Financial Performance - The company's revenue for the year ended December 31, 2022, was HKD 3,648,680, a decrease of 5.5% compared to HKD 3,859,530 in 2021[2] - Gross profit increased to HKD 148,032, up 67.7% from HKD 88,279 in the previous year[2] - The net profit attributable to the company's owners for the year was HKD 514,915, representing a significant increase of 189.5% from HKD 178,498 in 2021[2] - Basic and diluted earnings per share for 2022 were both 7.18 HKD cents, compared to 2.70 HKD cents in 2021[2] - Total comprehensive income for the year was HKD 412,533, up from HKD 156,135 in 2021[3] - The company reported a total tax expense of HKD 52,228 in 2022, compared to HKD 18,066 in 2021[29] - The company's 2022 profit was 515 million HKD, a 188% increase from 178 million HKD in 2021[68] - Total revenue for 2022 was 3,649 million HKD, a decrease of 5% from 3,860 million HKD in 2021, primarily due to reduced procurement and sales volume[68] Assets and Liabilities - Non-current assets increased to HKD 4,418,993 from HKD 4,416,372 in the previous year[4] - Current assets rose to HKD 2,446,714, compared to HKD 1,933,203 in 2021[4] - Total assets amounted to HKD 6,865,707, an increase from HKD 6,349,575 in 2021[4] - The total liabilities as of December 31, 2022, were HKD 3,517,568, down from HKD 4,194,352 in 2021[17] - Total liabilities decreased by 16% to HKD 3,518 million as of December 31, 2022, from HKD 4,194 million in 2021, primarily due to repayment of shareholder loans[73] - Current liabilities decreased by 45% to HKD 2,064 million as of December 31, 2022, from HKD 3,754 million in 2021, mainly due to repayment of loans to the direct holding company[77] - Non-current liabilities increased by 230% to HKD 1,454 million as of December 31, 2022, from HKD 440 million in 2021, primarily due to loans drawn by CGNM UK during the reporting period[78] Inventory and Sales - The company reported a significant increase in inventory, which rose to HKD 2,048,471 from HKD 1,743,152 in 2021[4] - Sales of goods amounted to HKD 3,645,362 in 2022, down from HKD 3,856,085 in 2021[27] - The group achieved natural uranium trading revenue of HKD 3,645 million for the year ended December 31, 2022, a decrease of 5% compared to 2021[50] - Revenue from equity natural uranium products sold from Xie Company and Ao Company was HKD 1,341 million, an increase of 120% from HKD 611 million in 2021[50] Production and Operations - The total uranium extraction by the company reached 959 tons, achieving 98.4% of the annual plan, with a total production of 940 tons after accounting for processing losses[46] - The company successfully completed the feasibility study for the PLS project, indicating a mine life of 10 years and a post-tax NPV of approximately CAD 1.204 billion[49] - The average grade of remaining geological reserves for the company's mines is 0.059% for the Xie mine and 0.0422% for the Yi mine[47] - The company maintained effective cost control, resulting in increased sales profits compared to 2021 due to rising uranium prices and currency depreciation[46] Strategic Initiatives - The company plans to continue its investment and trading in natural uranium resources, leveraging its 100% ownership of Beijing Zhongha Uranium and other strategic partnerships[41] - The company is currently assessing the impact of new accounting standards and their amendments on its financial reporting[10] - The company aims to enhance communication with Fission regarding technical support and feasibility studies in 2023[59] - The company is focused on expanding its uranium production capabilities in Kazakhstan[88] Market Trends - The global nuclear power market saw 423 operational reactors with a total installed capacity of 378,754 MWe by the end of 2022, highlighting the industry's growth potential[42] - The long-term uranium trade volume in 2022 was 43,846 tons, a 61.2% increase year-on-year, while spot trade volume decreased by 14.1% to 23,365 tons[45] - The natural uranium market is expected to continue its recovery trend in 2023, influenced by global energy security concerns and diversified supply strategies[56] Governance and Compliance - The company established an Environmental, Social, and Governance (ESG) committee on January 3, 2023[84] - The audit committee reviewed the group's accounting principles and practices, and the annual performance for the year ended December 31, 2022, was reviewed by the audit committee[84] Financing and Capital Management - The company completed a rights issue, raising a total of HKD 800 million, with a net financing amount of HKD 776 million after expenses[52] - The group's financing costs rose by 24% to HKD 62 million in 2022 from HKD 50 million in 2021, attributed to an increase in average interest-bearing debt and rising USD interest rates[72] - The board of directors decided not to recommend any final dividend for the year-end 2022, similar to 2021, to retain sufficient funds for business development[83]

Financial Performance - The Group's revenue for the six months ended June 30, 2022, was approximately HK$2,413 million, representing an increase of approximately 31% compared to the same period in 2021[14]. - Profit attributable to the owners of the Company for the Reporting Period was approximately HK$355 million, reflecting an increase of approximately 886% compared to the corresponding period in 2021[14]. - Basic earnings per share for the Reporting Period amounted to approximately HK5.28 cents, representing an increase of approximately 860% compared to the same period in 2021[14]. - The Group recorded total revenue of HK$2,413 million for the six months ended June 30, 2022, representing a 31% increase compared to HK$1,845 million in the same period of 2021[48]. - The Group's profit for the reporting period amounted to HK$355.12 million, representing a significant increase of 886% compared to the corresponding period in 2021[56]. - Profit before taxation increased to HK$414,167,000, compared to HK$42,869,000 in the previous year, reflecting a substantial growth[103]. - Total comprehensive income for the period attributable to owners of the Company was HK$278,166,000, compared to HK$43,090,000 previously[105]. - The gross profit margin increased to 8.11% in the first half of 2022, compared to 3.99% in the same period of 2021[45]. Market Conditions - The global economy has become more volatile due to the Russia-Ukraine conflict and contractionary monetary policy by the US Federal Reserve, impacting energy supply and prices[16]. - The energy supply situation is critical, with surging prices for electricity, oil, gas, and coal, leading to frequent supply shortages[16]. - The structural dilemma on the supply side and the global low-carbon development of energy resources is intensifying, posing challenges for national energy security[16]. Nuclear Energy Developments - The Company is focusing on the nuclear power industry, which is accelerating in response to these macroeconomic challenges[15]. - In February 2022, the European Commission passed a bill to classify nuclear power as a sustainable energy investment, significantly lowering the threshold for private investment in nuclear energy[18]. - France announced plans to construct six new nuclear reactors and conduct feasibility studies for an additional eight reactors, aiming to reduce energy consumption by 40% by 2050[19]. - The U.S. Department of Energy established a USD 6 billion Civil Nuclear Credit Program to prevent the premature retirement of nuclear power units[19]. - Belgium postponed its plan to abolish nuclear energy from 2025 to 2035[19]. - The UK plans to approve the construction of one nuclear reactor each year from 2023 to 2030, targeting a total installed capacity of 24 GWe by 2050, which is three times the current capacity[19]. - China approved the construction of six nuclear power units, marking a record high in recent years, with a total of 20 units approved since the relaunch of nuclear power in 2019[19]. - Korea aims to increase the share of nuclear energy in its energy mix to meet greenhouse gas emission reduction goals by 2030[19]. - The development of nuclear power in emerging countries is rising, and developed countries are adopting a more positive attitude towards nuclear energy, indicating a steady increase in market demand for natural uranium[20]. Sales and Revenue Generation - The company completed the sale of 684.0tU uranium products and 5.729 million pounds of U3O8 (approximately 2,204tU), generating trading revenue of approximately HK$2,411 million[23]. - A new sales framework agreement was signed with CGNPC-URC for the sale of natural uranium, with a minimum purchase quantity of 1,200tU per calendar year from January 1, 2023, to December 31, 2025[23]. - CGN Global entered into sales contracts for a total of 3.128 million pounds of natural uranium, with 70% from Europe and 30% from North America[24]. - The company delivered 5.729 million pounds of natural uranium, generating revenue of USD 222.4 million (approximately HK$ 1,725.0 million)[24]. Financial Position and Assets - The total assets of the Group as at 30 June 2022 were HK$7,060 million, reflecting an increase of 11% from HK$6,350 million as at 31 December 2021[56]. - The Group's current assets increased by 48% to HK$2,862 million as at 30 June 2022, up from HK$1,933 million as at 31 December 2021[60]. - The Group's equity attributable to the owners increased by 50% to HK$3,236 million as at 30 June 2022, compared to HK$2,155 million as at 31 December 2021[56]. - The Group's bank and cash balances increased significantly to approximately HK$1,272 million as at 30 June 2022, compared to HK$81 million as at 31 December 2021[60]. Cost and Expenses - The cost of sales amounted to HK$2,217 million, reflecting a 25% increase from HK$1,772 million in the corresponding period of 2021[50]. - Selling and distribution expenses decreased by 6% to HK$6.37 million, attributed to reduced storage costs for natural uranium inventories[53]. - Administrative expenses rose by 13% to HK$18.00 million, mainly due to increased withholding tax on UK interest[55]. - Finance costs for the Group were HK$24.00 million, representing a 31% increase compared to the same period in 2021[56]. Corporate Governance and Compliance - The Board does not recommend the payment of an interim dividend for this period[14]. - The Audit Committee reviewed the Group's unaudited financial statements for the six months ended June 30, 2022 and confirmed compliance with applicable accounting standards and legal requirements[90]. - The Company has adopted the Corporate Governance Code and has complied with all applicable code provisions during the Reporting Period[93]. Shareholder Information - The Company completed the issuance of 1.0 billion new ordinary shares, raising total proceeds of HK$ 800 million[33]. - The Company raised HK$800 million by issuing 1 billion shares at a price of HK$0.80 per share, resulting in a net financing amount of HK$776 million after expenses[34]. - As of June 30, 2022, CGNPC holds 4,405,057,558 shares, representing a 57.96% shareholding in the company[70]. - CGNPC-URC has an interest in 4,288,695,652 shares, accounting for 56.43% of the shareholding[70].

Financial Performance - Revenue for the year ended December 31, 2021, was HK$3,859,530,000, representing an increase of 35% from HK$2,862,226,000 in 2020[8] - Operating profit for 2021 was HK$246,247,000, up 11.5% from HK$220,855,000 in 2020[8] - Profit for the year attributable to owners of the Company was HK$178,498,000, an increase of 14.9% compared to HK$155,217,000 in 2020[8] - Total revenue for the Group was HK$3,860 million in 2021, reflecting a 35% increase from HK$2,862 million in 2020, primarily due to expanded sales and increased annual trade volume[86] - The Group's profit for 2021 was HK$178 million, representing a year-on-year increase of 15% compared to HK$155 million in 2020[85] - EBITDA for 2021 was HK$248.09 million, up from HK$222.78 million in 2020[82] - The gross profit margin decreased to 2.29% in 2021 from 7.08% in 2020[82] - The net profit margin for 2021 was 4.62%, down from 5.42% in 2020[82] Assets and Liabilities - Total assets as of December 31, 2021, amounted to HK$6,349,575,000, a significant rise of 51.6% from HK$4,187,787,000 in 2020[9] - Total liabilities increased to HK$4,194,352,000 in 2021, compared to HK$2,160,727,000 in 2020, reflecting a growth of 94%[9] - Total current liabilities rose by 209% to HK$3,754 million as of December 31, 2021, from HK$1,214 million in 2020, largely due to the drawdown of a shareholder loan to finance the acquisition[121] - The Group's net current assets were HK$-1,821 million as of December 31, 2021, a decrease of 187% from HK$2,100 million as of December 31, 2020, primarily due to financing the acquisition[109] - The total non-current assets increased by 405% to HK$4,416 million as of December 31, 2021, compared to HK$874 million in 2020, mainly due to the completion of the acquisition of 49% equity interest in Ortalyk[117] Market and Industry Trends - The ongoing pandemic and geopolitical tensions have increased the volatility of natural uranium prices, presenting challenges for natural uranium trade[13] - The broader consensus among countries on the role of nuclear power in achieving carbon neutrality presents new development opportunities for the company[15] - The natural uranium market is expected to continue its recovery in 2022, driven by long-term demand from financial investors who plan to hold their positions without short-term reductions[65] - The nuclear power market is experiencing a real recovery momentum, driven by increased long-term demand from nuclear power plant owners[64] Corporate Governance and Management - The Company is committed to enhancing its corporate governance and environmental, social, and governance (ESG) practices[3] - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code during the reporting period[158] - The Board currently comprises seven Directors, including two Executive Directors (EDs), two Non-Executive Directors (NEDs), and three Independent Non-Executive Directors (INEDs)[167] - The Company has established policies to ensure compliance with legal and regulatory requirements, including the Corporate Governance Code[175] - The Board is responsible for formulating the overall strategy and policy of the Group, ensuring sufficient capital and management resources for implementation, and compliance with legal requirements[170] Strategic Initiatives and Future Plans - The Company aims to be one of the top suppliers of natural uranium resources for nuclear power plants, focusing on the development and trade of these resources[3] - The management discussed future expansion strategies and potential market opportunities in the nuclear energy sector[3] - The company plans to enhance production and cost control at the Central Mynkuduk Deposit and Zhalpak Deposit to achieve more investment income[15] - The Company aims to actively seek new investment opportunities in high-grade uranium resources amid ongoing industry recovery[15] - The Company is committed to expanding its natural uranium equity production and securing higher returns on investments while exploring new trading opportunities[13] Risk Management - The board is focused on strengthening risk management and internal control systems to identify potential risks and respond effectively to unexpected situations[14] - A comprehensive risk management system was effectively implemented in 2021, with 17 risk warning and control indexes established for monitoring[74] - The Company is focusing on risk management, particularly in relation to operational risks in Kazakhstan and fluctuations in uranium prices[78] Investor Relations - The company received increased attention from investors, including significant inquiries and investments from international funds[11] - The North Shore Global Uranium Mining ETF increased its holdings in the company by 197.54 million shares, indicating growing investor interest[57] - Throughout the year, the company released 25 announcements, including 6 voluntary announcements, demonstrating transparency and communication with stakeholders[58] Acquisitions and Investments - In 2021, the company successfully acquired a 49% interest in Ortalyk, securing more natural uranium resources and expanding its interests in Kazakhstan, a leading natural uranium production area[11] - The company acquired a 49% interest in Ortalyk from Kazatomprom for approximately US$435 million, contributing 20,700tU of equity resources to the Group[50] - The Company entered into share subscription agreements to issue 1 billion new shares at HK$0.80 per share, expecting net proceeds of approximately HK$776 million for general working capital and uranium resource acquisitions[51] Production and Operations - The company closely monitored and ensured the successful completion of the annual production plan and various operational targets despite the pandemic's impact[11] - The total uranium extracted from Semizbay Mine and Irkol Mine was 975 tons, with a total annual natural uranium production of 961 tons after processing losses[40] - The Central Mynkuduk Deposit extracted 1,600 tons of uranium, resulting in a total natural uranium production of 1,579 tons after processing losses[43] Board Composition and Director Experience - The executive director and CEO, Mr. An Junjing, has extensive experience in the nuclear power sector, having joined the Group in 2018[136] - The CFO, Ms. Xu Junmei, has a strong background in finance, having worked at KPMG and held various positions within the CGN Group since 2013[139] - Mr. Yin Xiong has been a non-executive director since November 2018 and has extensive experience in management positions within CGN Group and other organizations[143] - The Company Secretary plays a crucial role in ensuring Board meetings are convened according to laws and regulations[191]

[Financial Highlights](index=5&type=section&id=Financial%20Highlights) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) The company's 2020 revenue grew 37.8% to HKD 2.86 billion, but profit for the year slightly decreased to HKD 155 million, while total assets expanded 35.3% to HKD 4.19 billion, largely due to increased liabilities Operating Results (Continuing Operations) | Metric | 2020 (Thousand HKD) | 2019 (Thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 2,862,226 | 2,076,688 | +37.8% | | **Operating Profit** | 220,855 | 196,638 | +12.3% | | **Profit Before Tax** | 179,966 | 176,172 | +2.2% | | **Profit for the Year** | 155,217 | 160,009 | -3.0% | | **Profit Attributable to Owners of the Company** | 155,217 | 160,009 | -3.0% | Financial Position | Metric | 2020 (Thousand HKD) | 2019 (Thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Assets** | 4,187,787 | 3,095,366 | +35.3% | | **Total Liabilities** | 2,160,727 | 1,151,125 | +87.7% | | **Equity Attributable to Owners of the Company** | 2,027,060 | 1,944,241 | +4.3% | [Chairman's Statement](index=6&type=section&id=Chairman%27s%20Statement) The Chairman noted that despite the pandemic's impact in 2020, the downstream power market's rigid demand showed resilience in the uranium industry, leading to an overall increase in natural uranium prices, while the company made substantial progress on a new uranium mining project in Kazakhstan and achieved significant profit growth in natural uranium sales - In 2020, the pandemic led to a contraction in global uranium production capacity and reduced supply, resulting in an overall upward trend in natural uranium prices and increased international trade activity[14](index=14&type=chunk) - The company made substantial progress in advancing a new uranium mining project in Kazakhstan, reaching a framework agreement by the end of 2020 to lock in the project's closing timeline[14](index=14&type=chunk) - Over the past five years, the company achieved "three expansions": expanded equity assets (acquiring **49%** of Semizbay-U and **19.99%** of Fission), expanded business scale (acquiring CGN Global), and expanded capital scale (introducing Fosun Group as a strategic investor), with total assets nearly doubling to over **HKD 4 billion**[15](index=15&type=chunk)[16](index=16&type=chunk)[18](index=18&type=chunk) - Looking ahead to the "14th Five-Year Plan," the company will pursue an "investment, financing, production, and sales" strategy, aiming to steadily control more high-quality global uranium resources, form a rational project pipeline, and enhance international trade profitability[19](index=19&type=chunk) [Chief Executive Officer's Statement](index=10&type=section&id=Chief%20Executive%20Officer%27s%20Statement) The CEO reviewed the main achievements of 2020, noting that despite pandemic challenges, the company completed all operational tasks, with natural uranium sales volume, revenue, and average delivery price all increasing, though profit attributable to owners of the company slightly decreased 2020 Key Performance Indicators | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Natural Uranium Sales Volume** | 4,756 tU | 3,696 tU | | **Revenue** | HKD 2.862 billion | HKD 2.077 billion | | **Weighted Average Delivery Price** | USD 29.8/lb | USD 27.8/lb | | **Profit Attributable to Owners of the Company** | HKD 155 million | HKD 160 million | | **Basic Earnings Per Share** | 2.35 HK cents | 2.42 HK cents | - The operating uranium mining project (Semizbay-U) saw a **24%** decrease in annual production to **733 tU** due to the pandemic and production cuts, but gross profit increased due to rising uranium prices and cost control[28](index=28&type=chunk)[29](index=29&type=chunk) - The exploration uranium mining project (Fission) completed two rounds of financing, raising approximately **CAD 24.07 million**, providing funding for its PLS project's feasibility study[30](index=30&type=chunk) - The natural uranium trading business (CGN Global) seized market opportunities, with delivery volume increasing by **34%** year-on-year, achieving sales revenue of **USD 313.9 million**, a **44%** increase year-on-year, becoming a new driver for annual performance growth[30](index=30&type=chunk) - Progress was made on the new uranium mining acquisition project in Kazakhstan, with an agreement in principle reached with Kazatomprom, planning to complete the closing by June 30, 2021, which will significantly increase the company's attributable sales volume[30](index=30&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=14&type=section&id=BUSINESS%20REVIEW) This section reviews the operating environment in 2020, analyzing global and Chinese nuclear power market trends and natural uranium supply-demand dynamics, noting steady progress in global nuclear power construction and a significant decrease in global natural uranium production due to the pandemic, leading to rising spot prices - As of the end of 2020, there were **443** operational nuclear power units globally, with **5** new units connected to the grid, **4** new units starting construction, and **6** units shut down in 2020[32](index=32&type=chunk)[34](index=34&type=chunk) - In 2020, China had **49** operational nuclear power units, with nuclear power generation reaching **366.243 billion kWh**, accounting for **4.94%** of the national total power generation, a **5.02%** increase year-on-year[39](index=39&type=chunk)[40](index=40&type=chunk) - Affected by the pandemic, global natural uranium production in 2020 was approximately **47,000 tU**, a **17%** decrease from 2019, marking the lowest point since 2008, accounting for only **69%** of global demand[43](index=43&type=chunk) - Global natural uranium spot trading volume in 2020 was **35,503 tU**, a **43%** increase year-on-year, with spot prices rising from **USD 24-26/lb** at the beginning of the year to **USD 30/lb** by year-end, while long-term trade volume was approximately **21,560 tU**, a decrease of about **42%** year-on-year[44](index=44&type=chunk)[45](index=45&type=chunk) [Business Performance and Analysis](index=20&type=section&id=BUSINESS%20PERFORMANCE%20AND%20ANALYSIS) This section details the operating performance of each business segment, including the operating uranium mine Semizbay-U's production reduction, Fission's successful financing, the natural uranium trading business's revenue growth, and the ongoing acquisition of the new Kazakhstan uranium mining project - The operating uranium mine Semizbay-U (Semizbay-U) saw a **24%** reduction in total production due to the pandemic, but the company still secured a committed natural uranium sales volume of **588 tU**, consistent with 2019[49](index=49&type=chunk)[50](index=50&type=chunk) - The undeveloped uranium mine Fission completed two rounds of financing in 2020, raising **CAD 24.07 million**, providing funding for the feasibility study of its PLS project[52](index=52&type=chunk) Key Data for Natural Uranium Trading Business | Metric | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Natural Uranium Trading Revenue** | HKD 2.859 billion | HKD 2.073 billion | +38% | | **Sales from Semizbay-U** | HKD 425 million | HKD 377 million | +12.5% | | **CGN Global Sales Volume** | 4,168 tU | - | - | | **CGN Global Sales Revenue** | Approx. HKD 2.434 billion | - | - | - As of the end of 2020, the Group held natural uranium inventory of **3,142 tU**, with a weighted average cost of **USD 27.90/lb**; contracted but undelivered sales volume was **5,096 tU**, with a weighted average selling price of **USD 32.28/lb**[54](index=54&type=chunk) [Business Prospects](index=26&type=section&id=BUSINESS%20PROSPECTS) Looking ahead, the nuclear power market has broad prospects under the global carbon neutrality goal, especially in China, which plans to steadily advance the construction of 6 to 8 nuclear power units annually during the "14th Five-Year Plan" period, while the natural uranium market is expected to continue experiencing demand exceeding production, leading to further inventory depletion - China's government work report used the term "actively" to describe nuclear power development for the first time in ten years, expecting **6 to 8** units to be built annually during the "14th Five-Year Plan" period, reaching **70 GW** of operational nuclear power capacity by 2025[64](index=64&type=chunk)[65](index=65&type=chunk) - Global natural uranium supply is expected to rebound in 2021 but will likely not return to pre-pandemic levels, with demand continuing to exceed production, leading to further inventory depletion[67](index=67&type=chunk) - The company's key operational development priorities for 2021 include: ensuring Semizbay-U completes its annual production plan; supporting Fission in completing its exploration plan; and strengthening engagement with end-customers to actively expand trading business[67](index=67&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - The company considers investment and acquisition of high-quality uranium resources as a lifeline for development, planning to complete the closing of the new Kazakhstan uranium mining project in the first half of 2021, while simultaneously seeking new investment opportunities in Central Asia, Africa, and other regions[70](index=70&type=chunk)[73](index=73&type=chunk) [Risk Identification and Management](index=29&type=section&id=RISK%20IDENTIFICATION%20AND%20MANAGEMENT) The company's comprehensive risk management system operated normally in 2020, with no major risk events, but it faces two main risks in 2021: international natural uranium trade risk due to pandemic challenges in obtaining contracts, and Semizbay-U's production and operation risk due to the uncontrolled pandemic in Kazakhstan - The company's main risks for 2021 include international natural uranium trade risk and Semizbay-U's production and operation risk[74](index=74&type=chunk) - To address trade risks, the company will optimize its exposure authorization mechanism, expand business in regions like Europe, and explore new business models such as UF6[75](index=75&type=chunk)[77](index=77&type=chunk) - To address production and operation risks, the company will assist Kazatomprom in epidemic prevention at the mine site and monitor daily production progress to ensure completion of production targets[76](index=76&type=chunk)[78](index=78&type=chunk) [Financial Performance and Analysis](index=31&type=section&id=FINANCIAL%20PERFORMANCE%20AND%20ANALYSIS) This section provides an in-depth analysis of the company's financial performance, noting that in 2020, the Group's revenue increased by 38% to HKD 2.86 billion, primarily driven by the natural uranium trading business, but profit for the year decreased by 3% to HKD 155 million due to a doubling of finance costs and a shift from profit to loss from associates, leading to a significant increase in the gearing ratio 2020 Key Financial Indicators | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Gross Profit Margin (%)** | 7.08 | 6.93 | | **Net Profit Margin (%)** | 5.42 | 7.71 | | **Profit Attributable to Owners of the Company to Revenue Ratio (%)** | 5.42 | 7.71 | | **Gearing Ratio (%)** | 106.59 | 59.21 | - Revenue increased by **38%** to **HKD 2.86 billion**, primarily due to CGN Global's vigorous expansion into international markets, leading to significant growth in natural uranium sales volume and revenue[86](index=86&type=chunk)[87](index=87&type=chunk) - Finance costs were **HKD 41 million**, a **100%** increase from **HKD 20 million** in 2019, mainly because CGN Global increased external borrowings to expand its business[99](index=99&type=chunk)[104](index=104&type=chunk) - Total assets increased by **35%** to **HKD 4.19 billion**, and total liabilities increased by **88%** to **HKD 2.16 billion**, primarily due to new bank borrowings for business expansion[106](index=106&type=chunk) - As of the end of 2020, the Group had undrawn credit facilities of **USD 857 million**, providing ample cash support for operations[128](index=128&type=chunk)[130](index=130&type=chunk) [Corporate Governance Report](index=44&type=section&id=Corporate%20Governance%20Report) [Biographies of Directors and Senior Management](index=44&type=section&id=BIOGRAPHIES%20OF%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) This section details the backgrounds and qualifications of the company's board members and senior management team, highlighting their extensive experience in company management, nuclear fuel systems, nuclear power operations, finance, law, and corporate management - Mr. Yu Zhiping, Chairman and Non-executive Director, joined the Group in 2011 and has over **30 years** of experience in company management and nuclear fuel system operations[135](index=135&type=chunk)[137](index=137&type=chunk) - Mr. An Junjing, Executive Director and Chief Executive Officer, joined the Group in 2018 and has extensive experience in nuclear power operation and management[138](index=138&type=chunk)[139](index=139&type=chunk) [Corporate Governance Structure](index=51&type=section&id=CORPORATE%20GOVERNANCE%20STRUCTURE) The company is committed to maintaining a high level of corporate governance, complying with all provisions of the Corporate Governance Code during the reporting period, with a Board of Directors comprising 8 members, including 3 independent non-executive directors, and established Audit, Remuneration, and Nomination committees, along with robust risk management and internal control systems - The Board of Directors comprises **8** directors, including **2** executive directors, **3** non-executive directors, and **3** independent non-executive directors, complying with listing rules[154](index=154&type=chunk)[156](index=156&type=chunk) - The Board has established an Audit Committee, a Remuneration Committee, and a Nomination Committee, with clear membership and responsibilities[183](index=183&type=chunk) - The company has established a comprehensive risk management system, referencing ISO31000:2009 standards, for effective risk identification, tracking, and control[204](index=204&type=chunk)[206](index=206&type=chunk) - As of the end of 2020, the Group had **15** employees, with **73%** holding intermediate or higher professional qualifications, and the company offers dual career development paths: management and professional technical[211](index=211&type=chunk)[212](index=212&type=chunk)[219](index=219&type=chunk) [Directors' Report](index=75&type=section&id=Directors%27%20Report) [Principal Activities and Dividend](index=75&type=section&id=PRINCIPAL%20ACTIVITIES%20AND%20DIVIDEND) The company primarily engages in natural uranium trading, property investment, and other investments, with the Board recommending a final cash dividend of **0.5 HK cents** per share for 2020, a decrease from **1 HK cent** in 2019, in line with its policy to allow shareholders to share in profits while retaining sufficient reserves for future growth - The company primarily engages in natural uranium resource investment and trading[227](index=227&type=chunk)[228](index=228&type=chunk) - The Board recommends a final cash dividend of **0.5 HK cents** per share for 2020, compared to **1 HK cent** per share in 2019[229](index=229&type=chunk) - The company's dividend policy stipulates that the final dividend distribution ratio shall not be less than **20%** of the distributable profit from continuing operations for the year[230](index=230&type=chunk) [Disclosure of Interests](index=81&type=section&id=DISCLOSURE%20OF%20INTERESTS) This section discloses the shareholdings of major shareholders, noting that as of December 31, 2020, controlling shareholder CGNPC, through its subsidiaries, collectively held approximately 67.69% of the company's shares, while the company's directors and chief executive did not hold any disclosable interests Major Shareholder Holdings (As of December 31, 2020) | Major Shareholder Name | Capacity | Number of Shares Held (Long Position) | Approximate Shareholding Percentage (Long Position) | | :--- | :--- | :--- | :--- | | **CGNPC** | Interest in controlled corporation | 4,467,887,558 | 67.69% | | **China Uranium Development** | Beneficial owner | 4,288,695,652 | 64.97% | | **Hong Kong Xinmao** | Beneficial owner | 659,400,000 | 9.99% | - As of December 31, 2020, the company's directors and chief executive did not hold any disclosable interests or short positions in the shares, underlying shares, and debentures of the company or its associated corporations[263](index=263&type=chunk) [Connected Transactions](index=84&type=section&id=CONNECTED%20TRANSACTIONS) During the reporting period, the company engaged in several continuing connected transactions, all reviewed and confirmed by independent non-executive directors and external auditors as compliant with relevant regulations and conducted within their annual caps, including natural uranium sales with controlling shareholder CGN Uranium Development Group, financial services with CGN Finance and Huasheng, and property leasing with CGN Uranium Development 2020 Key Continuing Connected Transactions | Counterparty | Nature of Transaction | Annual Cap | Actual Transaction Amount | | :--- | :--- | :--- | :--- | | **CGN Uranium Development** | Sale of Natural Uranium | HKD 1.96 billion | HKD 425 million | | **CGN Finance and Huasheng** | Deposit Services | USD 500 million | Max. daily deposit USD 159 million | | **CGN Uranium Development** | Property Leasing | RMB 3 million | RMB 3 million | - Independent non-executive directors and external auditors have reviewed and confirmed that all continuing connected transactions were conducted on normal commercial terms, were in the overall interest of the company and its shareholders, and did not exceed the annual caps[276](index=276&type=chunk) [Environmental, Social and Governance Report](index=93&type=section&id=Enterprise%20Environmental%2C%20Social%20and%20Governance%20Report) [Environmental Aspects](index=99&type=section&id=Environmental) The company is committed to environmental protection and sustainable development, strictly adhering to environmental regulations through measures such as equipment upgrades, using natural gas instead of diesel to reduce emissions, implementing energy and water-saving initiatives at mine sites, and promoting green office practices to minimize environmental impact 2020 Greenhouse Gas Emissions (tonnes CO2e) | Emission Category | UK and Hong Kong Offices | Mine Site | | :--- | :--- | :--- | | **Total Emissions** | 18.93 | 18,414.20 | | **Direct Emissions (Scope 1)** | 0 | 2,435.02 | | **Energy Indirect Emissions (Scope 2)** | 18.93 | 15,979.17 | 2020 Energy and Water Consumption | Resource Category | Unit | UK and Hong Kong Offices | Kazakhstan Mine Site | | :--- | :--- | :--- | :--- | | **Total Energy Consumption** | MWh | 21.54 | 31,886.81 | | **Total Water Consumption** | Cubic Meters | Not Applicable | 104,544.00 | - The mine site's large-scale wastewater recycling system saves **10%** of industrial water annually[323](index=323&type=chunk) [Social Aspects](index=113&type=section&id=Social) In terms of social responsibility, the company regards employees as its most valuable asset, implementing fair and open recruitment principles, strictly prohibiting child labor and forced labor, providing competitive compensation and development training, and focusing on employee well-being, while also establishing robust supplier screening processes, adhering to product quality standards, and actively participating in community investment - The company strictly complies with local labor laws, prohibiting child labor and forced labor, with no related violations reported during the period[349](index=349&type=chunk)[352](index=352&type=chunk) - The company has established a comprehensive supplier screening process and ensures fair competition through open bidding, while encouraging suppliers to fulfill environmental and social responsibilities[353](index=353&type=chunk)[356](index=356&type=chunk) - The company strictly adheres to product quality standards, and the mine site has obtained ISO 9001 quality management system certification, ensuring mining processes comply with international standards[360](index=360&type=chunk) - The company adheres to a strict anti-corruption policy, has formulated anti-corruption and anti-fraud policies, and regularly organizes anti-corruption training[364](index=364&type=chunk)[366](index=366&type=chunk) [Independent Auditor's Report](index=137&type=section&id=Independent%20Auditor%27s%20Report) Independent auditor BDO Limited issued an unmodified opinion on the company's consolidated financial statements for the year ended December 31, 2020, deeming them to present fairly and truly the Group's financial position, financial performance, and cash flows, and to have been properly prepared in accordance with regulations, with key audit matters including the impairment assessment of interests in an associate and a joint venture due to significant management judgment - The auditor issued an unmodified opinion on the 2020 consolidated financial statements[374](index=374&type=chunk) - Key audit matters include the impairment assessment of interests in an associate (Fission Uranium Corp.) and a joint venture (Semizbay-U), primarily because estimating their recoverable amounts involves significant management judgment[377](index=377&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) [Consolidated Financial Statements](index=144&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=144&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the 2020 fiscal year, the Group's revenue was HKD 2.862 billion, a 37.8% increase year-on-year, and gross profit was HKD 203 million, a 40.9% increase year-on-year, but due to increased finance costs and a shift from profit to loss from associates, profit before tax only slightly increased by 2.2% to HKD 180 million, and profit for the year decreased by 3.0% year-on-year to HKD 155 million Consolidated Statement of Profit or Loss Summary | Item (Thousand HKD) | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 2,862,226 | 2,076,688 | +37.8% | | **Gross Profit** | 202,766 | 143,905 | +40.9% | | **Profit Before Tax** | 179,966 | 176,172 | +2.2% | | **Profit Attributable to Owners of the Company for the Year** | 155,217 | 160,009 | -3.0% | | **Basic Earnings Per Share** | 2.35 HK cents | 2.42 HK cents | -2.9% | [Consolidated Statement of Financial Position](index=146&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of the end of 2020, the Group's total assets were HKD 4.188 billion, a 35.3% increase from the previous year, primarily driven by increases in inventories, trade receivables, and bank balances and cash, while total liabilities were HKD 2.161 billion, a significant 87.7% increase year-on-year, mainly due to new bank borrowings to support business expansion Consolidated Statement of Financial Position Summary | Item (Thousand HKD) | December 31, 2020 | December 31, 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | 873,748 | 844,275 | +3.5% | | **Current Assets** | 3,314,039 | 2,251,091 | +47.2% | | **Total Assets** | 4,187,787 | 3,095,366 | +35.3% | | **Current Liabilities** | 1,214,247 | 485,506 | +150.1% | | **Non-current Liabilities** | 946,480 | 665,619 | +42.2% | | **Total Liabilities** | 2,160,727 | 1,151,125 | +87.7% | | **Total Equity** | 2,027,060 | 1,944,241 | +4.3% | [Consolidated Statement of Cash Flows](index=151&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2020, the Group's net cash used in operating activities was HKD 315 million, primarily due to increases in inventories and trade receivables, while investing activities generated net cash inflow of HKD 25.72 million, and financing activities generated net cash inflow of HKD 786 million, mainly from new bank borrowings, resulting in a net increase in cash and cash equivalents of HKD 497 million Consolidated Statement of Cash Flows Summary | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (315,089) | (686,729) | | **Net Cash From/(Used in) Investing Activities** | 25,718 | (26,622) | | **Net Cash From Financing Activities** | 785,980 | 268,091 | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | 496,609 | (445,260) | | **Cash and Cash Equivalents at Beginning of Year** | 676,793 | 1,123,056 | | **Cash and Cash Equivalents at End of Year** | 1,174,508 | 676,793 |

Financial Performance - The Group's revenue for the reporting period was approximately HK$926 million, representing a decrease of approximately 3% compared to the corresponding period of 2019[12]. - Profit attributable to the owners of the Company was approximately HK$112 million, reflecting a substantial increase of approximately 45% compared to the same period in 2019[13]. - Basic earnings per share for the reporting period amounted to approximately HK1.70 cents, representing an increase of approximately 45% compared to the corresponding period of 2019[13]. - The Group achieved a profit of HK$112 million and revenue of HK$926 million in the first half of 2020, representing a substantial increase of 45% in profit and a slight decrease of 3% in revenue compared to the same period in 2019[23]. - The Group recorded revenue of HK$925.63 million for the six months ended June 30, 2020, a decrease of 2.53% compared to HK$949.64 million in the same period of 2019[43]. - During the reporting period, the Group's profit amounted to HK$112.22 million, representing a significant increase of 44.73% from the corresponding period of 2019[52]. - Profit for the period attributable to owners of the Company rose to HK$112,222,000, up 44.6% from HK$77,538,000 in 2019[101]. - The profit before taxation for the six months ended June 30, 2020, was HK$126,898,000, compared to HK$83,744,000 for the same period in 2019[137]. Revenue Sources - The Group completed the sale of 303.3tU mine products and 1,154tU (3 million pounds U3O8) in the international market, generating approximately HK$924 million in trading revenue[23]. - The natural uranium trading segment generated revenue of HK$924,056,000, while the property investment segment contributed HK$1,575,000[132]. - Segment profit for natural uranium trading was HK$80,850,000, compared to HK$40,902,000 in the same period of 2019, reflecting a significant increase[137]. Cost and Expenses - The cost of sales decreased by 7.93% to HK$816.74 million from HK$887.09 million in the corresponding period of 2019[45]. - Gross profit margin improved to 11.76% in 2020 from 6.59% in 2019[39]. - EBITDA increased to HK$146.54 million, representing an increase from HK$95.82 million in the previous year[39]. - Other operating income significantly decreased by 58.94% to HK$6.24 million from HK$15.19 million in 2019[46]. - The Group's selling and distribution expenses amounted to HK$4.66 million, representing an increase of 74.09% compared to HK$2.67 million for the corresponding period of 2019[48]. - Administrative expenses amounted to HK$13.67 million, representing an increase of 9.73% compared to HK$12.46 million for the corresponding period of 2019[48]. Assets and Liabilities - The Group's total assets amounted to HK$3,897 million, representing an increase of 25.88% from HK$3,095 million as at 31 December 2019[53]. - The Group's total liabilities amounted to HK$1,948 million, representing an increase of 69.25% from HK$1,151 million as at 31 December 2019[53]. - As of June 30, 2020, the Group's current liabilities were HK$1,271 million, a significant increase of 162% compared to HK$486 million as of December 31, 2019, primarily due to increases in trade and other payables, loans from a fellow subsidiary, and bank borrowings related to inventory procurement[59]. - The current ratio decreased to 241.11% from 463.66% in the previous period[40]. - The debt to asset ratio increased to 50.00% from 37.19% in the previous period[40]. Cash Flow and Financing - The net cash used in operating activities was HK$973,386,000, compared to HK$72,099,000 for the same period in 2019, indicating a significant increase in cash outflow[111]. - The company completed a financing of USD 10 million in April 2020 to support the preliminary work of the PLS Project's environmental impact assessment and feasibility study[28]. - As of June 30, 2020, the Group has an unutilized borrowing facility of USD 794.14 million to support operations and mitigate cash flow volatility[65]. - The Group has sufficient financial resources for daily operations and does not have seasonal borrowing demands[65]. Market and Industry Trends - The price of natural uranium rose significantly in the first half of 2020, with the spot price reaching a high of USD35.0 per pound in May before slightly declining to USD32.6 per pound by the end of the reporting period[21]. - The demand for nuclear fuel and natural uranium in China is expected to further increase with the ongoing development of the domestic nuclear power industry[18]. - As of June 2020, there were 440 nuclear reactors in operation globally, with 54 under construction, indicating a growing market for nuclear energy[19]. - The US Department of Energy announced a USD230 million Advanced Reactor Exemplary Program to revitalize domestic uranium mining and strengthen investment in advanced nuclear power research and development[17]. Corporate Governance - The Company has established an audit committee in compliance with the Listing Rules and Corporate Governance Code[87]. - The Board consists of two Executive Directors, three Non-Executive Directors, and three Independent Non-Executive Directors as of the report date[92]. - The Company has adopted the Corporate Governance Code and confirmed compliance with all provisions during the reporting period[92]. Shareholder Information - As of June 30, 2020, CGNPC holds 4,467,887,558 shares, representing 67.69% of the shareholding[70]. - CGNPC-URC Development has an interest in 4,288,695,652 shares, accounting for 64.97% of the shareholding[70]. - The weighted average number of ordinary shares for the purpose of basic earnings per share remained constant at 6,600,682,645 shares for both 2020 and 2019[156]. Inventory and Impairment - The inventory of uranium as of June 30, 2020, was HK$2,417,134, an increase of 67.6% from HK$1,441,980 as of December 31, 2019[178]. - The Group recognized a reversal of impairment loss of approximately HK$10,847,000 during the period due to the recovery of uranium prices[187]. Financial Instruments and Risks - The Group's sales and purchases were primarily settled in USD and RMB, with no significant foreign exchange risk impacting operations[65]. - The Group did not enter into any financial derivatives for hedging purposes during the reporting period[65].

Financial Performance - Revenue from continuing operations for 2019 was HK$2,076,688, an increase of 27.7% from HK$1,625,974 in 2018[7] - Operating profit for 2019 was HK$196,638, compared to HK$172,623 in 2018, reflecting a growth of 13.9%[7] - Profit from continuing operations reached HK$160,009 in 2019, up from HK$122,066 in 2018, marking a 31.1% increase[7] - Profit for the year was HK$160,009, reflecting a significant increase from HK$122,066 in 2018[7] - Profit attributable to owners of the Company was HK$160 million, up 31.1% from HK$122 million in 2018, with basic earnings per share increasing to HK2.42 cents from HK1.85 cents[15] - The Group's profit for 2019 was HK$160 million, representing a 31% increase compared to 2018[88][111] - Total revenue for 2019 was HK$2,077 million, an increase of 28% from HK$1,626 million in 2018, driven by significant growth in natural uranium sales[89][94] Assets and Liabilities - Total assets as of December 31, 2019, were HK$3,095,366, an increase from HK$2,674,507 in 2018[8] - Total liabilities increased by 42% to HK$1,151 million as of December 31, 2019, primarily due to increased loans from a fellow subsidiary[113][117] - Net current assets rose by 32% to HK$1,766 million as of December 31, 2019, compared to HK$1,341 million in 2018, driven by higher inventory and trade receivables[114] - The Group's bank balances and cash were approximately HK$677 million, a decrease of HK$446 million (40%) year-on-year, with 32% in HKD, 67% in USD, and 1% in RMB[119] - Non-current liabilities increased by 184% to HK$666 million, mainly due to an increase in long-term loans from a fellow subsidiary[126] Trading and Market Performance - The annual trade volume of natural uranium reached 8.08 million pounds, generating sales revenue of US$218.78 million, marking a significant growth driver for the Company's performance[19] - The Company maintained a gross profit margin of 7%, consistent with the previous year[15] - The average spot price of natural uranium in 2019 was US$25.72/lb, while the long-term price stabilized at US$32/lb[29] - Spot transaction volume in the natural uranium market dropped by 40% compared to 2018, while long-term market transaction volume increased by 6.6%[29] Strategic Initiatives - The acquisition of CGN Global was completed on January 17, 2019, impacting the financial results for the year[9] - The company aims to become one of the top suppliers of natural uranium resources for nuclear power plants[3] - The New Kazakhstan Uranium Project is a top priority, with breakthrough progress expected in 2020 following efforts in 2019[11] - The company aims to increase trading profits through new trading models as part of its medium- to long-term strategy for overseas natural uranium trading[11] - The company plans to seek high-value uranium projects and favorable acquisition terms through dynamic tracking of potential targets[13] Corporate Governance - The Company emphasizes the importance of good corporate governance to enhance credibility and protect shareholder interests[139] - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code during the Reporting Period, with specific deviations noted[157] - The Board is responsible for formulating the overall strategy and policy of the Group, ensuring sufficient capital and management resources for implementation[164] - The Company has a comprehensive governance structure that includes various committees such as the Remuneration Committee, Audit Committee, and Nomination Committee[163] Management and Leadership - Mr. Yu Zhiping has over 29 years of experience in corporate management and nuclear fuel system operation[140] - Mr. An Junjing, the CEO, has been with the Group since January 2018 and has extensive experience in nuclear power management[143] - The leadership team includes experienced professionals with advanced degrees in engineering and business administration[143][145][146] - The Company aims to maintain a high-quality board and robust internal controls[141] Risk Management - The Board approved the comprehensive risk management report for 2019, which includes a summary of the risk management situation of 2018[168] - The Company has established a monitoring mechanism for the operating environments of overseas projects to mitigate international operation risks[79] - The Company is strengthening trade risk management to address uncertainties in international natural uranium trade[76] Future Outlook - The company estimates that the natural uranium market will remain oversupplied in the next few years, with slow inventory consumption and slight long-term price increases[60] - The nuclear power market is expected to grow, with several countries beginning preparations for new nuclear power plants[26] - The World Nuclear Association (WNA) has raised its expectations for future nuclear power and natural uranium demand for the first time since 2011, indicating an improvement in global nuclear power development[60]