Financial Performance - The company reported a significant increase in revenue for the year ended December 31, 2022, with total revenue reaching approximately RMB 5.2 billion, representing a year-on-year growth of 15%[6]. - Total revenue for 2022 was RMB 14,460,271,000, down from RMB 19,116,121,000 in 2021, indicating a decrease of about 24%[36]. - The gross loss for 2022 was RMB 749,999,000, compared to a gross profit of RMB 783,956,000 in 2021, marking a significant shift in profitability[36]. - Loss attributable to owners was RMB 1,328,792,000 in 2022, a stark contrast to a profit of RMB 65,031,000 in 2021[36]. - Basic and diluted loss per share was RMB (56.09) cents in 2022, compared to earnings of 2.74 cents in 2021[36]. - The gross profit margin improved to 18% in 2022, up from 15% in 2021, reflecting better cost management and pricing strategies[10]. - The Group's revenue decreased by approximately 24.4% due to a decline in sales volume of ordinary steel and a decrease in average selling prices of ordinary and special steel products[64]. Production and Sales - The production volume of special steel increased by 20% compared to the previous year, totaling 1.2 million tonnes, driven by higher demand in the automotive and machinery sectors[10]. - Steel sales volume decreased to 2,459,638 tonnes in 2022 from 2,964,119 tonnes in 2021, representing a decline of approximately 17%[36]. - The sales volume of ordinary steel products decreased to 1,603,935 tonnes in 2022, down from 2,148,052 tonnes in 2021, representing a decline of approximately 25.4%[61]. - The sales volume of special steel products increased slightly by approximately 4.9% to 855,703 tonnes in 2022, while the average selling price decreased by approximately 9.4% to RMB4,070 per tonne[52][61]. - The average selling price of ordinary steel products decreased by approximately 15.4% from RMB4,383 per tonne in 2021 to RMB3,707 per tonne in 2022[58]. Market Strategy and Expansion - The company plans to expand its market presence in Southeast Asia, targeting a 10% increase in market share by the end of 2024[10]. - New product lines, including high-strength alloy steel, are expected to launch in Q3 2023, projected to contribute an additional RMB 300 million in revenue annually[10]. - The Group aims to enhance the production of high-quality and high value-added special steel products through cooperation with the IMR, indicating a strategic focus on product development[52][55]. Research and Development - The company has invested RMB 200 million in R&D for advanced steel manufacturing technologies, aiming to enhance production efficiency by 25% over the next two years[10]. - The Group invested approximately RMB 379 million in research and development costs during the year[194]. - The Group has established strategic cooperation with the Chinese Academy of Sciences to develop patented products with proprietary intellectual property rights[194]. Challenges and Risks - The steel industry faced significant challenges in 2022 due to the COVID-19 pandemic and economic pressures, leading to reduced production and sales[41]. - Global high inflation and rising raw material prices pose challenges to the Group's cost structure, potentially impacting the total cost of sales in 2023[164]. - The financial performance of the Company deteriorated in 2022, facing challenges in soliciting new funding sources and increased pressure on working capital due to high commodity prices and sluggish demand[173][176]. - The domestic demand from property developers in China is expected to remain weak in early 2023 due to a debt crunch, but risks may shrink with government stimulus measures[170][171]. Leadership and Governance - The resignation of Ms. Li Hai Xia as an executive director was noted, effective April 20, 2023, with the company emphasizing continuity in leadership[2]. - The Company has implemented anti-bribery and corruption policies and whistleblowing systems during the year[188]. - The Company has a long-established practice of assessing the independence of non-executive Directors annually[191]. - The Company has adopted a board diversity policy, subject to annual review by the Nomination Committee[191]. Financial Position and Liabilities - As of December 31, 2022, the Group's total assets were approximately RMB 15,070 million, a decrease from RMB 16,169 million as of December 31, 2021[87]. - The Group's total bank and other borrowings amounted to approximately RMB 4,477 million, an increase of approximately RMB 902 million compared to RMB 3,575 million as of December 31, 2021[93]. - The Group's gearing ratio as of December 31, 2022, was approximately 30.6%, up from approximately 22.9% as of December 31, 2021[96]. - The Group defaulted on guaranteed secured bonds amounting to approximately RMB100 million and RMB13 million, which matured on September 30, 2022[126]. - The Group's total defaulted other borrowings as of December 31, 2022, were approximately RMB381 million, including RMB10 million in principal and RMB5 million in interest from defaulted borrowings[130]. Employee and Corporate Culture - The total number of employees as of December 31, 2022, was 3,202, down from 3,459 in the previous year, with staff-related costs incurred during the year approximately RMB261 million, compared to RMB291 million the previous year[144][148]. - The Group continuously provides training to employees and potential employees to aid their career development in the steel industry[200]. - The Group is committed to fostering a corporate culture based on fairness, integrity, innovation, and transparency[193]. Future Outlook - The Company expects the recovery of the Chinese economy to stimulate steel demand growth in 2023, driven by infrastructure construction and the real estate market recovery[152][154]. - The Group plans to focus on developing high-end special steels, including bearing steel and railway steel, to achieve sustainable and high-quality development[153][155]. - The Group anticipates that steel prices may be less volatile in 2023, with expectations of improved demand in the second half of the year compared to the first half[170][172].

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 的 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 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 XIWANG SPECIAL STEEL COMPANY LIMITED 西王特鋼有限公司 （於香港註冊成立的有限公司） （股份代號：1266） 截 至2022年12月31日 止 年 度 的 年 度 業 績 公 告 更 新 本 公 告（「更 新 公 告」）乃 由 西 王 特 鋼 有 限 公 司（「本 公 司」，連 同 其 附 屬 公 司 統 稱 為「本 集 團」）作 出，旨 在 根 據 本 公 司 於 本 更 新 公 告 日 期 可 得 的 資 料， 向 其 股 東 及 潛 在 投 資 者 提 供 有 關 本 集 團 截 至2022年12月31日 止 年 度 之 經 審 核 年 度 業 績 的 若 干 更 新。 茲 提 述 ...

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 的 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 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 XIWANG SPECIAL STEEL COMPANY LIMITED 西王特鋼有限公司 （於香港註冊成立的有限公司） （股份代號：1266） 截 至2022年12月31日 止 年 度 的 年 度 業 績 公 告 更 新 本 公 告（「更 新 公 告」）乃 由 西 王 特 鋼 有 限 公 司（「本 公 司」，連 同 其 附 屬 公 司 統 稱 為「本 集 團」）作 出，旨 在 根 據 本 公 司 於 本 更 新 公 告 日 期 可 得 的 資 料， 向 其 股 東 及 潛 在 投 資 者 提 供 有 關 本 集 團 截 至2022年12月31日 止 年 度 之 經 審 核 年 度 業 績 的 若 干 更 新。 茲 提 述 ...

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 的 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 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 XIWANG SPECIAL STEEL COMPANY LIMITED 西王特鋼有限公司 （於香港註冊成立的有限公司） （股份代號：1266） 截 至2022年12月31日 止 年 度 的 年 度 業 績 公 告 財 務 摘 要 截 至12月31日 止 年 度 2022年 2021年 | --- | --- | --- | |-------------------------------|-----------|-----------| | 鋼 材 銷 售 量（噸） | 2,459,638 | 2,964,119 | | 營 業 額（人 民 幣 千 元） | | | | 普 通 鋼－棒 材 | 4,166,964 | 6 ...

Financial Performance - In the first half of 2022, the company recorded a revenue of approximately RMB 8,473.3 million, a decrease of 14.3% compared to RMB 9,890.8 million in the same period of 2021[16]. - The company experienced a gross loss of approximately RMB 24.2 million, compared to a gross profit of RMB 645.0 million in the previous period[8]. - The net loss for the period was approximately RMB 294.1 million, compared to a net profit of RMB 191.7 million in the previous period[8]. - The gross loss for the same period was RMB 24,192,000, compared to a gross profit of RMB 645,008,000 in 2021[74]. - The company reported a net cash outflow from operating activities of RMB (161,814,000) for the six months ended June 30, 2022, compared to a net inflow of RMB 768,353,000 in the same period of 2021[85]. - The company incurred a total comprehensive loss of RMB (300,349,000) for the period, compared to a total comprehensive income of RMB 184,269,000 in the previous year[83]. Sales and Pricing - The average selling price of ordinary steel products decreased from RMB 4,293 per ton to RMB 4,033 per ton, reflecting a decline of approximately 6.1%[9]. - The sales volume of special steel products decreased by 23.7% compared to the previous period, resulting in a gross loss of approximately RMB 14.1 million[13]. - The demand for rebar decreased by 18% due to a significant reduction in the real estate sector and insufficient infrastructure construction progress[9]. - Sales volume of ordinary steel products was 950,082 tons, accounting for 70% of total sales, while special steel sales volume was 401,132 tons, accounting for 30%[19]. - The company's total sales to external customers in the six months ended June 30, 2022, were RMB 8,473,283 thousand, down from RMB 9,890,828 thousand in the same period of 2021[107]. Cost and Expenses - The average unit cost of ordinary and special steel products increased by 6.2% during the period[9]. - The cost of sales for the period was approximately RMB 8,497.5 million, down from RMB 9,245.8 million in the first half of 2021, primarily due to reduced sales volume and trading activities[20]. - Administrative expenses increased to approximately RMB 66.2 million from RMB 48.8 million in the first half of 2021, attributed to higher intangible asset amortization and salary increases[26][27]. - Financing costs decreased to RMB 87,698,000 from RMB 146,511,000 in the previous year, indicating a reduction of 40%[74]. Assets and Liabilities - As of June 30, 2022, the total assets of the group were approximately RMB 16,094.5 million, a slight decrease from RMB 16,168.9 million as of December 31, 2021[31]. - The company’s total liabilities as of June 30, 2022, were RMB 3,628,267,000, compared to RMB 3,574,659,000 as of December 31, 2021, showing a slight increase[136]. - The group had capital commitments of approximately RMB 582.2 million as of June 30, 2022, compared to RMB 577.2 million as of December 31, 2021[41]. - The group had pledged assets totaling RMB 4,841.3 million, down from RMB 5,011.5 million as of December 31, 2021[36]. Employee and Management - The group employed 3,571 employees as of June 30, 2022, a decrease from 3,712 employees as of June 30, 2021[46]. - Employee costs for the period were approximately RMB 152.1 million, compared to RMB 149.1 million in the first half of 2021[46]. - The total compensation paid to key management personnel increased to RMB 5,995,000 in 2022 from RMB 3,624,000 in 2021[153]. Market Conditions and Future Outlook - The company anticipates continued challenges in the second half of 2022, with profit levels expected to remain weak due to increased downward pressure on costs and overall economic conditions[47]. - The real estate sector, a major consumer of steel, shows signs of bottoming out, but market confidence remains low, impacting the company's revenue[49]. - The overall demand for steel materials is not expected to return to the levels seen in the first half of the previous year in the short term[49]. Research and Development - Research and development expenses remained stable at approximately RMB 224.0 million, compared to RMB 223.7 million in the same period of 2021[28]. - The company has established a Special Steel New Materials Technology Innovation Center in Shandong, focusing on key technology research and development[50]. - The company aims to address "bottleneck" technology challenges in the specialty steel sector to meet high-end equipment material demands[50]. Shareholder Information - Major shareholder, Xiwang Investment, holds approximately 36.64% of the company's shares as of June 30, 2022[55]. - No interim dividend was declared for the period, consistent with the previous year[52]. Financial Instruments and Fair Value - The company’s financial instruments' carrying values are assessed to be similar to their fair values, with no significant changes in fair value due to credit risk[154]. - The fair value sensitivity analysis indicates that a 5% increase or decrease in the valuation multiple could lead to a change in fair value of RMB 2,582,000 for 2022, down from RMB 3,268,000 in 2021[158].

Annual Report 年報 XIWANG SPECIAL STEEL COMPANY LIMITED 2021 西王特鋼有限公 司 Annual Report 2021 年報 本年報內的資料 除另有說明或文義另有所指外，本年報乃根據本公司於截至2021年12月31日止年度，或本公司董事會（「董事 會」）審議通過本年報的日期（即2022年3月31日）所得的資料編製。 於2022年3月31日後及本年報付印前的最後實際可行日期之前，本公司的公司秘書及授權代表於2022年4月1 日變動如下： 詳情請參閱本公司於2022年4月1日刊發的公告。 1 西王特鋼有限公司 本年報內的資料 (a) 余志傑先生辭任本公司之公司秘書； (b) 余志傑先生辭任本公司授權代表，同時張健先生（現任本公司執行董事）獲委任為本公司授權代表以填 補空缺。 | 目錄 | | --- | | 公司簡介 | 3 | | --- | --- | | 公司資料 | 4 | | 財務摘要 | 6 | | 主席報告 | 7 | | 管理層討論及分析 | 9 | | 企業管治報告 | 19 | | 董事會及高級管理層 | 34 | | 董事會報告書 | ...

Revenue and Profitability - The company's revenue for the first half of 2021 was RMB 9,890,828,000, a significant increase of 108% compared to RMB 4,740,347,000 in the first half of 2020[15] - Gross profit for the first half of 2021 was RMB 645,008,000, significantly up from RMB 41,257,000 in the first half of 2020, resulting in a gross margin of 6.5% compared to 0.9% in 2020[21] - The net profit for the period was RMB 191,699,000, recovering from a loss of RMB 273,591,000 in the previous year[80] - Basic and diluted earnings per share for the period were RMB 8.09 cents, compared to a loss of RMB 11.55 cents per share in 2020[77] Sales and Market Performance - Steel sales volume for the first half of 2021 reached 1,679,506 tons, a 18% increase from 1,423,670 tons in the same period of 2020[18] - The average selling price of ordinary steel products increased, with rebar averaging RMB 4,199 per ton in 2021 compared to RMB 2,991 per ton in 2020, representing a 40.5% increase[16] - The sales of special steel products reached RMB 2,302,547,000, with an average selling price of RMB 4,381 per ton, up from RMB 3,225 per ton in 2020, indicating a 36% increase[16] Cost Management and Efficiency - The company emphasized the importance of cost control and efficiency improvements, which contributed to stable production and sales balance[7] - Sales cost increased to RMB 9,245,820,000 in the first half of 2021, up from RMB 4,699,090,000 in the same period of 2020, primarily due to increased sales volume and trading activities[19] - The company is actively adjusting its production processes to reduce reliance on iron ore prices by increasing the use of scrap steel[11] Research and Development - The company plans to deepen cooperation with the Chinese Academy of Sciences to achieve breakthroughs in product research and development[7] - The company aims to increase R&D investment, establishing five research departments to support the development of new products with independent intellectual property rights[51] - Research and development costs increased to RMB 223,699,000 from RMB 172,606,000, reflecting the company's commitment to innovation[77] Financial Position and Assets - Total assets as of June 30, 2021, were approximately RMB 16,083,180,000, an increase from RMB 15,369,929,000 at the end of 2020[30] - The debt-to-asset ratio improved to 23.5% as of June 30, 2021, down from 28.4% at the end of 2020[31] - Cash and cash equivalents were approximately RMB 330,548,000 as of June 30, 2021, down from RMB 386,812,000 at the end of 2020[29] Shareholder Information - As of June 30, 2021, major shareholder Wang Yong holds 1,165,539,000 shares, representing 49.20% of the company's equity[56] - Haitong International Strategy Investment Limited holds 1,147,321,000 shares, representing 48.43% of the company's equity[57] - The company’s equity structure shows significant concentration, with major shareholders holding nearly 50% of the total shares[56] Operational Challenges and Strategies - The company reported a significant increase in downstream demand for its products as the COVID-19 pandemic was effectively controlled[8] - The company anticipates stable steel demand due to ongoing infrastructure projects, with a focus on enhancing the quality of construction materials[50] - The company has implemented strict cost control measures in response to the stabilizing economic situation in China post-COVID-19, aiming to improve operating cash flow[92] Inventory and Liabilities - Total inventory as of June 30, 2021, was RMB 1,422,424,000, up from RMB 800,121,000 at the end of 2020, reflecting increased production and stock levels[119] - The total liabilities increased to RMB 10,168,025,000 from RMB 9,639,043,000, with current liabilities rising to RMB 9,516,353,000 from RMB 8,287,326,000[84] - The company’s net current liabilities as of June 30, 2021, were approximately RMB 5,498,244,000, up from RMB 5,038,200,000 as of December 31, 2020, reflecting ongoing liquidity challenges[1] Corporate Governance and Compliance - The company adhered to all applicable corporate governance codes during the reporting period[72] - The interim financial statements were approved and authorized for publication by the board of directors on August 31, 2021[158]

Financial Performance - Steel sales volume increased to 3,071,827 tons in 2020, up from 2,509,652 tons in 2019, representing a growth of approximately 22.4%[12] - Total revenue for 2020 reached RMB 15,288,101 thousand, a significant increase of 36.5% compared to RMB 11,170,040 thousand in 2019[12] - The gross profit decreased to RMB 468,807 thousand in 2020, down from RMB 705,437 thousand in 2019, reflecting a decline of 33.5%[12] - The profit attributable to owners decreased slightly to RMB 18,368 thousand in 2020, compared to RMB 19,789 thousand in 2019, a decrease of 7.1%[12] - The average gross profit per ton of steel produced and sold was RMB 139 in 2020, down from RMB 257 in 2019, indicating a decline of 45.9%[12] - The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was RMB 704,662 thousand in 2020, down from RMB 800,953 thousand in 2019, a decrease of 12%[12] - Profit before tax fell from RMB 33,019,000 in 2019 to RMB 15,697,000 in 2020, a decrease of about 52.5%[59] - Annual profit decreased from RMB 19,789,000 in 2019 to RMB 18,368,000 in 2020, reflecting a decline of approximately 7.1%[59] Revenue Breakdown - The sales of special steel reached RMB 2,662,448 thousand in 2020, up from RMB 1,762,540 thousand in 2019, marking a growth of 51.1%[12] - Ordinary steel sales from rebar amounted to RMB 5,144,095 thousand in 2020, compared to RMB 4,958,367 thousand in 2019, an increase of 3.7%[12] - Wire rod sales increased to RMB 2,095,615 thousand in 2020, up from RMB 1,797,765 thousand in 2019, reflecting a growth of 16.6%[12] - Steel sales revenue rose from RMB 8,518,672,000 in 2019 to RMB 9,902,158,000 in 2020, an increase of about 16.3%[20] Cost and Expenses - The sales cost increased significantly from RMB 10,464,603,000 in 2019 to RMB 14,819,294,000 in 2020, reflecting a rise of about 41.0%[26] - Sales and distribution expenses decreased from RMB 9,802,000 in 2019 to RMB 8,254,000 in 2020, attributed to prudent cost measures implemented by the company[29] - Administrative expenses reduced from RMB 85,233,000 in 2019 to RMB 75,400,000 in 2020, also due to cost control measures[30] Cash Flow and Assets - As of December 31, 2020, the company's cash and cash equivalents were RMB 386,812,000, up from RMB 193,849,000 in 2019, while pledged bank deposits decreased to RMB 492,219,000 from RMB 901,498,000[31] - Total assets increased to RMB 15,369,929,000 as of December 31, 2020, compared to RMB 13,445,167,000 in 2019, with total liabilities rising to RMB 9,639,043,000 from RMB 7,724,017,000[32] - The debt-to-asset ratio was 28.4% as of December 31, 2020, slightly down from 29.0% in 2019[33] Strategic Initiatives - The company aims to enhance the proportion of high-end special steel products to improve long-term profitability and maintain competitive advantages[16] - Strategic cooperation with the Chinese Academy of Sciences is ongoing to enhance R&D capabilities and develop patented products[16] - The company is focused on environmental sustainability through measures such as promoting electric arc furnace steelmaking and implementing ultra-low emission projects[18] - The company plans to expand its market presence both domestically and internationally, increasing product exports and enhancing customer value-added services[16] Market Conditions - In 2020, China's crude steel production reached 1.053 billion tons, marking a significant milestone, with apparent consumption of crude steel increasing by 9% year-on-year[54] - The steel industry is expected to maintain a high supply level, with overall profitability remaining challenging, while the special steel segment is projected to outperform ordinary steel[54] - The group anticipates that the manufacturing sector's growth will drive demand for special steel products, supported by national policies promoting new materials[54] Governance and Compliance - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, complying with the requirement that at least one-third of the board members are independent[70] - The company has adopted a diversity policy for the board to ensure a range of perspectives, including gender, age, cultural background, and professional experience[71] - The company has confirmed compliance with the corporate governance code throughout the year, ensuring transparency and protection of shareholder interests[69] - The independent non-executive directors possess over 20 years of experience in accounting and financial management, ensuring adequate expertise on the board[72] Risk Management - The company has implemented a structured mechanism for identifying, assessing, and managing risks, ensuring ongoing monitoring and prioritization[96] - The risk management framework is based on the "three lines of defense" model, ensuring clear roles and responsibilities across various levels of the organization[93] - The company conducts annual reviews of its risk management and internal control systems, confirming their effectiveness without significant issues identified[100] Related Party Transactions - The company has established various related party transactions, including financial services and logistics agreements, in compliance with listing rules[188] - The financial services agreement with Xiwang Group Financial Company was established on October 18, 2018[188] - The agreements with Xiwang Logistics and Xiwang Financial Company are part of a strategy to improve financial resource management and reduce operational risks[198] Employee and Management - The group employed 3,712 staff as of December 31, 2020, an increase from 3,608 in 2019, with total employee costs rising to RMB 283,136,000 from RMB 258,122,000[52] - The company emphasizes employee value and offers competitive compensation and training opportunities to enhance productivity and core competitiveness[138] - The company has experienced significant changes in its management team, with several key appointments in recent years[118][119][120]

Revenue and Sales Performance - The group's revenue for the first half of 2020 was RMB 4,740,347,000, a decrease of 20.4% compared to RMB 5,959,655,000 in the first half of 2019[16]. - Ordinary steel sales accounted for RMB 3,278,045,000, with an average price of RMB 2,999 per ton, while special steel sales were RMB 1,065,844,000, with an average price of RMB 3,225 per ton[17]. - Steel sales volume for the first half of 2020 was 1,423,670 tons, a 3.6% increase from 1,374,234 tons in the same period of 2019[20]. - Revenue for the six months ended June 30, 2020, was RMB 4,740,347,000, a decrease of 20.4% compared to RMB 5,959,655,000 for the same period in 2019[94]. - The group’s sales to external customers in the ordinary steel segment were RMB 3,278,045,000, while the special steel segment reported sales of RMB 1,065,844,000 for the first half of 2020[97]. Financial Performance - Gross profit for the first half of 2020 was RMB 41,257,000, a significant decrease of 92.5% compared to RMB 552,435,000 in the first half of 2019, resulting in a gross margin drop to 0.9% from 9.3%[23]. - The net loss for the period was RMB 273,591,000, compared to a profit of RMB 182,549,000 in the previous year[72]. - Basic loss per share was RMB (11.55) cents, compared to earnings of RMB 8.05 cents per share in 2019[72]. - The group incurred a loss before tax of RMB 343,249,000 for the six months ended June 30, 2020, compared to a profit before tax of RMB 216,536,000 for the same period in 2019[97][99]. - The company reported a total comprehensive loss of RMB 276,160,000 for the first half of 2020, compared to a total comprehensive income of RMB 176,810,000 in the same period of 2019[81]. Cost Management and Operational Efficiency - The management has implemented strict cost control measures and optimized the sales system to improve the connection between production and sales[9]. - Administrative expenses for the first half of 2020 were RMB 42,490,000, down from RMB 55,859,000 in the same period of 2019, reflecting cost control measures[28]. - The cost of sales for the first half of 2020 was RMB 4,699,090,000, down from RMB 5,407,220,000 in the same period of 2019[21]. - Financing costs for the six months ended June 30, 2020, totaled RMB 158,486,000, a decrease of 20.5% from RMB 198,515,000 in the same period of 2019[107]. Cash Flow and Liquidity - As of June 30, 2020, cash and cash equivalents were approximately RMB 765,272,000, a significant increase from RMB 193,849,000 as of December 31, 2019[30]. - Operating cash flow for the first half of 2020 was RMB 68,909,000, a significant decrease of 88% compared to RMB 576,456,000 in the same period of 2019[83]. - Cash and cash equivalents increased by RMB 575,564,000 in the first half of 2020, compared to a decrease of RMB 384,043,000 in the same period of 2019[83]. - The company successfully renewed interest-bearing bank and other borrowings amounting to approximately RMB 1,123,700,000 for 12 months, enhancing short-term liquidity[86]. Research and Development - The company is focusing on developing high-end steel products in collaboration with the Chinese Academy of Sciences, including high-performance marine steel and special-purpose steel[12]. - The group plans to enhance its R&D investment, establishing five research departments focused on special steel, which will support the development of new products with independent intellectual property rights[46]. - The group’s R&D expenses increased to RMB 172,606,000 in the first half of 2020, compared to RMB 162,125,000 in the same period of 2019, reflecting a focus on innovation[105]. Market Outlook and Strategic Initiatives - The company anticipates stable demand for rebar products due to ongoing infrastructure investments by the Chinese government, which are expected to provide demand support in the short term[45]. - The management anticipates an increase in downstream demand for the group's products as the COVID-19 situation improves in China[9]. - The company plans to accelerate cash recovery and increase sales to core customers as the market gradually recovers[9]. Shareholder Information - Major shareholder Wang Yong holds 1,379,672,000 shares, representing 58.24% of the company's equity[50]. - Haitong International Strategy Investment holds 1,361,454,000 shares, accounting for 57.47% of the company's equity[54]. - The total number of issued shares as of June 30, 2020, is 2,369,110,999[54]. Asset and Liability Management - The total assets as of June 30, 2020, were approximately RMB 14,874,507,000, up from RMB 13,445,167,000 as of December 31, 2019[31]. - The company's total liabilities as of June 30, 2020, were RMB 1,433,869,000, significantly higher than the previous year, indicating increased leverage[78]. - The debt-to-equity ratio increased to 79% as of June 30, 2020, compared to 68% as of December 31, 2019[32]. - The company has pledged assets worth RMB 5,157,874,000 as collateral for bank loans and other borrowings as of June 30, 2020[35]. Dividend Policy - The board decided not to declare an interim dividend for the period, consistent with the previous year[48]. - The company did not declare an interim dividend for the six months ended June 30, 2020, consistent with the same period in 2019[114].

Financial Performance - Steel sales volume decreased to 2,509,652 tons in 2019 from 2,986,621 tons in 2018, representing a decline of approximately 15.9%[12] - Total revenue for 2019 was RMB 11,170,040 thousand, down from RMB 11,917,535 thousand in 2018, indicating a decrease of about 6.3%[12] - Gross profit fell to RMB 705,437 thousand in 2019, compared to RMB 1,966,855 thousand in 2018, reflecting a significant drop of approximately 64.1%[12] - The profit attributable to owners decreased to RMB 19,789 thousand in 2019, down from RMB 961,550 thousand in 2018, a decline of around 97.9%[12] - Basic earnings per share dropped to RMB 0.87 in 2019 from RMB 42.72 in 2018, a decrease of approximately 98.0%[12] - The average gross profit per ton of steel produced and sold was RMB 257 in 2019, down from RMB 652 in 2018, a decline of about 60.6%[12] - The company reported an EBITDA of RMB 800,953 thousand for 2019, a decrease from RMB 1,959,400 thousand in 2018, indicating a decline of approximately 59.1%[12] - The group's revenue decreased from RMB 11,917,535,000 in 2018 to RMB 11,170,040,000 in 2019, primarily due to a drop in steel sales revenue from RMB 10,688,569,000 to RMB 8,518,672,000[19] - Other income and gains fell from RMB 132,846,000 in 2018 to RMB 89,790,000 in 2019, primarily due to reduced government subsidies[28] Sales and Production - The sales of ordinary steel (rebar and wire rod) and special steel saw significant declines, with ordinary steel rebar sales dropping from RMB 6,007,970 thousand to RMB 4,958,367 thousand[12] - Ordinary steel and special steel sales volumes were 2,023,175 tons and 486,477 tons respectively in 2019, down from 2,235,432 tons and 751,189 tons in 2018[24] - The average selling price for ordinary steel fell from RMB 3,505 per ton in 2018 to RMB 3,339 per ton in 2019, while special steel's average price decreased from RMB 3,799 per ton to RMB 3,623 per ton[19] - The group's sales cost increased from RMB 9,950,680,000 in 2018 to RMB 10,464,603,000 in 2019, attributed to rising average production costs per ton of steel[26] Strategic Initiatives - The group aims to enhance the proportion of high-end special steel products to improve long-term profitability and maintain competitive advantages[16] - The group plans to strengthen its R&D and innovation capabilities through continued collaboration with the Chinese Academy of Sciences[16] - The group is focused on expanding its market presence both domestically and internationally, particularly in Shandong Province, to increase product exports[16] - The group is committed to green development initiatives, including low-emission projects and energy-saving measures, to improve air quality and reduce pollution[18] - The group has invested in environmental governance projects to enhance its competitive edge in the context of stricter environmental regulations[18] - The group will continue to optimize production processes and cost management to improve economic efficiency and maintain competitiveness[18] Financial Position - As of December 31, 2019, cash and cash equivalents were RMB 193,849,000, down from RMB 935,676,000 in 2018[32] - Total assets as of December 31, 2019, were RMB 13,445,167,000, a decrease from RMB 14,396,982,000 in 2018[33] - The debt-to-equity ratio improved to 68% in 2019 from 86% in 2018[34] - The company holds a 5% equity interest in a non-listed investment valued at RMB 83,282,000 as of December 31, 2019[35] - Total pledged assets amounted to RMB 3,843,904,000 in buildings, machinery, and equipment as of December 31, 2019, compared to RMB 2,732,712,000 in 2018[36] - As of December 31, 2019, the group's capital commitments for property, plant, and equipment amounted to RMB 949,950,000, a decrease from RMB 1,019,575,000 in 2018[41] Human Resources - The group had a total of 3,608 employees as of December 31, 2019, down from 4,276 in 2018, with employee costs amounting to RMB 258,122,000, compared to RMB 297,565,000 in the previous year[48] - The group emphasizes a people-oriented management culture, recognizing employees as a vital resource for enhancing productivity and core competitiveness[132] Corporate Governance - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, complying with the requirement that at least one-third of the board members are independent[60] - The independent non-executive director, Mr. Liang Shuxin, has over 20 years of experience in accounting and financial management, ensuring the board's capability to safeguard shareholders' interests[62] - The company has adopted a board diversity policy to ensure a variety of perspectives, including gender, age, cultural background, and professional experience, in the selection of board candidates[61] - The board is responsible for major decisions, including mergers and acquisitions, and reviews the company's annual and interim performance[65] - The financial statements for the year ending December 31, 2019, were prepared on a going concern basis and have been audited[66] - The chairman, Mr. Wang Di, is responsible for formulating the group's plans and policies, while the CEO, Mr. Zhang Jian, oversees the implementation of these plans[70] Risk Management - The company conducts annual risk identification and assessment, prioritizing risks and developing mitigation plans for significant risks[89] - The internal audit function reports directly to the audit committee and conducts independent reviews of major business processes and controls[90] - The board has confirmed the effectiveness of the risk management and internal control systems for the year ending December 31, 2019, with no significant issues identified[93] Related Party Transactions - The company has established various related party transactions, including financial services and logistics agreements, which comply with listing rules[188] - The steam supply agreement with Xiwang Sugar expired on December 31, 2019, and a new agreement with Zouping Power Company was established for the period from January 1, 2020, to December 31, 2022, with a maximum annual transaction amount of RMB 30,000,000[191] - The financial services agreement with Xiwang Financial Company includes a maximum daily deposit limit of RMB 2.1 billion, RMB 2.3 billion, and RMB 2.5 billion for the years ending December 31, 2019, 2020, and 2021 respectively[200] Stock Options and Shareholder Information - The company has a stock option plan to incentivize and reward qualified participants, aligning their interests with the long-term development of the company[138] - The maximum number of shares that can be issued upon exercise of stock options under the plan is capped at 30% of the total issued shares[141] - The individual limit for shares issued to each qualified participant under the stock option plan is capped at 1% of the total shares of that class[143] - As of December 31, 2019, the company had 3,966,667 stock options outstanding under the stock option plan[154] - The company issued 100,000,000 new shares at a price of HKD 1.22 per share, as part of a technical cooperation agreement[159]