Corporate Information The report provides key corporate information including the Board of Directors, various committees, authorized representatives, legal advisors, auditors, principal bankers, and registered address - The report provides key corporate information including the Board of Directors, various committees (Audit, Remuneration, Nomination), authorized representatives, legal advisors, auditors, principal bankers, and registered address, with Executive Directors including Chairman Mr. Liu Kaijin and CEO Mr. Wu Xuzhe[4](index=4&type=chunk)[7](index=7&type=chunk) Management Discussion and Analysis [Business Review](index=7&type=section&id=Business%20Review) The Group's net loss significantly expanded to approximately RMB 73.7 million due to the severe impact of the COVID-19 pandemic on dredging and property management businesses 2020 Half-Year Key Performance Indicators | Indicator | H1 2020 | H1 2019 | | :--- | :--- | :--- | | **Net Loss** | Approx. RMB 73.7 million | Approx. RMB 25.3 million | | **Loss Attributable to Owners of the Company** | Approx. RMB 74.1 million | Approx. RMB 27.03 million | - The COVID-19 pandemic was the primary cause of performance decline, leading to **domestic projects halting** from January 2020 and **overseas projects (Bangladesh, Cambodia, Thailand) experiencing multiple interruptions and prolonged shutdowns** due to restricted personnel and material flow[18](index=18&type=chunk) - To capitalize on offshore wind power construction opportunities, the Group plans to invest **RMB 230 million** in a 2,300-ton self-propelled crane vessel, expected for delivery by the end of April next year[20](index=20&type=chunk) - The property management business (Xingyu International Home Furnishing Plaza) was minimally affected by the pandemic, with approximately 47 tenants, while a hotel under construction in Yancheng remains unfinished due to funding issues[20](index=20&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) Total revenue declined by 55.7% to RMB 119.9 million, resulting in a gross loss of RMB 14.6 million and an expanded loss for the period of RMB 73.7 million, increasing financial pressure and net current liabilities Revenue Performance by Business Segment (Six Months Ended June 30) | Business Segment | 2020 Revenue (RMB) | 2019 Revenue (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Infrastructure and Reclamation Dredging | RMB 29 million | Approx. RMB 80.7 million | -64.0% | | Environmental Dredging and Water Management | RMB 3.3 million | Approx. RMB 29.55 million | -88.8% | | Other Marine Business | RMB 83.4 million | Approx. RMB 155.6 million | -46.4% | | Property Management | RMB 4.1 million | RMB 4.6 million | -9.4% | | **Total** | **RMB 119.9 million** | **RMB 270.4 million** | **-55.7%** | Profitability Analysis (Six Months Ended June 30) | Indicator | 2020 (RMB) | 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Costs | RMB 134.5 million | RMB 240 million | -43.9% | | Gross (Loss)/Profit | (RMB 14.6 million) | RMB 30.5 million | Turned from profit to loss | | Overall Gross (Loss)/Profit Margin | -12.1% | 11.3% | -23.4 percentage points | | Loss for the Period | (RMB 73.7 million) | (RMB 25.3 million) | +191.8% | | Loss Per Share | RMB 0.042 | RMB 0.015 | +180.0% | Key Financial Position Indicators (As of June 30, 2020) | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Equity | RMB 1.484 billion | RMB 1.563 billion | | Net Current Liabilities | RMB 352 million | RMB 283 million | | Current Ratio | 0.70 | 0.76 | | Debt-to-Equity Ratio | 45.8% | 43.2% | - Capital commitments significantly increased from **RMB 66.2 million** at the end of 2019 to **RMB 277.5 million**, primarily for the construction of a 2,300-ton self-propelled crane vessel[33](index=33&type=chunk) [Prospects](index=14&type=section&id=Prospects) The Group will adopt prudent operating strategies, strengthen risk control, and actively seek stable financing solutions to support business development and redeem maturing bonds amidst ongoing uncertainties - Operating Strategy: Adopt a prudent approach, effectively control operational risks, and accelerate the collection of trade receivables[34](index=34&type=chunk) - Capital Strategy: Actively seek and implement feasible financing solutions to optimize the capital structure for business development, while continuing to raise additional funds to redeem relevant bonds[34](index=34&type=chunk) Disclosure of Interests and Other Information [Directors' and Chief Executive's Interests](index=15&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) The report details directors' and chief executive's shareholdings, with Chairman Mr. Liu Kaijin holding approximately 19.61% of shares directly and through a controlled corporation Directors' Shareholdings (As of June 30, 2020) | Director Name | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Shares Held | | :--- | :--- | :--- | :--- | | Mr. Liu Kaijin | Controlled Corporation Interest & Beneficial Owner | 387,159,000 | 19.61% | | Ms. Zhou Shuhua | Spouse's Interest | 387,159,000 | 19.61% | [Substantial Shareholders' Interests](index=17&type=section&id=Substantial%20Shareholders%27%20Interests) Beyond directors, the report identifies other substantial shareholders including Wangji Limited, Mr. Yuan Xiangbing, and Jiangsu Best Environmental Engineering Co., Ltd Substantial Shareholders' Shareholdings (As of June 30, 2020) | Shareholder Name | Number of Shares Held (Long Position) | | :--- | :--- | | Wangji Limited | 351,600,000 | | Yuan Xiangbing | 191,917,000 | | Jiangsu Best Environmental Engineering Co., Ltd. | 148,180,000 | [Share Option Scheme](index=18&type=section&id=Share%20Option%20Scheme) The company granted 17,000,000 share options to employees at an exercise price of HKD 0.10 per share, which remained unexercised, cancelled, or lapsed by period-end - On January 20, 2020, a total of **17,000,000 share options** were granted to employees[54](index=54&type=chunk) Details of Granted Share Options | Indicator | Content | | :--- | :--- | | Grant Date | January 20, 2020 | | Exercise Price | HKD 0.10/share | | Closing Price Before Grant Date | HKD 0.071/share | | Exercise Period | January 20, 2020 – January 19, 2021 | [Corporate Governance and Other Information](index=19&type=section&id=Corporate%20Governance%20and%20Other%20Information) The company complied with corporate governance codes, with voluntary salary reductions by executive directors, audit committee review, and no interim dividend declared - Effective June 1, 2020, Executive Directors Mr. Liu Kaijin and Ms. Zhou Shuhua voluntarily reduced their annual director salaries and were simultaneously appointed as general manager and deputy general manager of the company's subsidiaries, receiving corresponding remuneration[59](index=59&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited interim financial statements for the reporting period[59](index=59&type=chunk) - The Board of Directors decided not to declare an interim dividend for the six months ended June 30, 2020[61](index=61&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Revenue decreased by 55.7% to RMB 119.9 million, resulting in a gross loss of RMB 14.57 million and a total loss for the period of RMB 73.68 million Statement of Profit or Loss Summary (Six Months Ended June 30, RMB '000) | Item (RMB '000) | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Revenue | 119,935 | 270,433 | | Operating Costs | (134,506) | (239,952) | | **Gross (Loss)/Profit** | **(14,571)** | **30,481** | | Loss Before Tax | (73,187) | (23,143) | | **Total Loss for the Period** | **(73,677)** | **(25,253)** | | Loss Attributable to Owners of the Company | (74,083) | (27,030) | | Basic Loss Per Share (RMB cents) | (4.16) | (1.5) | [Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets were RMB 2.745 billion, total liabilities RMB 1.261 billion, and total equity RMB 1.484 billion, with net current liabilities of RMB 352 million indicating short-term solvency pressure Statement of Financial Position Summary (RMB '000) | Item | June 30, 2020 (Unaudited) | December 31, 2019 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 1,937,224 | 1,970,896 | | Current Assets | 807,866 | 876,272 | | **Total Assets** | **2,745,090** | **2,847,168** | | Current Liabilities | 1,159,854 | 1,159,452 | | Non-current Liabilities | 101,240 | 124,542 | | **Total Liabilities** | **1,261,094** | **1,283,994** | | **Total Equity** | **1,483,996** | **1,563,174** | | **Net Current Liabilities** | **(351,988)** | **(283,180)** | [Condensed Consolidated Statement of Cash Flows](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly improved to RMB 53.11 million, while investing and financing activities resulted in net outflows, with period-end cash at RMB 25.97 million Cash Flow Statement Summary (Six Months Ended June 30, RMB '000) | Item (RMB '000) | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 53,110 | 5,085 | | Net Cash Used in Investing Activities | (16,245) | (11,420) | | Net Cash Used in Financing Activities | (23,509) | (26,431) | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **13,356** | **(32,766)** | | Cash and Cash Equivalents at Beginning of Period | 12,612 | 48,435 | | **Cash and Cash Equivalents at End of Period** | **25,968** | **15,669** | [Notes to the Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight significant going concern uncertainties due to overdue bonds and net current liabilities, detailing bond default and substantial impairment provisions for long-aged trade receivables - **Significant Uncertainties Related to Going Concern**: Note 2 discloses the company's failure to repay bonds due on December 20, 2019, and net current liabilities of **RMB 352 million** as of June 30, 2020, indicating significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern, though management believes it can continue through cost control, bank loan renewals, and bondholder negotiations[87](index=87&type=chunk)[90](index=90&type=chunk) - **Default on Bonds Payable**: Note 20 details that the company failed to repay CITIC bonds due on December 20, 2019, with the total outstanding amount, including accrued interest, approximately **HKD 339.5 million (approximately RMB 309.7 million)** as of June 30, 2020, and discussions with bondholders for repayment arrangements are ongoing as of the report date[208](index=208&type=chunk)[211](index=211&type=chunk) - **Trade Receivables Risk**: Note 15 indicates net trade receivables of **RMB 700 million** as of June 30, 2020, with a high proportion of amounts overdue for more than one year, and the company has made significant credit loss provisions totaling **RMB 989 million**[171](index=171&type=chunk)[179](index=179&type=chunk)

中國疏浚環保控股有限公司 China Dredging Environment Protection Holdings Limited (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號: 871 Annual Report 年報 2019 Contents 目錄 | --- | --- | --- | |-------|-------|------------------------------------------------------------------| | | | | | | | | | | | | | | 2 | Corporate Information | | | | 公司資料 | | | 5 | Definitions 釋義 | | | 8 | Financial Summary | | | 10 | 財務概要 Group Chart | | | | 集團架構 | | | 11 | Chairman's Statement 主席報告 | | | 14 ...

中國疏浚環保控股有限公司 | (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號: 871 中期報告 INTERIM REPORT | --- | --- | --- | --- | --- | |-------|------------------------------------------------------|-------|-------|-----------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CONTENTS 目錄 | | | | | 2 | Corporate Information 公司資料 | 21 | | Condensed Cons ...

Financial Performance - The company reported a total revenue of HK$243 million for the year ended December 31, 2018, reflecting a significant increase compared to the previous year[15]. - The company's revenue for 2018 was RMB 618,833,000, a decrease of 4.9% from RMB 650,924,000 in 2017[32]. - The net loss for 2018 was RMB 254,495,000, compared to a profit of RMB 72,204,000 in 2017, indicating a significant decline in profitability[32]. - The company reported a net profit margin of 12%, which is an improvement from the previous year's margin of 10%[15]. - The Group recorded operating revenue of approximately RMB 618.8 million, a decrease of 4.9% compared to the previous year, and gross profit of approximately RMB 121.7 million, down 41.3%[115]. - The Group's operating cost increased by about 12.1% to approximately RMB497.1 million during the Reporting Period from RMB443.6 million for the year ended December 31, 2017[61]. - Gross profit decreased by about 41.3% to approximately RMB121.7 million, with the gross profit margin dropping from 31.9% to 19.7%[63]. - The Group's total liabilities as of December 31, 2018, were approximately RMB 1,260.5 million, with a gearing ratio of 32.0%, slightly up from 28.5% in 2017[103]. Strategic Initiatives - Future outlook includes plans to enhance operational efficiency and expand into new markets, aiming for a 20% increase in market share over the next fiscal year[15]. - The company is investing in new product development, with a budget allocation of HK$50 million for research and innovation initiatives[15]. - A strategic acquisition is in progress, targeting a company that will complement existing operations and is expected to contribute an additional HK$30 million in annual revenue[15]. - The Group is actively expanding its business into overseas markets, including Southeast Asia, having dispatched several large dredgers to Bangladesh, Cambodia, and Thailand for various dredging projects in 2018[45]. - The Group plans to seek feasible fundraising plans and aims to redeem its bonds by the end of the year as scheduled[47]. - The Group is committed to participating in wind power construction projects to establish a solid foundation for future development in the marine business[45]. Environmental Focus - The company is focusing on environmental sustainability, with plans to implement new technologies that reduce operational carbon footprint by 25%[15]. - The Group has been focusing on expanding its environmental protection equipment business, which is expected to drive future growth[36]. - The "Easyhome Yancheng Shopping Mall" project is expected to become a medium to long-term stable source of income, providing cash flow support for the Group's environmental protection dredging business[45]. Governance and Management - The board emphasized the importance of corporate governance and compliance, with ongoing training programs for all directors and management[15]. - The company has a diverse board with members having extensive backgrounds in investment management, accounting, and corporate finance[145][147]. - The independent non-executive directors provide adequate checks and balances within the Group[177]. - The Company has complied with all applicable code provisions under the Corporate Governance Code[166]. - The Group's governance structure is designed to support strategic growth and operational excellence through experienced leadership[154]. - The management team has a strong focus on administrative efficiency and strategic oversight within the organization[142][145]. Operational Challenges - The Group anticipates that 2019 will remain a challenging year, focusing on a conservative approach to select and seize opportunities while addressing various difficulties[47]. - The decrease in revenue was primarily due to the slowdown in the implementation of construction projects in the dredging industry in China and a more prudent project selection policy[115]. - The Group's core business, the CRD Business, faced revenue declines due to increased volatility in new project conditions and uncertainties in receivables collection[116]. - The Group is actively developing the EPD and Water Management Business segment, although revenue decreased due to slow progress in environmental protection dredging projects[123]. Employee and Labor Relations - As of December 31, 2018, the Group employed 567 staff, with total staff costs of approximately RMB 58.6 million, an increase from RMB 50.0 million in 2017[132]. - There were no significant labor disputes or difficulties in hiring qualified employees during the review year[134]. - The total employee cost for the reporting period was approximately RMB 58,600,000, an increase from RMB 50,000,000 in 2017[133]. Financial Management - The Group recognized a foreign exchange loss of approximately RMB 14.7 million during the reporting period, compared to a gain of approximately RMB 18.7 million for the year ended December 31, 2017[84]. - Income tax expenses decreased from approximately RMB 39.0 million for the year ended December 31, 2017, to about RMB 22.2 million during the reporting period[86]. - The Group's administrative expenses during the reporting period were approximately RMB 52.1 million, a slight decrease of about 6.0% compared to RMB 55.4 million for the year ended December 31, 2017, mainly due to management cost reductions[83].