Debt Restructuring - The debt restructuring plan includes the transfer of loans from four major banks, with the total principal amount owed to Agricultural Bank of China being approximately RMB 1,400,000,000, of which RMB 1,100,000,000 is owed by the group [3]. - The group plans to repurchase the transferred loans for approximately RMB 1,500,000,000 to RMB 1,600,000,000, with discussions still in early stages and no final agreements reached [5]. - The expected completion date for the full repurchase of transferred loans is between the end of 2023 and the first half of 2024 [7]. - The principal amount owed to China Construction Bank is approximately RMB 1,983,500,000, which has been transferred for about RMB 583,600,000 [4]. - The principal amount owed to the Export-Import Bank is approximately RMB 1,184,300,000, transferred for about RMB 356,000,000 [4]. - The group anticipates that the unpaid amount for the repurchased loans will be settled by the end of 2025 [7]. - The group is exploring various funding possibilities to advance the debt restructuring plan with potential investors expressing interest [5]. Loan Details - The total outstanding principal amount of loans as of January 31, 2023, is approximately RMB 1,326,300,000, with RMB 834,800,000 intended to be financed through ongoing business operations and future cash flows [7]. - The group has a remaining land and building value of approximately RMB 524,700,000, which is mortgaged as collateral for the repurchased loans [5]. - The outstanding amount for the repurchased loans is expected to be settled using proceeds from the sale of related properties [5].

Financial Performance - The company recorded a significant increase in net loss for the year due to the absence of one-time debt restructuring gains from the previous year, resulting in a net loss of approximately 1,519.6 million HKD[10]. - The company's consolidated revenue decreased by approximately 50.1% to around HKD 372.3 million, down from HKD 746.6 million in 2021[30]. - The gross profit also saw a significant decline of about 28.5%, amounting to HKD 34.6 million compared to HKD 48.4 million in the previous year[30]. - Other income and gains decreased by approximately 97.8% to about HKD 30.9 million, primarily due to the absence of a one-time debt restructuring gain recorded in 2021[40]. - Losses from Da Cheng Sugar and a non-wholly owned subsidiary amounted to approximately HKD 212.5 million, leading to a loss attributable to non-controlling interests of about HKD 76.5 million[45]. - The group recorded a net loss of approximately HKD 1,519.6 million for the year, compared to a loss of HKD 435.4 million in 2021, resulting in a net liability of approximately HKD 7,787.1 million[85]. Operational Challenges - The company's production activities were disrupted for two months due to pandemic control measures in Shanghai, affecting overall production and logistics[9]. - The upstream facilities were largely non-operational for most of the year, with a production resumption in December 2022[23]. - The global corn production for the 2022/23 season is estimated at 1,151.4 million tons, a decrease from 1,216 million tons in the previous season, impacting the company's upstream corn refining business[15]. - The revenue from the corn sweetener segment decreased by approximately 50.6% to about HKD 359.6 million (2021: HKD 727.3 million), primarily due to a sales volume drop of about 52.2% to approximately 85,000 tons (2021: 178,000 tons)[50]. Strategic Plans and Restructuring - The amino acid production line successfully resumed operations, and the restructuring plan with Da Cheng Sugar Industry is expected to significantly improve the company's financial situation[11]. - The company anticipates that after completing the restructuring plans, its business operations will gradually return to normal, facilitating strategic cooperation with third-party investors[12]. - The management is focused on debt restructuring plans to significantly improve the company's financial situation[27]. - The company plans to sell approximately 47% of its issued share capital in a subsidiary, which will improve its financial condition post-transaction[24]. - The company announced a proposed restructuring of Da Cheng Sugar, including the issuance of convertible bonds totaling RMB 120 million[37]. Market Conditions - Domestic corn production in China for the 2022/23 season is projected to be approximately 277.2 million tons, with consumption expected to be 286.6 million tons[15]. - The international corn price peaked at 818 cents per bushel in April 2022, influenced by the Ukraine war, but fell to 678.5 cents per bushel by the end of 2022[15]. - China's corn price increased to 2,816 RMB per ton by the end of 2022, compared to 2,734 RMB per ton at the end of 2021, due to high prices and economic slowdown[15]. - The average selling price of sweetener products increased, leading to a gross margin growth of 2.8 percentage points to 9.3% from 6.5% in 2021[30]. Cost Management - Sales and distribution costs decreased by 37.5% to approximately HKD 39.7 million, accounting for about 10.7% of the group's revenue[41]. - Administrative expenses decreased by 12.0% to approximately HKD 328.2 million, mainly due to effective cost control measures[42]. - Other expenses decreased by 14.2% to approximately HKD 545.2 million, primarily due to the release of financial guarantee liabilities[43]. - Financial costs decreased by 8.1% to approximately HKD 726.2 million, attributed to agreements reached with creditors[44]. Governance and Management - The company has established a robust mechanism to ensure strong independence of the board, which is reviewed annually for effectiveness[184]. - The audit committee, composed entirely of independent non-executive directors, held three meetings during the year to oversee financial reporting and risk management[174]. - The company has implemented a clear governance structure, including the establishment of various committees to enhance operational efficiency[196]. - The board meets at least four times a year to discuss overall strategy, operational and financial performance, and other significant matters[160]. Human Resources - The group employed approximately 3,500 full-time employees as of December 31, 2022, down from 3,700 in 2021[117]. - Employee costs, including director remuneration, amounted to approximately HKD 274,033,000 in 2022, compared to HKD 272,259,000 in 2021[117]. - The company emphasizes the importance of human resources management as a source of competitive advantage in a volatile environment[117]. - The company recognizes employee contributions and strives to maintain competitive compensation and career development opportunities[117].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何 部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 GLOBAL BIO-CHEM TECHNOLOGY GROUP COMPANY LIMITED 大 成 生 化 科 技 集 團 有 限 公 司 * （於開曼群島註冊成立的有限公司） （股份代號：00809） 截至 年 月 日止年度 2022 12 31 全年業績公告 財務概要 2022年 2021年 變動% 收益（百萬港元） 372.3 746.6 (50.1) 毛利（百萬港元） 34.6 48.4 (28.5) 本年度虧損（百萬港元） (1,519.6) (435.4) 不適用 本公司擁有人應佔虧損（百萬港元） (1,443.1) (400.8) 不適用 每股基本虧損（港仙） (16.2) (4.5) 不適用 擬派每股末期股息（港仙） — — 不適用 ...

Financial Performance - Revenue for the first half of 2022 was HKD 155.6 million, a decrease of 56.8% compared to HKD 359.9 million in the same period of 2021[4] - Gross profit for the first half of 2022 was HKD 11.7 million, down 23.0% from HKD 15.2 million in the previous year[4] - The company reported a net loss of HKD 829.2 million for the first half of 2022, compared to a profit of HKD 506.3 million in the same period of 2021[4] - The group's consolidated revenue decreased by approximately 56.8% to around HKD 155.6 million, down from HKD 359.9 million in 2021[28] - The group recorded a net loss of approximately HKD 829.2 million, compared to a profit of HKD 506.3 million in 2021[30] - The total comprehensive loss for the period was HKD 603,276,000, compared to a total comprehensive income of HKD 446,225,000 for the same period in 2021[104] - Basic and diluted loss per share for the period was HKD 8.8, compared to earnings of HKD 5.7 and HKD 3.9 per share in the same period of 2021[104] - The company reported a loss before tax of HKD 829,241,000 for the six months ended June 30, 2022, compared to a profit of HKD 506,275,000 in the same period of 2021[104] Operational Challenges - The company’s amino acid production facilities remain idle due to upstream supply chain issues, impacting cost-effectiveness[11] - The Shanghai sweetener production facility was temporarily shut down for about two months starting in April 2022 due to COVID-19 lockdowns[11] - The overall economic environment in China remains challenging, with logistics disruptions and rising costs impacting production and business activities[10] - The company anticipates ongoing challenges in the operating environment due to high commodity prices and energy costs, alongside geopolitical uncertainties[26] - The management expects the impact of COVID-19 to continue affecting the operating environment, leading to uncertainty in business operations[83] - The company has gradually resumed operations at its Shanghai production facilities since June 2022 after the lifting of lockdown measures[85] Debt and Financial Restructuring - The company is progressing with its debt restructuring plan, with expectations to complete part of it by the end of the year[15] - The company is actively negotiating with local authorities regarding compensation for land acquisition, which will provide necessary funds for debt repayment and cash flow needs[12] - The company is actively negotiating with banks and creditors regarding a debt restructuring plan to improve its financial situation[130] - The group is actively negotiating a debt restructuring plan with banks and creditors to improve its financial condition, with an expected completion by the end of 2022[134] - The company has received a preservation order from the Shenyang Intermediate Court to secure bank balances equivalent to the outstanding principal and interest owed to Bank of China Jinzhou Branch, totaling RMB 55,518,460.06[91] Market Conditions and Commodity Prices - High corn prices are expected to continue affecting the company's operational efficiency and business performance[14] - International corn prices reached $8.18 per bushel in April 2022, equivalent to RMB 2,129 per ton, and were $7.44 per bushel (RMB 1,962 per ton) by June 30, 2022[20] - China's domestic corn price increased to RMB 2,827 per ton by June 30, 2022, compared to RMB 2,790 per ton a year earlier[20] - The company anticipates significant improvement in its financial condition following the completion of the debt restructuring plan[134] Employee and Governance - As of June 30, 2022, the group employed approximately 3,600 full-time employees, a decrease from 3,700 as of December 31, 2021[64] - Employee benefits expenditure (excluding directors' remuneration) was approximately HKD 116.9 million for the period, down from HKD 153.2 million in 2021[64] - The board did not recommend any dividend distribution for the current period, consistent with the previous period[66] - The company has adhered to all corporate governance codes as outlined in the listing rules during the reporting period[74] Future Plans and Investments - The company plans to maintain competitiveness through internal R&D and diversification of product offerings while implementing a debt restructuring plan[62] - The company is exploring the potential for restructuring its product portfolio to include high-value products in response to market demand changes[24] - The company plans to relocate production facilities to the Xinglongshan area, with adjustments made to the relocation plan due to market conditions and funding availability[86] - The company aims to utilize part of the proceeds from the subscription to partially restore operations at its Xinglongshan plant, which is expected to generate operational cash inflow[87] Financial Position and Liabilities - The company's net liabilities as of June 30, 2022, were HKD (7,304,101,000), an increase from HKD (6,700,825,000) as of December 31, 2021[108] - The company's current liabilities increased to approximately HKD 12.63 billion as of June 30, 2022, compared to HKD 11.44 billion as of December 31, 2021[129] - The total outstanding principal amount for the loans under the Dazheng Biochemical Export-Import Bank Jilin Branch agreement is approximately RMB 648,000,000, along with accrued interest[94] - The total outstanding principal amount owed by the group to the Export-Import Bank is approximately RMB 1,200,000,000, including unpaid interest[95]

Financial Performance - Revenue for 2021 was HKD 746.6 million, a decrease of 12.1% from HKD 848.9 million in 2020[6] - Gross profit for 2021 was HKD 48.4 million, down 34.7% from HKD 74.1 million in 2020[6] - The company reported a significant annual loss of HKD 435.4 million, a reduction of 82.1% compared to a loss of HKD 2,433.3 million in 2020[12] - EBITDA for the year was approximately HKD 783.6 million[12] - The company's consolidated revenue decreased by 12.1% to approximately HKD 746.6 million, down from HKD 848.9 million in the previous year[33] - The gross profit for the year fell by approximately 34.7% to about HKD 48.4 million, with a gross margin decline of 2.2 percentage points to 6.5%[33] - The company recorded a significant reduction in net loss to approximately HKD 435.4 million, compared to HKD 2,433.3 million in the previous year, and EBITDA improved to about HKD 783.6 million from a loss of HKD 1,229.2 million[34] Production and Operations - The lysine production line remained idle throughout the year due to cash flow constraints, despite rising global lysine prices[16] - The sweetener business experienced a decline in gross profit and margin due to insufficient price increases to cover rising raw material and energy costs[16] - The company suspended most production facilities to avoid cash flow losses amid rising raw material costs and supply chain disruptions[12] - The group plans to resume some upstream production lines at the Xinglongshan plant within the year to improve cash flow and support downstream recovery[18] - The upstream business revenue plummeted by approximately 99.7% to about HKD 800,000, with no sales recorded for corn starch, which previously generated HKD 189.1 million[37] - The company plans to continue observing market conditions and adopt a cautious approach before restarting its biochemicals business, focusing on high-value products[32] - The company aims to maintain competitiveness through internal R&D, debt restructuring, and forming strategic alliances for sustainable development[77] - The company will focus on relocating production facilities and adjusting product mix to respond to market changes while improving operational efficiency through continuous R&D[77] Market Conditions - In 2021, China's GDP grew by 8.1%, but the growth rate showed a quarterly decline, indicating economic downward pressure[18] - The Omicron variant impacted business activities in multiple regions of China in Q1 2022, leading to challenges in the operating environment[18] - The anticipated high corn prices in 2022 are expected to continue posing challenges to the company's operating environment[32] - The operating environment remains challenging due to high raw material costs and geopolitical uncertainties affecting business operations[18] Debt and Financial Management - The company continued to focus on debt restructuring discussions with creditors to return to a healthy development track[12] - The group expects further progress on its debt restructuring plan by the end of 2022, which is crucial for restoring financial stability and growth[20] - The company aims to reduce its financial burden by expediting the collection of properties in Changchun and actively negotiating with banks to advance its debt restructuring plan[36] - The company issued convertible bonds totaling HKD 1,086,279,565, convertible into 4,722,954,631 shares at an initial conversion price of HKD 0.23 per share[54] - As of December 31, 2021, total borrowings decreased by approximately HKD 608,300,000 to about HKD 7,501,300,000, while cash and bank balances decreased by approximately HKD 160,900,000 to about HKD 22,300,000[52] Employee and Governance - The group employed approximately 3,700 full-time employees as of December 31, 2021, down from 4,000 in 2020, highlighting a focus on human resource management as a competitive advantage[79] - Employee compensation includes discretionary bonuses based on performance, aligning employee performance with the company's strategy[79] - The company recognizes the value of employee contributions and strives to maintain competitive compensation and career development opportunities[79] - The board consists of six directors, including two executive directors, one non-executive director, and three independent non-executive directors[97] - The company has achieved a diversity policy for its board members, focusing on gender, education, and professional qualifications[108] Risk Management - The company employs a "three lines of defense" approach to manage operational risks, integrating risk management into business processes[173] - The management is responsible for identifying, understanding, and managing risks to minimize, transfer, and avoid them[173] - Financial risks include liquidity risk due to production suspension, with measures such as property seizure to improve cash flow and attracting potential investors for partial recovery[178] - The company faced compliance risks related to loan agreements, with creditors seeking court orders for settlement, but reached agreements and sought legal advice[178] Corporate Governance - The board of directors is responsible for ensuring compliance with corporate governance policies and practices, having reviewed and monitored adherence to relevant regulations[146] - The company has adopted a code of conduct for directors' securities transactions, ensuring compliance with the relevant listing rules[92] - The audit committee, composed of independent non-executive directors, reviews the financial reporting process, risk management, and internal controls, holding three meetings during the year[136] - The company has established various communication channels with shareholders, including annual and interim reports published on the stock exchange and the company website[156] Environmental, Social, and Governance (ESG) - The company has committed to publishing its Environmental, Social, and Governance (ESG) report annually on its website and the stock exchange[186]

Financial Performance - Revenue for the first half of 2021 was HKD 359.9 million, a decrease of 24.9% compared to HKD 479.1 million in the same period of 2020[4] - Gross profit for the first half of 2021 was HKD 15.2 million, down 62.8% from HKD 40.9 million in the first half of 2020[4] - The company recorded a net profit of over HKD 500 million during the first half of 2021, significantly improving from a loss of HKD 902.8 million in the same period of 2020[10] - The company's overall revenue and gross profit decreased by approximately 24.9% and 62.8%, respectively, to about HKD 359.9 million and HKD 15.2 million during the period[29] - The company achieved a net profit of approximately HKD 506.3 million, a significant turnaround from a net loss of HKD 902.8 million in 2020[30] - The company reported a profit of approximately HKD 506.3 million for the six months ended June 30, 2021, compared to a loss of approximately HKD 902.8 million for the same period in 2020[138] - Total comprehensive income for the period was HKD 446,225,000, compared to a loss of HKD 857,557,000 in the prior year, marking a substantial improvement[115] Debt and Financial Restructuring - The company successfully completed the first phase of its debt restructuring plan in the first quarter of 2021, aiming to improve its overall financial condition[11] - The company recorded a one-time debt restructuring gain of approximately HKD 1.325 billion from agreements completed on March 31, 2021[30] - The company is negotiating with creditors to alleviate interest burdens and lay the foundation for gradual production recovery[12] - The company is actively negotiating debt restructuring plans with banks and creditors to improve its financial condition[139] - The group expects to complete the debt restructuring plan for loans transferred from Agricultural Bank of China and Construction Bank by the end of 2021, pending approvals from relevant creditors and local government agencies[142] Production and Operations - The company continued to suspend most of its production operations in the first half of 2021 to reduce cash outflow and protect financial resources[10] - The company anticipates that restoring production will require significant capital, leading to the continued suspension of most production facilities during the review period[14] - The company has suspended operations at several plants to reduce cash outflow and ensure financial resources are sufficient until market conditions improve[21] - The company plans to focus on improving operational efficiency and financial conditions by streamlining production processes and seeking partial resumption of operations[30] - The company plans to relocate production facilities to Xinglongshan, funded by internal resources and land compensation[65] - The company has adjusted its relocation plans for production facilities due to the challenging economic environment and ongoing pandemic effects[94] Market Conditions and Economic Environment - The overall economic environment remains uncertain, with the company focusing on resolving its heavy debt burden to facilitate business recovery[11] - The company continues to face challenges in the operating environment, with the COVID-19 pandemic impacting global economic conditions[20] - China's GDP grew by 7.9% year-on-year in Q2 2021, driven by retail sales and industrial production recovery[20] - The demand for corn remained high domestically, but the price increase of upstream corn refining products and downstream lysine products was insufficient to cover raw material cost increases[14] Revenue Segmentation - The amino acid segment recorded revenue of approximately HKD 1,100,000, a significant decrease from HKD 9,300,000 in 2020, with sales volume dropping to about 100 tons from 2,000 tons[33] - The corn sweetener segment's revenue increased by approximately 55.4% to about HKD 355,600,000, driven by a sales volume growth of about 20.3% to approximately 89,000 tons[34] - The bio-chemical alcohol segment's revenue rose by 84.6% to approximately HKD 2,400,000, with a gross profit of about HKD 1,500,000 and a gross margin of 62.5%[36] Financial Position and Liabilities - As of June 30, 2021, total interest-bearing bank and other borrowings decreased by approximately HKD 692,600,000 to about HKD 7,417,000,000[48] - The net debt position decreased to approximately HKD 7,363,000,000 as of June 30, 2021, down from HKD 7,926,400,000 at the end of 2020[48] - The company has outstanding loans totaling approximately RMB 648 million and RMB 1.8 billion from the Export-Import Bank of China and China Construction Bank, respectively, which remain unpaid[101][102] - The company has unpaid loans of approximately RMB 920 million and RMB 740 million from Agricultural Bank of China and China Construction Bank, respectively, which have become immediately due[106] Human Resources and Governance - The group employed approximately 3,800 full-time employees as of June 30, 2021, down from 4,000 on December 31, 2020[68] - The group recognizes the importance of human resources management as a competitive advantage in a volatile environment[68] - The company's governance committees, including the Remuneration Committee and Nomination Committee, are actively involved in reviewing policies and performance metrics for directors and senior management[86][89] Other Financial Metrics - Selling and distribution costs decreased by about 40.0% to approximately HKD 32,400,000, representing about 9.0% of total revenue[40] - Administrative expenses reduced by 2.9% to approximately HKD 175,100,000, accounting for 48.6% of total revenue[41] - Financial costs increased by 10.1% to approximately HKD 396,600,000, mainly due to increased interest on bank and other borrowings[44] - The company’s liquidity ratio and quick ratio remained at 0.1 as of June 30, 2021[58] - The company’s trade receivables turnover days increased to approximately 73 days as of June 30, 2021, compared to 58 days at the end of 2020[57]

Financial Performance - The company's revenue for 2020 was HKD 849 million, a decrease of 81.4% compared to HKD 4,561 million in 2019[5]. - Gross profit for 2020 was HKD 74 million, down 63.7% from HKD 204 million in 2019[5]. - The net loss for the year was HKD 2,433 million, significantly higher than the loss of HKD 1,116 million in 2019[5]. - The group's consolidated revenue decreased significantly by 81.4% to approximately HKD 848,900,000 compared to HKD 4,561,400,000 in 2019[37]. - Gross profit for the year fell by about 63.6% to approximately HKD 74,100,000, down from HKD 203,500,000 in 2019[37]. - The group recorded a net loss of approximately HKD 2,433,300,000 for the year, which includes a one-time loss of about HKD 728,200,000 related to convertible bonds[38]. - The upstream business revenue plummeted by approximately 90.5% to about HKD 248,600,000, down from HKD 2,626,300,000 in 2019[40]. - Amino acid segment revenue decreased sharply to approximately HKD 36.6 million, down 96.3% from HKD 991.6 million in 2019, with sales volume dropping to 7,000 tons from 186,000 tons[42]. - The gross profit for the amino acid segment was approximately HKD 1.4 million, a significant improvement from a gross loss of HKD 53.2 million in 2019, resulting in a gross margin of 3.8%[42]. - Corn sweetener segment revenue fell by 39.2% to approximately HKD 558.1 million, down from HKD 918.4 million in 2019, with sales volume decreasing by 41.8% to about 174,000 tons[45][46]. - The gross profit for the corn sweetener segment decreased by 54.3% to HKD 52 million, with a gross margin of approximately 9.3%, down from 12.4% in 2019[46]. - Bio-chemical alcohol segment revenue dropped 77.7% to approximately HKD 5.6 million, down from HKD 25.1 million in 2019, with a gross profit of HKD 2.4 million and a gross margin of 42.9%[47]. Debt and Financial Management - The company is actively restructuring its debt to alleviate financial pressure and improve cash flow[10]. - The company aims to resolve heavy debt issues and has entered into a repurchase agreement to settle outstanding loans, marking a significant milestone in improving its financial situation[18]. - The company plans to continue seeking additional funding sources to strengthen its overall financial position[12]. - Financial costs related to financial guarantee contracts were approximately HKD 153.5 million for the year, up from HKD 110.8 million in 2019[30]. - The group recorded a net loss of approximately HKD 2,433,300,000 for the year, up from HKD 1,116,300,000 in 2019, resulting in a net debt of approximately HKD 6,017,100,000[67]. - The capital debt ratio increased to 387.5% from 232.4% in 2019, attributed to the net loss and increased borrowings[67]. - As of December 31, 2020, total borrowings increased by approximately HKD 481.8 million to about HKD 8.1 billion, with net borrowings rising to approximately HKD 7.9 billion[59]. - The repayment ratio for interest-bearing and other borrowings within one year and from the second to the fifth year was 97.7% and 2.3%, respectively, compared to 73.2% and 26.8% in 2019[60]. - The group is actively negotiating with banks and creditors to advance debt restructuring plans[38]. - The company is actively negotiating with local governments and creditors to achieve a debt restructuring plan due to the transfer of most bank loans under a debt restructuring plan[173]. Market Conditions and Challenges - The company faced significant challenges due to the COVID-19 pandemic, impacting logistics and consumer demand[10]. - The anticipated corn deficit in China for 2021 is approximately 20 million tons, driven by increased consumption and reduced supply from major exporting countries[23]. - The outbreak of African swine fever has led to a reduction of at least 40% in China's pig population compared to pre-2018 levels, significantly impacting the feed market[25]. - The company anticipates continued challenges in 2021 due to high corn prices and the ongoing impact of COVID-19 on the global economy[29]. - The operational environment has been severely impacted by the COVID-19 pandemic, leading the company to streamline operations to ensure liquidity and closely monitor market changes[175]. Production and Operations - The company suspended all upstream product production starting from the second quarter of 2020 to reduce cash outflow due to high corn procurement costs and weak demand[14]. - The company has suspended production at several facilities to reduce cash outflows and ensure financial resources are sufficient until market conditions improve[22]. - The company will closely monitor market developments and assess the feasibility of resuming upstream corn processing and amino acid production in the third quarter of 2021[16]. - The company plans to upgrade production technology and product mix to address market changes due to aging production facilities[175]. - The company is focusing on research and development to diversify its product portfolio in response to the ongoing impact of African swine fever in China[175]. Corporate Governance - The management team emphasized the importance of maintaining high corporate governance standards to boost stakeholder confidence[92]. - The board of directors has adopted a diversity policy to ensure a balanced representation across various demographics[98]. - The company is committed to evaluating the independence of its non-executive directors annually to uphold governance standards[97]. - The board has established measurable diversity targets, including a specified percentage of female members and independent non-executive directors[102]. - The company has implemented measures to ensure the board receives all necessary information to effectively perform its duties[105]. - The audit committee's responsibilities include reviewing the company's annual and interim financial statements and ensuring compliance with accounting standards[136]. - The company has adopted a written policy for the nomination of new directors, considering factors such as time commitment and contribution to board diversity[139]. - The board has established various committees, including the audit committee, nomination committee, remuneration committee, and corporate governance committee, to ensure effective governance[132]. Employee Management - The company recognizes the importance of human resources management as a source of competitive advantage and emphasizes employee training and performance evaluation[79]. - As of December 31, 2020, the company employed approximately 4,000 full-time employees, a decrease from 4,300 in 2019[79]. Environmental and Risk Management - The company aims to provide stable and sustainable returns to shareholders through a progressive dividend policy[160]. - The company is committed to minimizing environmental impacts and ensuring public safety and health as part of its risk management strategy[171]. - The company has established a strong and independent review and inquiry process to enhance its strategic and operational effectiveness[171]. - The internal audit department reviewed the effectiveness of the company's risk management and internal control systems, identifying weaknesses and suggesting improvements[175].

Financial Performance - Revenue for the first half of 2020 was HKD 479.1 million, a decrease of 82.9% compared to HKD 2,799.4 million in the same period of 2019[5]. - Gross profit for the first half of 2020 was HKD 40.9 million, down 24.0% from HKD 53.8 million in the previous year[5]. - The company reported a pre-tax loss of HKD 902.8 million for the first half of 2020, compared to a loss of HKD 838.2 million in the same period of 2019[5]. - The company’s basic loss per share for the first half of 2020 was HKD (10.5), compared to HKD (12.5) in the same period of 2019[5]. - The group recorded a net loss of approximately HKD 902,800,000, compared to a net loss of HKD 838,200,000 in 2019[34]. - The total comprehensive loss for the period was HKD 857,557 thousand, compared to HKD 809,095 thousand in the previous year, marking an increase of about 6%[108]. - The company reported a loss before tax of HKD 902,843,000 for the six months ended June 30, 2020, compared to a loss of HKD 838,241,000 for the same period in 2019[161]. - The company incurred financial costs of HKD 360,331,000, an increase from HKD 301,160,000 in the previous year[120]. Operational Challenges - The company faced challenges due to the COVID-19 pandemic, which led to production halts and supply chain disruptions, impacting product demand and pricing[12]. - The company maintained a suspension of amino acid production facilities during the review period due to unprofitability caused by rising costs and declining sales prices[13]. - The company has suspended operations in several locations to reduce cash outflow until market conditions improve[22]. - The amino acid production operations have been suspended since August 2019 to minimize cash outflows, influenced by the ongoing African swine fever[90]. - The company has paused amino acid production operations to mitigate financial risks amid unfavorable market conditions[90]. Debt and Financial Restructuring - The company is progressing with a debt restructuring plan, with a significant step taken when a bank transferred outstanding loans of approximately RMB 4 billion to an asset management company[15]. - The company's debt restructuring plan has made encouraging progress with full support from local government[18]. - The group is actively negotiating with banks to secure sufficient bank loans and reduce the debt ratio[129]. - A debt restructuring plan has been recognized and supported by major banks and the Jilin Provincial Government, emphasizing the importance of the group's stable operations[132]. - The group expects to resolve all outstanding payments under the transferred loans and debts owed to major banks by the end of 2020[134]. - The group is exploring similar arrangements for other outstanding debts to improve financial conditions[132]. - The group has received approximately RMB 377 million as a prepayment for land compensation related to property acquisition discussions[135]. Market Conditions and Pricing - Corn prices in China surged to RMB 2,158 per ton by the end of June 2020, influenced by supply shortages and transportation delays due to lockdown measures[22]. - The outbreak of African swine fever in China is expected to reduce pork production to 36 million tons in 2020, a 33% decrease from 2018, significantly impacting lysine demand[24]. - Lysine prices ranged from RMB 6,500 to RMB 7,500 per ton during the period, while rising corn costs pressured profit margins[24]. - The average selling price of corn starch decreased by 3.3% during the period due to reduced downstream market demand[36]. Strategic Initiatives - The company has been focusing on maintaining limited operations to reduce cash outflow while actively pursuing debt restructuring and property acquisition[12]. - The company plans to explore appropriate increases in corn reserves based on financial conditions during the corn harvest period[16]. - The company will continue to develop high-value products through its R&D team to drive business growth[16]. - The group plans to maintain competitiveness through internal R&D, diversify product range, and improve high-value product development capabilities[67]. - The company is committed to ensuring that subsidiaries resume production as soon as feasible, considering the ongoing pandemic situation[90]. Shareholder and Capital Structure - Major shareholders include Huikang with 2,508,407,357 shares (28.16%) and Modern Agriculture with 8,308,269,029 shares (93.27%) as of June 30, 2020[74]. - The group raised approximately HKD 132 million from a subscription agreement for 1,228,607,685 new ordinary shares at a price of HKD 0.1080 per share[105]. - The intended use of the raised funds includes repaying trade and other payables of RMB 56 million and purchasing corn and other operating expenses of RMB 76 million[106]. Employee and Operational Efficiency - The group employed approximately 4,000 full-time employees as of June 30, 2020, down from 4,300 as of December 31, 2019[69]. - The company is focusing on improving operational efficiency and reducing costs through internal resources and collaboration with industry participants[68]. - The group has optimized production and integrated resources into high-efficiency divisions to minimize cash outflows[139].

Financial Performance - Revenue for 2019 decreased to HKD 4,561 million, down 19.4% from HKD 5,658 million in 2018[5] - Gross profit for 2019 was HKD 204 million, representing a decline of 21.6% compared to HKD 260 million in 2018[5] - The net loss for the year narrowed to HKD 1,116 million from HKD 1,299 million in the previous year[5] - The group’s consolidated revenue decreased by approximately 19.4% to about HKD 4,561,400,000 (2018: HKD 5,657,700,000), primarily due to a decline in sales from the amino acids and sweeteners segment[42] - The group confirmed a one-time compensation of approximately HKD 428,400,000 for the expropriation of related properties, resulting in a net loss of approximately HKD 1,116,300,000 (2018: HKD 1,299,200,000) and an EBITDA of HKD 32,400,000 (2018: LBITDA of HKD 299,100,000)[43] Business Operations - The company suspended amino acid production facilities in August 2019 to reduce cash outflow due to anticipated slow recovery in the domestic farming industry[18] - The corn sweetener business experienced a decline in revenue due to intensified competition and decreased demand, leading to a suspension of production in the third quarter of 2019[18] - The domestic demand for amino acid products decreased significantly due to the ongoing African swine fever epidemic, impacting the company's lysine business[16] - The sweetener business faces challenges in 2020 due to the impact of the COVID-19 pandemic and raw material supply shortages, leading to a temporary halt in production[21] - The group is actively seeking to adjust its product mix to include high-value products in response to changing market demands[28] Debt and Financial Restructuring - The company engaged in debt restructuring discussions with creditors to alleviate financial pressure and improve cash flow[18] - The group aims to resolve all outstanding payments and debts related to the transferred loans by the end of 2020[34] - The group plans to relocate production facilities to improve operational efficiency and release land for sale, while actively negotiating with banks to advance debt restructuring plans[43] - The group has taken measures to improve its financial condition as outlined in the consolidated financial statements, with the board believing there will be sufficient working capital for at least the next 12 months[35] Market Conditions and Economic Outlook - The economic growth rate in China for 2020 is expected to be between 5% and 6%, down from 6.1% in 2019, due to the impact of the COVID-19 pandemic and the African swine fever outbreak[19] - The overall business environment in various industries in China is expected to remain challenging in the new year[19] - The company is monitoring market conditions closely to balance maintaining cash flow and market share amid ongoing economic challenges[25] Corporate Governance - The company has adopted a corporate governance code and confirmed compliance with all provisions of the code during the year[89] - The board of directors held a total of 11 meetings, with attendance rates for executive directors ranging from 73% to 100%[92] - The company emphasizes board diversity, considering factors such as race, gender, age, and professional skills in its diversity policy[104] - The board aims to achieve measurable diversity targets, including a specified percentage of independent non-executive directors and members with professional qualifications[105] - The company has established an audit committee, nomination committee, remuneration committee, and corporate governance committee to ensure compliance with corporate governance codes[132] Risk Management - The company has established a "three lines of defense" risk management framework to manage operational risks effectively[173] - Financial risks include liquidity issues due to urgent cash needs, prompting the company to expedite land sales in the Green Park area for additional funding[177] - Compliance risks are addressed by regularly reviewing and testing the internal control system as per the internal audit department's recommendations[179] - The company is enhancing training for employees in China and Hong Kong to prevent non-compliance behaviors[180] Employee and Operational Efficiency - The group employed approximately 4,300 full-time employees, down from 4,600 in 2018, emphasizing the importance of human resource management[75] - The aging production facilities are impacting productivity, and the company is maintaining production efficiency with minimal investment[181] - The internal audit department plays a key role in monitoring the group's governance and reports directly to the audit committee[167] Shareholder Information - As of December 31, 2019, the total number of shares held by shareholders was 7,678,798,032, with a market value of HKD 1,151.8 million[158] - The public shareholding in Hong Kong accounted for 42.5% of the total shares, totaling 3,263,489,164 shares, valued at HKD 489.5 million[158] - The board of directors aims to distribute dividends amounting to at least 15% of the annual profit attributable to shareholders in the foreseeable future[162]

Financial Performance - Revenue for the first half of 2019 was HKD 2,799.4 million, a decrease of 4.6% compared to HKD 2,933.9 million in the same period of 2018[6]. - Gross profit dropped significantly to HKD 53.8 million, down 68.0% from HKD 168.1 million year-on-year[6]. - The company recorded a pre-tax loss of HKD 838.2 million, compared to a loss of HKD 767.6 million in the previous year[6]. - The group recorded a net loss of HKD 838,200,000 (2018: HKD 768,400,000) and an LBITDA of HKD 268,100,000 (2018: HKD 196,200,000) during the period[44]. - The company reported a net loss attributable to owners of HKD 4,219,351 for the period ending June 30, 2019, compared to a loss of HKD 3,447,881 for the same period in 2018[126]. - The company recorded a loss of approximately HKD 838.2 million for the six months ended June 30, 2019, compared to a loss of approximately HKD 768.4 million for the same period in 2018[145]. Revenue Breakdown - Revenue from the upstream business increased by 13.6% to approximately HKD 1,441,900,000 (2018: HKD 1,269,400,000) due to increased sales volume[45]. - The amino acid segment recorded revenue of approximately HKD 888,000,000 (2018: HKD 1,092,000,000), accounting for 31.7% of the group's revenue (2018: 37.2%) with a gross loss of HKD 34,700,000 (2018: gross profit of HKD 81,300,000)[47]. - The corn sweetener segment's revenue decreased by 17.1% to approximately HKD 465,600,000 (2018: HKD 561,900,000) with a gross profit decline of 30.7% to approximately HKD 57,900,000 (2018: HKD 83,500,000)[49]. - Revenue from the bio-chemical alcohol segment decreased by 63.2% to approximately HKD 3,900,000 (2018: HKD 10,600,000), while gross profit improved to approximately HKD 1,800,000 with a gross margin of 46.2% (2018: 13.2%)[53]. - Revenue from external customers in the upstream products segment was HKD 1,441,945, while the amino acids segment generated HKD 887,951, and the corn sweeteners segment brought in HKD 465,628[181]. Market Conditions - The average selling price of upstream products and amino acid products decreased significantly due to the African swine fever outbreak, leading to a substantial reduction in overall gross margin[15]. - The demand for corn refining products and lysine is expected to remain weak in the second half of the year due to the ongoing impact of the African swine fever, with lysine prices projected to stay at relatively low levels[20]. - The company anticipates a challenging operating environment in the second half of 2019 due to uncertainties from the US-China trade war affecting corn and soybean supply and prices[28]. - Export sales accounted for 16.6% of total revenue, down from 23.6% in 2018, with total export sales decreasing by 32.8% to approximately HKD 464,900,000 (2018: HKD 691,900,000) due to the outbreak of African swine fever in Asia[55]. Cost Management and Efficiency - The group plans to enhance energy-saving measures and optimize production processes to improve operational efficiency in the second half of the year[20]. - The group is focusing on relocating production facilities to improve operational efficiency and reduce debt levels through negotiations with banks regarding debt-to-equity proposals[44]. - The company is focused on enhancing cost efficiency through ongoing R&D investments and optimizing operational effectiveness to adapt to market changes[28]. - The company plans to focus on new product development and market expansion strategies to enhance future performance[125]. Debt and Financial Restructuring - The management is actively seeking financial restructuring solutions to improve the company's financial situation and has engaged with major lending banks for debt restructuring[19]. - The company is actively negotiating debt restructuring with banks regarding its subsidiaries in Changchun, China[105]. - The company is actively negotiating with banks to secure sufficient loans and finalize a debt-to-equity conversion proposal by the end of 2019[156]. - The company has submitted a revised debt-to-equity proposal to the Bank of China, aiming to convert bank debts into equity to reduce its debt ratio and attract strategic investors[151]. Shareholder and Investment Activities - The company successfully completed a share placement to independent third parties, introducing new strategic investors to enhance capital and support future business development[19]. - The company issued a subscription agreement for 1,279,799,672 new shares at a price of HKD 0.10 per share, representing 20.0% of the issued share capital prior to the subscription[106]. - The company has received a confirmation letter from Jilin Agricultural Investment Group, assuring continued financial support through loans and operational assistance[34]. - The company has secured financial support from its major shareholder, which will continue for the next 24 months to ensure ongoing operations[159]. Operational Changes and Future Plans - The group plans to relocate its production facilities to Xinglongshan, with methanol capacity of 165,000 tons/year expected to be completed by 2020[109]. - The first phase of modified starch production (food grade) at Xinglongshan will have a capacity of 20,000 tons/year, scheduled from June 2019 to May 2020[109]. - The company is exploring strategic options, including debt-to-equity proposals, to reduce its debt ratio and attract strategic investors[32]. - The R&D center is implementing a series of product development projects to introduce new high-value products to enhance the existing product portfolio[77]. Compliance and Governance - The audit committee, consisting of three independent non-executive directors, reviews the financial reporting procedures and risk management systems[94]. - The company has adopted a code of conduct for securities trading by directors, which is not less stringent than the standard code[91]. - The corporate governance committee monitors compliance with governance policies and regulations[98].