[Corporate Information](index=2&type=section&id=Corporate%20Information) The company's corporate information includes its board structure, committee oversight, listing details, and key professional advisers [Board of Directors and Committees](index=2&type=section&id=Board%20of%20Directors%20and%20Committees) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - Board members include Chairman and CEO Mr. Zhou Mingming, Mr. Zhou Longrui, Ms. Yang Yunfei, Mr. Yang Xinxin (Executive Directors), Ms. Fang Jianjun (Non-executive Director), and Mr. Li Gangwei, Mr. Wu Zhijie, Mr. Sun Wenping (Independent Non-executive Directors)[2](index=2&type=chunk)[3](index=3&type=chunk) - The Audit, Remuneration, and Nomination Committees are established, with Mr. Li Gangwei chairing the Audit and Remuneration Committees, and Mr. Zhou Mingming chairing the Nomination Committee[2](index=2&type=chunk)[3](index=3&type=chunk) [Company Details and Advisers](index=3&type=section&id=Company%20Details%20and%20Advisers) The company is listed on the Hong Kong Stock Exchange with stock code 00951, maintaining its principal place of business in Hong Kong and headquarters in China, supported by major banks and Ernst & Young as auditor - The company's stock code is **00951**, listed on The Stock Exchange of Hong Kong Limited[2](index=2&type=chunk) - The principal place of business in Hong Kong is in Tsim Sha Tsui, Guangdong Road, Lippo Sun Plaza, while the PRC head office is in Changxing County, Zhejiang Province[3](index=3&type=chunk) - Major bankers include China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, and Bank of China; Ernst & Young is the auditor[4](index=4&type=chunk) [Management Discussion & Analysis](index=4&type=section&id=Management%20Discussion%20%26%20Analysis) This section provides an overview of the company's financial performance, industry trends, business operations, future strategies, and detailed financial review for the period [Overall Financial Highlights](index=4&type=section&id=Overall%20Financial%20Highlights) For the six months ended June 30, 2024, total group revenue increased by **28.4%** to **RMB 21.236 billion**, driven by renewable materials sales, despite a decline in gross profit and profit attributable to owners, with gross margin decreasing from 10.4% to 7.6% Key Financial Data for H1 2024 | Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 21,236 | 16,539 | +28.4% | | Gross Profit | 1,614 | 1,712 | -5.7% | | Gross Profit Margin | 7.6% | 10.4% | -2.8 percentage points | | Profit Attributable to Owners of the Company | 203.4 | 254.4 | -20.1% | | Basic Earnings Per Share | 0.18 | 0.23 | -21.7% | - Revenue growth was primarily driven by increased sales of renewable materials[41](index=41&type=chunk)[42](index=42&type=chunk) - The decline in gross profit margin was mainly due to the increased revenue from lower-margin renewable materials[41](index=41&type=chunk)[42](index=42&type=chunk) [Industry Review](index=5&type=section&id=Industry%20Review) The e-bike and electric tricycle markets continue to grow, driven by policy support and increasing demand, with new national standards and trade-in programs stimulating replacement demand and industry consolidation, while lead-acid battery demand remains stable amidst favorable regulatory developments for leading enterprises - The e-bike market is driven by "low-carbon environmental protection" and "intelligentization" trends, rising oil prices, and traffic congestion, expanding application scenarios to personal mobility and instant delivery[7](index=7&type=chunk)[8](index=8&type=chunk) China Instant Delivery Market Data | Indicator | 2023 | 2028 (Estimated) | CAGR | | :--- | :--- | :--- | :--- | | Order Volume (100 million orders) | 408.8 | 813.1 | 14.7% | - The Chinese government's implementation of the "New National Standard" for e-bike safety, with transition periods ending or extending to 2025 in many provinces and cities, continues to drive e-bike replacement demand[7](index=7&type=chunk)[8](index=8&type=chunk) - In 2023, China's total e-bike shipments reached **67.4 million units**, a year-on-year increase of approximately **4.5%**; the social ownership is expected to reach approximately **350 million units** by the end of 2024[9](index=9&type=chunk)[11](index=11&type=chunk) - The state has strengthened regulation of electric tricycles, with Beijing implementing a "one vehicle, one battery, one code" policy, driving replacement demand and industry consolidation[9](index=9&type=chunk)[11](index=11&type=chunk) - China's Ministry of Commerce and 13 other departments issued the "Action Plan for Promoting Trade-in of Consumer Goods," encouraging e-bike trade-ins to accelerate the elimination of outdated products and enhance safety standards[10](index=10&type=chunk)[11](index=11&type=chunk) - Lead-acid power batteries maintain competitiveness in the e-bike market due to their cost-effectiveness, stable safety, wide applicability, and high recycling rate, with a two-year replacement cycle creating a huge replacement market[14](index=14&type=chunk) - Three ministries, including the Ministry of Industry and Information Technology, issued "E-bike Industry Standard Conditions" and "Management Measures" to strengthen industry management and improve product quality and safety; the "Safety Technical Specification for Lithium-ion Batteries for E-bikes" will be implemented on November 1, 2024, standardizing lithium-ion battery products[15](index=15&type=chunk)[16](index=16&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) The Group maintains a leading position in lead-acid power batteries, steadily develops its lithium-ion battery business, and actively promotes renewable materials recycling, enhancing market influence through optimized sales networks, overseas expansion, and continuous brand promotion, while solidifying industry leadership through technological innovation and talent reserves - Lead-acid power batteries are the Group's main product, maintaining an industry-leading position through technological strength, product quality, market channels, and brand effect[19](index=19&type=chunk)[21](index=21&type=chunk) Lead-Acid Power Battery Sales Revenue Composition (H1 2024) | Product Category | Sales Revenue (RMB million) | Share of Total Revenue (%) | | :--- | :--- | :--- | | Total Lead-Acid Power Batteries | 12,658 | 59.6% | | - E-bike Batteries | 8,596 | 40.5% | | - Electric Vehicle and Special Purpose EV Batteries | 4,062 | 19.1% | - The lithium-ion battery business, through the development and application of new materials, technologies, and processes, obtained the "National Torch Program Industrialization Demonstration Project Certificate," with sales revenue of approximately **RMB 65 million** during the period[20](index=20&type=chunk)[21](index=21&type=chunk) - The Group fully launched producer responsibility extension, established a standardized national recycling network, and independently developed a battery full lifecycle IoT management system to achieve full traceability of waste lead-acid battery circulation[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The Group has established a national sales and distribution network covering tier-one and tier-two markets, and continues to expand into overseas markets such as Southeast Asia and Africa[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The Group hosted the 2024 Chaowei New Energy Marketing Summit, formed a "Battery Doctor Service Team," and has continuously engaged Mr. Donnie Yen as brand ambassador for 21 years, deepening brand influence[30](index=30&type=chunk)[31](index=31&type=chunk) - The Group's R&D expenditure was approximately **RMB 556 million**, accounting for about **2.6%** of total revenue, a year-on-year increase of **11.8%**[34](index=34&type=chunk)[36](index=36&type=chunk)[45](index=45&type=chunk) - The Group holds **39 related technology patents** in graphene batteries and launched a new product, the "Andre Geim Technology Guided Battery," developed under the guidance of Nobel laureate Professor Andre Geim[35](index=35&type=chunk)[36](index=36&type=chunk) - The Group was listed among "China's Top 500 Enterprises" and "Global New Energy Enterprises Top 500," and recognized as a National Technology Innovation Demonstration Enterprise and National Intellectual Property Demonstration Enterprise[33](index=33&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) [Future Development Strategies](index=13&type=section&id=Future%20Development%20Strategies) The Group will seize "dual carbon" strategic opportunities, focus on "new technologies, new materials, and new products" innovation, commit to green development, build "Zero-Carbon Chaowei" and "Smart Chaowei," consolidate its leading position in the domestic market, deepen overseas market penetration, and strive to become a global leader in new energy manufacturing, operations, and services - Seize new industry opportunities brought by the national "dual carbon" strategy, focusing on continuous innovation in new energy batteries, key materials, and high-safety technologies[38](index=38&type=chunk)[39](index=39&type=chunk) - Fulfill the mission of "enabling the world to use Chaowei green energy," vigorously promote the construction of "Zero-Carbon Chaowei" and "Smart Chaowei," and plan high-quality development with a global perspective[38](index=38&type=chunk)[39](index=39&type=chunk) - Consolidate its leading position in the Chinese battery market, seize opportunities to deeply cultivate overseas markets, and promote the widespread application of new energy technologies globally[40](index=40&type=chunk)[41](index=41&type=chunk) - Continuously develop high-performance battery products with superior performance, longer lifespan, and greater environmental friendliness, and enhance brand image through product, marketing, and service innovation[40](index=40&type=chunk)[41](index=41&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) The Group's revenue significantly increased during the period, but gross profit and profit attributable to owners declined, mainly due to changes in renewable materials sales structure and increased expenses; government grants grew substantially, liquidity remained ample, but net debt and gearing ratio increased Key Financial Indicator Changes for H1 2024 | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 21,236,322 | 16,539,103 | +28.4% | | Gross Profit | 1,614,208 | 1,712,264 | -5.7% | | Other Income | 391,175 | 157,152 | +148.9% | | Distribution and Selling Expenses | 442,537 | 428,227 | +3.3% | | Administrative Expenses | 317,946 | 308,766 | +3.0% | | Research and Development Expenses | 555,867 | 497,113 | +11.8% | | Finance Costs | 230,246 | 195,528 | +17.8% | | Profit Before Tax | 408,317 | 407,606 | +0.2% | | Income Tax Expense | 95,724 | 116,277 | -17.7% | | Profit Attributable to Owners of the Company | 203,355 | 254,389 | -20.1% | - Other income significantly increased by **148.9%**, primarily due to higher government grants received during the period[45](index=45&type=chunk)[46](index=46&type=chunk) - Income tax expense decreased by **17.7%**, with the effective tax rate falling from **28.5%** to **23.4%**, mainly due to increased profit contributions from subsidiaries with lower tax rates[49](index=49&type=chunk) Liquidity and Financial Resources (As at June 30, 2024) | Indicator | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Net Current Assets | 2,844,468 | 2,301,298 | | Cash and Bank Balances | 2,832,550 | 3,540,761 | | Net Debt | 2,626,145 | 2,146,701 | | Current Ratio | 1.21 | 1.18 | | Gearing Ratio | 11.4% | 9.9% | - The Group possesses ample cash and available bank facilities to meet its commitments and working capital needs, and to explore potential investment and business development opportunities[52](index=52&type=chunk) - The Group's business is primarily transacted in RMB, and the Directors believe there are no significant foreign exchange rate risks to operating cash flows and liquidity[55](index=55&type=chunk)[56](index=56&type=chunk) Total Carrying Amount of Pledged Assets (RMB thousand) | Asset Category | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Buildings | 263,601 | 458,022 | | Right-of-use Assets | 144,890 | 78,915 | | Receivables at Fair Value Through Other Comprehensive Income | 2,401,864 | 2,128,772 | | Restricted Bank Deposits | 1,160,047 | 1,036,265 | | Inventories | 433,883 | 325,139 | - As at June 30, 2024, the Group had no contingent liabilities[58](index=58&type=chunk) [Human Resources and Employees' Remuneration](index=17&type=section&id=Human%20Resources%20and%20Employees%27%20Remuneration) As at June 30, 2024, the Group's total headcount was **15,654**, a decrease from the prior year, while total employee costs increased, reflecting the Group's ongoing commitment to staff training and competitive remuneration Employee Headcount and Costs | Indicator | As at June 30, 2024 | As at June 30, 2023 | | :--- | :--- | :--- | | Total Employees | 15,654 | 17,973 | | Total Employee Costs (RMB thousand) | 822,520 | 751,919 | - The Group provides targeted training and study opportunities for management and professional technical personnel, and communicates the latest industry policies to enhance employees' professional standards and overall quality[60](index=60&type=chunk) [Significant Investments and Material Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=18&type=section&id=Significant%20Investments%20and%20Material%20Acquisition%20or%20Disposal%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) As at June 30, 2024, the Group held no significant investments, nor did it undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period, with no such plans authorized by the Board - As at June 30, 2024, no significant investments were held; no material acquisitions or disposals of subsidiaries, associates, or joint ventures occurred during the period; and as of the report date, the Board had not authorized any plans for other significant investments or capital asset increases[61](index=61&type=chunk) [Purchase, Sale or Redemption of Listed Shares](index=18&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Shares) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed shares during the period, and the number of treasury shares remained zero - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares (including the sale of treasury shares) during the period[61](index=61&type=chunk)[62](index=62&type=chunk) - As at June 30, 2024, the number of treasury shares held by the Company was zero[61](index=61&type=chunk)[62](index=62&type=chunk) [Directors' Report](index=18&type=section&id=Directors%27%20Report) This report details the interim dividend decision, directors' and substantial shareholders' interests in shares, share option schemes, corporate governance practices, and securities transactions [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the period - The Board of Directors resolved not to declare an interim dividend for the period[65](index=65&type=chunk)[66](index=66&type=chunk) [Directors' Interests in Shares, Underlying Shares and Debentures](index=19&type=section&id=Directors%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As at June 30, 2024, several directors and their spouses held company shares directly or through controlled corporations, with Mr. Zhou Mingming and Ms. Fang Jianjun collectively owning approximately **37.33%** of the company's equity Directors' Long Positions in Shares (As at June 30, 2024) | Director's Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding in the Company (%) | | :--- | :--- | :--- | :--- | | Mr. Zhou Mingming | Interest in controlled corporation, spouse's interest and beneficial owner | 412,149,500 | 37.33% | | Ms. Fang Jianjun | Interest in controlled corporation and spouse's interest | 412,149,500 | 37.33% | | Mr. Zhou Longrui | Interest in controlled corporation and spouse's interest | 62,100,000 | 5.62% | | Ms. Yang Yunfei | Interest in controlled corporation and spouse's interest | 62,100,000 | 5.62% | | Mr. Yang Xinxin | Interest in controlled corporation | 20,000,000 | 1.81% | - Mr. Zhou Mingming holds shares through Great State Investment Limited and Jolly Pride Limited, and directly holds **3,900,000 shares**[68](index=68&type=chunk)[70](index=70&type=chunk) - Ms. Fang Jianjun holds shares through Bai Xiang Limited and is deemed to have an interest in shares held by Mr. Zhou Mingming due to being his spouse[68](index=68&type=chunk)[71](index=71&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=22&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As at June 30, 2024, several entities, in addition to the directors, held **5% or more** of the company's equity, with Great State Investment Limited and Tianneng Power International Limited identified as substantial shareholders Substantial Shareholders' Long Positions in Shares (As at June 30, 2024) | Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Great State (振邦) | Beneficial owner | 248,407,500 (L) | 22.50% | | Jolly Pride (榮喜) | Beneficial owner | 48,205,000 (L) | 4.37% | | Bai Xiang (百祥) | Beneficial owner | 111,637,000 (L) | 10.11% | | High Joy (高樂) | Beneficial owner | 25,875,000 (L) | 2.34% | | Shiny Century (紀明) | Beneficial owner | 36,225,000 (L) | 3.28% | | Tianneng Power International Limited (天能動力) | Interest in controlled corporation | 111,680,000 (L) | 10.11% | - Tianneng Power International Limited indirectly holds shares through Tianneng International Investment Holdings Limited and Zhejiang Tianneng Innovation Investment Management Co., Ltd[78](index=78&type=chunk)[80](index=80&type=chunk) [Share Option Schemes](index=23&type=section&id=Share%20Option%20Schemes) The company adopted the 2023 Share Option Scheme on June 6, 2023, to incentivize and retain eligible participants, with authorized and service provider limits, specified exercise prices, vesting periods, and clawback provisions; no options have been granted as of the report date - The 2023 Share Option Scheme was approved and adopted at the Annual General Meeting on **June 6, 2023**, with a validity period of **10 years**[84](index=84&type=chunk)[85](index=85&type=chunk) - The scheme aims to acknowledge contributions, provide incentives, retain and motivate employees, and attract suitable talent[85](index=85&type=chunk)[86](index=86&type=chunk) - Eligible participants include directors and employees of the Company and its subsidiaries, as well as suppliers, customers, and consultants providing services to the Group[87](index=87&type=chunk)[88](index=88&type=chunk) - The scheme's authorized limit is **10%** of the total issued shares on the adoption date (**110,412,697 shares**), with a service provider limit of **2%** (**22,082,539 shares**)[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk) - The option exercise price shall not be less than the highest of the nominal value of the shares, the closing price on the grant date, or the average closing price for the five business days immediately preceding the grant date[93](index=93&type=chunk)[95](index=95&type=chunk) - The vesting period is generally no less than **12 months**, and the Board may, at its discretion, determine the vesting period for employee participants under specific circumstances[94](index=94&type=chunk)[95](index=95&type=chunk) - Share options may be subject to clawback if there are material misstatements in financial reports or if participants are involved in gross negligence, fraud, or misconduct[94](index=94&type=chunk)[95](index=95&type=chunk) - No share options have been granted under the 2023 Share Option Scheme since its adoption date and up to the date of this report[98](index=98&type=chunk) [Corporate Governance](index=27&type=section&id=Corporate%20Governance) The company is committed to maintaining high corporate governance standards and complies with all code provisions of the Corporate Governance Code, though the roles of Board Chairman and CEO are combined in Mr. Zhou Mingming, an arrangement the Board believes benefits business strategy execution and operational efficiency - The Company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the period[98](index=98&type=chunk) - The roles of Chairman of the Board and Chief Executive Officer are combined in Mr. Zhou Mingming, which deviates from code provision C.2.1[99](index=99&type=chunk)[100](index=100&type=chunk) - The Board believes the current arrangement facilitates the execution of the Group's business strategies and enhances operational efficiency, benefiting the Company and all its shareholders[99](index=99&type=chunk)[100](index=100&type=chunk) [Directors' Securities Transactions](index=28&type=section&id=Directors%27%20Securities%20Transactions) The company has adopted a code of conduct for securities transactions by directors, senior management, and relevant employees, and all directors confirmed compliance with both this code and the Model Code during the period - The Company has adopted a code of conduct for securities transactions by directors, senior management, and relevant employees, with terms no less exacting than those set out in the Model Code[103](index=103&type=chunk) - All Directors confirmed compliance with the Model Code and the Company's own code of conduct throughout the period[103](index=103&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and monitoring the Group's financial reporting processes, risk management, and internal control systems, having reviewed the unaudited results for the period and confirmed their compliance with relevant accounting standards - The Audit Committee comprises three independent non-executive directors: Mr. Li Gangwei (Chairman), Mr. Wu Zhijie, and Mr. Sun Wenping[103](index=103&type=chunk)[105](index=105&type=chunk) - Its primary responsibilities include reviewing and monitoring the Group's financial reporting processes, risk management, and internal control systems[103](index=103&type=chunk)[105](index=105&type=chunk) - The Committee met with external auditor Ernst & Young and reviewed the Group's unaudited results for the period, deeming them compliant with relevant accounting standards, rules, and regulations[104](index=104&type=chunk)[105](index=105&type=chunk) [Report on Review of Interim Condensed Consolidated Financial Statements](index=28&type=section&id=Report%20on%20Review%20of%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This report details the auditor's review of the interim condensed consolidated financial statements, outlining the scope and concluding on their compliance with International Accounting Standard 34 [Introduction](index=28&type=section&id=Introduction) Ernst & Young has reviewed the interim condensed consolidated financial statements of Chaowei Power Holdings Limited and its subsidiaries for the six months ended June 30, 2024, prepared in accordance with International Accounting Standard 34 - The auditor has reviewed the Group's interim condensed consolidated financial statements for the six months ended June 30, 2024[106](index=106&type=chunk)[107](index=107&type=chunk) - The financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 "Interim Financial Reporting"[106](index=106&type=chunk)[107](index=107&type=chunk) [Scope of Review](index=30&type=section&id=Scope%20of%20Review) The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope significantly narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[110](index=110&type=chunk) - The scope of a review is substantially less than an audit, and consequently, no audit opinion is expressed[110](index=110&type=chunk) [Conclusion](index=30&type=section&id=Conclusion) Based on the review, the auditor found no matters leading them to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 - The auditor has not become aware of any matter that causes them to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[111](index=111&type=chunk)[112](index=112&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group's revenue increased by **28.4%** year-on-year, but both gross profit and profit attributable to owners of the company decreased, while other income significantly increased and income tax expense decreased Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2024) | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 21,236,322 | 16,539,103 | | Cost of Sales | (19,622,114) | (14,826,839) | | Gross Profit | 1,614,208 | 1,712,264 | | Other Income | 391,175 | 157,152 | | Other Gains and Losses | (70,148) | 6,227 | | Distribution and Selling Expenses | (442,537) | (428,227) | | Administrative Expenses | (317,946) | (308,766) | | Research and Development Expenses | (555,867) | (497,113) | | Finance Costs | (230,246) | (195,528) | | Profit Before Tax | 408,317 | 407,606 | | Income Tax Expense | (95,724) | (116,277) | | Profit for the Period | 312,593 | 291,329 | | Profit Attributable to Owners of the Company for the Period | 203,355 | 254,389 | | Profit Attributable to Non-controlling Interests for the Period | 109,238 | 36,940 | | Basic and Diluted Earnings Per Share (RMB) | 0.18 | 0.23 | [Interim Condensed Consolidated Statement of Financial Position](index=31&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As at June 30, 2024, the Group's total assets less current liabilities amounted to **RMB 9.192 billion**, with net current assets increasing but cash and bank balances decreasing, and property, plant, and equipment representing the largest portion of non-current assets Summary of Interim Condensed Consolidated Statement of Financial Position (As at June 30, 2024) | Indicator | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 4,510,003 | 4,751,420 | | Right-of-use Assets | 657,138 | 667,339 | | Goodwill | 49,447 | 49,447 | | Intangible Assets | 134,824 | 141,913 | | Deferred Tax Assets | 511,055 | 553,150 | | **Current Assets** | | | | Inventories | 5,157,858 | 4,473,315 | | Trade Receivables | 2,616,059 | 1,561,404 | | Receivables at Fair Value Through Other Comprehensive Income | 3,413,085 | 3,411,077 | | Bank Balances and Cash | 2,832,550 | 3,540,761 | | **Current Liabilities** | | | | Trade Payables | 1,615,348 | 1,582,586 | | Bills Payable | 3,821,903 | 2,255,100 | | Borrowings (Repayable within one year) | 5,075,805 | 5,208,025 | | **Net Current Assets** | 2,844,468 | 2,301,298 | | **Total Assets Less Current Liabilities** | 9,191,763 | 8,939,276 | | **Total Equity** | 7,449,024 | 7,196,807 | [Interim Condensed Consolidated Statement of Changes in Equity](index=33&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, equity attributable to owners of the company increased from **RMB 6.139 billion** at the beginning of the period to **RMB 6.284 billion**, primarily due to profit contributions for the period, with non-controlling interests also increasing Summary of Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2024) | Indicator | As at January 1, 2024 (RMB thousand) | As at June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | 74,704 | 74,704 | | Share Premium | 408,237 | 408,237 | | Statutory Surplus Reserve | 1,293,050 | 1,293,050 | | Share Option Reserve | 68,567 | 68,567 | | Fair Value Through Other Comprehensive Income Reserve | (26,702) | (31,095) | | Other Reserves | 220,024 | 220,024 | | Exchange Fluctuation Reserve | 319 | 107 | | Retained Earnings | 4,100,804 | 4,250,751 | | **Subtotal Equity Attributable to Owners of the Company** | **6,139,003** | **6,284,345** | | Non-controlling Interests | 1,057,804 | 1,164,679 | | **Total Equity** | **7,196,807** | **7,449,024** | - Profit attributable to owners of the Company for the period was **RMB 203,355 thousand**, and profit attributable to non-controlling interests was **RMB 109,238 thousand**[115](index=115&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, the Group experienced a significant decrease in net cash from operating activities, an increase in net cash used in investing activities, and a substantial increase in net cash used in financing activities, resulting in a net decrease in cash and cash equivalents at period-end Summary of Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2024) | Cash Flow Category | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 31,780 | 192,357 | | Net Cash Used In Investing Activities | (407,571) | (341,064) | | Net Cash (Used In)/From Financing Activities | (332,208) | 496,442 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (707,999) | 347,735 | | Cash and Cash Equivalents at Beginning of Period | 3,540,761 | 2,157,975 | | Effect of Exchange Rate Changes | (212) | 269 | | Cash and Cash Equivalents at End of Period | 2,832,550 | 2,505,979 | - In investing activities, expenditures for the purchase of property, plant, and equipment amounted to **RMB 238,735 thousand**, and government grant income was **RMB 7,416 thousand**[116](index=116&type=chunk) - In financing activities, borrowings raised amounted to **RMB 1,995,785 thousand**, borrowings repaid were **RMB 2,102,242 thousand**, and interest paid was **RMB 221,649 thousand**[117](index=117&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=36&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the Group's general information, basis of preparation, principal accounting policies, revenue breakdown, operating segments, other income, gains and losses, finance costs, profit before tax, income tax, earnings per share, dividends, asset movements, receivables, payables, borrowings, capital commitments, fair value measurements, and related party transactions [1. General Information](index=36&type=section&id=1.%20General%20Information) The company was incorporated in the Cayman Islands on January 18, 2010, with shares listed on the Main Board of the Hong Kong Stock Exchange, primarily engaged in manufacturing and selling lead-acid power batteries, lithium-ion batteries, and related products - The Company was incorporated in the Cayman Islands on **January 18, 2010**, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[119](index=119&type=chunk) - The Group's principal activities are the manufacture and sale of lead-acid power batteries, lithium-ion batteries, and other related products[119](index=119&type=chunk) [2. Basis of Preparation](index=37&type=section&id=2.%20Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2023 - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[119](index=119&type=chunk) - The statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2023[119](index=119&type=chunk) [3. Principal Accounting Policies](index=37&type=section&id=3.%20Principal%20Accounting%20Policies) The Group has not yet applied new and amended International Financial Reporting Standards that are issued but not yet effective, and is assessing their impact, which is not expected to have a significant effect on financial performance and position - The Group has not applied new and amended International Financial Reporting Standards that have been issued but are not yet effective, including amendments to IFRS 10 and IAS 28, IFRS 9 and IFRS 7, IAS 21, and IFRS 18[119](index=119&type=chunk)[125](index=125&type=chunk) - The Group is assessing the impact of these new and amended International Financial Reporting Standards upon initial application, which are not expected to have a significant effect on the Group's financial performance and financial position[123](index=123&type=chunk)[125](index=125&type=chunk) [4. Revenue](index=38&type=section&id=4.%20Revenue) The Group's total revenue for the period was **RMB 21.236 billion**, a year-on-year increase of **28.4%**, with significant growth in renewable materials sales, lead-acid power batteries remaining the primary revenue source, and a slight decrease in lithium-ion battery sales Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30, 2024) | Product Category | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Lead-acid Power Batteries | 12,658,141 | 11,566,928 | | - E-bike Batteries | 8,596,208 | 7,857,739 | | - Electric Vehicle and Special Purpose EV Batteries | 4,061,933 | 3,709,189 | | Lithium-ion Batteries | 65,459 | 76,545 | | Renewable Materials | 8,512,722 | 4,895,630 | | **Total Revenue** | **21,236,322** | **16,539,103** | - Revenue is recognized when control over the goods has been transferred, typically upon delivery of goods to the customer's designated location[131](index=131&type=chunk) - The Group generally grants credit terms of **45 to 90 days** to trading customers with good credit records[131](index=131&type=chunk) [5. Operating Segments](index=39&type=section&id=5.%20Operating%20Segments) The Group's operating segment information is primarily based on product revenue analysis, with most external revenue and non-current assets originating from China, and the Group experiences higher battery sales in the second half of the financial year, accumulating inventory through increased production to meet seasonal demand - The information reported to the chief operating decision maker (CODM) focuses on revenue analysis by product, without providing other individual financial information[131](index=131&type=chunk) - During the period, most of the Group's external revenue was derived from customers in Mainland China, and most of its non-current assets are also located in Mainland China[131](index=131&type=chunk)[132](index=132&type=chunk) - No single customer contributed **10% or more** to the Group's total revenue[134](index=134&type=chunk)[135](index=135&type=chunk) - The Group records higher battery sales in the second half of the financial year and accumulates inventories by increasing production in the second and third quarters, accounting for seasonal factors[134](index=134&type=chunk)[135](index=135&type=chunk) [6. Other Income](index=40&type=section&id=6.%20Other%20Income) The Group's other income significantly increased by **148.9%** to **RMB 391 million** during the period, primarily due to a substantial increase in government grants and higher interest income from bank deposits Other Income (For the six months ended June 30, 2024) | Income Category | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Government grants — income related | 295,492 | 68,106 | | Government grants — asset related | 14,595 | 15,471 | | Interest income from bank deposits | 77,995 | 36,419 | | Interest income from loans receivable | 1,911 | - | | Rental income | 1,182 | - | | Others | - | 34,326 | | **Total** | **391,175** | **157,152** | - Government grants primarily include subsidies for various purposes such as encouraging enterprise expansion, technological advancement, strengthening environmental protection measures, and product development[135](index=135&type=chunk) [7. Other Gains and Losses](index=41&type=section&id=7.%20Other%20Gains%20and%20Losses) The Group recorded other losses of **RMB 70.148 million** during the period, primarily due to fair value changes in financial assets at fair value through profit or loss and derivative financial assets Other Gains and Losses (For the six months ended June 30, 2024) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Fair value changes in financial assets at fair value through profit or loss (loss)/gain | (9,532) | 7,555 | | Fair value changes in derivative financial assets (loss)/gain | (54,839) | 22,337 | | Donations | (1,490) | (4,164) | | Loss on disposal of property, plant and equipment | (7,159) | (13,636) | | Net foreign exchange gain/(loss) | 2,777 | (3,750) | | Others | - | (1,000) | | **Total** | **(70,148)** | **6,227** | - Fair value changes in financial assets at fair value through profit or loss refer to the Group's investments in listed equity securities on the Hong Kong Stock Exchange and Mainland China[137](index=137&type=chunk)[138](index=138&type=chunk) [8. Finance Costs](index=41&type=section&id=8.%20Finance%20Costs) The Group's finance costs increased by **17.8%** year-on-year to **RMB 230 million** during the period, primarily due to increased interest expenses on bank borrowings Finance Costs (For the six months ended June 30, 2024) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on borrowings | 234,357 | 199,290 | | Interest expense on lease liabilities | 341 | 358 | | Less: Amount capitalised in construction in progress | (4,452) | (4,120) | | **Total** | **230,246** | **195,528** | - Borrowing costs capitalized during the period were derived from general borrowings, calculated at an annual interest rate of **4.09%** (H1 2023: **4.50%**)[138](index=138&type=chunk)[139](index=139&type=chunk) [9. Profit Before Tax](index=42&type=section&id=9.%20Profit%20Before%20Tax) The Group's profit before tax slightly increased by **0.2%** to **RMB 408 million** during the period, with higher staff costs, depreciation and amortization, and cost of inventories sold, while impairment losses shifted from recognition to reversal Adjustments to Profit Before Tax (For the six months ended June 30, 2024) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Total staff costs | 822,520 | 751,919 | | Amortisation of intangible assets | 63,282 | 25,670 | | Depreciation of property, plant and equipment | 404,049 | 334,310 | | Depreciation of right-of-use assets | 16,253 | 24,764 | | Cost of inventories sold | 19,622,114 | 14,366,105 | | Reversal of/(provision for) impairment losses | (19,777) | 60,214 | | Loss on disposal of property, plant and equipment | 7,159 | 13,636 | - Total staff costs increased, primarily comprising wages and salaries, contributions to retirement benefit schemes, and labor costs[140](index=140&type=chunk) - Impairment losses shifted from recognition in H1 2023 to a reversal in the current period, mainly related to trade receivables, other receivables, and amounts due from related parties[140](index=140&type=chunk) [10. Income Tax Expense](index=43&type=section&id=10.%20Income%20Tax%20Expense) The Group's income tax expense decreased by **17.7%** to **RMB 95.724 million** during the period, with the effective tax rate falling to **23.4%**, primarily due to increased profit contributions from subsidiaries with lower tax rates Income Tax Expense (For the six months ended June 30, 2024) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | PRC enterprise income tax | 59,252 | 113,149 | | Over-provision in prior years — PRC enterprise income tax | (4,346) | (17) | | Deferred tax | 40,818 | 3,145 | | **Total** | **95,724** | **116,277** | - PRC subsidiaries are subject to a tax rate of **25%**, while those qualified as high and new technology enterprises are entitled to a preferential tax rate of **15%**[145](index=145&type=chunk)[146](index=146&type=chunk) - The Company and its subsidiaries incorporated in the British Virgin Islands, Germany, Hong Kong, and other countries had no assessable profits during the period[148](index=148&type=chunk)[149](index=149&type=chunk) [11. Earnings Per Share](index=44&type=section&id=11.%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company for the period was **RMB 0.18**, a decrease from **RMB 0.23** in the prior period, with no dilution adjustment made as there were no potential dilutive ordinary shares Earnings Per Share Calculation Data (For the six months ended June 30, 2024) | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Profit attributable to owners of the Company for the period (RMB thousand) | 203,355 | 254,389 | | Weighted average number of ordinary shares for basic earnings per share (thousand shares) | 1,104,127 | 1,104,127 | | Basic and diluted earnings per share (RMB) | 0.18 | 0.23 | - No diluted earnings per share amount was presented as there were no potential dilutive ordinary shares in issue for both the current and prior periods[154](index=154&type=chunk) [12. Dividends](index=45&type=section&id=12.%20Dividends) A final dividend of **HKD 0.053** per share for the year ended December 31, 2023, totaling **RMB 53.408 million**, was declared to owners of the company during the period, while the Board resolved not to pay a dividend for the current period - A final dividend of **HKD 0.053** per share (equivalent to **RMB 0.048**) for the year ended December 31, 2023, was declared to owners of the Company during the period[154](index=154&type=chunk) - The total final dividend declared was **HKD 58,519,000** (equivalent to **RMB 53,408,000**), which was paid in July 2024[154](index=154&type=chunk) - The Board of Directors of the Company resolved not to pay a dividend for the period[155](index=155&type=chunk)[156](index=156&type=chunk) [13. Movements in Property, Plant and Equipment and Right-of-Use Assets](index=45&type=section&id=13.%20Movements%20in%20Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) During the period, the Group incurred losses from the disposal of certain plant and machinery, while also recognizing right-of-use assets and lease liabilities related to leased office and manufacturing buildings - During the period, the Group disposed of plant and machinery with a total carrying amount of **RMB 19,910,000**, resulting in a loss on disposal of **RMB 7,159,000**[155](index=155&type=chunk)[156](index=156&type=chunk) - The Group leases several office and manufacturing buildings for periods ranging from **2 to 8 years**[158](index=158&type=chunk)[159](index=159&type=chunk) - Lease liabilities of **RMB 6,052,000** related to right-of-use assets were recognized during the period[158](index=158&type=chunk)[159](index=159&type=chunk) [14. Loans Receivable](index=46&type=section&id=14.%20Loans%20Receivable) As at June 30, 2024, the Group's total loans receivable amounted to **RMB 5,108 thousand**, all classified as current assets Loans Receivable Analysis (RMB thousand) | Category | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Current assets | 5,108 | 5,108 | | Non-current assets | - | 53,831 | | **Total** | **5,108** | **58,939** | [15. Trade Receivables](index=47&type=section&id=15.%20Trade%20Receivables) As at June 30, 2024, the Group's net trade receivables amounted to **RMB 2.616 billion**, an increase from the end of 2023, with most receivables aged within **90 days** Trade Receivables (RMB thousand) | Item | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Trade receivables — from contracts with customers | 3,217,465 | 2,199,567 | | Less: Provision for credit losses | (601,406) | (638,163) | | **Net** | **2,616,059** | **1,561,404** | Ageing Analysis of Trade Receivables (As at June 30, 2024) | Ageing | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | 0–45 days | 1,260,864 | 864,298 | | 46–90 days | 577,426 | 204,244 | | 91–180 days | 559,153 | 219,493 | | 181–365 days | 78,927 | 109,709 | | Over 365 days | 139,689 | 163,660 | | **Total** | **2,616,059** | **1,561,404** | - The Group normally grants credit terms of **45 to 90 days** to customers with good credit records[163](index=163&type=chunk) [16. Receivables at FVTOCI](index=47&type=section&id=16.%20Receivables%20at%20FVTOCI) This balance represents bills receivable held by the Group, measured at fair value through other comprehensive income, as its business model aims to collect contractual cash flows and sell financial assets - The balance represents bills receivable held by the Group measured at fair value through other comprehensive income[165](index=165&type=chunk) - These bills are held under a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and whose contractual cash flows are solely payments of principal and interest on the principal amount outstanding[165](index=165&type=chunk) [17. Restricted Bank Deposits](index=48&type=section&id=17.%20Restricted%20Bank%20Deposits) Restricted bank deposits refer to bank deposits pledged by the Group to banks as collateral for certain credit facilities granted - Restricted bank deposits represent bank deposits pledged by the Group to banks as collateral for certain credit facilities granted to the Group[167](index=167&type=chunk) [18. Trade Payables](index=48&type=section&id=18.%20Trade%20Payables) As at June 30, 2024, the Group's total trade payables amounted to **RMB 1.615 billion**, with the majority aged within **90 days** Ageing Analysis of Trade Payables (As at June 30, 2024) | Ageing | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | 0–30 days | 891,327 | 873,249 | | 31–90 days | 519,562 | 509,025 | | 91–180 days | 46,105 | 26,555 | | 181–365 days | 25,829 | 37,062 | | 1–2 years | 36,232 | 42,355 | | Over 2 years | 96,293 | 94,340 | | **Total** | **1,615,348** | **1,582,586** | [19. Bills Payable](index=48&type=section&id=19.%20Bills%20Payable) All bills payable are trade-related and will mature within one year from their issue date - All bills payable are trade in nature and will mature within one year from their issue date[168](index=168&type=chunk)[169](index=169&type=chunk) [20. Borrowings](index=48&type=section&id=20.%20Borrowings) During the period, the Group raised new bank and other borrowings of **RMB 1.996 billion** and repaid **RMB 2.102 billion**, with new borrowings bearing market interest rates ranging from **2.80% to 4.75%** per annum - During the period, the Group raised new bank and other borrowings of **RMB 1,995,785,000** (H1 2023: **RMB 2,509,434,000**)[168](index=168&type=chunk)[169](index=169&type=chunk) - Repayments of bank and other borrowings amounted to **RMB 2,102,242,000** (H1 2023: **RMB 1,759,923,000**)[168](index=168&type=chunk)[169](index=169&type=chunk) - New borrowings raised bear interest at market rates ranging from **2.80% to 4.75%** per annum (H1 2023: **3.30% to 5.50%**)[168](index=168&type=chunk)[169](index=169&type=chunk) [21. Capital Commitments](index=49&type=section&id=21.%20Capital%20Commitments) As at June 30, 2024, the Group's total contracted but unprovided capital commitments for the acquisition of property, plant and equipment, and contributions to associates and joint ventures amounted to **RMB 82.335 million** Capital Commitments (RMB thousand) | Item | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 75,761 | 206,571 | | Contribution to associates | 6,400 | 6,400 | | Contribution to joint ventures | 174 | 174 | | **Total** | **82,335** | **213,145** | [22. Fair Value Measurements of Financial Instruments](index=49&type=section&id=22.%20Fair%20Value%20Measurements%20of%20Financial%20Instruments) The Group measures certain financial instruments at fair value, including financial assets at fair value through profit or loss, equity instruments and receivables at fair value through other comprehensive income, and derivative financial assets/liabilities, using valuation techniques such as quoted market prices and discounted cash flow methods Financial Assets and Liabilities Measured at Fair Value (As at June 30, 2024) | Financial Assets and Liabilities | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | Fair Value Hierarchy | Valuation Techniques and Key Inputs | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss (listed equity securities) | 77,131 | 96,994 | Level 1 | Quoted bid prices in active markets | | Equity instruments at fair value through other comprehensive income (unlisted entities) | 60,300 | 42,300 | Level 3 | Reference to issue price of recent share issuance or discounted cash flow method | | Receivables at fair value through other comprehensive income (bills receivable) | 3,413,085 | 3,411,077 | Level 2 | Discounted cash flow method | | Derivative financial assets/(liabilities) (futures contracts) | 578 | (266) | Level 1 | Quoted bid prices in active markets | - The Group's management appoints a team responsible for determining valuation techniques and inputs, and engages third-party valuers when necessary[173](index=173&type=chunk) - There were no transfers between Level 1, Level 2, and Level 3 during the period[174](index=174&type=chunk) [23. Related Party Transactions](index=51&type=section&id=23.%20Related%20Party%20Transactions) During the period, the Group engaged in purchase transactions with related parties and had amounts due from/to related parties, with key management personnel remuneration determined based on individual performance and market trends Purchases from Related Parties (For the six months ended June 30, 2024) | Related Party Category | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Entities controlled by directors of the Company | 17,389 | 9,913 | Amounts Due From Related Parties (Before Expected Credit Losses) (As at June 30, 2024) | Related Party Category | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Entities controlled by directors of the Company (trade) | 3,590 | 16,392 | | Associates (trade) | 8,265 | 8,269 | | Associates (non-trade) | 262,180 | 311,816 | | Joint ventures (trade) | 27,397 | 27,397 | | Joint ventures (non-trade) | 52,382 | 76,583 | | **Total** | **353,814** | **440,457** | Amounts Due To Related Parties (As at June 30, 2024) | Related Party Category | As at June 30, 2024 (RMB thousand) | As at December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Entities controlled by directors of the Company (trade) | 6,943 | 19,796 | | Entities controlled by directors of the Company (non-trade) | 3,010 | 4,085 | | Associates (non-trade) | 10,150 | 12,570 | | Joint ventures (non-trade) | 6,843 | 507 | | **Total** | **26,946** | **37,169** | - Non-trade balances due from/to related parties are unsecured, interest-free, and repayable on demand[179](index=179&type=chunk) Key Management Personnel Remuneration (For the six months ended June 30, 2024) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 5,693 | 3,556 | | Contributions to retirement benefit schemes | 68 | 52 | | **Total** | **5,761** | **3,608** | [24. Approval of the Condensed Consolidated Financial Statements](index=53&type=section&id=24.%20Approval%20of%20the%20Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 29, 2024 - The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on **August 29, 2024**[183](index=183&type=chunk)[184](index=184&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of approximately RMB 21.236 billion, an increase from RMB 16.539 billion in the same period of 2023, representing a growth of 28.5%[1] - The gross profit for the same period was approximately RMB 1.614 billion, down from RMB 1.712 billion in the prior year, indicating a decrease of 5.7%[1] - The net profit attributable to shareholders was approximately RMB 203.4 million, a decline from RMB 254.4 million in the same period of 2023, reflecting a decrease of 20%[1] - Basic earnings per share for the period were RMB 0.18, compared to RMB 0.23 in the same period last year, representing a decrease of 21.7%[1] - The company reported a total comprehensive income of RMB 312.6 million for the period, compared to RMB 291.3 million in the same period last year, reflecting an increase of 7.3%[4] - For the six months ending June 30, 2024, the company's pre-tax profit reached RMB 203,355,000, a decrease from RMB 254,389,000 for the same period in 2023, representing a decline of approximately 20%[17] - The company's income tax expense for the first half of 2024 was RMB 95,724,000, down from RMB 116,277,000 in the same period of 2023, showing a decrease of about 17.6%[15] - The basic earnings per share for the six months ending June 30, 2024, was RMB 0.184, compared to RMB 0.230 for the same period in 2023, representing a decline of approximately 20%[17] Assets and Liabilities - Non-current assets as of June 30, 2024, totaled RMB 6.347 billion, a decrease from RMB 6.638 billion as of December 31, 2023[5] - Current assets increased to RMB 16.689 billion from RMB 15.155 billion as of December 31, 2023, showing a growth of 10.1%[5] - The company reported net current assets of RMB 2,844,468 thousand, an increase from RMB 2,301,298 thousand, representing a growth of 23.6%[6] - Total assets minus current liabilities increased to RMB 9,191,763 thousand from RMB 8,939,276 thousand, showing a growth of 2.8%[6] - The company’s total equity rose to RMB 7,449,024 thousand from RMB 7,196,807 thousand, reflecting an increase of 3.5%[6] - The company has a total liability of RMB 13,844,183 thousand, compared to RMB 12,853,207 thousand, indicating a rise of 7.7%[6] - The total accounts receivable as of June 30, 2024, was RMB 2.616 billion, an increase from RMB 1.561 billion as of December 31, 2023[9] - The accounts payable as of June 30, 2024, was RMB 1.615 billion, slightly up from RMB 1.583 billion as of December 31, 2023[22] Revenue Breakdown - Revenue from lead-acid batteries amounted to RMB 8,596,208 thousand, up from RMB 7,857,739 thousand, reflecting a growth of 9.4%[11] - Lithium-ion battery revenue decreased to RMB 65,459 thousand from RMB 76,545 thousand, indicating a decline of 14.5%[11] - Lead-acid battery sales revenue reached approximately RMB 12.658 billion, accounting for about 59.6% of the total revenue[29] - Sales revenue from electric bicycle batteries was approximately RMB 8.596 billion, representing about 40.5% of total revenue[29] - Sales revenue from lithium-ion batteries amounted to approximately RMB 65 million, reflecting stable development in the sector[30] Operational Highlights - The company is focusing on expanding its market presence in the manufacturing and sales of lead-acid and lithium-ion batteries[7] - The company is evaluating the impact of new and revised international financial reporting standards on its accounting policies[9] - The company provides a credit period of 45 to 90 days to customers with good trading records, otherwise sales are conducted in cash[12] - The company aims to strengthen its position in the Chinese battery market while seizing opportunities to deepen its presence in overseas markets, promoting the widespread application of new energy technology globally[38] - The company plans to focus on the development of high-performance, longer-lasting, and more environmentally friendly efficient battery products, continuously enhancing its brand image[38] - The company is committed to achieving its vision of becoming a top ten global new energy enterprise, promoting green energy usage worldwide[38] Employee and Cost Management - Total employee costs for the first half of 2024 amounted to RMB 822,520,000, up from RMB 751,919,000 in the same period of 2023, indicating an increase of about 9.4%[5] - The group employed a total of 15,654 employees as of June 30, 2024, down from 17,973 employees as of June 30, 2023, indicating a reduction of approximately 12.9%[49] - The total depreciation and amortization expenses for the first half of 2024 were RMB 467,331,000, compared to RMB 359,980,000 in the same period of 2023, indicating an increase of approximately 30%[5] - The company's financing costs increased by approximately 17.8% to about RMB 230,246,000 from RMB 195,528,000 in the same period of 2023, primarily due to increased bank borrowing interest expenses[44] Market Trends and Regulations - The electric bicycle market in China saw a total shipment of 67.4 million units in 2023, representing a year-on-year growth of approximately 4.5%[25] - The Chinese instant delivery industry is projected to reach approximately 81.31 billion orders by 2028, with a compound annual growth rate of 14.7%[25] - New regulations for electric tricycles are expected to drive demand for upgrades and industry consolidation, with a focus on eliminating non-compliant vehicles[26] - The Chinese government continues to improve regulations for the electric bicycle and battery industry, promoting healthy development and quality standards[28] - The implementation of national standards for lithium-ion batteries will take effect on November 1, 2024, enhancing product quality and safety[28] Research and Development - R&D expenditure for the group reached approximately RMB 556 million, accounting for about 2.6% of total revenue[35] - Research and development expenses for the period were approximately RMB 555,867,000, an increase of about 11.8% from RMB 497,113,000 in the same period of 2023, driven by R&D spending on lead-acid power batteries and other new technology products[43] - The group has obtained 39 patents related to the application of graphene technology in lead-acid batteries, demonstrating its innovation capabilities[35] Corporate Governance and Future Outlook - The audit committee has reviewed the unaudited consolidated financial results for the period, confirming compliance with relevant accounting standards and regulations[55] - The board of directors has decided not to declare an interim dividend for the period[56] - The full interim report for the year 2024 will be sent to shareholders upon request and will be published on the stock exchange and the company's website[58] - The board expresses gratitude to shareholders and the public for their continued support, as well as to all employees for their efforts[59]

Financial Performance - The company's revenue for the fiscal year reached approximately RMB 40.375 billion, an increase of about 26.4% compared to RMB 31.931 billion in the previous year[17]. - The gross profit for the fiscal year was approximately RMB 3.6 billion, down from RMB 3.702 billion in the previous year[17]. - The net profit attributable to the company was approximately RMB 348 million, a decrease from RMB 417 million in the previous year[17]. - The basic earnings per share for the fiscal year was RMB 0.31, compared to RMB 0.38 in the previous year[17]. - Total revenue for the year 2023 reached RMB 40,374,512 thousand, an increase from RMB 31,930,551 thousand in 2022, representing a growth of approximately 26.5%[32]. - Gross profit for 2023 was RMB 3,599,731 thousand, compared to RMB 3,701,517 thousand in 2022, indicating a slight decrease of about 2.7%[32]. - Net profit for the year 2023 was RMB 530,514 thousand, down from RMB 587,849 thousand in 2022, reflecting a decline of approximately 9.8%[32]. - Basic and diluted earnings per share for 2023 were RMB 0.31, compared to RMB 0.38 in 2022, a decrease of about 18.4%[32]. - The company's profit before tax for the year 2023 was RMB 754,824 thousand, a decrease of 7.7% compared to RMB 818,077 thousand in 2022[48]. - The company reported a total depreciation and amortization expense of RMB 655,590 thousand in 2023, down from RMB 707,436 thousand in 2022, a decline of 7.3%[46]. - The company reported a net profit attributable to shareholders of RMB 347,528,000 for the year, down from RMB 417,181,000 in 2022, indicating a decline of 16.7%[141]. Dividend and Shareholder Returns - The company plans to distribute a final dividend of HKD 0.053 per share, with a total distribution amounting to approximately HKD 58.5 million, down from HKD 72.9 million in the previous year[17]. - The company declared a final dividend of HKD 58,519,000 for the year ended December 31, 2023, pending approval at the upcoming shareholders' meeting[66]. Market and Industry Insights - By the end of 2023, the number of electric bicycles in China surpassed 400 million, exceeding the 310 million cars, making electric bicycles the most common mode of transportation in the country[2]. - The electric bicycle market in China is projected to grow at a compound annual growth rate of approximately 3.8%, reaching around 60 million units from 2023 to 2027[2]. - The introduction of new standards for delivery electric bicycles is expected to drive the high-quality development of the electric bicycle industry[10]. - The demand for lead-acid batteries in the electric bicycle sector is expected to remain stable, supported by a large replacement market and the sensitivity of consumer groups to pricing[115]. - The new national standards for electric bicycles are expected to drive a wave of replacement purchases, benefiting leading companies in the high-quality battery sector[115]. Research and Development - The company’s research and development expenses for 2023 were RMB 1,213,781 thousand, compared to RMB 1,097,402 thousand in 2022, representing an increase of about 10.6%[32]. - The group's R&D expenditure for the year was approximately RMB 1.214 billion, which accounted for about 3.0% of total revenue[165]. - The group has been recognized as a national technology innovation demonstration enterprise and has established multiple R&D platforms, enhancing its competitive advantage in the battery industry[95]. - The group has hired over 20 renowned experts and formed a strategic partnership with Nobel Prize winner Professor Andre Geim for the development of graphene battery technology[95]. Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 8,939,276 thousand, an increase from RMB 8,483,247 thousand in 2022, representing a growth of approximately 5.4%[34]. - Current assets net amount for 2023 was RMB 2,301,298 thousand, up from RMB 1,552,276 thousand in 2022, indicating a significant increase of about 48.2%[34]. - The group reported a significant increase in cash and cash equivalents, amounting to 3,540,761 million, up from 2,157,975 million[176]. - The group's total liabilities increased to 12,853,207 million from 11,495,088 million, reflecting a rise in financial obligations[176]. Strategic Initiatives - The company has strategically deployed production facilities in regions with high demand for lead-acid batteries, including Shandong, Jiangsu, Henan, Zhejiang, Anhui, Jiangxi, and Hebei provinces, to reduce storage and logistics costs[3]. - The group has implemented effective strategic layouts and deepened brand building to enhance brand influence and competitiveness[86]. - The group aims to continue developing "zero carbon superpower" demonstration projects and will focus on technological innovation in new energy batteries, high safety technology, and new materials[120]. - The group will focus on market-driven strategies, emphasizing product differentiation, brand building, and smart management to enhance productivity and competitiveness[120]. Compliance and Governance - The company is committed to maintaining high levels of corporate governance to align with shareholder interests[14]. - The company is currently evaluating the impact of new accounting standards on its financial statements, with an expectation that these changes will not have a significant effect[40]. - The group has been applying the revised international financial reporting standards retroactively, ensuring compliance with the latest regulations[37]. Employee and Operational Insights - Total employee costs, including director remuneration, amounted to RMB 1,960,199 thousand in 2023, up from RMB 1,904,042 thousand in 2022, reflecting an increase of 2.9%[46]. - The company employed 16,721 staff as of December 31, 2023, a slight decrease from 16,977 in 2022, with total employee costs amounting to RMB 1,960,199,000[145]. - The company plans to continue enhancing employee training and providing competitive compensation to improve service quality[145].

Employee Information - As of June 30, 2023, the Group employed a total of 17,973 staff members, an increase of 12.2% from 16,025 staff members on June 30, 2022[2] - The total employee cost for the period was approximately RMB 751,919,000, representing an increase of 3.3% compared to approximately RMB 727,389,000 in the corresponding period of 2022[2] - The Group continues to enhance staff training and professional standards, focusing on management and technical personnel[2] - The Group aims to provide competitive salary packages to encourage employee dedication and service quality[2] Shareholding Information - The interests of Mr. Zhou Mingming and Ms. Fang Jianjun in the shares of the Company are both 422,887,000 shares, accounting for approximately 38.30% of the total shareholding[12] - Mr. Zhou Longrui and Ms. Yang Yunfei each hold 62,100,000 shares, representing approximately 5.62% of the total shareholding[12] - Mr. Yang Xinxin holds 20,000,000 shares, which is approximately 1.81% of the total shareholding[12] - Mr. Zhou holds a total of 422,887,000 shares, representing approximately 38.30% of the company's shareholding[25] - Great State, beneficially owned by Mr. Zhou, holds 248,407,500 shares, accounting for 22.50% of the total[25] - Ms. Fang Jianjun, also holding 422,887,000 shares, has a shareholding percentage of 38.30%[25] - Bai Xiang, beneficially owned by Ms. Fang, holds 111,637,000 shares, which is 10.11% of the total[25] - Mr. Zhou Longrui has an interest in 62,100,000 shares, representing 5.62% of the company's shareholding[25] - High Joy, beneficially owned by Mr. Zhou Longrui, holds 25,875,000 shares, accounting for 2.34%[25] - Tianneng International has an interest in 111,680,000 shares, which is 10.11% of the total[25] - Ms. Yang Yunfei holds 62,100,000 shares, representing 5.62% of the company's shareholding[25] - Shiny Century, beneficially owned by Ms. Yang, holds 36,225,000 shares, accounting for 3.28%[25] - Mr. Zhou directly holds 3,900,000 shares[28] Share Option Schemes - No share options under the 2010 Share Option Scheme were vested or exercised during the period, and 29,500,000 share options were cancelled[43] - As of June 30, 2023, no share options granted under the 2010 Share Option Scheme remained outstanding[43] - The estimated fair value of the share options under the 2010 Share Option Scheme was HK$121,403,000[51] - The estimated fair values of options granted to Directors on specific dates were HK$5,266,000, HK$2,981,000, and HK$1,266,000 respectively[51] - The estimated fair values of options granted to eligible employees on specific dates were HK$43,636,000, HK$35,769,000, and HK$32,485,000 respectively[51] - The exercise price per share for the options granted on March 25, 2019, was HK$3.09[46] - The closing prices of the Shares on the dates immediately before the share options were granted were HK$4.32, HK$3.04, and HK$3.09 respectively[50] - The share options granted shall vest according to a specific timetable, with 10% vesting on March 25, 2019, 20% on March 25, 2020, and 70% on March 25, 2021[48] - The share options' exercise is conditional upon achieving certain performance targets as outlined in the offer letters[48] - The 2010 Share Option Scheme had a term of 10 years and expired on July 6, 2020[42] - The maximum number of Shares that may be issued under the 2023 Share Option Scheme is capped at 110,412,697 Shares, representing approximately 10% of the total issued share capital as of June 6, 2023[55] - The 2023 Share Option Scheme allows for the issuance of options to eligible participants, including directors and employees, as well as service providers, to incentivize contributions to the Group[58] - The Service Provider Limit under the 2023 Share Option Scheme is set at 22,082,539 Shares, which is approximately 2% of the total issued share capital as of the Adoption Date[61] - The expected volatility for the share options is noted at 47.5%[54] - The risk-free interest rate applicable to the share options is 1.84%[54] - The dividend yield for the shares is reported at 1.8%[54] - The 2020 Share Option Scheme was terminated upon the adoption of the 2023 Share Option Scheme, which is valid for 10 years until June 9, 2030[58] - The 2023 Share Option Scheme was approved by shareholders on June 6, 2023, to comply with new requirements of the Listing Rules[58] - The expected life of the options granted under the schemes is 8 years[54] - The exercise price for the options under the 2023 Share Option Scheme is set at HKD4.332[54] - The maximum entitlement for each eligible participant under the 2023 Share Option Scheme is capped at 1% of the relevant class of Shares in issue within a 12-month period[62] - The total number of Shares available for issue under the 2023 Share Option Scheme is 110,412,697, representing approximately 10% of the issued share capital of the Company as of the report date[76] - If any grant of options exceeds 1% of the relevant class of Shares in issue, it requires separate approval from the shareholders[63] - Participants must pay HK$1.0 upon acceptance of the grant within 28 days after the offer date[68] - The exercise price of the options must not be less than the highest of the nominal value, the closing price on the grant date, or the average closing price for the five business days preceding the grant date[68] - The vesting period for options under the 2023 Share Option Scheme is not less than 12 months, unless specified otherwise by the Board[69] - No options have been granted under the 2023 Share Option Scheme since its adoption date up to the report date[76] - The Board may impose performance targets related to the eligible participant's performance or the Company's performance over a period of at least three financial years[70] Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 16,539,103, an increase from RMB 14,826,839 in the same period last year, representing a growth of approximately 11.5%[129] - Gross profit for the period was RMB 1,712,264, compared to RMB 1,567,589 in the previous year, indicating a year-on-year increase of about 9.2%[129] - Profit for the period attributable to owners of the Company was RMB 254,389, down from RMB 301,258, reflecting a decrease of approximately 15.5%[129] - Total comprehensive income for the period was RMB 279,697, compared to RMB 292,314 in the prior year, showing a decline of about 4.3%[129] - Basic and diluted earnings per share for the period were RMB 0.23, down from RMB 0.28 in the previous year[129] - The total depreciation and amortization for the period was RMB 359,980, up from RMB 263,056 in the previous year, marking an increase of approximately 37%[191] - The cost of inventories sold reached RMB 14,366,105, compared to RMB 11,093,552 in the same period of 2022, representing an increase of approximately 29.5%[191] - Current tax expense for the six months ended June 30, 2023, was RMB 113,149, a decrease from RMB 120,198 in 2022, reflecting a decline of about 5.5%[197] - The Group's total loss on disposal of assets for the six months ended 30 June 2022 was RMB 14,874,000, indicating a slight improvement in the current period[11] - The aggregate amount of the final dividend declared in the current period was RMB 67,188,000, reflecting a decrease in shareholder returns compared to the previous year[11] Assets and Liabilities - The total current assets as of 30 June 2023 were RMB 25,638,000, while non-current assets were RMB 50,076,000[120] - Current assets as of June 30, 2023, totaled RMB 14,611,423, an increase from RMB 13,047,364 at the end of 2022, representing a growth of approximately 12%[130] - Inventories increased significantly to RMB 5,298,836 from RMB 3,981,978, marking a rise of about 33%[130] - Net current assets improved to RMB 1,927,227, up from RMB 1,552,276, indicating a growth of approximately 24.2%[132] - Total liabilities as of June 30, 2023, were RMB 8,874,835, compared to RMB 8,483,247 at the end of 2022, reflecting an increase of about 4.6%[132] - The company reported a statutory surplus reserve of RMB 1,236,172,000 as of June 30, 2023, up from RMB 1,136,270,000 at the beginning of the year[135] - The total equity attributable to owners of the company increased to RMB 6,030,460,000 from RMB 5,597,940,000 at the beginning of the year, reflecting a growth of approximately 7.7%[135] Compliance and Governance - The interim financial results have been reviewed by the Company's auditors, Ernst & Young, and the Audit Committee[7] - The Company has established an Audit Committee comprising three independent non-executive Directors to oversee financial reporting and risk management[93] - The Company has confirmed compliance with the required standards of conduct regarding securities transactions by all Directors during the period[85] - The external auditors, Ernst & Young, have reviewed the interim condensed consolidated financial statements and found no significant issues[102] - The Company is responsible for preparing interim financial statements in accordance with International Accounting Standard 34[96] - The Company has complied with all code provisions of the Corporate Governance Code throughout the period, except for specific deviations noted[79] Taxation and Accounting - The income tax rate for subsidiaries established in the PRC was 25% for the period, consistent with the previous year[106] - The Company had no assessable profits during the period for subsidiaries incorporated in the BVI, Germany, Hong Kong, and other countries[106] - The financial statements for the six months ended June 30, 2023, were prepared in accordance with International Accounting Standard 34, indicating compliance with international financial reporting standards[148] - The Group has applied amendments to IFRSs for the first time, including IFRS 17 related to insurance contracts, effective from January 1, 2023[153] - The Group's accounting policies remain consistent with those presented in the annual financial statements for the year ended December 31, 2022[148] - The Group is currently revisiting accounting policy disclosures to ensure alignment with recent amendments to IFRS[153] Revenue Sources - Lead-acid motive batteries generated RMB 9,223,091,000 in revenue, up from RMB 7,505,654,000, reflecting a 22.9% growth year-over-year[163] - Revenue from renewable materials increased significantly to RMB 3,470,460,000, a 63.4% rise compared to RMB 2,124,513,000 in the previous year[163] - Other income for the period totaled RMB 157,152,000, down 38.9% from RMB 257,436,000 in the same period of 2022[177] - Government grants related to income amounted to RMB 68,106,000, a decrease from RMB 154,010,000 in the previous year[177] - The Group's production plan incorporates seasonality, with higher battery sales expected in the second half of the financial year due to increased market demand[170] - No single customer contributed over 10% of the total revenue, indicating a diversified customer base[170] - The Group's non-current assets are primarily located in the PRC, where most external revenues are generated[174] - The amendments to IFRS effective from January 1, 2023, are not expected to have a significant impact on the Group's financial statements[158] Cash Flow and Investments - Cash and cash equivalents at the end of the period were RMB 2,505,979,000, a decrease from RMB 2,744,398,000 at the end of June 2022[141] - Borrowings raised during the period totaled RMB 2,509,434,000, an increase from RMB 2,356,992,000 in the same period last year[141] - Net cash used in investing activities was RMB 341,064,000, compared to RMB 582,847,000 in the previous year, showing a reduction of approximately 41.5%[139] - The cash paid for the purchase of property, plant, and equipment was RMB 403,941,000, a decrease from RMB 488,853,000 in the previous year, indicating a reduction of approximately 17.4%[139] - The Group capitalized borrowing costs during the period amounting to RMB 199,648, slightly up from RMB 172,914 in the previous year[185]

Financial Performance - For the period, revenue was approximately RMB 16.539 billion, compared to RMB 13.264 billion in the same period last year, representing a year-over-year increase of about 24.3%[11] - Gross profit for the period was approximately RMB 1.712 billion, compared to RMB 1.568 billion in the same period last year, reflecting a growth of about 9.2%[11] - The company reported a profit attributable to shareholders of approximately RMB 254.4 million, down from RMB 301.3 million in the same period last year, indicating a decrease of about 15.5%[11] - Basic earnings per share for the period were RMB 0.23, compared to RMB 0.27 in the same period last year, showing a decline of approximately 14.8%[11] - The company did not declare an interim dividend for the period[11] - Net profit for the period was CNY 291,329 thousand, down from CNY 307,276 thousand in the previous year, indicating a decrease of about 5.2%[12] - The group’s profit before tax decreased by approximately 2.3% to about RMB 407,606,000, compared to RMB 417,176,000 in the same period last year[103] - The company's attributable profit for the period was approximately RMB 254,389,000, a decrease of about 15.6% from RMB 301,258,000 in the same period of 2022[128] Assets and Liabilities - Non-current assets totaled RMB 6.948 billion as of June 30, 2023, slightly up from RMB 6.931 billion as of December 31, 2022[2] - Current assets increased to RMB 14.611 billion as of June 30, 2023, compared to RMB 13.047 billion as of December 31, 2022[2] - The company reported net current assets of CNY 1,927,227 thousand, up from CNY 1,552,276 thousand year-over-year, indicating a growth of about 24.2%[14] - The company's current liabilities include trade payables of RMB 2,160,964,000 and borrowings of RMB 4,726,877,000 as of June 30, 2023, indicating a significant financial position[32] - The total employee cost for the period was approximately RMB 751,919,000, compared to RMB 727,389,000 in the same period last year, with a total of 17,973 employees as of June 30, 2023[108] - Cash and bank balances amounted to approximately RMB 2,505,979,000, up from RMB 2,157,975,000 on December 31, 2022[129] - The net debt was approximately RMB 2,927,373,000, compared to RMB 2,586,765,000 on December 31, 2022, with borrowings primarily used for capital expenditures, raw material purchases, and operational funding[129] Sales and Revenue Breakdown - The sales revenue from lead-acid batteries was approximately RMB 12.992 billion, accounting for about 78.6% of the total revenue, with electric bicycle battery sales contributing approximately RMB 9.223 billion, or 55.8% of total revenue[63] - Lithium-ion battery sales generated revenue of approximately RMB 77 million during the period[90] - The company reported a revenue of RMB 2,969,580,000 for the six months ending June 30, 2023, compared to RMB 2,898,628,000 for the same period in 2022, reflecting an increase of approximately 2.4%[44] Research and Development - The company’s operating expenses included research and development costs of CNY 497,113 thousand, compared to CNY 488,804 thousand in the previous year, indicating a slight increase in R&D investment[12] - R&D expenses for the period reached approximately RMB 497 million, accounting for about 3% of the group's total revenue[67] - The group has engaged over 19 renowned experts and established a strategic collaboration with Nobel laureate Professor Andre Geim for research and development in graphene battery technology[119] - The group has obtained 36 patents related to the application of graphene battery technology in lead-acid batteries, showcasing its technological innovation and product advantages[68] Market and Industry Position - The company continues to benefit from favorable industry policies that support leading enterprises in the sector[61] - The new national standards for electric bicycles, implemented gradually across the country, are expected to drive further growth in electric bicycle sales[58] - The production volume of electric bicycles in China reached approximately 59 million units in 2022, representing a year-on-year growth of about 8.5%[58] - The company has maintained long-term cooperation with several top electric bicycle manufacturers, providing comprehensive sales services through major customer departments[91] - The company plans to optimize its sales network by strategically locating production facilities in regions with high demand for lead-acid batteries, including Shandong, Jiangsu, Henan, Zhejiang, Anhui, Jiangxi, and Hebei provinces[64] Financial Management - The company’s income tax expense for the period was CNY (116,277) thousand, compared to CNY (109,900) thousand in the previous year, reflecting an increase in tax liabilities[12] - Tax expenses increased by approximately 5.8% to about RMB 116,277,000, with an effective tax rate of approximately 28.5%, up from 26.3% in the same period last year[103] - Financing costs increased by approximately 15.5% to RMB 195,528,000 from RMB 169,343,000 in the same period of 2022, primarily due to increased bank borrowing interest expenses[125] - The group has sufficient cash and available bank financing to meet operational needs and explore potential investment opportunities in the Chinese market[105] Corporate Governance and Strategy - The company is committed to maintaining high standards of corporate governance to align with shareholder interests[134] - The group aims to enhance its brand image and create value for consumers through continuous product, marketing, and service innovations as part of its new brand strategy[69] - The group will continue to focus on customer-centric service commitments and enhance brand influence through various marketing activities[65]

Shareholding Structure - As of December 31, 2022, Mr. Zhou Mingming holds 422,887,000 shares, representing 38.30% of the company's total shareholding[7] - Ms. Fang Jianjun also holds 422,887,000 shares, equivalent to 38.30% of the company's total shareholding, due to her interest in controlled corporations[9] - Mr. Zhou Longrui has an interest in 62,100,000 shares, which accounts for 5.62% of the company's total shareholding[10] - Ms. Yang Yunfei holds 62,100,000 shares, also representing 5.62% of the company's total shareholding[11] - Mr. Yang Xinxin is interested in 20,000,000 shares, which is 1.81% of the company's total shareholding[12] - The company has substantial shareholders with interests or short positions in shares required to be disclosed under the SFO, specifically those holding 5% or more of the nominal value of any class of share capital[18] - The total number of shares held by Mr. Zhou includes 248,407,500 shares from Great State Investments Limited and 58,942,500 shares from Jolly Pride (PTC) Limited[14] - Ms. Fang Jianjun is deemed to be interested in 111,637,000 shares held by Bai Xiang Limited, in addition to shares held by Mr. Zhou[5] - Mr. Zhou Longrui is deemed to be interested in 25,875,000 shares held by High Joy Investments Limited and 36,225,000 shares held by Shiny Century Limited[6] - The company maintains a significant concentration of shareholding among its directors and their spouses, indicating potential influence over corporate decisions[19] Financial Performance - Revenue for the Year reached approximately RMB 31,931 million[38] - The profit attributable to the owners of the Company amounted to approximately RMB 417 million[39] - The Group's revenue for the year reached approximately RMB 31.93 billion, reflecting steady business growth[41] - The Group's total revenue increased by approximately 8.3% to approximately RMB31,931 million in 2022, compared to RMB29,489 million in 2021[94] - Gross profit rose by approximately 11.3% to approximately RMB3,702 million, with an overall gross profit margin of approximately 11.6% in 2022, up from 11.3% in 2021[94] - Profit attributable to owners of the Company decreased by 19.2% to approximately RMB417 million in 2022, down from approximately RMB516 million in 2021[94] - Profit before tax rose approximately 4.3% to RMB818,077,000 in the current year, compared to RMB784,617,000 in 2021[80] - Income tax expenses decreased by approximately 7.7% to RMB230,228,000 in the current year, with an effective tax rate of approximately 28.1%[80] Research and Development - Research and development expenses for the year amounted to approximately RMB1,097,402,000, an increase of about 18.1% from RMB929,292,000 in 2021, primarily due to increased spending on lead-acid batteries and other new technology products[79] - The Group's R&D expenditure reached approximately RMB 1.097 billion, constituting about 3.4% of total revenue[174] - The Group has established multiple R&D platforms, including a nationally-recognised enterprise technology centre and a national environmental protection engineering technology centre[199] - The Group's R&D and innovation capabilities were certified as a "National Model Enterprise of Intellectual Property," enhancing its competitive edge[45] Market and Industry Trends - The GDP of the People's Republic of China achieved a positive growth of 3% during the year, supporting the Group's business performance despite the pandemic[46] - The implementation of new national standards for electric bicycles is expected to benefit leading enterprises in the industry significantly[46] - The new regulations for electric tricycles in China are expected to drive replacement demand and accelerate industry consolidation[146] - The lead-acid motive battery market remains stable due to its cost-effectiveness and high recyclability, supporting steady market share and sales volume[147] - The New National Standards for electric bikes, effective since April 15, 2019, will push up replacement demand as the transition period expires in 2023[148] Strategic Initiatives - The Group aims to fulfill its mission of promoting green energy as it celebrates its 25th anniversary in 2023, focusing on high-quality development[49] - The Group plans to enhance its brand image and innovate in products, marketing, and services to create value for consumers[116] - The Group will actively adjust marketing and production strategies in response to market changes as the Chinese economy continues to recover[116] - The Group aims to achieve the vision of becoming a top ten global new energy enterprise and a century-old brand with sales of RMB 100 billion[173] Share Option Scheme - The 2010 Share Option Scheme, which expired on 6 July 2020, had no further options granted but all outstanding options remain valid[31] - The 2010 Share Option Scheme was adopted on June 7, 2010, and has a duration of 10 years, expiring on July 6, 2020[67] - All unexercised share options granted under the 2010 Share Option Scheme remain valid and exercisable[67] - As of December 31, 2022, there were 29,500,000 share options outstanding under the 2010 Share Option Scheme[123] - The total number of options available for grant under the 2010 and 2020 Share Option Schemes is 110,412,697 options, with a potential issuance of 2.67% of the weighted average number of shares in issue for the Year[135] Corporate Governance - The Company has not been a party to any arrangements enabling Directors to acquire benefits through share acquisitions during the year[64] - The Company has complied with all code provisions of the Corporate Governance Code throughout the Year, with some deviations noted[188]

Financial Performance - The company's revenue for the year was approximately RMB 3.1931 billion, representing an increase of about 8.3% compared to last year (RMB 2.9489 billion) [7]. - The gross profit for the year was approximately RMB 3.702 billion, which is an increase of about 11.3% from last year's RMB 3.324 billion [7]. - The net profit attributable to the company was approximately RMB 417 million, down from RMB 516 million in the previous year [7]. - The basic earnings per share for the year were RMB 0.38, compared to RMB 0.47 in the previous year [7]. - Total revenue for the year ended December 31, 2022, was RMB 31,930,551 thousand, an increase from RMB 29,488,819 thousand in 2021, representing a growth of approximately 8.3% [30]. - Gross profit for 2022 was RMB 3,701,517 thousand, compared to RMB 3,324,497 thousand in 2021, indicating a year-over-year increase of about 11.3% [30]. - Net profit for the year was RMB 587,849 thousand, up from RMB 535,085 thousand in the previous year, reflecting an increase of approximately 9.8% [30]. - The company reported a total comprehensive income of RMB 580,276 thousand for 2022, compared to RMB 539,204 thousand in 2021, which is an increase of approximately 7.6% [30]. Taxation and Expenses - The total income tax expense for the year was RMB 230.228 million, a decrease from RMB 249.532 million in the previous year [5]. - The company reported a tax impact of RMB 204.519 million based on a statutory income tax rate of 25% [5]. - The company experienced a decrease in the tax impact from unrecognized tax losses and temporary differences, amounting to RMB 144.906 million, down from RMB 190.631 million in the previous year [5]. - The deferred tax liabilities decreased from RMB 20,877 thousand to RMB 10,000 thousand, a significant drop of about 52.1% [19]. - The actual tax rate for the year was approximately 28.1%, down from 31.8% in the previous year, mainly due to the reduction of previously unrecognized tax losses and temporary differences [146]. Research and Development - The company's research and development expenses recognized for the year were RMB 1.097 billion, up from RMB 929.292 million in the previous year [11]. - The group invested approximately RMB 1.097 billion in R&D, which accounted for about 3.4% of total revenue, focusing on core technology and product development [95]. - Research and development expenses increased to approximately RMB 1,097,402,000, an increase of about 18.1% from RMB 929,292,000 in the previous year, mainly due to increased R&D spending on lead-acid batteries and other new technology products [123]. Employee Costs - The total employee costs, including directors' remuneration, amounted to RMB 1.904 billion, compared to RMB 1.566 billion in the previous year [11]. - The total employee cost for the year was approximately RMB 1,904,042,000 [167]. - The company continues to enhance employee training, focusing on management and professional technical personnel [167]. Assets and Liabilities - Total current liabilities decreased from RMB 12,099,870 thousand to RMB 11,495,088 thousand, a reduction of approximately 5% [19]. - Total assets increased from RMB 8,083,892 thousand to RMB 8,483,247 thousand, reflecting a growth of approximately 4.9% [19]. - Total equity rose from RMB 6,380,685 thousand to RMB 6,810,306 thousand, an increase of around 6.7% [19]. - The company's retained earnings increased from RMB 5,523,236 thousand to RMB 5,819,442 thousand, showing a growth of about 5.4% [19]. - The company reported a decrease in borrowings from RMB 4,698,121 thousand to RMB 4,195,517 thousand, a reduction of approximately 10.7% [19]. - The group's debt net amount, including borrowings and lease liabilities, was approximately RMB 2,586,765,000, compared to RMB 2,150,287,000 on December 31, 2021 [147]. Sales and Revenue Breakdown - The company’s lithium-ion battery sales reached RMB 362,426,000 in 2022, up from RMB 245,914,000 in 2021, marking an increase of approximately 47.3% [63]. - The company’s lead-acid battery sales were RMB 19,471,287,000 in 2022, compared to RMB 16,038,462,000 in 2021, representing a growth of about 21.4% [63]. - Sales revenue from lead-acid batteries increased by 15.3% to approximately RMB 27.93 billion, accounting for about 87.5% of total revenue [91]. - Sales revenue from electric bicycle batteries rose by 21.4% to approximately RMB 19.47 billion, representing about 61% of total revenue [91]. - The sales revenue from electric tricycle batteries and special-purpose electric vehicle batteries increased by 3.4% to approximately RMB 8.463 billion, accounting for about 26.5% of total revenue [91]. Corporate Governance and Compliance - The company has adopted a code of conduct for securities trading by directors and senior management, ensuring compliance with relevant regulations [170]. - The audit committee has reviewed the group's accounting principles and practices, confirming compliance with applicable accounting standards [172]. - The board believes that the current arrangement of having the chairman also serve as the CEO enhances operational efficiency [168]. Future Outlook and Strategy - The company aims to leverage market changes to adjust marketing and production strategies, focusing on technological innovation and green development to achieve its vision of becoming a top ten global new energy enterprise [137]. - The implementation of the new national standard for electric bicycles is expected to drive a replacement wave, benefiting leading companies in the industry [90]. - The introduction of new regulations for electric tricycles is expected to drive replacement demand and accelerate industry consolidation [108].

Financial Performance - For the six months ended June 30, 2022, the total revenue was approximately RMB 13,264 million, a year-on-year increase of 2.4% from RMB 12,959 million in the corresponding period of 2021[12]. - The gross profit for the same period was approximately RMB 1,568 million, compared to RMB 1,448 million in the corresponding period of 2021, resulting in a gross profit margin of approximately 11.8%, up from 11.2%[12]. - Profit attributable to owners of the Company was approximately RMB 301.3 million, slightly increasing from RMB 300.5 million in the corresponding period of 2021[12]. - Basic earnings per share remained stable at RMB 0.27, consistent with the corresponding period in 2021[12]. - Revenue for the six months ended June 30, 2022, was RMB 13,264,191, an increase of 10.1% from RMB 12,959,494 in the same period of 2021[153]. - Gross profit for the period was RMB 1,567,589, representing a gross margin of approximately 11.85%[153]. - Profit for the period attributable to owners of the Company was RMB 301,258, compared to RMB 300,520 in the prior year[153]. - Total comprehensive income for the period was RMB 307,276, slightly down from RMB 328,146 in the previous year[153]. Revenue Breakdown - Revenue from sales of lead-acid motive batteries amounted to approximately RMB10,985 million, accounting for approximately 82.8% of the Group's total revenue[35]. - Revenue from sales of electric bike batteries was approximately RMB7,506 million, representing about 56.6% of total revenue[35]. - Revenue from sales of electric tricycle batteries and special-purpose electric vehicle batteries reached approximately RMB3,479 million, accounting for approximately 26.2% of total revenue[35]. - Revenue from lead-acid motive batteries was RMB 7,505,654, representing a growth from RMB 7,312,954 in 2021[196]. - Revenue from electric car batteries decreased to RMB 3,479,291 from RMB 3,793,142, a decline of 8.3% year-over-year[196]. - Lithium-ion battery revenue increased significantly to RMB 154,733 from RMB 87,705, marking a growth of 76.1%[196]. - Revenue from renewable materials rose to RMB 2,124,513, up from RMB 1,765,693, reflecting a growth of 20.4%[196]. Market Trends and Growth Potential - The production volume of electric bikes in the PRC exceeded 45 million units in 2021, representing a year-on-year increase of approximately 10.3%[12]. - The ownership of electric bikes in the PRC is expected to reach 400 million by 2022, indicating strong market growth potential[12]. - The gradual implementation of the "Safety Technical Specifications for Electric Bicycles" has driven replacement demand for electric bikes, further supporting sales growth[12]. - The market for electric bikes is bolstered by over 4 million on-demand delivery riders in the PRC, serving approximately 500 million users[12]. - The new travel habits formed during the COVID-19 pandemic are expected to further drive the sales growth of electric bikes as consumers seek safer transportation options[12]. - The new national standards implemented since April 15, 2019, have improved safety performance requirements for electric bikes, promoting demand for upgrades[20]. - Over 20 provinces and cities in China have introduced more than 60 energy storage policies since 2022, indicating significant market potential for new energy storage[27]. Research and Development - The Group's independent R&D capabilities have continuously improved product quality and performance, maintaining its leading position in the industry[35]. - R&D expenses amounted to approximately RMB 489 million, representing about 3.7% of the Group's total revenue[52]. - The Group has over 20 renowned domestic and foreign experts contributing to its R&D capabilities[53]. - The Group is committed to developing higher-efficiency battery products with superior performance and environmental friendliness[54]. - Research and development expenses were RMB 488,804, showing a commitment to innovation despite a slight increase from RMB 383,450 in the prior year[153]. Expenses and Financial Management - Other income decreased by approximately 10.8% to RMB 257,436,000 compared to RMB 288,487,000 in the corresponding period of 2021, mainly due to a reduction in government grants[64]. - Distribution and selling expenses increased by approximately 20.9% to RMB 443,964,000 from RMB 367,351,000 in the corresponding period of 2021, primarily due to increased logistics and transportation costs[64]. - Administrative expenses rose by approximately 27.6% to RMB 319,979,000 from RMB 250,850,000 in the corresponding period of 2021, mainly due to additional staff costs during the Pandemic[65]. - Finance costs decreased by approximately 6.1% to RMB 169,343,000 from RMB 180,355,000 in the corresponding period of 2021, attributed to lower interest rates on bank borrowings[69]. - Income tax expenses increased by approximately 18.2% to RMB 109,900,000 from RMB 92,979,000 in the corresponding period of 2021, with an effective tax rate of approximately 26.3%[71]. Shareholder Information - Mr. Zhou Mingming held a significant interest of approximately 37.50% in the Company, with 414,084,500 shares[87]. - The economic interest of all shares held by Jolly Pride belongs to 49 employees, but other shareholder rights are exercised exclusively by Jolly Pride[97]. - The company has disclosed substantial shareholders with interests of 5% or more in the nominal value of any class of share capital[92]. - The total value of receivables at FVTOCI was RMB 1,449,382,000 as of June 30, 2022, compared to RMB 1,413,237,000 as of December 31, 2021[78]. - The Group's total assets pledged for banking facilities increased from RMB 3,472,677,000 to RMB 3,631,119,000, indicating a growth of approximately 4.6%[78]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for specified deviations[130]. - The Audit Committee, consisting of four independent non-executive Directors, oversees the Group's financial reporting and risk management[140]. - The external auditors, Ernst & Young, have reviewed the interim condensed consolidated financial statements and found no significant issues[150]. - The Company emphasizes the importance of non-executive directors attending general meetings to understand shareholder views[132]. - The Board believes the current governance structure is beneficial for the Company and its shareholders[132]. Cash Flow and Liquidity - Net cash generated from operating activities for the six months ended June 30, 2022, was RMB 156,306, compared to a net cash used of RMB 651,861 in the same period of 2021[161]. - Cash and cash equivalents at the end of the period were RMB 2,744,398, an increase from RMB 1,749,113 at the end of the same period in 2021[164]. - The company reported a net decrease in cash and cash equivalents of RMB 116,556 for the first half of 2022, compared to a decrease of RMB 807,280 in the same period of 2021[164]. - Borrowings increased to RMB 5,035,766 as of June 30, 2022, compared to RMB 4,698,121 at the end of 2021, marking an increase of approximately 7.2%[156].

Company Overview - Chaowei Power Holdings Limited primarily engages in the manufacturing and sales of lead-acid motive batteries and lithium-ion batteries, with a focus on electric bikes and special-purpose electric vehicles[6]. - The company has a diversified product portfolio and is recognized as a leading player in the Chinese battery industry[12]. - The Group's manufacturing facilities are strategically located in high-demand regions across seven provinces in China, including Shandong and Jiangsu[7]. - The primary market includes top electric bike manufacturers, while the secondary market is supported by a nationwide distribution network covering all provinces in China[8]. - Chaowei Power Holdings Limited emphasizes advanced technology and environmentally friendly processes in its operations[12]. Financial Performance - The company's revenue for the year ended December 31, 2021, was approximately RMB 29,489 million, representing a 8.0% increase from RMB 27,305 million in 2020[23][24]. - Gross profit for the year was RMB 3,324 million, slightly up from RMB 3,297 million in the previous year, indicating a stable gross margin[23]. - Profit attributable to the owners of the company decreased to RMB 516 million, down 28.3% from RMB 720 million in 2020[23][34]. - Basic and diluted earnings per share were RMB 0.47, compared to RMB 0.65 in 2020, reflecting a decline of 27.7%[23]. - The Group's total revenue for the Year was approximately RMB29,489 million, an increase from RMB27,305 million in 2020, representing a year-on-year growth of approximately 8.0%[53]. - Gross profit for the Year was approximately RMB3,324 million, slightly up from RMB3,297 million in 2020, with a gross profit margin decrease to approximately 11.3% from 12.1%[53]. - Profit before tax decreased by approximately 26.4% to RMB784,617,000 from RMB1,065,559,000 in 2020[77]. - Profit attributable to owners of the Company was approximately RMB516 million, down from RMB720 million in 2020, indicating a decline of approximately 28.3%[53]. Market Trends and Outlook - The company continues to experience stable growth in market demand for its products[11]. - The market for electric bikes in China is expected to grow by approximately 14.9% year-on-year in 2022, with ownership exceeding 300 million units[54]. - The lead-acid motive batteries continue to dominate the market, holding approximately 90% market share due to their mature technology and cost-effectiveness[60]. - The implementation of new national standards for electric bikes is expected to create greater demand in the replacement market, boosting the overall electric bike market[60]. - The electric vehicle battery segment accounted for 54.39% of total revenue, while the electric bike battery segment contributed 17.02%[25][26]. Research and Development - The company is focused on technological innovation and aims to enhance production efficiency through R&D of new products[41][46]. - The Group's R&D expenses amounted to approximately RMB 929 million, which is about 3.2% of total revenue[72]. - The Group's lithium-ion battery sales revenue was approximately RMB 246 million, with plans to enhance product technology for better quality and efficiency[68]. - The Group was recognized as a "National Model Enterprise of Technological Innovation" and continues to invest in R&D platforms and talent acquisition[72]. Corporate Governance - The company has a strong governance structure with a mix of executive and independent non-executive directors, ensuring diverse perspectives in decision-making[121]. - The Audit Committee consists of four independent non-executive directors, ensuring oversight of financial reporting and internal controls[181]. - The Company has developed policies and practices on corporate governance, including compliance with legal and regulatory requirements[153]. - The Board comprises four executive Directors, one non-executive Director, and four independent non-executive Directors, with independent non-executive Directors accounting for more than one-third of the Board[159]. - The Company has arranged liability and reimbursement insurances for Directors and senior management[152]. Employee and Operational Insights - The total cost of employees amounted to approximately RMB 1,565,955,000, with a workforce of 13,062 employees as of December 31, 2021, down from 15,105 in 2020[86]. - The Group continues to enhance staff training and provide competitive salary packages to improve employee engagement and service quality[86]. - The Group's current ratio improved to 1.12 from 1.06 in the previous year, while the gearing ratio decreased to approximately 10.7% from 12.6%[80]. Dividend and Shareholder Information - Proposed final dividend per share is HK$0.087, down from HK$0.117 in the previous year, reflecting the company's cautious approach amid declining profits[23]. - The final dividend is expected to be paid on or around July 15, 2022, following the annual general meeting[104]. - The register of members will be closed from June 15, 2022, to June 17, 2022, for the purpose of determining shareholders' entitlement to the proposed final dividend[107]. Management Team - The Group's management team includes individuals with significant experience in both engineering and management roles, enhancing its strategic capabilities[120]. - The company has a strong leadership team with over 20 years of experience in the lead-acid battery industry, enhancing its strategic planning and investment decisions[110]. - The independent non-executive directors bring extensive experience from various sectors, contributing to strategic decision-making[129].

Financial Performance - The Group's total revenue for the period was approximately RMB 12,959 million, an increase from approximately RMB 11,109 million in the corresponding period of 2020, representing a growth of about 16.6%[14] - Gross profit for the period was approximately RMB 1,448 million, compared to RMB 1,403 million in the same period of 2020, with a gross profit margin of approximately 11.2%, down from 12.6%[14] - Profit attributable to owners of the Company was approximately RMB 300.5 million, a decrease from approximately RMB 407.2 million in the corresponding period of 2020, primarily due to losses on fair value of financial assets[14] - Basic and diluted earnings per share were RMB 0.27, down from RMB 0.37 in the same period of 2020[14] - The Group's revenue for the period was approximately RMB12,959,494,000, representing an increase of approximately 16.7% compared to RMB11,108,670,000 for the same period in 2020[64] - The Group's gross profit for the period was approximately RMB1,448,138,000, an increase of approximately 3.3% from RMB1,402,521,000 in the same period of 2020, with a gross profit margin of approximately 11.2%[67] - Profit before tax decreased by approximately 21.3% to approximately RMB421,125,000 compared to RMB534,924,000 for the same period in 2020[73] - Profit attributable to owners of the Company decreased by approximately 26.2% to approximately RMB300,520,000 compared to RMB407,152,000 for the same period in 2020[73] - The profit for the period was RMB 300,520,000, representing a significant increase compared to the previous period[192] Revenue Breakdown - Revenue from sales of lead-acid motive batteries for the period amounted to approximately RMB 11,106 million, accounting for approximately 85.7% of the Group's total revenue[37] - Revenue from sales of electric bike batteries was approximately RMB 7,313 million, representing about 56.4% of the Group's total revenue[37] - Revenue from sales of electric tricycle batteries and special-purpose electric vehicle batteries totaled approximately RMB 3,793 million, accounting for approximately 29.3% of the Group's total revenue[37] - Sales revenue from electric bicycle batteries was approximately RMB 7.313 billion, representing about 56.4% of the total revenue[39] - The Group's electric tricycle and special-purpose electric vehicle battery sales revenue was approximately RMB 3.793 billion, accounting for about 29.3% of total revenue[39] Market Trends and Demand - The demand for electric bikes continues to grow, with the PRC's annual output of electric bikes reaching approximately 30 million in 2020 and ownership exceeding 300 million[15] - The newly amended "Safety Technical Specification for Electric Bicycles" in the PRC is expected to increase replacement demand for electric bikes[15] - The electric bike sharing industry is expanding, further driving the production of electric bikes[15] - The PRC government has implemented stricter regulations for electric bicycles since the New National Standard came into effect on April 15, 2019, promoting the upgrade of electric bikes[24] - The transition periods for non-standard electric vehicles in regions like Beijing, Shanghai, and Zhejiang will expire in 2021, further stimulating demand for electric bicycles[26] - The demand for lead-acid motive batteries is expected to remain steady due to their regular replacement needs and large replacement market[24] - The implementation of new industry standards for electric bikes and batteries is anticipated to benefit sales in the sector[27] Research and Development - The Group's R&D expenditure reached approximately RMB 383 million, which is about 3.0% of total revenue[53] - R&D expenses for the period amounted to approximately RMB383,450,000, representing an increase of approximately 3.5% compared to RMB370,431,000 for the same period in 2020[68] - The Group aims to consolidate its market position through innovation and the development of high-performance battery products[13] - The Group will continue to develop new technologies, materials, products, and business models to lead industry development[62] Financial Position and Assets - As of 30 June 2021, the Group had net current assets of approximately RMB898,228,000, an increase from RMB644,490,000 as of 31 December 2020[77] - The Group's cash and bank balances were approximately RMB 1,749,113,000, down from RMB 2,552,548,000 as of December 31, 2020[78] - The net debt was approximately RMB 3,464,165,000, compared to RMB 2,414,359,000 as of December 31, 2020, indicating an increase in leverage[78] - The current ratio was approximately 1.07 as of June 30, 2021, slightly up from 1.06 as of December 31, 2020[79] - The gearing ratio (net debt/total assets) increased to approximately 16.7% from 12.6% as of December 31, 2020[80] - The total carrying amount of pledged assets at the end of the reporting period was approximately RMB 4,056,247,000, up from RMB 3,026,144,000 as of December 31, 2020[84] Shareholding Structure - The overall shareholding structure indicates a concentration of ownership among a few key individuals, which may impact corporate governance[99] - The company maintains a structure where certain economic interests are separated from voting rights, as seen in the Jolly Pride Trust Deed[100] - The report indicates that substantial shareholders have interests or short positions in shares or underlying shares of the company[108] - The financial implications of these shareholdings could affect market perception and investor confidence in the company[116] Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the separation of the roles of chairman and CEO[164] - The Board believes that the current arrangement of having the same individual serve as both chairman and CEO is beneficial for executing the Group's business strategies[165] - The Group has established an Audit Committee comprising four independent non-executive Directors, with Mr. Lee as the chairman, who has professional qualifications in accounting and finance[176] - The Audit Committee has reviewed the unaudited consolidated results for the Period and confirmed compliance with relevant accounting standards and regulations[178] Cash Flow and Investments - Net cash used in operating activities for the six months ended 30 June 2021 was RMB (651,861,000), a decrease from RMB 1,615,940,000 in the same period of 2020[194] - The total cash used in investing activities was RMB (881,774,000), a decrease from RMB (1,476,400,000) in the previous year[194] - Net cash from financing activities was RMB 726,355, compared to RMB 344,173 in the prior year, indicating a significant increase of about 111%[198] - Cash and cash equivalents at the end of the period were RMB 1,749,113, down from RMB 2,442,457 in the previous year, representing a decrease of approximately 28%[198]