Financial Performance - For the six months ended June 30, 2024, the company recorded revenue of RMB 1,373,300,000, a decrease of 27.9% compared to RMB 1,905,924,000 for the same period in 2023[1][2]. - Operating profit for the six months ended June 30, 2024, was RMB 146,200,000, down from RMB 259,300,000 in the same period of 2023[1][2]. - The profit attributable to equity holders of the company for the six months ended June 30, 2024, was RMB 43,000,000, compared to RMB 130,800,000 for the same period in 2023[1][2]. - Basic earnings per share for the six months ended June 30, 2024, were RMB 1.62, a decrease of RMB 3.52 from RMB 5.14 in the same period of 2023[1][3]. - The company reported a net foreign exchange loss of RMB 74,013,000 for the six months ended June 30, 2024, compared to a net gain of RMB 18,072,000 in the same period of 2023[25]. - The company’s total comprehensive profit before tax for the six months ended June 30, 2024, was RMB 74,014,000, a decline of 60% from RMB 185,722,000 in the same period of 2023[24]. - Net profit after tax for the six months ended June 30, 2024, was RMB 60,800,000, a decrease of 56.6% from RMB 140,100,000 in the same period of 2023[70]. Revenue and Production - External customer revenue for the coal business was RMB 1,373,271,000 for the six months ended June 30, 2024, down from RMB 1,905,924,000 in the same period of 2023, representing a decrease of approximately 28%[19]. - The coal operating and trading volume, as well as commercial coal production, were approximately 2,400,000 tons each, representing a decrease of 10.9% and 1.2% respectively compared to the same period in 2023[1]. - The average coal selling price decreased to RMB 571 per ton in the first half of 2024 from RMB 705 per ton in the same period of 2023, reflecting market price adjustments[65]. - Total commercial coal production for the six months ended June 30, 2024, was 2,387,000 tons, a decrease of 1.16% from 2,415,000 tons in 2023[79]. - The total production of raw coal for the first half of 2024 was 4.427 million tons, compared to 3.724 million tons in the same period of 2023, reflecting a significant increase[78]. Assets and Liabilities - Total assets less current liabilities amounted to RMB 2,514,425,000 as of June 30, 2024, compared to RMB 2,686,365,000 as of December 31, 2023[4]. - Non-current assets, including coal mining rights, were valued at RMB 1,650,902,000 as of June 30, 2024, down from RMB 1,864,159,000 as of December 31, 2023[4]. - The group’s liabilities include a total book value of RMB 2,173,246,000 in other borrowings as of June 30, 2024[10]. - Total liabilities as of June 30, 2024, were RMB 7,182,817,000, a decrease of 4.7% from RMB 7,538,655,000 as of December 31, 2023[22]. - The company’s total other payables included construction payables of approximately RMB 623,431,000 as of June 30, 2024, compared to RMB 633,861,000 as of December 31, 2023[15]. Cash Flow and Financing - The group recorded a net operating cash inflow of approximately RMB 698,780,000 for the reporting period, compared to RMB 999,866,000 for the six months ended June 30, 2023[12]. - The company has issued guarantees for loans amounting to approximately RMB 249,000,000 as of June 30, 2024, down from RMB 259,000,000 as of December 31, 2023[62]. - The company is actively seeking to improve its financial flexibility through diversified funding sources and is in discussions with financial institutions to renew and extend bank borrowings[84]. - The company has not implemented any foreign currency hedging policies despite recognizing potential exchange rate risks[87]. Legal and Regulatory Matters - The group’s ability to continue as a going concern is under significant doubt due to ongoing litigation and financial uncertainties[11]. - The company has engaged external and internal legal counsel to manage pending litigation and mitigate legal risks[12]. - A lawsuit regarding non-controlling shareholders' claims for dividends from Huamei Aoneng has been ongoing, with a claim amounting to approximately RMB 705,860,000[60]. Strategic Developments - The group has entered into a sale agreement to sell 40% of its subsidiary, Liyuan, for RMB 2,950,000,000, which is subject to adjustments[7]. - The company has established a new mining company in Indonesia, holding a 70% stake, following regulatory changes that required a reduction in foreign ownership[41]. - The SDE project officially commenced operations in Q4 2023, with ongoing high-standard and efficient construction of the second SDE mine, indicating progress in the company's international expansion[72]. - The company aims to establish the SDE project as a benchmark for overseas project cooperation among Chinese enterprises[73]. Employee and Governance - The company employed 3,340 employees as of June 30, 2024, and has implemented a performance-based reward system[95]. - The company has adhered to the corporate governance code as stipulated in the listing rules throughout the reporting period[94].

Financial Performance - For the year ended December 31, 2023, the turnover was RMB 3,449,182, a decrease of 9.1% from RMB 3,794,039 in 2022[12]. - Gross profit for 2023 was RMB 878,020, down 30.9% from RMB 1,273,283 in 2022[12]. - Operating profit for the year was RMB 523,859, a decline of 48.7% compared to RMB 1,020,470 in 2022[12]. - Profit for the year attributable to equity shareholders was RMB 200,346, a decrease of 56.1% from RMB 456,543 in 2022[12]. - Revenue from the coal business for 2023 was RMB 3,449,182,000, a decline of 9.1% compared to RMB 3,794,039,000 in 2022[58]. - The average coal selling price decreased to RMB 665 per tonne in 2023 from RMB 838 per tonne in 2022, a decline of about 20.6%[61]. - The gross profit margin decreased to 25.5% in 2023 from 33.6% in 2022, primarily due to the decline in average selling price of thermal coal[74]. - The net profit margin fell to 5.6% in 2023 from 12.9% in 2022, impacted by lower coal prices and impairment losses on property and equipment[170][172]. Assets and Liabilities - Total assets as of December 31, 2023, were RMB 7,857,573, slightly up from RMB 7,850,531 in 2022[14]. - Total liabilities increased to RMB 7,538,655 from RMB 7,037,320 in 2022, reflecting a rise of 7.1%[14]. - Total equity as of December 31, 2023, was RMB 318,918, down from RMB 813,211 in 2022, indicating a significant decline[14]. - Net current liabilities decreased to RMB 3,324.8 million as of December 31, 2023, from RMB 4,155.8 million in 2022, with an improved current ratio of 0.36 compared to 0.33 in 2022[87][90]. - Total bank and other borrowings amounted to RMB 1,876.1 million as of December 31, 2023, down from RMB 3,447.5 million in 2022[99][104]. - The gearing ratio improved to 29.8% as of December 31, 2023, from 32.1% in 2022, due to loan repayments during the year[102][106]. Production and Operations - Coal handling and trading volume for 2023 was 5,187,000 tonnes, an increase of 14.6% from 4,528,000 tonnes in 2022[12]. - Total raw coal production for 2023 reached 7,651,000 tonnes, an increase of 9.8% from 6,966,000 tonnes in 2022[54]. - Commercial coal production volume for 2023 was 4,882,000 tonnes, up 8% from 4,522,000 tonnes in 2022[54]. - The total coal reserves as of December 31, 2023, were 348.11 million tonnes, down from 356.38 million tonnes at the beginning of the year[52]. - The group’s total coal reserve depletion from mining operations for the year was 8.27 million tonnes[52]. - The Group's coal production capacity includes 1.5 million tonnes at Huameiao Energy – Xingtao Coal and 0.9 million tonnes at each of the other three Huameiao Energy coal mines[43]. Strategic Developments - The Group has completed the construction and commenced operations of the first large-scale modern underground coal mine in Indonesia, SDE Mine No. 1, which began trial operations in Q4 2023[17]. - The Group holds a 75% equity interest in PT Sumber Daya Energi (SDE) after acquiring an additional 5% equity interest during the year[37]. - The Group is focusing on the SDE coal mine project in Indonesia, which began trial operations in Q4 2023, with plans for further development and resource utilization in 2024[136]. - The Group plans to enhance terminal construction for the SDE project to ensure efficient coal transportation to southern China[134]. - The second SDE mine is under active construction, which is expected to create significant development potential once operational[134]. Community and Environmental Responsibility - The Group is committed to local community development and employment in Indonesia, providing on-the-job training programs for local employees[18]. - The Group's strategy emphasizes the importance of social responsibility, aiming to improve the quality of life for local residents in Indonesia[18]. - The Group aims to enhance local community engagement through social welfare activities, including building roads and schools, and improving local human resources through training programs[138]. - The company is committed to complying with environmental laws in both China and Indonesia, aiming to minimize operational impacts on the environment[177]. - The Environmental, Social and Governance Committee was established to monitor sustainability performance and stakeholder engagement[186]. Financial Management and Risk - The Group is negotiating with financial institutions to renew and extend bank borrowings to improve working capital[94][96]. - The company is closely monitoring credit risk and adjusting credit limits and terms for customers due to potential liquidity issues in the domestic economy[168]. - The Group's financial condition may be significantly impacted by liquidity issues faced by customers due to the domestic economic slowdown[165]. - The Group will continue to monitor macroeconomic developments and adjust strategies to mitigate risks associated with economic fluctuations and national policies[156]. - The Group's strategies will include cost control measures to minimize the impact of commodity price fluctuations on profit margins[157]. Governance and Compliance - The Group has complied in all material aspects with relevant laws and regulations, with no material breaches reported[188]. - The Group is subject to various laws and regulations in China and Indonesia, ensuring compliance to mitigate significant business impacts[189]. - There are no provisions for pre-emptive rights under the Company's articles of association or Cayman Islands law[200]. - The Group did not recommend the payment of a dividend for the year ended December 31, 2023[193]. - As of December 31, 2023, the Company had no distributable reserves, compared to zero in 2022[198].

Financial Performance - For the fiscal year ending December 31, 2023, the company's revenue was RMB 3.4 billion, a decrease of 9.1% compared to RMB 3.8 billion in 2022[28]. - The gross profit margin for 2023 was 25.5%, down from 33.6% in 2022, primarily due to a decrease in the average selling price of thermal coal[28]. - Operating profit for 2023 was RMB 523.9 million, a decrease of 48.7% from RMB 1.02 billion in 2022, attributed to the reduction in gross profit[28]. - The net profit after tax for 2023 was RMB 192 million, compared to RMB 490 million in 2022[28]. - The profit attributable to equity holders of the company for 2023 was RMB 200.3 million, down from RMB 456.5 million in 2022[28]. - Basic earnings per share for 2023 were RMB 0.078, compared to RMB 0.181 in 2022[28]. - Diluted earnings per share for 2023 were RMB 0.077, compared to RMB 0.175 in 2022[28]. - The company reported a total comprehensive income of RMB 183,836 thousand for 2023, significantly lower than RMB 501,750 thousand in 2022[66]. - The company reported a loss attributable to equity holders of approximately RMB 472,866,000 in 2023, compared to a loss of RMB 13,107,000 in 2022, indicating a significant increase in losses[47]. - The company reported a basic earnings attributable to ordinary equity holders of RMB 195,073,000 for 2023, down from RMB 451,489,000 in 2022, indicating a decline of approximately 57%[149]. Borrowings and Liabilities - As of December 31, 2023, the group had total bank and other borrowings amounting to RMB 3,566,000,000, an increase from RMB 3,520,800,000 as of December 31, 2022[2]. - The net current liabilities of the group were approximately RMB 3,324,762,000 as of December 31, 2023, with certain borrowings and accrued interest due for immediate payment[6]. - The total borrowings and accrued interest as of December 31, 2023, were approximately RMB 492,444,000, down from RMB 1,330,634,000 in 2022, showing a significant reduction of about 63%[50]. - The total liabilities for the reportable segments rose to RMB 7,367,925 thousand in 2023, compared to RMB 6,490,787 thousand in 2022, indicating an increase of 13.5%[87]. - The company’s total liabilities included secured bank loans of RMB 1,262,799,000 as of December 31, 2023, compared to RMB 665,666,000 in the previous year, showing a significant increase[161]. - The company reported a current liability of RMB 219,918,000 for loans due within one year as of December 31, 2023, compared to RMB 50,602,000 for the previous year[200]. Cash Flow and Financial Stability - The company recorded a net operating cash inflow of approximately RMB 1,460,298,000 in 2023, compared to RMB 984,432,000 in 2022, reflecting an increase of about 48%[54]. - The company has implemented cost control measures in sales, administrative expenses, and capital expenditures to sustain cash flow and financial stability[54]. - The company plans to accelerate coal production and apply for the renewal of expired mining rights, aiming to enhance internal cash generation and operational cash flow in the coming years[54]. Investments and Projects - The group did not engage in any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the year[11]. - The group is focusing on the SDE coal mine project in Indonesia, which began trial operations in Q4 2023, and plans to enhance infrastructure to facilitate coal transportation to southern China[16]. - The company has made significant investments in property, plant, and equipment amounting to RMB 1,121,038 thousand in 2023, an increase from RMB 768,003 thousand in 2022[87]. - The group successfully renewed its mining operating license for the coal mine in Indonesia, which will expire on May 14, 2034, and acquired an additional 5% stake in SDE, bringing total ownership to 75%[188]. Market Outlook - The outlook for 2024 anticipates stable economic policies in the domestic market, with expected increases in production supply and coal demand due to supportive government measures[13]. - The international coal market prices are expected to remain relatively stable due to ongoing competition among countries for coal procurement[15]. Social Responsibility and Compliance - The company emphasizes social responsibility by adhering to labor, environmental, and safety regulations in Indonesia, and plans to invest in local community projects[17]. Legal and Regulatory Matters - The company has engaged external lawyers to handle ongoing litigation and mitigate legal risks[74]. - The group faced litigation claims totaling approximately RMB 705,860,000 related to non-controlling shareholders' claims for benefits from coal production prices[179].

智通财经APP讯，中国秦发(00866)发布公告，根据协议纲领E，于成立时，PLKK须转让采矿经营许可证E的95%权益予新采矿公司E(一间将由PLKK成立及拥有的公司)及5%权益予一名第三方个人。于完成时，PLKK须按面值转让其于新采矿公司E的70%股权予秦发海外或其代名人。 由于转让采矿经营许可证E予新采矿公司E尚未完成，故从PLKK向秦发海外转让新采矿公司E的70%股权于本公布日期尚未进行。概无就协议纲领E项下拟进行的交易支付按金。 经审慎周详考虑后，于2024年3月1日(交易时段后)，集团订立协议纲领E的附函以终止协议纲领E项下拟进行的交易。 就有关终止协议纲领E而言，随着介绍集团予PLKK的Kokos Jiang于2021年逝世，PLKK表明其不愿继续进行协议纲领E项下拟进行的交易。经与协议纲领E的订约方公平磋商后，决定终止协议纲领E项下拟进行的交易。 ...

Revenue and Profitability - Revenue from coal business for the six months ended June 30, 2023, was RMB 1,905,924,000, a decrease from RMB 2,056,954,000 in the same period of 2022[18]. - For the six months ended June 30, 2023, the Group reported revenue of RMB 1,905,924,000, a decrease of 7.3% compared to RMB 2,056,954,000 in the same period of 2022[126]. - Gross profit for the six months ended June 30, 2023, was RMB 390.1 million, down 44.6% from RMB 703.6 million in the same period of 2022, resulting in a gross profit margin of 20.5% compared to 34.2% in 2022[24]. - Operating profit decreased by 57.9% to RMB 259.3 million for the six months ended June 30, 2023, from RMB 615.9 million in the same period of 2022[29]. - Profit after taxation for the six months ended June 30, 2023, was RMB 140.1 million, a decrease of 62.3% from RMB 371.2 million in the same period of 2022[30]. - Profit attributable to equity shareholders for the six months ended June 30, 2023, was RMB 130.8 million, down 60% from RMB 327.4 million in the same period of 2022[31]. - Total comprehensive income for the period was RMB 124,695,000, down 66.7% from RMB 374,399,000 in the same period of 2022[126]. - Profit for the period attributable to equity shareholders decreased to RMB 130,798,000 in 2023 from RMB 327,374,000 in 2022, representing a decline of 60%[129]. - Basic earnings per share attributable to equity shareholders decreased to RMB 5.14 cents in 2023 from RMB 13.03 cents in 2022, a decrease of 60.5%[129]. Coal Production and Sales - Coal handling and trading volume increased to 2,702,000 tonnes for the six months ended June 30, 2023, compared to 2,575,000 tonnes in the same period of 2022[18]. - Average coal selling prices decreased, ranging from RMB 557 to RMB 941 per tonne in the first half of 2023, compared to RMB 528 to RMB 1,295 per tonne in the same period of 2022[18]. - Average coal selling price for the six months ended June 30, 2023, was RMB 705 per tonne, a decrease of 11.8% from RMB 799 per tonne in the same period of 2022[23]. - Raw coal production volume for the six months ended June 30, 2023, was 3,724,000 tonnes, a decrease of 2.1% from 3,805,000 tonnes in 2022[61]. - Commercial coal production volume for the same period was 2,415,000 tonnes, down 2.3% from 2,473,000 tonnes in 2022[63]. - The production of raw coal in China for the first half of 2023 was 2,300 million tonnes, an increase of 4.4% year-on-year, while imported coal volume was 220 million tonnes, up 93.0% year-on-year[32]. Financial Position and Liabilities - As of June 30, 2023, net current liabilities were RMB 3,822.6 million, down from RMB 4,155.8 million as of December 31, 2022[68]. - The current ratio improved to 0.38 as of June 30, 2023, compared to 0.33 as of December 31, 2022[68]. - Total banking facilities as of June 30, 2023, were RMB 3,568.3 million, unchanged from December 31, 2022[80]. - The gearing ratio improved to 25.8% as of June 30, 2023, down from 32.1% as of December 31, 2022[82]. - The Group's debt-to-asset ratio improved to 25.8% as of June 30, 2023, compared to 32.1% as of December 31, 2022, due to an increase in cash and cash equivalents[85]. - Borrowings due for immediate payment amounted to approximately RMB 1,302,136,000, down from RMB 1,330,634,000 as of December 31, 2022[154]. - Short-term bank borrowings were RMB 562,492,000, compared to RMB 590,990,000 as of December 31, 2022, indicating a reduction in short-term debt[154]. Investments and Capital Expenditure - Capital expenditure for the six months ended June 30, 2023, was RMB 361.1 million, an increase of 36.4% from RMB 264.7 million in 2022[69]. - Total exploration, mining, and development expenses amounted to RMB 881.4 million in 2023, a decrease of 4.9% from RMB 927.2 million in 2022[67]. - The Group entered into a procurement contract for equipment worth approximately RMB 156 million for the SDE coal mine, including key machinery for coal extraction[40]. Safety and Environmental Practices - The Group emphasizes production safety and invests in innovative technology and digitization to enhance safety management culture in coal mines[44]. - The Group has implemented safety measures and emergency drills to enhance safety awareness among employees during the National "Safe Production Month" in June 2023[48]. - The Group is actively promoting ecological civilization and green energy development, aligning with the Chinese government's policies[49]. Strategic Focus and Future Outlook - The Group continued to focus on its coal business activities in China while expanding its integrated coal supply chain overseas during the reporting period[16]. - The Group's strategic focus includes enhancing operational efficiency and expanding market reach in both domestic and international markets[16]. - The management remains optimistic about future growth prospects despite the challenges in coal pricing[16]. - The Group plans to accelerate coal production in currently operating mines and apply for the renewal of expired coal mining rights to enhance internally generated funds and operating cash inflows[170]. Legal and Compliance Matters - The Group recognized other borrowings with carrying amounts of RMB 2,524,154,000 as of June 30, 2023, down from RMB 2,607,894,000 as of December 31, 2022[157]. - There are ongoing litigations against the Group primarily related to settling long outstanding payables with interest[158]. - The conditions indicate a material uncertainty regarding the Group's ability to continue as a going concern[159]. - The financial statements are unaudited and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2022[150]. - The Company has complied with the applicable code provisions in the Corporate Governance Code throughout the six months ended June 30, 2023[106].

Company Overview and Financial Summary This section provides an overview of the company's interim financial performance, including a profit warning and key consolidated financial statements [1.1 Company Information and Profit Warning](index=1&type=section&id=1.1%20Company%20Information%20and%20Profit%20Warning) Unaudited H1 2023 interim results, following a profit warning, show significant declines in revenue, gross margin, and profits, with no interim dividend recommended - The company released its unaudited interim results for the six months ended June 30, 2023, following a prior profit warning[7](index=7&type=chunk)[8](index=8&type=chunk) - The Board of Directors does not recommend paying any interim dividend for the six months ended June 30, 2023[7](index=7&type=chunk) Key Financial Summary for the Six Months Ended June 30 | Indicator | 2023 H1 (RMB) | 2022 H1 (RMB) | | :--- | :--- | :--- | | Revenue | 1,905,900,000 | 2,056,954,000 | | Coal Operating and Trading Volume | 2,700,000 tonnes | 2,575,000 tonnes | | Commercial Coal Production | 2,400,000 tonnes | 2,457,000 tonnes | | Gross Margin | 20.5% | 34.2% | | Operating Profit | 259,300,000 | 615,900,000 | | Profit After Tax | 140,100,000 | 371,200,000 | | Profit Attributable to Equity Holders of the Company | 130,800,000 | 327,400,000 | | Basic Earnings Per Share | RMB 5.14 cents | RMB 13.03 cents | | Diluted Earnings Per Share | RMB 5.01 cents | RMB 12.54 cents | [1.2 Condensed Consolidated Statement of Comprehensive Income Summary](index=2&type=section&id=1.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income%20Summary) For the six months ended June 30, 2023, the company's revenue decreased year-on-year, with increased cost of sales leading to a significant reduction in gross profit; operating profit and profit for the period also declined, while other comprehensive losses primarily stemmed from foreign currency translation differences Key Data from Condensed Consolidated Statement of Comprehensive Income (for the six months ended June 30) | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 1,905,924 | 2,056,954 | | Cost of Sales | (1,515,776) | (1,353,355) | | Gross Profit | 390,148 | 703,599 | | Operating Profit | 259,335 | 615,864 | | Net Finance Costs | (73,613) | (134,111) | | Profit Before Tax | 185,722 | 481,753 | | Income Tax Expense | (45,621) | (110,567) | | Profit for the Period | 140,101 | 371,186 | | Other Comprehensive (Loss)/Income (after tax) | (15,406) | 3,213 | | Total Comprehensive Income for the Period | 124,695 | 374,399 | Profit for the Period and Total Comprehensive Income Attributable to Equity Holders (for the six months ended June 30) | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period Attributable to Equity Holders of the Company | 130,798 | 327,374 | | Profit for the Period Attributable to Non-controlling Interests | 9,303 | 43,812 | | Total Comprehensive Income for the Period Attributable to Equity Holders of the Company | 115,392 | 330,587 | | Total Comprehensive Income for the Period Attributable to Non-controlling Interests | 9,303 | 43,812 | [1.3 Condensed Consolidated Statement of Financial Position Summary](index=4&type=section&id=1.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20Summary) As of June 30, 2023, the company's non-current assets slightly decreased, current assets saw a reduction in inventories and trade receivables but an increase in cash and cash equivalents and pledged/restricted deposits; net current liabilities improved but remained negative, while net assets grew Key Data from Condensed Consolidated Statement of Financial Position (as of June 30) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Coal Mining Rights | 2,017,520 | 2,367,351 | | Property, Plant and Equipment | 3,623,087 | 3,432,903 | | Total Non-current Assets | 5,680,908 | 5,845,437 | | **Current Assets** | | | | Inventories | 243,061 | 439,373 | | Trade Receivables | 137,220 | 178,867 | | Prepayments, Deposits and Other Receivables | 438,009 | 387,181 | | Pledged and Restricted Deposits | 370,229 | 143,676 | | Cash and Cash Equivalents | 1,131,141 | 855,997 | | Total Current Assets | 2,319,660 | 2,005,094 | | **Current Liabilities** | | | | Trade Payables | (501,511) | (387,564) | | Other Payables and Contract Liabilities | (2,019,942) | (1,967,025) | | Borrowings | (3,337,411) | (3,447,453) | | Total Current Liabilities | (6,142,255) | (6,160,933) | | **Net Current Liabilities** | (3,822,595) | (4,155,839) | | **Net Assets** | 935,282 | 813,211 | Notes to the Condensed Consolidated Financial Statements This section details the company's background, financial statement preparation, accounting policy changes, segment reporting, and specific financial item breakdowns, including significant borrowings and contingent liabilities [2.1 Company Background and Basis of Preparation](index=6&type=section&id=2.1%20Company%20Background%20and%20Basis%20of%20Preparation) This section outlines China Qinfagroup Limited's registration, listing, core business, and financial statement presentation, noting significant net current liabilities and going concern uncertainties, despite management's mitigating actions [2.1.1 General Information](index=6&type=section&id=2.1.1%20General%20Information) China Qinfagroup Limited, registered in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engages in coal mining, trading, washing, storage, and blending in China, with its functional currency being HKD but financial statements presented in RMB - The company was incorporated in the Cayman Islands on March 4, 2008, and listed on the Main Board of the Hong Kong Stock Exchange on July 3, 2009[15](index=15&type=chunk) - The Group's principal business activities are coal mining, trading, washing, storage, and blending in China[32](index=32&type=chunk) - The company's functional currency is HKD, but the condensed consolidated financial statements are presented in RMB[16](index=16&type=chunk) [2.1.2 Basis of Preparation and Going Concern](index=6&type=section&id=2.1.2%20Basis%20of%20Preparation%20and%20Going%20Concern) The condensed consolidated financial statements are unaudited and prepared in accordance with IAS 34 and HKEX Listing Rules; as of June 30, 2023, the company had net current liabilities of approximately RMB 3.823 billion, raising significant going concern doubts, though management has taken measures and is confident in fulfilling financial obligations within the next 12 months - The condensed consolidated financial statements are prepared in accordance with IAS 34 and the applicable disclosure requirements of the HKEX Listing Rules, and are unaudited[33](index=33&type=chunk)[34](index=34&type=chunk) - As of June 30, 2023, the Group's net current liabilities were approximately **RMB 3,822,595,000**, indicating a material uncertainty that casts significant doubt on its ability to continue as a going concern[35](index=35&type=chunk)[36](index=36&type=chunk) - Management has implemented several measures to improve financial position and cash flow, including actively negotiating loan renewals with banks, accelerating coal production, controlling costs, and seeking new financing sources, and believes it can meet its financial obligations within the next 12 months[37](index=37&type=chunk)[53](index=53&type=chunk) Borrowings and Accrued Interest Due for Immediate Repayment as of June 30, 2023 | Indicator | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Borrowings Due for Immediate Repayment | 1,302,136,000 | 1,330,634,000 | | Accrued Interest (including overdue interest) | 221,007,000 | 219,718,000 | [2.2 Changes in Accounting Policies and Critical Accounting Estimates](index=9&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Critical%20Accounting%20Estimates) During this interim period, the Group adopted new and revised IFRS standards issued by the IASB, which had no material impact on its financial position or performance, and management's judgments on accounting policy application and key estimation uncertainties remained consistent with the prior year - New and revised International Financial Reporting Standards, including IFRS 17, amendments to IAS 8, and amendments to IAS 12, were adopted for the first time during this interim period[39](index=39&type=chunk)[55](index=55&type=chunk) - The newly adopted changes in accounting policies had no material impact on the Group's financial position, performance, and/or disclosures for the current and prior periods[1](index=1&type=chunk)[55](index=55&type=chunk) - Management's significant judgments in applying accounting policies and key sources of estimation uncertainty in preparing the condensed consolidated financial statements are consistent with those for the consolidated financial statements for the year ended December 31, 2022[4](index=4&type=chunk)[41](index=41&type=chunk)[56](index=56&type=chunk) [2.3 Segment Reporting](index=10&type=section&id=2.3%20Segment%20Reporting) The Group operates a single reportable segment, the coal business, primarily in China, generating substantially all its revenue; the CEO monitors this segment based on operating profit, assets, and liabilities, but no detailed geographical or segment asset/liability analysis is presented - The Group has only one reportable segment, the coal business, which primarily operates in China and generates substantially all its revenue from external customers in China[57](index=57&type=chunk) - The Chief Executive Officer reviews internal management reports for each strategic business unit monthly, using "operating profit" and consolidated results to assess segment performance and allocate resources[2](index=2&type=chunk)[43](index=43&type=chunk)[57](index=57&type=chunk) Reportable Segment Revenue and Profit Before Tax (for the six months ended June 30) | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue from External Customers (Coal Business) | 1,905,924 | 2,056,954 | | Reportable Segment Profit Before Tax | 258,462 | 624,530 | Reportable Segment Assets and Liabilities (as of June 30) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Reportable Segment Assets | 7,624,186 | 7,649,342 | | Reportable Segment Liabilities | (5,932,694) | (5,960,443) | [2.4 Revenue](index=13&type=section&id=2.4%20Revenue) The Group's revenue primarily derives from coal sales, recognized upon goods delivery; for the six months ended June 30, 2023, coal sales revenue was RMB 1,905,924,000, a year-on-year decrease - Revenue primarily derives from coal sales, with performance obligations satisfied and revenue recognized upon delivery of goods[189](index=189&type=chunk) Revenue from Contracts with Customers by Service Type (for the six months ended June 30) | Revenue Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Coal Sales | 1,905,924 | 2,056,954 | [2.5 Other Income, Gains and Losses](index=13&type=section&id=2.5%20Other%20Income%2C%20Gains%20and%20Losses) For the six months ended June 30, 2023, total other income, gains, and losses amounted to RMB 22,242,000, a significant decrease from the prior year, primarily due to the absence of loan restructuring gains this period, while net exchange gains increased and government grants decreased - Government grants are primarily awarded by local Chinese governments as financial subsidies for business development, with related conditions met[190](index=190&type=chunk) Other Income, Gains and Losses (for the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Net Exchange Gains | 18,072 | 12,284 | | Government Grants | 3,131 | 5,112 | | Gain on Significant Modification of Loan Restructuring | – | 11,321 | | Net Gain on Non-significant Modification of Loan Restructuring | – | 31,203 | | Others | 1,088 | 733 | | **Total** | **22,242** | **61,531** | [2.6 Net Finance Costs](index=14&type=section&id=2.6%20Net%20Finance%20Costs) For the six months ended June 30, 2023, the Group's net finance costs significantly decreased to RMB 73,613,000 year-on-year, primarily due to increased capitalized borrowing costs and reduced interest expense from discounting liabilities - The decrease in net finance costs was primarily due to an increase in capitalized borrowing costs during the period (from RMB 2,006 thousand in 2022 to **RMB 23,342 thousand** in 2023) and a reduction in the discounting of liabilities[96](index=96&type=chunk)[207](index=207&type=chunk) - Finance costs are capitalized at an annual rate of **6.53%** (2022: 6.79%)[207](index=207&type=chunk) Net Finance Costs Composition (for the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Interest Income | (6,185) | (7,600) | | Interest on Borrowings | 58,425 | 63,708 | | Interest Expense on Discounting | 44,715 | 80,009 | | Less: Capitalized Interest | (23,342) | (2,006) | | **Net Finance Costs** | **73,613** | **134,111** | [2.7 Profit Before Tax and Income Tax Expense](index=15&type=section&id=2.7%20Profit%20Before%20Tax%20and%20Income%20Tax%20Expense) For the six months ended June 30, 2023, profit before tax significantly decreased to RMB 185,722,000 year-on-year, with a corresponding reduction in income tax expense, primarily comprising PRC Enterprise Income Tax and deferred tax credits - PRC Enterprise Income Tax is provided at the statutory rate of **25%**; Hong Kong and Indonesian subsidiaries did not incur income tax provisions due to the absence of assessable profits[194](index=194&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) Profit Before Tax Deductions (for the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 224,198 | 168,574 | | Depreciation of Right-of-Use Assets | 2,751 | 4,064 | | Amortization of Coal Mining Rights | 350,412 | 334,358 | Income Tax Expense (for the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 113,995 | 139,438 | | Deferred Tax Credit | (68,374) | (28,871) | | **Income Tax Expense** | **45,621** | **110,567** | [2.8 Earnings Per Share](index=16&type=section&id=2.8%20Earnings%20Per%20Share) For the six months ended June 30, 2023, both basic and diluted earnings per share attributable to ordinary equity holders of the company significantly decreased year-on-year, primarily due to reduced profit for the period; no outstanding share options were assumed to be exercised in diluted EPS calculation as their exercise price exceeded the average market price - No unexercised share options were assumed to be exercised in the calculation of diluted earnings per share because their adjusted exercise price was higher than the average market price of the shares during the period[65](index=65&type=chunk) Basic Earnings Per Share Calculation (for the six months ended June 30) | Indicator | 2023 (RMB thousands/shares) | 2022 (RMB thousands/shares) | | :--- | :--- | :--- | | Profit for the Period Attributable to Equity Holders of the Company | 130,798 | 327,374 | | Less: Distribution on Perpetual Subordinated Convertible Securities | (2,624) | (2,427) | | Profit for Basic EPS Calculation | 128,174 | 324,947 | | Weighted Average Number of Ordinary Shares | 2,493,413,985 | 2,493,413,985 | | **Basic Earnings Per Share** | **RMB 5.14 cents** | **RMB 13.03 cents** | Diluted Earnings Per Share Calculation (for the six months ended June 30) | Indicator | 2023 (RMB thousands/shares) | 2022 (RMB thousands/shares) | | :--- | :--- | :--- | | Adjusted Profit | 130,798 | 327,374 | | Adjustment for Perpetual Subordinated Convertible Securities | 118,000,000 | 118,000,000 | | Adjusted Weighted Average Number of Shares | 2,611,413,985 | 2,611,413,985 | | **Diluted Earnings Per Share** | **RMB 5.01 cents** | **RMB 12.54 cents** | [2.9 Coal Mining Rights](index=18&type=section&id=2.9%20Coal%20Mining%20Rights) The Group holds coal mining rights in five mines in China and one in Indonesia, which are significant non-current assets, with some pledged for borrowings; directors believe that expiring mining rights are highly likely to be renewed at minimal cost - The Group owns five coal mines in China and one in Indonesia, with mining rights representing the right to conduct mining operations in these regions[128](index=128&type=chunk)[217](index=217&type=chunk) - As of June 30, 2023, coal mining rights in China with a net book value of approximately **RMB 1,983,241,000** were pledged to secure borrowings[248](index=248&type=chunk) - Directors believe that expiring mining rights (such as Xinglong Coal Mine) are highly likely to be renewed at minimal cost, and relevant government authorities will re-issue the mining rights certificates[217](index=217&type=chunk) Coal Mining Rights Details | Coal Mine Name | Location | Ownership | Expiry Date | | :--- | :--- | :--- | :--- | | Xingtao Coal Mine | Shuozhou, Shanxi, China | 80% | September 14, 2034 | | Fengxi Coal Mine | Shuozhou, Shanxi, China | 80% | January 24, 2034 | | Chong Sheng Coal Mine | Shuozhou, Shanxi, China | 80% | December 14, 2039 | | Xinglong Coal Mine | Xinzhou, Shanxi, China | 100% | November 29, 2019 | | Hongyuan Coal Mine | Xinzhou, Shanxi, China | 100% | July 13, 2030 | | SDE Coal Mine | South Kalimantan, Indonesia | 70% | May 14, 2034 | [2.10 Trade and Other Receivables](index=19&type=section&id=2.10%20Trade%20and%20Other%20Receivables) This section details the company's trade and other receivables, including their composition, aging analysis, and impairment provisions, noting a decrease in net trade receivables, an increase in net prepayments and other receivables, and the impairment of certain amounts related to terminated acquisition transactions [2.10.1 Trade Receivables](index=19&type=section&id=2.10.1%20Trade%20Receivables) As of June 30, 2023, net trade receivables amounted to RMB 137,220,000, a decrease from the end of 2022; credit terms typically range from 0 to 60 days, and all trade receivables are expected to be collected within one year - Credit terms granted to customers primarily range from **0 to 60 days**; all trade receivables are expected to be recovered within one year from the end of the reporting period[68](index=68&type=chunk)[218](index=218&type=chunk) Trade Receivables (as of June 30) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Gross Trade Receivables | 173,522 | 215,169 | | Less: Provision for Credit Losses | (36,302) | (36,302) | | **Net Trade Receivables** | **137,220** | **178,867** | Aging Analysis of Trade Receivables (as of June 30) | Aging | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Within 2 Months | 77,903 | 119,550 | | Over 2 Years | 59,317 | 59,317 | | **Total** | **137,220** | **178,867** | [2.10.2 Prepayments and Other Receivables](index=20&type=section&id=2.10.2%20Prepayments%20and%20Other%20Receivables) As of June 30, 2023, net prepayments and other receivables increased to RMB 438,009,000 from the end of 2022, primarily comprising other deposits and prepayments, amounts due from non-controlling shareholders, and other non-trade receivables; some amounts are fully impaired and include deposits for an Indonesian coal mine acquisition, parts of which have been terminated - Other non-trade receivables primarily consist of receivables from government subsidies and recoverable VAT[70](index=70&type=chunk) - Amounts due from non-controlling shareholders are unsecured, interest-free, and have no fixed repayment terms, having been fully impaired in prior years[221](index=221&type=chunk) - The company had planned to acquire a **70%** equity interest in an Indonesian coal mining company and paid a deposit of **USD 4 million** (approximately **RMB 28,903,000**) as collateral, but parts of the transaction have been terminated[71](index=71&type=chunk)[223](index=223&type=chunk) Prepayments and Other Receivables (as of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Other Deposits (Non-current) | 28,903 | 27,858 | | Other Deposits and Prepayments (Current) | 212,305 | 119,860 | | Amounts Due from Non-controlling Shareholders | 322,703 | 322,703 | | Other Non-trade Receivables | 248,628 | 289,404 | | Less: Provision for Credit Losses | (345,627) | (344,786) | | **Net Amount** | **438,009** | **387,181** | [2.11 Trade and Other Payables](index=22&type=section&id=2.11%20Trade%20and%20Other%20Payables) This section discloses the company's trade payables, other payables, and contract liabilities, including their aging analysis and composition; a high proportion of trade payables are due within one year, and other payables primarily include construction payables and coal mine exploration and mining rights payables [2.11.1 Trade Payables](index=22&type=section&id=2.11.1%20Trade%20Payables) As of June 30, 2023, total trade payables increased to RMB 501,511,000 from the end of 2022, with the majority of amounts due within one year Aging Analysis of Trade Payables (as of June 30) | Aging | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Within One Year | 413,099 | 187,906 | | Over One Year but Not Exceeding Two Years | 5,869 | 79,814 | | Over Two Years | 82,543 | 119,844 | | **Total** | **501,511** | **387,564** | [2.11.2 Other Payables and Contract Liabilities](index=22&type=section&id=2.11.2%20Other%20Payables%20and%20Contract%20Liabilities) As of June 30, 2023, total other payables and contract liabilities amounted to RMB 2,019,942,000, slightly higher than at the end of 2022, primarily comprising accrued expenses, contract liabilities, amounts due to an associate, and other payables, with construction payables and coal mine exploration and mining rights payables forming a significant portion - Other payables primarily include construction payables (approximately **RMB 650 million**) and coal mine exploration and mining rights payables (approximately **RMB 240 million**)[256](index=256&type=chunk) - Amounts due to the ultimate holding company, controlling shareholders, associates, directors, and related parties are unsecured, interest-free, and have no fixed repayment terms[226](index=226&type=chunk) Other Payables and Contract Liabilities (as of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Accrued Expenses | 518,646 | 491,066 | | Contract Liabilities | 18,622 | 22,871 | | Amounts Due to an Associate | 215,276 | 215,276 | | Other Payables | 1,241,825 | 1,215,038 | | **Total** | **2,019,942** | **1,967,025** | [2.12 Borrowings](index=23&type=section&id=2.12%20Borrowings) This section details the Group's bank and other borrowings, including their composition, interest rates, maturity profile, collateral, and multiple settlement agreements with asset management companies; the Group faces substantial immediate repayment obligations due to overdue borrowings and is involved in various legal proceedings [2.12.1 Overview of Borrowings and Maturity Profile](index=23&type=section&id=2.12.1%20Overview%20of%20Borrowings%20and%20Maturity%20Profile) As of June 30, 2023, the Group's total borrowings amounted to RMB 3,568,384,000, with most classified as current liabilities due within one year or on demand; a significant portion of borrowings are immediately repayable due to covenant breaches or cross-default clauses, and secured borrowings due for immediate repayment are collateralized by coal mining rights and property, plant, and equipment - As of June 30, 2023, approximately **RMB 1,302,136,000** of borrowings were immediately repayable due to breaches of loan covenants or cross-default clauses, of which **RMB 739,644,000** were overdue[260](index=260&type=chunk) - Secured borrowings due for immediate repayment are collateralized by coal mining rights and property, plant, and equipment[78](index=78&type=chunk) Total Borrowings and Composition (as of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Bank Loans (Secured) | 234,540 | 74,676 | | Bank Loans (Unsecured) | 562,491 | 590,990 | | Other Borrowings (Secured Loan I) | 1,936,953 | 2,008,380 | | Other Borrowings (Secured Loan II) | 94,756 | 107,070 | | Other Borrowings (Secured Loan III) | 492,444 | 492,444 | | Other Borrowings (Unsecured) | 247,200 | 247,200 | | **Total Borrowings** | **3,568,384** | **3,520,760** | Borrowings Maturity Profile (as of June 30) | Maturity Period | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Within One Year or On Demand | 3,337,411 | 3,447,453 | | Over One Year but Not Exceeding Two Years | 3,565 | 1,370 | | Over Two Years but Not Exceeding Five Years | 227,408 | 71,937 | | **Total** | **3,568,384** | **3,520,760** | [2.12.2 Loan I Settlement Agreement](index=25&type=section&id=2.12.2%20Loan%20I%20Settlement%20Agreement) The Group entered into multiple settlement and supplemental agreements with an asset management company for Loan I, reducing the original bank loan principal and interest; these agreements involved significant modifications, leading to derecognition of the original liability, recognition of a new liability, and corresponding profit or loss adjustments, with no default events occurring by the reporting date - In 2018, the Group entered into a Loan I settlement agreement with an asset management company, reducing the original bank loan principal and interest by approximately **RMB 4.027 billion** and **RMB 582 million**, respectively[79](index=79&type=chunk) - The significant differences in the terms of the Loan I settlement agreement led to the derecognition of the original financial liability and recognition of a new financial liability, resulting in a gain of approximately **RMB 1.905 billion**[79](index=79&type=chunk) - The Loan I settlement agreement includes default clauses, requiring repayment of the outstanding balance and accrued interest of the original borrowing if not repaid on time; no default events occurred by the reporting date[81](index=81&type=chunk) - As of June 30, 2023, the book value of the Group's borrowings for Loan I was approximately **RMB 1,936,953,000**[232](index=232&type=chunk) [2.12.3 Loan II Settlement Agreement](index=26&type=section&id=2.12.3%20Loan%20II%20Settlement%20Agreement) The Group entered into a settlement and supplemental agreement with an asset management company for Loan II, reducing the original bank loan principal and interest; significant differences in agreement terms led to derecognition of the original liability, recognition of a new liability, and an other gain of approximately RMB 239 million, with no default events occurring by the reporting date - In 2021, the Group entered into a Loan II settlement agreement with an asset management company, reducing the original bank loan principal and interest by approximately **RMB 295 million** and **RMB 108 million**, respectively[233](index=233&type=chunk) - The significant differences in the terms of the Loan II settlement agreement led to the derecognition of the original financial liability and recognition of a new financial liability, resulting in an other gain of approximately **RMB 239 million**[233](index=233&type=chunk) - The Loan II settlement agreement includes default clauses, requiring repayment of the outstanding balance and accrued interest of the original borrowing if not repaid on time; no default events occurred by the reporting date[83](index=83&type=chunk) - As of June 30, 2023, the book value of the Group's borrowings for Loan II was approximately **RMB 94,756,000**[234](index=234&type=chunk) [2.12.4 Loan III Settlement Agreement](index=27&type=section&id=2.12.4%20Loan%20III%20Settlement%20Agreement) The Group entered into a settlement agreement with an asset management company for Loan III, reducing the original bank loan principal and interest; significant differences in agreement terms led to derecognition of the original liability and recognition of a new liability, but no restructuring gain or loss was recognized; this loan and its interest are classified as current liabilities, and no default events occurred by the reporting date - In 2021, the Group entered into a Loan III settlement agreement with an asset management company, reducing the original bank loan principal and interest by approximately **RMB 492 million** and **RMB 261 million**, respectively[235](index=235&type=chunk) - The significant differences in the terms of the Loan III settlement agreement led to the derecognition of the original financial liability and recognition of a new financial liability, but no restructuring gain or loss was recognized[235](index=235&type=chunk) - As of June 30, 2023, the book value of the Group's borrowings for Loan III, approximately **RMB 492,444,000**, and related accrued interest, approximately **RMB 187,146,000**, have been classified as current liabilities[84](index=84&type=chunk)[268](index=268&type=chunk) - The Loan III settlement agreement contains conditional terms, requiring repayment according to the revised plan unless the original borrowing is demanded or timely repayment fails; no default events occurred by the reporting date[236](index=236&type=chunk) [2.12.5 Other Borrowings and Legal Proceedings](index=29&type=section&id=2.12.5%20Other%20Borrowings%20and%20Legal%20Proceedings) As of June 30, 2023, the Group had RMB 247,200,000 in defaulted borrowings, leading to legal proceedings initiated by banks and asset management companies demanding immediate repayment; the Group continues to negotiate with lenders to renew the terms of outstanding and transferred loans - As of June 30, 2023, borrowings with a principal amount of **RMB 247,200,000** were in default, and banks and asset management companies have initiated legal proceedings demanding immediate repayment[87](index=87&type=chunk) - For the year ended December 31, 2022, an asset management company transferred the Group's overdue loans and interest, which were subject to legal proceedings, to other lenders in China[112](index=112&type=chunk) - The Group continues to negotiate with banks and asset management companies/lenders to renew the terms of outstanding and transferred loans[238](index=238&type=chunk) [2.13 Dividends and Capital Commitments](index=30&type=section&id=2.13%20Dividends%20and%20Capital%20Commitments) During this interim period, the company neither paid, declared, nor proposed any dividends; as of June 30, 2023, the Group's unfulfilled capital commitments amounted to RMB 204,300,000, primarily related to the purchase of property, plant, and equipment - No dividends were paid, declared, or proposed during this interim period or prior periods; the directors have determined that no dividend will be paid for this interim period[166](index=166&type=chunk)[297](index=297&type=chunk) - Capital commitments are primarily related to the purchase of property, plant, and equipment[133](index=133&type=chunk) Unfulfilled Capital Commitments (as of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Contracted but Not Yet Incurred | 204,300 | 264,400 | [2.14 Contingent Liabilities and Litigation](index=31&type=section&id=2.14%20Contingent%20Liabilities%20and%20Litigation) The Group faces multiple pending lawsuits, including claims from non-controlling shareholders, a contract performance lawsuit with Yulin Zhongkuang, and an overdue payables lawsuit with Shanxi Yunxin; additionally, the Group provides loan guarantees for its associate, Tongmei Qinfa; directors believe the Group has reasonable grounds for defense or has made sufficient provisions, and is not involved in other significant litigation or arbitration - The Group faces litigation claims from non-controlling shareholders regarding coal production distributions from Xingtao Coal, Fengxi Coal, and Chongsheng Coal, totaling approximately **RMB 706 million**[115](index=115&type=chunk)[170](index=170&type=chunk) - Yulin Zhongkuang has filed a lawsuit against the Group, seeking compensation for economic losses related to the suspension of a mining infrastructure construction project, with a claim amount of approximately **RMB 10,121,000**[90](index=90&type=chunk)[241](index=241&type=chunk) - Shanxi Yunxin has filed a lawsuit against the Group, demanding repayment of overdue payables and penalties, with a total claim amount of approximately **RMB 78,432,000**[242](index=242&type=chunk)[273](index=273&type=chunk) - The Group provides loan guarantees for its associate, Tongmei Qinfa, with a maximum liability of approximately **RMB 259,000,000**[180](index=180&type=chunk)[243](index=243&type=chunk) - Directors believe the Group has reasonable grounds to defend against all lawsuits or has made sufficient provisions, and is not involved in other significant litigation or arbitration[91](index=91&type=chunk)[274](index=274&type=chunk) Management Discussion and Analysis This section provides an in-depth analysis of the Group's business operations, market environment, financial performance, and future outlook, including details on coal mine operations, safety, environmental initiatives, and financial liquidity [3.1 Business Overview and Market Environment](index=33&type=section&id=3.1%20Business%20Overview%20and%20Market%20Environment) The Group, a leading non-state-owned thermal coal supplier in China, operates an integrated coal supply chain and has expanded internationally; in H1 2023, national policies ensured a relatively loose coal supply, with significant increases in raw coal production and imports, leading to a decrease in average coal selling prices - The Group is a leading non-state-owned thermal coal supplier in China, operating an integrated coal supply chain and having expanded its business overseas[276](index=276&type=chunk) - In H1 2023, the national policy of stabilizing prices and ensuring supply proved effective, with raw coal production increasing by **4.4%** year-on-year and coal imports increasing by **93.0%** year-on-year, leading to a relatively loose energy supply[124](index=124&type=chunk) - For the six months ended June 30, 2023, coal operating and trading volume increased year-on-year, but the average coal selling price decreased, primarily due to adjustments in thermal coal market prices[94](index=94&type=chunk) Average Coal Selling Price and Monthly Operating and Trading Volume | Indicator | 2023 H1 | 2022 H1 | | :--- | :--- | :--- | | Average Coal Selling Price (RMB per tonne) | 705 | 799 | | Average Monthly Coal Operating and Trading Volume (thousand tonnes) | 450 | 429 | [3.2 Financial Performance Analysis](index=34&type=section&id=3.2%20Financial%20Performance%20Analysis) This section analyzes the Group's financial performance indicators for the reporting period, including revenue, gross profit, operating profit, net finance costs, and profit after tax, highlighting that the decline in average thermal coal selling prices was the primary cause of the decrease in multiple profitability metrics [3.2.1 Coal Business Revenue and Operating Volume](index=33&type=section&id=3.2.1%20Coal%20Business%20Revenue%20and%20Operating%20Volume) For the six months ended June 30, 2023, coal business revenue was RMB 1,905,924,000, a year-on-year decrease, while coal operating and trading volume increased to 2,702 thousand tonnes - Coal operating and trading volume increased by **4.9%** compared to the same period last year[7](index=7&type=chunk) Coal Business Revenue and Operating Volume (for the six months ended June 30) | Indicator | 2023 (RMB thousands/thousand tonnes) | 2022 (RMB thousands/thousand tonnes) | | :--- | :--- | :--- | | Coal Business Revenue | 1,905,924 | 2,056,954 | | Coal Operating and Trading Volume | 2,702 | 2,575 | [3.2.2 Gross Profit and Gross Margin](index=34&type=section&id=3.2.2%20Gross%20Profit%20and%20Gross%20Margin) For the six months ended June 30, 2023, the Group's gross profit was RMB 390,100,000, with a gross margin of 20.5%, a significant year-on-year decrease primarily due to the decline in average thermal coal selling prices - The decrease in gross margin was primarily due to the decline in the average selling price of thermal coal[7](index=7&type=chunk)[277](index=277&type=chunk) Gross Profit and Gross Margin (for the six months ended June 30) | Indicator | 2023 (RMB) | 2022 (RMB) | | :--- | :--- | :--- | | Gross Profit | 390,100,000 | 703,600,000 | | Gross Margin | 20.5% | 34.2% | [3.2.3 Operating Profit](index=34&type=section&id=3.2.3%20Operating%20Profit) For the six months ended June 30, 2023, the Group's operating profit was RMB 259,300,000, a year-on-year decrease of 57.9%, primarily impacted by the decline in average thermal coal selling prices - The decrease in operating profit was due to the decline in the average selling price of thermal coal[122](index=122&type=chunk) Operating Profit (for the six months ended June 30) | Indicator | 2023 (RMB) | 2022 (RMB) | | :--- | :--- | :--- | | Operating Profit | 259,300,000 | 615,900,000 | | Year-on-Year Change | Decrease 57.9% | | [3.2.4 Net Finance Costs](index=34&type=section&id=3.2.4%20Net%20Finance%20Costs) For the six months ended June 30, 2023, the Group's net finance costs were RMB 73,600,000, a year-on-year decrease of 45.1%, primarily due to increased capitalized borrowing costs and reduced discounting of liabilities - The decrease in net finance costs was due to increased capitalized borrowing costs and reduced discounting of liabilities during the period[96](index=96&type=chunk) Net Finance Costs (for the six months ended June 30) | Indicator | 2023 (RMB) | 2022 (RMB) | | :--- | :--- | :--- | | Net Finance Costs | 73,600,000 | 134,100,000 | | Year-on-Year Change | Decrease 45.1% | | [3.2.5 Profit After Tax and Profit Attributable to Company Equity Holders](index=34&type=section&id=3.2.5%20Profit%20After%20Tax%20and%20Profit%20Attributable%20to%20Company%20Equity%20Holders) For the six months ended June 30, 2023, profit after tax was RMB 140,100,000, a year-on-year decrease of 62.3%, and profit attributable to equity holders of the company was RMB 130,800,000, a year-on-year decrease of 60.0%, both primarily impacted by the decline in average thermal coal selling prices - The decrease in profit was primarily due to the decline in the average selling price of thermal coal[97](index=97&type=chunk)[123](index=123&type=chunk) Profit After Tax and Profit Attributable to Company Equity Holders (for the six months ended June 30) | Indicator | 2023 (RMB) | 2022 (RMB) | | :--- | :--- | :--- | | Profit After Tax | 140,100,000 | 371,200,000 | | Year-on-Year Change | Decrease 62.3% | | | Profit Attributable to Equity Holders of the Company | 130,800,000 | 327,400,000 | | Year-on-Year Change | Decrease 60.0% | | [3.3 Business Review and Development](index=35&type=section&id=3.3%20Business%20Review%20and%20Development) This section reviews the Group's coal business progress, including the renewal of the Indonesian SDE coal mine's operating license and equipment procurement, investments in production safety and environmental protection, and provides an overview of its coal mines, coal characteristics, reserves, resources, and production data [3.3.1 SDE Coal Mine Operating License Renewal and Equipment Procurement](index=35&type=section&id=3.3.1%20SDE%20Coal%20Mine%20Operating%20License%20Renewal%20and%20Equipment%20Procurement) The Group's non-wholly owned subsidiary, SDE, successfully renewed its Indonesian coal mine's operating license until May 14, 2034; to enhance production efficiency and safety, the Group procured approximately RMB 156 million worth of key mining equipment, including shearers, scraper conveyors, and hydraulic supports; the Indonesian project is a significant milestone in the Group's internationalization, with active preparations for production underway - The SDE coal mine's mining operating license has been successfully renewed, valid until **May 14, 2034**[125](index=125&type=chunk) - The Group procured approximately **RMB 156 million** worth of key mining equipment, including shearers, scraper conveyors, and hydraulic supports, to enhance production safety and technology[100](index=100&type=chunk) - The success of the Indonesian project is a significant milestone in the Group's internationalization, with the team diligently advancing preparations for production, aiming to officially commence operations as a new growth engine as soon as possible[172](index=172&type=chunk) [3.3.2 Production Safety and Environmental Protection](index=36&type=section&id=3.3.2%20Production%20Safety%20and%20Environmental%20Protection) The Group prioritizes production safety, continuously monitoring coal mine safety and investing in intelligent mining; during "Safety Production Month," special inspection and rectification actions and safety contract signing ceremonies were held; concurrently, the Group actively promotes ecological civilization concepts through "World Environment Day" activities to enhance employee environmental awareness - The Group considers its employees its most valuable asset, with production safety being an uncompromising top priority, continuously implementing key supervision of coal mine safety and promoting intelligent mining[101](index=101&type=chunk) - During "Safety Production Month," coal mine management teams conducted special inspection and rectification actions, including refining safety objectives, focusing on hazard identification, implementing post responsibilities, conducting emergency drills, and holding safety contract signing ceremonies[283](index=283&type=chunk) - The Group organized "World Environment Day" promotional activities, conveying ecological civilization concepts to employees, advocating green and low-carbon lifestyles, and enhancing environmental awareness[102](index=102&type=chunk)[127](index=127&type=chunk) - The Group actively gives back to society and implements national green energy development policies[182](index=182&type=chunk) [3.3.3 Coal Mine Overview and Characteristics](index=37&type=section&id=3.3.3%20Coal%20Mine%20Overview%20and%20Characteristics) The Group owns five coal mines in China (Xingtao, Fengxi, Chongsheng, Xinglong, Hongyuan) and one in Indonesia (SDE); the report details each mine's location, ownership, area, production capacity, operational status, and coal quality characteristics, including moisture, ash, sulfur content, and gross calorific value - The Group owns five coal mines in China and one in Indonesia[128](index=128&type=chunk) Coal Mine Overview | Coal Mine Name | Location | Ownership | Area (sq. km) | Production Capacity (million tonnes) | Operational Status | | :--- | :--- | :--- | :--- | :--- | :--- | | Xingtao Coal | Shuozhou, Shanxi, China | 80% | 4.25 | 1.5 | Operating | | Fengxi Coal | Shuozhou, Shanxi, China | 80% | 2.43 | 0.9 | Operating | | Chongsheng Coal | Shuozhou, Shanxi, China | 80% | 2.88 | 0.9 | Operating | | Xinglong Coal | Xinzhou, Shanxi, China | 100% | 4.01 | 0.9 | Under Development (Suspended) | | Hongyuan Coal | Xinzhou, Shanxi, China | 100% | 1.32 | 0.9 | Under Development (Suspended) | | SDE Coal | South Kalimantan, Indonesia | 70% | 185 | Not Applicable | Under Development | Coal Quality Characteristics (Selected Coal Mines) | Coal Mine Name | Moisture (%) | Ash Content (db, %) | Sulfur Content (db, %) | Gross Calorific Value (Avg, kcal/kg, net, ar) | | :--- | :--- | :--- | :--- | :--- | | Xingtao Coal | 7–10 | 20–28 | 1.4–1.9 | 4,650–5,200 | | Fengxi Coal | 8–12 | 20–28 | 1.2–1.6 | 4,600–5,150 | | Chongsheng Coal | 8–12 | 20–28 | 1.6–2.5 | 4,600–5,150 | | SDE Coal | 8–11 | 22–25 | 0.18–1.2 | 5,300 | [3.3.4 Operational Data: Reserves, Resources, and Production](index=38&type=section&id=3.3.4%20Operational%20Data%3A%20Reserves%2C%20Resources%2C%20and%20Production) As of June 30, 2023, the Group's total proved and probable reserves were 330.76 million tonnes, and total resources were 714.77 million tonnes; total raw coal production for the first half of the year was 3.72 million tonnes, and commercial coal production was 3,724 thousand tonnes Reserves and Resources (as of June 30) | Indicator | January 1, 2023 (million tonnes) | June 30, 2023 (million tonnes) | | :--- | :--- | :--- | | Proved Reserves | 8.39 | 8.39 | | Probable Reserves | 326.09 | 322.37 | | **Total Reserves** | **334.48** | **330.76** | | Resources | 718.49 | 714.77 | | Less: H1 Raw Coal Production | (3.72) | (3.72) | | **Resources as of June 30** | **714.77** | **714.77** | Commercial Coal Production (for the six months ended June 30) | Coal Mine Name | 2023 (thousand tonnes) | 2022 (thousand tonnes) | | :--- | :--- | :--- | | Xingtao Coal | 1,593 | 805 | | Fengxi Coal | 1,190 | 1,262 | | Chongsheng Coal | 941 | 1,738 | | **Total** | **3,724** | **3,805** | [3.3.5 Exploration, Mining, and Development Expenses](index=39&type=section&id=3.3.5%20Exploration%2C%20Mining%2C%20and%20Development%20Expenses) For the six months ended June 30, 2023, the Group's total exploration, mining, and development expenses amounted to RMB 881,358,000, a decrease from the prior year, with amortization and depreciation being the largest component Exploration, Mining, and Development Expenses (for the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Materials and Consumables | 34,133 | 63,486 | | Staff Costs | 197,012 | 213,196 | | Amortization and Depreciation | 543,160 | 498,929 | | **Total** | **881,358** | **927,194** | [3.4 Financial Position and Liquidity](index=40&type=section&id=3.4%20Financial%20Position%20and%20Liquidity) This section analyzes the Group's capital structure, liquidity, borrowings, cash flow, exchange rate risk, asset pledges, guarantees, and material investment activities; the Group's net current liabilities improved but remain negative, facing challenges from substantial maturing borrowings, and has taken measures to enhance financial flexibility [3.4.1 Capital Structure and Net Current Liabilities](index=40&type=section&id=3.4.1%20Capital%20Structure%20and%20Net%20Current%20Liabilities) The Group's capital primarily consists of ordinary shares and perpetual subordinated convertible securities; as of June 30, 2023, net current liabilities were RMB 3,822,600,000, and the current ratio was 0.38, an improvement from the end of 2022 but still negative - The Group's capital primarily consists of ordinary shares and perpetual subordinated convertible securities[152](index=152&type=chunk) - Net current liabilities improved, and the current ratio increased, but it remains negative[106](index=106&type=chunk)[291](index=291&type=chunk) Net Current Liabilities and Current Ratio (as of June 30) | Indicator | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Net Current Liabilities | 3,822,600,000 | 4,155,800,000 | | Current Ratio | 0.38 | 0.33 | [3.4.2 Borrowings and Bank Facilities](index=40&type=section&id=3.4.2%20Borrowings%20and%20Bank%20Facilities) As of June 30, 2023, the Group's total bank facilities amounted to RMB 3,568,300,000, with the entire amount utilized; total borrowings were RMB 3,568,400,000, predominantly RMB-denominated, and a significant portion is immediately repayable due to defaults; the Group has taken measures to enhance financial flexibility through a diversified funding base - Approximately **RMB 1,302,100,000** of bank and other borrowings are immediately repayable due to breaches of loan covenants and/or default events[108](index=108&type=chunk) - Borrowings bear interest at annual rates ranging from **2.5% to 7.8%**[108](index=108&type=chunk) - The Group enhances financial flexibility through a diversified funding base and has obtained medium-term loans to replace short-term loans[134](index=134&type=chunk) Bank Facilities and Total Borrowings (as of June 30) | Indicator | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Total Bank Facilities | 3,568,300,000 | 3,520,800,000 | | Utilized Facilities | 3,568,300,000 | 3,520,800,000 | | Total Borrowings | 3,568,400,000 | 3,520,800,000 | [3.4.3 Cash and Cash Equivalents and Gearing Ratio](index=41&type=section&id=3.4.3%20Cash%20and%20Cash%20Equivalents%20and%20Gearing%20Ratio) As of June 30, 2023, the Group's cash and cash equivalents amounted to RMB 1,131,100,000, a year-on-year increase of 32.1%; the gearing ratio improved to 25.8%, primarily due to the increase in cash and cash equivalents - Cash and cash equivalents are primarily held in RMB, with portions held in USD, HKD, IDR, EUR, and SGD[135](index=135&type=chunk) - The gearing ratio improved due to the increase in cash and cash equivalents[185](index=185&type=chunk) Cash and Cash Equivalents (as of June 30) | Indicator | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,131,100,000 | 856,000,000 | | Year-on-Year Growth | 32.1% | | Gearing Ratio (as of June 30) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Gearing Ratio | 25.8% | 32.1% | [3.4.4 Exchange Rate Fluctuation Risk](index=42&type=section&id=3.4.4%20Exchange%20Rate%20Fluctuation%20Risk) The Group's cash and cash equivalents are primarily held in RMB and USD, operating expenses are mainly denominated in RMB, overseas purchases are generally denominated in USD, and revenue is typically received in RMB; directors believe the Group does not face significant exchange rate fluctuation risk - The Group's cash and cash equivalents are primarily held in RMB and USD[110](index=110&type=chunk) - Operating expenses are mainly denominated in RMB, overseas purchases are generally denominated in USD, and revenue is typically received in RMB[110](index=110&type=chunk) - Directors believe the Group does not face significant exchange rate fluctuation risk[110](index=110&type=chunk)[155](index=155&type=chunk) [3.4.5 Asset Pledges and Guarantees](index=42&type=section&id=3.4.5%20Asset%20Pledges%20and%20Guarantees) The Group's borrowings are secured by various assets, including coal mining rights, property, plant, and equipment, as well as shares held by the controlling shareholder, who pledged approximately 38.06% of the company's issued share capital to guarantee borrowings - Zhenfu International Limited, wholly owned by controlling shareholder Mr. Xu Jihua, pledged **949,000,000** shares of the company, representing approximately **38.06%** of the issued share capital, to guarantee approximately **RMB 1,936,954,000** in loans[111](index=111&type=chunk)[156](index=156&type=chunk) - Borrowings are secured by coal mining rights, property, plant and equipment, other receivables from related companies, controlling shareholder's property, and Group equity[113](index=113&type=chunk)[114](index=114&type=chunk)[271](index=271&type=chunk) - As of June 30, 2023, total borrowings of approximately **RMB 3,335,845,000** were guaranteed by the company, certain subsidiaries, related parties, and/or Mr. Xu[113](index=113&type=chunk) [3.4.6 Material Investments, Acquisitions, and Disposals](index=42&type=section&id=3.4.6%20Material%20Investments%2C%20Acquisitions%2C%20and%20Disposals) During the period, the Group did not undertake any material investments, major acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the period, the Group did not undertake any material investments, major acquisitions, or disposals of subsidiaries, associates, or joint ventures[138](index=138&type=chunk)[176](index=176&type=chunk) [3.4.7 Contingent Liabilities and Litigation](index=42&type=section&id=3.4.7%20Contingent%20Liabilities%20and%20Litigation) Except for certain litigation matters disclosed in Note 19 to the interim financial statements, the Group had no other material contingent liabilities at the end of the period - Except for certain litigation matters disclosed in Note 19 to the interim financial statements, the Group had no other material contingent liabilities at the end of the period[157](index=157&type=chunk)[295](index=295&type=chunk) [3.5 Business Outlook](index=43&type=section&id=3.5%20Business%20Outlook) The Group anticipates a relatively loose domestic thermal coal market in H2 2023, with coal prices potentially rebounding slightly before returning to an oversupply situation; the SDE coal mine project is progressing well, with preliminary trial production expected within one year; the Group will continue to increase investment in Indonesia, expand cooperation, and focus on local talent development and social responsibility [3.5.1 Market Expectations](index=43&type=section&id=3.5.1%20Market%20Expectations) The domestic thermal coal market is expected to remain relatively loose in H2 2023; while peak summer electricity demand may cause a slight rebound in coal prices, the long-term outlook suggests a return to an oversupply situation - The domestic thermal coal market is expected to maintain a relatively loose fundamental supply in H2 2023[140](index=140&type=chunk) - Peak summer electricity demand may cause a slight rebound in coal prices, but after the summer peak, the domestic thermal coal market will return to an oversupply situation[186](index=186&type=chunk) [3.5.2 SDE Coal Mine Project Progress and Social Responsibility](index=43&type=section&id=3.5.2%20SDE%20Coal%20Mine%20Project%20Progress%20and%20Social%20Responsibility) The SDE coal mine project construction is progressing smoothly, with preliminary trial production expected within one year; the Group actively fulfills its social responsibilities in Indonesia, assisting local community development, fostering regional prosperity, and has already hired over 700 local employees, aiming to create over 3,000 additional jobs in the next three years - SDE coal mine construction, including the main inclined shaft, auxiliary vertical shaft, return air shaft, coal transportation roads, and docks, is progressing smoothly, with preliminary trial production expected within one year[141](index=141&type=chunk)[159](index=159&type=chunk) - The Group actively fulfills its social responsibilities in Indonesia, assisting local community development, fostering regional prosperity, and helping local residents find employment[141](index=141&type=chunk) - Currently, over **700** local employees have been hired, with a target to create over **3,000** additional job opportunities in the next three years[141](index=141&type=chunk)[160](index=160&type=chunk) [3.5.3 Internationalization Strategy and Talent Development](index=43&type=section&id=3.5.3%20Internationalization%20Strategy%20and%20Talent%20Development) The Group is deeply committed to its Indonesian coal mining operations, planning to increase investment and strategic deployment, strengthen business exchanges with local enterprises, government departments, and communities to explore cooperation opportunities; concurrently, the Group adheres to a people-oriented approach, integrating employee religious beliefs, cultural integration, and social elements into talent training and development to build a sustainable business - The Group firmly believes in Indonesia's immense development potential and will continue to increase investment and make strategic deployments there, strengthening business exchanges and exploring broader cooperation opportunities[142](index=142&type=chunk)[162](index=162&type=chunk) - Indonesian authorities are actively creating a favorable investment environment and protecting investors' interests[162](index=162&type=chunk) - The Group adheres to a people-oriented approach, committed to integrating employee religious beliefs, cultural integration, and social elements into talent training and development, aiming to build a sustainable business and become a benchmark enterprise in Indonesia[161](index=161&type=chunk) [3.6 Corporate Governance and Employee Remuneration](index=44&type=section&id=3.6%20Corporate%20Governance%20and%20Employee%20Remuneration) The Group has an Audit Committee, composed of independent non-executive directors, responsible for reviewing and overseeing financial reporting procedures and internal controls; as of June 30, 2023, the Group employed 3,411 staff, utilizing a performance-based reward system to offer competitive remuneration and participating in social security schemes [3.6.1 Audit Committee](index=44&type=section&id=3.6.1%20Audit%20Committee) The Audit Committee, established on June 12, 2009, comprises three independent non-executive directors, chaired by Mr. Ho Ka Yiu, and is primarily responsible for reviewing and overseeing the Group's financial reporting procedures and internal controls; the company consistently complied with applicable Corporate Governance Code provisions during the reporting period - The Audit Committee was established on **June 12, 2009**, and its written terms of reference were formulated in accordance with the Corporate Governance Code set out in Appendix 14 of the Listing Rules[162](index=162&type=chunk) - The Audit Committee members are three independent non-executive directors: Mr. Ho Ka Yiu (Chairman), Professor Sha Zhenquan, and Mr. Jing Dacheng[162](index=162&type=chunk) - The Audit Committee's primary responsibilities are to review and oversee the Group's financial reporting procedures and internal controls[162](index=162&type=chunk) - The company consistently complied with the applicable code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules during the six months ended June 30, 2023[163](index=163&type=chunk) [3.6.2 Employees and Remuneration](index=44&type=section&id=3.6.2%20Employees%20and%20Remuneration) As of June 30, 2023, the Group employed 3,411 staff; the Group adopts a performance-based reward system, providing basic salaries and year-end bonuses, and participates in central pension schemes and mandatory provident fund schemes to ensure competitive remuneration - As of June 30, 2023, the Group employed **3,411** employees[164](index=164&type=chunk) - The Group adopts a performance-based reward system, which is regularly reviewed, and in addition to basic salaries, year-end bonuses may be offered to outstanding employees[164](index=164&type=chunk) - The Group's subsidiaries participate in central pension schemes operated by local municipal governments and pay social insurance contributions for employees monthly; the Hong Kong subsidiary participates in the Mandatory Provident Fund Scheme[165](index=165&type=chunk) - The company has adopted a post-IPO share option scheme to incentivize and retain employees, believing that the remuneration packages offered are competitive[178](index=178&type=chunk) [3.7 Other Information](index=45&type=section&id=3.7%20Other%20Information) This section provides information regarding interim dividends, trading of the company's listed securities, and the publication of interim results and reports [3.7.1 Interim Dividend](index=45&type=section&id=3.7.1%20Interim%20Dividend) The Board of Directors does not recommend paying any interim dividend for the six months ended June 30, 2023 - The Board of Directors does not recommend paying any interim dividend for the six months ended June 30, 2023[7](index=7&type=chunk)[166](index=166&type=chunk) [3.7.2 Purchase, Sale or Redemption of the Company's Listed Securities](index=45&type=section&id=3.7.2%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[188](index=188&type=chunk) [3.7.3 Publication of Interim Results and Interim Report](index=45&type=section&id=3.7.3%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the company's website and the HKEX website; the interim report will be dispatched to shareholders and made available on the websites in due course - This interim results announcement has been published on the company's website (www.qinfagroup.com) and the HKEX website (www.hkex.com.hk)[147](index=147&type=chunk) - The company will dispatch the interim report for the six months ended June 30, 2023, containing all information required by the Listing Rules, to shareholders and make it available on the aforementioned websites in due course[147](index=147&type=chunk)[167](index=167&type=chunk)

Financial Performance - For the year ended December 31, 2022, the turnover was RMB 3,794,039,000, a decrease of 16.8% from RMB 4,559,180,000 in 2021[14]. - Gross profit for 2022 was RMB 1,273,283,000, down 34.3% from RMB 1,941,119,000 in the previous year[14]. - Operating profit for the year was RMB 1,020,470,000, compared to an operating profit of RMB 4,330,857,000 in 2021, indicating a significant decline[14]. - Profit attributable to equity shareholders for 2022 was RMB 456,543,000, a decrease of 83.7% from RMB 2,793,546,000 in 2021[14]. - The Group's gross profit margin decreased to 33.6% in 2022 from 42.6% in 2021, primarily due to a decrease in production volume and revenue while the cost of sales remained relatively constant[83][88]. - The net profit margin decreased to 12.9% from 69.9%[172]. - The Group's sales volume decreased by over 60% in Q4 2022 compared to Q4 2021 due to COVID lockdowns affecting transportation infrastructure[2]. Assets and Liabilities - Total assets as of December 31, 2022, were RMB 7,850,531,000, slightly down from RMB 7,896,513,000 in 2021[15]. - Total liabilities decreased to RMB 7,037,320,000 in 2022 from RMB 7,579,998,000 in 2021[15]. - Total equity increased to RMB 813,211,000 in 2022, up from RMB 316,515,000 in 2021, indicating a recovery in equity position[15]. - As of December 31, 2022, the Group had net current liabilities of RMB 4,155.8 million, up from RMB 2,709.1 million in 2021, with a current ratio of 0.33 compared to 0.41 in 2021[98]. - The current ratio declined to 0.33 in 2022 compared to 0.41 in 2021, indicating a decrease in liquidity[172]. - The gearing ratio as of December 31, 2022, was 32.1%, down from 33.7% in 2021, attributed to loan repayments during the year[110]. Production and Operations - Coal handling and trading volume for 2022 was 4,528,000 tonnes, a decrease of 26% from 6,115,000 tonnes in 2021[14]. - In 2022, the Group's raw coal production increased by 9% year-on-year to 4,500 million tonnes, while imported coal volume decreased by 9.2% year-on-year to 290 million tonnes[34]. - The total raw coal production for the year was 6.97 million tonnes, impacting the reserves[56]. - Total raw coal production for 2022 was 6,966,000 tonnes, a decrease of 26.8% from 9,522,000 tonnes in 2021[60]. - Commercial coal production volume in 2022 was 4,522,000 tonnes, down 26.9% from 6,189,000 tonnes in 2021[60]. Revenue Streams - Revenue from coal business in 2022 was RMB3,794.0 million, a decline of 15.7% compared to RMB4,498.98 million in 2021[65]. - Revenue from power plants increased to RMB850.4 million in 2022, accounting for 22.4% of total revenue, compared to RMB518.8 million and 11.5% in 2021[73]. - Revenue from coal traders decreased to RMB2,943.6 million in 2022, making up 77.6% of total revenue, down from RMB3,980.2 million and 88.5% in 2021[73]. Costs and Expenses - The cost of sales for the Group in 2022 was RMB2,520.8 million, representing a decrease of 4.0% from RMB2,618.1 million in 2021[78]. - Exploration, mining, and development expenses totaled RMB1,784.1 million in 2022, an increase from RMB1,684.5 million in 2021[65]. - Distribution expenses decreased by 53.6% to RMB 2.1 million in 2022 from RMB 4.5 million in 2021, attributed to the absence of one-off commission expenses on vessel disposals[85][90]. - Administrative expenses increased by 21.8% to RMB 305.3 million in 2022 from RMB 250.7 million in 2021, mainly due to rising staff costs[86][91]. - Net finance costs decreased by 29.7% to RMB 253.7 million in 2022 from RMB 360.8 million in 2021, primarily due to repayment of borrowings[95]. Strategic Initiatives - The company plans to stabilize its current business and create opportunities for development despite macroeconomic challenges[19]. - Management is focused on leveraging extensive experience to navigate uncertainties and challenges in the market[19]. - The Group's core strategy of "seeking progress in stability" has enabled it to navigate economic cycles successfully[21]. - The Group is committed to achieving carbon neutrality by 2060 and is focusing on high-quality transformation and the construction of intelligent coal mines[141][143]. - The Group is closely monitoring macroeconomic developments and adjusting strategies to mitigate risks associated with economic fluctuations and national policies[159]. Awards and Recognition - The Group won the "China's Preferred Employer of the Year" award in 2022, reflecting its strong employer brand and corporate values of "integrity and diligence"[26]. - The Group was recognized in the "China Energy (Group) Top 500" list for its annual operating income, indicating its potential for development and ability to guide sustainable energy industry growth[20]. Environmental and Compliance - The Group strictly complies with various laws and regulations, including the Environmental Protection Law and Labour Law of the PRC[6]. - The establishment of an ESG Committee is aimed at monitoring sustainability performance and ensuring responsible procurement practices[7]. - The Group aims to minimize environmental impact by enhancing resource efficiency and reducing pollutant emissions[8]. - The board believes that the group has complied with all relevant laws and regulations affecting its business and operations[197]. Dividend and Shareholder Information - The Board does not recommend the payment of a final dividend for the year ended 31 December 2022, consistent with 2021[125][130]. - The Directors did not recommend the payment of a dividend for the year ended December 31, 2022[5]. - Fortune Pearl International Limited, the controlling shareholder, pledged 949,000,000 shares, representing approximately 38.06% of the issued share capital, to secure loans of approximately RMB 2,008,380,000 as of December 31, 2022[122].

[Annual Results Overview](index=1&type=section&id=%E6%9C%AB%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%81) In 2022, the company experienced significant declines across key financial and operational metrics, with no final dividend recommended - In 2022, the company's revenue, coal operation and trading volume, commercial coal production, gross profit margin, operating profit, profit after tax, and earnings per share all **significantly decreased**, and the Board does not recommend a final dividend[21](index=21&type=chunk) Key Financial and Operational Indicators for 2022 | Indicator | 2022 | 2021 | Change Rate | | :--- | :--- | :--- | :--- | | Revenue (RMB Billion) | 3.8 | 4.6 | -16.8% | | Coal Operation & Trading Volume (Tonnes) | approx. 4,530,000 | approx. 6,115,000 | -26.0% | | Commercial Coal Production (Tonnes) | approx. 4,520,000 | approx. 6,189,000 | -27.0% | | Gross Profit Margin (%) | 33.6 | 42.6 | -9.0 percentage points | | Operating Profit (RMB Billion) | 1.0 | 4.3 | -76.7% | | Profit After Tax for the Year (RMB Billion) | 0.49 | 3.2 | -84.7% | | Profit Attributable to Owners of the Company (RMB Billion) | 0.4565 | 2.8 | -83.7% | | Basic Earnings Per Share (RMB Fen) | 18.1 | 111.8 | -83.8% | | Diluted Earnings Per Share (RMB Fen) | 17.5 | 107.0 | -83.6% | - The Board does not recommend a final dividend for 2022[21](index=21&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the consolidated financial statements, including the statement of comprehensive income and statement of financial position [Consolidated Statement of Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) In 2022, the company's revenue decreased to **RMB 3.794 billion**, with gross profit, operating profit, and profit attributable to owners of the company all significantly declining Key Data from Consolidated Statement of Comprehensive Income | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | Change Rate | | :--- | :------------------ | :------------------ | :----- | | Revenue | 3,794,039 | 4,559,180 | -16.8% | | Cost of Sales | (2,520,756) | (2,618,061) | -3.7% | | Gross Profit | 1,273,283 | 1,941,119 | -34.4% | | Operating Profit | 1,020,470 | 4,330,857 | -76.5% | | Profit After Tax | 490,036 | 3,187,910 | -84.6% | | Profit Attributable to Owners of the Company | 456,543 | 2,793,546 | -83.7% | | Basic Earnings Per Share (RMB Fen) | 18.1 | 111.8 | -83.8% | | Diluted Earnings Per Share (RMB Fen) | 17.5 | 107.0 | -83.6% | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of 2022 year-end, net current liabilities expanded to **RMB 4.156 billion**, leading to a significant decrease in net assets Key Data from Consolidated Statement of Financial Position | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | Change Rate | | :--- | :------------------ | :------------------ | :----- | | Total Non-Current Assets | 5,845,437 | 6,024,659 | -2.97% | | Total Current Assets | 2,005,094 | 1,871,854 | +7.12% | | Total Current Liabilities | (6,160,933) | (4,580,923) | +34.48% | | Net Current Liabilities | (4,155,839) | (2,709,069) | +53.39% | | Net Assets | 813,211 | 316,515 | +156.9% | [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes and explanations supporting the consolidated financial statements [1. General Information](index=6&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Qinfa Group Limited is registered in the Cayman Islands, primarily engaged in coal mining, trading, and transportation in China - The company is registered in the **Cayman Islands**[9](index=9&type=chunk) - Principal activities include coal mining, purchase and sale of coal, coal washing, storage, blending, and shipping transportation in China[28](index=28&type=chunk) - Functional currency is Hong Kong Dollars; presentation currency is RMB[10](index=10&type=chunk) - The ultimate controlling shareholder is **Mr Xu Jihua**[9](index=9&type=chunk) [2. Basis of Preparation of Consolidated Financial Statements](index=6&type=section&id=2.%20%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The consolidated financial statements are prepared on a going concern basis, despite significant uncertainties including substantial net current liabilities, overdue borrowings, and pending litigations; management has implemented various measures to improve financial conditions and ensure continued operations - As of December 31, 2022, net current liabilities were approximately **RMB 4,155,839 thousand**, an increase of **53.39%** from 2021[11](index=11&type=chunk) - Borrowings of approximately **RMB 1,330,634 thousand** and accrued interest of approximately **RMB 219,718 thousand** were due and immediately payable[11](index=11&type=chunk) - Significant uncertainties exist that may cast substantial doubt on the ability to continue as a going concern[13](index=13&type=chunk) - Management has taken measures including actively negotiating loan renewals, securing new financing, accelerating coal production, controlling costs, and addressing pending litigations[14](index=14&type=chunk)[15](index=15&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) - Net cash inflow from operating activities was approximately **RMB 984,432 thousand** in 2022, compared to **RMB 1,887,867 thousand** in 2021[15](index=15&type=chunk) [3. Application of New and Revised International Financial Reporting Standards](index=8&type=section&id=3.%20%E6%87%89%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group first applied several revised International Financial Reporting Standards this year, with amendments to IAS 16 "Property, Plant and Equipment – Proceeds before Intended Use" impacting financial statement items, resulting in an increase of **RMB 31,923 thousand** in property, plant, and equipment - The Group first applied revised International Financial Reporting Standards, including amendments to the Conceptual Framework, Property, Plant and Equipment, and Onerous Contracts[16](index=16&type=chunk)[54](index=54&type=chunk) - Amendments to IAS 16 resulted in an increase of **RMB 31,923 thousand** in property, plant and equipment and a decrease of **RMB 31,923 thousand** in accumulated losses[17](index=17&type=chunk)[37](index=37&type=chunk)[55](index=55&type=chunk) - New and revised IFRSs issued but not yet effective include IFRS 17, and amendments to IAS 1, IAS 8, and IAS 12[19](index=19&type=chunk)[56](index=56&type=chunk) - Amendments to IAS 1 clarify that liability classification as current or non-current should be based on rights existing at the end of the reporting period, irrespective of management's intentions[20](index=20&type=chunk)[39](index=39&type=chunk)[57](index=57&type=chunk) [4. Segment Reporting](index=12&type=section&id=4.%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group primarily operates two reportable segments: coal business and shipping transportation; in 2022, coal business revenue was **RMB 3.794 billion**, while shipping transportation revenue was zero, reflecting the sale of all vessels - Two operating and reportable segments: coal business (coal mining, purchase and sale, washing, storage, blending) and shipping transportation (vessel time charter and voyage charter)[43](index=43&type=chunk)[61](index=61&type=chunk) Segment Revenue and Profit Before Tax | Indicator | Coal Business 2022 (RMB Thousand) | Coal Business 2021 (RMB Thousand) | Shipping Transportation 2022 (RMB Thousand) | Shipping Transportation 2021 (RMB Thousand) | | :--- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue from External Customers | 3,794,039 | 4,498,980 | – | 60,200 | | Reportable Segment Profit/(Loss) Before Tax | 1,021,808 | 4,323,732 | (990) | 19,875 | - All coal mining investments and assets are almost entirely located in China, with geographical segment information presented only by customer location revenue[48](index=48&type=chunk)[69](index=69&type=chunk) Revenue from Major Customers | Customer | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Customer A | 970,472 | 1,706,523 | | Customer B | 650,161 | 1,097,486 | | Customer C | 752,991 | 360,685 * | | Customer D | 625,983 | 401,229 * | [5. Revenue](index=16&type=section&id=5.%20%E6%94%B6%E7%9B%8A) Total revenue in 2022 was **RMB 3.794 billion**, entirely from coal sales, as shipping transportation operations have ceased Revenue from Contracts with Customers by Service Type | Service Type | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Coal Sales | 3,794,039 | 4,498,980 | | Rental Income | – | 60,200 | | Total | 3,794,039 | 4,559,180 | - Revenue from commodity sales is recognized when goods are transferred to customers; revenue from time charter services is recognized on a straight-line basis, and revenue from voyage charter services is recognized over time[71](index=71&type=chunk) [6. Other Income, Gains and Losses](index=16&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) Net other income, gains, and losses in 2022 amounted to **RMB 85.53 million**, a significant decrease from **RMB 377.51 million** in 2021, primarily due to a reduction in net gains from loan restructuring Other Income, Gains and Losses | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Net Exchange Gain/(Loss) | 20,656 | (7,909) | | Net Gain/(Loss) on Disposal of Property, Plant and Equipment | (210) | 27,121 | | Gain on Major Modification of Loans | 11,321 | 238,673 | | Net Gain on Non-Major Modification of Loans | 31,203 | – | | Government Grants | 17,488 | 115,673 | | Fair Value Gain on Financial Assets at FVTPL | 438 | – | | Others | 4,637 | 3,948 | | Total | 85,533 | 377,506 | - Government grants: **RMB 17,488 thousand** in 2022 and **RMB 115,673 thousand** in 2021, used for business development[52](index=52&type=chunk) [7. Net Finance Costs](index=17&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs in 2022 were **RMB 0.254 billion**, a **29.7% decrease** from **RMB 0.361 billion** in 2021, mainly attributable to lower interest expenses on borrowings and derecognition of discounted interest Net Finance Costs | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Interest Income | (16,197) | (7,038) | | Interest on Borrowings | 123,197 | 154,550 | | Interest Expense on Derecognition of Discounted Interest | 158,454 | 213,249 | | Net Finance Costs | 253,689 | 360,761 | - Finance costs were capitalized at an annual interest rate of **6.69%** in 2022[73](index=73&type=chunk) [8. Profit Before Tax](index=18&type=section&id=8.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax in 2022 was **RMB 0.767 billion**, a significant decrease from **RMB 3.970 billion** in 2021, primarily impacted by increased inventory costs, depreciation and amortization, and reduced reversal of impairment losses Items Deducted from Profit Before Tax | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Cost of Inventories | 1,840,799 | 1,534,600 | | Depreciation of Property, Plant and Equipment | 324,711 | 304,340 | | Amortization of Coal Mining Rights | 622,739 | 427,722 | | Staff Welfare Expenses | 540,260 | 450,818 | - Cost of inventories includes staff welfare expenses, depreciation, and amortization of approximately **RMB 1,416,740 thousand** (2021: **RMB 1,096,567 thousand**)[75](index=75&type=chunk) [9. Income Tax Expense](index=19&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense in 2022 was **RMB 0.277 billion**, a substantial decrease from **RMB 0.782 billion** in 2021, mainly due to a reduction in China corporate income tax Income Tax Expense | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Current Tax Expense | 286,089 | 440,001 | | Deferred Tax | (9,344) | 342,185 | | Income Tax Expense | 276,745 | 782,186 | - China corporate income tax is provided at the statutory rate of **25%**[78](index=78&type=chunk) - Hong Kong profits tax is provided at the statutory rate of **16.5%**[98](index=98&type=chunk) - Indonesian corporate income tax is provided at the statutory rate of **22%**, but no provision was made in 2022 and 2021 due to no taxable profit[99](index=99&type=chunk) [10. Earnings Per Share](index=20&type=section&id=10.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share in 2022 were **RMB 18.1 fen**, and diluted earnings per share were **RMB 17.5 fen**, both significantly lower than in 2021 Earnings Per Share | Indicator | 2022 (RMB) | 2021 (RMB) | | :--- | :-------------- | :-------------- | | Basic Earnings Per Share | 18.1 fen | 111.8 fen | | Diluted Earnings Per Share | 17.5 fen | 107.0 fen | - Weighted average number of ordinary shares used for basic earnings per share calculation: **2,493,413,985 shares**[101](index=101&type=chunk) - Adjusted weighted average number of shares used for diluted earnings per share calculation: **2,611,413,985 shares**[82](index=82&type=chunk) [11. Dividends](index=21&type=section&id=11.%20%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any dividend for the year ended December 31, 2022 - No final dividend is recommended for 2022[104](index=104&type=chunk) [12. Coal Mining Rights](index=22&type=section&id=12.%20%E7%85%A4%E7%82%AD%E6%8E%A1%E7%A4%A6%E6%AC%8A) The Group holds multiple coal mining rights in China and Indonesia, with some Chinese mining rights expired or nearing expiration, though management expects successful renewal; certain mining rights are pledged for borrowings - Key coal mining rights include Fengxi Coal Mine, Hongyuan Coal Mine, Xingtao Coal Mine, Xinglong Coal Mine, SDE Coal Mine, and Chong Sheng Coal Mine[86](index=86&type=chunk)[87](index=87&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[135](index=135&type=chunk) - The Xinglong Coal Mine mining right expired on November 29, 2019, but management expects to renew it at minimal cost[107](index=107&type=chunk)[108](index=108&type=chunk) - As of December 31, 2022, China coal mining rights with a net carrying value of approximately **RMB 2,333,653 thousand** were pledged for borrowings[136](index=136&type=chunk) [13. Property, Plant and Equipment](index=23&type=section&id=13.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of December 31, 2022, the carrying value of mining-related property, plant, and equipment in China was **RMB 2.713 billion** - Carrying value of mining-related property, plant and equipment in China: **RMB 2,712,910 thousand** (2021: **RMB 2,864,588 thousand**)[109](index=109&type=chunk) [14. Trade Receivables](index=23&type=section&id=14.%20%E6%87%89%E6%94%B6%E8%B2%A8%E6%98%93%E8%B3%B3%E6%AC%BE) As of the end of 2022, net trade receivables amounted to **RMB 0.179 billion**, with **RMB 59.32 million** overdue for more than two years, for which management believes no impairment provision is necessary Trade Receivables | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Trade Receivables | 215,169 | 218,723 | | Less: Provision for Credit Losses | (36,302) | (36,302) | | Net Amount | 178,867 | 182,421 | - Trade receivables overdue for more than two years: **RMB 59,317 thousand**, from customers with outstanding trade and other payables balances[89](index=89&type=chunk)[137](index=137&type=chunk) - Credit period mainly ranges from **0 to 60 days**[112](index=112&type=chunk) [15. Trade Payables](index=24&type=section&id=15.%20%E6%87%89%E4%BB%98%E8%B2%A8%E6%98%93%E8%B3%B3%E6%AC%BE) As of the end of 2022, total trade payables were **RMB 0.388 billion**, an increase from 2021 Ageing Analysis of Trade Payables | Ageing | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Within 1 year | 187,906 | 126,026 | | Over 1 year but not exceeding 2 years | 79,814 | 96,357 | | Over 2 years | 119,844 | 98,081 | | Total | 387,564 | 320,464 | [16. Borrowings](index=24&type=section&id=16.%20%E5%80%9F%E8%B2%B8) As of the end of 2022, the Group's total borrowings were **RMB 3.521 billion**, with most classified as current liabilities and some subject to immediate repayment due to covenant breaches or default events; the company has entered into multiple settlement agreements with asset management companies to restructure borrowings Total Borrowings | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Bank Loans | 665,666 | 638,000 | | Other Borrowings | 2,855,094 | 3,054,632 | | Total Borrowings | 3,520,760 | 3,692,632 | Borrowing Repayment Schedule | Term | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Within 1 year or on demand | 3,447,453 | 1,475,850 | | Over 1 year but not exceeding 2 years | 1,370 | 2,216,782 | | Over 2 years but not exceeding 5 years | 71,937 | – | | Total | 3,520,760 | 3,692,632 | - Approximately **RMB 1,330,634 thousand** of bank and other borrowings were due and immediately repayable, of which **RMB 739,644 thousand** were overdue[116](index=116&type=chunk) - Pledged borrowings are secured by coal mining rights and property, plant and equipment with carrying values of **RMB 2,333,653 thousand** and **RMB 255,348 thousand**, respectively[117](index=117&type=chunk)[131](index=131&type=chunk) - Loan I, II, III, IV Settlement Agreements: The company reached multiple agreements with asset management companies to restructure and reduce the principal and interest of bank-transferred loans, with some agreements resulting in gain recognition[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk)[181](index=181&type=chunk) - As of December 31, 2022, total borrowings of approximately **RMB 3,446,084 thousand** were guaranteed by the company, subsidiaries, related parties, and/or Mr Xu[184](index=184&type=chunk) [17. Contingent Liabilities](index=31&type=section&id=17.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group faces several pending litigations, including non-controlling shareholder profit distribution claims, former shareholder claims, contract performance disputes, and overdue accounts payable claims, but management believes there are reasonable grounds for defense or sufficient provisions have been made - Non-controlling shareholder claim: Demands **20%** profit distribution from Huameiao Energy subsidiary's coal production from 2013-2020, totaling approximately **RMB 705,860 thousand**[185](index=185&type=chunk) - Former shareholder claim: Demands payment of unsettled consideration of **RMB 30,469 thousand** and related compensation of **RMB 3,000 thousand** for business transfer[158](index=158&type=chunk) - Yulin Zhongkuang contract performance litigation: Demands reimbursement for economic losses related to the suspended mining infrastructure construction project, with a court order of approximately **RMB 10,121 thousand**[186](index=186&type=chunk) - Shanxi Yunxin contract performance litigation: Demands immediate repayment of overdue accounts payable of approximately **RMB 54,124 thousand** and penalties of approximately **RMB 23,306 thousand**[187](index=187&type=chunk) - Financial guarantees issued: Maximum liability for outstanding borrowings of approximately **RMB 259,000 thousand** for associate Tongmei Qinfa[163](index=163&type=chunk)[189](index=189&type=chunk) [Management Discussion and Analysis](index=33&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an overview of the Group's business, operational performance, financial review, and future outlook [Business Review](index=33&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In 2022, China Qinfa Group, a leading non-state-owned thermal coal supplier, continued to focus on its integrated coal supply chain and expand overseas operations; international coal prices remained high due to the Russia-Ukraine war, while China increased domestic coal production to reduce import reliance; the company actively advanced construction and equipment procurement for the SDE coal mine in Indonesia - The company is a leading non-state-owned thermal coal supplier in China, operating an integrated coal supply chain and expanding overseas operations[192](index=192&type=chunk) - In 2022, international coal prices remained high due to the Russia-Ukraine war, while China's domestic raw coal output increased by **9%** year-on-year, and coal imports decreased by **9.2%**[166](index=166&type=chunk)[192](index=192&type=chunk) - The Indonesian SDE coal mine is a key development focus, with construction of the main inclined shaft, auxiliary vertical shaft, return air shaft, coal transportation road, and wharf underway[167](index=167&type=chunk)[193](index=193&type=chunk) - SDE signed a procurement contract with Jiangsu Sumec Complete Equipment Engineering Co, Ltd to purchase **10 sets of diesel generators** and supporting equipment, totaling approximately **RMB 39,000 thousand**[168](index=168&type=chunk) - Qingdao Qinfa signed a procurement contract with Zhengzhou Coal Mining Machinery Group Co, Ltd to purchase coal shearers, scraper conveyors, and hydraulic supports, totaling approximately **RMB 156,000 thousand**[169](index=169&type=chunk) - As of December 31, 2022, the Group owned **5 coal mines in China** and **1 coal mine in Indonesia**[170](index=170&type=chunk)[171](index=171&type=chunk) [Coal Characteristics](index=35&type=section&id=%E7%85%A4%E7%82%AD%E7%89%B9%E5%BE%B5) The commercial coal produced from the Group's operating coal mines exhibits varying coal quality characteristics, including moisture, ash, sulfur content, and gross calorific value Coal Quality Characteristics | Coal Quality Characteristic | Huameiao Energy – Xingtao Coal | Huameiao Energy – Fengxi Coal | Huameiao Energy – Chong Sheng Coal | Shenda Energy – Xinglong Coal | Shenda Energy – Hongyuan Coal | Sumber Daya Energi – SDE Coal | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coal Seam | 4, 8, 9, 10, 11 | 4, 9, 11 | 4, 9, 11 | 2, 5 | 2, 5, 6 | B, D | | Moisture (%) | 7–10 | 8–12 | 8–12 | 8.5 | 8.5 | 8–11 | | Ash Content (db, %) | 20–28 | 20–28 | 20–28 | 21.45 | 30–72 | 22–25 | | Sulfur Content (db, %) | 1.4–1.9 | 1.2–1.6 | 1.6–2.5 | 1.52 | 1.45 | 0.18–1.2 | | Gross Calorific Value (Avg, kcal/kg, Net, ar) | 4,650–5,200 | 4,600–5,150 | 4,600–5,150 | 4,838 | 4,187 | 5,300 | - SDE coal mine has the **highest gross calorific value** and **lowest sulfur content**, indicating its potential for high-quality coal[197](index=197&type=chunk) [Reserves and Resources](index=35&type=section&id=%E5%84%B2%E9%87%8F%E5%8F%8A%E8%B3%87%E6%BA%90%E9%87%8F) As of December 31, 2022, the Group's total reserves were **334.48 million tonnes** and total resources were **718.49 million tonnes**, with the SDE coal mine in Indonesia contributing the majority of both Reserves and Resources | Indicator | December 31, 2022 (Million Tonnes) | January 1, 2022 (Million Tonnes) | Total Raw Coal Production During the Year (Million Tonnes) | | :--- | :---------------------- | :-------------------- | :---------------------- | | Total Reserves | 334.48 | 341.45 | (6.97) | | Total Resources | 718.49 | 725.46 | (6.97) | - The Indonesian SDE coal mine has estimated reserves of **293.00 million tonnes** and resources of **589.22 million tonnes**, making it the Group's largest source of coal reserves and resources[197](index=197&type=chunk) [Operating Data](index=35&type=section&id=%E7%87%9F%E9%81%8B%E6%95%B8%E6%93%9A) In 2022, total raw coal production was **6,966 thousand tonnes**, and total commercial coal production was **4,522 thousand tonnes**, both decreasing from 2021 Raw Coal and Commercial Coal Production | Indicator | 2022 (Thousand Tonnes) | 2021 (Thousand Tonnes) | Change Rate | | :--- | :------------ | :------------ | :----- | | Total Raw Coal Production | 6,966 | 9,522 | -26.8% | | Total Commercial Coal Production | 4,522 | 6,189 | -27.0% | - Xingtao Coal, Fengxi Coal, and Chong Sheng Coal operations historically achieved an average of **65%** blended saleable raw coal production[223](index=223&type=chunk) [Exploration, Mining and Development Expenses](index=37&type=section&id=%E5%8B%98%E6%8E%A2%E3%80%81%E9%96%8B%E6%8E%A1%E5%8F%8A%E9%96%8B%E7%99%BC%E8%B2%BB%E7%94%A8) Total exploration, mining, and development expenses in 2022 amounted to **RMB 1.784 billion**, a slight increase from 2021, primarily due to a significant rise in staff costs Exploration, Mining and Development Expenses | Indicator | 2022 (RMB Thousand) | 2021 (RMB Thousand) | Change Rate | | :--- | :------------------ | :------------------ | :----- | | Materials and Consumables | 115,022 | 105,913 | +8.6% | | Staff Costs | 455,921 | 340,642 | +33.8% | | Utilities | 59,951 | 56,850 | +5.5% | | Indirect Costs and Others | 1,152,120 | 1,180,525 | -2.4% | | Assessment Fees | 1,054 | 586 | +79.9% | | Total | 1,784,068 | 1,684,516 | +5.9% | [Financial Review](index=37&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In 2022, the company's financial performance significantly declined, with substantial decreases in revenue, gross profit, and profit attributable to owners of the company, mainly due to reduced production, relatively flat cost of sales, lower impairment loss reversals, and decreased gains from loan restructuring [Revenue](index=37&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7-%E6%94%B6%E7%9B%8A) Total revenue in 2022 was **RMB 3.794 billion**, entirely from China coal sales, with zero shipping transportation revenue; average coal selling price increased, but coal operation and trading volume decreased Revenue Sources | Source | 2022 (RMB Thousand) | 2021 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Coal Business | 3,794,039 | 4,498,980 | | Shipping Transportation | – | 60,200 | | Total | 3,794,039 | 4,559,180 | - Coal operation and trading volume in 2022 was **4,528 thousand tonnes**, a decrease from **6,115 thousand tonnes** in 2021[224](index=224&type=chunk)[230](index=230&type=chunk) Average Coal Selling Price and Trading Volume | Indicator | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Average Coal Selling Price (RMB per tonne) | 838 | 736 | 367 | | Average Monthly Coal Operation & Trading Volume (Thousand Tonnes) | 377 | 510 | 497 | Coal Business Revenue by Industry Segment | Industry Segment | 2022 Revenue (RMB Thousand) | 2022 Share (%) | 2021 Revenue (RMB Thousand) | 2021 Share (%) | | :--- | :---------------------- | :------------- | :---------------------- | :------------- | | Power Plants | 850,414 | 22.4 | 518,815 | 11.5 | | Coal Traders | 2,943,625 | 77.6 | 3,980,165 | 88.5 | | Total | 3,794,039 | 100 | 4,498,980 | 100.0 | - The Group sold all its vessels on December 31, 2021, resulting in zero shipping transportation revenue[229](index=229&type=chunk) [Cost of Sales](index=39&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales in 2022 was **RMB 2.521 billion**, a slight decrease from 2021, but remained relatively flat given the decline in revenue Cost of Sales for Coal Business Segment | Indicator | 2022 (RMB Million) | 2021 (RMB Million) | | :--- | :-------------------- | :-------------------- | | Purchase Costs | – | 9 | | Coal Transportation Costs | 737 | 890 | | Costs of Self-Produced Coal | 1,784 | 1,685 | | Raw Materials, Fuel, Power | 175 | 163 | | Staff Costs | 456 | 341 | | Depreciation and Amortization | 958 | 724 | | Others | 195 | 457 | | Total Cost of Sales | 2,521 | 2,584 | [Gross Profit](index=39&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E6%AF%9B%E5%88%A9) The gross profit margin in 2022 was **33.6%**, down from **42.6%** in 2021, primarily due to reduced production and sales volume while cost of sales remained relatively flat - Gross profit margin in 2022: **33.6%**[205](index=205&type=chunk) - Gross profit margin in 2021: **42.6%**[205](index=205&type=chunk) - The decrease in gross profit margin was mainly due to reduced production and sales volume while cost of sales remained relatively flat[205](index=205&type=chunk) [Other Income, Gains and Losses](index=40&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) Net other income, gains, and losses in 2022 amounted to **RMB 85.5 million**, a significant decrease from **RMB 377.5 million** in 2021, mainly due to a reduction in net gains from loan restructuring - Net gains in 2022: **RMB 85,500 thousand**[233](index=233&type=chunk) - Net gains in 2021: **RMB 377,500 thousand**[233](index=233&type=chunk) - The decrease of approximately **RMB 292,000 thousand** was primarily due to a reduction in net gains from major/non-major modifications of loans from approximately **RMB 238,700 thousand** in 2021 to approximately **RMB 42,500 thousand** in 2022[233](index=233&type=chunk) [Distribution Expenses](index=40&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Distribution expenses in 2022 were **RMB 2.1 million**, a **53.6% year-on-year decrease**, primarily due to the absence of one-off commission expenses from vessel sales in 2022 - Distribution expenses in 2022: **RMB 2,100 thousand**[207](index=207&type=chunk) - Distribution expenses in 2021: **RMB 4,500 thousand**[207](index=207&type=chunk) - The **53.6% decrease** was mainly due to the absence of one-off commission expenses from vessel sales in 2022[207](index=207&type=chunk) [Administrative Expenses](index=40&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses in 2022 were **RMB 0.305 billion**, a **21.8% year-on-year increase**, mainly attributable to higher staff costs - Administrative expenses in 2022: **RMB 305,300 thousand**[208](index=208&type=chunk) - Administrative expenses in 2021: **RMB 250,700 thousand**[208](index=208&type=chunk) - The **21.8% increase** was mainly due to higher staff costs[208](index=208&type=chunk) [Other Expenses](index=40&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) Other expenses in 2022 were **RMB 27.9 million**, a **37.4% year-on-year decrease**, mainly due to reduced fund utilization fees and surcharges on resource tax payments - Other expenses in 2022: **RMB 27,900 thousand**[209](index=209&type=chunk) - Other expenses in 2021: **RMB 44,500 thousand**[209](index=209&type=chunk) - The **37.4% decrease** was mainly due to reduced fund utilization fees and surcharges on resource tax payments[209](index=209&type=chunk) [Net Finance Costs](index=40&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs in 2022 were **RMB 0.254 billion**, a **29.7% year-on-year decrease**, primarily due to repayment of borrowings - Net finance costs in 2022: **RMB 253,700 thousand**[210](index=210&type=chunk) - Net finance costs in 2021: **RMB 360,800 thousand**[210](index=210&type=chunk) - The **29.7% decrease** was mainly due to repayment of borrowings[210](index=210&type=chunk) [Profit Attributable to Owners of the Company](index=41&type=section&id=%E8%B2%A1%E5%9B%9E%E9%A1%A7-%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%BA%A2%E5%88%A9) Profit attributable to owners of the company in 2022 was **RMB 0.457 billion**, a significant decrease from **RMB 2.8 billion** in 2021, primarily due to reduced impairment loss reversals, increased depreciation and amortization, and lower gains from loan restructuring - Profit attributable to owners of the company in 2022: **RMB 456,500 thousand**[236](index=236&type=chunk) - Profit attributable to owners of the company in 2021: **RMB 2,800,000 thousand**[236](index=236&type=chunk) - The decrease was mainly due to no reversal of impairment losses on property, plant and equipment and coal mining rights of **RMB 2,300,000 thousand** in 2022 (compared to a reversal in 2021)[212](index=212&type=chunk) - The decrease was mainly due to increased depreciation of property, plant and equipment and amortization of coal mining rights[236](index=236&type=chunk) - The decrease was mainly due to lower net gains from major/non-major modifications of loans[212](index=212&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=41&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) In 2022, the Group's net current liabilities significantly increased and the current ratio deteriorated, but efforts are underway to improve financial conditions through diversified financing, loan renewals, and asset pledges [Net Current Liabilities and Current Ratio](index=41&type=section&id=%E6%B5%81%E5%8B%95%E8%B2%A0%E5%82%B5%E6%B7%A8%E9%A1%8D%E5%8F%8A%E6%B5%81%E5%8B%95%E6%AF%94%E7%8E%87) Net current liabilities in 2022 were **RMB 4.156 billion** and the current ratio was **0.33**, both deteriorating from 2021, mainly due to certain borrowings maturing within the next 12 months - Net current liabilities in 2022: **RMB 4,155,800 thousand** (2021: **RMB 2,709,100 thousand**)[213](index=213&type=chunk)[260](index=260&type=chunk) - Current ratio in 2022: **0.33** (2021: **0.41**)[213](index=213&type=chunk) - The deterioration in net current liabilities and current ratio was mainly due to certain borrowings maturing within the next 12 months[213](index=213&type=chunk) - Approximately **RMB 3,447,500 thousand** of bank and other borrowings were classified as current liabilities[216](index=216&type=chunk) - Approximately **RMB 1,330,600 thousand** of borrowings were due and immediately repayable[216](index=216&type=chunk) [Capital Expenditure and Commitments](index=41&type=section&id=%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA%E5%8F%8A%E6%89%BF%E6%93%94) Total capital expenditure in 2022 was **RMB 0.780 billion**, primarily for the purchase of plant and equipment, with capital commitments of **RMB 0.264 billion** - Total capital expenditure in 2022: **RMB 780,300 thousand** (2021: **RMB 157,900 thousand**), primarily related to the purchase of plant and equipment[237](index=237&type=chunk) - Capital commitments contracted but not yet incurred in 2022: **RMB 264,400 thousand** (2021: **RMB 157,000 thousand**), primarily related to the purchase of plant and equipment[237](index=237&type=chunk) [Capital Structure](index=42&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group's capital structure primarily consists of ordinary shares and perpetual subordinated convertible securities, with stringent financial management policies in place to fund business activities through internal resources and borrowings - Capital structure primarily consists of ordinary shares and perpetual subordinated convertible securities[238](index=238&type=chunk) - Total bank and other borrowing facilities in 2022: **RMB 3,520,800 thousand**, fully utilized[261](index=261&type=chunk) - Cash and cash equivalents in 2022: **RMB 856,600 thousand** (2021: **RMB 1,030,400 thousand**)[239](index=239&type=chunk) [Gearing Ratio](index=43&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The gearing ratio in 2022 was **32.1%**, a decrease from **33.7%** in 2021, mainly due to loan repayments during the year - Gearing ratio in 2022: **32.1%** (2021: **33.7%**)[262](index=262&type=chunk) - The decrease was mainly due to loan repayments during the year[262](index=262&type=chunk) [Pledge of the Group's Assets](index=43&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the end of 2022, the Group pledged **RMB 2.589 billion** in assets as collateral for credit facilities from banks and asset management companies - Total pledged assets in 2022: **RMB 2,589,000 thousand** (2021: **RMB 3,316,300 thousand**), including property, plant and equipment, coal mining rights, prepaid lease payments, inventories, trade receivables, and bank deposits[242](index=242&type=chunk) [Foreign Exchange Fluctuation Risk](index=43&type=section&id=%E5%BD%99%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA) The Group primarily holds cash and receives revenue in RMB, with operating expenses also mainly denominated in RMB, thus facing no significant foreign exchange fluctuation risk - Cash and cash equivalents are primarily held in RMB, with some held in USD, HKD, IDR, EUR, and SGD[240](index=240&type=chunk) - Operating expenses of China subsidiaries are mainly denominated in RMB, while overseas purchases are denominated in USD and IDR[218](index=218&type=chunk) - Revenue is generally received in RMB[218](index=218&type=chunk) - The Directors believe the Group faces no significant foreign exchange fluctuation risk[218](index=218&type=chunk) [Contingent Liabilities and Litigation](index=43&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%A8%B4%E8%A8%9F) As of December 31, 2022, the Group had no other significant contingent liabilities apart from the litigations disclosed in Note 17 to the financial statements - As of December 31, 2022, the Group had no other significant contingent liabilities, except for the litigation matters disclosed in Note 17[264](index=264&type=chunk) [Final Dividend for the Year Ended December 31, 2022](index=43&type=section&id=%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%8C%E5%B9%B4%E5%8D%81%E4%BA%8C%E6%9C%88%E4%B8%89%E5%8D%81%E4%B8%80%E6%97%A5%E6%AD%A2%E5%B9%B4%E5%BA%A6%E4%B9%8B%E6%9C%AB%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any final dividend for the year ended December 31, 2022 - No final dividend is recommended for 2022[265](index=265&type=chunk) [Employees and Remuneration](index=43&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC) As of the end of 2022, the Group employed **3,067 staff** and implemented performance-based incentive schemes and share option plans to motivate employees - As of December 31, 2022, the Group employed **3,067 staff**[243](index=243&type=chunk) - Performance-based incentive schemes and share option plans are adopted to motivate employees[243](index=243&type=chunk)[267](index=267&type=chunk) - Employees of China subsidiaries participate in central retirement benefit schemes and pay social insurance contributions[244](index=244&type=chunk) - Employees of Hong Kong subsidiaries participate in the Mandatory Provident Fund Scheme[244](index=244&type=chunk) [Business Outlook](index=44&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The Group will continue to prioritize the construction of the SDE coal mine in Indonesia, dynamically adjust investment projects, and commit to high-quality transformation and intelligent mine construction, adhering to green energy development policies to address climate change and national carbon peak and neutrality goals - The construction of the Indonesian SDE coal mine is a top priority, with continued resource allocation and dynamic adjustment of investment[246](index=246&type=chunk) - SDE has successfully renewed its mining operating license until May 14, 2034[246](index=246&type=chunk) - The Group is committed to high-quality transformation, intelligent mine construction, and green energy development, responding to national "carbon peak before 2030 and carbon neutrality by 2060" policies[247](index=247&type=chunk) - China's coal production is expected to continue increasing in 2023, with the coal market stabilizing and prices fluctuating within a reasonable range[267](index=267&type=chunk) [Corporate Governance](index=45&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) This section outlines the Group's corporate governance practices, including the roles of the Audit Committee and the auditor [Board Audit Committee](index=45&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Board Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting processes and internal controls - The Audit Committee was established on June 12, 2009, with written terms of reference in accordance with the Code[248](index=248&type=chunk) - Primary responsibilities: reviewing and overseeing the Group's financial reporting processes and internal controls[248](index=248&type=chunk) - Members: Mr Liu Sik Yuen (Chairman), Professor Sha Zhenquan, and Mr Jing Dacheng (all independent non-executive directors)[248](index=248&type=chunk) [Auditor's Scope of Work](index=45&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E4%B9%8B%E5%B7%A5%E4%BD%9C%E7%AF%84%E5%9C%8D) The Audit Committee has reviewed the audited consolidated financial statements for FY2022; the Group's auditor has reconciled the preliminary announcement data with the consolidated financial statements, but their work does not constitute an assurance engagement - The Audit Committee has reviewed the audited consolidated financial statements for FY2022[270](index=270&type=chunk) - The Group's auditor, UHY CPA Limited, has reconciled the preliminary announcement data with the consolidated financial statements[270](index=270&type=chunk) - The auditor's work does not constitute an assurance engagement under Hong Kong Standards on Auditing, Review Engagements, or Assurance Engagements[270](index=270&type=chunk) [Extract from Independent Auditor's Report](index=46&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A%E6%91%98%E9%8C%84) This section highlights key findings from the independent auditor's report, including the fair presentation of financial statements and significant uncertainties regarding going concern - The auditor believes the consolidated financial statements fairly present the Group's financial position, performance, and cash flows in accordance with International Financial Reporting Standards[271](index=271&type=chunk) - Significant uncertainties regarding going concern exist, including net current liabilities of approximately **RMB 4,155,839 thousand**, and borrowings of approximately **RMB 1,330,634 thousand** and accrued interest of approximately **RMB 219,718 thousand** due and immediately payable[271](index=271&type=chunk) - Pending litigations against the Group exist, primarily demanding immediate repayment of certain interest-bearing payables[271](index=271&type=chunk) - The auditor's opinion on the significant uncertainties regarding going concern has not been modified[253](index=253&type=chunk) [Other Information](index=46&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section provides additional information regarding the company's securities, annual report publication, and share transfer registration suspension [Purchase, Sale or Redemption of the Company's Listed Securities](index=46&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the year ended December 31, 2022, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - In 2022, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[254](index=254&type=chunk) [Publication of Annual Report](index=46&type=section&id=%E5%88%8A%E7%99%BB%E5%B9%B4%E5%A0%B1) The annual report, containing information required by Appendix 16 of the Listing Rules and other applicable laws and regulations, will be dispatched to shareholders and published on the HKEX and company websites in due course - The annual report will be dispatched to shareholders and published on the HKEX website (www.hkex.com.hk) and the company's website (www.qinfagroup.com)[255](index=255&type=chunk) [Suspension of Share Transfer Registration](index=47&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) To determine eligibility for the Annual General Meeting on June 20, 2023, the company will suspend share transfer registration from June 13 to June 20, 2023 - Share transfer registration will be suspended from **Tuesday, June 13, 2023, to Tuesday, June 20, 2023**[274](index=274&type=chunk) - The deadline for share transfer registration is **4:00 p.m. on Monday, June 12, 2023**[274](index=274&type=chunk)

Revenue and Profitability - Revenue from coal business for the six months ended June 30, 2022, was RMB 2,056,954,000, an increase from RMB 1,572,535,000 in the same period of 2021, representing a growth of approximately 30.7%[27]. - Revenue for the six months ended June 30, 2022, was RMB 2,056,954, an increase of 28% compared to RMB 1,605,452 in the same period of 2021[126]. - Gross profit for the period was RMB 703,599, representing a 34% increase from RMB 523,963 in the previous year[126]. - Profit after taxation for the six months ended June 30, 2022, was RMB 371.2 million, down RMB 107.4 million or 22.4% from RMB 478.6 million in the same period of 2021[36][41]. - Profit attributable to equity shareholders for the six months ended June 30, 2022, was RMB 327.4 million, compared to RMB 472.8 million in the same period of 2021[37][42]. - Total comprehensive income for the period was RMB 374,399, compared to RMB 483,698 in the same period last year, indicating a decrease of 23%[126]. - Basic earnings per share decreased to RMB 13.03 cents from RMB 18.87 cents, a decline of 30% year-over-year[129]. - The Group's gross profit for the six months ended June 30, 2022, was RMB 703.6 million, compared to RMB 524.0 million in the same period of 2021, resulting in a gross profit margin of 34.2% versus 32.6%[33][38]. Coal Production and Sales - Coal handling and trading volume for the same period was 2,575,000 tonnes, a decrease from 2,725,000 tonnes in 2021, indicating a decline of about 5.5%[27]. - The average coal selling price for the six months ended June 30, 2022, was RMB 799 per tonne, an increase from RMB 577 per tonne in the same period of 2021[30]. - The total raw coal production for the period from January 1, 2022, to June 30, 2022, was 3.80 million tonnes, a decrease from 4.11 million tonnes in the same period of 2021[75]. - The commercial coal production volume for the six months ended June 30, 2022, was 2.47 million tonnes, compared to 2.67 million tonnes in the same period of 2021[76]. - Average coal selling prices increased significantly, ranging from RMB 528 to RMB 1,295 per tonne in 2022, compared to RMB 345 to RMB 801 per tonne in 2021, reflecting a substantial rise in market prices[27]. Financial Position and Liabilities - As of June 30, 2022, the Group's net current liabilities decreased to RMB 2,290.7 million from RMB 2,709.1 million as of December 31, 2021, resulting in a current ratio improvement to 0.45 from 0.41[83]. - The total liabilities decreased to RMB 4,140,927 from RMB 4,580,923, a reduction of approximately 10%[131]. - The Group's cash and cash equivalents amounted to RMB 1,016.4 million as of June 30, 2022, down 1.4% from RMB 1,030.4 million as of December 31, 2021[90]. - The total bank and other borrowings of the Group were RMB 1,453.3 million as of June 30, 2022, compared to RMB 1,475.9 million as of December 31, 2021, indicating a decrease of approximately 1.5%[91]. - The gearing ratio of the Group as of June 30, 2022, was 32.6%, slightly improved from 33.8% as of December 31, 2021[98]. - The Group's total banking facilities were RMB 3,502.6 million as of June 30, 2022, a decrease from RMB 3,962.6 million as of December 31, 2021[97]. Operational Strategies and Future Outlook - The Group continued to focus on its core coal operations in China while expanding its foreign operations during the reporting period[25]. - Future strategies include enhancing logistics services and transportation to improve delivery efficiency to coastal customers[23]. - The management remains optimistic about future growth prospects despite the decrease in trading volume, focusing on market expansion and operational efficiency[25]. - The Group aims to streamline the approval process for the mining business license transfer in Indonesia, which is expected to expedite the transfer of the mining operating license[56]. - The Group is actively engaged in the construction of necessary infrastructure, including roads and wharfs, to support coal transportation for the SDE Coal Mine[59]. - The Group plans to accelerate coal production in currently operating mines and apply for the renewal of expired coal mining rights to increase internally generated funds and operating cash inflows in the coming years[164]. Market Conditions and Challenges - From January to June 2022, imported coal volume was 115 million tonnes, down 17.5% from the same period last year, contributing to high domestic thermal coal prices[46][48]. - The Group expects a decline in imported coal volume in the second half of 2022 due to global energy supply tightness[118]. - The domestic coal supply is anticipated to remain high, with coal prices expected to stay relatively elevated[119]. - The peak season for coal consumption in China is expected to increase demand from November to December 2022[119]. Corporate Governance and Compliance - The Group's audit committee has reviewed the unaudited interim financial statements for the six months ended June 30, 2022[117]. - The Company has complied with the Corporate Governance Code throughout the reporting period[116]. - The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), ensuring compliance with global accounting standards[152]. Employee and Social Responsibility - As of June 30, 2022, the Group employed 2,945 employees and has adopted a performance-based reward system to motivate staff[118]. - The Group's subsidiaries in the PRC are required to pay monthly social insurance premiums covering various insurances for employees[110]. - Training programs for Indonesian frontline staff are being implemented to enhance their skills and provide local employment opportunities[121].

Financial Performance - The Group reported a significant increase in revenue, achieving a total of $X million, representing a Y% growth compared to the previous year[10]. - The company's turnover for the year ended December 31, 2021, was RMB 4,559,180, a significant increase from RMB 2,247,363 in 2020, representing a growth of approximately 102.0%[12]. - Gross profit for 2021 reached RMB 1,941,119, compared to RMB 355,315 in 2020, indicating a growth of about 446.5%[12]. - The operating profit for 2021 was RMB 4,330,857, a turnaround from an operating loss of RMB 3,946,158 in 2020[12]. - Profit for the year attributable to equity shareholders was RMB 2,793,546, compared to a loss of RMB 2,901,499 in the previous year[12]. - Total revenue for the year ended 31 December 2021 was RMB 4,498.98 million, a significant increase from RMB 2,190.11 million in 2020, representing a growth of 105.9%[85]. - The coal business revenue for 2021 reached RMB 4,498.98 million, a significant increase from RMB 2,190.11 million in 2020, reflecting a growth of approximately 105.9%[74]. - The average coal selling price in 2021 was RMB 736 per tonne, up from RMB 367 per tonne in 2020, indicating a price increase of about 100%[81]. - The net profit margin turned positive at 69.9% in 2021, a significant improvement from a loss margin of (152.9%) in 2020[163][165]. Operational Highlights - User data showed an increase in active users, reaching Z million, which is an A% increase year-over-year[10]. - Cash flow from operations increased by I%, providing a solid foundation for future investments[10]. - The total raw coal production for the year 2021 was 9.52 million tonnes, compared to 8.78 million tonnes in 2020, representing an increase of approximately 8.4%[70]. - The commercial coal production volume for 2021 was 6,189 thousand tonnes, compared to 5,710 thousand tonnes in 2020, representing an increase of approximately 8.4%[70]. - The total coal handling and trading volume for 2021 was 6,115 thousand tonnes, compared to 5,964 thousand tonnes in 2020, showing an increase of approximately 2.5%[78]. - The average monthly coal handling and trading volume in 2021 was 510 thousand tonnes, slightly up from 497 thousand tonnes in 2020[81]. Strategic Initiatives - The Group has provided a positive outlook for the next fiscal year, projecting revenue growth of B%[10]. - New product launches are expected to contribute an additional $C million in revenue, enhancing the overall product portfolio[10]. - Market expansion efforts are underway, targeting E new regions, which are anticipated to increase market share by F%[10]. - The Group is considering strategic acquisitions to bolster its market position, with potential targets identified[10]. - The company is actively seeking development opportunities in foreign markets and exploring merger and acquisition opportunities, particularly focusing on a project in Indonesia as a key growth driver[16]. - The Group is in the process of acquiring 70% equity interest in five additional mining business licenses, with government approvals pending[45]. - The Group successfully acquired the SDE coal mine in Indonesia in 2021 and is expediting its commissioning to put it into operation as soon as possible[126][129]. Financial Management - The Group's debt-to-equity ratio improved to H%, indicating a stronger financial position[10]. - The Group reached a loan restructuring proposal, reducing the original debt by approximately RMB 404,088,649, resulting in an outstanding principal balance of RMB 435,636,667[46][49]. - The Group's bank and other borrowings as of 31 December 2021 totaled RMB 1,475.9 million, down from RMB 1,971.0 million in 2020[113]. - The gearing ratio decreased to 33.8% as of 31 December 2021 from 83.8% in 2020, attributed to an increase in total assets[113]. - The Group aims to improve cash flow by negotiating with creditors and exploring various financing and repayment plans[46][49]. - The Group's financial management policies focus on maintaining a healthy financial condition, funding operations through internally generated resources and borrowings[110]. Environmental and Social Governance - The company has established an ESG committee and task force to enhance its environmental, social, and governance practices, aiming to protect stakeholder interests[17]. - The Group aims to minimize environmental impact by enhancing resource efficiency and reducing pollutant emissions[172]. - The establishment of an ESG Committee is intended to monitor sustainability performance and ensure responsible procurement practices[178]. - The Group is committed to promoting green production to reduce its carbon footprint[172]. - The company is focusing on low-carbon transformation research and phasing out outdated technologies to contribute to environmental protection and emissions reduction[23]. Safety and Risk Management - The company is committed to improving production safety and adhering to relevant laws and regulations to prevent accidents[18]. - The management emphasizes the importance of risk prevention and control to navigate the challenges posed by the changing external environment and coal market[25]. - The Group is focused on enhancing safety management and control systems in coal mining operations to mitigate safety risks[156][159]. - The Group will closely monitor credit exposure and adjust credit lines and periods to manage liquidity risks due to potential cash flow issues among customers[157][160].