunk) [Future Prospects](index=58&type=section&id=4.21%20Future%20Prospects) The Company will continue to achieve cost reduction and efficiency improvement through enhanced internal management, technological upgrades, facility optimization, brand promotion, and employee training; future focus will be on core businesses, exploring more rare metal varieties (especially in the clean energy sector), and actively developing the rare earth segment to optimize asset structure and enhance profitability - The Company will enhance operational efficiency and effectively achieve cost reduction and efficiency improvement through improved internal management, process optimization, and technological upgrades[112](index=112&type=chunk) - It will continue to actively explore more rare metal varieties, especially investment opportunities related to the clean energy sector[112](index=112&type=chunk) - It will focus on developing the rare earth segment and exploring business opportunities in other rare metals, as rare earth permanent magnet materials have broad development prospects in new energy vehicles, new energy power generation, and industrial robots[112](index=112&type=chunk) [V. Other Information](index=58&type=section&id=V.%20Other%20Information) [Share Capital](index=58&type=section&id=5.1%20Share%20Capital) As of June 30, 2024, the Company's issued share capital was HK$5,520 thousand, divided into 552,000,000 shares with a par value of HK$0.01 each - As of June 30, 2024, the Company's issued share capital was **HK$5,520 thousand**, divided into **552,000,000 shares** with a par value of HK$0.01 each[113](index=113&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=58&type=section&id=5.2%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) In H1 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[114](index=114&type=chunk) [Material Litigation and Arbitration](index=59&type=section&id=5.3%20Material%20Litigation%20and%20Arbitration) To the best of the Directors' knowledge, the Group was not involved in any material litigation, arbitration, or claim during the reporting period - To the best of the Directors' knowledge, the Group was not involved in any material litigation, arbitration, or claim during the reporting period[115](index=115&type=chunk) [No Material Change](index=59&type=section&id=5.4%20No%20Material%20Change) There has been no material change in the Company's business since the publication of its latest annual report for the year ended December 31, 2023 - There has been no material change in the Company's business since the publication of its latest annual report for the year ended December 31, 2023[116](index=116&type=chunk) [Compliance with the Corporate Governance Code](index=59&type=section&id=5.5%20Compliance%20with%20the%20Corporate%20Governance%20Code) The Company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules and has complied with the code during the reporting period - The Company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules and has complied with the code during the reporting period[116](index=116&type=chunk) [Compliance with the Model Code](index=59&type=section&id=5.6%20Compliance%20with%20the%20Model%20Code) The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors have complied with this standard during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors have complied with this standard during the reporting period[117](index=117&type=chunk) [Audit Committee](index=60&type=section&id=5.7%20Audit%20Committee) The Company's Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2024, and considers it to be in compliance with applicable accounting standards and requirements - The Company's Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2024, and considers it to be in compliance with applicable accounting standards and requirements[118](index=118&type=chunk) [Events After the Reporting Period](index=60&type=section&id=5.8%20Events%20After%20the%20Reporting%20Period) As of the date of this announcement, no material events have occurred after the reporting period that would require additional disclosure or could affect the Company - As of the date of this announcement, no material events have occurred after the reporting period that would require additional disclosure or could affect the Company[119](index=119&type=chunk)