Financial Performance - In 2019, LongiTech Smart Energy achieved revenue of RMB 147,460,000, a decrease of 79.2% compared to RMB 708,493,000 in 2018[22] - The loss attributable to owners of the Company was RMB 264,522,000, compared to a profit of RMB 107,720,000 in the same period of 2018[22] - The Group's revenue for the reporting period was RMB 147,460,000, a decrease of 79.2% compared to RMB 708,493,000 in the same period of 2018[32] - The loss attributable to owners of the Company was RMB 264,522,000, representing a decline of approximately 345.6% compared to a profit of RMB 107,720,000 in the same period of 2018[32] - The Group's total revenue for the Reporting Period was RMB 147,460,000, a significant decrease from RMB 708,493,000 in the same period of 2018[62] - The gross profit margin increased to 53.4%, up from 34.4% in the same period of 2018[62] - The smart energy business generated approximately RMB116,806,000 in revenue, a decrease of about 77.9% compared to the same period last year[49] - The public infrastructure construction business generated revenue of approximately RMB30,654,000, down from RMB179,235,000 in the same period last year[49] Economic Environment - The overall economic environment in 2019 was challenging, with significant downward pressure on China's economic growth[19] - The solar power industry faced lower profit margins due to reduced subsidies and delayed project construction policies[20] - The tightening capital chain in the solar power industry led to a wave of disposals of solar power plants by large generators[20] Strategic Adjustments - The Group adopted prudent operation strategies, focusing on risk control and reducing the development scale of the home photovoltaic system business[22] - The Group's strategies included slowing down investment in other clean energy businesses during the Reporting Period[22] - The Group's strategy has shifted to slowing down business expansion and focusing on risk control amid a challenging economic environment[32] - The Group plans to optimize its organizational structure and implement cost control measures while ensuring business development[25] - The Group's strategic adjustment involved a contraction in business expansion and a focus on risk control and stable development in response to economic and industry changes[34] Provisions and Impairments - The Group made larger provisions for historical receivables and financial assets, significantly impacting income and profit for the Reporting Period[22] - The Group made a provision of approximately RMB 156,887,000 for trade receivables from the home photovoltaic system business during the reporting period, significantly impacting the loss before income tax[32] - The Group made a provision of approximately RMB 94,889,000 for financial assets at amortized cost, resulting in a direct increase in the Group's loss before income tax during the reporting period[39] - The Group made impairment provisions of RMB 156,887,000 for trade receivables related to the home photovoltaic system business, a significant increase from RMB 14,861,000 in the same period of 2018[68] Operational Developments - The Group's existing 11 solar power plants are under stable operations, with the Baoding Donghu Project having a development volume of over RMB 2 billion, expected to lay a solid foundation for future development[25] - The Group's solar power plants achieved a historic high in power generation during the Reporting Period, totaling approximately 80,724 MWh, an increase of 7.2% compared to 75,044 MWh in the same period of 2018[44] - All solar power plants are connected to a Cloud Platform for real-time monitoring and optimization of power generation and operation[45] Investment and Financing - The Group's total capital, defined as net debt plus total equity, was RMB 1,676,020,000 as of December 31, 2019, down from RMB 1,883,413,000 in the previous year[89] - The Group's external borrowings as of December 31, 2019, were RMB 534,400,000, a decrease from RMB 567,600,000 as of December 31, 2018[89] - The Group's cash position included approximately RMB 66,388,000 in restricted bank balances as of December 31, 2019, primarily for the Baoding Donghu Project expenses[85] - The Group expects that interest rate risk will have no material impact on its consolidated profit or loss[98] Environmental and Regulatory Compliance - The Group is committed to environmental protection and compliance with relevant laws and regulations impacting its operations during the reporting period[132] - The Group complied with all relevant environmental laws and regulations during the Reporting Period, with no incidents of non-compliance that had a significant impact[138] - The Company emphasizes compliance with environmental laws and regulations during the development of its smart energy and solar energy businesses[157] Shareholder and Governance Matters - The Board does not recommend the payment of a final dividend for the year ended December 31, 2019, consistent with the previous year[143] - The Company has adopted a dividend policy where cash dividends may be paid out when the distributable profit is positive, with a proportion of cash dividends being not less than 20%-50% of the year's distributable profit attributable to shareholders[146] - The Company aims to maintain financial stability and autonomy while ensuring sustained, stable, and healthy development[146] Connected Transactions - The Group's sales to Longchuang Heating, a connected person, amounted to 10% of total sales for the Reporting Period[183] - The transactions under the First Master Agreement constitute continuing connected transactions as per Chapter 14A of the Listing Rules[169] - The independent non-executive Directors confirmed that the continuing connected transactions were entered into in the ordinary course of business and on normal commercial terms[180]

隆基泰和智慧能源 LONGITECH SMART ENERGY LongiTech Smart Energy Holding Limited 隆基泰和智慧能源控股有限公司 (incorporated in the Cayman Islands with limited liability 於開曼群島註冊成立的有限公司) Stock Code 股份代號：1281 | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | . | INTERIM REPORT 中期報告 | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | |----------|------------------------------------------------------------------ ...

Financial Performance - In 2018, the Group's revenue was approximately RMB 708,493,000, a decrease of approximately 21.1% compared to RMB 897,902,000 in 2017[19]. - Profit attributable to owners of the Company was RMB 107,720,000, representing a decrease of approximately 20.3% from RMB 135,197,000 in the previous year[19]. - The smart energy business generated revenue of RMB 529,258,000, contributing to 74.7% of the Group's total revenue[30]. - The profit from the smart energy business was RMB 130,063,000, accounting for 120.7% of the Group's total profit attributable to owners[30]. - Gross profit for the reporting period was RMB 243,831,000, down from RMB 260,480,000 in the same period of 2017, reflecting a decline of 6.4%[58]. - Revenue from the public infrastructure construction business was approximately RMB 179,235,000, down 25.9% from RMB 241,954,000 in the same period of 2017[58]. - Revenue from the smart energy business was RMB 529,258,000, a decrease of 19.3% from RMB 655,948,000 in the same period of 2017[58]. Business Challenges and Strategies - The decline in revenue and profit was mainly due to the impact of the "531 Policy" on the home photovoltaic system business and increased operating costs from investments and acquisitions[19]. - The Group adjusted its business strategies and investment structure in response to external challenges, focusing on mergers and acquisitions in distributed energy and energy conservation technologies[19]. - The external environment in 2018 was complicated, with economic slowdown and increased operational pressure on enterprises, particularly private ones[18]. - The overall market environment experienced significant fluctuations due to domestic supply-side reforms and de-leveraging policies[18]. - The Group's proactive adjustments included providing energy-saving and technology consulting services to maintain business stability[19]. Investments and Acquisitions - The Group engaged in investments and acquisitions related to heat, gas, and particularly distributed natural gas heating supply business[19]. - The Group plans to actively expand its distributed energy, particularly in distributed natural gas heating, in response to industry development opportunities[26]. - The Group aims to develop home photovoltaic systems in alignment with national subsidy policies for the solar power industry[26]. - The Group invested in distributed natural gas heating projects covering an area of approximately 600,000 square meters, with an expected investment cost recovery period of 4 to 6 years[40]. - The Group's investment strategy focuses on stable public institutions and quality commercial and residential customers in the "2+26" cities[42]. Financial Position and Assets - As of December 31, 2018, the bank balances and cash amounted to approximately RMB 164,136,000, an increase from RMB 108,701,000 as of December 31, 2017, primarily due to proceeds from a rights issue and collections from the smart energy business[80]. - Total current assets were approximately RMB 1,370,646,000 as of December 31, 2018, down from RMB 1,404,387,000 in 2017, while the liquidity ratio increased to 9.75 from 2.73 due to a net decrease of RMB 253,040,000 in current bank borrowings[81]. - External borrowings decreased to RMB 567,600,000 as of December 31, 2018, from RMB 933,545,000 in 2017, with RMB 282,600,000 secured by solar power plant machineries[82]. - The gearing ratio improved to 21.4% as of December 31, 2018, down 30.2 percentage points from 51.6% in 2017, primarily due to the repayment of bank borrowings[86]. - Long-term debts accounted for 94.2% of the Group's total debts as of December 31, 2018, with specific borrowings being gradually settled through electricity sales and government project funding[88]. Operational Efficiency and Cost Management - Selling and distribution expenses decreased by 9.7% to RMB 22,146,000 from RMB 24,519,000 in the same period of 2017[59]. - Administrative expenses increased by 30.9% to RMB 89,234,000 from RMB 68,190,000 in the same period of 2017, primarily due to increased investments and mergers and acquisitions[60]. - Net financial expenses decreased by 51.6% to RMB 9,308,000 from RMB 19,235,000 in the same period of 2017, attributed to repayment of bank loans[61]. - Income tax expenses decreased by 53.5% to RMB 10,386,000 from RMB 22,328,000 in the same period of 2017, due to a decrease in profit before income tax from the smart energy business[62]. Future Outlook and Development - The Group plans to adopt more flexible operation strategies and optimize its industrial structure in response to the complex economic situation in 2019[54]. - The Group will focus on diversified investments in distributed energy business, particularly in areas like distributed heating and gas, through investments, mergers, and acquisitions[55]. - The Group aims to leverage its capabilities in monitoring and big data analysis to achieve unattended and automated control of energy projects, saving manpower costs[47]. Stakeholder Engagement and Compliance - The company is committed to environmental protection and has complied with relevant environmental laws and regulations during the reporting period[176]. - The company recognizes the importance of maintaining relationships with stakeholders, including employees, customers, suppliers, and local communities[180]. - There were no incidents of non-compliance with relevant laws and regulations that had or would have a significant impact on the Company during the Reporting Period[182].