Acquisition and Strategic Focus - The company acquired a 62.5% stake in Ganzhou Chengzheng Rare Earth New Materials Co., marking a strategic shift towards rare earth, new energy, and energy-saving industries[4] - The company aims to leverage its expertise in rare earth exploration and production to enhance its position in the rare earth and permanent magnet business[200] Environmental Performance - Nitrogen oxide emissions were reduced by 81.70% compared to 2022, reflecting significant progress in emissions management[14] - The total energy consumption for the year 2023 was 541,898.62 GJ, with an energy consumption density of 1.96 GJ per thousand HKD revenue, achieving a 69.56% reduction compared to 2022[63] - The greenhouse gas emissions for the year saw a significant decrease due to the reduced use of self-produced clinker, with a notable drop in emissions reported[41] - The total greenhouse gas emissions reported were 408,072.01 tons of CO2 equivalent, with scope 1 and scope 2 emissions being monitored and reported[39] - The group reported a reduction in nitrogen oxide emissions to 13,231 kg in 2023 from 72,283 kg in 2022, indicating improved environmental performance[121] - The group reported a significant decrease in waste gas emissions due to a shift towards using commercial clinker[97] Compliance and Risk Management - Environmental supervision assessments met all relevant legal and regulatory standards throughout the year[29] - The company achieved a 100% compliance rate for pollutant emissions, dust and noise emissions, and solid waste classification and disposal[58] - A total of 1,313 environmental factors were identified in 2023, with 28 classified as significant[32] - A total of 1,051 potential hazards were identified, with 26 classified as medium to high risk, leading to enhanced risk management measures[80] - The group strictly adhered to environmental laws and regulations, enhancing its emergency response mechanisms for environmental incidents[105] Employee Engagement and Training - A total of 871 employees participated in safety training, accumulating 210 hours of training[85] - The company conducted a total of 682 training sessions covering various topics, achieving a training coverage rate of 100%[132] - The company has implemented diverse training programs to align employee career development with corporate growth strategies[132] - The company focused on enhancing employee engagement by actively soliciting feedback to improve training programs[132] Financial Performance - The company reported a loss attributable to shareholders of approximately HKD 36,525,000, with a basic loss per share of HKD 0.066 for the year[178] - The company recorded total revenue of HKD 307,263,000 for the year, with the cement segment contributing approximately HKD 266,129,000, a decrease of 28.5% compared to the same period in 2022[178] - The cost of sales increased to HKD 311,750,000, resulting in a gross loss of HKD 4,487,000, compared to a gross profit of HKD 3,377,000 in the previous year[191] - Operating loss for 2023 was HKD 43,948,000, an improvement from a loss of HKD 56,351,000 in 2022[191] - The company experienced a net cash outflow of HKD 112,295,000 from operating activities in 2023, compared to a cash inflow of HKD 124,475,000 in 2022[190] Community and Social Responsibility - The group has set a target for community contributions and is actively exploring opportunities to enhance local community development[118] - The company did not allocate any funds for charitable contributions in 2023, compared to HKD 115,000 in 2022[142] Safety and Health - The group recorded zero incidents of major casualties, fires, or occupational diseases in 2023, with general injury rates maintained below 1%[83] - The group has maintained a zero fatality rate in workplace accidents over the past three years, demonstrating a strong commitment to employee health and safety[108] - The group implemented a closed-loop water recycling system, contributing to a reduction in wastewater generation[104] Market and Industry Trends - The cement industry faced severe challenges in 2023, with a significant decline in demand due to the real estate sector's ongoing adjustment[193] - The demand for rare earth permanent magnet materials is expected to increase significantly, supported by national policies and the growing clean energy market[200]

Financial Performance - For the period from August 1, 2023, to December 31, 2023, the group recorded total sales of approximately HKD 10,021,000, with the breakdown as follows: electrical sales HKD 790, magnetic material sales HKD 2,410, negative electrode and oxide sales HKD 2,802, electroplating processing HKD 1,249, and sintering services HKD 3,572[2][3]. - The group reported a gross loss of approximately HKD 4,487,000 for the reporting period, with the cement segment contributing a gross loss of about HKD 2,431,000, a decrease of approximately 172% compared to the previous year's loss of HKD 3,377,000[3]. - The gross profit margin for 2023 was approximately -0.9%, a decline of about 1.8% from the previous year's margin of approximately 0.9%, primarily due to intensified market competition and high upstream raw material costs[3]. - The group's revenue for the reporting period was approximately HKD 307,263,000, a decrease of about HKD 65,075,000 or 17.5% compared to HKD 372,338,000 for the year ended December 31, 2022[53]. - The gross loss for 2023 was HKD 4,487 thousand, compared to a gross profit of HKD 3,377 thousand in 2022, indicating a significant shift in profitability[54]. - The total comprehensive loss for the year was HKD 55,661 thousand in 2023, down from HKD 101,449 thousand in 2022, indicating an improvement of approximately 45%[54]. - The company reported a net loss of HKD 41,178 thousand for the year, slightly improved from a net loss of HKD 43,073 thousand in 2022, indicating a reduction of about 4.4%[54]. Cash Flow and Assets - As of December 31, 2023, the group's cash and cash equivalents amounted to approximately HKD 21,895,000, an increase of about 185.8% from HKD 7,662,000 as of December 31, 2022[10]. - The operating cash flow before changes in working capital showed a loss of HKD (25,710) compared to a loss of HKD (32,066) in the previous year[35]. - Cash generated from investment activities was HKD 125,533,000, a significant improvement from a cash outflow of HKD (248,666,000) in the previous year[36]. - The total assets as of December 31, 2023, amounted to HKD 1,034,643,000, while total liabilities were HKD 454,366,000[74]. - Total current assets increased to HKD 782,803 thousand in 2023 from HKD 630,364 thousand in 2022, showing a growth of about 24%[56]. - Total current liabilities decreased to HKD 337,310 thousand in 2023 from HKD 418,265 thousand in 2022, a reduction of approximately 19.4%[58]. - The company's total liabilities decreased from HKD 223,619,000 in 2022 to HKD 178,210,000 in 2023, reflecting a reduction in financial obligations[123]. Segment Performance - The segment performance for cement production showed a loss of HKD (36,782,000)[74]. - The group's revenue from the cement production and sales segment for the year ended December 31, 2023, was approximately HKD 302,222,000, a decrease of 18.7% from HKD 371,737,000 in 2022[105]. - Revenue from the largest external independent customer in the cement production and sales segment was approximately HKD 35,705,000, accounting for 11.62% of the group's total revenue, down from 12.64% in 2022[104]. - The cement segment's sales volume in 2023 was approximately 939,000 tons, a decrease of about 4.4% compared to 2022, with sales revenue of approximately HKD 265,908,000, down about 28.5%[200]. - The rare earth segment recorded a gross loss of approximately HKD 2,086,000 from August 1, 2023, to December 31, 2023, with a gross margin of about -19.3%[175]. Financing and Expenses - The company incurred financing expenses of HKD 8,556,000, an increase from HKD 6,701,000 in the previous year[35]. - The group reported a net cash outflow from financing activities of HKD (783,000), a decrease from a net cash inflow of HKD 46,401,000 in the previous year[36]. - The company’s provisions for trade receivables increased significantly, indicating a cautious approach to credit risk management[122]. - The company incurred employee expenses of HKD 25,262,000 for wages and salaries[81]. Future Plans and Investments - The group plans to enhance the production capacity of permanent magnetic materials and strengthen the research and development of new permanent magnetic motors in 2024, while also participating in rare earth product trading to improve overall economic benefits[19]. - The company plans to reduce its focus and investment in the biopharmaceutical sector, particularly in CAR-T cell therapy, due to the high difficulty and uncertainty in the research and development process[166]. - The company completed a series of optimizations in the rare earth segment, including upgrading production processes and equipment, which is expected to enhance economic benefits and expand production volume[197]. - The company engaged in international trade, focusing on products like electrolytic copper, and established a subsidiary in Laos to enhance its rare earth mining-related business[198]. Dividends and Shareholder Returns - The company did not declare a final dividend for the year ending December 31, 2023, consistent with the previous year[159]. - The company did not declare or propose any dividends for the year ending December 31, 2023, consistent with 2022[184].

Financial Performance - Net profit margin decreased by 3.3% to approximately -9.8% compared to the same period last year, primarily due to reduced revenue and increased general and administrative expenses[2] - Revenue for the six months ended June 30, 2023, was HKD 140,576 thousand, a decrease from HKD 203,321 thousand in the same period last year[9] - Gross profit for the six months ended June 30, 2023, was HKD 2,517 thousand, compared to a gross loss of HKD 15,474 thousand in the same period last year[9] - Operating loss for the six months ended June 30, 2023, was HKD 22,969 thousand, an improvement from HKD 28,064 thousand in the same period last year[9] - The company's total comprehensive loss for the six months ended June 30, 2023, was HKD 44,914 thousand, compared to HKD 52,483 thousand in the same period last year[9] - Revenue for the first half of 2023 was approximately HKD 140,576,000, a decrease of 30.9% compared to HKD 203,321,000 in the same period last year[71] - The company's net profit margin for the period was approximately -13.1%[126] - The company reported a loss of HKD 17,433,000 for the six months ended June 30, 2023, compared to a loss of HKD 18,661,000 for the same period in 2022[163] - Total comprehensive loss for the six months ended June 30, 2023, was HKD 44,257,000[163] - Revenue from the cement production and sales segment was HKD 140.576 million, a decrease from HKD 203.321 million in the same period last year[199] - The cement production and sales segment reported a loss of HKD 10.196 million, while the biotechnology R&D segment reported a loss of HKD 2.816 million[199] Assets and Liabilities - Total assets decreased to HKD 569,066 thousand as of June 30, 2023, from HKD 616,378 thousand as of December 31, 2022[23] - Total liabilities decreased to HKD 386,830 thousand as of June 30, 2023, from HKD 418,265 thousand as of December 31, 2022[22] - The company's equity attributable to owners decreased to HKD 542,956 thousand as of June 30, 2023, from HKD 587,213 thousand as of December 31, 2022[23] - The company's capital-to-debt ratio as of June 30, 2023, was 78.6%[108] - The company's capital-to-debt ratio was 78.6% as of June 30, 2023, slightly higher than 78.3% at the end of 2022, while the asset-to-liability ratio was 44.0%, up from 43.9%[136] - Total assets as of June 30, 2023, were HKD 955.896 million, down from HKD 1.034 billion at the end of the previous year[199] - Trade receivables and bills receivable decreased to HKD 31.183 million from HKD 43.209 million at the end of the previous year[193] - Depreciation for property, plant, and equipment was HKD 13.150 million, with a carrying amount of HKD 175.821 million as of June 30, 2023[194] Revenue Breakdown by Region - Jiangsu Province accounted for 87.47% of total revenue, generating 122,809 thousand HKD[39] - Wujiang District contributed 75.74% of total revenue, with 106,343 thousand HKD[39] - Suzhou City (excluding Wujiang District) accounted for 11.73% of total revenue, generating 16,466 thousand HKD[39] - Zhejiang Province contributed 11.54% of total revenue, with 16,213 thousand HKD[39] - Southern Zhejiang (including Taizhou, Zhoushan, and Ningbo) accounted for 1.06% of total revenue, generating 1,492 thousand HKD[39] - Jiaxing City contributed 10.48% of total revenue, with 14,721 thousand HKD[39] - Shanghai accounted for 0.99% of total revenue, generating 1,387 thousand HKD[39] - Total revenue for the period was 140,409 thousand HKD[39] Cement Market and Sales - Cement product sales volume decreased by 7% YoY to approximately 444 thousand tons, with sales revenue down by 31% YoY[38] - PO 42.5 cement sales volume decreased to 326,000 tons from 383,000 tons, with average selling price dropping to HKD 324/ton from HKD 433.19/ton[72] - PC 32.5 cement sales volume increased to 118,000 tons from 95,000 tons, but average selling price decreased to HKD 294/ton from HKD 392.10/ton[72] - National cement production in the first half of 2023 was 953 million tons, a 1.3% year-on-year increase, but the lowest in 12 years[70] - Cement prices in key regions (Nanjing, Hangzhou, Shanghai) dropped significantly, with PO42.5 cement prices falling by 23.6%, 27.7%, and 10% respectively[70] - Cement demand remained sluggish due to a downturn in the real estate market, with insufficient new construction projects and funding shortages in the real estate sector[37] - The cement segment's gross profit was approximately HKD 2.517 million, a significant improvement from a gross loss of HKD 15.474 million in the same period last year, representing an increase of HKD 17.991 million or 116.3%. The gross margin improved to 1.8% from -7.6% last year, primarily due to lower raw material costs, especially coal prices[123] Expenses and Costs - Distribution expenses decreased by 39.9% to HKD 1.144 million from HKD 1.905 million last year, primarily due to reduced cement deliveries. Distribution expenses accounted for 1% of the company's consolidated revenue, consistent with the previous year[124] - General and administrative expenses increased by 88.1% to HKD 24.927 million from HKD 13.255 million last year, mainly due to increased consulting fees related to the acquisition of Ganzhou Chengzheng Rare Earth Technology Co., Ltd[135] - Cost of goods sold for the six months ended June 30, 2023, was HKD 137,788,000, down from HKD 218,143,000 in the same period in 2022[174] - Depreciation of property, plant, and equipment for the six months ended June 30, 2023, was HKD 12,451,000[174] - Employee expenses, including director remuneration, totaled HKD 9,122,000 for the six months ended June 30, 2023[174] - The company's minimum lease payments as of June 30, 2023, were HKD 1,314,000, with a present value of HKD 1,273,000[169] Cash Flow and Liquidity - Cash and cash equivalents decreased by 27% to HKD 5.63 million as of June 30, 2023, from HKD 7.662 million at the end of 2022, primarily due to increased administrative expenses[136] - The company maintains sufficient cash and credit facilities to meet its liquidity requirements[165] - Operating cash flow from activities was negative at HKD 16.117 million, compared to a positive HKD 103.857 million in the same period last year[178] - Investment activities generated a net cash inflow of HKD 25.616 million, a significant improvement from a net cash outflow of HKD 60.423 million in the previous year[178] - Financing activities resulted in a net cash outflow of HKD 11.357 million, compared to a net cash outflow of HKD 3.220 million in the prior year[178] - The company's cash and cash equivalents decreased by HKD 1.858 million, ending the period at HKD 5.630 million, down from HKD 125.563 million at the end of the previous period[178] Investments and Acquisitions - The company acquired 25% equity in a target company for RMB 40 million and injected RMB 160 million, increasing its total stake to 62.5%[75] - The target company specializes in rare earth exploration, rare earth permanent magnet materials, and rare earth permanent magnet motors[75] - The company acquired 25% equity of the target company for RMB 40 million (approximately HKD 44.01 million) and injected RMB 160 million (approximately HKD 176 million) into the target company, increasing its registered capital by RMB 56 million (approximately HKD 61.62 million) and capital reserve by RMB 104 million (approximately HKD 114 million). Post-injection, the company holds 62.5% equity in the target company[120] - The company holds a 43.2% stake in Suzhou Dongtong Environmental Technology Co., Ltd., with an investment cost of HKD 27,637,000[161] Other Financial Information - Bank borrowings decreased by 15.0% to HKD 85,320,000 as of June 30, 2023, compared to HKD 100,317,000 as of December 31, 2022, mainly due to loan repayments during the reporting period[3] - The company's capital expenditure for the first half of 2023 was approximately HKD 2.532 million, all generated by the cement segment, a significant decrease compared to HKD 10.618 million in the same period last year[116] - The company's capital commitment as of June 30, 2023, was approximately HKD 646,000, down from HKD 1.154 million as of December 31, 2022[116] - The company had 213 employees as of June 30, 2023, with total employee compensation amounting to approximately HKD 12.617 million during the reporting period[109] - The company did not have any unused bank financing facilities as of June 30, 2023[96] - The company did not have any significant contingent liabilities as of June 30, 2023[118] - The company did not mortgage any assets during the reporting period[117] - The company plans to meet its working capital needs primarily through cash flow generated from operating activities, bank loans, trade and other payables, and proceeds from its initial public offering[98] - The company did not experience significant foreign exchange risks during the reporting period and did not implement any hedging measures[119] - The company's major shareholder, Goldview, held a 53.89% stake in the company as of June 30, 2023[113] - Other income for the period was approximately HKD 585,000, a decrease of HKD 1.985 million or 77.2% compared to HKD 2.57 million last year, mainly due to reduced government subsidies[124] - The company's income tax credit for the period was approximately HKD 224,000, a significant decrease from HKD 2.558 million last year, mainly due to pre-tax losses incurred during the period[147] - The company's total bank and other borrowings amounted to HKD 163.206 million as of June 30, 2023, a decrease from HKD 178.439 million at the end of 2022[145] - Prepayments and deposits for raw materials, machinery, and property licenses amounted to HKD 6,934,000, HKD 469,000, and HKD 24,300,000 respectively as of June 30, 2023[157] - Exchange rate differences resulted in a loss of HKD 26,824,000 for the six months ended June 30, 2023[163] Strategic Plans and Future Outlook - The company plans to enhance internal management, upgrade facilities, and explore opportunities in the new energy sector[75] - The biopharmaceutical segment's R&D progress slowed due to the pandemic, with ongoing clinical studies for CAR-T cell therapy and early-stage development of ADC drugs[73] - No interim dividend was recommended for the six months ended June 30, 2023[88] Customer and Market Concentration - The single largest external independent customer accounted for 19.93% of the company's revenue, up from 15.92% in the previous year[191]

Financial Performance - The group's revenue for the six months ended June 30, 2023, was approximately HKD 140,576,000, a decrease of about HKD 62,745,000 or 30.9% compared to HKD 203,321,000 for the same period in 2022[26] - The group reported a net loss attributable to shareholders of approximately HKD 18,418,000, a decrease from a loss of approximately HKD 19,944,000 for the six months ended June 30, 2022[26] - Revenue for the six months ended June 30, 2023, was HKD 140,576 thousand, a decrease of 30.8% compared to HKD 203,321 thousand for the same period in 2022[27] - The net loss for the period was HKD 18,418 thousand, slightly improved from HKD 19,944 thousand in the prior year[29] - Total comprehensive loss for the period was HKD 44,914 thousand, compared to HKD 52,483 thousand in the previous year, reflecting a decrease of 14.5%[27] - The net profit margin for the group during the reporting period was approximately -13.1%[14] - The basic loss per share for the period was HKD 0.032, compared to HKD 0.034 in the same period of the previous year[29] Segment Performance - The gross profit margin for the cement segment improved from approximately -7.6% for the six months ended June 30, 2022, to about 1.8% in the current reporting period[26] - The group's gross profit for the cement segment was approximately HKD 2,517,000, an increase of about HKD 17,991,000 or 116.3% compared to a gross loss of HKD 15,474,000 in the previous year[8] - The segment loss for cement production and sales was HKD 10,196,000, while the biotechnology research and development segment reported a loss of HKD 2,816,000, resulting in a total segment loss of HKD 13,012,000[60] Cash Flow and Assets - The net cash flow from operating activities for the six months ended June 30, 2023, was a loss of HKD 16,117,000, compared to a gain of HKD 103,857,000 for the same period in 2022[37] - Current assets totaled HKD 581,656 thousand, a decrease from HKD 630,364 thousand at the end of 2022[31] - Total assets as of June 30, 2023, amounted to HKD 955,896,000, down from HKD 1,034,643,000 as of December 31, 2022[62] - The company reported a decrease in trade and other receivables, contributing to the cash flow from operating activities[37] Liabilities and Equity - Total liabilities decreased to HKD 386,830 thousand from HKD 418,265 thousand at the end of 2022, indicating improved financial stability[31] - The company's equity attributable to owners was HKD 542,956 thousand as of June 30, 2023, down from HKD 587,213 thousand at the end of 2022[33] - Total financial liabilities decreased to HKD 361,574,000 as of June 30, 2023, from HKD 402,307,000 as of December 31, 2022[128] Investments and Acquisitions - The group completed the acquisition of a 62.5% stake in Ganzhou Chengzheng Rare Earth New Materials Co., Ltd. for a cash consideration of RMB 200,000,000 on July 31, 2023, aiming to diversify its business and enhance shareholder value[4] - The company acquired a 25% stake in Jiangxi Xingyao for RMB 40 million (approximately HKD 44.01 million) and injected RMB 160 million (approximately HKD 176 million) into the target company[165] - Following the acquisition, the company will hold 62.5% of the target company, and its financial performance will be consolidated into the company's financial statements[165] Operational Highlights - Cement product sales volume was approximately 444,000 tons, a year-on-year decrease of about 7%, with sales revenue declining by approximately 31%[141] - The average cement prices in major sales regions showed significant declines, with prices in Nanjing, Hangzhou, and Shanghai dropping by 23.6%, 27.7%, and 10% respectively compared to the same period last year[18] - The company aims to maintain sufficient cash and credit lines to meet its working capital requirements[54] Employee and Management - The company has a total of 213 employees, with total employee compensation amounting to approximately HKD 12.62 million during the reporting period[164] - The company plans to enhance internal management and reduce costs while upgrading existing facilities to increase production efficiency and reduce maintenance costs in the second half of 2023[165] General and Administrative Expenses - General and administrative expenses for the reporting period were approximately HKD 24,927,000, an increase of about HKD 11,672,000 or 88.1% compared to HKD 13,255,000 in the same period last year[144] - The net profit margin decreased by 3.3% to approximately -9.8% compared to the same period last year, primarily due to the decrease in revenue and the increase in general and administrative expenses[146] Other Financial Information - The company has not adopted any new accounting standards or amendments that have a significant impact on its financial performance during the current accounting period[48] - The financial data is prepared in accordance with Hong Kong Accounting Standards and reflects the same accounting policies as the previous year[41] - No dividends were declared or proposed for the six months ended June 30, 2023, consistent with 2022[117]

Financial Performance - In 2022, cement product sales volume was approximately 982,000 tons, a decrease of about 21.3% compared to 2021, with sales revenue of approximately HKD 371,737,000, down about 36.8%[1]. - Revenue from cement kiln leasing in 2022 was approximately HKD 601,000, a decline of about HKD 307,000 or 34% from approximately HKD 908,000 in 2021[2]. - Gross profit for the reporting period was approximately HKD 3,377,000, a decrease of about HKD 107,854,000 or approximately 96.96% from HKD 111,231,000 in 2021, with a gross margin of approximately 0.9%, down from 18.9% in 2021[6]. - The net profit margin for the reporting period was approximately -11.6%, a significant decline from 7.5% in 2021, primarily due to decreased domestic cement demand and increased costs[11]. - The company's revenue from the cement segment for the reporting period was approximately HKD 372,338,000, a decrease of about HKD 217,123,000 or 36.8% compared to HKD 589,461,000 in the same period of 2021 due to the impact of the pandemic and a sluggish cement market[135]. - The company reported a significant decline in cement product sales revenue, amounting to approximately HKD 371,737,000, down from HKD 588,553,000, reflecting a drop of about HKD 216,816,000 or 36.8%[135]. Expenses and Costs - Sales and distribution expenses for the group were approximately HKD 3,077,000, a decrease of about HKD 2,763,000 or approximately 47.3% from HKD 5,840,000 in 2021[24]. - General and administrative expenses increased to approximately HKD 59,461,000, up about HKD 14,664,000 or approximately 32.7% from HKD 44,797,000 in 2021, mainly due to rising costs from the pandemic[25]. - The total employee compensation during the reporting period was approximately HKD 28,477,000, with a total of 218 employees as of December 31, 2022[51]. Cash Flow and Capital Structure - As of December 31, 2022, cash and cash equivalents were approximately HKD 7,662,000, a decrease of about 91.5% from HKD 90,292,000 on December 31, 2021[33]. - The debt-to-capital ratio increased to 78.3% in 2022 from 63.4% in 2021, while the asset-to-liability ratio rose to 43.9% from 38.8%[32]. - As of December 31, 2022, the group's bank borrowings amounted to approximately HKD 100,317,000, a decrease of about 17.3% from HKD 121,355,000 as of December 31, 2021, primarily due to loan repayments during the reporting period[34]. - The capital expenditure for the group in 2022 was approximately HKD 18,907,000, significantly reduced from HKD 32,382,000 in 2021, mainly due to a decrease in technical renovation costs[41]. - The company's total issued share capital as of December 31, 2022, was HKD 5,520,000, divided into 552,000,000 shares with a par value of HKD 0.01 per share[110]. - The distributable reserves available to shareholders as of December 31, 2022, were approximately HKD 175,691,000, down from HKD 216,159,000 as of December 31, 2021, representing a decrease of about 18.7%[110]. Strategic Initiatives and Future Outlook - The company plans to enhance internal management and reduce costs in 2023, while also upgrading existing facilities to increase production efficiency[52]. - The company is focused on expanding its market presence and enhancing its operational efficiency through strategic management and investment initiatives[71]. - The company is actively pursuing new strategies for market expansion and product development to meet evolving customer needs[71]. - The group has established an ESG working group to regularly review ESG-related strategies, management systems, and implementation status[99]. - The group aims to identify, assess, and monitor key ESG risks and opportunities that significantly impact its business, reporting to the board and providing important references for annual ESG goals[100]. Leadership and Governance - Liu Dong has over 10 years of experience in the Hong Kong capital market and investor relations, having served in various executive roles since 2016[68]. - Wu Junxian has been with the group since 2009 and has held multiple management positions, currently serving as CEO and General Manager of Suzhou Dongwu[69]. - The company has a strong leadership team with extensive experience in finance, management, and investment, including independent directors with backgrounds in banking and asset management[77][78][79]. - The board of directors includes members with significant experience in international business and investment, contributing to the company's strategic direction[70][74]. - The company has maintained a high standard of corporate governance, adopting the corporate governance code as its own[157]. - The board held a total of four ad-hoc meetings during the reporting period to discuss significant matters, including voluntary announcements and profit warnings[158]. Risk Management and Compliance - The company has implemented policies to manage environmental and social risks within its supply chain, although specific metrics were not disclosed[124]. - The company has maintained compliance with all relevant laws and regulations during the reporting period, ensuring a good working relationship with regulatory authorities[105]. - The company has no significant contingent liabilities or legal claims as of December 31, 2022[114]. - The group did not engage in any significant acquisitions or disposals of subsidiaries or associates during the reporting period[49]. Market Conditions - The average price of cement in the East China region for 2022 was RMB 473 per ton, a decrease of 10% compared to 2021, while the highest average price was in North China at RMB 503 per ton[135]. - The average price in the Southwest region was the lowest at RMB 406 per ton, with a year-on-year decrease of 3.6%[135]. - The company experienced multiple production stoppages due to stringent pandemic control measures, alongside ongoing pressures from the real estate market and rising raw material costs[135]. Research and Development - The R&D progress in the biopharmaceutical segment was slowed down due to the pandemic, with ongoing projects including CAR-T cells, antibody-drug conjugates (ADC), and oncolytic viruses[136]. - The ROR1 CAR-T cell drug is undergoing clinical research at Huazhong University of Science and Technology, focusing on its safety and preliminary efficacy for treating ROR1-positive advanced ovarian cancer[136].

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]