俄罗斯当地时间7月15日，大明国际俄罗斯代表处在莫斯科隆重开业。来自卢克石油、TEM P、诺瓦泰 克、俄罗斯原子能集团、Metalloinvest、中石化、中技开、能建、天辰、长城汽车、三一重工、柳工、 江苏核电、中信保、国开行、中行、工行、建行等企业的百余位嘉宾参加了开业仪式。 《华夏时报》记者从公司展示的现场合影看到，到场的华人面孔至少占了三成。其中不乏重量级嘉宾， 大明国际董事会主席周克明亲自为代表处揭牌，中国能建（601868）俄罗斯公司总经理宋亮、太钢营销 中心党委书记、总经理黄涛均现场致辞。 不知不觉之间，中国企业在俄罗斯的展业已经不再是单打独斗，而是显现出"体系化""矩阵化"的特征。 近日，中国金属加工龙头大明国际(01090.HK)通过官微发布消息，其俄罗斯代表处已在莫斯科开业。现 场参加开业仪式的嘉宾里，包括了中石化、中技开、能建、天辰、长城汽车（601633）、三一重工 （600031）、柳工（000528）、江苏核电、中信保、国开行、中行、工行、建行等一大批中资企业的代 表。这意味着，一大批中资企业已经在俄罗斯布局落子。 "代表处更多的是一个服务的窗口，方便就近服务我们现有的客户。另外， ...

Financial Reporting - Da Ming International Holdings Limited will publish its annual report for the year ending December 31, 2024, on April 24, 2025[2] Employee Incentive Plans - The company has a share incentive plan that allows selected employees to receive up to 30% of their awarded shares on the third anniversary of the grant date[3] - On the fourth anniversary, selected employees may receive up to 60% of their awarded shares under the same plan[4] - The remaining awarded shares will fully vest on the fifth anniversary, subject to performance criteria and continued employment[4]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 46,453,309 thousand, a decrease of 8.1% compared to RMB 50,560,063 thousand in 2023[8] - Gross profit for the same period was RMB 685,686 thousand, down 25.6% from RMB 921,534 thousand in 2023[8] - The total comprehensive loss for the year was RMB (385,139) thousand, representing an increase of 102.2% compared to RMB (190,493) thousand in 2023[8] - The company recorded a net loss of approximately RMB 385.1 million for the year ending December 31, 2024, an increase of about 102.2% compared to a net loss of approximately RMB 190.5 million for the year ending December 31, 2023[42] - The company achieved revenue of approximately RMB 46.45 billion and a gross profit of approximately RMB 686 million for the review year[45] - Gross profit decreased from approximately RMB 921.5 million in 2023 to approximately RMB 685.7 million in 2024, primarily due to the reduction in revenue[53] - Other income fell from approximately RMB 69.2 million in 2023 to approximately RMB 57.3 million in 2024, mainly due to a decrease in government subsidy income[54] Sales and Processing Volumes - Stainless steel sales volume increased by 0.7% to 2,056,957 tons from 2,043,000 tons in 2023[11] - Carbon steel sales volume rose by 4.2% to 5,059,186 tons compared to 4,855,332 tons in 2023[11] - The processing volume of stainless steel decreased by 1.9% to 3,179,884 tons from 3,241,597 tons in 2023[11] - The processing volume of carbon steel also declined by 1.6% to 4,785,147 tons from 4,863,370 tons in 2023[11] - The annual sales volume of stainless steel processing increased by approximately 0.7% from about 2,043,000 tons in 2023 to about 2,057,000 tons in 2024, while processing volume decreased by approximately 1.9% from about 3,242,000 tons to about 3,180,000 tons[42] - The annual sales volume of carbon steel processing increased by approximately 4.2% from about 4,855,000 tons in 2023 to about 5,059,000 tons in 2024, while processing volume decreased by approximately 1.6% from about 4,863,000 tons to about 4,785,000 tons[42] Corporate Governance and Board Structure - The board consists of 6 executive directors, 2 non-executive directors, and 4 independent non-executive directors, with a total of 5 board meetings held in the fiscal year ending December 31, 2024[71][73] - The board's composition reflects a mix of experience, with recent appointments and resignations noted, ensuring a diverse governance structure[71][72] - The board of directors consists of four independent non-executive directors, accounting for one-third of the board's total members[87] - The board has delegated certain functions to committees, including the remuneration committee, nomination committee, and audit committee[89] - The independent non-executive directors provide independent opinions on the group's business strategy, performance, and management[86] - The company has established a mechanism to ensure the board receives independent views and opinions, with at least one-third of the board being independent non-executive directors[83] Strategic Initiatives and Future Plans - The company plans to focus on market expansion and new product development in the upcoming fiscal year[18] - The company plans to enhance service networks and improve processing service capabilities through investments in advanced automation equipment and digital transformation of existing production facilities[43] - The company aims to become a global leader in metal processing services, focusing on sustainable profitability, cash flow, and dividend growth without compromising financial stability[70] - The company is focused on internal growth in industries or regions where it has management experience and resources[70] - The company is increasingly prioritizing sustainability, including circular economy practices and sustainable procurement[70] Risk Management and Internal Controls - The board is responsible for risk management and internal control systems, which are designed to manage risks rather than eliminate them[128] - The group has established and maintained effective risk management and internal control systems, ensuring adequate resources and qualified personnel in accounting, internal audit, and financial reporting[132] - The internal audit function regularly analyzes and independently reviews the adequacy and effectiveness of the group's risk management and internal control systems, reporting findings to the audit committee[133] - The group conducts annual reviews of its risk management and internal control systems, covering all significant controls including financial, operational, and compliance monitoring[135] - The group has adopted a whistleblowing and anti-fraud policy to maintain high standards of business ethics, encouraging employees to report observed and suspected violations[136] Employee and Board Diversity - The company aims to maintain gender diversity on the board, with one female director representing 8% of the board members[106] - As of December 31, 2024, 81% of the company's employees and senior management are male, while 19% are female[109] - The company has adopted a board diversity policy since 2013, considering various factors such as gender, age, and professional experience[102] - The company plans to review its diversity policy annually to ensure its effectiveness and make necessary adjustments[108] Shareholder Communication and Engagement - The company emphasizes regular communication with shareholders and investors to ensure they are informed about strategies and financial performance[123] - The company will hold interactive live sessions after announcing interim or annual results to enhance communication with investors[126] Major Shareholders and Ownership Structure - The major shareholders include Lianhao Group Limited with 738,435,000 shares (57.94%), China Baowu Steel Group Co., Ltd. with 207,500,000 shares (16.28%), and Baosteel Stainless Steel (International) Co., Ltd. with 103,750,000 shares (8.14%)[192] - The board of directors includes significant shareholders, with Zhou Keming and Xu Xia holding 738,551,000 shares each, representing 57.95% of the issued share capital[186] Dividend Policy - The company has a dividend policy established in 2019, which was revised on March 28, 2025, focusing on sustainable dividend distribution while enhancing business growth capabilities[115] - The board will consider various factors, including financial performance and capital expenditure needs, when proposing any dividend distribution[116] - The company did not declare any interim dividends for the year, consistent with 2023[158] - The company did not recommend any final dividends for the year ending December 31, 2024, similar to 2023[159]

Summary of Conference Call Transcript Company Overview - The company is a leading player in the metal processing and manufacturing services industry, specifically focusing on stainless steel and carbon steel products. It has undergone significant transformations since its establishment in 1988, with a major shift in 2022 from a trading company to a processing service provider [1][3]. Key Points Industry and Market Position - The company holds a 16.28% stake from China Baowu Steel Group and a 2.29% stake from a Japanese trading company, indicating strong backing [1]. - It has established 11 processing centers across various cities in China, including Wuxi, Jinjiang, and Hangzhou, enhancing its service network [2]. - The company has a robust customer base and extensive industry experience, positioning it well to meet the growing demand for high-end manufacturing services [3][4]. Financial Performance - The company reported a revenue of 46.5 billion yuan, with stainless steel sales increasing by 1% and carbon steel sales by 4% [15]. - The sales of specialty steel increased by 20%, with total sales volume exceeding 2.47 million tons, accounting for over 48% of total sales [15]. - The company has faced challenges due to price fluctuations in carbon steel, leading to significant losses in mid-2023, but managed to recover some losses by year-end [19][20]. Strategic Initiatives - The company is focusing on expanding its manufacturing capabilities, including large containers and precision components for various industries such as petrochemicals and renewable energy [5][6]. - It has launched supply chain financial products to support customer financing needs, with cumulative business amounts exceeding 6 billion yuan [6]. - The company is enhancing its international presence by collaborating with foreign trading companies and establishing overseas service networks [7][18]. Technological Advancements - The company has invested heavily in R&D, with over 300 patents and certifications in the processing and manufacturing sector [8]. - It is committed to digital transformation and automation, with plans to implement smart manufacturing solutions and enhance operational efficiency [56][58]. Future Outlook - The company aims to maintain steady growth despite market challenges, focusing on high-value products and expanding its service offerings [21][22]. - It plans to enhance its digital capabilities and explore e-commerce opportunities to improve service delivery and customer engagement [50][51]. - The management is optimistic about future growth, citing the potential for increased market share in the manufacturing sector [44][45]. Risks and Challenges - The company acknowledges risks related to market demand fluctuations, particularly in the construction and real estate sectors, which may impact steel demand [22][41]. - It is also concerned about geopolitical tensions and their potential impact on business operations [60]. Additional Insights - The company has a strong focus on talent acquisition and retention, emphasizing the importance of creating a supportive work environment for employees [59]. - It is actively pursuing partnerships and collaborations to enhance its competitive edge and expand its market reach [11][12]. This summary encapsulates the key points discussed in the conference call, highlighting the company's strategic direction, financial performance, and market positioning within the metal processing industry.

Group 1: Industry Overview - In 2024, the apparent consumption of crude steel in China decreased by 5.4% year-on-year, with export volumes reaching a historical high but prices dropping over 19%, severely squeezing profit margins for enterprises [1] - The demand for high-end and special steel is gradually increasing due to the ongoing transformation and upgrading of domestic manufacturing, providing new growth points for the steel industry [1] Group 2: Company Performance - Daming International (01090.HK) reported a revenue of RMB 46.453 billion in 2024, with a loss of RMB 385 million, reflecting the severe external environment rather than a lack of internal momentum [1] - The company achieved significant sales in 2024, with stainless steel sales reaching 2.057 million tons and carbon steel sales reaching 5.059 million tons, showing resilience against industry trends [2] - The processing business generated approximately RMB 43.69 billion in revenue, while the manufacturing business contributed about RMB 1.46 billion, highlighting Daming International's leadership in one-stop metal processing services [2] Group 3: Infrastructure and Logistics - The Daming Yangtze River Terminal commenced operations in 2024, designed to handle 1.053 million tons annually, enhancing logistics services and expanding the service capacity of the Daming Jingjiang base [3] Group 4: International Expansion - Daming International is actively expanding its overseas business, with products sold to major countries and regions, and reported overseas revenue of RMB 1.48 billion in 2024, remaining stable year-on-year [4] - Successful overseas projects include the export of condenser equipment to Spain and support for major projects in South America and Australia, enhancing the company's global brand recognition [4] Group 5: Technological Innovation - The company is increasing investments in advanced processing equipment and technology to enhance service capabilities and operational efficiency, including exploring AI applications in manufacturing [5] - Analysts suggest that ongoing investments in infrastructure and high-end manufacturing will sustain demand for high-quality steel products, providing Daming International with opportunities for recovery [5][6]

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 46,453,309 thousand, a decrease of 8.1% compared to RMB 50,560,063 thousand in 2023[2] - Gross profit for the same period was RMB 685,686 thousand, reflecting a decline of 25.6% from RMB 921,534 thousand in the previous year[3] - The company reported a total annual loss of RMB 385,139 thousand, which is an increase of 102.2% compared to a loss of RMB 190,493 thousand in 2023[3] - The basic and diluted loss per share for the year was RMB 0.33, compared to RMB 0.17 in 2023[3] - The net loss attributable to shareholders for the year ended December 31, 2024, was RMB 414,579 thousand, compared to a loss of RMB 219,068 thousand in 2023, indicating a significant increase in losses[26] - The group reported a total segment loss of RMB 258,406,000 for the year ended December 31, 2024, compared to a loss of RMB 27,267,000 for the year ended December 31, 2023[19] - The company recorded a net loss of approximately RMB 385,100,000 for the year ending December 31, 2024, a 102.2% increase compared to a net loss of approximately RMB 190,500,000 in 2023[45] Revenue Breakdown - Sales revenue from the processing segment was RMB 43,686,749,000 for the year ended December 31, 2024, compared to RMB 47,265,587,000 for the previous year, a decline of about 7.5%[18] - The manufacturing segment reported sales revenue of RMB 1,455,604,000 for the year ended December 31, 2024, an increase from RMB 1,204,642,000 in the previous year, reflecting a growth of approximately 20.8%[18] - Stainless steel sales volume increased by 0.7% to 2,056,957 tons, while carbon steel sales volume rose by 4.2% to 5,059,186 tons[2] - Stainless steel processing sales volume increased by 0.7% to approximately 2,057,000 tons in 2024 from 2,043,000 tons in 2023, while processing volume decreased by 1.9% to approximately 3,180,000 tons[45] - Carbon steel processing sales volume rose by 4.2% to approximately 5,059,000 tons in 2024 from 4,855,000 tons in 2023, with processing volume decreasing by 1.6% to approximately 4,785,000 tons[45] Cash Flow and Assets - The operating cash flow for the year was RMB 439,462 thousand, significantly higher than RMB 67,280 thousand in 2023[8] - Cash and cash equivalents at year-end decreased to RMB 153,891 thousand from RMB 265,311 thousand at the beginning of the year[8] - Total assets decreased to RMB 12,970,475 thousand from RMB 13,188,882 thousand in the previous year[4] - Total liabilities increased to RMB 10,105,677 thousand, up from RMB 9,907,634 thousand in 2023[6] - Current liabilities exceeded current assets by approximately RMB 1,270,595,000 as of December 31, 2024, compared to RMB 562,329,000 as of December 31, 2023[10] - Cash and cash equivalents decreased from RMB 265,311,000 as of December 31, 2023, to RMB 153,891,000 as of December 31, 2024[10] Expenses and Costs - The total expenses for the year ended December 31, 2024, amounted to RMB 46,711,715 thousand, a decrease of 7.4% from RMB 50,587,330 thousand in 2023[20] - The cost of raw materials consumed was RMB 44,411,966 thousand, down from RMB 48,311,029 thousand, representing a reduction of 6.0%[20] - Distribution costs increased from approximately RMB 493.3 million in 2023 to approximately RMB 506.4 million in 2024, primarily due to rising transportation costs[59] Financial Position - The company’s debt-to-equity ratio was 71.42% as of December 31, 2024, compared to 68.37% in 2023, indicating an increase in financial leverage[67] - As of December 31, 2024, accounts payable increased to RMB 1,082,057,000 from RMB 707,959,000 in 2023, representing a growth of approximately 52.8%[32] - The aging analysis of trade payables shows that payables within 6 months rose to RMB 972,012,000 in 2024 from RMB 688,721,000 in 2023, an increase of about 41.3%[33] Strategic Initiatives - The group plans to improve operational performance and cash flow by increasing sales volume and enhancing inventory management[12] - The company aims to enhance profitability through improved customer service, operational efficiency, and technological innovation, with increased investment in advanced processing equipment and technology[36] - A strategic cooperation agreement was signed with China CRRC and Anomi Marine Technology to develop a strong supply system for clean energy market products[43] - The company successfully exported condenser equipment to Spain, showcasing its competitive edge in the condenser manufacturing sector[37] - A new processing base will be established in Chongqing through a tripartite joint venture agreement, enhancing service capabilities in the southwestern region[42] - The opening of the Yangtze River terminal marks a significant milestone in the company's development, enhancing its high-end manufacturing service capabilities[44] Governance and Compliance - The company has adhered to the Corporate Governance Code as per the Hong Kong Stock Exchange's Listing Rules throughout the year[70] - The audit committee reviewed the audited consolidated annual results for the year ending December 31, 2024, confirming compliance with applicable accounting standards[74] - The company did not purchase, sell, or redeem any of its listed securities during the year[71] Employment and Workforce - As of December 31, 2024, the company employed 6,738 staff, a decrease of approximately 6.8% from 7,231 in 2023[68] - The workforce comprised 4,993 production and technical personnel (74.1%), 1,114 sales personnel (16.5%), and 631 management and finance personnel (9.4%)[68] Dividends - The company did not declare any dividends for the year ended December 31, 2024, consistent with the previous year[28] - No interim dividend was declared for the year, consistent with 2023, and no final dividend is recommended for the year ending December 31, 2024[69] Future Outlook - The company anticipates continued growth in overseas business revenue and stable income from stainless steel processing services[46] - The company plans to enhance its service network and improve processing capabilities through advanced automation equipment and digital transformation of existing production facilities[46]

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 22,800,874 thousand, a decrease of 7.0% compared to RMB 24,504,930 thousand in 2023[3]. - Comprehensive income for the period decreased by 19.0% to RMB 9,424 thousand from RMB 11,628 thousand in 2023[3]. - For the six months ended June 30, 2024, the company recorded a net profit of approximately RMB 9.4 million, a decrease of about 19.0% compared to RMB 11.6 million for the same period in 2023[16]. - Revenue for the six months ended June 30, 2024, was approximately RMB 22,800,874 thousand, a decrease from RMB 24,504,930 thousand for the same period in 2023, representing a decline of 6.9%[32]. - The company reported a net profit of RMB 9,424 thousand for the period, down from RMB 11,628 thousand in the same period of 2023[46]. - Basic and diluted earnings per share were both RMB 0.35, compared to RMB 0.57 in the previous year[46]. - The income tax expense for the six months ended June 30, 2024, was RMB 20,798 thousand, an increase from RMB 13,520 thousand in the same period of 2023, representing a growth of 53.4%[16]. Sales and Production - Stainless steel sales volume increased by 0.9% to 965,145 tons, while processing volume decreased by 1.5% to 1,524,910 tons[6]. - Carbon steel sales volume rose by 7.1% to 2,382,729 tons, with processing volume decreasing by 1.8% to 2,292,416 tons[6]. - The stainless steel processing business sales volume increased from approximately 957,000 tons for the six months ended June 30, 2023, to approximately 965,000 tons for the same period in 2024, representing a growth of about 0.9%[21]. - The carbon steel processing business sales volume rose from approximately 2,225,500 tons for the six months ended June 30, 2023, to approximately 2,382,729 tons for the same period in 2024, reflecting an increase of about 7.1%[21]. Costs and Expenses - Other income decreased from approximately RMB 41,300 thousand in the first half of 2023 to approximately RMB 27,900 thousand in the first half of 2024, primarily due to a reduction in government subsidies received[34]. - Distribution costs slightly increased from approximately RMB 225,400 thousand in the first half of 2023 to approximately RMB 228,300 thousand in the first half of 2024, mainly due to higher employee benefit expenses[35]. - Administrative expenses rose from approximately RMB 140,600 thousand in the first half of 2023 to approximately RMB 176,400 thousand in the first half of 2024, attributed to increased employee benefit expenses[36]. - Financing costs increased from approximately RMB 119,300 thousand in the first half of 2023 to approximately RMB 122,300 thousand in the first half of 2024, mainly due to a decrease in interest income received[37]. - The company's cost of sales, distribution costs, and administrative expenses totaled RMB 22,691,071 thousand for the six months ended June 30, 2024, a decrease of 7.0% from RMB 24,406,674 thousand in the same period of 2023[14]. Assets and Liabilities - The total asset value of the group as of June 30, 2024, was approximately RMB 16.33 billion, with equity attributable to shareholders amounting to approximately RMB 2.97 billion[20]. - Total liabilities increased to RMB 13,039,051 thousand, up 31.5% from RMB 9,907,634 thousand as of December 31, 2023[45]. - As of June 30, 2024, the company's total borrowings were approximately RMB 10,266,000 thousand, with a debt-to-equity ratio of 75.15% compared to 68.37% as of December 31, 2023[41]. - The company's trade payables rose to RMB 885,479 thousand as of June 30, 2024, compared to RMB 707,959 thousand as of December 31, 2023, representing an increase of approximately 25.0%[68]. - The total borrowings as of June 30, 2024, reached RMB 10,265,931 thousand, up from RMB 7,358,725 thousand as of December 31, 2023, indicating a significant increase of around 39.0%[67]. Strategic Initiatives - The company has expanded its production capacity in key regions to enhance regional competitive advantages and support overall performance growth strategies[11]. - The company has invested in advanced processing equipment and technology to improve processing and manufacturing service capabilities, which also helps to increase product premiums[11]. - The company aims to enhance profitability through continuous improvement in customer service, operational efficiency, and technological innovation[11]. - The company has initiated strategic collaborations, including partnerships with 兰石重装 and 东方电机, to enhance manufacturing capabilities[15]. - A significant order for tank prefabrication was received from a client in the Democratic Republic of the Congo, showcasing the international competitiveness of Chinese manufacturing[13]. Risk Management - The company faced foreign exchange risks due to transactions denominated in foreign currencies, primarily USD, EUR, HKD, and JPY, and management is monitoring exchange rate fluctuations closely[40]. - The company continues to assess the impact of market risks, including currency risk and fair value interest rate risk, on its operations[58]. - The company has not made any changes to its risk management policies since the end of the last fiscal year, maintaining its approach to financial risk factors[58]. Employment and Shareholding - As of June 30, 2024, the company employed 7,011 staff, an increase from 6,719 in 2023, with production and technical personnel making up 73.4% of the workforce[90]. - Major shareholders include Lianhao Group Limited with 788,435,000 shares, representing 61.86% of the issued share capital, and China Baowu Steel Group Co., Ltd. with 207,500,000 shares, representing 16.28%[95]. - The company’s shareholding structure indicates a strong concentration of ownership, with the top three shareholders holding over 86% of the total shares[96]. - The company has a compensation policy that includes discretionary bonuses based on individual performance, skills, and market trends[90].

Related Party Transactions - The company confirmed that related party transactions disclosed in the 2023 annual report constitute financial assistance provided to the group, qualifying as related transactions[1] - Financial assistance received by the group was conducted on normal commercial terms or better, with no assets of the group being pledged as collateral[1] - The company has complied with the relevant provisions of the Listing Rules regarding continuing connected transactions as detailed in the 2023 annual report[1]

Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 22,800,874, a decrease of 7.0% compared to RMB 24,504,930 in the same period of 2023[1] - Total comprehensive income for the period was RMB 9,424, a decline of 19.0% from RMB 11,628 in the previous year[2] - Operating profit for the period was RMB 136,390, slightly down from RMB 137,645 in the previous year[2] - Basic and diluted earnings per share for the period were both RMB 0.35, down from RMB 0.57 in the previous year[2] - The net profit for the six months ended June 30, 2024, was RMB 9,424, compared to RMB 11,628 for the same period in 2023, reflecting a decrease of about 18.9%[20] - Profit for the period decreased from approximately RMB 116.0 million for the six months ended June 30, 2023, to approximately RMB 9.4 million for the six months ending June 30, 2024[54] Sales Volume and Processing - Stainless steel sales volume increased by 0.9% to 965,145 tons, while processing volume decreased by 1.5% to 1,524,910 tons[1] - Carbon steel sales volume rose by 7.1% to 2,382,729 tons, with processing volume declining by 1.8% to 2,292,416 tons[1] - Stainless steel processing sales volume increased from approximately 957,000 tons for the six months ending June 30, 2023, to approximately 965,000 tons for the same period in 2024, representing a growth of about 0.9%[37] - Carbon steel processing sales volume rose from approximately 2,226,000 tons for the six months ending June 30, 2023, to approximately 2,383,000 tons for the same period in 2024, reflecting an increase of about 7.1%[37] Financial Position - Total assets as of June 30, 2024, amounted to RMB 16,329,723, an increase from RMB 13,188,882 at the end of 2023[3] - Total liabilities increased to RMB 13,039,051 from RMB 9,907,634 at the end of 2023[4] - As of June 30, 2024, the company's current liabilities exceeded current assets by approximately RMB 499,276 thousand, raising concerns about liquidity[10] - The company reported a net current liability of approximately RMB 499 million as of June 30, 2024[56] - As of June 30, 2024, the company's total borrowings amounted to approximately RMB 10.26 billion, with a debt-to-equity ratio of 75.15%, up from 68.37% as of December 31, 2023[56] Cash Flow and Financing - For the six months ended June 30, 2024, the company's operating cash flow was RMB (46,620) thousand, a significant decrease from RMB (392,600) thousand in the same period of 2023, indicating a decline of approximately 88.1%[7] - The net cash used in operating activities for the first half of 2024 was RMB (179,584) thousand, compared to RMB (555,773) thousand in the prior year, reflecting a reduction of about 67.7%[7] - The financing activities generated a net cash inflow of RMB 514,536 thousand for the first half of 2024, compared to RMB 768,642 thousand in the previous year, indicating a decrease of approximately 33.1%[7] - The company has confidence in its ability to refinance its bank loans and credit lines based on its past experience and good credit standing, which supports its going concern assumption[10] Expenses and Costs - The cost of raw materials consumed was RMB 21,515,055 for the six months ended June 30, 2024, compared to RMB 23,263,492 in the same period of 2023, showing a decrease of about 7.5%[21] - The company reported a significant increase in employee benefits expenses, which rose to RMB 512,020 for the six months ended June 30, 2024, from RMB 479,615 in the same period of 2023, an increase of approximately 6.8%[21] - The depreciation and amortization expense for the six months ended June 30, 2024, was RMB 223,093, compared to RMB 211,130 for the same period in 2023, reflecting an increase of about 5.7%[21] - Distribution costs increased from approximately RMB 225.4 million for the six months ended June 30, 2023, to approximately RMB 228.3 million for the six months ending June 30, 2024, primarily due to increased employee benefits expenses[50] - Administrative expenses rose from approximately RMB 140.6 million for the six months ended June 30, 2023, to approximately RMB 176.4 million for the six months ending June 30, 2024, mainly driven by higher employee benefits expenses[51] - Financing costs increased from approximately RMB 119.3 million for the six months ended June 30, 2023, to approximately RMB 122.3 million for the six months ending June 30, 2024, primarily due to a decrease in interest income[52] Dividends and Shareholder Information - The company did not declare any interim dividend for the six months ended June 30, 2024, consistent with the previous year[28] - The board of directors did not recommend the payment of an interim dividend for the six months ended June 30, 2024, compared to no dividend declared for the same period in 2023[59] Operational Developments - The company has established ten processing centers and one manufacturing base, serving over 70,000 customers across various industries[31] - The global apparent consumption of steel in 2023 reached 1.763 billion tons, with China accounting for nearly 896 million tons, providing a solid market foundation for the company’s services[32] - The company is enhancing its operational efficiency and service quality through investments in advanced processing equipment and technology[32] - The successful delivery of significant projects, such as the CE-certified cooling kiln to Finland, demonstrates the company's growing capabilities in high-end equipment manufacturing[33] Compliance and Reporting - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2024, and confirmed compliance with applicable accounting standards and regulations[61] - The interim report for the six months ended June 30, 2024, will be sent to shareholders and made available on the Hong Kong Stock Exchange website and the company's website[62]

Sales and Processing Volumes - Stainless steel sales volume reached 2,043,000 tons in 2023, an increase of 9.9% from 1,858,780 tons in 2022[16] - Carbon steel sales volume increased by 21.6% to 4,855,332 tons in 2023, up from 3,992,889 tons in 2022[16] - The processing volume of stainless steel rose to 3,241,597 tons, reflecting a 13.7% increase from 2,849,891 tons in the previous year[16] - The processing ratio for stainless steel improved to 1.59 in 2023, compared to 1.53 in 2022[16] - Carbon steel processing volume also increased by 15.0% to 4,863,370 tons from 4,230,227 tons in 2022[16] - The processing ratio for carbon steel decreased to 1.00 in 2023, down from 1.06 in 2022[16] Financial Performance - Revenue for the year ended December 31, 2023, was RMB 50,560,063, representing a 0.9% increase from RMB 50,122,319 in the previous year[135] - Gross profit for the same period was RMB 921,534, up 1.4% from RMB 908,633[135] - The total comprehensive loss for the year was RMB (190,493), an increase of 19.9% compared to RMB (158,833) in the prior year[135] - The company's distributable reserves as of December 31, 2023, amounted to approximately RMB 1,889,000,000, compared to RMB 1,880,600,000 in 2022[61] - The board does not recommend the payment of a final dividend for the year ended December 31, 2023, consistent with the previous year[60] Shareholder and Governance Information - The company has no predetermined dividend payout ratio, with dividends being decided at the discretion of the board[4] - The company emphasizes regular communication with shareholders to ensure they are informed about its strategies and financial performance[9] - Major shareholders include Lianhao Group Limited, holding 62.25% of the issued share capital, and China Baowu Steel Group Co., Ltd., with a combined holding of 16.28%[143] - The public float of the company is approximately 20.71%, which is below the minimum requirement of 25% as per Hong Kong listing rules[151] - The company has a significant public shareholding issue and is considering measures to restore it to the minimum required percentage[167] Risk Management and Internal Controls - The company has implemented various measures to enhance risk management and internal control systems[40] - The company is committed to identifying, assessing, and managing significant risks that may affect its main operational processes[40] - The audit committee reviewed the consolidated financial statements for the year ended December 31, 2023, and confirmed compliance with applicable accounting standards[168] - The group evaluated the inherent risk of material misstatement related to inventory valuation due to subjectivity and management bias[197] Employee and Incentive Plans - A total of 228,000 reward shares were granted to an employee on January 5, 2023, under the share incentive plan[75] - The company has adopted stock option and share incentive plans to reward employees based on their contributions[165] - The total number of options granted and exercised during the year was 12,800,000, with an exercise price of HKD 2.364[72] - As of December 31, 2023, there are 12,800,000 stock options granted to directors and employees that remain unexercised[92] Strategic Initiatives and Market Position - The company aims to enhance profitability through continuous improvement in customer service, operational efficiency, technological innovation, inventory management, and higher-level processing and manufacturing support services[35] - Recent investments in advanced processing equipment and technology have improved processing and manufacturing capabilities, contributing to product premiumization[35] - The company is expanding production capacity in key regions to strengthen regional competitive advantages and support overall performance growth strategies[35] - The company focuses on providing customized metal processing and manufacturing services, emphasizing efficiency and cost-effectiveness for downstream customers[116] - The company is positioned as a leading provider of metal materials and components processing, linking upstream metal producers with downstream end-users[116] Customer and Supplier Relationships - A broad customer base and increasing customer loyalty, along with stable long-term relationships with upstream suppliers, support the company's leading performance in the industry[38] - The group’s top five customers accounted for less than 30% of total revenue, indicating a diversified customer base[86] - The largest supplier accounted for approximately 42% of total procurement, highlighting reliance on key suppliers[86] Audit and Compliance - The independent auditor's report confirms the consolidated financial statements as of December 31, 2023[156] - The audit firm confirmed that sufficient and appropriate audit evidence was obtained to support their audit opinion[194] - The audit procedures included testing the internal controls and estimates related to the net realizable value of inventory, considering market conditions and historical sales data[197] - The independent auditor's report indicates that the financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards[193]