Summary of Conference Call Records Company and Industry Overview - The conference call primarily discusses the **lead-acid battery industry**, focusing on **TianNeng Power** as a leading company in the sector. The industry is undergoing significant changes due to new policies and market dynamics [1][2][3][4]. Key Points and Arguments 1. **Policy Changes and Industry Impact** - The introduction of new national standards (新国标) has shifted market perceptions, moving away from traditional products towards lead-acid batteries as the dominant technology in electric two-wheelers and three-wheelers [1][2][3][4]. - The new standards are expected to positively influence the industry, particularly benefiting leading companies across the supply chain, including battery manufacturers and vehicle producers [5][6]. 2. **Market Demand Dynamics** - The demand for electric two-wheelers and three-wheelers is characterized as **rigid and consumer-driven**, with a significant existing market of approximately **480 million units** and annual new sales around **60 million units** [2][3][4]. - The company reports that **75%** of its sales are driven by replacement demand, indicating a stable market for battery products [2][3][4]. 3. **Current Market Challenges** - The period leading up to the formal release of the new standards has created uncertainty, leading to a cautious market environment where both dealers and consumers are hesitant to make purchases [5][6]. - The company is experiencing **inventory pressure**, with a significant portion of raw materials (70%) affecting production stability [7][8]. 4. **Future Outlook and Strategic Planning** - The company is optimistic about the recovery of demand post-implementation of the new standards, expecting a return to growth by **2025** as market conditions stabilize [9][10]. - Plans for the next five years include expanding into overseas markets and enhancing production capabilities, particularly in lithium battery recycling and lead-acid battery recovery [7][8][9]. 5. **Investment in Emerging Technologies** - The company is also focusing on developing lithium battery technologies and has established a **10 GWh** production capacity, aiming to leverage this for future growth [9][10]. - The strategy includes a cautious approach to new investments while ensuring the sustainability of traditional operations [7][8]. Additional Important Insights - The government has provided a grace period for existing electric two-wheelers produced under old standards, allowing them to remain on the market, which helps alleviate immediate sales pressures [5][6]. - The overall sentiment in the industry reflects a transition towards more sustainable practices, with a focus on recycling and environmental responsibility [9][10]. This summary encapsulates the critical insights from the conference call, highlighting the evolving landscape of the lead-acid battery industry and the strategic direction of TianNeng Power amidst regulatory changes and market challenges.

Investment Rating - The report maintains an "Accumulate" rating for the company, suggesting investors pay attention to its performance [2][3]. Core Views - The company, Tianneng Power, remains a leader in the lead-acid battery sector with a robust network of over 400,000 retail outlets nationwide, ensuring a solid performance base [1][3]. - The current dividend yield is attractive, and future capital expenditures are expected to decrease, which, combined with strong cash flow from lead-acid operations, will improve overall cash flow and provide room for shareholder returns [1][3]. - The projected net profits for the company from 2024 to 2026 are estimated at 1.981 billion, 2.230 billion, and 2.385 billion RMB, reflecting year-on-year growth rates of 8.7%, 12.5%, and 7.0% respectively [1][4]. Summary by Sections Financial Performance - In H1 2024, the company's revenue increased by 20.4% year-on-year to 49.91 billion RMB, with manufacturing and trading revenues at 21.21 billion and 28.70 billion RMB, respectively [1]. - The gross profit for H1 2024 was 2.55 billion RMB, down 16.1% year-on-year, with a gross margin of 5.1%, a decline attributed to rising lead prices and an increase in lower-margin trading business [1][4]. - The net profit attributable to shareholders for H1 2024 was 0.93 billion RMB, a slight increase of 1.1% year-on-year, supported by government subsidies and derivative contract gains [1]. Competitive Advantages - The company has a strong market position in lead-acid batteries, particularly for two-wheeled vehicles, with a production capacity of 130 GWh [1]. - Tianneng Power's channel advantage and production efficiency contribute to its growing market share, with minimal impact from competitors like Yadea [1]. - The company is expanding its overseas operations, with a factory planned in Vietnam, which is expected to enhance revenue growth in Southeast Asia [1]. Capital Expenditure and Cash Flow - Capital expenditures have been high from 2021 to 2023, but are expected to decrease as the company pauses lithium battery expansion and optimizes its recycling operations [1][3]. - The company reported a dividend of 0.43 HKD per share in 2023, with a payout ratio of approximately 22%, translating to a dividend yield of 6.5% based on the closing price on September 12, 2024 [1][2].

Financial Performance - The group’s revenue for the reporting period was approximately RMB 49.915 billion, an increase of about 20.36% compared to the same period last year[36]. - Gross profit for the period was approximately RMB 2.546 billion, a decrease of about 16.08% year-on-year, with a manufacturing gross margin of approximately 12.12%, down about 2.01 percentage points[37]. - Other income increased by approximately 58.29% to RMB 1.242 billion, primarily due to increased government subsidies and interest income[38]. - Revenue for the six months ended June 30, 2024, was RMB 49,914,629 thousand, an increase of 20.3% compared to RMB 41,471,150 thousand in the same period of 2023[63]. - The net profit for the period was RMB 1,065,607 thousand, compared to RMB 1,007,974 thousand for the same period in 2023, reflecting a growth of 5.7%[77]. Revenue Breakdown - The company achieved a manufacturing revenue of approximately RMB 21.211 billion during the reporting period[15]. - Revenue from high-end environmentally friendly batteries reached approximately RMB 19.252 billion[16]. - The lead-acid power battery segment generated revenue of about RMB 18.884 billion, maintaining its strategic focus[17]. - The lead-carbon energy storage battery business generated revenue of approximately RMB 160 million during the reporting period[21]. - Revenue from other high-end environmentally friendly batteries reached approximately RMB 208 million, with significant partnerships established in the automotive start-stop system sector[22]. - The new energy battery business, focusing on lithium-ion, hydrogen fuel, and sodium-ion batteries, achieved revenue of approximately RMB 187 million during the reporting period[23]. Product Development and Innovation - The company launched several new products, including the first electric motorcycle-specific lead-acid battery and the next-generation sodium-ion power battery "TianSodium T2"[13]. - The company launched the OPzV-1000 valve-regulated gel lead-carbon battery, addressing key pain points such as low energy efficiency and short lifespan, and proving its performance in the "Peaceful Co-storage" power station project with approximately 3 million lead-carbon batteries[21]. - The company launched the "Tian Sodium T2" power battery for electric two-wheelers, featuring layered oxide technology with superior performance characteristics[27]. - The first sodium-ion battery cell "Sodium Storage No. 1" was introduced, offering excellent low-temperature discharge performance and ease of maintenance[27]. - The company is committed to technological innovation, focusing on the dual-core development of "power batteries and energy storage systems"[13]. International Expansion - The first overseas smart manufacturing base was established in Vietnam, marking a significant step in expanding into the Southeast Asian market[14]. - The company is actively pursuing international expansion, with partnerships in Southeast Asia, Europe, and Africa[14]. - The company is actively expanding its international strategy, with production base construction in Vietnam and partnerships established in Southeast Asia, Europe, and the Americas[20]. Recycling and Sustainability - The recycling rates for waste lead-acid battery components exceeded 99%, while the recovery rates for lithium-ion battery sulfate and lithium carbonate reached over 98.5% and 90%, respectively[13]. - The company has established a comprehensive recycling industry chain for batteries, integrating production, recycling, smelting, and regeneration[29]. - The lead-acid battery recycling business generated revenue of about RMB 1.286 billion, with a processing capacity of 1 million tons of waste lead-acid batteries annually[30]. - The lithium-ion battery recycling segment reported revenue of approximately RMB 268 million, with a processing capacity of 10,000 tons of waste ternary lithium batteries annually[32]. - The group aims to establish a closed-loop green industry system for the entire lifecycle of lead and lithium batteries as a key development goal[34]. Financial Position - The group's total assets as of June 30, 2024, were approximately RMB 54.288 billion, an increase of about 16.12% from RMB 46.751 billion at the end of 2023[43]. - Total liabilities increased by approximately 25.57% to RMB 35.544 billion, with current liabilities rising by about 21.53% to RMB 28.299 billion[43]. - The group's cash and bank balances amounted to approximately RMB 19.493 billion, up from RMB 15.435 billion at the end of 2023[45]. - The debt-to-asset ratio was approximately 26.40%, compared to 19.42% at the end of 2023[47]. - The company’s total liabilities increased significantly, with borrowings repaid amounting to RMB (5,070,382,000) compared to RMB (3,898,063,000) in the previous year[71]. Employee and Governance - As of June 30, 2024, the total number of employees in the group was 21,929, a decrease from 27,253 as of June 30, 2023[50]. - Employee costs for the reporting period were approximately RMB 1.601 billion, compared to RMB 1.692 billion for the six months ending June 30, 2023[50]. - The company maintained high standards of corporate governance and complied with the relevant listing rules[58]. - The independent auditor reviewed the interim financial statements, confirming no significant issues were found[62]. Shareholder Information - Dr. Zhang Tianren holds 411,355,650 shares, representing 36.53% of the total issued share capital of 1,126,124,500 shares as of June 30, 2024[150][151]. - The company has a 25% equity interest in the joint venture Zhejiang Tianneng New Materials Co., Ltd., with Dr. Zhang Tianren owning 34,314,000 shares[148]. - The company’s total equity remained stable with issued and paid-up shares at 1,126,124,500 as of June 30, 2024, unchanged from previous periods[116].

Financial Performance - Revenue increased by approximately 20.36% to approximately RMB 49.914 billion[2] - Profit attributable to owners increased by approximately 1.09% to approximately RMB 928 million[2] - Basic earnings per share increased by approximately 1.09% to RMB 82.43[6] - The company reported a net profit of RMB 1.066 billion compared to RMB 1.008 billion in the previous year, an increase of approximately 5.7%[4] - The net profit for the six months ended June 30, 2024, reached RMB 928,222,000, a slight increase from RMB 918,209,000 in the same period of 2023, representing a growth of approximately 1.1%[23] - The group achieved a manufacturing revenue of approximately RMB 21.211 billion during the reporting period[41] - The group’s total revenue for the reporting period was approximately RMB 49.915 billion, an increase of about 20.36% year-on-year[58] Cost and Profitability - Gross profit decreased to RMB 2.546 billion from RMB 3.034 billion, a decline of approximately 16.1%[3] - Gross profit for the reporting period was approximately RMB 2.546 billion, a decrease of about 16.08% year-on-year, with a manufacturing gross margin of approximately 12.12%[59] - Other income increased by approximately 58.29% year-on-year to about RMB 1.242 billion, mainly due to increased government subsidies and interest income[60] Assets and Liabilities - Total assets increased to RMB 33.860 billion from RMB 29.340 billion, an increase of approximately 15.5%[7] - Total assets as of June 30, 2024, were approximately RMB 54.288 billion, an increase of about 16.12% compared to December 31, 2023[63] - Current liabilities increased to RMB 28.299 billion from RMB 23.286 billion, an increase of approximately 21.6%[8] - Total liabilities increased by approximately 25.57% to about RMB 35.544 billion as of June 30, 2024[63] - The debt-to-asset ratio as of June 30, 2024, is approximately 26.40%, up from 19.42% as of December 31, 2023[65] Research and Development - Research and development costs increased to RMB 942 million from RMB 829 million, an increase of approximately 13.6%[3] - Research and development costs rose from approximately RMB 829 million to about RMB 942 million, driven by an increase in the number of R&D projects[62] Shareholder Returns - The company declared a final dividend of HKD 0.43 per ordinary share, equivalent to RMB 0.3915, compared to RMB 0.3552 for the final dividend of HKD 0.40 per share in 2023, marking an increase of about 10.4%[22] - The company has not recommended an interim dividend for the six months ended June 30, 2024, and June 30, 2023[22] Employee and Operational Metrics - The total number of employees as of June 30, 2024, is 21,929, a decrease from 27,253 as of June 30, 2023, with employee costs for the reporting period amounting to approximately RMB 1.601 billion[68] International Expansion and Market Strategy - The company is committed to international expansion, with a focus on innovation and adapting battery products and energy solutions for global markets[40] - The group is actively expanding its international strategy, with production base construction in Vietnam and partnerships in Southeast Asia, Europe, and America[44] - The first overseas smart manufacturing base has been established in Vietnam, serving as a foothold for expanding into the Southeast Asian market[40] Product Development and Innovation - The company has developed and launched several new products, including the first electric motorcycle lead-acid battery and the next-generation sodium-ion power battery "TianSodium T2"[39] - The company launched a new generation 5MWh smart liquid cooling storage system, achieving industry-leading levels in adaptability, safety, and cycle life[49] - The company has established a comprehensive hydrogen energy solution covering various applications, including buses and loaders, contributing to local zero-carbon transportation initiatives[50] Environmental and Circular Economy Initiatives - The recycling rate for waste lead-acid battery components exceeds 99%, while the recovery rates for waste lithium-ion battery sulfate and lithium carbonate are over 98.5% and 90%, respectively[39] - The company reported external revenue of approximately RMB 1.554 billion from its circular economy initiatives during the reporting period[52] - The lead-acid battery recycling business generated revenue of approximately RMB 1.286 billion during the reporting period[53] - The group's lithium-ion battery recycling business generated revenue of approximately RMB 268 million during the reporting period[55] - The actual recycling volume of used lithium-ion batteries in 2023 was 623,000 tons, with the group capable of processing 10,000 tons of used ternary lithium-ion batteries annually[55] Governance and Compliance - The company has adopted corporate governance practices in compliance with the listing rules, with the chairman also serving as the CEO to enhance operational efficiency[73] - The financial information disclosed has not been audited but has been prepared in accordance with Hong Kong Accounting Standard 34[74]

Financial Performance - The company's revenue for 2023 was RMB 83,890,973, representing a 12.46% increase from RMB 74,598,641 in 2022[9] - The profit attributable to shareholders for 2023 was RMB 1,821,836, slightly up from RMB 1,796,385 in 2022, indicating a growth of 1.42%[9] - The company reported a basic earnings per share of RMB 1.62 for 2023, compared to RMB 1.60 in 2022[9] - The company's total revenue for the year ended December 31, 2023, was approximately RMB 83.891 billion, an increase of about 12.46% compared to the previous year[24] - The profit attributable to shareholders was approximately RMB 1.822 billion, reflecting a growth of about 1.42% year-on-year[24] - The basic earnings per share for the year were approximately RMB 1.62, with a proposed cash dividend of HKD 0.43 per share[24] - The group's gross profit decreased by approximately 6.65% from RMB 6.389 billion in 2022 to RMB 5.965 billion in 2023, with a gross margin decline of 1.45 percentage points to 7.11%[72] - Other income increased by approximately 71.47% from RMB 1.106 billion in 2022 to RMB 1.897 billion in 2023, primarily due to an increase in government subsidies from RMB 704 million to RMB 1.219 billion[73] Assets and Liabilities - Total assets increased to RMB 46,750,952 in 2023 from RMB 40,135,923 in 2022, reflecting a growth of 16.1%[11] - The total liabilities rose to RMB 28,306,329 in 2023, up from RMB 22,969,749 in 2022, marking a 23.5% increase[11] - Total assets increased by approximately 16.48% from RMB 40.136 billion in 2022 to RMB 46.751 billion in 2023, with non-current assets growing by about 28.05%[81] - Total liabilities rose by approximately 23.23% from RMB 22.970 billion in 2022 to RMB 28.306 billion in 2023, with non-current liabilities increasing by about 93.37%[83] - The net debt ratio improved from -11.00% in 2022 to -2.03% in 2023, indicating a stronger financial position[88] - As of December 31, 2023, the asset-liability ratio was approximately 19.42%, up from 15.47% in 2022[93] Market and Business Strategy - The company is focusing on the electric vehicle market and energy storage systems, with new projects like the South Taihu high-energy lithium battery and Jiangxi Xinfeng new energy manufacturing base being launched[19] - The company aims to enhance its resource recycling capabilities, improving the recycling level of used batteries and reducing energy consumption[19] - The company is actively participating in national strategies such as the "Belt and Road" initiative and "Yangtze River Delta Integration" to strengthen its market position[20] - The company aims to enhance its comprehensive competitiveness by developing diversified products and improving technological content and added value[25] - The company plans to continue its focus on green development and innovation, aiming to create a more attractive industrial ecosystem in the new energy sector[25] - The company is expanding its overseas market presence, having signed cooperation agreements with over 20 international distributors and opened offices in Thailand and the Netherlands[41] - The company is committed to driving the collaborative development of lead-acid batteries and smart energy storage as part of its core business strategy[30] Research and Development - The company has established its first overseas R&D center and completed two national key R&D project acceptances, enhancing its innovation capabilities[21] - The company has developed high-performance lead-carbon batteries, overcoming traditional battery limitations and achieving international leading performance levels[21] - The company launched the "TianNeng Full-Engine Technology Platform," enhancing key technologies across the battery lifecycle, including advanced material formulation and intelligent cloud charging[37] - The company has established a national-level technology center, emphasizing its focus on research and development in battery technology[120] - The company has established a sodium battery industry ecosystem alliance to promote the development and construction of the sodium battery ecosystem[56] Sustainability and Environmental Impact - The company is committed to sustainable development and has upgraded its resource recycling ecosystem to minimize environmental impact[19] - The company has achieved a metal material recovery rate of over 99% in its recycling operations, contributing to both economic and environmental benefits[33] - The recycling rate for metals, sulfuric acid, and plastics from waste lead-acid batteries exceeds 99%, significantly reducing the carbon footprint throughout the battery lifecycle[60] - The company has been recognized as a "Green Industrial Park" and "Green Factory" by the Ministry of Industry and Information Technology of China, showcasing its commitment to sustainable manufacturing[38] Corporate Governance - The company has maintained a high level of corporate governance, which is crucial for enhancing investor confidence[132] - The board consists of eight members, including three independent non-executive directors, ensuring strong independent elements for effective judgment[134] - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring unbiased decision-making[134] - The company has established a system for directors to seek independent professional advice when necessary[136] - The board has mechanisms in place to ensure independent opinions are provided, including resources for directors to fulfill their duties[136] - The company is committed to reviewing its corporate governance structure to assess the need for separating the roles of chairman and CEO[133] Internal Control and Risk Management - The company has established a robust internal control and risk management system, which is reviewed annually to ensure effectiveness[174] - The audit committee will monitor the company's risk management system starting from January 1, 2022[168] - The company has appointed a professional management consulting firm to assess the effectiveness of its internal control system until December 31, 2023, and the board believes the system is adequate and effective[175] - The board has reviewed the effectiveness of the company's accounting and financial reporting functions and believes it has sufficient resources and qualified personnel[177] Employee and Management - Employee costs for the reporting period were approximately RMB 3.280 billion, slightly up from RMB 3.272 billion in 2022, with a total workforce of 25,776 employees[98] - The company has a strong management team with extensive experience in the battery industry, including Dr. Zhang Tianren, who has 38 years of experience in technology research and management[115] - The management team includes several executives with over 30 years of experience in battery enterprise management and sales, indicating a robust leadership structure[119][121] - The management team has undergone advanced training in business management, enhancing their strategic capabilities[121] Shareholder Information - The proposed final dividend is expected to be paid on or before July 8, 2024, pending shareholder approval at the annual general meeting on June 7, 2024[112] - The company has approximately RMB 919 million available for distribution reserves as of December 31, 2023, compared to RMB 909 million in 2022, reflecting a 1.1% increase[190] - The company will suspend share transfer registration from June 4, 2024, to June 7, 2024, and again from June 17, 2024, to June 18, 2024, for the annual general meeting and dividend entitlement respectively[112] - The company encourages effective communication between shareholders and the board, particularly during annual general meetings[152]

Financial Performance - Revenue increased by approximately 12.46% to approximately RMB 83.89 billion[2] - Profit attributable to shareholders increased by approximately 1.42% to approximately RMB 1.82 billion[2] - Basic earnings per share grew to approximately RMB 1.62[2] - Proposed final dividend of HKD 0.43 per share[2] - Gross profit decreased to RMB 5.96 billion from RMB 6.39 billion[4] - The group's net profit for the year was RMB 1,835,705 thousand, a decrease from RMB 2,079,678 thousand in 2022, representing a decline of approximately 11.7%[18] - The company's profit before tax for the year ended December 31, 2023, was RMB 2,563,485,000, a decrease of 6.4% compared to RMB 2,738,841,000 in 2022[33] - The net profit margin decreased from 2.79% in 2022 to 2.19% in 2023, reflecting the impact of declining lithium battery gross margins[72] Revenue Segmentation - External sales from the manufacturing segment reached RMB 47,397,428 thousand, up from RMB 41,971,044 thousand in the previous year, indicating a growth of about 12.3%[18] - External sales from the trading segment increased to RMB 36,493,545 thousand from RMB 32,627,597 thousand, reflecting a growth of approximately 11.4%[18] - Revenue from the manufacturing segment was RMB 42,423,301 thousand, up from RMB 35,747,300 thousand in the previous year, representing a growth of 18.7%[23] - The lead-acid power battery segment generated revenue of approximately RMB 39.152 billion, with a year-on-year increase of about 19.32%[47] - The high-end eco-friendly battery business achieved revenue of approximately RMB 42.423 billion, representing a year-on-year growth of about 18.68%[46] - The lead-carbon energy storage battery business generated approximately RMB 338 million in revenue, representing a year-on-year growth of over 100%[50] - The new energy battery segment achieved revenue of approximately RMB 882 million, focusing on lithium-ion, hydrogen fuel, and sodium-ion battery development[52] Costs and Expenses - The cost of goods sold increased significantly to RMB 74,642,355,000 from RMB 67,160,592,000, reflecting a rise of approximately 11.0%[34] - Total employee costs for the year were RMB 3,283,960,000, slightly up from RMB 3,276,024,000 in the previous year[34] - Distribution and selling costs rose by approximately 15.86% from about RMB 1.229 billion in 2022 to approximately RMB 1.424 billion in 2023, driven by higher transportation and travel expenses[66] - Financing costs rose to RMB 482,780 thousand in 2023, up from RMB 340,738 thousand in 2022, indicating a 41.7% increase[30] - The income tax expense for 2023 was RMB 727,780 thousand, compared to RMB 659,163 thousand in 2022, which is an increase of 10.4%[31] Assets and Liabilities - Total assets less current liabilities increased to RMB 23.46 billion from RMB 19.76 billion[8] - Cash and cash equivalents increased to RMB 9.46 billion from RMB 7.55 billion[7] - Total equity increased to RMB 18.44 billion from RMB 17.17 billion[8] - Non-current assets increased to RMB 17.41 billion from RMB 13.60 billion[6] - Total liabilities rose by approximately 23.23% from about RMB 22.970 billion in 2022 to approximately RMB 28.306 billion in 2023, with non-current liabilities increasing by about 93.37%[71] - Total liabilities to total assets ratio increased to 19.42% in 2023 from 15.47% in 2022[79] Market and Strategic Initiatives - The company is focusing on the development of new energy storage technologies, including sodium-ion and hydrogen fuel cells, while continuously iterating lithium-ion battery technologies[44] - The company has established offices in the Netherlands, Vietnam, and Thailand, signing cooperation agreements with over 20 overseas distributors to expand its market presence[45] - The company is actively promoting its products in overseas markets, with steady sales growth in power batteries and initial success in energy storage products[49] - The company aims to strengthen its high-end environmental battery business and expand its energy storage industry as a second growth curve[63] - The company plans to enhance its global strategy and localize operations overseas to increase its influence in the renewable energy sector[63] Recycling and Sustainability - The company has achieved a maximum metal material recovery rate of over 99% in its recycling operations, contributing to both economic and environmental benefits[45] - The company's recycling industry generated approximately RMB 3.6 billion in revenue during the reporting period[58] - The lead-acid battery recycling segment achieved external revenue of about RMB 3.069 billion, with a steady growth trend in China's lead-acid battery recycling market[59] - The lithium-ion battery recycling segment generated revenue of approximately RMB 531 million, with a projected market scale nearing RMB 100 billion by 2026[61] - The company has implemented a digital recycling model to enhance the management of the entire lifecycle of waste lead-acid batteries[60] Corporate Governance - The audit committee, consisting of three independent non-executive directors, is responsible for reviewing the financial reporting procedures and internal controls of the group[89] - The company has adopted the corporate governance code as per the listing rules, with the current chairman and CEO being the same individual to enhance operational efficiency[90] - Deloitte has confirmed the financial figures for the year ending December 31, 2023, but did not provide an audit opinion on the preliminary announcement[91] - All directors have confirmed compliance with the standard code for securities trading throughout the reporting period[92]

Financial Performance - For the reporting period ending June 30, 2023, the group achieved a manufacturing revenue of approximately RMB 21.641 billion, representing a year-on-year growth of about 24.31%[10] - The group’s revenue for the reporting period was approximately RMB 41.471 billion, an increase of about 33.66% compared to the same period last year[43] - Gross profit for the period was approximately RMB 3.034 billion, representing a year-on-year increase of about 27.49%[44] - Net profit for the six months ended June 30, 2023, was RMB 1,007,974 thousand, representing a 11.8% increase compared to RMB 901,147 thousand in the prior year[68] - Basic earnings per share for the period was RMB 81.54, compared to RMB 67.47 in the same period last year, reflecting a growth of 20.9%[68] Revenue Breakdown - The high-end environmental battery business generated revenue of approximately RMB 19.306 billion, an increase of approximately 35.83% compared to the same period last year[11] - The lead-acid power battery segment reported revenue of approximately RMB 18.867 billion, reflecting a year-on-year growth of approximately 35.73%[12] - The revenue from other high-end eco-friendly batteries reached approximately RMB 213 million during the reporting period[21] - The revenue from the new energy battery business amounted to approximately RMB 373 million[22] - The lithium-ion battery business generated revenue of about RMB 369 million, with a focus on energy storage systems and power batteries[23] Research and Development - As of June 2023, the group holds over 4,800 patents and has led or participated in the revision of more than 170 domestic and international standards[9] - Research and development costs increased from approximately RMB 709 million to RMB 829 million, mainly due to an increase in the number of R&D projects[47] - The company launched a new generation sodium-ion battery "Tian Sodium T1" for electric light vehicles in the first half of 2023, featuring a cycle life exceeding 3,000 times and higher energy density than conventional lithium manganese oxide batteries[32] - The company established a sodium-ion battery industry ecological alliance with leading electric light vehicle companies and investment institutions to support technological innovation and industrial application[33] Market Expansion - The group is focusing on two trillion-level industry ecosystems: power batteries and energy storage systems, with a commitment to becoming the leader in the new lead-acid battery industry in China[7] - The group has established over 130 subsidiaries and its overseas sales cover nearly 50 countries and regions, enhancing local operational capabilities[9] - The group is actively expanding its international market presence, having delivered its first batch of products to a well-known vehicle manufacturer in Cambodia in February 2023[15] - The group has made significant progress in global expansion, with new offices established in countries like Vietnam and Thailand to enhance local product and service capabilities[9] Sustainability and Innovation - The group is committed to sustainable development through green manufacturing and innovation, driving industry upgrades and digital transformation[7] - The lead-carbon battery technology is recognized as a key technology in China's "14th Five-Year Plan" for new energy storage development[18] - The company is optimistic about the lead-acid battery recycling industry despite challenges from rising market prices, focusing on advanced technology and automation to enhance operational efficiency[38] Financial Position - Total assets as of June 30, 2023, were approximately RMB 47.257 billion, a growth of about 17.74% compared to December 31, 2022[48] - The total liabilities increased by approximately 28.94% to about RMB 29.617 billion, with current liabilities rising by about 33.57%[48] - As of June 30, 2023, the company's debt-to-asset ratio was approximately 23.98%, up from 15.47% on December 31, 2022[52] - The company reported a total equity of RMB 17,639,870 thousand as of June 30, 2023, compared to RMB 17,166,174 thousand as of December 31, 2022, reflecting an increase of approximately 2.8%[71] Cash Flow and Investments - Operating cash flow turned from a net outflow of approximately RMB 468 million last year to a net inflow of approximately RMB 1.531 billion, driven by increased revenue and sales collections[48] - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 1,530,622 thousand, a significant improvement compared to a net cash outflow of RMB (467,692) thousand in the same period of 2022[75] - The company invested RMB 437,210,000 in machinery and manufacturing facilities during the period, compared to RMB 301,865,000 in the previous year, reflecting a 44.8% increase in capital expenditure[93] Corporate Governance - The company has maintained high standards of corporate governance and complied with the relevant listing rules during the reporting period[61] - The company’s independent auditor reviewed the interim financial information, which was prepared in accordance with Hong Kong Accounting Standard 34[62] Related Party Transactions - The group reported related party transactions with Zhejiang Changtong Technology Co., Ltd., including material purchases of RMB 277,106,000, an increase of 7.5% from RMB 258,767,000 in the previous year[136] - Accounts receivable from related parties as of June 30, 2023, totaled RMB 232,895,000, down 26.3% from RMB 316,228,000 as of December 31, 2022[137]

Financial Performance - Revenue increased by approximately 33.66% to approximately RMB 41.47 billion[2] - Gross profit increased by approximately 27.49% to approximately RMB 3.03 billion[2] - Profit attributable to owners of the company increased by approximately 20.86% to approximately RMB 918.21 million[6] - Basic earnings per share increased by approximately 20.85% to RMB 81.54[6] - For the six months ended June 30, 2023, total revenue reached RMB 41,471,150 thousand, a significant increase from RMB 31,026,206 thousand in the same period of 2022, representing a growth of approximately 33.7%[18] - The group's profit for the period was RMB 1,007,974 thousand, up from RMB 901,147 thousand, reflecting a growth of 11.8% year-over-year[25] - Other income for the reporting period was approximately RMB 792 million, a year-on-year increase of about 16.87%, mainly due to increased interest income[71] Assets and Liabilities - Total assets less current liabilities amounted to RMB 20.04 billion, compared to RMB 19.76 billion at the end of 2022[9] - Non-current assets increased to RMB 15.59 billion from RMB 13.60 billion[7] - Cash and cash equivalents increased to RMB 11.56 billion from RMB 7.55 billion[8] - Current liabilities increased to RMB 27.21 billion from RMB 20.37 billion[9] - Total assets as of June 30, 2023, were approximately RMB 47.257 billion, an increase of about 17.74% from December 31, 2022[74] - Total liabilities as of June 30, 2023, were approximately RMB 29.617 billion, an increase of about 28.94% from December 31, 2022[74] - The debt-to-asset ratio as of June 30, 2023, was approximately 23.98%, compared to 15.47% on December 31, 2022[76] Revenue Breakdown - Lead-acid battery products generated revenue of RMB 19,305,930 thousand, up from RMB 14,212,873 thousand, reflecting a growth of about 36.8% year-over-year[18] - The revenue from trading activities was RMB 19,829,727 thousand, compared to RMB 13,616,661 thousand in the previous year, marking an increase of approximately 45.5%[18] - Revenue from lithium battery products decreased to RMB 368,962 thousand from RMB 762,997 thousand, indicating a decline of around 51.6%[18] - Revenue from the domestic market in China was RMB 41,367,805 thousand, compared to RMB 30,815,846 thousand in the previous year, representing a growth of about 34.2%[18] - Total sales revenue for the group reached RMB 41,942,830 thousand, a 34.3% increase from RMB 31,293,014 thousand in the previous year[19] Research and Development - Research and development expenses increased to RMB 829.34 million from RMB 708.94 million[3] - The company is committed to technological innovation, having undertaken over 20 key national and provincial projects related to smart manufacturing[45] - The company aims to optimize its service ecosystem by developing cutting-edge battery technologies such as fuel cells, sodium-ion batteries, and solid-state batteries[44] Market Expansion and Operations - The company has established over 130 subsidiaries and its sales network covers nearly 50 countries and regions[45] - The company is actively expanding into new markets, with offices established in countries such as Vietnam and Thailand to enhance local operations[45] - The group has established over 3,000 offline distributors, covering more than 400,000 retail stores, enhancing long-term stable partnerships with downstream manufacturers[48] Dividend and Shareholder Information - The group declared a final dividend of HKD 0.40 per share, equivalent to RMB 35.52 cents, compared to RMB 34.15 cents in the previous year[26] - The company has a total of 33,390,000 share options exercisable as of June 30, 2023, down from 34,344,000 options as of June 30, 2022[40] Environmental and Circular Economy Initiatives - The lead-acid battery recycling sector generated operating revenue of approximately RMB 1.414 billion, with a recycling capacity of about 1 million tons per year[63][64] - The group has established over 600 battery recycling points across more than 10 provinces in China, enhancing its competitive advantage in the lead-acid battery recycling market[64] - The group received the "National Circular Economy Technology Center" certificate from the China Circular Economy Association in May 2023, highlighting its leadership in the circular economy[64] Corporate Governance - The company has maintained high standards of corporate governance and complied with the relevant listing rules[84] - The audit committee reviewed the interim performance and recommended the board to adopt the financial information[84] - The company’s interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 and reviewed by independent auditors[84]

Financial Performance - The total revenue for the year 2022 was RMB 74,598,641, a decrease of 12.9% compared to RMB 85,615,917 in 2021[8] - The profit before tax for 2022 was RMB 2,738,841, an increase of 49.1% from RMB 1,836,942 in 2021[8] - The net profit attributable to the owners of the company for 2022 was RMB 1,796,385, representing a 38.4% increase from RMB 1,299,952 in 2021[8] - The company's total revenue for the year ended December 31, 2022, was approximately RMB 74.599 billion, a decrease of 12.87% year-on-year[20] - The net profit attributable to shareholders was approximately RMB 1.796 billion, an increase of 38.19% compared to the previous year[20] - The group's gross profit increased by approximately 38.27% from RMB 4.621 billion in 2021 to RMB 6.389 billion in 2022, with an overall gross margin rising from 5.40% to 8.56%[51] - Other income rose by approximately 1.11% from RMB 1.094 billion in 2021 to RMB 1.106 billion in 2022, primarily due to increased government subsidies and interest income, which grew from RMB 218 million to RMB 315 million[52] - The company reported a proposed final dividend of HKD 0.40 per share for the year ended December 31, 2022, consistent with the previous year[130] Assets and Liabilities - The total assets as of December 31, 2022, were RMB 40,135,923, up 22.4% from RMB 32,738,944 in 2021[9] - The total liabilities increased to RMB 22,969,749 in 2022, a rise of 32.5% from RMB 17,362,012 in 2021[9] - The group's total assets increased by approximately 22.59% from RMB 32.739 billion in 2021 to RMB 40.136 billion in 2022, with non-current assets growing by approximately 40.87%[56] - Total liabilities increased by approximately 32.30% from RMB 17.362 billion in 2021 to RMB 22.970 billion in 2022, with current liabilities rising by approximately 33.27%[57] - The net cash from operating activities for 2022 was approximately RMB 1.590 billion, a decrease from RMB 2.105 billion in 2021, primarily due to increased inventory[54] Market Strategy and Innovation - The company aims to enhance its strategic transformation and industry upgrade in response to market challenges and economic pressures[15] - The company is focusing on innovation and upgrading its product offerings to maintain competitive advantages in the market[15] - The company plans to continue expanding its market presence and exploring new business strategies to drive future growth[15] - The company plans to accelerate the development of new battery technologies, including solid-state batteries and sodium-ion batteries, in 2023[22] - The company is actively expanding its lithium battery business to create a second growth curve, leveraging synergies between lead-acid and lithium-ion technologies[26] Production and Operations - The manufacturing segment's revenue increased by approximately 10.68% year-on-year, reaching RMB 41.971 billion[20] - The company implemented 68 digital innovation projects and established the industry's first smart factory, improving production and supply chain efficiency[19] - The company has developed various energy storage products, including air-cooled and liquid-cooled energy storage cabinets, and is actively conducting pilot demonstrations in the "new energy + energy storage" sector[26] - The company has successfully launched energy storage cells of 100Ah, 180Ah, and 280Ah, and has developed various cooling modules, including the TN200 liquid-cooled energy storage cabinet, with all relevant national standard certifications obtained[37] Research and Development - The company is focusing on talent acquisition and strategic partnerships to accelerate breakthroughs in key technologies and expand commercial applications[27] - The company has established a dedicated production line for sodium-ion batteries and is currently ramping up production capacity[43] - The sodium-ion battery technology has achieved significant breakthroughs, earning recognition as one of the "Top Ten Innovative Brands of 2022" and receiving the "Golden Ding Award" for technological innovation[43] - Research and development expenses amounted to RMB 1,622,379 thousand, compared to RMB 1,483,162 thousand in 2021, reflecting an increase of about 9.4%[199] Corporate Governance - The company has maintained a high level of corporate governance, believing that good governance practices are crucial for maintaining and enhancing investor confidence[89] - The board of directors consists of eight members, including three independent non-executive directors, ensuring compliance with listing rules[90] - The company has established mechanisms to ensure the board receives independent opinions and sufficient resources to fulfill its duties[91] - The company has a commitment to transparency and accountability in its governance practices, ensuring all directors can communicate freely and independently with management[91] Shareholder Information - The company plans to suspend share transfer registration from June 5, 2023, to June 8, 2023, and again from June 15, 2023, to June 16, 2023, for dividend entitlement purposes[76] - The proposed final dividend is expected to be paid on or before July 7, 2023, pending shareholder approval at the annual general meeting on June 8, 2023[76] - The company has a total of 1,126,124,500 shares issued as of December 31, 2022[141] - The company’s shareholding structure indicates a significant concentration of ownership with Dr. Zhang Tianren and Prime Leader Global Limited holding a combined 36.44%[148] Related Party Transactions - The company has complied with the applicable regulations under the Listing Rules regarding related party transactions and continuous related party transactions[188] - The investment agreement constitutes a related party transaction as Tianchang Holdings is a connected person of the company[188] - The group plans to continue its procurement and service agreements with related parties, ensuring compliance with pricing policies and regulations[186] Environmental and Social Responsibility - The group made charitable donations of approximately RMB 2.0012 million for the year ended December 31, 2022, compared to RMB 3.5677 million in 2021[176]

Financial Performance - Gross profit increased by approximately 38.27% to about RMB 6.39 billion[2] - Shareholders' profit attributable increased by approximately 38.19% to about RMB 1.80 billion[2] - Basic earnings per share increased by approximately 39.13% to about RMB 1.60[2] - Total comprehensive income for the year was RMB 2.13 billion, compared to RMB 1.45 billion in the previous year[5] - The profit for the year was RMB 1,551,212 thousand, down 25.4% from RMB 2,079,678 thousand in the previous year[15] - The net profit margin improved from 1.81% in 2021 to 2.79% in 2022, reflecting enhanced profitability[79] Revenue and Sales - Revenue for the year ended December 31, 2022, was RMB 74.60 billion, a decrease from RMB 85.62 billion in the previous year[4] - The group's total revenue for the year ended December 31, 2022, was RMB 85,615,917 thousand, a decrease of 1.4% from RMB 86,041,456 thousand in 2021[15] - Manufacturing business external sales reached RMB 41,971,044 thousand, up 10.4% from RMB 37,920,576 thousand in the previous year[15] - Trade external sales decreased to RMB 32,627,597 thousand from RMB 47,695,341 thousand, representing a decline of 31.6%[15] - Revenue from lead-acid battery products was RMB 35,747,300 thousand, up from RMB 31,820,839 thousand, reflecting a growth of 12.1%[19] - The group's lead-acid battery business achieved revenue of approximately RMB 35.11 billion, representing a year-on-year growth of about 12.31%[46] - The lithium-ion battery business achieved revenue of approximately RMB 1.602 billion, representing a year-on-year growth of about 62.30%[55] - The lithium-ion energy storage segment generated revenue of approximately RMB 524 million, with a significant year-on-year increase of approximately 353.51%[56] - The hydrogen fuel cell business reported revenue of approximately RMB 63.39 million during the reporting period[60] Costs and Expenses - Research and development costs for the year were RMB 1.62 billion, up from RMB 1.48 billion in the previous year[4] - Distribution and selling costs increased by approximately 18.53% from RMB 1.037 billion in 2021 to RMB 1.229 billion in 2022, mainly due to rising transportation costs[74] - Administrative expenses increased by approximately 37.75% from RMB 989 million in 2021 to RMB 1.363 billion in 2022, driven by higher employee costs and consulting fees[75] - The total financing costs for the year ended December 31, 2022, amount to RMB 340,738,000, an increase from RMB 254,089,000 in 2021[27] - The income tax expense for the year ended December 31, 2022, is RMB 659,163,000, compared to RMB 285,730,000 in 2021[28] - The total employee costs for the year ended December 31, 2022, are RMB 2,706,962,000, a decrease from RMB 3,276,024,000 in 2021[31] Assets and Liabilities - Non-current assets increased to RMB 13.60 billion from RMB 9.65 billion in the previous year[6] - Current assets increased to RMB 26.54 billion from RMB 23.09 billion in the previous year[6] - Current liabilities increased to RMB 20.37 billion from RMB 15.29 billion in the previous year[7] - The company's total assets grew by approximately 22.59% from RMB 32.739 billion in 2021 to RMB 40.136 billion in 2022, with non-current assets increasing by about 40.87%[77] - Total liabilities increased by approximately 32.30% from RMB 17.362 billion in 2021 to RMB 22.970 billion in 2022, with current liabilities rising by about 33.27%[78] Dividends and Shareholder Information - The proposed final dividend is HKD 0.40 per share[2] - The company declared a final dividend of HKD 0.40 per share (equivalent to approximately RMB 34.84) for the year ended December 31, 2022[33] - Basic earnings per share rose to RMB 1.60 from RMB 1.15, with a proposed dividend of 40.00 HKD cents per share[84] Strategic Initiatives and Developments - The company has established subsidiaries in Hong Kong and Nigeria, and set up overseas offices in Vietnam, India, and the Netherlands to enhance international business expansion[43] - The company is focusing on dual technology routes with lead-acid and lithium-ion batteries to drive sustainable development in the new energy sector[42] - The company has increased its research and development efforts in new battery technologies, including fuel cells and sodium-ion batteries, to enhance its competitive edge[43] - The company has established strategic partnerships with major enterprises such as State Grid and China Huaneng Group to promote new energy and energy storage development models[57] - The company plans to enhance global energy cooperation and expand its market presence through a more open and integrated approach[71] Operational Metrics - The company employed 26,971 staff as of December 31, 2022, up from 25,618 in the previous year, with employee costs totaling approximately RMB 3.26 billion[90] - The cash net amount from operating activities decreased to approximately RMB 1.590 billion in 2022 from RMB 2.105 billion in 2021, mainly due to increased production capacity and inventory growth[76] - Inventory turnover days increased by 10 days to 30 days due to increased production capacity and inventory in 2022[82] - Accounts receivable turnover days increased by 2 days to 8 days, attributed to growth in primary market sales[82] Governance and Compliance - Deloitte has confirmed the financial statements for the year ending December 31, 2022, ensuring the accuracy of the reported figures[97] - All directors have confirmed compliance with the standard code for securities trading throughout the year ending December 31, 2022[98] - The company has adopted the corporate governance code as per the listing rules for the year ending December 31, 2022, with the exception of certain provisions[96] Future Outlook - The company aims to build a trillion-level industrial ecosystem around lead-acid and energy storage sectors, focusing on technological innovation and strategic layout[70] - Future plans include further automation in production to reduce labor costs amid rising labor expenses in China[92]