Core Viewpoint - Datang Environment (01272) expects a decrease in profit before tax for the six months ending June 30, 2025, projected to be between RMB 350 million and RMB 400 million, compared to approximately RMB 478 million for the same period ending June 30, 2024 [1] Group 1 - The anticipated decrease in profit is primarily due to a decline in overall thermal power generation in China, which has led to reduced revenue and profit from desulfurization and denitrification concession projects [1] - Last year's figures included one-time excess income from project settlements, which will not be replicated in the upcoming period [1]

1272 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不會就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之任何損失承擔任何責任。 Datang Environment Industry Group Co., Ltd.* 中國北京，2025年7月31日 公告 2025年中期業績負面盈利預警 本公告乃由大唐環境產業集團股份有限公司（「本公司」，連同其附屬公司，統稱「本集 團」）根據香港聯合交易所有限公司證券上市規則（「上市規則」）第13.09(2)(a)條以及證券及 期貨條例（香港法例第571章）第XIVA部項下之內幕消息條文而作出。 本公司董事（「董事」）會（「董事會」）謹此知會本公司股東（「股東」）及潛在投資者，根據董 事會對本集團截至2025年6月30日止六個月最新可用未經審計綜合管理賬目之初步評估及 董事會可得最新資料，本集團預期錄得除稅前利潤介乎人民幣350百萬元至人民幣400百 萬元，與之相比，截至2024年6月30日止六個月的除稅前利潤約為人民幣478百萬元。 除稅前利潤預計減少主要是由於(1)國內火電發電量整 ...

Business Development and Strategy - In 2024, the company focused on high-quality development and deepened reforms, achieving stable growth in main businesses and increasing market share[8]. - The company aims to develop four major industrial sectors: in-depth environmental treatment, environmental protection product manufacturing, new energy technology services, and resource recycling by 2025[10]. - The company is committed to improving quality and efficiency, consolidating competitive advantages in traditional industries, and advancing technological innovation[10]. - The company plans to establish three platforms for innovative research, investment in strategic emerging industries, and engineering consulting services[10]. - The company is positioned as the sole platform for environmental protection and energy conservation business under China Datang Corporation[16]. - The Group plans to actively explore clients in the iron and steel, cement, and petrochemical industries to diversify its client base[142]. - The Group aims to improve quality and efficiency, consolidating competitive advantages in traditional industries by enhancing value creation capabilities and optimizing procurement strategies for bulk materials[145]. - The Group plans to deepen its traditional environmental protection business, focusing on expanding the scale of liquid ammonia to urea and zero wastewater discharge projects[145]. - The Group will expand its franchise business by actively pursuing incremental projects in Chaozhou, Lvsi, and Sanmenxia, aiming for steady growth in profitability[145]. Financial Performance - For the year ended 31 December 2024, the Group's revenue amounted to RMB 5,770.9 million, representing an increase of 0.9% compared to the previous year[21]. - The gross profit for the year ended 31 December 2024 was RMB 1,229.4 million, reflecting a 7.4% increase year-over-year, with a gross profit margin of 21.3%, up by 1.3 percentage points[21]. - Total comprehensive income attributable to owners of the parent for the year ended 31 December 2024 was RMB 548.4 million, an increase of 4.9% compared to the previous year[21]. - The Group's profit for 2024 amounted to RMB 552.4 million, representing an increase of RMB 48.8 million, or 9.7%, from RMB 503.6 million in 2023[75]. - Profit before tax increased by 6.1% to RMB 655.1 million in 2024 from RMB 617.6 million in 2023[91][97]. - Profit attributable to owners of the parent increased by RMB 26.7 million to RMB 549.1 million in 2024 from RMB 522.4 million in 2023[94][100]. - The Group's return on total assets for 2024 was 3.6%, an increase from 2.8% in 2023[75]. - The Group's cash and cash equivalents decreased by 43.5% to RMB 994.7 million as of December 31, 2024, down from RMB 1,759.4 million as of December 31, 2023[111]. - Total assets decreased by 14.9% to RMB 15,348.1 million as of December 31, 2024, compared to RMB 18,045.1 million as of December 31, 2023[75]. Market Position and Industry Outlook - The Group maintained its position as the largest desulfurization and denitrification concession operator and the largest manufacturer of denitrification catalysts in the PRC[21]. - The environmental protection industry is projected to reach a scale of approximately RMB 15 trillion by 2030, indicating significant growth potential for the Group's related business[28]. - The environmental protection industry is projected to reach approximately RMB 15 trillion by 2030, driven by comprehensive green transformation initiatives[29]. - The Group's customers are spread across 30 provinces in the PRC and eight overseas countries, highlighting its extensive market reach[26]. - The Group's environmental protection facility concession operation business is strategically located in economically developed areas with high electricity demand, enhancing its operational efficiency[36]. Technological Innovation and Development - The company built an initial honeycomb catalyst product library and developed a 70-hole honeycomb catalyst, overcoming key technological bottlenecks[9]. - Significant progress was made in carbon monitoring, resource recycling, and solid waste disposal, supporting sustainable development[9]. - The Group's strategic focus on green recycling aligns with national policies aimed at enhancing resource recycling quality and efficiency[30]. - The Group intends to enhance its research and development capabilities in the new catalyst industry, aiming to develop catalysts for marine diesel engines and achieve SCR certification[149]. - The Group will accelerate the implementation of resource recycling projects, including the recycling of retired wind turbine blades and solid waste disposal projects, to meet the business needs of wind farms[149]. Shareholder and Dividend Information - As of December 31, 2024, the company had issued a total of 2,967,542,000 shares, with the controlling shareholder, China Datang, holding approximately 78.96%[15]. - The Board proposed a final dividend of RMB 0.051 per ordinary share (before tax) for the year ended 31 December 2024[21]. - The proposed final dividend for the year ended December 31, 2024, is RMB 0.051 per ordinary share, compared to RMB 0.076 per share for the year ended December 31, 2023[186]. Risk Management and Compliance - The company has implemented risk management and internal control measures to ensure compliance with relevant laws and regulations[167]. - The Group's exposure to foreign currency risk was deemed insignificant for the years ended December 31, 2024, and December 31, 2023[134]. - The Group's ability to generate adequate cash inflows from operating activities will depend largely on project schedules and timely collection of receivables[141]. Environmental and Social Responsibility - The company actively fulfilled its social responsibilities in 2024, focusing on sustainable development and cooperation with stakeholders[162]. - The Group's management believes that the PRC government is unlikely to revise environmental protection policies adversely, given the severity of pollution issues[137].

Financial Performance - For the year ending December 31, 2024, the group's revenue was RMB 5,770.9 million, an increase of 0.9% compared to the previous year[4] - The group's gross profit for the year was RMB 1,229.4 million, up 7.4% year-on-year, with a gross profit margin of 21.3%, an increase of 1.3 percentage points[4] - The total comprehensive income attributable to equity holders of the parent company was RMB 548.4 million, reflecting a 4.9% increase from the previous year[4] - The net profit for the year was RMB 552.4 million, compared to RMB 503.6 million in the previous year[6] - The company's net profit for the year ended December 31, 2024, was RMB 549,061,000, an increase from RMB 522,375,000 in the previous year, representing a growth of approximately 5.1%[9] - Total comprehensive income for the year was RMB 548,352,000, compared to RMB 522,586,000 in the previous year, indicating an increase of about 4.9%[9] - The basic and diluted earnings per share attributable to ordinary shareholders was RMB 0.19, compared to RMB 0.18 in the previous year[6] - The group’s profit for 2024 was RMB 552.4 million, an increase of RMB 48.8 million (or 9.7%) compared to RMB 503.6 million in 2023[92] - Profit before tax increased by 6.1% from RMB 617.6 million in 2023 to RMB 655.1 million in 2024[100] - Net profit increased by RMB 48.8 million to RMB 552.4 million in 2024, with the profit margin rising to 9.6% from 8.8% in 2023[102] Dividends - The board proposed a final dividend of RMB 0.051 per ordinary share (pre-tax) for the year ending December 31, 2024[4] - The company declared a final dividend of RMB 314,500,000 for the year, compared to RMB 148,377,000 in the previous year, representing an increase of about 111.2%[11] - The proposed final dividend for the year ending December 31, 2024, is RMB 0.051 per share, a decrease from RMB 0.076 per share for the previous year[127] - The interim dividend for 2024 is set at RMB 0.03 per share, totaling RMB 88,953,000[50] Assets and Liabilities - The total assets less current liabilities amounted to RMB 9,013.9 million, compared to RMB 9,306.1 million in the previous year[8] - Current liabilities decreased to RMB 6,334.1 million from RMB 8,739.0 million in the previous year[8] - Non-current assets totaled RMB 6,796.4 million, down from RMB 7,292.1 million in the previous year[7] - The total assets of the group amounted to RMB 15,348,073 thousand as of December 31, 2024[30] - The total liabilities as of December 31, 2024, amounted to RMB 7,838,479 thousand, a decrease from RMB 10,763,498 thousand in the previous year[33] - The total liabilities decreased by 27.2% from RMB 10,763.5 million at the end of 2023 to RMB 7,838.5 million at the end of 2024[92] Cash Flow - Cash generated from operating activities was RMB 1,840,770,000, slightly down from RMB 1,906,327,000 in the previous year, reflecting a decrease of approximately 3.4%[10] - The company reported a decrease in cash flow from investing activities, with a net outflow of RMB 340,970,000 compared to RMB 560,210,000 in the previous year, a reduction of about 39.1%[11] - Financing activities resulted in a net cash outflow of RMB 2,139,909,000, significantly higher than the previous year's outflow of RMB 364,157,000, indicating a substantial increase in financing costs[11] - The company’s cash and cash equivalents at the end of the year were RMB 994,747,000, down from RMB 1,759,357,000 at the beginning of the year, reflecting a decrease of approximately 43.4%[11] - Operating cash flow for the group was RMB 1,702.8 million for the year ending December 31, 2024, with a significant reliance on project timelines and collection of receivables for future cash flow[121] Segment Performance - The environmental energy solutions segment generated revenue of RMB 5,497,468 thousand, accounting for approximately 95.3% of total revenue[30] - The renewable energy engineering segment reported revenue of RMB 252,259 thousand, representing a smaller portion of the overall revenue[30] - The group incurred a loss of RMB 128,515 thousand in the other business segment, impacting overall profitability[30] - The segment revenue from Environmental Solutions was RMB 5,497,468 thousand, while Renewable Energy Engineering contributed RMB 252,259 thousand for the year ended December 31, 2024[37] - Revenue from energy-saving solutions increased by 2.4% to RMB 5,497.5 million in 2024, accounting for 94.7% of total revenue[105] Research and Development - The company has allocated HKD 1,219.50 million for expanding its desulfurization and denitrification business, which has been fully utilized[134] - Research and development expenses amounted to HKD 101.60 million, with HKD 75.11 million actually used, and an expected remaining balance of HKD 18.49 million to be utilized by December 2025[134] - The group obtained 45 patent authorizations in 2024, including 36 invention patents[90] Market Position and Strategy - The company maintained its position as the largest desulfurization and denitrification operator and the largest denitrification catalyst manufacturer in the People's Republic of China[4] - The company operates in various sectors including environmental facility operation, denitration catalyst production and sales, water services, energy-saving engineering, and renewable energy projects[12] - The environmental protection industry is projected to reach a scale of approximately RMB 15 trillion by 2030, indicating significant growth potential for the company's related business[71] - The company is expanding its business in the recycling of retired wind turbine blades, waste photovoltaic panels, and energy storage batteries, guided by recent government policies promoting resource recycling[72] - The company is actively involved in the development of a clean, low-carbon, safe, and efficient new energy system, aligning with national carbon neutrality goals[73] Compliance and Governance - The company has adopted revised International Financial Reporting Standards (IFRS) for the fiscal year ending December 31, 2024, with no significant impact on financial statements[15] - The company has adhered to the corporate governance code and has not faced any significant legal lawsuits requiring board member accountability during the reporting period[128] - The chairman, Mr. Zhu, is also acting as the general manager following the resignation of the previous general manager in September 2023, which deviates from the corporate governance code[129] - The audit committee has reviewed the annual performance and the consolidated financial statements prepared in accordance with international financial reporting standards[132]

Financial Performance - For the six months ended June 30, 2024, the company's revenue was RMB 2,603,089,000, an increase of 4.2% compared to RMB 2,499,180,000 in the same period of 2023[7]. - Gross profit for the same period was RMB 642,493,000, up 24.2% from RMB 517,157,000 in 2023[7]. - Profit for the period reached RMB 408,924,000, representing a significant increase of 51.6% compared to RMB 270,119,000 in the previous year[9]. - Earnings per share attributable to ordinary equity holders of the parent increased to RMB 0.13, compared to RMB 0.09 in the same period last year[9]. - Total comprehensive income for the period was RMB 407,598,000, compared to RMB 268,134,000 in 2023, reflecting a growth of 52.1%[8]. - The company reported a profit before tax of RMB 477,999,000, an increase from RMB 319,354,000 in the same period of 2023[7]. - The Group's profit for the six months ended 30 June 2024 amounted to RMB 408.9 million, an increase of RMB 138.8 million from RMB 270.1 million for the same period in 2023[37]. - Profit before tax increased by 49.7% to RMB 478.0 million for the six months ended 30 June 2024, compared to RMB 319.4 million for the same period in 2023[43]. - Profit for the period increased by 51.4% from RMB 270.1 million for the six months ended 30 June 2023 to RMB 408.9 million for the six months ended 30 June 2024[43]. Assets and Liabilities - Total current assets decreased to RMB 9,859,952, down 8.3% from RMB 10,752,980 as of December 31, 2023[10]. - Total liabilities decreased to RMB 9,450,013, down 8.8% from RMB 10,763,498 as of December 31, 2023[10]. - The Group's total assets decreased to RMB 16,897,809, down 6.4% from RMB 18,045,122 as of December 31, 2023[10]. - Total current liabilities decreased to RMB 7,464,591, down 14.6% from RMB 8,739,021 as of December 31, 2023[10]. - The Group's total equity increased to RMB 7,447,796, up 2.3% from RMB 7,281,624 as of December 31, 2023[10]. - The Group's cash and cash equivalents decreased by 12.5% to RMB 1,538.7 million as of June 30, 2024, compared to RMB 1,759.4 million as of December 31, 2023[50]. - The Group's total liabilities decreased by 12.2% to RMB 9,450.0 million as of June 30, 2024, down from RMB 10,763.5 million as of December 31, 2023[39]. - The Group's return on total assets for the six months ended 30 June 2024 was 2.42%, compared to 1.46% for the same period in 2023[39]. Cash Flow - Net cash flows generated from operating activities increased to RMB 539,133, up 40.2% from RMB 384,924 in the same period of 2023[11]. - Net cash flows used in investing activities improved to RMB (135,412), a decrease of 12.1% from RMB (154,109) in the same period of 2023[11]. - Cash and cash equivalents at the end of the period stood at RMB 1,538,656 thousand, up from RMB 1,092,443 thousand, reflecting an increase of approximately 40.5%[147]. - The company reported a decrease in cash and cash equivalents of RMB (220,735) thousand for the current period, contrasting with an increase of RMB 219,994 thousand in the previous period[147]. Business Operations - The company operates primarily in environmental protection and energy conservation, with key business segments including water treatment and renewable energy engineering[5]. - The Group operates in over 30 provinces and 7 countries, providing environmental protection solutions for coal-fired power generation enterprises[12]. - The energy conservation and environmental protection industry is projected to reach approximately RMB 15 trillion by 2030, an increase of RMB 6 trillion compared to 2023[15]. - The Group's revenue from concession operations is directly affected by the power generation output of coal-fired power plants, which is a significant part of its business focus[55]. - The Group is actively developing its overseas business, particularly in countries along the "Belt and Road" route, and has established mature risk management systems to mitigate associated risks[56]. Shareholder Information - The controlling shareholder, China Datang, holds approximately 78.96% of the total issued shares as of June 30, 2024[5]. - As of June 30, 2024, the total number of shares is 2,967,542,000, with domestic shares at 2,343,245,800 and H shares at 624,296,200[68]. - The proposed interim dividend for the six months ended June 30, 2024, is RMB 0.03 per share, totaling approximately RMB 89,026,260 before tax, based on 2,967,542,000 shares issued as of June 30, 2024[82]. Governance and Compliance - The company has complied with the Corporate Governance Code during the reporting period, with no deviations noted[78]. - Mr. Zhu Liming served as both the chairman and acting general manager during the reporting period, which deviated from the Corporate Governance Code provision C.2.1[79]. - The company will continue to review the current structure of the Board to ensure proper checks and balances[79]. - The company has adopted the Model Code for dealing in its securities, and all Directors and Supervisors confirmed compliance during the reporting period[80]. Research and Development - The Group obtained 18 patents in the first half of 2024, all of which were invention patents, bringing the total to 1,229 patents in force[33]. - The company aims to advance the development of high-porosity honeycomb catalyst technology and new products such as medium and low-temperature honeycomb catalysts[62]. - The company is focusing on developing industrial and commercial distributed photovoltaics and user-side energy storage projects to promote coordinated development of clean energy solutions[63]. Market Trends and Future Outlook - The low-carbon transformation plan provides a clear direction for the Company to explore new avenues in environmental protection operations and construction businesses[20]. - The management believes that coal-fired power generation will continue to dominate the market in the PRC, despite concerns over environmental issues[55]. - The ongoing development of new technologies and products in the renewable energy sector reflects the Group's strategy for future growth and market expansion[157].

Financial Performance - For the six months ended June 30, 2024, the group's revenue was RMB 2,603.1 million, an increase of 4.2% compared to the same period last year[1]. - The gross profit for the same period was RMB 642.5 million, with a gross profit margin of 24.7%, which is an increase of 4 percentage points year-on-year[1]. - The total comprehensive income attributable to the owners of the parent company was RMB 398.9 million, representing a significant increase of 50.5% compared to the previous year[1]. - The net profit for the period was RMB 408.9 million, compared to RMB 270.1 million in the same period last year, reflecting a year-on-year increase of 51.5%[2]. - The total comprehensive income for the six months ended June 30, 2024, was RMB 398,948,000, compared to RMB 265,109,000 for the same period in 2023, showing a growth of approximately 50%[6]. - The profit attributable to the parent company's owners increased by 50.2% to RMB 399.9 million for the six months ended June 30, 2024, from RMB 266.2 million in the same period of 2023[92]. - The group's pre-tax profit increased by 49.7% to RMB 478.0 million for the six months ended June 30, 2024, from RMB 319.4 million in the same period of 2023[89]. Dividends - The board proposed an interim dividend of RMB 0.03 per share for the six months ended June 30, 2024, subject to shareholder approval[1]. - The company plans to distribute a cash dividend of RMB 0.03 per share for the six months ended June 30, 2024, amounting to RMB 89,026,260, pending shareholder approval[28]. - The company declared a final dividend of RMB 225,533,000 for the year 2023, reflecting a commitment to returning value to shareholders despite the operational challenges[6]. Assets and Liabilities - The total assets less current liabilities amounted to RMB 9,433.2 million as of June 30, 2024, compared to RMB 9,306.1 million as of December 31, 2023[4]. - Non-current assets totaled RMB 7,037.9 million as of June 30, 2024, down from RMB 7,292.1 million at the end of the previous year[4]. - Current liabilities decreased to RMB 7,464.6 million from RMB 8,739.0 million as of December 31, 2023[4]. - As of June 30, 2024, the total equity amounted to RMB 7,447,796,000, an increase from RMB 6,896,749,000 as of January 1, 2023, reflecting a growth of approximately 8%[6]. - The total assets of the group as of June 30, 2024, were RMB 16,897,809 thousand, with total liabilities amounting to RMB 9,450,013 thousand[18]. - Total liabilities decreased by 12.2% to RMB 9,450.0 million as of June 30, 2024, from RMB 10,763.5 million as of December 31, 2023[81]. Cash Flow - The net cash flow from operating activities for the six months ended June 30, 2024, was RMB 539,133,000, compared to RMB 384,924,000 for the same period in 2023, representing an increase of about 40%[7]. - The company reported a net cash outflow from investing activities of RMB 135,412,000 for the first half of 2024, a slight improvement from RMB 154,109,000 in the previous year[7]. - Financing activities resulted in a net cash outflow of RMB 624,456,000 for the six months ended June 30, 2024, compared to RMB 10,821,000 in the same period of 2023, indicating a significant increase in financing costs[7]. - Cash and cash equivalents stood at RMB 1,538,657 thousand as of June 30, 2024, down from RMB 1,759,357 thousand as of December 31, 2023, representing a decrease of about 12.5%[35]. Revenue Breakdown - Revenue from environmental energy-saving solutions was RMB 2,457,887 thousand, while renewable energy engineering contributed RMB 135,335 thousand, and thermal power engineering had no reported revenue for this period[18]. - Revenue from major customer China Datang Group was approximately RMB 1,992 million for the six months ended June 30, 2024, compared to RMB 2,138 million for the same period in 2023[20]. - Sales to China Datang Group amounted to RMB 1,992,076 thousand for the six months ended June 30, 2024, compared to RMB 2,138,196 thousand for the same period in 2023, a decrease of 6.8%[46]. - Sales to China Datang Group and its associates accounted for approximately 80.6% of total revenue, totaling RMB 2,098.6 million for the six months ended June 30, 2024[105]. Operational Highlights - The company plans to continue expanding its renewable energy engineering projects, focusing on wind, biomass, and photovoltaic power plants[14]. - The company is actively involved in the environmental protection industry, serving clients across over 30 provinces and regions in China and seven other countries[67]. - The company has ongoing distributed photovoltaic projects with a total installed capacity of 14.91 MW, generating 9.0322 million kWh in the first half of 2024[77]. - The company has five ongoing desulfurization projects with a total value of RMB 697.35 million as of June 30, 2024[74]. - The company signed three new renewable energy engineering projects with a total installed capacity of 246.191 MW in the first half of 2024[78]. Employee and Management - As of June 30, 2024, the company employed a total of 969 employees, with 32.51% in franchise management, 30.65% in R&D, and 19.92% in engineering[109]. - The employee training rate reached 100%, with 25 training programs conducted during the reporting period[110]. - Total remuneration paid to key management personnel decreased to RMB 2,144,000 in the six months ended June 30, 2024, down 27.7% from RMB 2,966,000 in the same period of 2023[53]. Compliance and Governance - The company has maintained compliance with corporate governance codes, ensuring appropriate checks and balances within its board structure[115]. - The company emphasizes compliance with Chinese labor laws and has established a performance evaluation system to motivate employees[110]. - The audit committee has reviewed the unaudited interim consolidated financial information for the six months ended June 30, 2024, with no disagreements noted[123]. Future Outlook - The company plans to actively expand its customer base in industries such as steel, cement, and petrochemicals, in response to the growing demand for environmental energy solutions[107]. - The company aims to enhance its core capabilities in engineering business, focusing on traditional environmental protection services and expanding into carbon reduction and wastewater treatment[114]. - The company is committed to developing strategic emerging industries, including advancements in catalyst technology and carbon monitoring products[112]. - The company will adjust its business focus to strategic emerging industries, withdrawing from less competitive areas to concentrate resources on high-potential sectors[111].

Financial Performance - The group achieved a revenue of RMB 5,720,131 thousand in 2023, compared to RMB 5,322,722 thousand in 2022, reflecting an increase of approximately 7.5%[6] - Gross profit for the year was RMB 1,145,018 thousand, up from RMB 789,421 thousand in the previous year, indicating a significant growth of about 45%[6] - The group reported a pre-tax profit of RMB 617,626 thousand, which is a substantial increase from RMB 296,795 thousand in 2022, representing a growth of approximately 108%[6] - Net profit for the year reached RMB 503,570 thousand, compared to RMB 238,123 thousand in 2022, marking an increase of around 111%[6] - The effective tax rate for the group decreased to 18.47% in 2023 from 19.77% in 2022, indicating improved tax efficiency[72] - The company declared dividends of RMB 148,377 thousand to shareholders for the year ended December 31, 2023, compared to RMB 88,432 thousand in the previous year, marking an increase of approximately 67.8%[72] - Basic earnings per share for 2023 were RMB 0.18, compared to RMB 0.09 in 2022, representing a 100% increase[1] - The company's profit before tax surged by 108.1% from RMB 296.8 million in 2022 to RMB 617.6 million in 2023[172] - The annual profit increased from RMB 238.1 million in 2022 to RMB 503.6 million in 2023, representing a growth of 111.4%[189] - The profit margin for the group rose to 8.8% in 2023, compared to 4.5% in 2022[189] Revenue Sources - Revenue from sales of goods and services to China Datang and its subsidiaries amounted to approximately RMB 5,119 million, up from RMB 4,070 million in 2022[33] - Revenue generated from contracts with customers reached RMB 5,720,131 thousand in 2023, compared to RMB 5,322,722 thousand in 2022, reflecting a growth of approximately 7.5%[34] - The company’s revenue from desulfurization and denitrification services amounted to RMB 4,320,846 thousand, contributing significantly to the overall revenue[76] - The company’s revenue from construction services was RMB 1,103,860 thousand, highlighting its strong performance in this segment[76] - The company's revenue increased by 7.5% from RMB 5,322.7 million in 2022 to RMB 5,720.1 million in 2023, primarily due to the growth in environmental energy-saving business[170] Operational Efficiency - Cash flow from operating activities for the year was RMB 1,811,106 thousand, significantly up from RMB 531,346 thousand in the previous year, indicating improved operational efficiency[13] - The group’s sales cost increased by 0.9% from RMB 4,533.3 million in 2022 to RMB 4,575.1 million in 2023, primarily due to rising costs in engineering operations[30] - The total gross profit for the environmental energy solutions segment was RMB 1,180.9 million in 2023, with a gross margin of 22.0%, up from RMB 880.4 million and 17.3% in 2022[196] - The total gross profit for renewable energy engineering was RMB 43.9 million in 2023, a significant improvement from a loss of RMB 75.6 million in 2022[196] Assets and Liabilities - The total equity of the group increased to RMB 7,281,624 thousand as of December 31, 2023, compared to RMB 6,896,749 thousand in 2022[11] - Total liabilities amounted to RMB 10,763,498 thousand, with allocated liabilities across various business segments including RMB 9,113,737 thousand for environmental energy solutions[54] - The company’s total liabilities as of December 31, 2023, were RMB 11,451,508 thousand, reflecting a stable financial position[73] - Total assets decreased by 1.7% from RMB 18,348.3 million in 2022 to RMB 18,045.4 million in 2023[102] - Total liabilities decreased by 6.0% from RMB 11,451.5 million in 2022 to RMB 10,763.5 million in 2023[102] Investments and Expenditures - Capital expenditures for the year totaled RMB 389,844 thousand, primarily for property, plant, and equipment[54] - The company’s capital expenditure for the year was RMB 172,178 thousand, indicating ongoing investment in growth and infrastructure[73] - The company issued three tranches of short-term financing bonds totaling RMB 1.5 billion in 2023, with interest rates ranging from 2.25% to 2.38%[182] Market Position and Expansion - The group maintained its position as the largest flue gas desulfurization and denitrification concessionaire in China, with all new projects transitioning to operational status in 2023[2] - The group continues to lead as the largest producer of denitrification catalysts in China, with total catalyst production in 2023 reflecting this status[1] - The group is actively expanding its environmental governance services into non-electric sectors such as steel, cement, and metallurgy, broadening its business scope and influence[2] - The group plans to actively explore the environmental market in non-electric industries such as petroleum, coking, steel, and cement[55] - The group has successfully launched overseas projects in Thailand and India, with stable operations and no ongoing overseas projects as of December 31, 2023[125] Trade Receivables and Impairments - Trade receivables as of December 31, 2023, amounted to RMB 7,797,976,000, down from RMB 8,677,433,000 in 2022, a decrease of approximately 10.1%[2] - The provision for impairment of trade receivables increased to RMB 333,490,000 in 2023 from RMB 309,483,000 in 2022, reflecting a rise of 7.8%[4] - The net impairment loss on trade receivables was RMB 24,007,000 in 2023, compared to RMB 16,518,000 in 2022, indicating an increase of 45.5%[134] Corporate Governance and Compliance - The company has not adopted certain revised international financial reporting standards that are relevant to its consolidated financial statements, planning to apply them upon their effective dates[43] - The company has implemented various policies in 2023 aimed at carbon neutrality, which are expected to create new opportunities in carbon monitoring and energy-saving industries[167] - The company has a favorable corporate income tax rate of 15% due to recognition as a high-tech enterprise[110] Research and Development - The company obtained 50 patent authorizations in 2023, including 33 invention patents[97] - The company recognized a full impairment provision of RMB 4,053,000 for receivables due to disputes with an Indian client regarding project delays[157] Other Financial Metrics - Other income increased from RMB 111.5 million in 2022 to RMB 157.8 million in 2023, primarily due to increased gains from the disposal of properties, plants, and equipment[106] - Financial expenses decreased by 11.5% from RMB 199.3 million in 2022 to RMB 176.3 million in 2023, attributed to a reduction in long-term interest-bearing bank loans[108] - The aging analysis of trade receivables showed that amounts overdue for more than three years were RMB 1,973,762,000 in 2023, slightly down from RMB 2,016,666,000 in 2022[133]

大唐環境產業集團股份有限公司 Datang Environment Industry Group Co., Ltd.* I N IN IN BE * For identification purpose only 懂供識別 Interim Condensed Consolidated Statement of Financial Highlights 3 財務摘要 Significant Events 33 重大事項 Profit or Loss and Other Comprehensive Income 56 Interim Condensed Consolidated Statement of Cash Flows 61 中期簡明合併現金流量表 of total before revenue before elimination (1) Revenue elimination (1) Change Revenue As at 30 June 2023, the Company's major corporate structure was as follows: 於2023年6月30日，本公司主要企業架 ...

[Financial and Operational Summary](index=1&type=section&id=Financial%20and%20Operational%20Summary) The company reported key financial metrics for the first half of 2023, showing revenue growth and increased comprehensive income, with no interim dividend proposed Key Financial Indicators for H1 2023 | Indicator | H1 2023 (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 2,499.2 | +7.8% | | Gross Profit | 517.2 | - | | Gross Margin | 20.7% | -0.2 percentage points | | Total Comprehensive Income Attributable to Owners of the Parent | 265.1 | +33.8% | - The Board did not recommend the distribution of an interim dividend for the six months ended June 30, 2023[202](index=202&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated financial statements, including income, financial position, equity changes, and cash flows [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the company's revenue increased by **7.8%** to **RMB 2,499.2 million**, with gross profit at **RMB 517.2 million** and a slight decrease in gross margin, while profit for the period and profit attributable to owners of the parent both achieved significant growth Overview of Profit or Loss and Other Comprehensive Income | Indicator | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,499,180 | 2,318,791 | +7.8 | | Cost of Sales | (1,982,023) | (1,834,623) | +8.0 | | Gross Profit | 517,157 | 484,168 | +6.8 | | Selling and Distribution Expenses | (9,809) | (6,300) | +55.7 | | Administrative Expenses | (162,174) | (159,294) | +1.8 | | Other Income and Losses | 67,234 | 35,466 | +89.5 | | Net Other Expenses | – | (4,275) | - | | Finance Costs | (89,082) | (103,090) | -13.6 | | Impairment Losses on Financial and Contract Assets, Net | (3,972) | (4,801) | -17.2 | | Profit Before Tax | 319,354 | 241,874 | +32.0 | | Income Tax Expense | (49,235) | (41,964) | +17.3 | | Profit for the Period | 270,119 | 199,910 | +35.1 | | Profit Attributable to Owners of the Parent | 266,220 | 197,038 | +35.1 | | Profit Attributable to Non-controlling Interests | 3,899 | 2,872 | +35.7 | | Basic and Diluted Earnings Per Share | RMB 0.09 | RMB 0.07 | +28.6 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets slightly increased, and net current assets significantly rose, primarily due to increased trade receivables and reduced interest-bearing bank and other borrowings, leading to an improved net debt to capital ratio Overview of Financial Position | Indicator | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 7,252,379 | 7,410,661 | -2.1 | | Total Current Assets | 11,225,925 | 10,937,596 | +2.6 | | Total Current Liabilities | 8,786,108 | 10,533,347 | -16.5 | | Net Current Assets | 2,439,817 | 404,249 | +503.6 | | Total Non-current Liabilities | 2,675,788 | 918,161 | +191.4 | | Net Assets | 7,016,408 | 6,896,749 | +1.7 | | Total Equity | 7,016,408 | 6,896,749 | +1.7 | - As of June 30, 2023, the Group's net debt to capital ratio (net debt divided by the sum of net debt and total equity) was **39.71%**, a decrease of **1.17 percentage points** from **40.88%** as of December 31, 2022[86](index=86&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2023, total equity attributable to owners of the parent increased to **RMB 7,176,995 thousand**, primarily driven by profit growth for the period, alongside the declaration of the 2022 final dividend Overview of Changes in Equity | Indicator | January 1, 2023 (Audited) (RMB thousand) | Profit for the Period (RMB thousand) | Other Comprehensive Loss for the Period (RMB thousand) | Final Dividend Declared for 2022 (RMB thousand) | June 30, 2023 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Attributable to Owners of the Parent | 7,060,361 | 266,220 | (1,111) | (148,475) | 7,176,995 | | Non-controlling Interests | (163,612) | 3,899 | (874) | – | (160,587) | | Total Equity | 6,896,749 | 270,119 | (1,985) | (148,475) | 7,016,408 | - In the first half of 2023, exchange differences related to overseas operations resulted in an **other comprehensive loss of RMB 1,111 thousand**[187](index=187&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash flow from operating activities significantly increased, cash outflow from investing activities rose, while cash outflow from financing activities substantially decreased, leading to a net increase in cash and cash equivalents at period-end Overview of Cash Flows | Indicator | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 384,924 | 276,587 | +39.1% | | Net Cash Flows Used in Investing Activities | (154,109) | (97,880) | +57.4% | | Net Cash Flows Used in Financing Activities | (10,821) | (451,612) | -97.6% | | Net Increase / (Decrease) in Cash and Cash Equivalents | 219,994 | (272,905) | - | | Cash and Cash Equivalents at End of Period | 1,092,443 | 972,286 | +12.4% | - Cash outflow from financing activities significantly decreased, primarily due to reduced repayments of bank and other borrowings[189](index=189&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=8&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes and explanations supporting the interim condensed consolidated financial statements [Company and Group Information](index=8&type=section&id=Company%20and%20Group%20Information) The company was established in China on **July 25, 2011**, listed on the Stock Exchange in **2016**, and primarily engages in environmental facility concession operations, denitration catalyst production and sales, environmental facility engineering, water treatment, energy-saving engineering, and renewable energy engineering, with China Datang Corporation Ltd. as its direct and ultimate controlling company - The company was established in China on **July 25, 2011**, and listed on the Main Board of the Stock Exchange on **November 15, 2016**[190](index=190&type=chunk) - The Group's principal activities include environmental facility concession operations, production and sales of denitration catalysts, environmental facility engineering, water treatment business, energy-saving engineering business, and renewable energy engineering business[210](index=210&type=chunk) - The company's direct and ultimate controlling company is China Datang Corporation Ltd., which is wholly owned by the State-owned Assets Supervision and Administration Commission of the State Council[191](index=191&type=chunk) [Basis of Preparation and Changes in Accounting Policies and Disclosures](index=8&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) These interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and are consistent with the accounting policies of the 2022 annual consolidated financial statements, with no significant impact from newly adopted IFRS and IAS amendments during the period - These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[232](index=232&type=chunk) - The accounting policies and basis of preparation for these interim condensed consolidated financial statements are consistent with those used in the Group's annual consolidated financial statements for the year ended December 31, 2022[195](index=195&type=chunk) - The adoption of new and revised International Financial Reporting Standards and International Accounting Standards had no significant impact on the unaudited condensed consolidated financial statements for the six months ended June 30, 2023[234](index=234&type=chunk) [Operating Segment Information](index=10&type=section&id=Operating%20Segment%20Information) The Group's operations are categorized into four segments: environmental protection and energy-saving solutions, renewable energy engineering, thermal power engineering, and other businesses, with management allocating resources and assessing performance based on segment results, and segment assets and liabilities determined by direct attribution or reasonable allocation - The Group's operating businesses are categorized by nature into environmental protection and energy-saving solutions, renewable energy engineering, thermal power engineering, and other businesses[216](index=216&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) H1 2023 Segment Revenue and Results | Segment | Revenue (RMB thousand) | Segment Results (RMB thousand) | | :--- | :--- | :--- | | Environmental Protection and Energy-Saving Solutions | 2,264,734 | 401,787 | | Renewable Energy Engineering | 222,774 | 11,168 | | Thermal Power Engineering | – | – | | Other Businesses | 24,348 | (22,135) | | Total | 2,511,856 | 390,820 | - Segment results are assessed based on adjusted profit before tax, excluding other income and losses, other expenses, finance costs unrelated to leases, and corporate and other unallocated expenses[239](index=239&type=chunk) [Segment Revenue](index=11&type=section&id=Segment%20Revenue) Environmental protection and energy-saving solutions business is the primary revenue source, with significant growth in renewable energy engineering revenue, and total revenue aligns with the consolidated income statement after inter-segment eliminations H1 2023 Segment Revenue Details | Segment | Sales to External Customers (RMB thousand) | Inter-segment Sales (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Environmental Protection and Energy-Saving Solutions | 2,264,734 | – | 2,264,734 | | Renewable Energy Engineering | 222,774 | – | 222,774 | | Thermal Power Engineering | – | – | – | | Other Businesses | 11,672 | 12,676 | 24,348 | | Total | 2,499,180 | 12,676 | 2,511,856 | - External revenue from the renewable energy engineering business increased by **123.2%** year-on-year, indicating strong growth in this segment[102](index=102&type=chunk) [Geographical Information and Major Customers](index=13&type=section&id=Geographical%20Information%20and%20Major%20Customers) The Group's principal operations and revenue are concentrated in mainland China, with significant related party transactions with China Datang Corporation Ltd. and its subsidiaries - Major non-current assets are located in mainland China, and major revenue is derived from mainland China, thus no further geographical segment information is presented[244](index=244&type=chunk) - Revenue from sales of goods and services to China Datang and its subsidiaries was approximately **RMB 2,138 million** (H1 2022: approximately **RMB 1,977 million**)[245](index=245&type=chunk) [Revenue](index=13&type=section&id=Revenue) For the six months ended June 30, 2023, the Group's revenue was **RMB 2,499,180 thousand**, primarily from desulfurization and denitration services and construction services, with significant growth in construction service revenue Revenue by Type of Goods or Services | Type of Goods or Services | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Sales of Industrial Products | 147,035 | 187,760 | | Construction Services | 426,436 | 238,680 | | Desulfurization and Denitration Services | 1,925,709 | 1,892,351 | | Total | 2,499,180 | 2,318,791 | - Construction service revenue increased from **RMB 238,680 thousand** in H1 2022 to **RMB 426,436 thousand** in H1 2023[224](index=224&type=chunk) - Revenue recognition primarily occurs for services transferred over time (**RMB 2,352,145 thousand**), followed by goods transferred at a point in time (**RMB 147,035 thousand**)[224](index=224&type=chunk) [Other Income and Losses](index=15&type=section&id=Other%20Income%20and%20Losses) For the six months ended June 30, 2023, the Group's total other income and losses amounted to **RMB 67,234 thousand**, a significant increase from the prior period, primarily driven by higher government grants Details of Other Income and Losses | Item | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 3,434 | 4,760 | | Government Grants | 53,722 | 24,866 | | Gain on Disposal of Property, Plant and Equipment Items | 2,945 | – | | Compensation Income | 1,301 | – | | Investment Income | 977 | – | | Exchange Gain | 4,855 | 5,999 | | Other Losses, Net | – | (159) | | Total | 67,234 | 35,466 | - Government grants significantly increased from **RMB 24,866 thousand** in H1 2022 to **RMB 53,722 thousand** in H1 2023[3](index=3&type=chunk) [Finance Costs](index=17&type=section&id=Finance%20Costs) For the six months ended June 30, 2023, the Group's finance costs were **RMB 89,082 thousand**, a decrease from the prior period, primarily due to a reduction in the annual interest rate on borrowings Details of Finance Costs | Item | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Interest Expense on Lease Liabilities | 5,480 | 6,061 | | Interest Expense on Bank and Other Borrowings | 83,961 | 97,029 | | Less: Capitalized Interest | (359) | – | | Total | 89,082 | 103,090 | - Finance costs decreased by **13.6%** year-on-year, primarily due to a reduction in the annual interest rate on borrowings during the current period compared to the same period last year[164](index=164&type=chunk) [Income Tax Expense](index=17&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2023, the Group's income tax expense was **RMB 49,235 thousand**, an increase from the prior period, primarily contributed by current income tax Details of Income Tax Expense | Item | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax | 50,642 | 41,600 | | Deferred Income Tax | (1,407) | 364 | | Total | 49,235 | 41,964 | - Income tax expense increased by **17.1%** to **RMB 49.2 million** from **RMB 42.0 million** in the same period of 2022[99](index=99&type=chunk) [Dividends](index=18&type=section&id=Dividends) The Board did not recommend an interim dividend for the six months ended June 30, 2023, while the 2022 final dividend of **RMB 148,475,000** was approved at the shareholders' meeting on June 29, 2023 - The Board did not recommend the distribution of any interim dividend for the six months ended June 30, 2023[144](index=144&type=chunk)[256](index=256&type=chunk) - The final dividend for the year ended December 31, 2022, of **RMB 0.05 per share** (pre-tax), amounting to **RMB 148,475,000**, was approved at the shareholders' meeting on **June 29, 2023**[284](index=284&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=18&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For the six months ended June 30, 2023, basic and diluted earnings per share increased to **RMB 0.09** from **RMB 0.07** in the prior period, primarily due to higher profit attributable to ordinary equity holders of the parent Earnings Per Share Calculation | Indicator | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Parent (RMB thousand) | 266,220 | 197,038 | | Weighted Average Number of Ordinary Shares in Issue (shares) | 2,967,542,000 | 2,967,542,000 | | Basic / Diluted Earnings Per Share | RMB 0.09 | RMB 0.07 | - The company had no potential dilutive ordinary shares in issue, thus the diluted earnings per share amount is the same as the basic earnings per share amount[8](index=8&type=chunk) [Property, Plant and Equipment](index=19&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2023, the Group's expenditures on purchases of property, plant and equipment items increased, and gains were recognized from the disposal of related items - For the six months ended June 30, 2023, the Group purchased property, plant and equipment items at a cost of **RMB 61,819,000**, an increase from **RMB 44,047,000** in the prior period[259](index=259&type=chunk) - The carrying amount of property, plant and equipment items disposed of by the Group was **RMB 2,669,000**, resulting in a **gain on disposal of RMB 2,945,000**[9](index=9&type=chunk) [Trade Receivables, Bills Receivable and Contract Assets](index=19&type=section&id=Trade%20Receivables%2C%20Bills%20Receivable%20and%20Contract%20Assets) As of June 30, 2023, the Group's total trade receivables, bills receivable, and contract assets amounted to **RMB 9,302,348 thousand**, a slight increase from the end of 2022, with contract assets showing significant growth Details of Trade Receivables, Bills Receivable and Contract Assets | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (Net) | 8,364,459 | 8,367,950 | | Bills Receivable | 524,041 | 610,254 | | Contract Assets (Net) | 413,848 | 183,725 | | Total | 9,302,348 | 9,161,929 | - Contract assets increased from **RMB 183,725 thousand** as of December 31, 2022, to **RMB 413,848 thousand** as of June 30, 2023, primarily originating from construction services[260](index=260&type=chunk) - Trade receivables are non-interest bearing, and the Group exercises strict control over outstanding receivables to mitigate credit risk[10](index=10&type=chunk) [Prepayments, Other Receivables and Other Assets](index=20&type=section&id=Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2023, the Group's total prepayments, other receivables, and other assets amounted to **RMB 578,937 thousand**, a decrease from the end of 2022 Details of Prepayments, Other Receivables and Other Assets | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Prepayments | 168,092 | 221,600 | | Deposits | 44,468 | 40,390 | | Other Receivables | 81,877 | 104,854 | | Other Current Assets | 286,923 | 292,824 | | Less: Impairment Allowance | (2,423) | (2,423) | | Total | 578,937 | 657,245 | [Cash and Cash Equivalents and Restricted Cash](index=21&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) As of June 30, 2023, the Group's cash and cash equivalents amounted to **RMB 1,092,443 thousand**, with restricted cash of **RMB 99,069 thousand**, primarily for performance bond deposits related to engineering services and property maintenance, and bank frozen funds related to construction contract disputes Details of Cash and Cash Equivalents and Restricted Cash | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Cash and Bank Balances | 1,191,512 | 964,534 | | Less: Restricted Cash | (99,069) | (92,338) | | Cash and Cash Equivalents | 1,092,443 | 872,196 | - Restricted cash primarily refers to deposits held for bills payable and performance bonds issued for engineering services, property maintenance, and bank frozen funds related to construction contract disputes[291](index=291&type=chunk) [Trade and Bills Payable](index=21&type=section&id=Trade%20and%20Bills%20Payable) As of June 30, 2023, the Group's total trade and bills payable amounted to **RMB 4,632,103 thousand**, a slight decrease from the end of 2022, and are typically settled within one year Details of Trade and Bills Payable | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 4,583,562 | 4,759,759 | | Bills Payable | 48,541 | 54,053 | | Total | 4,632,103 | 4,813,812 | - Trade and bills payable are non-interest bearing and are normally settled within one year[13](index=13&type=chunk) [Other Payables and Accruals](index=22&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2023, the Group's total other payables and accruals amounted to **RMB 1,077,053 thousand**, an increase from the end of 2022, primarily influenced by growth in contract liabilities and dividends payable Details of Other Payables and Accruals | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Contract Liabilities | 255,751 | 232,089 | | Taxes Payable Other Than Income Tax | 26,631 | 55,296 | | Interest Payable | 16,083 | 10,222 | | Dividends Payable | 176,400 | 28,925 | | Other Payables | 602,188 | 628,984 | | Total | 1,077,053 | 955,516 | - Other payables are non-interest bearing and have no fixed repayment terms[15](index=15&type=chunk) [Provisions](index=22&type=section&id=Provisions) As of June 30, 2023, the Group's total provisions amounted to **RMB 223 thousand**, a decrease from the end of 2022 Details of Provisions | Item | December 31, 2022 (Audited) (RMB thousand) | Amounts Utilized During the Year (RMB thousand) | June 30, 2023 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | :--- | | Classified as Current Liabilities | 600 | (377) | 223 | | Classified as Non-current Liabilities | 480 | – | 480 | | Total | 1,080 | (377) | 703 | [Interest-bearing Bank and Other Borrowings](index=23&type=section&id=Interest-bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2023, the Group's total interest-bearing bank and other borrowings amounted to **RMB 5,713,392 thousand**, a slight increase from the end of 2022, with a decrease in short-term borrowings and an increase in long-term borrowings Maturity Profile of Interest-bearing Bank and Other Borrowings | Maturity Period | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within One Year (Bank Borrowings) | 2,328,580 | 3,608,661 | | Second Year (Bank Borrowings) | 407,698 | 331,992 | | Third to Fifth Year (Bank Borrowings) | 973,748 | 187,802 | | Within One Year (Other Borrowings) | 738,891 | 1,142,791 | | Second Year (Other Borrowings) | 628,879 | 140,735 | | Third to Fifth Year (Other Borrowings) | 479,495 | 84,608 | | After Five Years (Other Borrowings) | 156,101 | 143,652 | | Total | 5,713,392 | 5,640,241 | - The company issued two tranches of super short-term commercial papers on **February 22, 2023**, and **April 20, 2023**, each with a face value of **RMB 500 million**, and actual annual interest rates of **2.25%** and **2.36%**, respectively[269](index=269&type=chunk) [Commitments](index=25&type=section&id=Commitments) As of June 30, 2023, the Group had contracted but unprovided capital commitments, primarily related to plant and equipment, and the previously planned joint venture with Datang Henan has been agreed to be withdrawn Details of Capital Commitments | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 335 | 322 | | Plant and Equipment | 66,347 | 61,571 | | Equity Investments | – | 15,048 | | Total | 66,682 | 76,941 | - The company and Datang Henan have agreed to withdraw from establishing a joint venture, and the originally planned equity investment of **RMB 15,048,000** has been cancelled[297](index=297&type=chunk) [Related Party Transactions](index=25&type=section&id=Related%20Party%20Transactions) The Group has significant related party transactions with China Datang Corporation Ltd. and its associates, including sales of goods and services, purchases of goods and services, interest on borrowings and deposits, outstanding balances, and property leases, and is actively expanding its customer base to reduce reliance on related party transactions - For the six months ended June 30, 2023, the Group's total sales of goods and services to China Datang Corporation Ltd. and its associates amounted to approximately **RMB 2,211.1 million**, accounting for approximately **88.4%** of total revenue[133](index=133&type=chunk) - For the six months ended June 30, 2023, the Group's total purchases of goods and services from China Datang Corporation Ltd. and its associates amounted to approximately **RMB 636.1 million**, accounting for approximately **32.1%** of total costs[133](index=133&type=chunk) Details of Related Party Transactions (H1 2023) | Type of Transaction | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Sales of Goods and Services to China Datang Corporation Ltd. | 2,138,196 | 1,976,528 | | Sales of Goods and Services to Associates and Joint Ventures of China Datang Corporation Ltd. | 72,946 | 125,565 | | Interest Expense on Borrowings from Subsidiaries of China Datang Corporation Ltd. | 7,744 | 6,767 | | Interest Income from Deposits with Subsidiaries of China Datang Corporation Ltd. | 1,687 | 2,855 | | Borrowings from Subsidiaries of China Datang Corporation Ltd. | 605,000 | 1,179,000 | | Purchases of Goods and Services from China Datang Corporation Ltd. | 592,353 | 645,750 | | Purchases of Goods and Services from Associates and Joint Ventures of China Datang Corporation Ltd. | 43,834 | 34,773 | - The Group is actively expanding its customer base, with contracts valued at **RMB 145 million** entered into with customers other than China Datang Corporation Ltd. and its associates as of June 30, 2023, accounting for approximately **17%** of the total contract value[133](index=133&type=chunk) [Fair Value of Financial Instruments and Fair Value Hierarchy](index=31&type=section&id=Fair%20Value%20of%20Financial%20Instruments%20and%20Fair%20Value%20Hierarchy) The fair value of the Group's financial instruments approximates their carrying amounts, primarily due to their short-term maturity, while the fair value of long-term interest-bearing bank and other borrowings is calculated by discounting future cash flows, with no fair value measurement hierarchy changes or fair value measured liabilities held during the period - The fair values of cash and cash equivalents, restricted cash, trade and bills receivable, financial assets included in prepayments, other receivables and other assets, trade and bills payable, financial liabilities included in other payables and accruals, and the current portion of interest-bearing bank and other borrowings all approximate their carrying amounts, primarily due to their short-term maturity[55](index=55&type=chunk) - The fair value of the non-current portion of long-term interest-bearing bank and other borrowings (excluding lease liabilities) is calculated by discounting expected future cash flows using current applicable discount rates for instruments with similar terms, credit risk, and remaining maturities[306](index=306&type=chunk) - During the period, the Group did not reclassify any financial assets or financial liabilities from Level 1 to Level 2, nor did it reclassify any financial assets or financial liabilities into or out of Level 3 of the fair value hierarchy[31](index=31&type=chunk) - As of June 30, 2023, and December 31, 2022, the Group did not hold any liabilities measured at fair value[342](index=342&type=chunk) [Contingent Liabilities](index=33&type=section&id=Contingent%20Liabilities) The Group faces contract disputes related to the Gujarat and NLC projects in India, for which performance bond provisions have been fully recognized, but the possibility of other compensation cannot be reliably measured at present - Due to the impact of the COVID-19 pandemic, the construction period for the Gujarat project in India was delayed, and GSECL proposed potential contract termination and performance bond encashment, for which the Group has fully provided for performance bond provisions of **RMB 75,848,000**[309](index=309&type=chunk) - Due to the impact of the COVID-19 pandemic, NLC India requested termination of the NLC project contract and encashment of the performance bond of **RMB 47,303,000**, for which the Group has fully provided and settled the provision[32](index=32&type=chunk) - As of the date of this announcement, the possibility of other compensation arising from the aforementioned contract disputes cannot be reliably measured[32](index=32&type=chunk)[309](index=309&type=chunk) [Events After the Reporting Period](index=34&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company's wholly-owned subsidiary, Water Engineering Company, agreed to sell target assets to Datang Baoji Thermal Power Plant, expecting to record a gain on disposal, and the Board also resolved to approve the registration and issuance of super short-term commercial papers and short-term commercial papers/medium-term notes not exceeding **RMB 3 billion** each - Water Engineering Company agreed to sell various buildings, structures, and equipment to Datang Baoji Thermal Power Plant for a consideration of **RMB 37,997,700**, with an expected pre-tax gain on disposal of approximately **RMB 26,331,800**[344](index=344&type=chunk) - The Board resolved to approve the registration and issuance of super short-term commercial papers not exceeding **RMB 3 billion**, and short-term commercial papers and medium-term notes totaling not exceeding **RMB 3 billion**, with the National Association of Financial Market Institutional Investors[33](index=33&type=chunk) [Approval of Interim Condensed Consolidated Financial Information](index=34&type=section&id=Approval%20of%20Interim%20Condensed%20Consolidated%20Financial%20Information) These interim condensed consolidated financial statements were approved and authorized for issue by the Board on **August 31, 2023** - The interim condensed consolidated financial statements were approved and authorized for issue by the Board on **August 31, 2023**[157](index=157&type=chunk) [Management Discussion and Analysis](index=35&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's operational performance, financial condition, and future outlook [Industry Overview](index=35&type=section&id=Industry%20Overview) In the first half of 2023, the environmental protection industry benefited from national 'dual carbon' goals and green development policies, with energy digitalization, intelligence, and new power system construction creating significant development opportunities for the company's integrated smart energy business - The 20th National Congress of the Communist Party of China emphasized 'promoting green development and harmonious coexistence between humanity and nature,' providing top-level design and policy assurance for the company's green and low-carbon transformation and development[61](index=61&type=chunk) - The National Energy Administration issued 'Several Opinions on Accelerating the Digital and Intelligent Development of Energy' and the 'Blue Book on the Development of New Power Systems,' which will drive the development of related industries such as photovoltaics, wind power, and energy storage, creating immense opportunities for the Group's integrated smart energy business[36](index=36&type=chunk) - The National Standardization Administration and 11 other departments issued the 'Guidance on Building a Carbon Peak and Carbon Neutrality Standard System,' projecting the formulation and revision of no less than **1,000 national and industry standards by 2025**, bringing new opportunities for the company's new industries in 'dual carbon' related fields[62](index=62&type=chunk) [Green Development and Harmonious Coexistence](index=35&type=section&id=Green%20Development%20and%20Harmonious%20Coexistence) National policies emphasize promoting green development and harmonious coexistence between humanity and nature, providing policy assurance for the environmental protection industry - The 20th National Congress of the Communist Party of China emphasized 'promoting green development and harmonious coexistence between humanity and nature,' providing top-level design and policy assurance for the company's green and low-carbon transformation and development[61](index=61&type=chunk) [Carbon Peak and Carbon Neutrality Standard System](index=36&type=section&id=Carbon%20Peak%20and%20Carbon%20Neutrality%20Standard%20System) The release of the 'Guidance on Building a Carbon Peak and Carbon Neutrality Standard System' will promote full coverage of carbon accounting and verification standards, bringing opportunities for the company's new industries in 'dual carbon' related fields - The 'Guidance on Building a Carbon Peak and Carbon Neutrality Standard System' was released, projecting the formulation and revision of no less than **1,000 national and industry standards by 2025**, achieving full coverage of carbon accounting and verification standards in major industries[62](index=62&type=chunk) [Construction of New Energy System](index=36&type=section&id=Construction%20of%20New%20Energy%20System) The National Energy Administration released the 'Blue Book on the Development of New Power Systems,' outlining a 'three-step' development path that will drive the growth of industries such as photovoltaics, wind power, and energy storage, creating immense opportunities for the company's integrated smart energy business - The National Energy Administration released the 'Blue Book on the Development of New Power Systems,' comprehensively elaborating on the development philosophy and characteristics of new power systems, and formulating a 'three-step' development path[36](index=36&type=chunk) - The planning and construction of a new energy system will drive the vigorous development of related industries such as photovoltaics, wind power, and energy storage, creating immense opportunities for the Group's integrated smart energy business[36](index=36&type=chunk) [Business Review](index=37&type=section&id=Business%20Review) In the first half of 2023, the Group maintained stable concession installed capacity in environmental protection and energy-saving solutions, increased denitration catalyst production and sales, and actively expanded into non-power industries, while the renewable energy business secured new energy storage EPC projects, thermal power engineering business was not conducted, no new overseas projects were signed, and multiple patents were granted in R&D - As of June 30, 2023, the Group's cumulative installed capacity for desulfurization concession operations was **48,250 MW**; and for denitration concession operations was **41,240 MW**[63](index=63&type=chunk) - From January to June 2023, the Group's denitration catalyst business achieved production and sales volumes of **13,716.26 cubic meters** and **31,074.86 cubic meters**, respectively, and actively sold to non-power industries and overseas customers[39](index=39&type=chunk)[64](index=64&type=chunk)[318](index=318&type=chunk) - From January to June 2023, the Group signed **1 new energy storage EPC project** with an installed capacity of **100 MWh**, and was awarded **1 renewable energy engineering project** pending signing with an installed capacity of **100 MW**[43](index=43&type=chunk) - From January to June 2023, the Group did not undertake thermal power engineering business, had no new overseas projects signed, and no projects under execution[324](index=324&type=chunk)[325](index=325&type=chunk) - In the first half of 2023, the Group obtained **25 patent grants**, including **13 invention patents**, bringing the cumulative number of valid patents to **1,246**[326](index=326&type=chunk) [Environmental Protection and Energy-Saving Solutions Business](index=37&type=section&id=Environmental%20Protection%20and%20Energy-Saving%20Solutions%20Business) This business encompasses environmental facility concession operations, denitration catalysts, environmental facility engineering, water treatment, and energy-saving businesses, with stable concession installed capacity, increased catalyst production and sales, active expansion into non-power industries, and energy-saving achieved through energy consumption diagnostics and technological applications - As of June 30, 2023, the Group's cumulative installed capacity for desulfurization concession operations was **48,250 MW**; and for denitration concession operations was **41,240 MW**[63](index=63&type=chunk) - From January to June 2023, the Group's denitration catalyst business achieved production and sales volumes of **13,716.26 cubic meters** and **31,074.86 cubic meters**, respectively, with **8,761.29 cubic meters** sold to customers outside China Datang Corporation Ltd., including **2,900.8 cubic meters** to overseas customers and **968.45 cubic meters** to non-power industry customers[39](index=39&type=chunk)[64](index=64&type=chunk)[318](index=318&type=chunk) - From January to June 2023, the Group continued to undertake environmental facility engineering businesses, including desulfurization, denitration, dust removal, ultra-low emission, and industrial plant dust control, and actively explored non-power industry markets such as petroleum, coking, steel, and cement[40](index=40&type=chunk) - From January to June 2023, the Group focused on energy consumption diagnostics and 'one plant, one policy' indicator improvement, achieving approximately **15%** reduction in ammonia injection and **5-10%** decrease in slurry circulation pump power consumption through the application of new technologies such as denitration fine ammonia injection control technology[158](index=158&type=chunk) [Environmental Facility Concession Operations](index=37&type=section&id=Environmental%20Facility%20Concession%20Operations) As of June 30, 2023, the Group's cumulative installed capacity for desulfurization concession operations was **48,250 MW**, and for denitration concession operations was **41,240 MW** - As of June 30, 2023, the Group's cumulative installed capacity for desulfurization concession operations was **48,250 MW**; and for denitration concession operations was **41,240 MW**[63](index=63&type=chunk) [Denitration Catalyst Business](index=38&type=section&id=Denitration%20Catalyst%20Business) In the first half of 2023, denitration catalyst production and sales volumes were **13,716.26 cubic meters** and **31,074.86 cubic meters**, respectively, with active expansion into non-power industries and overseas markets H1 2023 Denitration Catalyst Business Data | Indicator | Quantity (cubic meters) | | :--- | :--- | | Production Volume | 13,716.26 | | Sales Volume | 31,074.86 | | Volume of Waste Catalyst Comprehensive Utilization | 2,437.6 | - From January to June 2023, the Group sold **8,761.29 cubic meters** of catalysts to customers outside China Datang Corporation Ltd., including **2,900.8 cubic meters** to overseas customers and **968.45 cubic meters** to non-power industry customers such as glass and alumina industries[318](index=318&type=chunk) [Environmental Facility Engineering Business](index=38&type=section&id=Environmental%20Facility%20Engineering%20Business) In the first half of 2023, the Group continued to undertake engineering businesses including desulfurization, denitration, dust removal, ultra-low emission, and industrial plant dust control, and actively explored non-power industry markets - From January to June 2023, the Group continued to undertake environmental facility engineering businesses, including desulfurization, denitration, dust removal, ultra-low emission, and industrial plant dust control, and actively explored non-power industry markets such as petroleum, coking, steel, and cement[40](index=40&type=chunk) H1 2023 Environmental Facility Engineering Business in Power Industry | Project | Number of Awarded and Signed Projects | Value of Awarded and Signed Projects (RMB million) | Number of Projects Under Construction | Value of Projects Under Construction (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Desulfurization | 1 | 26.51 | 2 | 243.66 | | Denitration | 2 | 52.26 | 1 | 19.30 | | Dust Removal | 0 | 0 | 2 | 228.16 | | Others | 2 | 94.80 | 0 | 0 | [Water Treatment Business](index=39&type=section&id=Water%20Treatment%20Business) As of June 30, 2022, the Group had **4 operational water treatment engineering projects** and **7 projects under construction** - As of June 30, 2022, the Group had **4 operational water treatment engineering projects** and **7 water treatment engineering projects under construction**[320](index=320&type=chunk) [Energy-Saving Business](index=39&type=section&id=Energy-Saving%20Business) As of June 30, 2023, the Group had **1 energy performance contracting project** under execution, with a total investment of **RMB 37.5098 million** - As of June 30, 2023, the Group had **1 energy performance contracting project** under execution, with a total investment of **RMB 37.5098 million**[321](index=321&type=chunk) [Renewable Energy Business](index=39&type=section&id=Renewable%20Energy%20Business) The Group is actively expanding in the renewable energy sector, having signed new energy storage EPC projects and operating multiple distributed photovoltaic power generation projects - From January to June 2023, the Group signed **1 new energy storage EPC project** with an installed capacity of **100 MWh**, and was awarded **1 renewable energy engineering project** pending signing with an installed capacity of **100 MW**[43](index=43&type=chunk) - As of June 30, 2023, the Group had a total of **3 renewable energy engineering projects under construction**, with a total installed capacity of **6.535 MW**[43](index=43&type=chunk) - As of June 30, 2023, the Group had **8 operational distributed photovoltaic power generation projects**, with a total installed capacity of **7.97 MW**[322](index=322&type=chunk) [Investment Business](index=39&type=section&id=Investment%20Business) As of June 30, 2023, the Group had **8 operational distributed photovoltaic power generation projects**, with a total installed capacity of **7.97 MW** - As of June 30, 2023, the Group had **8 operational distributed photovoltaic power generation projects**, with a total installed capacity of **7.97 MW**[322](index=322&type=chunk) [Engineering Business](index=39&type=section&id=Engineering%20Business) In the first half of 2023, the Group signed **1 new energy storage EPC project** with an installed capacity of **100 MWh**, and had **3 renewable energy engineering projects under construction** - From January to June 2023, the Group signed **1 new energy storage EPC project** with an installed capacity of **100 MWh**, and was awarded **1 renewable energy engineering project** pending signing with an installed capacity of **100 MW**[43](index=43&type=chunk) - As of June 30, the Group had a total of **3 renewable energy engineering projects under construction**, with a total installed capacity of **6.535 MW**[43](index=43&type=chunk) [Thermal Power Engineering Business](index=39&type=section&id=Thermal%20Power%20Engineering%20Business) From January to June 2023, the Group did not undertake thermal power engineering business - From January to June 2023, the Group did not undertake thermal power engineering business[324](index=324&type=chunk) [Overseas Business](index=39&type=section&id=Overseas%20Business) In the first half of 2023, the Group had no new overseas projects signed and no projects under execution - From January to June 2023, the Group had no new overseas projects signed and no projects under execution[325](index=325&type=chunk) [Research and Development](index=39&type=section&id=Research%20and%20Development) In the first half of 2023, the Group obtained **25 patent grants**, including **13 invention patents**, bringing the cumulative number of valid patents to **1,246** - In the first half of 2023, the Group obtained **25 patent grants**, including **13 invention patents**, bringing the cumulative number of valid patents to **1,246**[326](index=326&type=chunk) [Discussion and Analysis of Financial Position and Operating Results](index=40&type=section&id=Discussion%20and%20Analysis%20of%20Financial%20Position%20and%20Operating%20Results) In the first half of 2023, the Group achieved growth in both revenue and profit, primarily driven by increased construction service revenue and reduced finance costs, with a slight decrease in gross margin but overall improved profitability, significant increases in cash and cash equivalents and net current assets, and a lower net debt to capital ratio, indicating an improved financial position - The Group's revenue increased by **7.8%** to **RMB 2,499.2 million** for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to increased construction service revenue[68](index=68&type=chunk) - The Group's profit for the period was **RMB 270.1 million**, an increase of **RMB 70.2 million** or **35.1%** compared to the same period in 2022[162](index=162&type=chunk)[177](index=177&type=chunk) - The Group's cash and cash equivalents increased by **25.3%** to **RMB 1,092.4 million** as of June 30, 2023, from **RMB 872.2 million** as of December 31, 2022[82](index=82&type=chunk) - The Group's net current assets increased by **503.6%** to **RMB 2,439.8 million** as of June 30, 2023, from **RMB 404.2 million** as of December 31, 2022, primarily due to increased trade receivables and reduced interest-bearing bank and other borrowings[83](index=83&type=chunk) - The Group's net debt to capital ratio was **39.71%** as of June 30, 2023, a decrease of **1.17 percentage points** from **40.88%** as of December 31, 2022[86](index=86&type=chunk) [Overview](index=40&type=section&id=Overview) In the first half of 2023, the Group achieved growth in both revenue and profit, with increases in cash and cash equivalents and total assets, a slight rise in total liabilities, and an improved return on total assets H1 2023 Financial Overview | Indicator | June 30, 2023 (RMB million) | December 31, 2022 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,499.2 | - | +7.8 | | Profit for the Period | 270.1 | - | +35.1 | | Profit Attributable to Owners of the Parent | 266.2 | - | - | | Cash and Cash Equivalents | 1,092.4 | 872.2 | +25.3 | | Total Assets | 18,478.3 | 18,348.3 | +0.7 | | Total Liabilities | 11,461.9 | 11,451.5 | +0.1 | | Return on Total Assets | 1.46% | 1.11% (2022同期) | +0.35 percentage points | [Operating Results](index=40&type=section&id=Operating%20Results) The Group's revenue grew by **7.8%** and gross profit by **6.8%** in the first half of 2023, despite a slight decrease in gross margin, while other income significantly increased, finance costs decreased, and both profit before tax and profit for the period achieved substantial growth - The Group's revenue increased by **7.8%** to **RMB 2,499.2 million** for the six months ended June 30, 2023, from **RMB 2,318.8 million** in the same period of 2022, primarily due to increased construction service revenue[68](index=68&type=chunk) - The Group's gross profit increased by **6.8%** to **RMB 517.2 million** from **RMB 484.2 million** in the same period of 2022, but the gross margin slightly decreased from **20.9%** to **20.7%**[105](index=105&type=chunk) - Other income and losses increased by **89.3%** to **RMB 67.2 million** compared to the same period in 2022, primarily due to an increase in government grants[66](index=66&type=chunk) - Finance costs decreased by **13.6%** to **RMB 89.1 million** compared to the same period in 2022, primarily due to a reduction in the annual interest rate on borrowings during the current period[164](index=164&type=chunk) - Profit before tax increased by **32.0%** to **RMB 319.4 million** for the six months ended June 30, 2023, from **RMB 241.9 million** in the same period of 2022[98](index=98&type=chunk) - Profit for the period increased by **35.1%** from **RMB 199.9 million** to **RMB 270.1 million**, with its proportion of total revenue rising to **10.8%**[177](index=177&type=chunk) [Revenue (Operating Results)](index=40&type=section&id=Revenue%20(Operating%20Results)) The Group's revenue increased by **7.8%** year-on-year to **RMB 2,499.2 million** in the first half of 2023, primarily driven by growth in construction service revenue - The Group's revenue increased by **7.8%** to **RMB 2,499.2 million** for the six months ended June 30, 2023, from **RMB 2,318.8 million** in the same period of 2022, primarily due to increased construction service revenue[68](index=68&type=chunk) [Cost of Sales](index=41&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by **8.0%** year-on-year to **RMB 1,982.0 million**, in line with revenue growth - The Group's cost of sales increased by **8.0%** to **RMB 1,982.0 million** for the six months ended June 30, 2023, from **RMB 1,834.6 million** in the same period of 2022, primarily due to increased construction costs in line with revenue growth during the year[69](index=69&type=chunk) [Selling and Distribution Expenses](index=41&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's selling and distribution expenses increased by **55.6%** year-on-year to **RMB 9.8 million** - The Group's selling and distribution expenses increased by **55.6%** to **RMB 9.8 million** for the six months ended June 30, 2023, from **RMB 6.3 million** in the same period of 2022[70](index=70&type=chunk) [Administrative Expenses](index=41&type=section&id=Administrative%20Expenses) The Group's administrative expenses increased by **1.8%** year-on-year to **RMB 162.2 million** - The Group's administrative expenses increased by **1.8%** to **RMB 162.2 million** for the six months ended June 30, 2023, from **RMB 159.3 million** in the same period of 2022[71](index=71&type=chunk) [Other Gains and Losses](index=41&type=section&id=Other%20Gains%20and%20Losses) The Group's other gains and losses increased by **89.3%** to **RMB 67.2 million** compared to the same period in 2022, primarily due to higher government grants - The Group's other gains and losses increased by **89.3%** to **RMB 67.2 million** for the six months ended June 30, 2023, from **RMB 35.5 million** in the same period of 2022, primarily due to an increase in government grants compared to last year[66](index=66&type=chunk) [Net Other Expenses](index=41&type=section&id=Net%20Other%20Expenses) For the six months ended June 30, 2023, the Group had no net other expenses, compared to **RMB 4.3 million** in the same period of 2022, which was primarily due to exchange differences arising from provisions for losses on pending litigation - For the six months ended June 30, 2023, the Group had no net other expenses, compared to **RMB 4.3 million** in the same period of 2022, which was due to exchange differences arising from provisions for losses on pending litigation[96](index=96&type=chunk) [Finance Costs (Operating Results)](index=41&type=section&id=Finance%20Costs%20(Operating%20Results)) The Group's finance costs decreased by **13.6%** year-on-year to **RMB 89.1 million**, primarily due to a reduction in the annual interest rate on borrowings - The Group's finance costs decreased by **13.6%** to **RMB 89.1 million** for the six months ended June 30, 2023, from **RMB 103.1 million** in the same period of 2022, primarily due to a reduction in the Group's annual interest rate on borrowings during the current period compared to the prior year[164](index=164&type=chunk) [Profit Before Tax](index=42&type=section&id=Profit%20Before%20Tax) The Group's profit before tax increased by **32.0%** year-on-year to **RMB 319.4 million** - The Group's profit before tax increased by **32.0%** to **RMB 319.4 million** for the six months ended June 30, 2023, from **RMB 241.9 million** in the same period of 2022[98](index=98&type=

Financial Performance - For the year ended December 31, 2022, the Group's revenue amounted to RMB 5,322.7 million, representing an increase of 0.6% compared to the previous year[6]. - The Group's gross profit for the year was RMB 789.4 million, reflecting a significant increase of 131.2%, with a gross profit margin of 14.8%, up by 8.3 percentage points from last year[6]. - Total comprehensive income attributable to owners of the parent reached RMB 273.4 million, marking a 230.2% increase year-on-year[6]. - The profit for the year was RMB 238,123,000, a turnaround from a loss of RMB 443,270,000 in the previous year[32]. - The total comprehensive income for the year was RMB 239,641,000, recovering from a loss of RMB 444,350,000 in 2021[32]. - The Group's profit for 2022 amounted to RMB 238.1 million, representing an increase of RMB 681.4 million compared to a loss of RMB 443.3 million in 2021[47]. - Profit attributable to owners of the parent amounted to RMB 272.4 million[47]. - The profit margin for 2022 was 4.5%, compared to -8.4% in 2021[49]. - Profit before tax increased by 178.5% to RMB 296.8 million in 2022 from RMB -378.2 million in 2021[60]. - The Group's income tax expense was RMB 58.7 million in 2022, a decrease of 9.8% from RMB 65.1 million in 2021, mainly due to the decrease in profit before tax[60]. Assets and Liabilities - The total current assets of the Group as of December 31, 2022, were RMB 10,937.6 million, while total non-current assets were RMB 7,410.7 million[8]. - Total equity as of December 31, 2022, was RMB 6,896.7 million, reflecting the Group's financial stability[8]. - The Group's cash and cash equivalents decreased by 29.9% to RMB 872.2 million as of December 31, 2022, compared to RMB 1,244.9 million as of December 31, 2021[47]. - Total assets decreased by 0.4% to RMB 18,348.3 million as of December 31, 2022, from RMB 18,428.4 million as of December 31, 2021[47]. - Total liabilities decreased by 1.9% to RMB 11,451.5 million as of December 31, 2022, from RMB 11,672.8 million as of December 31, 2021[47]. - The Group's net current assets decreased by 63.0% to RMB 404.2 million as of December 31, 2022, compared to RMB 1,092.5 million as of December 31, 2021, mainly due to decreases in contract assets, trade receivables, and cash and cash equivalents[166]. - The Group's borrowings decreased by 5.3% to RMB 5,640.2 million as of December 31, 2022, from RMB 5,952.8 million as of December 31, 2021[166]. - The current ratio as of December 31, 2022, was 103.8%, down from 111.5% in 2021[166]. - The quick ratio as of December 31, 2022, was 102.4%, down from 109.4% in 2021[166]. - The liabilities to assets ratio as of December 31, 2022, was 62.4%, slightly improved from 63.3% in 2021[166]. - The return on total assets for 2022 was 1.3%, a recovery from -2.3% in 2021[166]. - The return on equity for 2022 was 3.4%, compared to -6.3% in 2021, indicating improved profitability[166]. Business Operations and Market Position - The Group maintained its position as the largest desulfurization and denitrification concession operator and the largest manufacturer of denitrification catalysts in the PRC[6]. - The Group's environmental protection facility engineering business continued to expand into non-electric industries such as petroleum, coking, steel, and cement[22]. - The Group maintained its leading position in the environmental protection sector, being the largest desulfurization and denitrification concession operator in China as of the end of 2022[38]. - The Group's external revenue from other businesses decreased by 41.3% to RMB 39.1 million in 2022 from RMB 66.7 million in 2021[64]. - The Group aims to transform its traditional business competitiveness and achieve breakthroughs in new industry market promotion[70]. - The Group aims to achieve newly installed capacity of concession operation of no less than 2,000 MW during the "14th Five-Year" period[146]. - The Group plans to ensure additional disposal recycling production capacity of 10,000 m³ of honeycomb catalyst and 20,000 m³ of spent catalysts during the year[146]. - The Group is committed to improving lean management across all processes and enhancing the efficiency of environmental protection facilities[146]. - The Group is positioned as a leading enterprise in providing comprehensive energy solutions and systematic solutions to environmental issues[99]. Strategic Initiatives and Future Outlook - The Group plans to implement a "1461" development strategy in 2023, focusing on safety, innovation, and enhancing management efficiency[70]. - The Group aims to promote the construction of a second production base for denitrification catalysts according to domestic first-class and international leading standards[146]. - The Group will actively expand the scale of operation business in response to the acceleration of coal-fired power approvals and investments[146]. - The Group will focus on enhancing core competitiveness through a strong talent base and innovation-driven strategies[149]. - The compound annual growth rate of operating revenue for China's environmental protection industry is projected to reach 12% from 2022 to 2027, with expectations to exceed RMB 5 trillion by 2030[82][83]. - The Group is committed to becoming a first-class comprehensive energy and environmental governance service provider through technological advancement and industry collaboration[184]. Research and Development - The Group was awarded 56 patent authorizations in 2022, including 16 invention patent authorizations[134]. - The project "Research and Application of Key Technologies of Synergistic Denitrification and Dehydration Catalysts" won multiple awards, including the innovation achievement award of power sci-tech management[134]. - Datang Environment is investing RMB 300 million in research and development for renewable energy solutions, aiming for a 10% reduction in operational costs[195]. Employee and Labor Relations - The company has a total of 1,008 employees as of December 31, 2022, with all employees based in the PRC and having entered into employment agreements[181]. - The company has established labor union branches and complies with PRC Labor Law in its employment agreements[181]. Overseas Expansion and Risks - The company is actively expanding its overseas business, particularly in countries involved in the Belt and Road Initiative, focusing on markets in India and Thailand[182]. - The management acknowledges potential risks in overseas expansion, including financing availability, personnel management, and local business environment understanding[182]. - The company emphasizes the importance of project management experience in countries like India and Thailand for future overseas development[182]. - The company has established mature risk management and internal control systems to mitigate risks associated with overseas business operations[182].