Financial Performance - In 2019, the total revenue of the Group was approximately HK$1,605,356,000, an increase from HK$1,478,049,000 in 2018[29]. - The gross profit for 2019 was HK$175,857,000, resulting in a gross profit margin of approximately 11.0%, down from 16.6% in 2018[29]. - Profit after tax for the year was approximately HK$14,703,000, significantly lower than HK$146,708,000 in 2018[29]. - Basic earnings per share for the year were 0.35 Hong Kong cents, down from 4.95 Hong Kong cents in 2018[29]. - The Group's revenue from coke production for the year was approximately HK$1,434,311,000, an increase of 6.2% compared to approximately HK$1,351,046,000 in the previous year, primarily due to increased sales volume of coke[37]. - The segment results from coke production decreased to approximately HK$97,849,000 from approximately HK$504,755,000, a decline of 80.7%, attributed to lower coke prices and rising coal prices[37]. - Profit before tax dropped to approximately HK$26,250,000 from approximately HK$176,659,000, a decline of 85.2%, mainly due to the absence of impairment reversal this year[41]. - The Group's profit for the year was approximately HK$14,703,000, down from approximately HK$146,708,000, a decrease of 90.0%, due to the full utilization of tax losses from the previous year[47]. Market Conditions and Future Outlook - In 2019, the domestic coke market was generally weak, with coke prices dropping from high levels at the beginning of the year, leading to a substantial depression of the Group's gross margin[9]. - The Group expects the coke market environment to improve in 2020 due to government policies and economic stimulus measures, which are anticipated to stimulate coke demand[15]. - The Group anticipates that the PRC government will launch further economic incentive measures to stimulate production demand in the steel industry, positively impacting the coke industry[84]. - The execution of environmental output-limitation and capacity elimination is expected to intensify, with a goal to eradicate production capacity of up to 50 million tons in 2020[84]. - The Group anticipates limited impact on overall production and operations due to the COVID-19 pandemic, with expectations of further economic stimulus measures from the Chinese government to boost steel industry demand[87]. Strategic Initiatives - The Group entered into Shareholders Agreements to establish Shanxi Golden Rock Rich Hydrogen Energy Co., Ltd., which will engage in producing LNG, synthetic ammonia, urea, and related products, diversifying revenue sources[10]. - A Framework Agreement was signed with Shanxi Jinyan Energy Technology Company Limited to acquire a coke production project with a capacity of over 5 million tons per year, enhancing production scale and technology[10]. - The Group plans to actively facilitate the acquisition and merger of the coke production project in Xiaoyi, Shanxi, to integrate coke production business and propel industry transformation[16]. - The Group plans to invest in a hydrogen energy coke oven gas project, which is expected to produce 250,000 tons of liquefied natural gas, 800,000 tons of synthetic ammonia, and 1.4 million tons of urea annually[18]. - The Group aims to acquire a 5 million ton per year coke production project in Shanxi Province to enhance its production capabilities and drive industry transformation[18]. - The Group intends to expand its international trading business for coke products to increase cash flow and improve overall profitability[90]. - A joint venture, Rich Hydrogen Energy, has been established in Shanxi Province to develop liquefied natural gas, synthetic ammonia, and hydrogen energy projects, which is expected to enhance future profitability[90]. Cost Management and Efficiency - Selling and distribution costs decreased to approximately HK$123,024,000 from approximately HK$137,637,000, a reduction of 10.6%, mainly due to lower transportation costs[38]. - Administrative expenses were approximately HK$88,018,000, down from approximately HK$103,301,000, a decrease of 14.8%, due to salary control and reduced maintenance costs[39]. - The Group aims to implement stringent cost controls and reduce expenses to enhance profitability in the upcoming year[84]. Human Resources and Management - The Group's staff costs for the year ended December 31, 2019, amounted to approximately HK$54,905,000, down from approximately HK$95,317,000 in the previous year, reflecting a significant reduction in employee expenses[76]. - The Group had approximately 530 employees as of December 31, 2019, a decrease from approximately 1,400 employees in 2018[76]. - The Group's human resource management focuses on competitive remuneration and career development opportunities for employees[153]. Environmental and Regulatory Compliance - The Group is committed to complying with national environmental standards and upgrading production equipment to reduce emissions and resource consumption[91]. - The Group's operations in Shanxi Province complied with environmental regulations, providing 31% of local heating demand and reducing air emissions from crude coal burning[160]. - The Group is committed to environmental protection and may invest in upgrading equipment to meet domestic environmental standards[134]. - Environmental regulations in China are becoming stricter, impacting production capacity and operational costs for the Group[133]. - The Group has complied with all applicable laws and regulations in the PRC and Hong Kong during the reporting period[161]. Risk Management - The Group's interest rate risk is managed by maintaining borrowings at a fixed interest rate to minimize fair value interest rate risk[72]. - The Group's monetary assets and liabilities are primarily denominated in RMB, USD, and HK$, exposing it to foreign currency risk[73]. - The Group's risk management framework includes a three-tier approach to identify, assess, and manage risks effectively[68]. - The management is closely monitoring the economic environment and will adjust production plans and enhance cost monitoring in response to market risks[126]. - The Group faces risks associated with fluctuating prices of coke and coal, which may adversely affect its business and financial condition[130]. Corporate Governance - The Board does not recommend the payment of a final dividend for the year ended December 31, 2019, consistent with the previous year[170]. - The Company has maintained compliance with all applicable laws and regulations in China and Hong Kong as of December 31, 2019[164]. - All independent non-executive Directors confirmed their independence for the year ended 31 December 2019[187]. - The Company maintained permitted indemnity provisions in its Directors' and officers' liability insurance during the year ended 31 December 2019[188].

Financial Performance - The Group recorded total revenue of approximately HK$1,478,049,000 for FY2018, representing a growth of approximately 11.1% compared to HK$1,330,791,000 for FY2017[14] - Operating profit before interest and tax was approximately HK$178,132,000 in FY2018, reflecting a growth of approximately 32.3% from HK$134,674,000 in FY2017[14] - Profit attributable to owners of the Company amounted to approximately HK$128,391,000 in FY2018, an increase of approximately 8.9% from HK$117,898,000 in FY2017[14] - Basic earnings per share was 4.92 Hong Kong cents in FY2018, compared to 4.54 Hong Kong cents in FY2017[14] - The gross profit margin for the year was approximately 16.6%, up from approximately 16.0% in 2017[32] - Profit for the year amounted to HK$145,981,000, compared to HK$131,913,000 in 2017, while profit attributable to owners of the Company was HK$128,391,000, up from HK$117,898,000[32] Market Conditions - The PRC's GDP exceeded RMB90 trillion in 2018, with a year-on-year increase of 6.6%[9] - The coke production capacity demonstrated an overall downward trend due to environmental protection policies, leading to a rise in coke prices[9] - The overall coke supply situation remained tight, driving coke prices upwards due to low capacity utilization in the industry[26] - The gradual release of new capacity in the coke industry may lead to a phased mismatch of supply, while downstream steel industry demand is expected to support coke prices[83] - For 2019, the demand for coke in the steel industry is expected to remain stable, with the Group planning to adjust its business strategy to navigate market challenges and opportunities[141] Strategic Initiatives - The Group aims to upgrade existing equipment and facilities to achieve cleaner emissions in response to stricter environmental standards[16] - The Group plans to gradually acquire interests and control of Energy Technology to expand its business scale and enhance production technology[20] - The management is actively exploring investment opportunities to expand production scale, upgrade technology, and enhance environmental standards to ensure sustainable growth[90] - The management will seek new business development opportunities to enhance profitability and ensure long-term returns for shareholders[144] Environmental and Regulatory Challenges - The Group anticipates that environmental protection policies will continue to impact the coke industry, leading to low capacity utilization and potential mismatches in coke supply[83] - The Group is facing increased regulatory challenges due to stricter environmental policies from the Chinese government, which may affect production operations[89] - The Chinese government's environmental policies are tightening, which may affect production capacity and operational costs, necessitating potential investments in equipment upgrades to meet standards[134] - The Group plans to upgrade production facilities to meet environmental standards and reduce emissions, aligning with government policies aimed at combating air pollution[145] Financial Position and Management - Administrative expenses increased by 23.3% from approximately HK$83,804,000 in 2017 to approximately HK$103,301,000 in 2018, mainly due to higher professional fees and staff costs[42] - Finance costs decreased from approximately HK$8,015,000 in 2017 to approximately HK$2,200,000 in 2018, attributed to the restructuring of convertible bonds issued in November 2016[47] - The gearing ratio as of 31 December 2018 was 64%, up from 62% in 2017[57] - The Group's cash and bank balances decreased to HK$18,894,000 in 2018 from HK$69,655,000 in 2017[59] - The Group's current ratio as of December 31, 2018, was 0.92, slightly down from 0.96 in 2017[63] Human Resources and Governance - As of December 31, 2018, the Group had approximately 1,400 employees, a decrease from approximately 1,500 employees in 2017, with staff costs amounting to approximately HK$95,317,000, up from HK$73,999,000 in 2017[81] - The Group's human resource management aims to reward and recognize employees through competitive remuneration and career development opportunities[151] - The company has a strong board with members holding advanced degrees in finance, management, and law, enhancing its governance and strategic direction[114] - The company’s board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[173] Investment and Acquisitions - The joint venture subsidiary, GRG Huscoke, is involved in a coke project with an annual capacity of 5 million tons in Shanxi Province[20] - The company has not yet settled the outstanding consideration of RMB40 million related to the acquisition of EDB Holding, pending the receipt of audited financial statements[96] - The company has urged EDB Holding to complete its audit works, with expectations that the audited financial statements will be completed around May 2019[100] Shareholder Returns - The Board does not recommend the payment of a final dividend for the year ended December 31, 2018, maintaining a focus on sustainable returns to shareholders[166][167] - The company aims to provide stable and sustainable returns to shareholders through a consistent dividend policy, balancing shareholder returns with investment in sustainable development[171]