Overview - The demand for carrageenan is increasing in the food industry due to rising health consciousness and the preference for natural additives among consumers [1][10] - In the pharmaceutical sector, carrageenan is recognized for its biocompatibility and biodegradability, making it suitable for drug delivery systems and wound dressings [1][10] - China has become a major producer and consumer of carrageenan, with projected sales reaching 67,300 tons in 2024, although market size is expected to decline to 2.872 billion yuan due to falling product prices [1][10] Industry Background - Economic development and rising income levels in China are driving demand for carrageenan across various sectors, particularly food, cosmetics, and pharmaceuticals [4] - The food industry is the primary application area for carrageenan, accounting for over 70% of consumption, with a growing need for high-quality products [8] Industry Chain - The upstream of the carrageenan industry includes the cultivation and harvesting of red algae, while the downstream encompasses applications in food, medical, cosmetic, and agricultural sectors [6] - Carrageenan is widely used in beverages, candies, and meat processing for thickening and stabilizing, and in cosmetics for its moisturizing properties [6] Market Dynamics - In 2024, China's carrageenan export volume is expected to reach 25,200 tons, with an export value of approximately 20.84 million USD [12] - Major export destinations include Spain, Russia, and the Philippines, with significant revenue contributions from these markets [12] Competitive Landscape - The carrageenan market in China is becoming increasingly competitive, with key players including Green New Hydrophilic Gels, Zhejiang Shangfang Biotechnology, and Fujian Green Power Biotechnology [14][19] - Green New Hydrophilic Gels reported a revenue of 989 million yuan in 2024, with a gross profit margin of 22.49% [17] Future Trends - The application of carrageenan is expected to expand in biotechnology, particularly in tissue engineering and regenerative medicine [21] - There is a growing emphasis on sustainable production practices, with companies likely to adopt green technologies and biodegradable products to meet market demands for environmentally friendly options [21]

Market Position and Production Capacity - The company maintains its market leadership, being recognized as the largest global producer of agar and refined and semi-refined carrageenan products for 2023 and 2024, according to a report by Frost & Sullivan[5][18]. - As of December 31, 2024, the total designed production capacity is 27,390 tons, including 7,265 tons of agar, 10,355 tons of carrageenan, 1,500 tons of konjac composite products, and 3,300 tons of blended products[6]. - The company completed the acquisition of 82% of Hong Tai Shun International Trading Co., which holds 99.83% of PT Hongxin Algae International, enhancing its production capacity for semi-refined carrageenan by 4,300 tons annually[10]. - The designed production capacity for konjac gum products at the Shiyan Haiyi production base is 660 tons annually, maintaining the same capacity as in 2023[6]. - The company has been recognized as the leading producer of carrageenan and agar in China for 2020 and 2021, and continues to hold this position for 2023 and 2024[17][18]. Financial Performance - For the fiscal year 2024, the company's revenue was RMB 989.3 million, a decrease of RMB 184.7 million or 15.7% compared to RMB 1,174.0 million in 2023[36]. - The gross profit for fiscal year 2024 increased by RMB 184.8 million or 491.0%, resulting in a gross margin of 22.5%, up 19.3 percentage points from the previous year[37]. - The net profit for fiscal year 2024 was RMB 60.9 million, a turnaround from a net loss of RMB 85.4 million in 2023, representing an increase of RMB 146.3 million[37]. - Sales revenue from carrageenan products decreased by RMB 220.9 million or 31.2% compared to the previous year, primarily due to a decline in seaweed material prices[36]. - The sales revenue from compound products increased by RMB 29.1 million or 17.4% in fiscal year 2024[36]. - The total asset value for fiscal year 2024 was RMB 1,572.3 million, an increase from RMB 1,205.3 million in 2023[26]. - The net debt to total asset ratio for fiscal year 2024 was 26.9%, compared to 24.3% in 2023[29]. - The group's revenue for fiscal year 2024 was RMB 989.3 million, a decrease of RMB 184.7 million or 15.7% compared to RMB 1,174 million in fiscal year 2023[54]. - The group's gross profit for fiscal year 2024 was RMB 222.5 million, an increase of RMB 184.9 million or 491.8% compared to fiscal year 2023[58]. - The overall gross profit margin for fiscal year 2024 was 22.5%, an increase of 19.3 percentage points from fiscal year 2023[58]. Research and Development - The number of R&D personnel increased to 106 in 2024, up from 80 in 2023, indicating a focus on innovation and product development[7]. - The company launched the production of agarose microspheres in 2022, aimed at the biopharmaceutical sector, indicating a diversification of its product offerings[10]. - The company established "Xiamen Blue Seaweed Film Biotechnology Co., Ltd." in July 2023 to develop 100% biodegradable seaweed films for beauty masks and plastic alternatives, reflecting its commitment to sustainability[10]. Corporate Governance and Management - The board of directors includes independent non-executive directors who have confirmed their independence as per the listing rules[100]. - The company emphasizes high standards of corporate governance, which are crucial for balancing the interests of shareholders, customers, and employees[168]. - The board has appointed Mr. Chen Jincong as both Chairman and CEO, emphasizing the importance of his leadership in the group's strategic planning and business development[176]. - The company has established appropriate insurance arrangements for directors and senior officers facing legal claims[186]. - The board confirmed that there are no significant uncertainties regarding the company's ability to continue as a going concern[196]. Employee Relations and Compensation - The group has 1,148 full-time employees as of December 31, 2024, with 961 located in mainland China and 187 in Hong Kong and other regions[73]. - Competitive compensation packages are offered to employees, with regular reviews based on group performance and individual contributions[73]. - The company has maintained competitive compensation to attract and motivate employees, with no major disputes with customers or suppliers during the year[97]. Environmental and Regulatory Compliance - The company has not recorded any environmental violations or exceeded environmental standards during the reporting period[98]. - The company has complied with all relevant laws and regulations without any significant violations during the review period[99]. Shareholder Information and Dividends - The company proposed a final cash dividend of HKD 0.012 per share for the fiscal year 2024, totaling HKD 10.5 million[40]. - As of December 31, 2024, the company's distributable reserves were approximately RMB 867 million[93]. - The company proposed a final dividend of HKD 0.012 per share, totaling HKD 10.5 million, compared to HKD 0 in the previous year[90]. Future Outlook - The company expects a rebound in global demand for hydrophilic colloid products in the foreseeable future, driven by a decline in seaweed prices and an anticipated increase in customer demand[38]. - The group anticipates a rebound in global demand for hydrophilic colloid products in the foreseeable future, supported by a decrease in seaweed sales prices[49]. Audit and Risk Management - The audit committee consists of three independent non-executive directors, with Mr. He Guicheng serving as the chairman, responsible for reviewing financial statements and overseeing risk management policies[164]. - The internal audit department is responsible for reviewing operational, financial, and compliance controls to ensure adherence to the group's risk management and internal control policies[200]. - Audit results and control deficiencies are reported to management responsible for ensuring timely remediation[200].

Financial Performance - Revenue for the fiscal year 2024 was RMB 989.3 million, a decrease of 15.7% compared to RMB 1,174.0 million in fiscal year 2023[3] - Gross profit was RMB 222.5 million with a gross margin of 22.5%, an increase of RMB 184.9 million and 19.3 percentage points from RMB 37.6 million and 3.2% in fiscal year 2023[3] - The profit for the fiscal year 2024 was RMB 60.9 million, with a net profit margin of 6.1%, an increase of RMB 146.3 million and 13.4 percentage points from a net loss of RMB 85.4 million and a net loss margin of 7.3% in fiscal year 2023[3] - Basic and diluted earnings per share for the fiscal year 2024 were RMB 0.074, compared to a loss of RMB 0.103 in fiscal year 2023[4] - The group’s net profit for the fiscal year 2024 was RMB 609 million, a significant increase of RMB 1.463 billion compared to a net loss of RMB 854 million in fiscal year 2023[55] Assets and Liabilities - Total assets as of December 31, 2024, were RMB 1,572.3 million, an increase from RMB 1,543.6 million as of December 31, 2023[6] - Total equity increased to RMB 850.1 million from RMB 754.1 million year-over-year[7] - Non-current liabilities rose to RMB 126.4 million from RMB 92.4 million in the previous year[7] - Cash and bank balances increased to RMB 120.7 million from RMB 72.6 million year-over-year[6] - The total amount of trade and other receivables reached RMB 149,536,000 in 2024, up from RMB 127,337,000 in 2023[39] Revenue Breakdown - Revenue from the Chinese market was RMB 475,237,000 in 2024, down from RMB 595,174,000 in 2023, reflecting a decrease of about 20.2%[22] - Sales revenue from carrageenan products decreased by RMB 220.9 million or 31.2% due to a decline in seaweed material prices[56] - The sales value in the Chinese market for fiscal year 2024 was RMB 475.2 million, a decrease of RMB 119.9 million or 20.1% compared to fiscal year 2023[57] Expenses - The cost of raw materials and consumables used in 2024 was RMB 598,374,000, down from RMB 884,780,000 in 2023, representing a reduction of 32.4%[25] - Research and development expenses for 2024 amounted to RMB 22,808,000, an increase of 46.1% from RMB 15,589,000 in 2023[26] - The total employee benefits expense for 2024 was RMB 117,576,000, slightly down from RMB 117,866,000 in 2023[25] - The group's sales and distribution expenses rose to RMB 20.6 million, an increase of RMB 2.8 million or 15.7% due to more overseas sales representatives[61] - Administrative expenses increased by RMB 7.3 million or 7.5% to RMB 104.6 million, primarily due to increased material costs in R&D functions[62] Dividends and Shareholder Returns - The company proposed a final cash dividend of HKD 0.012 per share, subject to shareholder approval[2] - The proposed final dividend for 2024 is HKD 0.012 per share, totaling approximately RMB 9,713,000, compared to zero in 2023[38] - The company plans to pay a final cash dividend of HKD 0.012 per share, totaling HKD 10.5 million, to share its operational results with shareholders[54] Corporate Governance - The company confirmed adherence to the corporate governance code, with the exception of the separation of the roles of chairman and CEO as per code provision C.2.1[90] - The company has adopted the principles and provisions of the corporate governance code as its governance framework since its listing[89] - The audit committee, consisting of three independent non-executive directors, reviewed the company's annual performance and financial statements for the fiscal year 2024[93] Future Outlook and Investments - The company is currently evaluating the comprehensive impact of new accounting standards and interpretations on its operations[17] - The company expects that newly issued accounting standards will not have a significant impact on its financial reporting in the foreseeable future[16] - The group plans to invest further in expanding the production capacity of Hongxin using internal resources in the foreseeable future[77] - The group has entered into an investment agreement to inject up to RMB 63.85 million into Xiamen Blue Sea Algae Film Biotechnology Co., Ltd.[73] Market Position and Strategy - The group maintained its market leadership in agar products and refined carrageenan products in China, being recognized as the largest global producer of these products by 2025[48] - The company has launched a 100% biodegradable seaweed film as a plastic alternative, aiming to capitalize on global decarbonization opportunities[51] - The group aims to diversify the geographical location of its production facilities to reduce costs and improve product quality and competitiveness[52] Taxation - The income tax expense for 2024 was RMB 19,996,000, compared to a tax benefit of RMB 27,447,000 in 2023[28] - The effective tax rate for 2024 was 25%, up from 24% in 2023[32] - The group’s subsidiaries in Indonesia and Hong Kong are subject to a corporate tax rate of 22% and 16.5%, respectively[29] Compliance and Reporting - The company will publish its annual report for the fiscal year 2024 on its website and the stock exchange website, in compliance with applicable laws and regulations[97] - The company will suspend share transfer registration from June 3, 2025, to June 6, 2025, to determine eligibility for attending the annual general meeting and voting rights[94] - The company confirmed that there were no significant events affecting the group from December 31, 2024, to the date of the announcement[88]

Financial Performance - The company's revenue for the first half of 2024 was RMB 459.0 million, a decrease of 21.2% compared to RMB 582.9 million in the same period of 2023[7]. - In the first half of 2024, the company's gross profit was RMB 98.8 million, a decrease of RMB 7.3 million or 6.9% compared to the first half of 2023[5]. - The overall gross margin for the first half of 2024 was 21.5%, an increase of 3.3 percentage points from the first half of 2023[5]. - The profit attributable to the owners of the company for the first half of 2024 was RMB 231 million, down RMB 19 million or 7.6% from RMB 250 million in the same period of 2023[22]. - The net profit for the period was RMB 22,624,000, compared to RMB 25,116,000 in the previous year, a decrease of 9.9%[38]. - The company reported a basic and diluted earnings per share of RMB 0.028, unchanged from the previous year[38]. - The company's interim profit for the six months ended June 30, 2024, was RMB 22,624,000, a decrease of 9.9% compared to RMB 25,116,000 for the same period in 2023[39]. - Total comprehensive income for the period was RMB 20,534,000, down from RMB 21,503,000 in the previous year, reflecting a decline of 4.5%[39]. Sales and Market Performance - Sales revenue from agar and carrageenan products accounted for 78.8% of total sales revenue, a decrease of 6.6% compared to the first half of 2023[7]. - Sales revenue from carrageenan decreased by RMB 141.3 million or 39.5% in the first half of 2024, primarily due to a drop in seaweed material prices[13]. - The sales value from the Chinese market accounted for 53.6% of total sales, while the overseas market accounted for 46.4%, with respective sales values of RMB 245.9 million and RMB 213.1 million[5]. - The company anticipates a recovery in global demand for hydrophilic colloid products in the foreseeable future due to reduced inventory levels among customers[5]. - The economic conditions in China and European countries remain weak, impacting overall market demand for the company's products[7]. Cost and Expenses - The sales cost for the first half of 2024 was RMB 360.2 million, a reduction of RMB 116.5 million or 24.4% compared to RMB 476.7 million in the first half of 2023[14]. - Administrative expenses for the first half of 2024 were RMB 491 million, up RMB 36 million or 8.0% from RMB 454 million in the same period last year[18]. - In the first half of 2024, the group's sales and distribution expenses amounted to RMB 94 million, an increase of RMB 9 million or 11.0% compared to the same period in 2023[17]. - The company reported financing costs of RMB 16.7 million for the six months ended June 30, 2024, with financing costs decreasing by RMB 3.0 million or 15.2%[16]. Financing and Cash Flow - Financing costs decreased in the first half of 2024 due to lower procurement prices of seaweed materials and reduced average loan balances in RMB, USD, and HKD[7]. - The company's financing income and costs were RMB 287,000 and RMB 16.7 million respectively, with financing costs decreasing by RMB 3.0 million or 15.2%[16]. - The company’s cash flow from operating activities was impacted by a significant increase in tax payments, which rose by approximately 122% year-over-year[17]. - The total cash and cash equivalents at the end of the period were RMB 64,556 thousand, up from RMB 46,620 thousand at the end of June 2023[17]. Assets and Liabilities - As of June 30, 2024, the group's cash and bank balances reached RMB 646 million, a decrease of RMB 80 million or 11.1% from the end of 2023[23]. - The total assets as of June 30, 2024, amounted to RMB 1,509,240,000, a decrease from RMB 1,543,603,000 at the end of 2023, representing a reduction of 2.2%[40]. - The company's equity attributable to owners increased to RMB 769,274,000 from RMB 745,243,000, reflecting a growth of 3.2%[40]. - Total liabilities decreased to RMB 731,736,000 from RMB 789,491,000, a reduction of 7.3%[41]. - The total bank borrowings amounted to RMB 5,843 million, with RMB 5,251 million due within one year[26]. Research and Development - The company has made progress in developing new applications and end products through its research and development efforts[6]. - The company aims to expand its business into high-tech and commercially attractive compound product markets to meet diverse customer needs[6]. - The company has set long-term goals to provide high-technology products, enhancing its product mix and profitability through continuous investment in R&D[5]. Corporate Governance and Compliance - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited interim results for the first half of 2024[121]. - The company has adopted the corporate governance code and confirmed compliance with its applicable provisions during the first half of 2024, with one exception regarding the separation of the roles of chairman and CEO[119]. - The company has established strict guidelines for securities trading by directors and employees, confirming compliance with these standards during the first half of 2024[120]. Shareholder Information - The ownership structure shows that Mr. Chen Jincong holds a 19.48% equity interest and a 70.87% interest through a concert party agreement, reflecting significant insider ownership[97]. - Major shareholders include Chuangyu and Yingbo, each holding 161,700,000 shares, representing 19.39% of the total shares[99]. - The combined holdings of the concert party agreement amount to 588,000,000 shares, which is 70.49% of the total[99]. Dividend and Share Options - The board did not recommend the distribution of an interim dividend for the first half of 2024[12]. - The company did not propose an interim dividend for 2024, consistent with the decision in 2023[71]. - The company has no options granted, exercised, or canceled under the pre-IPO share option plan as of June 30, 2024[103].

Financial Performance - Revenue for the first half of 2024 was RMB 459.0 million, a decrease of 21.2% compared to RMB 582.9 million in the first half of 2023[1] - Gross profit was RMB 98.8 million with a gross margin of 21.5%, down from RMB 106.1 million and 18.2% in the same period last year[1] - Profit for the first half of 2024 was RMB 22.6 million, with a net profit margin of 4.9%, compared to RMB 25.1 million and 4.3% in the first half of 2023[1] - Operating profit for the first half of 2024 was RMB 46.4 million, down from RMB 52.9 million in the previous year[3] - The company reported a net profit of RMB 23,086 thousand for the six months ended June 30, 2024, compared to RMB 25,008 thousand for the same period in 2023, reflecting a decrease of approximately 7.7%[8] - The total comprehensive income for the six months ended June 30, 2024, was RMB 20,534 thousand, down from RMB 21,503 thousand in the same period of 2023[8] - Profit attributable to ordinary equity holders for the six months ended June 30, 2024, was RMB 23,086,000, down from RMB 25,008,000 in 2023, reflecting a decrease of about 7.69%[36] Dividends and Earnings - The company did not recommend the distribution of an interim dividend for the first half of 2024[1] - Basic and diluted earnings per share for the first half of 2024 were RMB 0.028, compared to RMB 0.030 in the same period last year[3] - Basic and diluted earnings per share for the six months ended June 30, 2024, were RMB 0.028, a decrease from RMB 0.030 in 2023, representing a decline of approximately 6.67%[35] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 1,509.2 million, a decrease from RMB 1,543.6 million as of December 31, 2023[5] - Total liabilities decreased to RMB 731.7 million from RMB 789.5 million at the end of 2023[6] - Cash and bank balances were RMB 64.6 million, down from RMB 72.6 million at the end of 2023[5] - The company’s total liabilities include RMB 4,277,000 in lease liabilities as of June 30, 2024[52] - Trade payables as of June 30, 2024, amount to RMB 83,794,000, a decrease from RMB 103,713,000 as of December 31, 2023[51] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2024, was RMB 45,391 thousand, a significant improvement from a cash outflow of RMB 46,747 thousand in the same period of 2023[9] - The company incurred a net cash outflow from investing activities of RMB 20,590 thousand for the six months ended June 30, 2024, compared to RMB 4,614 thousand in the prior year[9] - Financing activities resulted in a net cash outflow of RMB 33,129 thousand for the six months ended June 30, 2024, compared to a net cash inflow of RMB 58,536 thousand in the same period of 2023[10] Revenue Breakdown - The group reported total sales of RMB 459,015 thousand for the six months ending June 30, 2024, with the following breakdown: RMB 145,213 thousand from gelatin sales, RMB 216,434 thousand from carrageenan sales, RMB 31,673 thousand from konjac products, RMB 60,910 thousand from blended products, and RMB 4,785 thousand from other sales[27] - Revenue from the Chinese market was RMB 245,862,000, down from RMB 294,712,000 in the previous year, reflecting a decline of approximately 16.5%[30] - Sales revenue from carrageenan decreased by RMB 141.3 million or 39.5% in the first half of 2024, primarily due to a decline in seaweed material prices[68] Expenses and Costs - The company incurred administrative expenses of RMB 45,435,000, which is a slight decrease from RMB 49,061,000 in the previous period[29] - Financing costs amounted to RMB 19,738,000, compared to RMB 16,693,000 in the previous period, indicating an increase of approximately 12.4%[29] - The income tax expense for the period was RMB 7,367,000, down from RMB 8,388,000 in the same period last year[32] - The group's net financial costs for the first half of 2024 were RMB 16.7 million, a decrease of RMB 3.0 million or 15.2% from RMB 19.7 million in the same period of 2023, attributed to a reduction in bank deposit amounts and a decline in loan interest rates[73] Financial Position and Ratios - The group's current ratio as of June 30, 2024, was 1.51, compared to 1.43 as of December 31, 2023, while the capital debt ratio increased to 43.3% from 41.2%[77] - The net current assets as of June 30, 2024, were RMB 329.0 million, an increase of RMB 29.4 million or 9.8% from RMB 299.6 million as of December 31, 2023[78] Corporate Governance and Compliance - The audit committee reviewed the unaudited interim results for the first half of 2024, ensuring compliance with relevant financial reporting standards[96] - The company has adopted corporate governance principles to enhance overall effectiveness and shareholder value[95] Future Outlook - The company anticipates a recovery in global demand for hydrophilic colloid products in the foreseeable future due to price adjustments and customer inventory replenishment needs[67] - The company has set long-term goals for continuous investment in product technology to enhance its product offerings and profitability[66]

Safety and Health Management - In 2023, the company implemented a safety production responsibility system, emphasizing accountability at all levels to enhance safety performance [2]. - The company conducted safety training and inspections, including emergency drills for hazardous chemical leaks and fire evacuations, to improve employee emergency response capabilities [5]. - Over the past three years, the company reported no fatalities due to work-related incidents, with a total of 300 workdays lost due to injuries in the reporting period [6]. - The company provided personal protective equipment such as anti-static clothing and high-pressure gloves to employees engaged in special operations [7]. - The company established a monthly performance evaluation system for production staff to enhance safety performance indicators and address potential safety hazards [2]. - The company organized a "Safety Production Month" in 2023, promoting the concept of "safety first" among employees [3]. - The company adheres to the Occupational Disease Prevention Law, conducting annual health check-ups for employees and maintaining health monitoring files [7]. - The company has implemented a comprehensive safety management system, including regular inspections and emergency response plans for various hazardous operations [2]. - The company actively promotes safety awareness through signage and LED displays in production areas [4]. Employee Management and Training - The total number of employees as of December 31, 2023, is 1,184, all of whom are full-time staff [22]. - The company hired 2 external trainers for specialized training for managerial staff and team leaders in 2023 [14]. - The company has established a comprehensive training management system, including annual and monthly training plans, to enhance employee skills and knowledge [14]. - The company offers various training opportunities, including external training, onboarding for new employees, and management training [14]. - The company aims to cultivate innovative talents and enhance operational efficiency through its training programs [14]. - In 2023, the company conducted 6 employee communication meetings to strengthen the connection between employees and management [29]. - The company emphasizes performance-based management and has optimized its performance evaluation system with four core assessment dimensions [24]. - The company is committed to providing fair treatment to all employees, ensuring compliance with labor laws and regulations [27]. - The company has implemented a "Key Department Talent Pipeline Construction Plan" to match talent with key positions and tailor training programs accordingly [20]. Financial Performance - The group experienced a significant decline in gross profit and gross margin due to a sharp drop in the selling price of carrageenan products, influenced by a substantial decrease in overseas customer demand [70]. - The group recorded an annual net loss for the fiscal year 2023, attributed to high sales costs and rising bank borrowing rates in USD and HKD [70]. - The total revenue for the fiscal year 2023 was RMB 1,174.0 million, a decrease of 16.8% compared to RMB 1,410.9 million in fiscal year 2022 [88]. - The overall gross profit was RMB 180.0 million with a gross margin of 15.3%, down 53.1% and 11.9 percentage points from RMB 384.1 million and 27.2% in fiscal year 2022, respectively [96]. - The sales value from the Chinese market was RMB 595.2 million, an increase of RMB 12.3 million or 2.1%, while the overseas market sales value was RMB 578.8 million, a decrease of RMB 249.2 million or 30.1% [81]. - The company recorded an annual net loss in fiscal year 2023 due to a significant decline in the selling price of carrageenan products and rising bank borrowing rates [79]. - The net loss attributable to the owners of the company was RMB 85.3 million, a decrease of RMB 284.5 million or 142.8% compared to a profit of RMB 199.2 million in fiscal year 2022 [100]. - The cash and bank balances increased by RMB 45.6 million or 117.8% to RMB 84.3 million as of December 31, 2023 [101]. - The current ratio as of December 31, 2023, was 1.43, down from 1.60 as of December 31, 2022 [101]. - The total bank borrowings amounted to RMB 599.1 million, with a weighted average interest rate of 5.73% as of December 31, 2023, compared to 4.59% in the previous year [107]. Corporate Governance and Compliance - The board is responsible for the group's risk management and internal control systems, ensuring their overall effectiveness [35]. - The internal audit department, led by the internal audit manager, conducts reviews of operational, financial, and compliance controls to ensure adherence to risk management policies [36]. - The board reviewed the effectiveness of the risk management and internal control systems and found them to be adequate and effective [37]. - The company has established an insider information disclosure policy to manage and disclose insider information in compliance with regulations [37]. - The company has implemented training for all directors to ensure compliance with listing rules and regulations regarding securities trading [42]. - The company secretary has completed no less than 15 hours of relevant professional training to update skills and knowledge as required by listing rules [43]. - The company's Audit Committee consists of three independent non-executive directors, ensuring compliance with corporate governance standards [189]. - The Nomination Committee reviewed the board's structure and diversity, ensuring appropriate qualifications for board members [191]. - The Remuneration Committee assessed the remuneration of directors and senior management, ensuring transparency in compensation policies [197]. - The company confirmed no significant uncertainties affecting its ability to continue as a going concern [198]. Research and Development - The number of product R&D personnel increased to 80 in 2023, up from 63 in 2022 [58]. - Continuous investment in R&D is aimed at enhancing product offerings, with significant market potential identified for instant agar products and deep-processed carrageenan products [84]. - The group has initiated research and preliminary production of 100% biodegradable seaweed films for plastic alternative packaging and mulch [59]. Shareholder Relations and Dividends - Shareholders have the right to propose independent resolutions at general meetings on significant matters, including the election of individual directors [44]. - The company did not recommend any final dividend for the fiscal year 2023, compared to a final dividend of HKD 0.03 per share for the fiscal year 2022 [143]. - The company’s dividend policy aims to distribute at least 20% of the distributable profit attributable to shareholders, subject to operational needs and future business expansion plans [180]. - The company encourages shareholders to attend the annual general meeting to raise any questions directly to the board and management [178]. - The board has reviewed the implementation and effectiveness of the shareholder communication policy, with satisfactory results [176]. - The company has established a channel for effective communication through its website, where financial information and other relevant data are published [176]. Environmental and Social Responsibility - The company has not recorded any environmental breaches or violations during the fiscal year ending December 31, 2023 [150]. - The company emphasizes the importance of maintaining good relationships with employees, customers, and suppliers to achieve its short-term and long-term goals [149]. - The company has complied with all relevant laws and regulations that significantly impact its business and operations during the review period [151]. - The nature of the company's main business has not undergone significant changes during the year [141].

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 1,173,991 thousand, a decrease of 16.8% from RMB 1,410,889 thousand in 2022[2] - Gross profit for the year was RMB 37,641 thousand, significantly down from RMB 384,122 thousand in the previous year[2] - The company reported a net loss of RMB 85,444 thousand for the year, compared to a profit of RMB 199,919 thousand in 2022[2] - Basic and diluted loss per share for the year was RMB (0.103), compared to earnings of RMB 0.242 in the previous year[2] - Total revenue for the fiscal year 2023 was RMB 1,174.0 million, a decrease of 16.8% compared to RMB 1,410.9 million in fiscal year 2022[68] - The loss attributable to the company's owners was RMB 85.3 million, a decrease of RMB 284.5 million or 142.8% compared to a profit of RMB 199.2 million in fiscal year 2022[77] - The company incurred a loss of RMB 85.4 million in fiscal year 2023, with a net loss margin of 7.3%, a decline of 142.7% compared to a profit of RMB 199.9 million and a net profit margin of 14.1% in fiscal year 2022[167] Revenue Breakdown - Revenue from the China segment was RMB 595,174 thousand, a slight increase from RMB 582,922 thousand in 2022[18] - Revenue from the European segment decreased to RMB 291,632 thousand from RMB 470,733 thousand in the previous year, reflecting a decline of 38.0%[18] - Revenue from the China segment was RMB 423,478 thousand in 2023, down from RMB 448,184 thousand in 2022, reflecting a decline of approximately 5.5%[43] - In fiscal year 2023, sales value from the Chinese market accounted for approximately 50.7%, while overseas market sales value accounted for 49.3%, compared to 41.3% and 58.7% in fiscal year 2022[69] - Sales value in the Chinese market was RMB 595.2 million, an increase of RMB 12.3 million or 2.1%, while overseas market sales value decreased by RMB 249.2 million or 30.1% to RMB 578.8 million[69] Inventory and Provisions - The company recognized an inventory provision of RMB 142.4 million to adjust inventory to its net realizable value as of December 31, 2023[9] - The company recognized a provision for inventory write-down amounting to RMB 142,424 thousand in 2023, compared to no provision in 2022[46] - The gross profit margin decreased by 24.0 percentage points to 3.2% due to higher sales costs of carrageenan products, including a provision of RMB 142.4 million for inventory[97] - The group recorded a significant impact of RMB 142.4 million in inventory provisions for carrageenan products based on current market price estimates[102] - Inventory as of December 31, 2023, was RMB 784.998 million, down from RMB 906.209 million in the previous year[169] Assets and Liabilities - Total equity as of December 31, 2023, was RMB 754,112 thousand, down from RMB 852,210 thousand in 2022[4] - The total amount of trade payables decreased to RMB 103,713 thousand in 2023 from RMB 137,763 thousand in 2022, a reduction of approximately 24.7%[65] - The total liabilities of the company as of December 31, 2023, were RMB 789.5 million, compared to RMB 838.8 million in the previous year[164] - Total assets decreased to RMB 1,543.6 million as of December 31, 2023, from RMB 1,691.0 million in the previous year[169] Operational Insights - The company plans to continue focusing on operational cash flow and bank borrowings to meet its working capital needs[9] - The company plans to expand the capacity of PT Hongxin to leverage cost advantages and potential tax benefits in the foreseeable future[72] - The company maintains a focus on product innovation and technical expertise to enhance performance and investment returns despite global economic uncertainties[70] - The group plans to continue investing in capacity expansion at PT Hongxin in 2024 as part of its strategy to enhance cost competitiveness[116] Employee and Governance - Employee benefit expenses increased to RMB 117,866 thousand in 2023 from RMB 110,117 thousand in 2022, reflecting a rise of approximately 7.9%[46] - The group had a total employee cost of RMB 117.9 million in fiscal year 2023, compared to RMB 110.1 million in fiscal year 2022[119] - The company has maintained a good working relationship with employees and offers competitive compensation aligned with market standards[138] - The board of directors has complied with all provisions of the corporate governance code for fiscal year 2023, with one exception regarding the separation of roles of chairman and CEO[125][126] Taxation - The company’s subsidiary in Indonesia is subject to a corporate tax rate of 22%, consistent with the previous year[49] - The company plans to maintain a tax rate of 25% for its subsidiaries in China, consistent with the previous year[194] - The income tax expense for 2023 was RMB (27,447) thousand, a decrease from RMB 61,670 thousand in 2022, marking a reduction of approximately 144.5%[196] Shareholder Information - The company declared a final dividend of 3 HK cents per share in 2023, up from 2.5 HK cents per share in 2022, totaling RMB 22,433 thousand[56] - The company did not recommend any final dividend for fiscal year 2023, compared to a dividend of HKD 0.03 per share in fiscal year 2022[167] - In the fiscal year 2023, the company adopted a share incentive plan, purchasing 544,000 shares at a total cost of approximately HKD 482,000[122] - A total of 860,000 shares were vested under the share incentive plan in fiscal year 2023[122]

Financial Performance - For the first half of 2023, the company's revenue was RMB 582.9 million, a decrease of 9.5% compared to RMB 644.2 million in the same period of 2022[8]. - The company reported a net profit attributable to shareholders of RMB 25.0 million, a decrease of 76.0% from RMB 104.4 million in the first half of 2022[14]. - The total comprehensive income for the period was RMB 20,846 thousand, down from RMB 97,626 thousand in the previous year[28]. - The company reported a net profit of RMB 25,008 thousand for the six months ended June 30, 2023, compared to RMB 104,408 thousand for the same period in 2022, indicating a significant decrease[28]. - The net profit for the six months ended June 30, 2023, was RMB 25,116 thousand, a decline of 76.0% compared to RMB 104,460 thousand in the previous year[52]. - The gross profit for the same period was RMB 106,143 thousand, down 45.7% from RMB 195,421 thousand in 2022[52]. - The gross profit margin for carrageenan products significantly declined due to increased average inventory costs and rising sales costs[4]. - Net profit decreased to RMB 25.1 million, down RMB 79.4 million, primarily due to a 37.7% reduction in net sales volume from overseas customers and a gross margin decline of 12.1 percentage points to 18.2%[150]. Market Performance - Sales value in the Chinese market was RMB 294.7 million, an increase of RMB 39.6 million or 15.5%, while overseas market sales value was RMB 288.2 million, a decrease of RMB 100.9 million or 26%[5]. - The sales revenue of carrageenan and agar products accounted for 85.4% of total sales revenue, reflecting a 3.5% decrease compared to the first half of 2022[8]. - The total sales in the Chinese market reached RMB 294,712 thousand, an increase from RMB 255,097 thousand, representing a growth of approximately 15.5%[101]. - In the first half of 2023, the sales revenue of blended products increased by RMB 21.4 million or 55.0% compared to the first half of 2022, driven by an increase in new customer numbers[189]. Assets and Liabilities - As of June 30, 2023, total liabilities amounted to RMB 939,098 thousand, an increase of 11.9% from RMB 838,797 thousand as of December 31, 2022[27]. - The company's bank borrowings increased to RMB 590,362 thousand, up 20.1% from RMB 491,269 thousand in the previous period[27]. - The company's total assets reached RMB 1,818,862 thousand, an increase from RMB 1,691,007 thousand at the end of the previous period[27]. - The total equity as of June 30, 2023, reached RMB 879,764 thousand, a growth of 12.5% from RMB 782,363 thousand at the end of the previous period[28]. - Trade and other payables rose to RMB 227,610 thousand, reflecting an increase of 9.6% compared to RMB 207,838 thousand as of December 31, 2022[27]. - Trade receivables as of June 30, 2023, totaled RMB 155,971,000, up from RMB 107,527,000 as of December 31, 2022, reflecting an increase of approximately 45.0%[139]. Cash Flow and Financing - The company's cash and cash equivalents as of June 30, 2023, were RMB 608,119 thousand, showing an increase from RMB 500,736 thousand at the end of the previous period[28]. - The effective tax expense for the first half of 2023 was RMB 8.4 million, a decrease of RMB 25.0 million or 74.9% compared to RMB 33.4 million in the same period of 2022[12]. - The weighted average interest rate on bank borrowings was 5.64% as of June 30, 2023, compared to 4.46% in 2022[170]. - The group had a net current asset value of RMB 459.7 million, an increase of RMB 29.3 million from December 31, 2022, primarily due to an increase in inventory[169]. - The company incurred financing costs of RMB (19,738) thousand, up from RMB (10,781) thousand in the previous year, marking an increase of approximately 83.5%[77]. Strategic Goals and Investments - The company anticipates a recovery in global demand for hydrophilic colloid products in the foreseeable future due to price adjustments and replenishment of customer inventories[6]. - The company has set long-term goals to enhance product technology levels, aiming to differentiate from competitors and meet changing customer demands[5]. - The company continues to invest in product development, particularly in blended products and processed carrageenan, which are expected to drive future profitability[5]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[29]. - The group plans to further invest in expanding the production capacity of its subsidiary Hongxin, which specializes in semi-refined carrageenan manufacturing[172]. Employee and Operational Costs - Employee benefits expenses, including director remuneration, increased to RMB 57,558 thousand from RMB 52,063 thousand, reflecting a rise of about 10.6%[77]. - Administrative expenses rose by 2.7% to RMB 45.4 million, mainly due to increased labor costs and annual wage growth[167]. - The group employed 1,257 full-time employees as of June 30, 2023, with 1,201 based in mainland China[174]. Dividends and Share Capital - The company did not propose an interim dividend for 2023, compared to a dividend of 0.02 HKD per share in 2022, which amounted to RMB 14,029[119]. - The company’s share capital increased to RMB 7,485,000 as of June 30, 2023, from RMB 7,444,000 as of December 31, 2022, following the issuance of additional shares[140].

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份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 GREEN FUTURE FOOD HYDROCOLLOID MARINE SCIENCE COMPANY LIMITED 綠 新 親 水 膠 體 海 洋 科 技 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1084） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 董事會欣然宣佈二零二三年上半年的未經審核簡明綜合中期財務業績如下： － 收益為人民幣582.9百萬元，較二零二二年上半年人民幣644.2百萬元減少 9.5%。 － 毛利為人民幣106.1百萬元，毛利率為18.2%，較二零二二年上半年的人民幣 195.4百萬元及30.3%分別減少人民幣89.3百萬元及12.1個百分點。 － 二零二三年上半年溢利為人民幣25.1百萬元，淨利率為4.3%，較截至二零 二二年上半年的人民幣104.5百萬元及16.2%分別減少人民幣79.4百萬元及 ...

Financial Performance - For the year ended December 31, 2022, the group's gross profit was HKD 447.5 million, representing a 65.5% increase compared to HKD 270.4 million in 2021[3]. - The overall gross profit margin for the year was 27.2%, an increase of 4.0 percentage points from the previous year[3]. - Total revenue for 2022 reached HKD 1,643.8 million, a 41.3% increase from HKD 1,163.1 million in 2021[115]. - Net profit increased by HKD 129.0 million to HKD 232.9 million, driven by stable sales volume of agar and carrageenan products and a gross margin increase of 4.0 percentage points to 27.2%[115]. - Sales revenue from agar and carrageenan products increased by 28.8% and 60.3% respectively, while konjac product sales revenue decreased by 22.6%[135]. - The income tax expense for the year was HKD 71.9 million, a significant increase of 113.4% from HKD 33.7 million in 2021, primarily due to an increase in taxable profits[5]. Sales and Market Performance - The average selling prices for agar, carrageenan, and blended products increased by 12.7%, 67.6%, and 33.3% respectively during the year[3]. - Sales revenue from the Chinese market accounted for 41.3% of total sales, while overseas markets contributed 58.7%, with significant growth in Europe (48.1%), North America (110.5%), South America (45.4%), and Asia (excluding China) (83.2%)[116]. - Agar and carrageenan products accounted for approximately 89.7% of total sales revenue, an increase of 5.7 percentage points from the previous year[133]. Expenses and Costs - The group's sales cost for the year ended December 31, 2022, was HKD 1,196.3 million, an increase of 34.0% compared to HKD 892.7 million in 2021[145]. - Administrative expenses increased by 14.4% to HKD 106.2 million, primarily due to rising salary costs and increased R&D expenses[137]. - The net financing cost increased by 43.8% to HKD 32.2 million for the year ended December 31, 2022, from HKD 22.4 million in 2021, primarily due to rising loan interest rates in Hong Kong[147]. Investments and Acquisitions - The group acquired an additional 39% stake in Green Qi (Shanghai) for a cash consideration of approximately HKD 1.846 million, making it a wholly-owned subsidiary[11]. - The company completed the acquisition of 82% of Hongtai Shun International Trading Co., which holds 99.83% of PT Hongxin Algae International, enhancing its production capacity by 4,300 tons per year[104]. - The company completed the acquisition of a majority stake in PT Hongxin, enhancing operational efficiency and reducing costs[134]. Employee and Compensation - The total employee cost for the year was HKD 128.3 million, an increase from HKD 119.2 million in 2021, with a total of 1,234 full-time employees[12]. - The company is committed to providing competitive compensation to attract and motivate employees, regularly reviewing and adjusting salaries to meet market standards[47]. Research and Development - The company has a research and development team of 63 personnel as of December 31, 2022, down from 65 in the previous year[83]. - The company launched the production of agarose microspheres in 2022, which are widely used as separation media in the biopharmaceutical field[86]. - The company has established a product innovation team to closely collaborate with production teams for ongoing improvements[195]. Environmental and Regulatory Compliance - The company has not recorded any environmental violations or exceeded environmental standards as of December 31, 2022[55]. - The company has complied with all relevant laws and regulations that significantly impact its business and operations during the review period, with no major violations reported[57]. Future Outlook and Strategy - The company anticipates substantial long-term growth in global food demand following the full recovery from COVID-19 and the easing of restrictions in China by the end of 2022[71]. - The management expects that the market potential for instant agar products and processed carrageenan products will significantly enhance profit margins in the foreseeable future[131]. - The company aims to leverage its industry leadership and ongoing product development to enhance performance and investment returns despite global economic uncertainties[122]. Shareholder Returns - The company plans to pay a final cash dividend of HKD 0.03 per share, totaling HKD 24.7 million, reflecting its commitment to shareholder returns[120]. - The company proposed a final dividend of HKD 0.03 per share, totaling HKD 24.7 million for the year ended December 31, 2022, up from HKD 20.5 million in 2021[168].