Group 1 - The core viewpoint of the news highlights the recent performance of Southern Manganese (01091.HK), which saw a significant increase in stock price despite a broader market decline, indicating potential investor interest or market speculation [1][2]. - Southern Manganese's stock price closed at 0.335 HKD per share, reflecting a 24.07% increase with a trading volume of 46.02 million shares and a turnover of 14.82 million HKD, showcasing high volatility with a fluctuation of 29.63% [1]. - Over the past month, Southern Manganese has experienced a cumulative increase of 3.85%, but year-to-date, it has declined by 27.03%, underperforming the Hang Seng Index by 19.18% [2]. Group 2 - Financial data reveals that as of December 31, 2024, Southern Manganese achieved total revenue of 12.233 billion CNY, a year-on-year decrease of 22.9%, and a net profit attributable to shareholders of -0.671 billion CNY, a significant decline of 1230.38% [2]. - The company's gross profit margin stands at 3.08%, with a debt-to-asset ratio of 77.5%, indicating a high level of leverage [2]. - Currently, there are no institutional investment ratings for Southern Manganese, and its price-to-earnings ratio is -1.53, ranking 62nd in the industry, which has an average TTM P/E ratio of -2.24 [3]. Group 3 - Southern Manganese is a leading multinational enterprise group engaged in the production and research of manganese products, including electrolytic metal manganese and manganese-based battery materials, with operations extending to regions such as Guangxi, Guizhou, Guangdong, and Gabon in Africa [3]. - The company possesses rich manganese ore resources and operates the largest manganese mine in China, ensuring a strong supply chain for its core products [3]. - Southern Manganese has been publicly listed on the Hong Kong Stock Exchange since November 18, 2010, under the stock code 1091.HK, and has established itself as a key player in the manganese industry by drafting and approving national and industry quality standards for its products [3].

Financial Performance - The company's revenue for the year ended December 31, 2024, was HKD 13,210,519, a decrease of 23.5% compared to HKD 17,133,960 in 2023[11]. - The company reported a loss before tax of HKD 757,073 for 2024, compared to a profit of HKD 109,930 in 2023[11]. - The net loss for the year was HKD 801,966, a significant decline from a profit of HKD 72,386 in the previous year[11]. - The loss attributable to the owners of the company was HKD 725,070, compared to a profit of HKD 64,144 in 2023[11]. - The company incurred an income tax expense of HKD 44,893 for the year, compared to HKD 37,544 in the previous year[11]. - The company reported a significant increase in non-current assets, rising to HKD 5,063,574,000 in 2024 from HKD 5,025,589,000 in 2023, an increase of about 0.8%[12]. - The company reported a total available distributable reserve of HKD 2,618,617,000 as of December 31, 2024, which can be used to offset accumulated losses of HKD 1,074,959,000 and distribute dividends to shareholders[42]. - The group recorded a consolidated net loss of HKD 802.0 million for the year ended December 31, 2024, compared to a profit of HKD 72.4 million in 2023[130]. - The group reported a loss attributable to shareholders of HKD 725.1 million in 2024, compared to a profit of HKD 64.1 million in 2023[115]. - The loss per share for 2024 was HKD 0.2115, compared to earnings per share of HKD 0.0187 in 2023[116]. Operational Strategy and Future Outlook - The company is focusing on expanding its market presence and exploring new strategies for growth[2]. - Future outlook includes potential new product development and technological advancements[2]. - The company is actively considering mergers and acquisitions to enhance its market position[2]. - The management is committed to improving operational efficiency to mitigate losses[2]. - The company aims to strengthen its financial position through strategic investments and partnerships[2]. - The company aims to address market challenges and promote the manganese industry towards higher quality and sustainability[23]. - The operational strategy includes increasing production capacity, reducing costs, and improving management efficiency to achieve high-quality development by 2025[141]. - The company plans to implement detailed cost control measures and strengthen audit supervision to achieve significant cost reduction[145]. Market and Sales Performance - Sales to the top five customers accounted for 21.4% of total sales during the year, with the largest customer contributing 7.2%[44]. - The average selling price of electrolytic manganese products dropped by 9.3% to HKD 12,289 per ton in 2024, down from HKD 13,556 per ton in 2023[83]. - The average selling price of lithium manganese oxide decreased by 49.4% to HKD 34,731 per ton in 2024, but the unit sales cost improved due to better management of raw material prices[101]. - The manganese mining segment's revenue decreased by 10.5% to HKD 1,175.3 million in 2024, primarily due to a drop in the average selling price of Gabon ore[93]. - The revenue from electrolytic manganese products accounted for 15.4% of total revenue in 2024, up from 12.3% in 2023[91]. - The revenue from the electrolytic manganese and alloy materials production segment decreased by 21.5% to HKD 2,162.9 million, compared to HKD 2,754.0 million in 2023[95]. - The revenue from alloy products dropped by 84.8% to HKD 96.2 million in 2024, primarily due to an 82.9% decrease in sales volume to 13,805 tons[97]. Environmental and Social Responsibility - The company emphasized the importance of safety and environmental responsibility, achieving zero environmental incidents during the year[18]. - The company is focused on green transformation and sustainable development through various environmental protection initiatives[18]. - The company made charitable donations totaling HKD 704,000 during the year, a decrease from HKD 2,539,000 in the previous year[43]. Corporate Governance and Management - The company has established appropriate compliance procedures to ensure adherence to relevant laws and regulations[32]. - The company has a remuneration policy aimed at providing fair market compensation to attract and retain talent, with salaries based on individual knowledge, skills, and performance[50]. - The company has established a stock option plan to incentivize qualified personnel, including full-time and part-time employees, to contribute to the company's interests[59]. - The company’s board of directors includes independent non-executive directors appointed on September 10, 2024[46]. - The company has a maximum limit on the total number of shares that can be issued under the stock option plan, not exceeding 10% of the total issued shares at the time of listing without shareholder approval[59]. - The company has no directors with direct or indirect interests in any competing businesses during the year[52]. - The company has no management contracts related to the majority of its business operations as of December 31, 2024[41]. Financial Position and Assets - Total assets decreased to HKD 8,786,603,000 in 2024 from HKD 11,366,020,000 in 2023, representing a decline of approximately 22.5%[12]. - Current liabilities reduced to HKD 5,382,420,000 in 2024 from HKD 7,231,694,000 in 2023, a decrease of about 25.5%[12]. - Net assets fell to HKD 1,977,187,000 in 2024 compared to HKD 2,828,362,000 in 2023, reflecting a decline of approximately 30%[12]. - The group’s current assets, including prepayments and other receivables, decreased by 42.0% to HKD 1,062.1 million as of December 31, 2024[122]. - The group’s borrowings as of December 31, 2024, decreased to HKD 3,945.6 million from HKD 5,120.6 million in 2023[125]. - The group has a remaining unutilized portion of HKD 75.0 million from the IPO proceeds, expected to be fully utilized by December 31, 2032[118]. Production and Mining Activities - Total mining production for Daxin Manganese Mine in 2024 is 593,000 tons, down from 940,000 tons in 2023, with an average manganese grade of 11.9% compared to 12.5%[172]. - Total mining production for Tiandeng Manganese Mine in 2024 is 234,000 tons, down from 666,000 tons in 2023, with an average manganese grade of 11.9%[173]. - Total mining production for Bembélé Manganese Mine in 2024 is 1,954,000 tons, down from 2,240,000 tons in 2023, with an average manganese grade of 30.7% compared to 29.0%[176]. - The company has not conducted any significant exploration activities in China during the year, focusing instead on geological exploration at the Bembélé Manganese Mine in Gabon[157]. - The company has completed infrastructure projects at Bembélé Manganese Mine, enhancing processing capacity and transportation capabilities[170]. - The company has invested in upgrading and maintaining mining equipment across various mines to improve operational efficiency[166][168]. Challenges and Risks - The company anticipates ongoing challenges due to rising production costs and geopolitical tensions affecting energy and raw material prices[82]. - The company faces interest rate risk from floating rate debt, which may increase financial costs if the Chinese loan market interest rates rise[136]. - The company is actively seeking other financing options, including equity issuance, to strengthen its financial position and reduce reliance on short-term borrowing[137].

Industry Overview - Manganese is a crucial strategic mineral resource, with China categorizing it as a scarce mineral. The country has a high dependence on imports, with 80%-90% of its manganese supply sourced from abroad, making it the largest manganese importer globally [2][3] - China's manganese ore production has been declining due to low ore grades, high impurities, and stringent mining regulations. The import volume and net import volume have consistently remained above 27 million tons, with projections for 2024 showing a decrease to approximately 29.29 million tons and 29.02 million tons, representing year-on-year declines of 6.28% and 7.14% respectively [2][3] Industry Chain - The manganese industry chain consists of three segments: upstream (exploration and mining), midstream (smelting and processing), and downstream (application in various industries). Key players in the upstream include companies like Western Gold, WISCO, and Southern Manganese, while midstream players include Tianyuan Manganese and Southern Manganese [4] - The downstream applications of manganese products span across steel, batteries, chemicals, construction, real estate, transportation, new energy vehicles, aerospace, and pharmaceuticals [4] Global Manganese Resources - Global manganese metal reserves are approximately 1.5 billion tons, with South Africa, Australia, China, and Brazil accounting for over 85% of total reserves. South Africa holds the largest share at around 32%, while China ranks third with about 15% [5] - High-grade manganese resources, with manganese content above 35%, are primarily found in South Africa, Gabon, Australia, and Brazil, while China mainly has low-grade resources with manganese content generally below 30% [5] Domestic Manganese Resources - China's manganese ore resources are predominantly composed of carbonate manganese ore, which constitutes about 55.8% of the total reserves. The distribution of manganese resources is uneven, with the highest concentration in Guangxi, accounting for 43.24% of the national reserves, followed by Guizhou at 17.83% [9] Market Report - The report titled "China Manganese Industry Market Operation Status and Future Strategic Analysis" provides a comprehensive analysis of the manganese industry's development environment, operational status, import and export dynamics, and competitive landscape, projecting trends for 2025 [11][13]

Financial Performance - In 2024, the revenue was HKD 13,210.5 million, a decrease of 22.9% compared to HKD 17,134.0 million in 2023[3]. - The gross profit for 2024 was HKD 406.4 million, down 56.5% from HKD 934.1 million in 2023, resulting in a gross margin of 3.1%, a decline of 2.4 percentage points from 5.5% in 2023[3]. - The operating loss for 2024 was HKD 375.7 million, compared to a profit of HKD 123.7 million in 2023[3]. - The loss attributable to owners of the company was HKD 725.1 million in 2024, compared to a profit of HKD 64.1 million in 2023[3]. - Total comprehensive loss for the year amounted to HKD 851.2 million, compared to a total comprehensive income of HKD 3.9 million in 2023[5]. - The group recorded a consolidated net loss of HKD 801,966,000 for the year ended December 31, 2024, compared to a profit of HKD 72,386,000 in 2023[11]. - The company reported a net loss attributable to owners of the company of HKD (725,070,000) for 2024, compared to a profit of HKD 64,144,000 in 2023[51]. - The company recorded a loss attributable to shareholders of HKD 725.1 million in 2024, compared to a profit of HKD 64.1 million in 2023[98]. Assets and Liabilities - Current assets decreased to HKD 3,723.0 million in 2024 from HKD 6,340.4 million in 2023[7]. - Current liabilities decreased to HKD 5,382.4 million in 2024 from HKD 7,231.7 million in 2023[9]. - The net assets attributable to owners of the company decreased to HKD 2,361.6 million in 2024 from HKD 3,142.2 million in 2023[9]. - As of December 31, 2024, the group had net current liabilities of HKD 1,659,391,000, up from HKD 891,263,000 in 2023[11]. - Total assets amounted to HKD 8,786,603,000, with total liabilities at HKD 6,809,416,000[25]. - The company’s total liabilities as of December 31, 2024, were HKD 8,537,658, compared to HKD 5,628,642 in 2023, indicating an increase of approximately 51.5%[32]. - The group’s current ratio dropped to 0.69 in 2024 from 0.88 in 2023, indicating a decline in liquidity[112]. - The group’s net debt ratio increased to 136.9% in 2024 from 121.9% in 2023, primarily due to the net loss incurred during the year[113]. Cash Flow and Financing - Net cash inflow from operating activities was HKD 1,597,774,000, a significant improvement from a cash outflow of HKD 319,820,000 in the previous year[11]. - The group is actively seeking other financing options, including equity issuance, to strengthen its financial position and reduce reliance on short-term borrowings[12]. - The group has successfully renewed existing borrowings and secured additional bank loans totaling HKD 323,970,000[12]. - The total borrowings decreased to HKD 3,945.6 million in 2024 from HKD 5,120.6 million in 2023, reflecting a reduction of 22.9%[109]. - The group is exploring various methods, including short-term or medium-term notes, to improve its borrowing structure in terms of interest rates and repayment terms[109]. Operational Performance - The group is restructuring its manganese product processing portfolio to increase the proportion of higher-margin products, aiming for profitability and positive cash flow[11]. - The group is adjusting its trading business sales strategy for 2025 in response to recent trends in manganese ore and non-manganese metal prices[11]. - The manganese mining segment generated external sales of HKD 144,497,000, while the electrolytic manganese and alloy materials segment achieved HKD 1,030,761,000 in sales[25]. - The battery materials production segment reported external sales of HKD 2,162,924,000, contributing significantly to overall revenue[25]. - The average selling price of electrolytic manganese metal products decreased by 9.3% to HKD 12,289 per ton in 2024, compared to HKD 13,556 per ton in 2023[60]. - The average selling price of lithium manganate decreased by 49.4% to HKD 34,731 per ton, compared to HKD 68,654 per ton in 2023[80]. Cost Management - The group is implementing measures to enhance cost control over administrative and operational expenses to improve cash flow[11]. - Administrative expenses decreased by 18.7% to HKD 523.9 million in 2024, compared to HKD 644.8 million in 2023[90]. - The cost of goods sold decreased to HKD 11,685,627,000 in 2024 from HKD 16,099,731,000 in 2023, a decline of about 27.5%[39]. - Research and development costs reduced to HKD 76,969,000 in 2024 from HKD 116,799,000 in 2023, a decrease of approximately 34.1%[39]. Future Strategies - The group aims to enhance manganese resource exploration and reserves through strategic acquisitions and operational efficiency improvements[126]. - The company plans to implement a strategy focused on increasing production capacity, reducing costs, promoting savings, and strengthening management by 2025[127]. - The company will introduce advanced production equipment and optimize processes to increase overall production capacity and efficiency[128]. - Cost reduction will be achieved through detailed planning and strict cost control measures across production, procurement, and operations[129]. Corporate Governance and Communication - The annual general meeting is scheduled for June 6, 2025, to discuss future strategies and performance[134]. - The audit committee has reviewed the accounting policies and financial reporting for the year ending December 31, 2024[136]. - The company has published its annual report and financial results on the Hong Kong Stock Exchange and its own website[143]. - The company expresses gratitude to shareholders, business partners, distributors, and customers for their loyal support[144].

[Financial Performance](index=4&type=section&id=財務業績) This section provides an overview of the company's financial results, including income, balance sheet, and cash flow statements, along with detailed notes [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=中期簡明綜合損益及其他全面收益表) For the six months ended June 30, 2024, the company turned from profit to loss, with total revenue decreasing by **25.9%** to **5.73 billion HKD** and gross profit significantly declining by **56.9%** to **282 million HKD** Key Financial Performance for H1 2024 (Thousand HKD) | Indicator | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 5,733,287 | 7,732,538 | -25.9% | | **Gross Profit** | 282,068 | 654,960 | -56.9% | | **(Loss)/Profit Before Tax** | (135,675) | 177,373 | Turned from profit to loss | | **(Loss)/Profit for the Period** | (177,534) | 133,552 | Turned from profit to loss | | **(Loss)/Profit Attributable to Owners of the Company** | (162,783) | 134,903 | Turned from profit to loss | | **Basic (Loss)/Earnings Per Share (HKD)** | (0.0475) | 0.0393 | Turned from profit to loss | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=中期簡明綜合財務狀況表) As of June 30, 2024, the company's total assets were **11.33 billion HKD**, total liabilities were **8.69 billion HKD**, and net assets were **2.63 billion HKD**, a decrease from **2.83 billion HKD** at the end of 2023, indicating liquidity pressure due to net current liabilities Financial Position Summary (Thousand HKD) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Non-current Assets** | 5,006,501 | 5,025,589 | | **Total Current Assets** | 6,319,002 | 6,340,431 | | **Total Current Liabilities** | 7,164,223 | 7,231,694 | | **Net Current Liabilities** | (845,221) | (891,263) | | **Total Non-current Liabilities** | 1,529,064 | 1,305,964 | | **Net Assets** | 2,632,216 | 2,828,362 | - The company's current liabilities exceeded its current assets by **845 million HKD** at the end of the reporting period, but the directors believe the Group has sufficient working capital for the next twelve months, thus the financial statements are prepared on a going concern basis[10](index=10&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=中期簡明綜合現金流量表) In the first half of 2024, the company generated **911 million HKD** in net cash from operating activities, a significant year-on-year increase, while net cash used in investing activities also increased substantially to **575 million HKD**, with cash and cash equivalents at period-end rising to **1.061 billion HKD** Cash Flow Summary (Thousand HKD) | Indicator | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | | :--- | :--- | :--- | | **Net Cash Generated from Operating Activities** | 911,171 | 517,739 | | **Net Cash Used in Investing Activities** | (575,312) | (271,448) | | **Net Cash Used in Financing Activities** | (247,736) | (414,574) | | **Cash and Cash Equivalents at End of Period** | 1,061,232 | 950,014 | [Notes to the Interim Condensed Consolidated Financial Statements](index=10&type=section&id=中期簡明綜合財務報表附註) The notes to the financial statements provide detailed disclosures on accounting policies, segment operations, asset and liability breakdowns, and related party transactions, highlighting that declining revenue from electrolytic manganese metal and trading businesses was a primary driver of overall revenue decrease, while the battery materials business contributed the main profit, and a significant impairment provision for an associate was a key factor in the current period's loss - The Group's principal businesses are divided into four reportable operating segments: manganese ore mining, electrolytic manganese metal and alloy materials production, battery materials production, and other businesses (primarily trading)[13](index=13&type=chunk) - Due to the Group undertaking guarantee liabilities for associate Dushan Jinmeng and repaying related bank loans, an expected credit loss provision of **108 million HKD** was recognized for the secured amounts receivable from Dushan Jinmeng[33](index=33&type=chunk) - In the first half of 2024, the Group undertook guarantee liabilities for an associate, repaying a total of approximately **322 million HKD** in loan principal and interest to banks, with the guarantee settled by period-end[59](index=59&type=chunk) [Management Discussion and Analysis](index=34&type=section&id=管理層討論及分析) This section analyzes the company's financial performance and business operations, discussing key drivers of results, segment-specific performance, liquidity, and future outlook [Financial Review and Business Overview](index=34&type=section&id=財務回顧) In the first half of 2024, the company's performance faced challenges due to global economic uncertainties and weak demand in the domestic steel industry, resulting in a **25.9%** revenue decrease and a decline in gross profit margin from **8.5%** to **4.9%**, primarily driven by falling electrolytic manganese metal prices, gross loss in trading business, and a significant **109 million HKD** impairment loss related to an associate guarantee settlement Financial Summary for H1 2024 (Million HKD) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 5,733.3 | 7,732.5 | -25.9% | | **Gross Profit** | 282.1 | 655.0 | -56.9% | | **Gross Profit Margin** | 4.9% | 8.5% | -3.6pp | | **(Loss)/Profit Attributable to Owners of the Company** | (162.8) | 134.9 | Turned from profit to loss | - Core reasons for the performance decline include: electrolytic manganese metal product average selling price decrease of **15.8%**; gross loss recorded in the trading business; and an impairment loss of **108.7 million HKD** recognized on receivables from associate Dushan Jinmeng[74](index=74&type=chunk)[75](index=75&type=chunk) [Segment Performance Analysis](index=37&type=section&id=分部表現) Business segment performance diverged, with manganese ore mining revenue increasing due to higher sales volume but gross profit declining, while electrolytic manganese metal and alloy materials saw significant drops in both revenue and gross profit, recording an operating loss, and the battery materials segment, despite a revenue decrease, remained the primary profit contributor, demonstrating strong resilience, as other businesses (trading) experienced a sharp revenue decline and turned to gross loss - **Manganese Ore Mining**: Revenue increased by **12.4%** to **654 million HKD**, primarily due to higher sales volume of Gabon ore, but gross profit decreased by **13.4%**[79](index=79&type=chunk) - **Electrolytic Manganese Metal and Alloy Materials**: Revenue decreased by **28.2%** to **1.161 billion HKD**, mainly due to a **15.8%** drop in average selling price of electrolytic manganese metal products and a **75.0%** sharp decline in alloy product sales volume, with this segment recording a loss of **50.7 million HKD**[82](index=82&type=chunk)[83](index=83&type=chunk) - **Battery Materials Production**: Revenue decreased by **13.9%** to **798 million HKD**, but segment profit increased by **12.2%** to **194 million HKD**, making it the Group's most significant profit contributor[84](index=84&type=chunk)[85](index=85&type=chunk) - **Other Businesses (Trading)**: Revenue decreased by **32.3%** to **3.12 billion HKD** and recorded a gross loss of **211 million HKD**, primarily due to a decrease in manganese ore selling prices[86](index=86&type=chunk)[87](index=87&type=chunk) [Liquidity and Financial Resources](index=42&type=section&id=流動資金與財務資源) As of June 30, 2024, the Group's total borrowings slightly increased to **5.21 billion HKD**, with the net gearing ratio remaining stable at **121.2%**, and while facing liquidity pressure from **845 million HKD** in net current liabilities, management believes working capital is sufficient for the next 12 months due to successful renewal and new bank loans combined with operating cash flow, also disclosing significant credit risk with a specific customer Key Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Current Ratio** | 0.88 | 0.88 | | **Quick Ratio** | 0.67 | 0.64 | | **Net Gearing Ratio** | 121.2% | 121.9% | - The Group had net current liabilities of **845 million HKD**, but the Board believes the Group can continue as a going concern, considering **221 million HKD** in new loans obtained after the period-end and internal funds[110](index=110&type=chunk) - The Group faces significant credit risk with a single customer A, with accounts receivable of **232 million HKD** fully overdue and a full bad debt provision made[111](index=111&type=chunk) [Future Development and Outlook](index=45&type=section&id=未來發展及展望) Looking ahead, the Group will cautiously implement investment plans due to economic recovery uncertainties, anticipating continued challenges in the traditional manganese product market, which the industry has addressed through production cuts and technological upgrades, while remaining optimistic about the battery materials production sector (e.g., electrolytic manganese dioxide, lithium manganese oxide), aiming to consolidate its market leadership and capitalize on opportunities from new energy vehicle development - The Group will invest cautiously, focusing on five major business segments: ore, traditional manganese products, new energy materials, alloy materials, supply chain logistics, and solid waste utilization, to enhance internal efficiency[116](index=116&type=chunk) - The outlook for the traditional electrolytic manganese metal market remains challenging, with industry participants advocating for production cuts, while the Group is optimistic about the battery materials production sector and will continue R&D to consolidate its leading position[116](index=116&type=chunk) [Other Disclosure Information](index=45&type=section&id=其他披露資訊) This section covers the company's ESG practices, updates on manganese ore resources and reserves, and corporate governance details [Environmental, Social and Governance (ESG) Report](index=45&type=section&id=環境、社會及管治報告) This report outlines the company's sustainability philosophy and practices, focusing on four key areas: production safety, energy conservation and environmental protection, employee development, and social welfare, with no fatal accidents or work-related injuries reported during the period, and detailed disclosures on key performance indicators such as electricity and water consumption, exhaust gas, and greenhouse gas emissions, emphasizing the integration of ESG management into daily operations and commitment to exceeding regulatory requirements for green and harmonious development - The company categorizes significant ESG management matters into four aspects: production safety and labor protection, energy conservation and environmental protection, establishing an excellent operating system (employee training and growth), and social welfare[118](index=118&type=chunk) Key ESG Performance for H1 2024 | Key Area | Key Performance Indicator | H1 2024 | | :--- | :--- | :--- | | **Production Safety** | Fatalities | 0 | | | Work-related Injuries | 0 | | **Energy Conservation & Environmental Protection** | Total Electricity Consumption (Thousand kWh) | 769,696 | | | Total Water Consumption (Tons) | 2,865,271 | | | Greenhouse Gas Emissions (Tons) | 19,619 | | **Social Welfare** | Donation Amount (HKD) | 348,000 | - The company continuously invests in production safety, strictly implementing the "Six Major Systems" construction in Chinese mining areas and maintaining Level 2 safety production standardization for multiple production units[123](index=123&type=chunk) [Manganese Ore Resources and Reserves Summary](index=59&type=section&id=我們的錳礦資源摘要及我們的錳礦石儲量摘要) The report updates the company's manganese ore resources and reserves data for each mining area as of June 30, 2024, with total mineral resources of approximately **103.08 million tons** and total ore reserves of approximately **79.20 million tons**, slightly decreased from the end of 2023 due to mining depletion, while exploration activities focused on the Bembélé manganese mine in Gabon, and domestic Chinese mines concentrated on capacity expansion and equipment upgrades Manganese Ore Resources and Reserves Summary (Million Tons) | Category | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | **Total Mineral Resources** | 103.08 | 105.72 | | **Total Ore Reserves** | 79.20 | 81.84 | - Exploration activities are primarily conducted at the Bembélé manganese mine in Gabon to study deep mineralization patterns and provide data for further detailed exploration[151](index=151&type=chunk)[156](index=156&type=chunk) - The Daxi manganese mine's **1 million tons/year** underground mining expansion project continues to advance, and the Bembélé manganese mine completed infrastructure projects like the high-level water tank for the beneficiation plant to reduce costs and enhance transportation capacity[156](index=156&type=chunk)[160](index=160&type=chunk) [Corporate Governance and Other Information](index=67&type=section&id=企業管治及其他信息) The company complied with most provisions of the Corporate Governance Code during the reporting period, with one deviation: the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Li Weijian, and the company has adopted securities dealing codes no less stringent than the standard code, with all directors confirming compliance, while the report also discloses major shareholder holdings, including Mr. Sun Mingwen and Guangxi Damang indirectly holding **29.00%** and **22.64%** of shares respectively, with no purchases, redemptions, or sales of listed securities during the period - The company deviated from Corporate Governance Code Provision C.2.1, where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Li Weijian, an arrangement the Board considers optimal given the company's challenges[177](index=177&type=chunk)[178](index=178&type=chunk) - All directors confirmed compliance with the company's securities dealing code during the reporting period[179](index=179&type=chunk) Major Shareholder Holdings (as of June 30, 2024) | Shareholder Name | Number of Shares Held (Long Position) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | | Sun Mingwen (through Youfu Investment) | 994,260,000 | 29.00% | | Guangxi Damang (through Guinan Damang) | 776,250,000 | 22.64% | | Ma Xuedong (through Fengxiang Investment) | 184,740,000 | 5.39% |

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，概不對因本公告全部或任何 部份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。 South Manganese Investment Limited 南方錳業投資有限公司 （於百慕達註冊成立之有限公司） （股份代號：1091） 截至二零二四年六月三十日止六個月的中期業績公告 | --- | --- | |-------|-------------------------------------------------------------------------------------------------------| | | | | | 財務概要 | | • | 於二零二四年上半年，收益為 5,733.3 百萬港元，較二零二三年上半年的 | | | 7,732.5 百萬港元減少 25.9% 。 | | • | 於二零二四年上半年，毛利為 282.1 百萬港元，較二零二三年上半年的 655.0 | | | 百萬港元減少 56.9% 。於二零二四年上半年，毛利率為 4.9% ， ...

Financial Performance - The company's revenue for 2023 was HKD 17,134.0 million, an increase of 6.9% compared to HKD 16,031.9 million in 2022, primarily due to increased sales volume of Gabonese ore and higher trading business revenue[36]. - The manganese mining segment generated revenue of HKD 1,313.7 million, up 4.5% from HKD 1,257.2 million in 2022[35]. - The trading business reported revenue of HKD 11,348.0 million, a significant increase of 20.6% from HKD 9,411.0 million in the previous year[35]. - Revenue from the production of electrolytic manganese and alloy materials was HKD 2,754.0 million, reflecting an 18.4% decrease from HKD 3,377.0 million in 2022[35]. - The battery materials production segment generated revenue of HKD 1,718.2 million, down 13.5% from HKD 1,986.7 million in 2022[35]. - The overall gross profit decreased by 31.9% to HKD 934.1 million in 2023, down from HKD 1,372.3 million in 2022, with a gross margin of 5.5% compared to 8.6% in 2022[68]. - The profit attributable to the owners of the company was HKD 64.1 million in 2023, down from HKD 336.1 million in 2022[72]. - The earnings per share for the owners of the company were HKD 0.0187 in 2023, compared to HKD 0.0980 in 2022[73]. - The profit before tax for 2023 was HKD 109,930, a significant decrease of 72.1% from HKD 394,879 in the previous year[105]. - The net profit attributable to the owners of the company for 2023 was HKD 64,144, down 81.0% from HKD 336,091 in 2022[105]. Operational Highlights - The total mining production for 2023 reached 2,240 thousand tons, an increase from 2,186 thousand tons in 2022, representing a growth of approximately 2.5%[150]. - The total production of manganese concentrate at the Daxin Concentration Plant was 820 thousand tons in 2023, compared to 639 thousand tons in 2022, marking a significant increase of approximately 28.3%[160]. - The production of electrolytic manganese dioxide at the Daxin plant was 20.1 thousand tons in 2023, an increase from 18.2 thousand tons in 2022[163]. - The total production of sulfuric manganese reached 30.3 thousand tons in 2023, up from 17.6 thousand tons in 2022, indicating a growth of approximately 72.0%[156]. - The average manganese grade for open-pit mining in 2023 was 29.0%, up from 28.8% in 2022[150]. - The average grade of carbonated manganese ore at the Daxin mine was 12.5% in 2023, slightly down from 12.9% in 2022[160]. Strategic Initiatives - The company aims to enhance strategic control over manganese resources and reserves through exploration and acquisitions[100]. - The company plans to establish and strengthen strategic business relationships with selected key customers and industry-leading partners[87]. - The company aims to enhance operational efficiency and profitability while navigating challenges in the market due to inflation and economic uncertainties[109]. - The company plans to continue focusing on five major business segments to improve internal efficiency and management skills[109]. - The company is committed to monitoring financial instruments and cash flow forecasts to manage funding shortfall risks effectively[84]. - The company is advocating for production limits and technological upgrades to address challenges in the electrolytic manganese sector[111]. - The company is strengthening its strategic control over manganese resources by sourcing high-grade manganese ore from overseas suppliers[111]. Market Environment - The global economic environment in 2023 remained relatively stagnant, with increased borrowing costs and rising production costs impacting recovery[34]. - The ongoing geopolitical uncertainties, including the Israel-Hamas conflict, have added further complexity to the economic recovery path[34]. - The outlook for the electrolytic manganese segment in 2024 is expected to be challenging due to oversupply and rising production costs in the steel industry[111]. - The Chinese government has announced a "green stimulus plan" with a scale of approximately $195 billion, aimed at accelerating the development of new energy and electric vehicle industries, which presents significant market opportunities for the company's cathode battery materials[112]. Governance and Management - The company emphasizes the importance of maintaining a good corporate governance structure to protect shareholder interests[187]. - The board consists of nine members, including four executive directors, two non-executive directors, and three independent non-executive directors[197]. - The company has a balanced board composition to ensure effective independent judgment[189]. - The chairman and CEO positions have been combined since December 22, 2020, which the board believes enhances operational efficiency[196]. - The board will review the separation of the chairman and CEO roles to align with the best interests of the company[196]. Environmental and Safety Compliance - The company aims to enhance environmental indicators while considering practical possibilities and socio-economic factors[2]. - The company is committed to complying with health, safety, and environmental regulations applicable in China and Gabon[2]. - The company regularly reviews and updates its health, safety, and environmental management practices to align with international standards[2]. - The company is dedicated to ensuring a safe working environment for its employees[187].

Financial Performance - In 2023, the company's revenue was HKD 17,134.0 million, an increase from HKD 16,031.9 million in 2022[2] - The gross profit for 2023 was HKD 934.1 million, down from HKD 1,372.3 million in 2022, resulting in a gross margin of 5.5%, a decrease of 3.1 percentage points from 8.6% in 2022[2] - The profit attributable to the company's owners was HKD 64.1 million in 2023, compared to HKD 336.1 million in 2022[2] - The basic earnings per share for 2023 was HKD 0.0187, down from HKD 0.0980 in 2022[6] - The operating profit for the year was HKD 17,342,928, with a pre-tax profit of HKD 109,930 after accounting for financial expenses of HKD 224,719[42] - The group reported a net profit of HKD 72,386 for the year, after tax expenses of HKD 37,544[42] - The operating profit decreased by 75.9% to HKD 123.7 million in 2023, down from HKD 514.2 million in 2022, primarily due to reduced gross profit contributions from electrolytic manganese products[115] - The EBITDA for 2023 was HKD 780.2 million, a decrease of 41.0% from HKD 1,323.0 million in 2022[115] - The group’s profit attributable to owners was HKD 64.1 million in 2023, down from HKD 336.1 million in 2022, with earnings per share decreasing to HKD 0.0187 from HKD 0.0980[161][162] Revenue Breakdown - The total revenue for the year ending December 31, 2023, reached HKD 17,133,960, with external sales from the manganese mining segment in China amounting to HKD 131,203 and from Gabon at HKD 1,182,462[42] - Total external customer sales reached HKD 16,031,885,000, with significant contributions from electrolytic manganese and alloy materials production at HKD 3,377,047,000 and battery materials production at HKD 1,986,662,000[43] - Revenue from mainland China reached HKD 16,581,604, an increase of 10.6% from HKD 14,989,718 in the previous year[69] - Total customer contract revenue for the year ended December 31, 2023, was HKD 17,133,960, up from HKD 16,031,885 in 2022, representing a growth of 6.9%[96] - Sales of manganese mining products amounted to HKD 1,313,665, while battery materials production generated HKD 2,754,029 in revenue[96] - The total revenue from manganese ore mining increased by 4.5% to HKD 1,313.7 million in 2023, up from HKD 1,257.2 million in 2022[145] - The total revenue from trading business rose by 20.6% to HKD 11,348.0 million in 2023, compared to HKD 9,411.0 million in 2022[145] - The revenue from electrolytic manganese and alloy materials production was HKD 2,754.0 million in 2023, representing an 18.4% increase[145] Expenses and Liabilities - The total current liabilities amounted to HKD 7,231.7 million, compared to HKD 7,073.7 million in 2022[8] - The total non-current liabilities decreased to HKD 1,305.9 million in 2023 from HKD 1,544.6 million in 2022[25] - The total financial expenses for 2023 were HKD 243.2 million, slightly up from HKD 221.3 million in 2022[100] - Administrative expenses increased by 3.3% to HKD 644.8 million in 2023, up from HKD 623.9 million in 2022, mainly due to increased R&D spending on battery materials and alloys[156] - The group’s net current liabilities increased to 891.3 million HKD, up from 746.3 million HKD in 2022, due to more long-term loans maturing within one year[197] Asset Management - As of December 31, 2023, the net debt ratio increased to 121.9%, up from the previous year's figure[2] - The total assets less current liabilities were HKD 4,134.3 million, a decrease from HKD 4,376.9 million in 2022[24] - The total assets of the group amounted to HKD 11,366,020, while total liabilities were HKD 8,537,658, resulting in a net asset position[42] - The total assets amounted to HKD 11,450,624,000, while total liabilities were HKD 8,618,338,000, resulting in a net asset position[43] - Cash and bank balances as of December 31, 2023, were HKD 1,291.2 million, down from HKD 1,606.3 million in 2022[166] Market and Operational Insights - The company continues to expand its operations in the manganese mining and battery materials production sectors, focusing on enhancing production capabilities and market reach[38] - The group is exploring new strategies for market expansion and product development, particularly in battery materials and manganese production[88] - The company plans to continue expanding its market presence and investing in new technologies to enhance production capabilities[43] - The group’s largest customer accounted for less than 10% of total revenue, indicating a diversified customer base[71] Impairments and Losses - The company recognized impairment losses totaling HKD 132,632,000 during the year, impacting overall profitability[43] - The company experienced a net loss from financial assets of HKD 8.9 million in 2023, compared to a minor loss of HKD 164, indicating a substantial increase in financial asset impairments[112] - Financial asset impairment losses in 2023 were HKD 8.9 million, compared to HKD 0.2 million in 2022, primarily from long-aged customers in the battery materials segment[158] Dividends and Shareholder Returns - The company did not recommend any dividend payment for the year ended December 31, 2023[6] - The board did not recommend any dividend payment for the year ending December 31, 2023, consistent with the previous year[189]

Financial Performance - For the six months ended June 30, 2023, total revenue was HKD 7,732,538, a decrease of 14.2% compared to HKD 9,008,594 for the same period in 2022[19] - The operating profit for the period was HKD 724,208, with a notable increase from the previous year's HKD 600,000, reflecting a growth of around 20.7%[44] - The net profit for the period was HKD 397,656, compared to HKD 383,199 in the same period last year, indicating a year-on-year increase of approximately 3.8%[52] - The gross profit was HKD 655.0 million, a decrease of 42.3% compared to HKD 1,134.5 million in the first half of 2022, with a gross margin of 8.5%, down 4.1 percentage points from 12.6% in the previous year[125] - The profit attributable to the owners of the company was HKD 134.9 million, a decrease of 64.8% from HKD 383.2 million in the first half of 2022[157] Cash Flow and Liquidity - The net cash flow from operating activities for the six months ended June 30, 2023, was HKD 517,739, compared to HKD 389,866 for the same period in 2022, representing a 32.8% increase[11] - The company’s cash and cash equivalents decreased by HKD 168,283, resulting in a closing balance of HKD 950,014 as of June 30, 2023, down from HKD 1,324,256 at the end of 2022[11] - The cash flow from financing activities showed a net outflow of HKD 414,574 for the six months ended June 30, 2023, compared to a net inflow of HKD 377,606 in the same period of 2022[11] - As of June 30, 2023, the group's cash and bank balances (including pledged deposits) amounted to HKD 1,705.8 million, an increase from HKD 1,606.3 million as of December 31, 2022[199] - The group's net borrowings, after deducting cash and bank balances, were HKD 2,610.8 million, down from HKD 2,854.1 million as of December 31, 2022[199] Taxation - The company reported a total tax expense of HKD 43,821 for the six months ended June 30, 2023, down from HKD 109,507 for the same period in 2022, indicating a significant reduction of 60%[25] - The actual tax rate for the first half of 2023 was 24.7%, up from 21.6% in the first half of 2022[174] - The company is benefiting from a preferential corporate income tax rate of 15% due to its operations in Guangxi, which will expire in 2030[26] Revenue Breakdown - The production segment for electrolytic manganese and alloy materials generated revenue of HKD 1,615,881, a decrease of 28.5% from HKD 2,263,223 in the previous year[19] - The total revenue from manganese ore mining in the first half of 2023 was HKD 581.9 million, a decrease of 9.0% compared to HKD 639.6 million in the first half of 2022[129] - The total revenue from battery materials production was HKD 926.7 million in the first half of 2023, a decrease of 12.2% compared to HKD 1,054.9 million in the first half of 2022[129] - The total revenue from trading business was HKD 4,608.0 million in the first half of 2023, an 8.8% decrease from HKD 5,050.9 million in the first half of 2022[129] Environmental Impact - The company has maintained a commitment to environmental protection, with no significant penalties or prosecutions for violations of environmental regulations during the reporting period[57] - The company achieved a reduction in nitrogen oxides (NOx) emissions to 17 tons in the first half of 2023, down from 21 tons in 2021[79] - The total greenhouse gas emissions for the first half of 2023 amounted to 78,478 tons, with scope 1 emissions at 72,681 tons and scope 2 emissions at 5,797 tons[79] - The company reported a significant increase in slag emissions to 1,191,361 tons in the first half of 2023, compared to 819,144 tons in the same period of 2022[81] - Tailings emissions for the first half of 2023 were recorded at 460,065 tons, a decrease from 532,036 tons in the same period of 2022[82] Operational Efficiency - The company has implemented measures to optimize production layout and improve mining methods, which are expected to reduce operational costs significantly[58] - The company is focusing on enhancing safety measures and environmental risk management in its operations, particularly in the electrolytic manganese production process[97] - The company aims to improve the recovery rate of washing water in the electrolytic manganese production process to reduce energy consumption[98] Management and Governance - The total remuneration paid to key management personnel for the first half of 2023 was HKD 22,000, significantly higher than HKD 4,683 in the same period of 2022[117] - The board does not recommend the payment of any interim dividend for the six months ended June 30, 2023[198] Safety and Compliance - The company reported zero fatal accidents and zero work-related injury days lost across all regions for the first half of 2023, maintaining a strong safety record[102] - The company is committed to complying with all safety and labor standards in Hong Kong, mainland China, and Gabon, with no significant violations reported for the first half of 2023[104]

Manganese Ore Mining Segment Performance - Manganese ore mining segment turned a profit of HKD 73.4 million in 2022, compared to a loss of HKD 180.6 million in 2021, primarily due to the early termination of subcontracting services at the Bembélé manganese mine in Gabon, which incurred settlement expenses of HKD 166.0 million in 2021[31] - Manganese ore mining revenue increased to HKD 1,257.2 million in 2022, accounting for 74.2% of total revenue, up from HKD 721.7 million in 2021[29] - Manganese mining segment revenue increased by 74.2% to 1,257.2 million HKD in 2022 from 721.7 million HKD in 2021 due to expanded mining operations at the Bembélé manganese mine[176] Electrolytic Manganese Metal Products Performance - The company's electrolytic manganese metal products saw an 8.1% decrease in average selling price to HKD 20,322 per ton in 2022, down from HKD 22,121 per ton in 2021[26] - Gross profit margin for electrolytic manganese metal products dropped by 28.2 percentage points to 16.0% in 2022, compared to 44.2% in 2021[26] - Gross profit contribution from electrolytic manganese metal products decreased by 71.5% to HKD 385.8 million in 2022, down from HKD 1,355.7 million in 2021[26] - Electrolytic manganese product sales volume decreased by 14.6% to 118,500 tons in 2022 (2021: 138,682 tons), with an average selling price decrease of 8.1% to HKD 20,322 per ton (2021: HKD 22,121 per ton)[52] Trade Business Performance - Trade business revenue grew to HKD 9,411.0 million in 2022, representing 58.8% of total revenue, up from HKD 5,924.6 million in 2021[29] - The total sales cost increased by 39.7% to HKD 14,659.6 million in 2022 (2021: HKD 10,491.8 million), in line with the increase in trade business revenue and sales costs[36] Battery Materials Production Performance - Battery materials production revenue increased to HKD 1,986.7 million in 2022, representing 18.7% of total revenue, up from HKD 1,673.9 million in 2021[29] - The battery materials production division's revenue increased by 18.7% to HKD 1,986.7 million in 2022 (2021: HKD 1,673.9 million), and gross profit increased by 55.7% to HKD 692.5 million (2021: HKD 444.7 million)[53] - The average selling price of lithium manganate increased by 130.3% to HKD 99,597 per ton in 2022 (2021: HKD 43,236 per ton), in line with the surge in lithium carbonate prices[35] Financial Performance Overview - Total revenue increased by 24.9% to HKD 16,031.9 million in 2022 (2021: HKD 12,830.8 million), while gross profit decreased by 41.3% to HKD 1,372.3 million (2021: HKD 2,338.9 million), with a gross margin of 8.6% (2021: 18.2%)[46] - The company's operating profit decreased by 59.0% to HKD 514.2 million in 2022, compared to HKD 1,254.1 million in 2021, mainly due to reduced gross profit contribution from electrolytic manganese metal products[28] - The company's attributable profit to owners was HKD 336.1 million in 2022 (2021: HKD 454.6 million)[46] - The company's profit attributable to owners for 2022 was HK$336.1 million, a decrease from HK$454.6 million in 2021[60] - Revenue increased by 24.9% to 16,031,885 thousand HKD in 2022 compared to 12,830,762 thousand HKD in 2021[175] - Gross profit decreased by 41.3% to 1,372,332 thousand HKD in 2022 from 2,338,939 thousand HKD in 2021, with gross margin dropping to 8.6% from 18.2%[175] - Operating profit fell by 59.0% to 514,169 thousand HKD in 2022 from 1,254,104 thousand HKD in 2021[175] - Profit before tax decreased by 27.7% to 394,879 thousand HKD in 2022 from 546,344 thousand HKD in 2021[175] - Net profit attributable to the company's owners dropped by 26.1% to 336,091 thousand HKD in 2022 from 454,583 thousand HKD in 2021[175] Impairment Losses and Adjustments - The company recognized non-cash impairment losses of HKD 119.7 million for property, plant, and equipment, and mining rights in 2022 (2021: HKD 236.4 million)[46] - The company adjusted its investment and expansion plans for the Changgou and Waifu manganese mines, resulting in impairment losses of HKD 70.9 million and HKD 48.8 million, respectively[40][43] - The company recognized a non-cash impairment loss of 119.7 million HKD related to mining rights in 2022[164] Financial Position and Liquidity - Cash and bank balances (including pledged deposits) increased to HK$1,606.3 million in 2022 from HK$1,245.9 million in 2021, while borrowings increased to HK$4,460.4 million from HK$4,113.9 million[64] - Net current liabilities decreased to HK$746.3 million in 2022 from HK$1,584.9 million in 2021, primarily due to obtaining more long-term loans[67] - Fixed-rate and floating-rate borrowings were HK$3,534.7 million and HK$925.7 million respectively in 2022, with fixed-rate loans carrying interest rates between 1.40% and 9.3%[69] - The company's financial expenses remained stable at HK$221.3 million in 2022, compared to HK$236.0 million in 2021[83] - The net debt ratio decreased to 90.1% as of December 31, 2022 (2021: 92.3%)[46] - The group's quick ratio improved to 0.63 in 2022 from 0.60 in 2021, while the net debt ratio decreased to 90.1% from 92.3%[126] - The company's current liabilities exceeded its current assets by HKD 746.3 million as of December 31, 2022, raising liquidity risk concerns[128] - The company successfully renewed or obtained new bank loans amounting to HKD 3,145.5 million from January 1, 2023, to September 30, 2023, addressing liquidity concerns[128] Tax and Dividend Information - The effective tax rate for 2022 was 13.3%, lower than the statutory corporate income tax rate due to the utilization of unrecognized tax loss balances by certain profitable subsidiaries[84] - The company did not recommend any dividend for the year ended December 31, 2022, consistent with 2021[85] - The company did not recommend the payment of any dividends for the year[170] Operational and Strategic Developments - The company is exploring ways to improve its borrowing structure, including short-term and medium-term notes, to optimize interest rates and repayment terms[93] - The group is negotiating a repayment schedule with Customer A and preparing for legal action to expedite the recovery of overdue amounts[108] - The group faces interest rate risk due to fluctuations in the China Loan Prime Rate and LIBOR, which could increase financial expenses if rates rise[108] - The group uses interest rate swap contracts to manage interest rate risk by converting some floating-rate USD borrowings to fixed rates[108] - The group's operations in China and Gabon face foreign exchange risks, with revenues and expenses denominated in RMB, USD, and Central African CFA francs[111] - The group aims to become a leading global manganese producer with a focus on improving operational efficiency and profitability[112] - The electrolytic manganese division faces challenges due to oversupply and rising production costs in the steel industry, leading to reduced demand[114] - The company is optimistic about China's economic recovery following the relaxation of COVID-19 quarantine measures and lockdown policies at the end of 2022[133] - The company focuses on five business segments: ore and traditional manganese-related products, new energy materials, alloy materials, supply chain logistics, and solid waste resource utilization[134] - The company is actively developing new energy battery materials, including electrolytic manganese dioxide and lithium manganate, to expand applications in electric vehicles and other tools[144] - The company established an independent investigation committee on March 31, 2023, to address audit concerns[149] - The company's two subsidiaries were recognized as Guangxi Digital Workshops and Guangxi Green Manufacturing Enterprises[157] - The company was selected as one of the first batch of manufacturing single champion demonstration enterprises in Guangxi in 2022[189] - The company's high-performance lithium-ion battery cathode material key technology and industrialization project won the second prize of the Guangxi Autonomous Region Science and Technology Progress Award in 2022[189] Asset and Liability Changes - Prepayments, other receivables, and other assets classified as current assets decreased by 21.7% to HK$1,380.9 million in 2022[65] - Other payables and accrued expenses decreased by 30.7% to HK$1,521.4 million in 2022, mainly due to reduced advances from trade business customers and decreased VAT payable in China[66] - Inventory increased by 32.2% to HKD 1,849.1 million in 2022, driven by higher inventory and production materials at the Bembélé manganese mine in Gabon[89] - Trade payables and notes increased by 65.3% to HKD 2,148.9 million in 2022, mainly due to increased production and trade-related payables[90] - Total borrowings increased to HKD 4,460.4 million in 2022, with HKD 3,266.9 million due within one year[93] - Total assets increased to 11,450,624 thousand HKD in 2022 from 10,984,343 thousand HKD in 2021[185] - Total liabilities increased to 8,618,338 thousand HKD in 2022 from 8,248,510 thousand HKD in 2021[185] Corporate Governance and Auditing - The company appointed PricewaterhouseCoopers as its new auditor effective October 19, 2022, following the resignation of Ernst & Young[135] - The company is addressing internal control deficiencies identified in an independent review to meet the Hong Kong Stock Exchange's resumption guidance[139] - The group's financial statements for 2021 were restated due to underreporting of reserves and overreporting of non-controlling interests[118][119] - The group may incur additional income tax expenses and related late payment fees due to past tax planning arrangements for certain subsidiaries[121] Other Financial Metrics - EBITDA for 2022 decreased by 20.8% to 1,048.0 million HKD from 1,323.0 million HKD in 2021[164] - Other income and gains increased by 15.7% to 183.2 million HKD in 2022, primarily due to foreign exchange gains[166] - The company holds 33% equity in an associate company, with outstanding bank loans secured by the associate's land, property, plant, and equipment[95] - The company used HK$7.2 million in 2022 to pay the Chinese government for the extension of mining rights for the Changgou Manganese Mine, with annual payments of approximately RMB 6.2 million required from 2023 to 2032[63] - Total funds raised from the IPO amounted to HKD 1,983 million, with HKD 1,894 million (95.5%) utilized as of December 31, 2022[86] - The company's registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda[155] - The company's headquarters in Hong Kong is located at Room A02, 35/F, United Centre, 95 Queensway, Admiralty, Hong Kong[155]