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].