香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何 部分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 常茂生物化學工程股份有限公司 Changmao Biochemical Engineering Company Limited* （於中華人民共和國註冊成立之股份有限公司） （股份代號：954） 截至二零二四年六月三十日止六個月 中期業績公告 | --- | --- | --- | |-------------------------------------|------------------------|------------| | | | | | 摘要 | | | | | 截至六月三十日止六個月 | | | | 二零二四年 | 二零二三年 | | | 人民幣千元 | 人民幣千元 | | 收入 | 313,802 | 296,608 | | 期內歸屬於本公司股東的（虧損）╱利潤 | (18,786) | 4,157 | 股息 董事不建議就截至二零二四年六月三十日止六個月派付中期股息。 * 僅供識別 ...

Financial Performance - The company's sales revenue for the year ended December 31, 2023, was RMB 637,078,000, a decrease of 13% compared to RMB 730,034,000 in the previous year[13]. - The net loss attributable to shareholders for 2023 was approximately RMB 86,057,000, compared to a net profit of RMB 81,423,000 in the previous year[13]. - Revenue for 2023 was RMB 637,078,000, a decrease of 12.7% from RMB 730,034,000 in 2022[28]. - Gross margin for 2023 was 4.1%, down from 24.8% in 2022, primarily due to declining sales prices and reduced export demand[28]. - The company incurred a net loss of RMB 1,112,000 in 2023 compared to a net income of RMB 1,895,000 in 2022, attributed to losses from the sale of properties and equipment[28]. - Other income increased to RMB 6,745,000 in 2023 from RMB 3,477,000 in 2022, mainly due to higher government subsidies[28]. - The company recorded an impairment provision of RMB 38,583,000 for its construction in progress, property, machinery, and equipment due to underperformance at the Lianyungang facility[13]. - For the year ended December 31, 2023, the group recorded a loss attributable to shareholders of approximately RMB 86,057,000, compared to a profit of RMB 81,423,000 in 2022, primarily due to a decline in sales revenue and gross margin, as well as impairment losses and deferred tax asset write-offs[31]. Production and Operations - The decline in sales revenue and gross margin was primarily due to lower product sales prices and weakened export demand[13]. - The new factory in Dalian began operations in Q4 2022 but has not yet reached target production levels, negatively impacting overall gross margin[13]. - The company expects the Dalian factory's production lines to reach full capacity, which will gradually improve operational conditions and become a profit growth point[13]. - The Jiangsu factory completed its upgrade and has stabilized production, ensuring steady production and sales volumes despite market downturns[15]. - The second production line at the Dalian factory is expected to begin trial production in 2024[15]. - The company plans to continue supporting the construction of the Dalian factory, which is expected to enhance production capabilities and economic benefits[22]. - The company has implemented a clean production strategy to reduce emissions and production costs, including the use of butane instead of benzene since 2018[106]. - The new factory in Dalian commenced production in Q4 2022, contributing to increased operational capacity and efficiency[106]. Research and Development - Five new patents were granted in 2023, including two invention patents, reflecting ongoing investment in research and development[19]. - The company aims to enhance product competitiveness through technological innovation and increased R&D investment[23]. - The company is investing 10 million in R&D for new technologies aimed at enhancing production efficiency[49]. - The company invests annually in R&D to improve existing processes and develop new product technologies, with future prospects heavily reliant on successful commercialization of new products[179]. Market and Sales Strategy - The company adjusted its sales strategy in response to challenges, including building a new team and improving assessment mechanisms to enhance team effectiveness[15]. - The company aims to continue developing functional nutritional health products while extending its product chain[6]. - Export sales accounted for approximately 27.0% of the group's revenue, down from 35.1% in 2022, while domestic sales increased to approximately 73.0% from 64.9%[32]. - The company is focused on expanding market reach and developing high-end customers to improve brand recognition and competitiveness[26]. - Market expansion plans include entering two new international markets by the end of 2023, targeting a 20% increase in market share[49]. Financial Position and Debt - As of December 31, 2023, the group had total outstanding bank loans of RMB 492,613,000, an increase from RMB 289,615,000 in 2022, with new loan agreements signed for RMB 200 million during the year[35]. - The debt-to-asset ratio increased to 47.6% as of December 31, 2023, from 35.5% in 2022, primarily due to increased bank loans for the construction of a new production line[36]. - The group's cash and cash equivalents amounted to approximately RMB 89,554,000 as of December 31, 2023, compared to RMB 59,993,000 in 2022[36]. Employee and Governance - Total employee costs for the year were approximately RMB 89,667,000, down from RMB 91,520,000 in 2022, mainly due to the absence of incentive bonuses for directors and employees[37]. - The total number of employees increased to 609 in 2023, up from 497 in 2022, representing a growth of 22.5%[119]. - The employee turnover rate for males decreased to 12% in 2023 from 15% in 2022, while the turnover rate for females increased to 16% from 9%[119]. - Training expenses for employees rose to RMB 415,000 in 2023, compared to RMB 193,000 in 2022, marking a significant increase of 115.5%[121]. - The company reported zero fatalities due to work-related incidents in 2023, maintaining a strong safety record[121]. - The board of directors held five meetings during the year ending December 31, 2023, with a 100% attendance rate from executive directors[62]. - The company has implemented an employee incentive plan based on the skills and contributions of each director or senior management member[67]. Environmental and Sustainability Initiatives - The company’s environmental management system is certified under ISO 14001, focusing on energy conservation and pollution reduction[101]. - The company is committed to long-term strategies for energy saving, emission reduction, and environmental protection in response to climate change challenges[102]. - The company has established waste treatment facilities to minimize environmental pollution from its production activities[179]. - The company has implemented centralized management and treatment of solid and hazardous waste across its production facilities[101]. - The company achieved ISO 45001 certification for occupational health and safety management in 2023, enhancing workplace safety standards[116]. Corporate Governance - The company maintained a high standard of corporate governance, believing it establishes a framework for effective management and shareholder value enhancement[58]. - The audit committee consists of three independent non-executive directors, ensuring compliance with listing rules[68]. - The company has adopted a standard code of conduct for securities trading, with no known violations reported for the year ending December 31, 2023[63]. - The board's main responsibilities include setting overall strategy and monitoring management performance, ensuring financial statements are prepared on a going concern basis[59]. - The company has established three board committees: remuneration and assessment, audit, and nomination committees to enhance governance practices[59]. Shareholder Information - The company aims for a dividend payout ratio of 30% to 70% of the consolidated net profit attributable to shareholders, although actual payouts may vary based on cash flow and future funding needs[93]. - The company did not declare any interim dividends for the year, consistent with the previous year[133]. - As of December 31, 2023, the company's distributable reserves amounted to approximately RMB 606,876,000, an increase from RMB 602,511,000 in 2022, reflecting a growth of about 0.6%[136]. - The beneficial ownership of shares includes 2,500,000 domestic shares and 135,000,000 foreign shares held by Mr. Rui Xingsheng, representing approximately 39.30% of foreign shares[146].

Revenue and Sales Performance - The group's revenue from exports accounted for approximately 27.0% of total revenue, down from 35.1% in 2022, while domestic sales increased to 73.0% from 64.9%[1]. - The group recorded a loss attributable to shareholders of approximately RMB 86,057,000 for the year ended December 31, 2023, compared to a profit of RMB 81,423,000 in 2022, primarily due to a decline in sales revenue and gross margin[6]. - The group's total revenue for the year was RMB 637,078,000, a decrease from RMB 730,034,000 in the previous year[16]. - Revenue from mainland China was RMB 465,224,000, down 1.9% from RMB 474,146,000 in 2022[27]. - The company's revenue for 2023 was RMB 637,078,000, a decrease of 12.7% from RMB 730,034,000 in 2022, with a gross margin of 4.1%, down from 24.8% in the previous year[85]. - The decline in sales revenue and gross margin was primarily due to decreased product sales prices and weakened export demand[64]. - The group's largest customer contributed approximately RMB 35,115,000, accounting for 6% of total revenue, up from 5% in 2022[28]. Financial Position and Liabilities - As of December 31, 2023, the group had outstanding bank loans totaling RMB 492,613,000, an increase from RMB 289,615,000 in 2022, with new loan agreements of RMB 200 million signed during the year[3]. - The total liabilities increased to RMB 590,907,000 in 2023 from RMB 427,862,000 in 2022, reflecting a rise in financial obligations[105]. - The company's total liabilities to total assets ratio increased to 47.6% in 2023 from 35.5% in 2022, primarily due to increased bank loans for the construction of the Dalian factory[91]. - The actual interest rate for secured bank loans was 4.4% in 2023, slightly up from 4.3% in 2022[62]. Expenses and Costs - The group's total expenses for 2023 were RMB 694,759,000, compared to RMB 646,033,000 in 2022, reflecting an increase of 7.5%[35]. - The income tax expense for 2023 was RMB 27,938,000, significantly higher than RMB 6,286,000 in 2022[36]. - The total employee cost for the year ended December 31, 2023, was approximately RMB 89,667,000, a decrease from RMB 91,520,000 in 2022, primarily due to no incentive bonuses being granted in 2023 compared to RMB 7,110,000 in 2022[97]. - Research and development costs for 2023 amounted to RMB 10,209,000, down from RMB 13,920,000 in 2022[35]. Assets and Investments - The total assets of the group as of December 31, 2023, amounted to RMB 1,242,496,000, an increase from RMB 1,206,755,000 in 2022[17]. - The total non-current assets of the group as of December 31, 2023, were RMB 903,495,000, an increase from RMB 820,055,000 in 2022[27]. - The group had capital commitments of approximately RMB 86,586,000 for property, plant, and equipment, primarily for the construction and renovation of production lines[8]. - The company has recognized an impairment provision of RMB 38,583,000 for construction in progress, properties, machinery, and equipment due to underperformance at Lianyungang Changmao[64]. Corporate Governance and Shareholder Information - The company maintains compliance with the corporate governance code as of December 31, 2023[157]. - Independent non-executive directors have confirmed their independence in accordance with the listing rules[158]. - The company has a total of 343,500,000 foreign shares issued as of December 31, 2023, with a percentage ownership of 18.20% held by Shanghai Technology Venture Investment Co., Ltd.[146]. - The largest shareholder, Hong Kong Newborn Venture Investment Co., Ltd., owns 135,000,000 shares, accounting for 39.30% of the total shares[140]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2023[102]. Strategic Plans and Future Outlook - The company plans to enhance its sales strategy by building new teams and improving assessment mechanisms to adapt to business transformation[65]. - The company aims to continue environmental efforts through ongoing technological updates and new equipment investments to reduce energy consumption and emissions[66]. - The company plans to enhance its market expansion efforts by focusing on high-end end-users and international markets to increase brand recognition and competitiveness[82]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $100 million allocated for potential deals[165]. - The company is actively investing in the research and development of sodium pyrroloquinoline quinone (PQQ.Na2) products, with the application scope expanded to weaned piglets in 2023[100].

智通财经APP讯，常茂生物(00954)发布公告，集团预期取得截至2023年12月31日止年度归属于公司股东 的综合净亏损，金额为人民币8500万元至人民币9500万元之间。截至2022年12月31日止年度归属于公司 股东的综合净利润约人民币8142.3万元。 该公司董事会认为集团2023年度之财务表现受影响主要因素如下：(1)产品销售价格下降、出口需求减 弱导致销售收入及毛利率下降;(2)集团位于大连市的新工厂已于2022年第四季度开始运营，其生产线仍 在调整中以实现目标产出及成本。目前尚未盈利，因此对集团整体毛利率产生负面影响。董事会预期经 调整后，大连工厂的生产线将达到计划产量和成本，经营状况将逐步改善，最终成为集团的增长点;及 (3)集团之附属公司，常茂生物连云港有限公司由于未满负荷营运且产品销售价格下降，2023年度出现 亏损。因此集团对连云港常茂在建工程、物业、机器及设备及递延税项资产的帐面价值再进行评估。根 据董事会的最新评估，集团预计将对在建工程、物业、机器及设备计提了减损准备及冲销递延税项资 产，一共为人民币5500万元至人民币6500万元(2022年：无)。董事会谨此强调，根据香港财务报告 ...

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 296,608,000, a decrease of 22.5% compared to RMB 382,810,000 in the same period of 2022[4] - Gross profit for the same period was RMB 41,470,000, down 54.5% from RMB 91,015,000 year-on-year[4] - Operating profit decreased significantly to RMB 8,715,000, compared to RMB 49,216,000 in the previous year, reflecting a decline of 82.3%[4] - Net profit attributable to shareholders for the period was RMB 4,157,000, a decrease of 89.8% from RMB 40,880,000 in the prior year[4] - The company reported a basic and diluted earnings per share of RMB 0.008, down from RMB 0.077 in the previous year[4] - For the six months ended June 30, 2023, the company's profit attributable to shareholders was approximately RMB 4,157,000, a decrease of 89.8% compared to RMB 40,880,000 for the same period in 2022[32] - The company experienced a decline in performance primarily due to a decrease in sales prices of major products, reduced export sales due to lower overseas demand, and production adjustments at the Dalian factory[51] Assets and Liabilities - Total assets as of June 30, 2023, increased to RMB 1,276,792,000 from RMB 1,206,755,000 at the end of 2022, representing a growth of 5.8%[5] - Total liabilities rose to RMB 534,767,000, up from RMB 427,862,000 at the end of 2022, indicating an increase of 25%[6] - The company's total equity as of June 30, 2023, was RMB 688,934,000, reflecting a slight increase from RMB 725,561,000 at the beginning of the year[41] - The company's debt-to-asset ratio was 41.9% as of June 30, 2023, compared to 35.5% as of December 31, 2022[72] Cash Flow and Management - For the six months ended June 30, 2023, the operating cash flow was a net outflow of RMB 20,388,000, compared to a net inflow of RMB 21,738,000 in the same period of 2022, indicating a significant decline in cash generation[10] - The cash and cash equivalents as of June 30, 2023, amounted to RMB 100,132,000, a decrease from RMB 113,945,000 at the end of the previous year[10] - The company reported a net cash outflow from investing activities of RMB 57,464,000 for the first half of 2023, compared to RMB 127,927,000 in the same period of 2022, showing improved cash management[10] - The financing activities generated a net cash inflow of RMB 121,221,000 in the first half of 2023, down from RMB 155,804,000 in the same period of 2022[10] - The company received government subsidies totaling RMB 15,000,000 during the first half of 2023, compared to no subsidies in the same period of 2022[10] Operational Developments - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[4] - The company aims to improve operational efficiency and reduce costs in response to the declining profit margins observed in the first half of 2023[4] - The company is focusing on the construction of the Dalian production base, which is expected to become the main production base for chemical products, enhancing production advantages and accelerating the industrialization of R&D projects[59] - The company is actively promoting new products, including the feed additive PQQ.Na2, and has seen growth in sales of pharmaceutical excipients and raw materials[54][55] - The Changzhou factory is undergoing upgrades, with plans for smart transformation and new equipment expected to be operational within the year[58] - The company aims to accelerate transformation and upgrades, focusing on new materials and raw materials, while increasing R&D investment to foster technological innovation[60] Shareholder Information - As of June 30, 2023, the company has 2,500,000 domestic shares held by Mr. Rui, representing 100% ownership, and 135,000,000 foreign shares, accounting for approximately 39.30%[80] - Major shareholders include Hong Kong Newborn Venture Capital holding 39.30% (135,000,000 shares), Hong Kong Biochemical High-Tech Investment holding 19.65% (67,500,000 shares), and Early Work Limited holding 19.21% (66,000,000 shares)[92] - The company has not disclosed any additional shareholdings by directors or supervisors as of June 30, 2023[83] - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2023[93] Governance and Compliance - The company adhered to the corporate governance code as per the listing rules during the six months ending June 30, 2023[97] - There were no known violations of the standard code of conduct for securities trading by the directors during the six months ending June 30, 2023[98] - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[99]

Financial Performance - The total sales revenue for the year ended December 31, 2022, was RMB 730 million[14]. - Total revenue for the year ended December 31, 2022, was RMB 730,034,000, representing a 33.1% increase from RMB 547,976,000 in 2021[38]. - Gross profit for 2022 was RMB 180,831,000, compared to RMB 38,680,000 in 2021, indicating a significant improvement in profitability[38]. - Operating profit increased to RMB 89,373,000 in 2022, up from RMB 85,824,000 in the previous year, reflecting a growth of 1.8%[38]. - Net profit for the year was RMB 81,358,000, a 39.7% increase from RMB 58,207,000 in 2021[38]. - The profit for the year 2022 was RMB 81.423 million, an increase from RMB 58.318 million in 2021, representing a growth of approximately 39.6%[60]. - Net profit attributable to shareholders for 2022 was approximately RMB 81,423,000, representing a growth of about 40% from RMB 58,318,000 in the previous year[89]. Assets and Liabilities - Total assets as of December 31, 2022, amounted to RMB 1,206,755,000, up from RMB 956,515,000 in 2021, showing a growth of 26.1%[40]. - The company’s non-current liabilities totaled RMB 153,845,000 in 2022, significantly higher than RMB 2,277,000 in 2021, reflecting a substantial increase in financial obligations[42]. - Cash and cash equivalents at year-end were RMB 59,993,000, slightly up from RMB 58,628,000 in 2021, indicating stable liquidity[40]. - The total assets of the company increased to RMB 220,710,000 in 2022 from RMB 144,620,000 in 2021, reflecting a growth of approximately 52.5%[61]. - Short-term bank deposits with maturities exceeding three months increased to RMB 450,000 in 2022 from RMB 200,000 in 2021, indicating better liquidity management[61]. Revenue Recognition and Compliance - The company has implemented strict internal controls for revenue recognition related to product sales[14]. - The company has confirmed that all revenue recognition policies are in line with applicable accounting standards[14]. - The company recognizes revenue from the sale of organic acid products when control is transferred to the customer, with no financing elements involved[180]. - The company has maintained compliance with relevant laws and regulations throughout the year[5]. - The company’s financial reporting aligns with the Hong Kong Financial Reporting Standards, ensuring compliance and transparency[115]. Audit and Governance - The audit report confirmed that the financial statements accurately reflect the company's financial position as of December 31, 2022[8]. - The audit was conducted in accordance with Hong Kong auditing standards, ensuring the integrity of the financial reporting[9]. - The supervisory board has conducted thorough reviews of the company's financial status and related transactions[5]. - The company has established a governance structure that includes a board of directors and a supervisory board, along with three committees: the remuneration and assessment committee, audit committee, and nomination committee[163]. - The board of directors held six meetings during the fiscal year ending December 31, 2022, with full attendance from all members[165]. Impairment and Asset Management - The impairment provision for Lianyungang Changmao's properties, machinery, and equipment amounted to RMB 18 million as of December 31, 2021[18]. - Management conducted a reassessment of the impairment of these assets for the year ending December 31, 2022[18]. - The audit focused on the impairment provisions due to the high estimation uncertainty associated with the recoverable amount[20]. - The company did not recognize any additional provisions for these assets based on management's assessment[20]. - The inventory impairment was recognized at RMB 17,607,000 for the year ended December 31, 2022, up from RMB 6,733,000 in the previous year, reflecting a significant increase in costs[122]. Research and Development - The company is focused on expanding its market presence and enhancing its product offerings through continuous research and development[56]. - The research and development efforts included the ongoing project for the new feed additive PQQ.Na2, with market development and customer feedback being pursued[96]. - The pharmaceutical division received approval for the L-malic acid raw material drug project, marking a significant step in product upgrade and value addition[97]. - The company plans to invest in research and development for new products and technologies to drive future growth[63]. Corporate Social Responsibility - The company invested in environmental protection measures, including energy-saving projects and emissions reduction initiatives at its factories[95]. - The company contributes to employee retirement benefit plans established by local governments in mainland China, with no further payment obligations after contributions[175]. Market and Product Development - The company’s main products include a series of organic acids and derivatives, primarily used as food additives and pharmaceutical intermediates[53]. - The company emphasizes technological investment and innovation, integrating production, learning, and research[56]. - The company is exploring potential mergers and acquisitions to further enhance its market position and operational capabilities[63].

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 382,810 thousand, representing a 55.4% increase from RMB 246,356 thousand in the same period of 2021[5] - Gross profit for the same period was RMB 91,015 thousand, compared to RMB 29,755 thousand in 2021, indicating a significant improvement in profitability[5] - Operating profit for the six months was RMB 49,216 thousand, a turnaround from an operating loss of RMB 888 thousand in the previous year[5] - Net profit attributable to equity holders for the period was RMB 40,880 thousand, compared to RMB 242 thousand in the same period of 2021[5] - Total revenue for the six months ended June 30, 2022, reached RMB 382,810,000, up from RMB 246,356,000 in the same period of 2021, representing a year-over-year growth of approximately 55.3%[27] - For the six months ended June 30, 2022, the company reported a net profit before tax of RMB 48,152,000, a significant increase from a loss of RMB 1,136,000 in the same period of 2021[36] - The company reported a basic and diluted earnings per share of RMB 0.077, a significant increase from RMB 0.000 in the previous year[5] Assets and Equity - Total assets increased to RMB 1,149,413 thousand as of June 30, 2022, up from RMB 956,515 thousand at the end of 2021, reflecting strong growth[7] - The company’s total equity increased to RMB 738,185 thousand from RMB 697,526 thousand, reflecting a solid financial position[9] - Non-current assets totaled RMB 744,701 thousand, up from RMB 639,489 thousand, showing investment in long-term growth[7] - The company’s total equity as of June 30, 2022, was RMB 685,014,000, an increase from RMB 586,054,000 as of December 31, 2021[47] Cash Flow and Liquidity - Cash and bank balances rose to RMB 113,945 thousand from RMB 58,628 thousand, indicating improved liquidity[7] - Operating cash flow for the six months ended June 30, 2022, was RMB 49,088,000, a significant improvement from a cash outflow of RMB 7,372,000 in the same period of 2021[15] - Net cash generated from operating activities was RMB 21,738,000, compared to a net cash outflow of RMB 16,012,000 in the prior year[15] - Cash and cash equivalents increased to RMB 113,945,000 as of June 30, 2022, from RMB 57,226,000 at the end of the previous year[15] - The company’s cash and cash equivalents increased to RMB 113,945,000 as of June 30, 2022, compared to RMB 58,178,000 as of December 31, 2021, representing a growth of 96.1%[43] Operational Highlights - The company experienced a recovery in production capacity after relocation, leading to a notable increase in product sales growth[62] - The company’s Lianyungang plant has gradually released production capacity after product structure adjustments, achieving profitability in the second quarter of 2022[62] - The company’s management and sales teams adjusted strategies to deepen domestic demand while stabilizing overseas orders, effectively navigating the new dual circulation pattern[63] - The company has successfully adjusted production and sales strategies at the Lianyungang plant, achieving profitability in Q2 2022 and significantly reducing losses compared to the same period last year [69] Market and Growth Strategy - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[5] - The company plans to accelerate transformation and upgrade efforts, particularly at the Dalian base, which will become a major production hub for chemical products and new materials [71] - The company aims to enhance safety and environmental standards, focusing on risk control and clean production to align with national carbon neutrality goals [73] - The sales team is dedicated to developing high-end customers and expanding international markets, enhancing brand recognition and competitiveness [75] - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[139] Research and Development - The company has made significant progress in R&D, with multiple projects underway, including the submission of supplementary materials for the apple acid API project to the National Medical Products Administration (CDE) [65] - Investment in R&D has increased by 30%, focusing on innovative technologies and product development[139] - The Dalian plant project is a key focus for the company, with the first phase of construction nearly complete, aiming to enhance production scale and accelerate the industrialization of R&D projects [67] Financing and Debt - The company reported a net cash inflow from financing activities of RMB 155,804,000, compared to RMB 68,495,000 in the previous year[15] - As of June 30, 2022, the total outstanding bank loans amounted to RMB 244.5 million, an increase from RMB 88.4 million as of December 31, 2021[82] - The company has a loan agreement of RMB 200 million with a state-owned commercial bank, with a remaining balance of RMB 195 million as of June 30, 2022, intended for the construction of a new factory in Dalian[82] Employee and Operational Costs - The company reported a total employee cost of approximately RMB 42.39 million for the six months ended June 30, 2022, up from RMB 30.33 million for the same period in 2021, primarily due to an increase in employee numbers and salary adjustments[85] - The company employed a total of 479 employees as of June 30, 2022, compared to 424 employees as of June 30, 2021[85] Corporate Governance and Shareholding - The company has complied with the corporate governance code as per the listing rules during the reporting period[132] - The company’s H shares were listed on the main board of the Hong Kong Stock Exchange since June 28, 2013[127] - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2022[125] - The company’s board of directors has adopted a standard code for securities trading by directors, with no known violations during the reporting period[134]

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 382,810 thousand, representing a 55.4% increase from RMB 246,356 thousand in the same period of 2021[3] - Profit attributable to equity holders for the same period was RMB 40,880 thousand, a significant increase from RMB 242 thousand in the prior year[3] - Gross profit for the six months was RMB 91,015 thousand, compared to RMB 29,755 thousand in the previous year, indicating a substantial improvement in profitability[6] - Operating profit for the period was RMB 49,216 thousand, recovering from an operating loss of RMB 888 thousand in the same period last year[6] - Total comprehensive income for the period was RMB 40,659 thousand, compared to RMB 20 thousand in the same period last year[6] - Basic and diluted earnings per share attributable to equity holders was RMB 0.077, a significant increase from RMB 0.000 in the prior year[6] - The company reported a net cash increase of RMB 49,615 thousand for the six months ended June 30, 2022, compared to a decrease of RMB 76,628 thousand in the same period of 2021[16] - Operating cash flow for the six months ended June 30, 2022, was RMB 49,088 thousand, a significant improvement from a cash outflow of RMB 7,372 thousand in the same period of 2021[16] - The total employee cost for the six months ended June 30, 2022, was approximately RMB 42.39 million, an increase from RMB 30.33 million for the same period in 2021[90] Assets and Liabilities - Total assets increased to RMB 1,149,413 thousand as of June 30, 2022, up from RMB 956,515 thousand at the end of 2021[9] - The company reported a net cash and bank balance of RMB 113,945 thousand, compared to RMB 58,628 thousand at the end of the previous year[9] - The company’s non-current assets (excluding deferred tax assets) amounted to RMB 724,959 thousand as of June 30, 2022, compared to RMB 618,998 thousand as of December 31, 2021[32] - Trade receivables as of June 30, 2022, amounted to RMB 66,632,000, an increase from RMB 56,263,000 as of December 31, 2021, indicating growth in sales or credit terms[48] - Trade payables as of June 30, 2022, amounted to RMB 41.76 million, a decrease from RMB 52.21 million as of December 31, 2021[60] - The company has outstanding bank loans totaling RMB 244.5 million, with a loan balance of RMB 195 million used for constructing a new factory in Dalian[87] - The company has a debt-to-asset ratio of 35.8% as of June 30, 2022, compared to 27.1% as of December 31, 2021[88] Taxation and Income - The income tax expense for the period was RMB 7,498,000, compared to a tax credit of RMB (1,157,000) in the previous year, reflecting a substantial change in tax obligations[41] - The deferred tax expense for the period was RMB (788,000), compared to RMB (2,998,000) in the previous year, indicating improved tax efficiency[41] - The net financing cost for the six months ended June 30, 2022, was RMB 1,064 thousand, an increase from RMB 248 thousand in the previous year[37] Dividends and Share Capital - The company did not recommend an interim dividend for the six months ended June 30, 2022[3] - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2022, consistent with the previous year[45] - The company maintained a weighted average of 529,700,000 shares issued during both periods, reflecting stability in share capital[43] Growth and Development - The company has shown a strong growth trajectory, with a focus on expanding its market presence and enhancing product offerings[6] - The company is focusing on the construction of the Dalian plant, which is expected to enhance production capacity and support new product development[69] - The Changzhou plant is undergoing upgrades to improve production efficiency and implement smart manufacturing solutions[71] - The Lianyungang plant achieved profitability in the second quarter of 2022, significantly narrowing losses compared to the same period last year[72] - The company plans to accelerate transformation and upgrade efforts, particularly in the Dalian production base, to create new economic benefits[73] - Research and development projects are progressing steadily, with increased investment in new product development and existing product process improvements[66] - The company emphasizes technology innovation as a long-term development source, increasing R&D investment to accelerate product upgrades and develop competitive new products[75] - The company is actively developing new functional food additives and materials to extend its product line and strengthen its market position[79] Market Presence - The company reports that approximately 35% of its sales revenue comes from exports, while domestic sales account for about 65%[82] - The company plans to enhance its market presence by focusing on high-end customers and expanding internationally through collaborations with major global clients[77] Corporate Governance - The company appointed Ms. Zheng Minhua as an independent non-executive director and chairman of the audit committee effective July 1, 2022, after a vacancy in the audit committee chair[132] - The company complied with the corporate governance code and related regulations as of June 30, 2022, following the appointment of the new independent non-executive director[132] - All directors, except for Ms. Ou Fenglan, were unable to attend the annual general meeting on May 25, 2022, due to the COVID-19 pandemic[132] Shareholder Information - Major shareholders include Hong Kong Newborn Venture Capital Limited with 135,000,000 shares, representing 39.30% of foreign shares[122] - Hong Kong Biochemical High-Tech Investment Limited holds 67,500,000 shares, accounting for 19.65% of foreign shares[122] - The total issued shares as of June 30, 2022, are 529,700,000, comprising 183,700,000 H shares, 2,500,000 domestic shares, and 343,500,000 foreign shares[128] - The percentage of foreign shares is calculated based on the total of 343,500,000 issued foreign shares[122] - The percentage of H shares is based on the total of 183,700,000 issued H shares[123] - Lin Mao holds beneficial ownership of 66,000,000 foreign shares and 2,620,000 H shares, representing 19.21% and 1.43% respectively[120] - Shanghai Technology Venture Investment Co., Ltd. has beneficial ownership of 62,500,000 foreign shares, which is 18.20% of the total[122] Risk Management - The company did not report any significant changes in risk management policies since the end of the previous year[27] - As of June 30, 2022, the company had no significant contingent liabilities[95] Employee Incentives - The company has established an employee incentive plan, with performance-based bonuses amounting to approximately RMB 4 million for the six months ended June 30, 2022[91]

Financial Performance - For the year ended December 31, 2021, the group's sales revenue was approximately RMB 547,976,000, an increase of about 23% compared to RMB 444,106,000 in the same period last year[15]. - The net profit attributable to equity holders of the company was approximately RMB 58,318,000, representing a growth of about 247% from RMB 16,827,000 in the previous year[15]. - Revenue for 2021 was RMB 547,976,000, an increase of 23.5% from RMB 444,106,000 in 2020[38]. - Other income for 2021 was RMB 124,176,000, a significant increase from a net loss of RMB 4,075,000 in 2020, mainly due to relocation compensation[41]. - The group experienced a net loss of RMB 49,195,000 after excluding relocation income, mainly due to impairment of construction projects and increased production costs leading to a decline in gross margin[43]. - Gross margin for 2021 decreased to 7.1% from 21.5% in 2020, primarily due to increased production costs and reduced overseas demand[38]. - The company incurred a projected loss of RMB 7,982,000 due to rising raw material prices affecting irrevocable sales contracts[38]. Production and Operations - The company has completed the relocation of production equipment related to succinic anhydride from its factories in Changzhou and Lianyungang to Dalian[15]. - The company completed the relocation and transformation of its Changzhou factory, enhancing automation and improving production processes to increase product competitiveness[18]. - The Dalian new factory project is a key focus for the company, with the first phase expected to begin trial production in 2022, expanding phthalic anhydride production capacity[27]. - The Lianyungang factory resumed production in 2021 but faced challenges due to unstable steam supply, with plans to improve operations in 2022 following the Dalian factory's production start[29]. - The company plans to relocate its production line to a new factory in Dalian, which is expected to restore normal production of phthalic anhydride[39]. - The company plans to resume production of phthalic anhydride at the new Dalian factory, which is expected to utilize self-generated steam for production[146]. Research and Development - The company emphasizes technological investment and innovation, having won several awards related to production technology, including first-class and second-class awards in the petrochemical industry[8]. - The company aims to leverage its strong R&D capabilities to drive rapid development in the future[8]. - The research and development bases are located in Changzhou and Shanghai, where the company continuously launches new products and technologies[8]. - The pharmaceutical division has made progress in the development of malic acid raw materials, which are set to be used in various medical applications, potentially increasing sales of high-value products[25]. - The company is committed to increasing R&D investment to drive technological innovation and product upgrades[32]. Environmental Management - The company has established a clean production audit report, achieving advanced domestic standards in pollution reduction and resource utilization efficiency[23]. - The company is committed to enhancing environmental management during the Changzhou factory's relocation, ensuring compliance with government standards for soil investigation and pollution cleanup[21]. - The company invested approximately RMB 9 million in environmental protection efforts in 2021[131]. - The company has implemented a new method for producing phthalic anhydride since 2018, significantly reducing greenhouse gas emissions[134]. - The company has established a dedicated environmental protection workshop to manage wastewater and solid waste effectively[130]. - The total greenhouse gas emissions amounted to 73,278 tons in 2021, slightly down from 75,808 tons in 2020, while emissions per unit of production increased to 2.61 tons per ton[137]. - The total wastewater discharged was 329,204 tons, a decrease from 384,199 tons in 2020 and 393,492 tons in 2019[137]. - The company has not reported any significant violations of environmental protection laws and regulations in 2021[131]. Corporate Governance - The company emphasizes high-quality corporate governance, believing it establishes a framework for effective management and enhances shareholder value[71]. - The board of directors confirmed their responsibility for the preparation of the financial statements for the fiscal year ending December 31, 2021[108]. - The company has adopted a standard code of conduct for securities trading, ensuring compliance among all directors[77]. - The board includes independent directors with significant experience in finance and investment banking, enhancing corporate governance[62]. - The company has established three board committees: the remuneration committee, audit committee, and nomination committee[72]. - The Audit Committee held five meetings in 2021, with a 100% attendance rate from all members, focusing on reviewing the financial reporting procedures and internal control systems of the group[89]. - The company has adopted a board diversity policy, recognizing the benefits of diverse perspectives and experiences among board members[99]. Employee Management - Employee costs totaled approximately RMB 64,859,000 for the year, an increase from RMB 55,946,000 in 2020, driven by higher average employee numbers and salaries[51]. - The employee turnover rate for males was 25% in 2021, an increase from 18% in 2020, while the turnover rate for females rose to 15% from 8%[154]. - The average training hours per employee was 69 hours in 2021, slightly up from 68 hours in 2020[156]. - The company has established a detailed social responsibility system covering employment regulations and social welfare[151]. Market and Sales - Domestic sales grew by approximately 27% in 2021, driven by adjustments in sales strategies and increased efforts in promoting products like tartaric acid and malic acid[19]. - Export sales accounted for approximately 33.7% of total revenue, a decrease from 35.6% in 2020, while domestic sales increased to 66.3% from 64.2%[45]. - The company is actively developing high-end end-user clients and expanding into international markets[35]. - The company will continue to focus on food additives while exploring new market segments and applications[36]. Financial Position - As of December 31, 2021, the total outstanding bank loans amounted to RMB 88,400,000, with RMB 86,900,000 due within one year[47]. - The debt-to-asset ratio increased to 27.1% as of December 31, 2021, up from 23.3% in 2020, mainly due to increased bank loans for the new factory[50]. - Cash and cash equivalents decreased to approximately RMB 58,178,000 from RMB 133,693,000 in 2020, primarily due to funding for the new factory[50]. - The company aims for a dividend payout ratio of 30% to 70% of the consolidated net profit attributable to shareholders[121]. Shareholder Information - As of December 31, 2021, the company's distributable reserves amounted to approximately RMB 517,198,000, an increase from RMB 511,932,000 in 2020[171]. - The company did not declare any interim dividends for the year, nor did it recommend a final dividend for the year ending December 31, 2021[168]. - The beneficial ownership structure indicates significant control by key individuals, with Mr. Rui and Ms. Leng both holding substantial shares[188]. - The company continues to maintain a diverse ownership structure with both domestic and foreign investments[188].

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 246,356,000, an increase from RMB 219,947,000 in the same period of 2020, representing a growth of approximately 12%[5] - Gross profit for the period was RMB 34,090,000, down from RMB 49,972,000 in the previous year, indicating a decline of about 32%[5] - Profit attributable to equity holders of the company was RMB 242,000, compared to RMB 15,178,000 in the same period last year, reflecting a significant decrease[3] - Basic and diluted earnings per share were RMB 0.000 and RMB 0.029 respectively, showing a decline in profitability[4] - Total comprehensive income for the period was RMB 20,000, down from RMB 14,978,000 in the previous year[6] - The company reported a net loss from operations of RMB 888,000, compared to a profit of RMB 20,429,000 in the previous year[5] - For the six months ended June 30, 2021, the company's operating cash flow was a net outflow of RMB 16,012,000, compared to a net inflow of RMB 29,078,000 in the same period of 2020[14] - The company reported a significant increase in sales in mainland China, reaching RMB 158,221,000, up 26.73% from RMB 124,848,000 in 2020[25] - The net profit attributable to equity holders for the same period was approximately RMB 242,000, a decrease of about 98% from RMB 15,178,000 in the previous year[54] Assets and Liabilities - Total assets as of June 30, 2021, amounted to RMB 889,050,000, an increase from RMB 847,329,000 at the end of 2020[10] - Total liabilities increased to RMB 249,709,000 from RMB 197,414,000, indicating a rise of approximately 26%[10] - Cash and bank deposits decreased to RMB 57,226,000 from RMB 134,343,000, a decline of about 57%[8] - The total non-current assets, excluding deferred tax assets, amounted to RMB 466,355,000 as of June 30, 2021, compared to RMB 412,137,000 as of December 31, 2020[26] - Trade receivables increased to RMB 56,890,000 as of June 30, 2021, from RMB 52,389,000 as of December 31, 2020, indicating a growth of 8.5%[40] - Trade payables increased to RMB 38,170,000 as of June 30, 2021, compared to RMB 28,000,000 as of December 31, 2020[49] - The debt-to-asset ratio as of June 30, 2021, was 28.1%, an increase from 23.3% as of December 31, 2020[79] Cash Flow and Investments - The net cash used in investing activities was RMB 129,111,000, compared to RMB 20,936,000 in the same period of 2020, indicating increased investment in property, plant, and equipment[14] - Cash and cash equivalents decreased to approximately RMB 57,226,000 as of June 30, 2021, down from RMB 133,693,000 as of December 31, 2020, primarily due to funding needs for the new factory[79] - The company has authorized but not contracted capital commitments of RMB 106,696,000 as of June 30, 2021, compared to RMB 6,547,000 as of December 31, 2020[52] - The company has capital commitments of approximately RMB 106,696,000 for the construction of a new factory in Dalian, China, expected to be funded through cash flow and/or bank financing[79] Operational Developments - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[2] - The company plans to continue focusing on the production and sales of organic acid products, with an emphasis on enhancing overall group efficiency[24] - The company is preparing for the registration and verification of the apple acid raw material project, which is expected to enhance product value[58] - The company continues to advance the application for the new feed additive project PQQ.Na2, with expert review recently completed[58] - The company has faced significant production cost increases due to the rising market price of its main raw material, causing a decline in gross margin[54] - The company is adjusting its sales strategy to strengthen domestic market sales in response to decreased demand in major export regions due to the pandemic[55] - The Dalian new factory project is a key focus for the company, with construction progressing rapidly and all necessary permits obtained by June 30, 2021[60] - The company has transitioned its Changzhou base from a chemical enterprise to a light industry enterprise, with the first phase of the factory being dismantled as per the relocation agreement[61][62] - Lianyungang Changmao has resumed production as a non-chemical enterprise, completing the dismantling of chemical facilities by June 30, 2021[63] - Despite a decline in net profit in the first half of 2021, production and sales have remained stable, with the company focusing on technological innovation and product upgrades[65] - The company aims to accelerate the construction of the Dalian base, which will serve as a major production hub for high-end food additives and new materials[65] - Continuous investment in R&D is planned to enhance the development of new products, including biodegradable materials and pharmaceutical excipients[66] - The company is committed to improving safety and environmental standards, aiming to become a resource-saving and environmentally friendly enterprise[68] Employee and Governance - The total employee cost for the six months ended June 30, 2021, was approximately RMB 30,330,000, an increase from RMB 25,360,000 for the same period in 2020, attributed to salary increases[80] - As of June 30, 2021, the company employed a total of 424 employees, down from 448 employees as of June 30, 2020[80] - The company has established an employee incentive plan linked to achieving a target profit of at least RMB 40,000,000 for the year ending December 31, 2022[80] - The company has complied with the corporate governance code as per the listing rules during the reporting period[116] - The company’s board of directors has adopted a standard code for securities trading conduct, with no known violations reported during the period[117] Shareholder Information - Hong Kong Newborn Venture Capital Limited holds 135,000,000 foreign shares, representing approximately 39.30% of the total issued foreign shares of 343,500,000[101] - Hong Kong Biochemical High-Tech Investment Limited owns 67,500,000 foreign shares, accounting for about 19.65% of the total issued foreign shares[101] - Early Service Limited has a stake in 66,000,000 foreign shares, which is approximately 19.21% of the total issued foreign shares[101] - Lin Mao holds 2,620,000 H shares, representing about 1.43% of the total issued H shares of 183,700,000[101] - Shanghai Technology Venture Investment Co., Ltd. controls 62,500,000 foreign shares, which is approximately 18.20% of the total issued foreign shares[103] - As of June 30, 2021, the company had a total of 529,700,000 issued shares, comprising 183,700,000 H shares, 2,500,000 domestic shares, and 343,500,000 foreign shares[111] - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2021[111] - The company’s foreign shares are valued in Renminbi and are issued to the initiators, with a par value of RMB 0.10 per share[112] - The company’s H shares were listed on the Hong Kong Stock Exchange's main board on June 28, 2013, after being transferred from the Growth Enterprise Market[112] - There were no arrangements made for directors or their family members to hold any shares or debt securities of the company during the reporting period[109] - The company’s legal advisors have indicated that foreign shareholders should have the same rights and obligations as domestic shareholders[114]