Financial Performance - For the year ended December 31, 2024, the Group recorded total revenue of HK$3,951 million, a decrease of 2.5% year-on-year, while profit for the year was HK$482 million, an increase of 20.4% year-on-year[10]. - The gross profit margin of the chemical operations was 29.4%, representing a 3.4 percentage point increase compared to last year, and the Group's net profit margin rose by 2.3 percentage points year-on-year to 12.2%[10]. - The basic earnings per share for the year ended December 31, 2024, was HK58.5 cents, compared to HK48.6 cents in 2023[21]. - The Group recorded revenue from Chemical operations of approximately HK$3,922 million, a decrease of HK$59 million or 1.5% compared to last year[22]. - Gross profit amounted to HK$1,164 million, an increase of HK$102 million, primarily due to a decline in raw material prices and energy costs[31]. - Administrative expenses increased by approximately HK$16 million to HK$275 million, representing 7.0% of total revenue compared to 6.4% last year[33]. - Research and development costs were approximately HK$136 million, representing 3.4% of total revenue, focusing on optimizing process technology and improving product quality[34]. - The total shareholders' equity as of December 31, 2024, was HK$5,936 million, an increase from HK$5,800 million in 2023[45]. - The current ratio was 1.21 as of December 31, 2024, down from 1.29 at the end of 2023[45]. - The net debt to equity ratio was 6.03% as of December 31, 2024, compared to 7.04% in 2023[46]. Operational Developments - The Group plans to continue promoting production automation at its three factories to improve cost-effectiveness and production efficiency in 2025[12]. - The construction of the vinylene carbonate (VC) production line at the Changshu plant and the optimization of fluoroethylene carbonate (FEC) capacity at the Zhuhai plant were completed by the end of 2024, with trial production and sales expected to begin this year[14]. - The Group is actively planning to develop a high-end fluoropolymer production line at a new site in Jiangxi and expand overseas sales channels to support future sales growth[14]. - The Group's focus on developing diversified high-value-added chemical products and maintaining high product quality is expected to strengthen its competitive advantage[13]. - The operating environment in 2025 is anticipated to be challenging due to global economic uncertainties, but the Group is committed to navigating these challenges through strategic initiatives[12]. Sustainability and Environmental Initiatives - The Group aims to implement various sustainable development plans, including improving energy efficiency and reducing carbon emissions, to achieve sustainable development while providing satisfactory returns to shareholders[15]. - The Group has established clear and quantifiable targets for sustainable development, adhering to HKFRS S1 requirements, and maintained full compliance with environmental protection laws throughout 2024[163]. - The Group has optimized production processes and automated production control, leading to reductions in energy consumption and pollutant emissions[165]. - The Group aims to minimize carbon emissions through a comprehensive carbon emissions inventory and strategies including "prevention at source, process control, end treatment, and comprehensive utilization"[168]. - The Group has maintained full compliance with environmental laws and regulations throughout the year, with no reported violations[166]. - The Safety and Environmental Protection Department (SEPD) has been set up to manage compliance and monitoring of ESG-related risks, particularly in the chemical industry[172]. - The Group emphasizes a "green supply chain and high-quality low-carbon products" as part of its commitment to sustainable development[173]. Governance and Risk Management - The Board of Directors comprises seven members, including three Executive Directors and three Independent Non-executive Directors, ensuring a diverse governance structure[75]. - The Company has complied with the Corporate Governance Code as set out in the Listing Rules, demonstrating its commitment to high standards of corporate governance[68][72]. - The Group has established a risk management framework involving the Board, Audit Committee, and Risk Management Taskforce[116]. - The Risk Management Taskforce identifies and prioritizes significant risks annually, establishing mitigation plans for those deemed significant[117]. - The Group's risk management and internal control systems are reviewed annually by the Board, which considers them effective in managing risks associated with business objectives[122]. - The Company is committed to ensuring that announcements are not misleading and provide a clear and balanced view of both positive and negative facts[124]. Employee and Stakeholder Engagement - The Group's workforce consisted of around 1,900 employees as of December 31, 2024, with competitive compensation and incentives based on performance and market conditions[52][57]. - The Group's workforce consists of approximately 76% male employees and 24% female employees, indicating a commitment to gender diversity[145]. - Employee satisfaction metrics improved, with a reported 85% satisfaction rate, up from 80% last year[198]. - Stakeholder engagement is crucial for understanding expectations and recommendations related to ESG topics, involving various parties such as management, employees, and local organizations[185]. - The Group's long-term development plan will incorporate stakeholder suggestions to foster mutually beneficial relationships[187]. Future Outlook and Growth Strategies - The company provided guidance for the next quarter, expecting revenue to reach between $1.6 billion and $1.8 billion, indicating a potential growth of 7% to 20%[200]. - New product launches are anticipated to contribute an additional $200 million in revenue over the next fiscal year[198]. - Market expansion plans include entering three new international markets by Q3 2024, projected to increase market share by 15%[200]. - The company is exploring strategic acquisitions to bolster its product portfolio, with a budget of $100 million allocated for potential deals[198]. - Environmental compliance initiatives are expected to reduce operational costs by 10% over the next two years[199]. - The company aims to achieve a 30% reduction in carbon emissions by 2025, aligning with new regulatory standards[200].

Revenue and Profit - Revenue remained flat at HKD 3.951 billion[4] - Total revenue for the year ended December 31, 2024, was HKD 3,950,833, a decrease of 2.5% from HKD 4,050,581 in 2023[16] - The group reported a pre-tax profit of HKD 596,198 for 2024, compared to HKD 493,898 in 2023, representing an increase of 20.8%[22] - Profit increased by 20.4% to HKD 482.3 million, benefiting from lower raw material and energy costs[4] - Net profit for the year was HKD 482.3 million, up from HKD 400.7 million[5] - The net profit attributable to shareholders for 2024 was 482,284,000 HKD, up from 400,665,000 HKD in 2023, representing a growth of 20.3%[33] Dividends - Proposed final dividend of HKD 0.15 per share, totaling HKD 0.29 for 2024 compared to HKD 0.19 in 2023[4] - Total dividend declared for 2024 was 231,000,000 HKD, an increase of 27.3% from 181,500,000 HKD in 2023[35] - The board proposed a final dividend of HKD 0.15 per share for the year ended December 31, 2024, subject to shareholder approval at the upcoming annual general meeting[44] Costs and Expenses - Total sales cost decreased to HKD 2.787 billion from HKD 2.988 billion[5] - Research and development costs increased to HKD 135.8 million from HKD 120.8 million[5] - Administrative expenses increased to approximately HKD 275 million, up about HKD 16 million from the previous year, accounting for 7.0% of total revenue compared to 6.4% last year[60] - Interest expenses decreased to approximately HKD 22 million from HKD 39 million in the previous year, primarily due to the repayment of bank loans[62] - The company's total employee costs for 2024 were 388,774,000 HKD, up from 365,027,000 HKD in 2023, indicating a rise of 6.5%[32] Assets and Liabilities - Non-current assets increased from HKD 5,515,991 thousand in 2023 to HKD 5,809,033 thousand in 2024, representing a growth of 5.3%[6] - Current assets decreased from HKD 1,512,976 thousand in 2023 to HKD 1,387,410 thousand in 2024, a decline of 8.3%[6] - Total assets less current liabilities rose to HKD 6,050,267 thousand in 2024, up from HKD 5,857,151 thousand in 2023, indicating an increase of 3.3%[7] - The company's total equity increased from HKD 5,799,755 thousand in 2023 to HKD 5,935,970 thousand in 2024, a growth of 2.3%[7] - The company's total liabilities increased from HKD 1,171,816 thousand in 2023 to HKD 1,146,176 thousand in 2024, a decrease of 2.2%[7] Inventory and Receivables - Inventory decreased to 600,940,000 HKD in 2024 from 787,749,000 HKD in 2023, a reduction of 23.7%[37] - Trade receivables as of December 31, 2024, amounted to 209,621,000 HKD, an increase from 189,853,000 HKD in 2023[39] - Overdue trade receivables reached 77,274,000 HKD in 2024, significantly higher than 29,981,000 HKD in 2023[40] Segment Performance - Total income from chemical segment was HKD 3.922 billion, while the property segment contributed HKD 28.6 million[5] - Chemical segment revenue was HKD 3,922,260, down from HKD 3,980,919 in the previous year, reflecting a decline of 1.5%[22] - Property segment revenue decreased significantly to HKD 28,573 from HKD 69,662, a drop of 59.0%[22] Financial Position - The company's cash and bank balances decreased from HKD 263,666 thousand in 2023 to HKD 222,781 thousand in 2024, a reduction of 15.5%[6] - Trade and other payables increased from HKD 383,345 thousand in 2023 to HKD 493,417 thousand in 2024, marking a rise of 28.8%[6] - Bank borrowings increased from HKD 587,937 thousand in 2023 to HKD 671,767 thousand in 2024, an increase of 14.2%[6] - The group maintained a strong financial position with cash and bank deposits of approximately HKD 291 million, an increase from HKD 264 million in the previous year[66] Operational Developments - The group plans to continue investing in the automation of three factories to enhance cost efficiency and production effectiveness amid a challenging economic environment[49] - The construction of the vinyl acetate production line at the Changshu factory and the optimization of production capacity at the Zhuhai factory were completed by the end of 2024, with trial production and sales expected to commence within the year[50] - The group aims to develop a high-end fluoropolymer production line in Jiangxi and expand overseas sales channels to support future sales growth[50] Market and Pricing - The average selling prices for key products such as dichloromethane and trichloromethane increased by approximately 4% and 7% respectively, while the price for hydrogen peroxide decreased by about 16%[54] - The majority of the group's revenue is derived from external customers located in China, with significant non-current assets also situated in China[24] Other Financial Metrics - The gross profit margin for the chemical business improved by 3.4 percentage points to 29.4%, and the net profit margin rose by 2.3 percentage points to 12.2%[48] - The group's gross profit for the year was approximately HKD 1.164 billion, an increase of HKD 102 million compared to the previous year, attributed to a decline in raw material prices and energy costs[58] - The sales and distribution costs were approximately HKD 203 million, representing about 5.1% of total revenue, a slight decrease from 5.2% in the previous year[59] - Research and development costs were approximately HKD 136 million, constituting about 3.4% of total revenue, focusing on optimizing product craftsmanship and enhancing market competitiveness[61]

Financial Performance - Total revenue for the six months ended June 30, 2024, was HK$1,989,690,000, a slight decrease of 0.3% compared to HK$1,996,136,000 in the same period last year[9]. - Gross profit increased to HK$575,214,000, representing a 30.4% increase from HK$440,984,000 in the previous year[9]. - Profit for the period reached HK$240,085,000, up 129.4% from HK$104,611,000 in the same period last year[9]. - Earnings per share for the period were HK$29.1 cents, compared to HK$12.7 cents in the previous year, marking a significant increase[9]. - The company reported a profit before taxation of HK$297,776,000, significantly higher than HK$130,510,000 in the previous year[9]. - Total comprehensive income for the period was HK$240,368,000, which includes a profit for the period of HK$240,085,000, reflecting stable performance compared to previous periods[15]. - Profit for the period attributable to owners of the Company was HK$240,085,000, a significant increase from HK$104,611,000 in 2023, representing a growth of approximately 129%[45]. Revenue Breakdown - Revenue from the manufacture and sale of chemical products was HK$1,968,854, compared to HK$1,938,347 in the previous year, indicating an increase of about 1.6%[26]. - Revenue from chloromethane products decreased to HK$457,431 from HK$467,513, reflecting a decline of approximately 2.3%[26]. - The Group's revenue from contracts with customers was HK$1,987,848, slightly down from HK$1,996,136, a decrease of about 0.4%[26]. - The Group's rental income for the period was HK$1,842, which is a new revenue stream introduced this year[26]. - The chemical segment includes the manufacture and sale of various products, with a focus on maintaining operational efficiency and profitability[28]. - The property segment generated revenue from property development and sales, alongside rental income, contributing to the overall financial performance[28]. Cost Management - The cost of sales decreased to HK$1,414,476,000, down 9.1% from HK$1,555,152,000 in the previous year[9]. - Research and development costs were HK$54,529,000, a decrease from HK$71,850,000 in the previous year, indicating a focus on cost management[9]. - Selling and distribution expenses for the six months ended June 30, 2024, were approximately HK$108 million, a decrease of approximately HK$1 million from HK$109 million in the previous period, representing about 5.4% of total revenue[92]. - General and administrative expenses increased to approximately HK$135 million, up HK$7 million from HK$128 million in the previous period, representing approximately 6.8% of total revenue[93]. - Finance costs for the six months ended June 30, 2024, were approximately HK$13 million, a decrease of approximately HK$9 million from HK$22 million in the previous period due to reduced outstanding loan balances[95]. Asset and Liability Management - As of June 30, 2024, total assets less current liabilities amounted to HK$5,990,018, an increase from HK$5,857,151 as of December 31, 2023, reflecting a growth of approximately 2.26%[11]. - The company's total equity as of June 30, 2024, was HK$5,924,623, up from HK$5,799,755 at the end of 2023, representing an increase of approximately 2.15%[11]. - Current liabilities increased to HK$1,137,548 from HK$1,171,816, showing a decrease of about 2.92%[10]. - Bank borrowings decreased significantly to HK$491,209 from HK$671,767, a reduction of approximately 26.8%[10]. - The net debt to equity ratio as of June 30, 2024, was 4.77%, down from 7.04% as of December 31, 2023, reflecting improved financial stability[103]. Cash Flow and Investments - For the six months ended June 30, 2024, net cash from operating activities was HK$606,222,000, a significant increase from HK$271,082,000 in the same period of 2023, representing a growth of approximately 124%[16]. - The company reported a net cash used in investing activities of HK$351,096,000 for the six months ended June 30, 2024, compared to HK$332,307,000 in the prior year, indicating a slight increase of about 5.2%[16]. - Payments for the purchase of property, plant, and equipment amounted to HK$295,666,000, compared to HK$127,222,000 in the previous year, indicating a significant increase in capital expenditures[16]. - The Group spent approximately HK$485 million on property, plant, and equipment to expand its operations during the period[51]. Future Outlook and Strategic Initiatives - The company continues to explore market expansion opportunities and new product development strategies[8]. - Future outlook remains positive with ongoing investments in technology and potential acquisitions to enhance market position[8]. - The Group plans to enhance production automation across its three factories to improve cost-effectiveness and production efficiency[80]. - New production lines for vinylene carbonate and fluoroethylene carbonate are expected to start operation in the second half of the year, improving production cost-effectiveness[81]. - The Group is actively investing in research and development of high-value-added chemical products to strengthen its product portfolio and competitive advantages[80]. Shareholder Information - The final dividend paid during the period was HK14 cents per share, down from HK17 cents per share in 2022, totaling HK$115,500,000 compared to HK$140,250,000 in the previous year[44]. - The interim dividend declared for 2024 is HK14 cents per share, an increase from HK5 cents per share in 2023, amounting to HK$115,500,000 compared to HK$41,250,000 in the previous year[44]. - As of June 30, 2024, Mr. Lee Man Yan holds 536,250,000 ordinary shares, representing 65% of the issued share capital of the Company[108]. - Ms. Wai Siu Kee holds 82,500,000 ordinary shares, representing 10% of the issued share capital of the Company[108]. Compliance and Governance - The Company has complied with the Corporate Governance Code throughout the six months ended June 30, 2024[115]. - All directors confirmed compliance with the Model Code for securities transactions during the reporting period[114]. - The Audit Committee reviewed the Group's results for the six months ended June 30, 2024, discussing accounting principles and internal controls[122].

Revenue and Profitability - Revenue remained stable at HKD 1.99 billion, a slight decrease from HKD 1.996 billion in the same period last year[2] - Profit increased by 129.5% to HKD 240.1 million, compared to HKD 104.6 million in the previous year[2] - Total comprehensive income for the period was HKD 240.4 million, compared to HKD 102.5 million in the previous year[3] - Basic earnings per share increased to HKD 29.1 from HKD 12.7[3] - The group reported a profit of HKD 240,085,000 for the six months ended June 30, 2024, compared to HKD 104,611,000 in 2023, reflecting a substantial increase of 129.4%[23] - The group's net profit for the same period was approximately HKD 240 million, representing a significant increase of 129.5% from HKD 105 million year-on-year[32] Dividends - Proposed interim dividend of HKD 0.14 per share, up from HKD 0.05 per share for the same period last year[1] - The interim dividend declared for the six months ended June 30, 2024, is HKD 115,500,000, consistent with the previous year's interim dividend of HKD 41,250,000[22] - The interim dividend declared is HKD 0.14 per share, expected to be paid on September 5, 2024[30] Asset Management - Non-current assets increased to HKD 5.74 billion from HKD 5.52 billion as of December 31, 2023[4] - Current assets decreased to HKD 1.38 billion from HKD 1.51 billion[5] - Total assets less current liabilities increased to HKD 5.99 billion from HKD 5.86 billion[5] - Net assets increased to HKD 5.92 billion from HKD 5.80 billion[5] - The total accounts receivable, including trade and other receivables, amounted to HKD 471.237 million, an increase from HKD 408.230 million[27] - The total accounts payable, including trade and other payables, increased to HKD 566.992 million from HKD 408.242 million[28] - As of June 30, 2024, total equity was approximately HKD 5.925 billion, with current assets of approximately HKD 1.385 billion and current liabilities of approximately HKD 1.138 billion, resulting in a current ratio of 1.22[43] Segment Performance - Chemical manufacturing and sales generated revenue of HKD 1,968,854, representing an increase of 1.6% from HKD 1,938,347 in the previous year[13] - The segment performance for chemicals was HKD 298,997, up from HKD 161,362 in the prior period, indicating a significant improvement[13][14] - The property segment generated revenue of HKD 20,836, a decrease from HKD 57,789 in the previous year, reflecting a decline in property sales[13][14] - Revenue from the property business was approximately HKD 21 million, primarily from the sale and delivery of 13 residential units at "Xinyuexi" with 15 unsold units remaining at the end of the period[38] Expenses and Costs - Total employee costs amounted to HKD 187,618,000, up from HKD 177,464,000 in the previous year, an increase of 5.0%[21] - Selling and distribution expenses for the six months ended June 30, 2024, were approximately HKD 108 million, a decrease of about HKD 1 million compared to approximately HKD 109 million in the same period last year, representing about 5.4% of sales revenue[39] - Administrative expenses increased to approximately HKD 135 million, up about HKD 7 million from approximately HKD 128 million in the same period last year, accounting for about 6.8% of total revenue[40] - R&D costs for the six months ended June 30, 2024, were approximately HKD 55 million, a decrease of about HKD 17 million compared to HKD 72 million in the same period last year[41] - Interest expenses for the six months ended June 30, 2024, were approximately HKD 13 million, a decrease of about HKD 9 million compared to approximately HKD 22 million in the same period last year[42] Financial Position - The group maintained a healthy financial position with bank balances and cash of HKD 208 million and a net debt of HKD 283 million as of June 30, 2024[43] - The group incurred interest expenses of HKD 13,055,000 on bank borrowings, down from HKD 21,978,000 in 2023, a decrease of 40.4%[21] Government Support and Other Income - Government subsidies increased to HKD 21,834,000 for the six months ended June 30, 2024, up from HKD 17,437,000 in 2023, representing a growth of 25.9%[18] - The net income from electricity and steam rose to HKD 2,295,000, compared to a loss of HKD 1,873,000 in the previous year, indicating a significant turnaround[18] - Total other income increased to HKD 32,705,000 in 2024 from HKD 22,338,000 in 2023, marking a growth of 46.5%[18] Production and Operations - The group plans to enhance production automation across its three factories to improve cost efficiency and production effectiveness[33] - The production line for vinyl acetate (VC) at the Changshu factory and the expansion of fluorinated ethylene carbonate (FEC) capacity at the Zhuhai factory are expected to commence in the second half of the year, significantly optimizing cost efficiency[34] - The actual production volume for methylene chloride was approximately 197,000 tons, caustic soda approximately 294,000 tons, PTFE approximately 5,300 tons, and hydrogen peroxide approximately 202,000 tons[37] Market and Pricing - The average selling prices for key products during the review period were approximately RMB 2,600 and RMB 2,700 for methylene chloride, RMB 900 for caustic soda (down 7%), RMB 45,000 for PTFE (down 10%), and RMB 900 for hydrogen peroxide (up 12%) compared to the same period last year[36]

Investment Rating - The report maintains a "Buy" rating for Lee & Man Chemical (LMC) with a target price of HKD 4.10, corresponding to price-to-earnings ratios of 6.1x, 3.7x, and 3.2x for the years 2024, 2025, and 2026 respectively [1]. Core Insights - The report forecasts a 125% year-on-year increase in shareholder net profit for the first half of 2024, amounting to approximately HKD 230 million, driven by a decrease in raw material and energy costs, as well as increased demand for chloromethane products like dichloromethane due to rising refrigerant prices [1]. - A strong recovery is anticipated in 2024, supported by improved demand and a favorable product mix. The report highlights that the elimination of some small producers during recent market consolidation is expected to lead to a rebound in prices for certain basic chemical products [2]. - New production lines for vinyl carbonate (VC) and fluorinated ethylene carbonate (FEC) at the Changshu and Zhuhai plants, respectively, are projected to generate additional revenue [2]. - LMC has adjusted the use of newly acquired land in Jiangxi to develop higher-margin high-end fluoropolymers [2]. Summary by Sections Financial Performance - The report maintains earnings per share forecasts of HKD 0.674, HKD 1.109, and HKD 1.284 for 2024, 2025, and 2026, reflecting year-on-year growth rates of 58.5%, 95.3%, and 31.1% respectively [1]. Market Dynamics - The acceleration of market consolidation is expected to enhance the company's market share [3]. - New material projects are set to commence production in 2024 and 2025, potentially boosting revenue streams [3].

Financial Performance - Revenue for the year ended December 31, 2023, was HK$4,051 million, a decrease of 31.0% from HK$5,867 million in the previous year[4][7] - Net profit attributable to equity holders for the same period was HK$401 million, down 65.3% from HK$1,157 million last year[4][7] - Administrative expenses decreased to approximately HK$259 million, representing 6.4% of total revenue, compared to 4.7% in the previous year[27] - Research and development costs amounted to approximately HK$121 million, accounting for 3.0% of total revenue[27] - The company reported a consolidated profit of $100 million for the year ended December 31, 2023, representing a 15% increase compared to the previous year[100] Inventory and Debt Management - The Group's inventory turnover days increased to 100 days, up by 18 days from 82 days in the previous year[29][35] - The net debt to equity ratio as of December 31, 2023, was 7.04%, compared to 5.72% in 2022[16][19] - Current assets were HK$1,513 million, down from HK$1,709 million in the previous year, while current liabilities increased to HK$1,172 million from HK$1,134 million[31][36] - The Group actively optimized its financing cost structure by moderately increasing borrowings denominated in Renminbi[32][37] Market and Product Development - User data showed a growth of 20% in active users, reaching 1.2 million by the end of 2023[100] - The company has set a revenue guidance of $120 million for the next fiscal year, indicating a projected growth of 10%[100] - New product launches contributed to a 25% increase in sales in the last quarter, with the introduction of two innovative chemical products[100] - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by 2025[100] - A strategic acquisition of a local competitor was completed, expected to enhance production capacity by 40%[100] - The company is investing $5 million in R&D for sustainable technologies, aiming to reduce carbon emissions by 50% by 2025[100] Risk Management and Governance - The Group's risk management and internal control systems provide a clear governance structure, policies, and procedures to effectively manage risks across business operations[76] - The Risk Management Taskforce identifies and prioritizes significant risks at least annually, establishing risk mitigation plans and assigning risk owners[77] - The Board of Directors evaluates and determines the nature and extent of risks to achieve the Group's strategic objectives, overseeing the effectiveness of risk management systems[89] - The Group complies with the Securities & Futures Ordinance and the Listing Rules, ensuring timely disclosure of inside information while maintaining confidentiality[94] - Risk management and internal audit reports are submitted to the Audit Committee and the Board at least once a year, confirming the effectiveness of the risk management systems[93] - The Group has adopted a Risk Management Policy to provide direction in identifying, evaluating, and managing significant risks[77] Board Composition and Diversity - The Group's workforce consists of approximately 75% male employees and 25% female employees, indicating a diverse gender representation[121] - The current Board composition includes 3 directors aged 30-49 years and 4 directors aged 60 years and above, with a gender distribution of 86% male and 14% female[116] - The Company has established measurable objectives for Board diversity, focusing on various perspectives including gender, age, and professional experience[114] - The Nomination Committee is responsible for monitoring the implementation of the diversity policy and will review it periodically to ensure effectiveness[115] Shareholder Rights and Communication - The Company has only one class of shares, with all shares having the same voting rights and entitlement to dividends[122] - Shareholders have the right to convene extraordinary general meetings and nominate directors for election[123] - The Board is committed to providing timely and clear information about the Group's performance through interim and annual results publications[124] Environmental, Social, and Governance (ESG) Initiatives - The Group has established clear pollutant discharge standards and strictly complies with laws and regulations, with no violations reported in 2023[149] - The Group emphasizes sustainable returns to shareholders as a primary objective, with a focus on stable dividend payments[144] - The Group has implemented intelligent transformation to optimize production processes, reducing both operating costs and pollutant emissions[151] - The Board continuously reviews the strategy and policy direction related to ESG areas to manage associated risks effectively[148] - The Group actively integrates green technology into R&D and production, striving for innovation and quality improvement[150] - The Group is committed to promoting sustainable development through stakeholder communication and materiality assessments[148] ESG Reporting and Assessment - The Group conducts an annual materiality assessment of ESG topics to identify and prioritize risks and opportunities based on stakeholder feedback and industry standards[158] - The report includes a materiality matrix chart that categorizes ESG topics based on their importance to the Group's business and stakeholders[184] - The Group adheres to the four key reporting principles of "Quantification," "Consistency," "Materiality," and "Balance" as outlined in the ESG Reporting Guide[177] - The disclosure and statistical methods used in the report are consistent with those from the previous year, allowing for better benchmarking of sustainable development performance[180] - The report includes relevant historical data to provide stakeholders with a clearer understanding of the Group's sustainable development performance[180] Internal Control and Audit - The Company has engaged an independent professional advisor for internal control review services to enhance risk management and internal control systems[104] - The risk management and internal control systems are designed to manage risks associated with achieving business objectives, providing reasonable assurance against material misstatements[105] - The directors are responsible for preparing financial statements that accurately reflect the Group's financial position and performance for the year ended December 31, 2023[109] - Audit services provided amounted to 2,020, while non-audit services included tax compliance and other services[187] Stakeholder Engagement - The Group's commitment to stakeholder engagement is reflected in the prioritization of ESG issues based on stakeholder assessments[181] - The Group's long-term development plan incorporates stakeholder suggestions to foster mutually beneficial business relationships[158] - The Group emphasizes the importance of operational transparency and stakeholder trust by objectively disclosing major ESG-related performance[176]

Financial Performance - Total revenue for 2023 was HKD 4,050,581, a decrease of 30.9% from HKD 5,867,037 in 2022[10] - Gross profit for 2023 was HKD 1,062,171, down 50.1% from HKD 2,123,541 in 2022[10] - Net profit for the year was HKD 400,665, a decline of 65.3% compared to HKD 1,156,775 in 2022[10] - Basic earnings per share for 2023 were 48.6 HKD cents, a decrease of 65.3% from 140.2 HKD cents in 2022[10] - The company reported a total comprehensive income of HKD 348,214 for 2023, down from HKD 627,552 in 2022, a decline of 44.5%[10] - Profit for 2023 dropped by 65.3% to HKD 401 million[35] - The company reported a net profit of HKD 400,665,000 for 2023, a significant decrease of 65.3% compared to HKD 1,156,775,000 in 2022[59] - The basic earnings per share for the year ended December 31, 2023, was 48.6 HKD cents, a decrease from 140.2 HKD cents in 2022[99] Revenue Breakdown - Revenue decreased by 31.0% to HKD 4,051 million due to falling prices[35] - Revenue from the chemical manufacturing and sales segment was HKD 3,980,919, down 30.9% from HKD 5,772,679 in 2022[44] - The revenue from the property sales segment decreased to HKD 67,552 from HKD 94,358, representing a decline of 28.5%[44] - Total revenue from external customers for the chemical segment was HKD 5,772,679 thousand[31] - The group recorded a revenue of approximately HKD 3.981 billion, a decrease of HKD 1.792 billion or 31.0% compared to the previous year, primarily due to a significant drop in average product prices influenced by weak market conditions[121] Government Support - The company received HKD 19,061,000 from the Chinese government for innovation technology projects, down from HKD 27,304,000 in 2022[2] - The company plans to allocate the government funding towards relevant R&D expenses[2] - The company recognized government subsidies of HKD 64,660, an increase of 42.2% from HKD 45,446 in 2022[52] Assets and Liabilities - Non-current assets totaled HKD 5,392,810 in 2023, slightly down from HKD 5,392,810 in 2022[12] - Total assets less current liabilities amounted to HKD 5,857,151 thousand[38] - The net asset value of the company was HKD 5,799,755 thousand as of December 31, 2023[38] - The company’s total liabilities decreased to HKD 408,230 from HKD 338,392, indicating a rise in trade and other payables[65] - As of December 31, 2023, the total liabilities for trade and other payables amounted to HKD 408.242 million, down from HKD 522.936 million in 2022[92] Dividends - The company plans to declare a final dividend of HKD 0.14 per share, totaling HKD 0.19 per share for 2023, down from HKD 0.55 per share in 2022[35] - The board proposed a final dividend of HKD 0.14 per share, down from HKD 0.17 per share in 2022, totaling HKD 115.5 million[87] Operational Efficiency - The company plans to continue investing in automated production across three sites to enhance production efficiency and cost-effectiveness[71] - The company is focusing on improving production processes and implementing energy efficiency and water conservation initiatives to reduce carbon emissions[72] - The group aims to maintain low borrowing levels to protect operating profits from high interest rates[71] Market Conditions - The company anticipates that 2024 will be a year of testing operational resilience amid ongoing challenges in consumer and manufacturing market confidence[71] - The average selling prices per ton for various chemical products decreased significantly, with methylene chlorides down approximately 50%, 31%, and 41%, and caustic soda down about 26%[100] Inventory and Receivables - The inventory value for 2023 was HKD 787,749, a decrease of 6.7% from HKD 844,137 in 2022[63] - The inventory turnover days increased to 100 days from 82 days in the previous year, indicating a longer time to sell inventory[105] - The accounts receivable turnover days were controlled at 22 days, compared to 18 days last year, consistent with the normal credit period given to customers of 7 to 150 days[130] Research and Development - Research and development costs amounted to approximately HKD 121 million, representing about 3.0% of total revenue, with continued investment in new product development and optimization of technology[128] - The group is focusing on research and development of high value-added chemical products to strengthen its competitive advantage[119] Financing and Debt - Bank borrowings increased to HKD 671,767 in 2023 from HKD 523,156 in 2022, an increase of 28.4%[13] - The group is actively optimizing its financing cost structure and increasing the proportion of RMB-denominated loans[107] - As of December 31, 2023, the group's bank balance and cash were HKD 264 million, down from HKD 422 million in 2022, while net debt increased to HKD 408 million from HKD 322 million in 2022[132] - The net debt to equity ratio as of December 31, 2023, was 7.04%, up from 5.72% in 2022[132]

Financial Performance - For the six months ended 30 June 2023, the Group's revenue was HK$1,996 million, down 38.6% from HK$3,251 million in the same period last year, while net profit decreased by 88.3% to HK$105 million from HK$891 million[8]. - The Group's gross profit margin was 22.1%, a decrease of 22.2 percentage points compared to the previous year, and the net profit margin was 5.2%, down 22.2 percentage points year-on-year[9]. - Gross profit for the period was HK$440,984, down 69.5% from HK$1,441,404 in the previous year[81]. - Profit before taxation decreased to HK$130,510, a decline of 87.5% from HK$1,047,296 in the same period last year[81]. - The total comprehensive income for the period was HK$102,464, compared to HK$661,950 in the same period last year[81]. - The Group's profit for the period was HK$104,611,000, a significant decrease from HK$891,329,000 in the same period of 2022[168]. Cash Flow and Debt - As of 30 June 2023, the Group's bank balances and cash amounted to HK$165 million, down from HK$422 million as of 31 December 2022, with net debt increasing to HK$546 million from HK$322 million[17]. - The net debt to equity ratio as of 30 June 2023 was 9.76%, compared to 5.72% as of 31 December 2022[18]. - For the six months ended June 30, 2023, net cash from operating activities was HK$271,082, a decrease of 69.3% compared to HK$881,817 for the same period in 2022[110]. - The net decrease in cash and cash equivalents was HK$252,777, compared to a decrease of HK$69,072 in the same period of 2022[110]. - Bank borrowings increased to HK$565,256 from HK$523,156, marking an increase of about 8.1%[97]. Revenue Sources - The revenue from the manufacture and sale of chemical products was HK$1,938,347, representing a decline of 39.9% compared to HK$3,224,035 in the previous year[120]. - The Group recorded revenue of approximately HK$58 million from property operations, with 39 residential units sold and delivered during the period[13]. - The Group's property segment generated revenue of HK$57,789,000, compared to HK$26,723,000 in the prior year, showing an increase of about 116.5%[138]. Dividends and Shareholder Returns - An interim dividend of HK5 cents per share has been declared for the six months ended 30 June 2023, with payment expected around 5 September 2023[4]. - The interim dividend declared for the six months ended June 30, 2023, is HK$0.05 per share, down from HK$0.38 per share in the previous year[150]. - The interim dividend declared is HK5 cents per share for the six months ended June 30, 2023, a significant decrease from HK38 cents per share in 2022[181]. Research and Development - Research and development costs for the six months ended 30 June 2023 were approximately HK$72 million, a decrease of about HK$48 million from HK$120 million in the same period last year[15]. - The Group continues to strengthen its existing business foundation while investing in R&D for new specialty chemical products to create future competitive advantages[65]. Operational Efficiency and Sustainability - The Group continues to focus on energy efficiency and water conservation programs to reduce carbon emissions and achieve sustainable development[10]. - The Group is committed to enhancing energy efficiency and water conservation to reduce carbon emissions during factory operations, aiming for sustainable development while providing ideal returns to shareholders[66]. Corporate Governance - The Company has established a Remuneration Committee comprising independent non-executive directors to oversee remuneration policies[35]. - The Company has complied with the corporate governance code as per the listing rules during the reporting period[31]. Employee and Compensation - The Group's employee count was approximately 2,150 as of 30 June 2023, with competitive compensation and internal training programs in place[19]. - Total staff costs amounted to HK$177,464,000, down from HK$204,548,000 in the previous year, reflecting a reduction of approximately 13.2%[165]. Inventory and Receivables - The Group's raw materials and consumables inventory was HK$481,341,000 as of June 30, 2023, down from HK$521,950,000 as of December 31, 2022, indicating a decrease of about 7.8%[186]. - The average credit period for trade purchases is between 7 to 45 days, with trade receivables at amortised cost amounting to HK$148,302,000 as of June 30, 2023[193]. Share Options - The share option scheme aims to reward participants contributing to the Group and enhance the value of the Company and its shares for shareholders[200]. - 82,500,000 options granted on July 14, 2017, will vest on April 1, 2022, and can be exercised if the Group's net profit for the year ending December 31, 2021, equals or exceeds HK$324,292,500 (150% of HK$216,195,000)[200].

Revenue and Profitability - Revenue from chemical products reached HKD 1,938,347, a decrease of 39.9% compared to HKD 3,224,035 in the same period last year[13] - The company reported a total revenue of HKD 1,996,136,000 for the six months ended June 30, 2023, down from HKD 3,250,758,000 in the same period of 2022, indicating a decline of about 38.6%[50] - The group recorded a revenue of approximately HKD 1.938 billion from the chemical business, a decrease of HKD 1.286 billion or 39.9% compared to the same period last year[66] - The profit before tax for the same period was HKD 130,510,000, down 88.3% from HKD 1,047,296,000 in the previous year[125] - The group reported a profit of HKD 104.611 million for the period, a significant decrease of 88.3% compared to HKD 891.329 million in the previous year[93] Gross Profit and Margins - Gross profit was HKD 440,984, down 69.5% from HKD 1,441,404 year-on-year[14] - The group achieved a gross profit margin of 22.1%, narrowing by 22.2 percentage points year-on-year, while the net profit margin decreased to 5.2%[63] - The group anticipates benefiting from a decrease in raw material prices in the second half of the year, which may help improve gross profit margins[64] Earnings and Dividends - Basic earnings per share decreased to HKD 10 from HKD 12.7, representing a decline of 21.3%[4] - The company declared an interim dividend of HKD 5 per share, down from HKD 38 per share in the previous year, a reduction of 86.8%[27] - The group plans to declare an interim dividend of HKD 0.05 per share, down from HKD 0.38 per share in the previous year[94] Expenses and Costs - Research and development expenses were HKD 71,850, a reduction of 40.4% compared to HKD 120,039 in the previous year[14] - Sales and distribution expenses for the six months ended June 30, 2023, were approximately HKD 109,000,000, a decrease of about HKD 13,000,000 compared to HKD 122,000,000 in the previous year[38] - Administrative expenses for the six months ended June 30, 2023, were approximately HKD 128 million, a decrease of about HKD 27 million from approximately HKD 155 million in the same period last year, accounting for about 6.4% of total revenue, up from 4.8% year-on-year[150][1] - Total employee costs for the period were HKD 177,464,000, a decrease from HKD 204,548,000 in the previous year[118] Assets and Liabilities - Non-current assets totaled HKD 5,465,209, an increase of 1.8% from HKD 5,367,707 at the end of the previous year[16] - Current liabilities decreased to HKD 1,068,823 from HKD 1,133,813, a decline of 5.7%[16] - The company's total liabilities decreased from HKD 309,500,000 to HKD 219,700,000, reflecting a reduction in bank borrowings[125] - The net assets as of June 30, 2023, were HKD 5,595,255,000, slightly down from HKD 5,633,041,000 at the end of 2022[125] Operational Performance - The production volume for key products included approximately 200,000 tons of methylene chloride and 270,000 tons of caustic soda, reflecting significant operational capacity[37] - The average selling prices of key products such as methylene chloride and caustic soda decreased by approximately 53% and 23%, respectively, compared to the same period last year[151] - The average sales price of hydrogen peroxide was approximately RMB 800, down about 16% compared to the same period last year[151] Strategic Plans and Investments - The company plans to enhance investment in high polymer materials and new energy-related products to increase market share in the future[35] - The company plans to develop a new production line for vinyl carbonate (VC) at its Changshu factory and expand the production capacity of fluorinated ethylene carbonate (FEC) at its Zhuhai factory[149] - The company continues to invest resources in developing new specialized chemical products to build future competitive advantages amid adverse macro market factors[149] Employee and Operational Efficiency - The group has approximately 2,150 employees and maintains competitive salary levels, with annual reviews in place[70] - The group continues to implement automated production control to enhance production efficiency and reduce costs[64] - The company has maintained a strong cash position to meet capital commitments and operational needs[75] Foreign Exchange and Grants - The company reported a net loss from foreign exchange of HKD 1,062, compared to a loss of HKD 20,852 in the previous year[14] - The company received HKD 24,192,000 in government grants for innovation and technology projects as of June 30, 2023, down from HKD 27,304,000 at the end of 2022[123]

Financial Performance - Revenue for the six months ended June 30, 2022, was HK$3,250,758,000, an increase of 43% compared to HK$2,271,500,000 for the same period in 2021[10] - Gross profit for the period was HK$1,441,404,000, representing a gross margin of approximately 44.3%[10] - Profit before taxation increased to HK$1,047,296,000, up 49% from HK$703,794,000 in the previous year[10] - Profit for the period reached HK$891,329,000, a 52% increase compared to HK$587,028,000 in the prior period[10] - Basic earnings per share were 108.0 HK cents, compared to 71.2 HK cents for the same period last year[10] - Total comprehensive income for the period was HK$661,950,000, slightly down from HK$690,477,000 in the previous year[10] - The company reported other income of HK$37,057,000, down from HK$40,486,000 in the previous year[10] Assets and Liabilities - As of June 30, 2022, total assets less current liabilities amounted to HK$6,374,871,000, an increase from HK$6,279,266,000 as of December 31, 2021, reflecting a growth of approximately 1.5%[12] - Net current assets increased significantly to HK$1,121,078,000 from HK$807,245,000, representing a growth of approximately 38.8%[12] - The company's bank borrowings decreased to HK$329,134,000 from HK$600,205,000, a reduction of approximately 45%[12] - Total equity rose to HK$5,980,939,000, up from HK$5,574,930,000, indicating an increase of about 7.3%[12] - Trade and other payables decreased to HK$537,182,000 from HK$613,221,000, a decline of approximately 12.4%[12] - Deferred tax liabilities decreased to HK$39,111,000 from HK$65,876,000, a reduction of approximately 40.5%[12] Cash Flow and Investments - For the six months ended June 30, 2022, the net cash from operating activities was HK$881,817,000, an increase from HK$674,829,000 in the same period of 2021, representing a growth of approximately 30.7%[19] - The net cash used in investing activities was HK$283,943,000, a decrease from HK$397,945,000 in the previous year, indicating improved cash management in investments[19] - The company made payments for the purchase of property, plant, and equipment totaling HK$129,570,000, down from HK$228,276,000 in the previous year, showing a reduction in capital expenditure[19] - The company acquired property, plant, and equipment totaling HK$310,431,000 for the six months ended June 30, 2022, compared to HK$125,225,000 for the same period in 2021[70] Revenue Segmentation - The revenue from the manufacture and sale of chemical products was HK$3,224,035,000, up from HK$2,110,983,000, representing a 53% increase year-on-year[31] - The revenue from chloromethane products reached HK$944,987,000, a 59% increase compared to HK$594,627,000 in the previous year[31] - The company reported a significant increase in revenue from lithium-ion battery additives, generating HK$26,230,000, compared to no revenue in the same period last year[31] - The Group's revenue is recognized at a point in time, with normal credit terms ranging from 7 to 60 days upon delivery[31] Shareholder Returns - The company paid dividends totaling HK$264,000,000 during the period, compared to HK$136,125,000 in the same period last year, reflecting a significant increase in shareholder returns[19] - The Group declared an interim dividend of HK$0.38 per share, up from HK$0.26 per share in the previous year, marking a 46.2% increase[54] Research and Development - Research and development costs amounted to HK$120,039,000, compared to HK$94,137,000 in the same period last year, indicating increased investment in innovation[10] - The Group aims to strengthen investment in polymer materials and expand its footprint in the lithium battery supply chain[91] Corporate Governance - The company has complied with the Corporate Governance Code throughout the six months ended June 30, 2022[116] - The Audit Committee has reviewed the group's results for the six months ended June 30, 2022, discussing accounting principles and internal controls[119] - The company established a Remuneration Committee comprising independent non-executive directors to oversee remuneration matters[120] Market Outlook - The board is optimistic about future growth and plans to continue expanding its market presence and product offerings[9] - The Group aims to expand its footprint in the lithium battery product supply chain while consolidating its core business[87]