Company Overview - Tibet Water Resources Ltd. is a leading manufacturer of high-end fast-consuming beverages in Tibet, primarily focusing on water and beer segments[6]. - The Group's beer segment, "Tibet Green Barley Beer," was acquired in 2013 and is brewed using high-quality highland barley and local spring water[8]. - The water business segment covers both Mainland China and Hong Kong markets, with products available in convenience stores of Sinopec and PetroChina gas stations[7]. Product Recognition and Quality - The "Tibet 5100 Glacial Spring Mineral Water" has been recognized as a quality mineral water source in China and awarded the best mineral water at a global bottled water congress[7]. - The Group has developed diversified packaging for the 5100 series, including the Diamond Series and Blue Cap Series, enhancing product offerings[7]. - The company adheres to stringent quality control to provide healthy specialty products globally, aiming to be a world-class premium beverage manufacturer[9]. Financial Performance - The financial highlights and performance metrics for 2020 are detailed in the annual report, showcasing the Group's growth and market position[3]. - The Group's operating revenue for the year ended December 31, 2020, was RMB 493 million, a decrease of approximately 31.7% compared to RMB 721 million in the same period last year[28]. - Profit attributable to shareholders was RMB 16.97 million, a significant recovery from a loss of RMB 745 million in 2019[28]. - The Group's revenue for 2020 was RMB 493 million, a decrease of 31.7% compared to RMB 721 million in 2019[44]. - Operating profit for 2020 was RMB 81 million, down 39.0% from RMB 133 million in 2019[44]. - Adjusted EBITDA for 2020 was RMB 162 million, reflecting a decline of 29.2% from RMB 228 million in 2019[44]. - The gross profit margin decreased to 43.6% in 2020, down 12.4 percentage points from 56.0% in 2019[44]. Market Strategy and Future Outlook - Future outlook includes expanding product lines and enhancing market penetration in both domestic and international markets[9]. - The Group plans to leverage its logistics network and new retail sales model to enhance customer service coverage, integrating sales channels with Sinopec and PetroChina gas stations[33]. - The Group aims to develop new high-quality sales channels in 2021, focusing on e-commerce and gas station channels to reach more end consumers[34]. - The Group plans to expand its sales channels through e-commerce and gas station partnerships in 2021, targeting significant growth in the beer business[36]. - The Group remains confident in returning to robust growth in the long term despite the challenges posed by the COVID-19 pandemic[41]. Environmental and Social Responsibility - The Group emphasizes environmental protection and has established the "5100 Tibet Education Development Specialty Grant" to support local education in Tibet[35]. - The Group actively supports local Tibetan pastoral farmers and initiatives aimed at poverty alleviation to improve livelihoods in Tibet[35]. - The Group aims to minimize environmental impact through waste management procedures and adheres to low carbon emission principles[132]. - The Group has established a "water protection zone" of 60 square kilometers around its water source to maintain product quality and safety[131]. Challenges and Risks - The bottled water and beer industry in China is highly competitive, with increasing competition affecting market share and profit margins[146]. - The Group's reliance on a limited water source poses risks if the quality of the spring water is adversely affected[147]. - Financial risks include market risk, credit risk, and liquidity risk, with a focus on minimizing adverse effects on financial performance[154]. - Any macroeconomic changes in China could negatively impact consumer spending on beverages, affecting the Group's business[144]. Governance and Management - The company has a strong governance structure with experienced directors overseeing various committees[200]. - The management team has a diverse background in finance, regulatory affairs, and industry leadership, enhancing the company's strategic decision-making capabilities[200]. - The company is committed to maintaining high standards of corporate governance and risk management through its board structure[200].

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 222,986,000, a decrease of 46% compared to RMB 409,785,000 in 2019[16] - Profit attributable to the owners of the Company was RMB 50,397,000, down 66% from RMB 146,981,000 in the previous year[16] - Basic and diluted earnings per share decreased to 2.01 RMB cents, a decline of 66% from 5.87 RMB cents in 2019[16] - The Group's net profit decreased by RMB 97 million or 66% compared to the same period last year[24] - The profit for the half-year period decreased by RMB 97 million from RMB 147 million in the first half of 2019 to RMB 50 million in the first half of 2020[43] - Total comprehensive income for the half-year was RMB 44,872,000, down 69.0% from RMB 144,834,000 in 2019[112] - Gross profit for the half-year was RMB 101,716,000, a decline of 56.3% compared to RMB 232,373,000 in the previous year[110] - Operating profit fell to RMB 29,660,000, down 80.7% from RMB 153,668,000 in 2019[110] Revenue Breakdown - The revenue generated from the water business segment was RMB 83 million, reflecting a decrease of 68% compared to the first half of 2019[25] - Revenue from the "5100 Glacial Water" products and "Gesang Spring" products decreased by 60% and 79%, respectively, compared to the first half of 2019[25] - The beer business segment generated approximately RMB 139 million in revenue, representing a decrease of 10% compared to the first half of 2019[25] - Total segment revenue for the six months ended June 30, 2020, was RMB 222,986,000, with the water segment contributing RMB 83,349,000 and the beer segment contributing RMB 138,482,000[193] Sales Volume and Pricing - Sales volume for the period was 39,469 tonnes, representing a 29% decrease from 55,289 tonnes in 2019[16] - In the first half of 2020, the total sales volume of the Group's products was 39,469 tonnes, a decrease of 40% compared to 55,289 tonnes in the first half of 2019[28] - The average selling price of water products was RMB 3,920 per tonne, down 36% from RMB 6,094 per tonne in the first half of 2019[28] Assets and Liabilities - Total assets as of June 30, 2020, increased to RMB 4,320,401,000, reflecting a 1% growth from RMB 4,262,406,000 at the end of 2019[16] - Total liabilities increased to RMB 1,573,470,000, up from RMB 1,560,367,000 at the end of 2019[108] - As of June 30, 2020, net trade receivables amounted to RMB 315 million, an increase from RMB 259 million as of December 31, 2019[43] - The Group's cash and cash equivalents decreased by approximately RMB 303 million from RMB 453 million as of December 31, 2019, to RMB 150 million[48] Cost Management - Selling and distribution costs decreased by approximately 9% to approximately RMB 40 million from RMB 44 million in the first half of 2019[32] - Administrative expenses decreased by approximately 25% from RMB 44 million in the first half of 2019 to RMB 33 million in the first half of 2020[32] - The gross profit margin of the Group was 46%, a decrease of 11 percentage points compared to the first half of 2019[28] - The gross profit margin for the water business segment was 53%, down 8 percentage points from the first half of 2019[28] - The gross profit margin for the beer business segment decreased by 9 percentage points to 41% in the first half of 2020[28] Impairment and Provisions - Impairment loss on trade receivables increased from RMB 2 million in the first half of 2019 to RMB 10 million in the first half of 2020[33] - The Group recognized an additional provision for impairment loss of trade receivables of RMB 10 million in the first half of 2020, compared to RMB 2 million in the first half of 2019[43] - Net impairment losses on financial assets for the period were RMB 10,088,000, with the water segment reporting RMB 9,771,000 and the beer segment reporting RMB 317,000[193] Cash Flow and Financing - Cash inflows from operating activities were RMB 32 million, while cash outflows from investing activities were approximately RMB 355 million in the first half of 2020[48] - The company reported a net cash flow from operating activities of RMB 31,878,000 for the first half of 2020, a decrease of 87.3% compared to RMB 251,091,000 in the same period of 2019[117] - The company incurred net cash flows used in investing activities of RMB 355,482,000, which is a significant increase from RMB 160,424,000 in the previous year[117] - The Group's bank borrowings included RMB 290 million secured by a 35% equity interest in Tibet Tiandi Green Beverage Development Co., and RMB 100 million secured by factory buildings and land use rights[67] Strategic Initiatives - The Group is actively resuming production and sales, leveraging existing resource and logistics advantages[24] - The Group will continue to leverage existing advantages in resources, marketing channels, and logistics to strengthen its strategic position in Tibet's water industry[92] - The Group plans to intensify strategic cooperation with Sinopec and PetroChina to fully utilize the advantages of Highland Natural Water and Tibet Shannan Yalaxiangbu's water resources[92] - The Group aims to promote high-quality water from Tibet to numerous households through additional strategic cooperation[92] Governance and Compliance - The audit committee reviewed the accounting principles and practices adopted by the group for the interim results of the first half of 2020[103] - The company has complied with the Corporate Governance Code provisions for the first half of 2020, with one noted deviation regarding the independence of a director[103] - The company has adopted the Model Code for Securities Transactions by Directors, with all directors confirming compliance for the first half of 2020[103]

| --- | --- | |--------------------------------------------------------------------------------------------|-------| | | | | | | | TOPS | | | Tibet Water Resources Ltd. (Incorporated in the Cayman Islands with limited liability) | | | (於閑曼群島註冊成立的有限公司) Stock code 股份代號：1115 | | | | | | Annual Report 2019 | | | | | 2 0100 2100 TIBET TIBET a Read S one | --- | --- | --- | --- | --- | --- | |-------|-------|-------|--------------|-----------------------------------------------------------------|-------| | | | | ...

Financial Performance - Revenue for the first half of 2019 was RMB 409.8 million, a decrease of 8% compared to RMB 447.2 million in the first half of 2018[5] - Profit attributable to the owners of the Company was RMB 147.0 million, down 14% from RMB 170.6 million in the same period last year[6] - Total sales volume decreased to 55,289 tonnes, a decline of 7% from 59,181 tonnes in the first half of 2018[6] - Revenue from the water business segment was RMB 257 million, representing a 6% decrease compared to the first half of 2018[22] - Revenue from the beer business segment was RMB 153 million, a decrease of 12% compared to the same period last year[23] - Profit for the period decreased by 14% to RMB 147 million from RMB 171 million in the first half of 2018[54] - Gross profit decreased to RMB 232,373, down 8.26% from RMB 253,354 in the previous year[138] - Operating profit for the half-year was RMB 153,668, a decline of 13.45% from RMB 177,575 in 2018[138] - Earnings per share decreased to 5.87 RMB cents, down from 6.81 RMB cents in 2018, representing a decline of 13.82%[138] - Total comprehensive income for the half-year was RMB 144,834,000, a decline of 13.0% compared to RMB 166,393,000 in the previous year[33] Sales and Volume - Total sales volume in the first half of 2019 was 55,289 tonnes, a decrease of 6% compared to 59,181 tonnes in the same period of 2018[31] - Water product sales volume increased by 4% to 33,623 tonnes, while beer product sales volume decreased by 19% to 21,666 tonnes compared to the first half of 2018[31] - The average selling price decline impacted the revenue of the water business segment, particularly the "Gesang Spring" products, which saw a 25% revenue decrease[22] - The beer products' sales volume decreased by 19% due to strong competition in the limited market in Tibet[20] - Revenue from Highland Natural Water increased by 9% to RMB 275 million, with sales volume rising by 11% to 124,556 tonnes[47] Assets and Liabilities - Total assets increased by 9% to RMB 5.35 billion from RMB 4.91 billion as of June 30, 2019[9] - Equity attributable to owners of the Company rose by 4% to RMB 3.60 billion from RMB 3.46 billion[10] - As of June 30, 2019, net trade receivables increased to RMB396 million from RMB290 million as of December 31, 2018, primarily due to increased trade receivables from institutional clients and distributors[62] - As of June 30, 2019, cash and cash equivalents increased by RMB213 million to RMB490 million, mainly due to cash inflows from operating activities of RMB285 million[72] - As of June 30, 2019, inventories decreased to RMB53 million from RMB99 million as of December 31, 2018, mainly due to a decrease in the balance of raw materials[68] - Trade and notes payables increased to RMB252 million as of June 30, 2019, compared to RMB79 million as of December 31, 2018, due to procurement being mainly settled in the form of bills[76] - Total current liabilities rose to RMB 1,457,931, an increase of 23.93% from RMB 1,176,658 in the previous year[136] Costs and Expenses - Selling and distribution costs decreased by 17% to RMB 44 million, while administrative expenses increased by 13% to RMB 44 million[40] - Income tax expense increased by RMB 2 million to RMB 17 million, with an effective tax rate of 10% in the first half of 2019[53] - Finance costs increased by RMB 11 million to RMB 29 million, while finance income rose by RMB 12 million to RMB 24 million[48] Investments and Financing - The Group's total investment in Shanghai Maikaite Network Technology Co., Ltd. was RMB 5 million, accounted for as financial assets at fair value through profit or loss[90] - A bank loan of RMB 290 million was secured with a pledge of 35% of Tiandi Green's equity interests as of June 30, 2019[93] - The Group's convertible bonds with a par value of HKD 525,000,000 matured on June 24, 2019, with no bond holders exercising the conversion option[152] - By June 30, 2019, the Group had repaid principal of RMB 94,050,000, and by July 16, 2019, the remaining balance of RMB 382,277,000 was fully repaid, including principal of RMB 366,589,000 and interest of RMB 15,688,000[152] Corporate Governance - The Company has complied with the Code on Corporate Governance Practices during the first half of 2019, with no incidents of non-compliance noted[1] - The audit committee, consisting of three independent non-executive Directors, reviewed the accounting principles and practices adopted by the Group for the first half of 2019[1] - PricewaterhouseCoopers confirmed that nothing has come to their attention that causes them to believe that the interim financial information is not prepared in accordance with International Accounting Standard 34[130] Future Outlook and Strategy - The Group intends to further invest in Shannan Yalaxiangbu to stimulate the rapid development of Tibet's natural drinking water industry and improve its strategic position in the region[110] - The development goal of Tibet's natural drinking water industry is to increase production capacity to 5 million tonnes by 2020 and 10 million tonnes by 2025[115] - The Group will assess its production capacity periodically and consider increasing it to meet future development demands[103] - The Group's compound annual revenue growth rate is projected to be between 22.8% and 28.0% from 2019 to 2021, and between 7.3% and 22.2% from 2022 to 2026[165] Financial Risks - The Group's financial activities expose it to various financial risks, including market risk, credit risk, and liquidity risk[172] - There have been no changes in the risk management policies since the year-end[173] - The interim financial information does not include all financial risk management disclosures required in the annual financial statements[173]

| --- | --- | |---------------------------------------------------------------------------------------------------------------------------|-------| | | | | | | | TOPS | | | Tibet Water Resources Ltd. (Incorporated in the Cayman Islands with limited liability) (於閑曼群島註册成立的有限公司) | | | Stock code 股份代號：1115 | | | | | | Annual Report 2018 年 報 | | | | | PREMIUM GLACIER MINERAL WATER IN THE MARKET 市場上的高端冰川礦泉水 CONTENTS 目錄 STAKEHOLDERS INFORMATION 權益人資料 Corporate Profile 2 公司簡介 Financial Calendar 4 財務日誌 GROUP INFORMA ...