Company Information [Board of Directors and Committees](index=2&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure sound corporate governance - The Board of Directors includes Mr. Cui Yazhou (Chairman), Mr. Ye Xin, Ms. Wang Qian, Mr. Zhou Jianzhong (Executive Directors), Mr. Cao Ye (Non-executive Director), and Ms. Xiang Siying, Ms. Huang Mei, Mr. Chan Ping Kuen (Independent Non-executive Directors)[2](index=2&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee all include independent non-executive directors Ms. Xiang Siying and Ms. Huang Mei, ensuring independent oversight[2](index=2&type=chunk) [Company Secretary, Auditor, and Legal Advisors](index=2&type=section&id=Company%20Secretary%2C%20Auditor%2C%20and%20Legal%20Advisors) The company has appointed Mr. Qiu Kangjun as Company Secretary and Authorized Representative, Zhonghui Anda Certified Public Accountants Co., Ltd. as independent auditor, with legal services provided by Li Zhicong Solicitors and King & Wood Mallesons - Mr. Qiu Kangjun serves as the Company Secretary and Authorized Representative[2](index=2&type=chunk) - The independent auditor is Zhonghui Anda Certified Public Accountants Co., Ltd[2](index=2&type=chunk) - Legal advisors include Li Zhicong Solicitors (Hong Kong and PRC law) and King & Wood Mallesons (PRC law)[2](index=2&type=chunk) [Registered Office and Principal Place of Business](index=2&type=section&id=Registered%20Office%20and%20Principal%20Place%20of%20Business) The company is registered in the Cayman Islands, with principal places of business in Hami, Xinjiang, China, and Hong Kong, and share registrars in both locations - The registered office is located in the Cayman Islands[2](index=2&type=chunk) - Principal places of business are in Hami City, Xinjiang Uygur Autonomous Region, China, and Gloucester Road, Hong Kong[2](index=2&type=chunk) - Share registrars are Codan Trust Company (Cayman) Limited in the Cayman Islands and Tricor Investor Services Limited in Hong Kong[2](index=2&type=chunk) Mining Information [Mineral Resources and Ore Reserves](index=4&type=section&id=Mineral%20Resources%20and%20Ore%20Reserves) As of June 30, 2024, the Baiganhu project holds total lead-zinc mineral resources of **3,880 thousand tonnes**, comprising **251,450 tonnes of zinc metal** and **156,580 tonnes of lead metal**, with a probable ore reserve category of **1,055 thousand tonnes** Baiganhu Project Mineral Resources (As of June 30, 2024) | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :--------- | :--- | :----------- | :----------- | :------------ | :----------- | :------------ | | Baiganhu Project | Controlled | 1,730 | 113,540 | 6.57 | 71,440 | 4.13 | | | Inferred | 2,150 | 137,910 | 6.42 | 85,140 | 3.96 | | | Total | 3,880 | 251,450 | 6.49 | 156,580 | 4.03 | Baiganhu Project Ore Reserves (As of June 30, 2024) | Reserve Category | Ore Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :------- | :--------------- | :----------- | :---------- | :----------- | :---------- | | Probable | 1,055 | 62,773 | 5.95 | 39,352 | 3.73 | - The mineral resources and ore reserves report was prepared by independent technical consultant Mining One Pty Ltd[4](index=4&type=chunk) [Mining Permits](index=5&type=section&id=Mining%20Permits) The Baiganhu project's mining permit expired in September 2021, and the Group is currently processing its renewal application Baiganhu Project Mining Permit | Project Name | Exploration Ore Type | Mining Area (sq km) | Permit Expiry Date (Year/Month) | | :--------- | :----------- | :------------------- | :----------------------- | | Baiganhu Project | Lead, Zinc | 0.96 | September 2021 | - The Group is in the process of renewing these permits, with renewal applications submitted to the relevant government departments[6](index=6&type=chunk) [Capital and Exploration Expenditures](index=5&type=section&id=Capital%20and%20Exploration%20Expenditures) For the six months ended June 30, 2024 and 2023, the Group had no ore production, nor capital or exploration expenditures related to development and mining activities - For the six months ended June 30, 2024 and 2023, the Group did not engage in any ore production[7](index=7&type=chunk) - For the six months ended June 30, 2024 and 2023, there were no capital expenditures for development and mining activities[7](index=7&type=chunk) - For the six months ended June 30, 2024 and 2023, the Group did not deduct any exploration expenditures in the interim condensed consolidated statement of comprehensive income[7](index=7&type=chunk) Interim Condensed Consolidated Statement of Comprehensive Income [Key Financial Performance](index=6&type=section&id=Key%20Financial%20Performance) The company achieved a 1.9% revenue growth and a 36.2% increase in gross profit, leading to a 42.2% rise in profit for the period Key Financial Performance for the Six Months Ended June 30 | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | Year-on-year Change (%) | | :------------- | :------------------ | :------------------ | :----------- | | Revenue | 1,359,778 | 1,334,580 | 1.9 | | Cost of sales | (1,230,149) | (1,239,425) | -0.7 | | Gross profit | 129,629 | 95,155 | 36.2 | | Operating profit | 140,153 | 93,737 | 49.5 | | Profit before income tax | 138,213 | 96,170 | 43.7 | | Profit for the period | 116,983 | 82,286 | 42.2 | | Earnings per share (RMB cents) | 6.08 | 5.08 | 19.7 | - A bargain purchase gain of **RMB 20,071 thousand** from the acquisition of a subsidiary positively impacted operating profit[8](index=8&type=chunk) - Net finance costs shifted from income in 2023 to costs in 2024, primarily due to increased interest expenses[8](index=8&type=chunk) Interim Condensed Consolidated Statement of Financial Position [Assets and Liabilities](index=8&type=section&id=Assets%20and%20Liabilities) The company's total assets increased by 46.3% to **RMB 2.31 billion**, driven by significant growth in both current and non-current assets, with a corresponding rise in total liabilities Financial Position as of June 30, 2024 and December 31, 2023 | Indicator | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | Change (%) | | :------------- | :------------------------- | :-------------------------- | :------- | | Total non-current assets | 468,879 | 299,532 | 56.5 | | Total current assets | 1,838,953 | 1,278,258 | 43.9 | | Total assets | 2,307,832 | 1,577,780 | 46.3 | | Total current liabilities | 1,180,812 | 742,163 | 59.1 | | Total non-current liabilities | 174,894 | 43,551 | 301.6 | | Total liabilities | 1,355,706 | 785,714 | 72.6 | | Total equity | 952,126 | 792,076 | 20.2 | - Property, plant and equipment significantly increased from **RMB 177,647 thousand** to **RMB 327,859 thousand**[10](index=10&type=chunk) - Trade and bills receivables increased by **160%** from **RMB 238,525 thousand** to **RMB 621,745 thousand**[10](index=10&type=chunk) - Trade payables increased by **50.8%** from **RMB 637,851 thousand** to **RMB 961,740 thousand**[10](index=10&type=chunk) - New items "Loan from former shareholder of a subsidiary" and "Bills payable" in non-current liabilities led to a substantial increase in non-current liabilities[11](index=11&type=chunk) Interim Condensed Consolidated Statement of Changes in Equity [Overview of Equity Changes](index=10&type=section&id=Overview%20of%20Equity%20Changes) Total equity attributable to owners increased from **RMB 788.0 million** on January 1, 2024, to **RMB 948.1 million** on June 30, 2024, primarily due to comprehensive income for the period and shares issued upon subsidiary acquisition Changes in Equity Attributable to Owners of the Company (RMB thousand) | Item | January 1, 2024 | Total Comprehensive Income for the Period | Shares Issued upon Acquisition of a Subsidiary | Appropriation to Statutory Reserve | June 30, 2024 | | :--------------------------------- | :----------- | :--------------- | :--------------------- | :------------- | :------------ | | Share capital | 152,933 | - | 14,303 | - | 167,236 | | Share premium | 703,804 | - | 28,606 | - | 732,410 | | Other reserves (Safety fund, Maintenance fund, Capital reserve, Exchange reserve, Statutory reserve) | 21,056 | 158 | - | 3,951 | 25,165 | | Retained profits / (Accumulated losses) | (89,750) | 117,032 | - | (3,951) | 23,331 | | Subtotal | 788,043 | 117,190 | 42,909 | - | 948,142 | | Non-controlling interests | 4,033 | (49) | - | - | 3,984 | | Total equity | 792,076 | 117,141 | 42,909 | - | 952,126 | - Total comprehensive income for the period was **RMB 117,141 thousand**, of which **RMB 117,190 thousand** was attributable to owners of the Company[14](index=14&type=chunk) - Shares issued upon acquisition of a subsidiary resulted in an increase of **RMB 14,303 thousand** in share capital and **RMB 28,606 thousand** in share premium, totaling **RMB 42,909 thousand**[14](index=14&type=chunk) Interim Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=10&type=section&id=Cash%20Flow%20Overview) Net cash from operating activities shifted from inflow to an outflow of **RMB 213.5 million**, leading to a net decrease in cash and cash equivalents for the period Cash Flows for the Six Months Ended June 30 (RMB thousand) | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | Change | | :------------------------- | :------------------ | :------------------ | :--- | | Net cash (used in) / from operating activities | (213,530) | 69,496 | Shifted to outflow | | Net cash used in investing activities | (17,761) | (1,027) | Increased outflow | | Net cash used in financing activities | (1,987) | (1,367) | Increased outflow | | Net (decrease) / increase in cash and cash equivalents | (233,278) | 67,102 | Shifted to decrease | | Cash and cash equivalents at end of period | 241,786 | 435,100 | Decreased | | Cash and cash equivalents at beginning of period | 474,597 | 369,309 | Increased | - Operating cash outflow was primarily due to an increase in cash used in operating activities to **RMB (199,191) thousand**[15](index=15&type=chunk) - Net cash used in investing activities significantly increased, reflecting higher capital expenditures[15](index=15&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [1 General Information](index=12&type=section&id=1%20General%20Information) Huili Resources (Group) Limited is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engaged in lead-zinc mining, ore processing, and coal trading, processing, storage, and supply chain management services in China - The Company was incorporated in the Cayman Islands on February 19, 2010, and listed on the Main Board of the Hong Kong Stock Exchange on January 12, 2012[17](index=17&type=chunk) - The Group's principal activities include the mining, ore processing, and sale of lead and zinc products, as well as trading of coal, provision of coal processing services, coal storage services, and supply chain management services[17](index=17&type=chunk) - The interim condensed consolidated financial statements are presented in RMB and were approved for issue by the Board of Directors on August 29, 2024[17](index=17&type=chunk) [2 Basis of Preparation](index=12&type=section&id=2%20Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, and should be read in conjunction with the 2023 annual consolidated financial statements, prepared on a historical cost basis except for financial assets measured at fair value - The statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Listing Rules of the Stock Exchange[18](index=18&type=chunk) - The statements should be read in conjunction with the 2023 annual consolidated financial statements prepared in accordance with Hong Kong Financial Reporting Standards[18](index=18&type=chunk) - The statements are prepared on the historical cost basis, except for financial assets at fair value through other comprehensive income and derivative financial assets which are measured at fair value[19](index=19&type=chunk) [3 Changes in Accounting Policies](index=13&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group has adopted several new and amended HKFRSs, deeming them to have no significant impact on the interim condensed consolidated financial statements for the current period, and anticipates no material impact from future effective standards [3.1 New and Amended Standards Adopted by the Group](index=13&type=section&id=3.1%20New%20and%20Amended%20Standards%20Adopted%20by%20the%20Group) The Group has initially adopted new and amended standards such as HK(IFRIC)-Int 5 (Revised), HKAS 1 (Amendments), and HKFRS 16 (Amendments), but considers them to have no material impact on the financial statements for the current period New and Amended Standards Adopted by the Group | Standard Name | Content | | :------------------------- | :------------------------- | | HK(IFRIC)-Int 5 (Revised) | Amendments to HKAS 1 | | HKAS 1 (Amendments) | Classification of Liabilities as Current or Non-current | | HKAS 1 (Amendments) | Non-current Liabilities with Covenants | | HKFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | | HKFRS 7 and HKAS 7 (Amendments) | Supplier Finance Arrangements | - The Group considers that the adoption of these new and amended HKFRSs has had no material impact on the amounts reported and/or disclosures contained in these interim condensed consolidated financial statements for the current period[21](index=21&type=chunk) [3.2 New and Amended Standards Issued But Not Yet Effective and Not Early Adopted by the Group for the Accounting Period Beginning 1 January 2024](index=14&type=section&id=3.2%20New%20and%20Amended%20Standards%20Issued%20But%20Not%20Yet%20Effective%20and%20Not%20Early%20Adopted%20by%20the%20Group%20for%20the%20Accounting%20Period%20Beginning%201%20January%202024) The Group is evaluating several new and amended standards issued but not yet effective, including HKAS 21 (Amendments) and HKFRS 7 & 9 (Amendments), with preliminary expectations of no significant impact on financial performance and position New and Amended Standards Issued But Not Yet Effective | Standard Name | Content | Effective Date | | :------------------------- | :------------------------- | :------------------------- | | HKAS 21 (Amendments) | Lack of Exchangeability | January 1, 2025 | | HKFRS 7 and 9 (Amendments) | Classification and Measurement of Financial Instruments | January 1, 2026 | | HKFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | HKFRS 19 | Subsidiaries without Public Accountability: Disclosures | January 1, 2027 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | - The Group is assessing the impact of these new and amended standards, and preliminary results indicate that their application is not expected to have a significant impact on the Group's financial performance and financial position[23](index=23&type=chunk) [4 Estimates](index=15&type=section&id=4%20Estimates) Management's significant judgments and key sources of estimation uncertainty in preparing the interim condensed consolidated financial statements are consistent with those applied in the 2023 annual financial statements - Management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses that are not readily apparent from other sources[24](index=24&type=chunk) - Actual results may differ from these estimates[24](index=24&type=chunk) [5 Financial Risk Management](index=15&type=section&id=5%20Financial%20Risk%20Management) The Group's business is exposed to market risks (foreign exchange, interest rate, price), credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2023, and fair value measurements of financial instruments primarily use Level 2 inputs, with no Level 3 instruments [5.1 Financial Risk Factors](index=15&type=section&id=5.1%20Financial%20Risk%20Factors) The Group's business is exposed to various financial risks: market risk (including foreign exchange risk, interest rate risk, and price risk), credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2023 - The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk, and price risk), credit risk, and liquidity risk[25](index=25&type=chunk) - There have been no significant changes in risk management policies since December 31, 2023[25](index=25&type=chunk) [5.2 Fair Value Estimation](index=16&type=section&id=5.2%20Fair%20Value%20Estimation) The Group's financial instruments are primarily measured at fair value using Level 2 inputs, including derivative financial assets and financial assets at fair value through other comprehensive income, with no transfers between Level 1 and Level 2 or into or out of Level 3 as of June 30, 2024 Fair Value Hierarchy of Financial Instruments (RMB thousand) | Item | Level 1 | Level 2 | Level 3 | Total | | :----------------------------- | :---- | :---- | :---- | :--- | | As of June 30, 2024 | | | | | | – Derivative financial assets | – | 368 | – | 368 | | – Financial assets at fair value through other comprehensive income | – | 9,383 | – | 9,383 | | As of December 31, 2023 | | | | | | – Financial assets at fair value through other comprehensive income | – | 8,868 | – | 8,868 | - The fair value of financial assets at fair value through other comprehensive income is measured based on the transaction prices of similar debt instruments in the over-the-counter market[29](index=29&type=chunk) - Derivative financial assets are foreign currency forward contracts, and their fair value is determined by exchange rates quoted by financial institutions[30](index=30&type=chunk) - For the six months ended June 30, 2024 and 2023, there were no fair value measurement transfers between Level 1 and Level 2, nor any transfers into or out of Level 3[30](index=30&type=chunk) [6 Segment Information](index=18&type=section&id=6%20Segment%20Information) The Group has minimized its mining segment activities and plans for disposal, currently operating its coal supply chain business as a single operating segment, with revenue primarily derived from coal trading, processing, storage, and supply chain management services in the China market [Operating Segments](index=18&type=section&id=Operating%20Segments) The Group's chief operating decision-maker has decided to focus resources on the coal supply chain business, minimize mining segment activities, and plans to dispose of the mining business after the reporting period, thus treating the coal supply chain business as a single operating segment - The chief operating decision-maker believes that focusing resources on the coal supply chain business is in the best interest of the Company and has decided to minimize mining segment activities and dispose of the mining business after the reporting period[32](index=32&type=chunk) - The Group's coal supply chain business is considered a single operating segment, and therefore, no separate segment analysis is presented in the interim condensed consolidated financial report[32](index=32&type=chunk) [(A) Disaggregation of Revenue from Contracts with Customers](index=18&type=section&id=%28A%29%20Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) For the six months ended June 30, 2024, the Group's revenue from contracts with customers was **RMB 1,359,778 thousand**, primarily from coal trading and processing services in the China market Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30, RMB thousand) | Item | 2024 | 2023 | | :--------------------------- | :----- | :----- | | **Major geographical markets** | | | | – China | 1,359,778 | 1,334,580 | | **Major products and services** | | | | – Trading of coal and provision of coal processing services | 1,329,032 | 1,304,219 | | – Coal storage services | 13,371 | – | | – Coal supply chain management services | 17,375 | 30,361 | | **Timing of revenue recognition** | | | | – At a point in time | 1,359,778 | 1,334,580 | - Coal storage services contributed **RMB 13,371 thousand** in revenue in 2024, with no such revenue in 2023[33](index=33&type=chunk) - Revenue from coal supply chain management services decreased from **RMB 30,361 thousand** in 2023 to **RMB 17,375 thousand** in 2024[33](index=33&type=chunk)[34](index=34&type=chunk) [(B) Geographical Information](index=20&type=section&id=%28B%29%20Geographical%20Information) The Group's revenue and specific non-current assets are primarily concentrated in China, with revenue of **RMB 1,359,778 thousand** and specific non-current assets of **RMB 463,519 thousand** as of June 30, 2024 Geographical Information (RMB thousand) | Region | Revenue from Customers (2024) | Revenue from Customers (2023) | Specific Non-current Assets (June 30, 2024) | Specific Non-current Assets (December 31, 2023) | | :--- | :----------------------- | :----------------------- | :------------------------------- | :------------------------------- | | China | 1,359,778 | 1,334,580 | 463,519 | 292,386 | | Hong Kong | – | – | 1,016 | 1,340 | | Total | 1,359,778 | 1,334,580 | 464,535 | 293,726 | - Specific non-current assets in China increased by **58.5%** from **RMB 292,386 thousand** at the end of 2023 to **RMB 463,519 thousand** as of June 30, 2024[36](index=36&type=chunk) [7 Other Income – Net](index=21&type=section&id=7%20Other%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2024, net other income was **RMB 9,479 thousand**, a decrease from **RMB 15,401 thousand** in the prior period, mainly due to lower net exchange gains and penalty income from customers Other Income – Net (RMB thousand) | Item | 2024 | 2023 | | :--------------------------------- | :----- | :----- | | Net exchange gains | 4,138 | 6,787 | | Government grants | 4,737 | 5,280 | | Penalty income from customers | 119 | 2,100 | | Interest income from financial assets at fair value through other comprehensive income | 241 | 422 | | Dividend income from financial assets at fair value through profit or loss | – | 589 | | Others | 244 | 223 | | Total | 9,479 | 15,401 | - Net exchange gains decreased from **RMB 6,787 thousand** in 2023 to **RMB 4,138 thousand** in 2024[37](index=37&type=chunk) - Penalty income from customers significantly decreased from **RMB 2,100 thousand** in 2023 to **RMB 119 thousand** in 2024[37](index=37&type=chunk) [8 Finance (Costs) / Income – Net](index=22&type=section&id=8%20Finance%20%28Costs%29%20%2F%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2024, the Group recorded net finance costs of **RMB 1,940 thousand**, compared to net finance income of **RMB 2,433 thousand** in the prior period, primarily due to a significant increase in interest expenses Finance (Costs) / Income – Net (RMB thousand) | Item | 2024 | 2023 | | :--------------------------------- | :----- | :----- | | Finance income – Interest income | 1,141 | 2,873 | | Finance costs – Interest expense | (3,081) | (440) | | Finance (costs) / income – Net | (1,940) | 2,433 | - Interest expense significantly increased from **RMB 440 thousand** in 2023 to **RMB 3,081 thousand** in 2024, mainly including interest on loans from a former director of a subsidiary and bills payable[38](index=38&type=chunk) [9 Profit Before Income Tax](index=22&type=section&id=9%20Profit%20Before%20Income%20Tax) For the six months ended June 30, 2024, profit before income tax was **RMB 138,213 thousand**, a **43.7%** increase from **RMB 96,170 thousand** in the prior period, mainly influenced by changes in cost of inventories, depreciation, and employee costs Profit Before Income Tax Deductions (RMB thousand) | Item | 2024 | 2023 | | :------------------------- | :----- | :----- | | Cost of inventories | 1,157,369 | 1,007,987 | | Depreciation of right-of-use assets | 2,496 | 1,950 | | Depreciation of property, plant and equipment charged to profit or loss | 4,761 | 4,009 | | Employee costs | 41,787 | 25,680 | - Cost of inventories increased from **RMB 1,007,987 thousand** in 2023 to **RMB 1,157,369 thousand** in 2024[39](index=39&type=chunk) - Employee costs increased from **RMB 25,680 thousand** in 2023 to **RMB 41,787 thousand** in 2024[39](index=39&type=chunk) [10 Income Tax Expense](index=23&type=section&id=10%20Income%20Tax%20Expense) For the six months ended June 30, 2024, income tax expense was **RMB 21,230 thousand**, a **53%** increase from **RMB 13,884 thousand** in the prior period, primarily due to increased PRC corporate income tax and deferred tax expense Income Tax Expense (RMB thousand) | Item | 2024 | 2023 | | :------------------------- | :----- | :----- | | Current tax – PRC corporate income tax | 18,844 | 14,100 | | Deferred tax | 2,386 | (216) | | Income tax expense | 21,230 | 13,884 | - PRC subsidiaries are subject to corporate income tax at a rate of **25%**, with some qualifying for preferential tax rates as small low-profit enterprises[41](index=41&type=chunk)[43](index=43&type=chunk) - Hainan Runce and Shenzhen Runce enjoy a preferential tax rate of **15%** under free trade port and Qianhai policies[43](index=43&type=chunk) [11 Earnings Per Share](index=25&type=section&id=11%20Earnings%20Per%20Share) For the six months ended June 30, 2024, basic and diluted earnings per share were **RMB 6.08 cents**, a **19.7%** increase from **RMB 5.08 cents** in the prior period, mainly due to increased profit attributable to owners of the Company Earnings Per Share Calculation | Indicator | 2024 | 2023 | | :--------------------------------- | :----- | :----- | | Profit attributable to owners of the Company (RMB thousand) | 117,032 | 82,352 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,924,198 | 1,620,000 | | Basic and diluted earnings per share (RMB cents) | 6.08 | 5.08 | - Diluted earnings per share are equal to basic earnings per share as there were no potential dilutive ordinary shares outstanding during the period[45](index=45&type=chunk) [12 Dividends](index=25&type=section&id=12%20Dividends) The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[46](index=46&type=chunk) [13 Property, Plant and Equipment](index=25&type=section&id=13%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2024, the Group's capital expenditure on property, plant and equipment was approximately **RMB 23,215 thousand**, a significant increase from the prior period Capital Expenditure on Property, Plant and Equipment (RMB thousand) | Item | 2024 | 2023 | | :--------- | :----- | :----- | | Capital expenditure | 23,215 | 4,388 | | Loss on write-off | 0 | 86 | - For the six months ended June 30, 2024 and 2023, there were no disposals of property, plant and equipment[47](index=47&type=chunk) [14 Trade and Bills Receivables](index=26&type=section&id=14%20Trade%20and%20Bills%20Receivables) As of June 30, 2024, net trade and bills receivables significantly increased to **RMB 621,745 thousand**, a **160%** rise from the end of 2023, primarily due to an increase in trade receivables Net Trade and Bills Receivables (RMB thousand) | Item | June 30, 2024 | December 31, 2023 | | :------------------------- | :------------ | :------------- | | Net trade receivables | 575,772 | 188,303 | | Net bills receivables | 45,973 | 50,222 | | Total net trade and bills receivables | 621,745 | 238,525 | Ageing Analysis of Trade and Bills Receivables (RMB thousand) | Ageing | June 30, 2024 | December 31, 2023 | | :--------- | :------------ | :------------- | | Up to 3 months | 600,019 | 229,887 | | 3 to 6 months | 21,726 | 8,638 | | Total | 621,745 | 238,525 | - The carrying amounts of trade and bills receivables approximate their fair values, with approximately **RMB 605,215 thousand** denominated in RMB and **RMB 16,530 thousand** in USD[51](index=51&type=chunk) [15 Other Receivables and Prepayments](index=27&type=section&id=15%20Other%20Receivables%20and%20Prepayments) As of June 30, 2024, net other receivables and prepayments increased to **RMB 118,851 thousand**, an **83%** rise from the end of 2023, mainly due to a significant increase in prepayments to suppliers and other recoverable taxes Net Other Receivables and Prepayments (RMB thousand) | Item | June 30, 2024 | December 31, 2023 | | :------------------------- | :------------ | :------------- | | Net other receivables | 2,339 | 2,669 | | Deposits paid to suppliers – third parties | 11,050 | 9,890 | | Prepayments to suppliers – third parties | 72,067 | 49,805 | | Other recoverable taxes | 33,395 | 2,577 | | Total net other receivables and prepayments | 118,851 | 64,941 | - Other recoverable taxes significantly increased from **RMB 2,577 thousand** at the end of 2023 to **RMB 33,395 thousand** as of June 30, 2024[52](index=52&type=chunk) [16 Trade Payables](index=28&type=section&id=16%20Trade%20Payables) As of June 30, 2024, total trade payables increased to **RMB 961,740 thousand**, a **50.8%** rise from the end of 2023, primarily concentrated within the 3-month ageing period Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2024 | December 31, 2023 | | :--------- | :------------ | :------------- | | Up to 3 months | 770,094 | 586,651 | | 3 to 6 months | 181,339 | 49,662 | | 6 to 12 months | 5,527 | 823 | | Over 12 months | 4,780 | 715 | | Total | 961,740 | 637,851 | - Trade payables are short-term in nature, their carrying amounts approximate their fair values, and the balances are denominated in RMB[53](index=53&type=chunk) [17 Other Payables and Accruals](index=29&type=section&id=17%20Other%20Payables%20and%20Accruals) As of June 30, 2024, total other payables and accruals were **RMB 68,798 thousand**, a **16.6%** increase from the end of 2023, mainly due to an increase in other payables Other Payables and Accruals (RMB thousand) | Item | June 30, 2024 | December 31, 2023 | | :--------------------- | :------------ | :------------- | | Other payables | 43,147 | 27,424 | | Accrued salaries and welfare | 19,528 | 19,738 | | Accrued taxes (excluding income tax) | 6,123 | 11,865 | | Total | 68,798 | 59,027 | - Other payables primarily include deposits received from customers, equipment purchase costs payable, service fees payable, and third-party advances[54](index=54&type=chunk) [18 Share Capital and Share Premium](index=30&type=section&id=18%20Share%20Capital%20and%20Share%20Premium) As of June 30, 2024, the Company's issued shares increased to **1,943,988 thousand shares**, with share capital and share premium increasing due to shares issued upon subsidiary acquisition Changes in Share Capital and Share Premium (RMB thousand) | Item | Number of Shares (thousand shares) | Share Capital | Share Premium | Total | | :--------------------------------- | :--------------- | :----- | :------- | :----- | | As of January 1, 2023 | 1,620,000 | 137,361 | 668,768 | 806,129 | | Shares issued upon acquisition of a subsidiary | 167,388 | 15,572 | 35,036 | 50,608 | | As of December 31, 2023 and January 1, 2024 | 1,787,388 | 152,933 | 703,804 | 856,737 | | Shares issued upon acquisition of a subsidiary (Note 19) | 156,600 | 14,303 | 28,606 | 42,909 | | As of June 30, 2024 | 1,943,988 | 167,236 | 732,410 | 899,646 | - The authorized share capital is **5,000,000,000 shares** of **HKD 0.1** each[56](index=56&type=chunk)[57](index=57&type=chunk) [19 Acquisition of CC Bong Logistics Limited](index=31&type=section&id=19%20Acquisition%20of%20CC%20Bong%20Logistics%20Limited) The Group completed the acquisition of 100% equity in CC Bong Logistics Limited in January 2024 for a consideration of **RMB 77,558 thousand**, primarily paid through share issuance and bills payable, resulting in a bargain purchase gain of **RMB 20,071 thousand** aimed at strengthening coal supply chain management services - The Group entered into an agreement on December 29, 2023, to acquire 100% equity in CC Bong Logistics Limited for **RMB 77,558 thousand**, completed on January 24, 2024[59](index=59&type=chunk) Fair Value of Assets and Liabilities Acquired in CC Bong Logistics Limited Acquisition (RMB thousand) | Item | Amount | | :--------------------- | :----- | | Net identifiable assets acquired | 97,629 | | Bargain purchase gain on acquisition of a subsidiary | (20,071) | | Consideration | 77,558 | | Consideration paid by | | | – Issue of shares | 42,909 | | – Issue of bills payable | 34,649 | | Total | 77,558 | - The acquisition resulted in a bargain purchase gain of approximately **RMB 20,071 thousand**, mainly due to a decrease in the fair value of consideration shares[59](index=59&type=chunk)[61](index=61&type=chunk) - CC Bong Logistics Limited and its subsidiaries are engaged in coal supply chain management services, and this acquisition helps strengthen the Group's existing coal trading business and supply chain management service capabilities[59](index=59&type=chunk) [20 Related Party Transactions](index=33&type=section&id=20%20Related%20Party%20Transactions) The Group's related parties include Tianyuan International Limited, holding **26.8%** of the Company's shares, and its legal beneficial owner Mr. Cui Yazhou, with key management personnel compensation significantly increasing in the first half of 2024 [(a) Related Parties](index=33&type=section&id=%28a%29%20Related%20Parties) Tianyuan International Limited, holding **26.8%** of the Company's shares, and its legal beneficial owner Mr. Cui Yazhou, are considered related parties of the Group Related Party Information | Related Party Name | Relationship with the Group | | :--------------- | :------------- | | Tianyuan International Limited | Shareholder of the Company holding 26.8% equity in the Company | | Mr. Cui Yazhou | Legal beneficial owner of Tianyuan International Limited | [(b) Key Management Personnel Compensation](index=33&type=section&id=%28b%29%20Key%20Management%20Personnel%20Compensation) For the six months ended June 30, 2024, total key management personnel compensation was **RMB 3,476 thousand**, a significant increase from **RMB 1,520 thousand** in the prior period Key Management Personnel Compensation (RMB thousand) | Item | 2024 | 2023 | | :----------------- | :----- | :----- | | Basic salaries, allowances and other benefits | 3,387 | 1,505 | | Contributions to retirement benefit schemes | 89 | 15 | | Total | 3,476 | 1,520 | [21 Capital Commitments](index=33&type=section&id=21%20Capital%20Commitments) As of June 30, 2024, the Group's contracted but unprovided capital expenditures in the consolidated financial statements amounted to **RMB 3,814 thousand**, primarily for the acquisition of property and equipment Capital Commitments (RMB thousand) | Item | June 30, 2024 | December 31, 2023 | | :----------------- | :------------ | :------------- | | Acquisition of property and equipment | 3,814 | 4,173 | | Construction of new production plant | – | 136 | | Total | 3,814 | 4,309 | [22 Contingent Liabilities](index=34&type=section&id=22%20Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[65](index=65&type=chunk) [23 Events After the Reporting Period](index=34&type=section&id=23%20Events%20After%20the%20Reporting%20Period) After the reporting date, the Group entered into an agreement to dispose of 95% equity in Hami Jin Hua Mineral Resources Development Co., Ltd. and acquired the entire issued share capital of Mouton Investment Limited to further adjust its business portfolio [(a) Disposal of Hami Jin Hua Mineral Resources Development Co., Ltd.](index=34&type=section&id=%28a%29%20Disposal%20of%20Hami%20Jin%20Hua%20Mineral%20Resources%20Development%20Co.%2C%20Ltd.) On July 19, 2024, the Group entered into an agreement to dispose of 95% equity in Hami Jin Hua Mineral Resources Development Co., Ltd., which holds a non-ferrous metal mining right, for **RMB 94,000 thousand** - On July 19, 2024, the Group entered into a sale and purchase agreement to dispose of 95% equity in Hami Jin Hua Mineral Resources Development Co., Ltd. for a consideration of **RMB 94,000,000**[66](index=66&type=chunk) - Hami Jin Hua holds a non-ferrous metal mining right and is engaged in the mining, processing, and sale of lead and zinc products in China[66](index=66&type=chunk) [(b) Acquisition of Mouton Investment Limited](index=34&type=section&id=%28b%29%20Acquisition%20of%20Mouton%20Investment%20Limited) On June 25, 2024, the Group entered into an agreement to acquire the entire issued share capital of Mouton Investment Limited for **HKD 40,333,333**, a company engaged in supply chain management services and general cargo warehousing services - On June 25, 2024, the Group entered into an agreement to acquire the entire issued share capital of Mouton Investment Limited for a consideration of **HKD 40,333,333**[66](index=66&type=chunk) - The consideration will be settled by the allotment and issue of **73,333,333 consideration shares**[66](index=66&type=chunk) - Mouton and its subsidiaries are engaged in supply chain management services and general cargo warehousing services[66](index=66&type=chunk) Management Discussion and Analysis [Business Review](index=35&type=section&id=Business%20Review) The Group is transitioning from lead-zinc mining to strategically focusing on its coal supply chain business, actively expanding into international markets and green energy projects, and enhancing competitiveness through warehouse acquisitions and diversified services despite domestic coal market challenges [Coal Business](index=35&type=section&id=Coal%20Business) China's coal industry remains dominant in the energy mix, with slowing domestic production but surging imports; the Group's coal supply chain business serves local traders, steel mills, and energy companies, expanding warehousing and blending capabilities through acquisitions of CC Bong Logistics and Mouton Investment Limited, while also developing international supply chain trade and photovoltaic projects - China's coal consumption accounts for **55.3%** of national energy consumption, significantly higher than the global average[68](index=68&type=chunk) - In the first half of 2024, raw coal output from industrial enterprises above designated size decreased by **1.7%** year-on-year, but coal and lignite imports significantly increased by **12.5%** year-on-year to **250 million tonnes**[68](index=68&type=chunk) - The Group engages in coal trading and washing through Changzhi Runce, Hainan Runce, and Shanxi Fanpo, and provides coal supply chain management, warehousing, and blending services through Shenzhen Runce, Shanxi Magao, and the newly acquired Changzhi Desheng[71](index=71&type=chunk) - The acquisition of CC Bong Logistics Limited was completed, which indirectly owns two coal sheds with a total storage capacity of **1 million tonnes**, strategically located in a logistics park in Shanxi Province[71](index=71&type=chunk) - The acquisition of Mouton Investment Limited was completed, which owns two coal sheds with a total storage capacity of **120,000 tonnes**, conveniently located near the Group's existing coal washing plant[73](index=73&type=chunk) - The Company strategically expanded into international supply chain trade business, contributing approximately **RMB 82.6 million** in revenue during the period[74](index=74&type=chunk) - The Company has initiated photovoltaic projects aimed at promoting decarbonization and achieving integrated development of coal-based energy with multiple green energy sources[76](index=76&type=chunk) - During the period, the coal business segment contributed approximately **RMB 1.36 billion** in revenue to the Group (2023: **RMB 1.33 billion**)[76](index=76&type=chunk) [Mining Business](index=40&type=section&id=Mining%20Business) The Group's mining business primarily involves lead-zinc mines in Xinjiang, China, where zinc and lead prices fluctuated due to global economic slowdown; to maximize economic value, the Group decided to dispose of Hami Jin Hua and monetize the Baiganhu project, marking the termination of its mining operations - The Group's diversified non-ferrous mineral resources include various non-ferrous minerals such as nickel, copper, zinc, and lead in the Xinjiang Uygur Autonomous Region, China[77](index=77&type=chunk) - The commodity market performance remained relatively weak during the period, mainly due to the ongoing global economic slowdown[77](index=77&type=chunk) - Zinc prices during the period fell from approximately **USD 2,640/tonne** to approximately **USD 2,300/tonne**, then rebounded to approximately **USD 3,100/tonne**, finally closing at **USD 2,920/tonne**[77](index=77&type=chunk) - Lead prices during the period fluctuated from approximately **USD 2,030/tonne** to approximately **USD 1,950/tonne**, then peaked at approximately **USD 2,300/tonne**, finally closing at approximately **USD 2,150/tonne**[77](index=77&type=chunk) - The Group monetized the Baiganhu project through the disposal of Hami Jin Hua for a consideration of **RMB 94,000,000**, which will enhance capital returns and shareholder value[78](index=78&type=chunk) - During the period, Hami Jin Hua did not conduct any mining and beneficiation operations[78](index=78&type=chunk) [Results Review](index=41&type=section&id=Results%20Review) The Group's revenue grew by **1.9%** to **RMB 1.36 billion**, and gross profit surged by **36.2%** to **RMB 129.6 million**, primarily driven by growth in coal supply chain services and strategic investments in warehousing facilities, while administrative expenses, finance costs, and income tax expense all increased [Revenue and Gross Profit](index=41&type=section&id=Revenue%20and%20Gross%20Profit) Revenue for the period increased by **1.9%** to **RMB 1.36 billion**, with cost of sales decreasing by **0.7%**, leading to a **36.2%** surge in gross profit to **RMB 129.6 million**, primarily attributable to increased supply chain service revenue and high-margin warehousing services - The Group's revenue increased by approximately **1.9%** from approximately **RMB 1.33 billion** in the prior period to approximately **RMB 1.36 billion** in the current period[81](index=81&type=chunk) - Cost of sales for the current period was approximately **RMB 1.23 billion**, a year-on-year decrease of approximately **0.7%**[81](index=81&type=chunk) - Gross profit surged by approximately **36.2%** from approximately **RMB 95.2 million** in the prior period to approximately **RMB 129.6 million** in the current period[81](index=81&type=chunk) - The significant growth in gross profit was mainly due to increased revenue from the Group's supply chain services business and the provision of high-margin warehousing services to external customers[81](index=81&type=chunk) - The Group completed the acquisitions of CC Bong Logistics and Mouton HK to expand its warehousing and coal blending service capabilities for the coal supply chain business[81](index=81&type=chunk)[82](index=82&type=chunk) [Administrative Expenses](index=43&type=section&id=Administrative%20Expenses) Administrative expenses for the period were approximately **RMB 19.3 million**, an increase from **RMB 17.2 million** in the prior period, mainly due to increased staff costs from business expansion Administrative Expenses (RMB million) | Indicator | 2024 | 2023 | | :------- | :----- | :----- | | Administrative expenses | 19.3 | 17.2 | - The increase in administrative expenses was mainly due to increased staff costs resulting from the expansion of business activities during the period[83](index=83&type=chunk) [Other Income – Net](index=44&type=section&id=Other%20Income%20%E2%80%93%20Net) Net other income for the period was approximately **RMB 9.5 million**, a decrease from **RMB 15.4 million** in the prior period, primarily due to lower net unrealized exchange gains and penalty income from customers Other Income – Net (RMB million) | Item | 2024 | 2023 | | :--------------- | :----- | :----- | | Other income – Net | 9.5 | 15.4 | | Net exchange gains | 4.1 | 6.8 | | Government grants | 4.7 | 5.3 | | Penalty income from customers | 0.1 | 2.1 | - Unrealized exchange gains primarily arose from financial assets denominated in USD and HKD, due to the appreciation of USD and HKD against RMB[85](index=85&type=chunk) [Other Operating (Losses) / Gains](index=44&type=section&id=Other%20Operating%20%28Losses%29%20%2F%20Gains) The period recorded other operating losses of approximately **RMB 0.1 million**, mainly due to expected credit losses on trade and bills receivables, partially offset by a reversal of expected credit losses on other receivables - Other operating losses for the period were approximately **RMB 0.1 million**[86](index=86&type=chunk) - Expected credit losses on trade and bills receivables were approximately **RMB 0.6 million**, offset by a reversal of expected credit losses on other receivables of approximately **RMB 0.5 million** recorded during the period[86](index=86&type=chunk) [Finance (Costs) / Income – Net](index=44&type=section&id=Finance%20%28Costs%29%20%2F%20Income%20%E2%80%93%20Net) Net finance costs for the period were approximately **RMB 1.9 million**, compared to net finance income of **RMB 2.4 million** in the prior period, mainly due to increased interest expenses on lease liabilities and interest-bearing borrowings Finance (Costs) / Income – Net (RMB million) | Indicator | 2024 | 2023 | | :--------------------- | :----- | :----- | | Finance (costs) / income – Net | (1.9) | 2.4 | - This primarily includes interest expenses of approximately **RMB 3.1 million** on lease liabilities and interest-bearing borrowings, net of interest income of approximately **RMB 1.1 million** earned from the Group's bank cash[87](index=87&type=chunk) [Income Tax Expense](index=44&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was approximately **RMB 21.2 million**, an increase from **RMB 13.9 million** in the prior period, mainly due to tax provisions for PRC operations and deferred tax expense Income Tax Expense (RMB million) | Indicator | 2024 | 2023 | | :--------- | :----- | :----- | | Income tax expense | 21.2 | 13.9 | - The increase was mainly due to deferred tax expense of approximately **RMB 2.4 million** during the period, compared to a deferred tax credit of approximately **RMB 0.2 million** in the prior period[88](index=88&type=chunk) [Holdings of Significant Investments](index=44&type=section&id=Holdings%20of%20Significant%20Investments) As of June 30, 2024, the Group's investments in debt securities were approximately **RMB 9.4 million**, which did not reach or exceed **5%** of the Group's total assets Debt Securities Investments (RMB million) | Indicator | June 30, 2024 | December 31, 2023 | | :--------- | :------------ | :------------- | | Debt securities investments | 9.4 | 8.9 | - The Group's holdings of debt securities, individually and in aggregate, did not reach or exceed **5%** of the Group's total assets[89](index=89&type=chunk) [Material Acquisitions and Disposals](index=45&type=section&id=Material%20Acquisitions%20and%20Disposals) During and after the reporting period, the Group completed the acquisitions of CC Bong Logistics Limited and Mouton Investment Limited to expand its coal supply chain business's warehousing and blending service capabilities, while also entering into an agreement to dispose of Hami Jin Hua Mineral Resources Development Co., Ltd. to terminate mining operations and reallocate resources [(i) Acquisition of CC Bong Logistics Limited](index=45&type=section&id=%28i%29%20Acquisition%20of%20CC%20Bong%20Logistics%20Limited) The Group completed the acquisition of CC Bong Logistics Limited in January 2024 for a consideration of **HKD 100,000,000** (approximately **RMB 77.6 million**), primarily paid through share issuance and bills payable, aiming to leverage its two coal sheds with a total storage capacity of **1 million tonnes** to enhance coal supply chain services - The Group entered into an agreement on December 29, 2023, to acquire the entire issued share capital of CC Bong Logistics Limited for **HKD 100,000,000**, completed in January 2024[90](index=90&type=chunk)[92](index=92&type=chunk) - The consideration was paid by issuing **156,600,000 new shares** (**HKD 62,640,000**) and issuing an unsecured bill payable with a principal amount of **HKD 37,360,000**[90](index=90&type=chunk) - The core assets of the CC Bong Logistics Group are two coal sheds with a total storage capacity of **1 million tonnes** and related machinery, strategically located in a logistics park in Shanxi Province, China[92](index=92&type=chunk) [(ii) Acquisition of Mouton Investments Limited](index=46&type=section&id=%28ii%29%20Acquisition%20of%20Mouton%20Investments%20Limited) The Group entered into an agreement on June 25, 2024, to acquire the entire issued share capital of Mouton Investment Limited for **HKD 35,200,000** (final consideration approximately **HKD 40.3 million**), completed on July 24, 2024; the Mouton Group owns two coal sheds with a total storage capacity of **120,000 tonnes**, aiming to enhance the Group's warehousing and blending service capabilities in Shanxi Province - The Group entered into an agreement on June 25, 2024, to acquire the entire issued share capital of Mouton Investment Limited for **HKD 35,200,000**, completed on July 24, 2024[93](index=93&type=chunk)[94](index=94&type=chunk) - The consideration was paid by allotting and issuing **73,333,333 shares** of the Company[93](index=93&type=chunk) - The core assets of the Mouton Group are two coal sheds with a total storage capacity of **120,000 tonnes** and related machinery, located in Shanxi Province, China, near the Group's existing coal washing plant, with convenient transportation[94](index=94&type=chunk) - Both acquisitions align with the Group's development strategy to strengthen its existing coal trading business and coal supply chain management service capabilities[94](index=94&type=chunk) [(iii) Disposal of Hami Jin Hua Mineral Resources Development Co., Ltd.](index=48&type=section&id=%28iii%29%20Disposal%20of%20Hami%20Jin%20Hua%20Mineral%20Resources%20Development%20Co.%2C%20Ltd.) On July 19, 2024, the Group entered into an agreement to dispose of 95% equity in Hami Jin Hua Mineral Resources Development Co., Ltd. for **RMB 94,000,000**, aiming to monetize valuable resources and reallocate them to strategic business units - On July 19, 2024, Huili Investment, a wholly-owned subsidiary of the Company, entered into a sale and purchase agreement with Changzhi Rongtong to dispose of 95% equity in Hami Jin Hua for a consideration of **RMB 94,000,000**[96](index=96&type=chunk) - Hami Jin Hua owns a non-ferrous metal mining permit in Xinjiang, China, namely the Baiganhu mine for producing lead and zinc ore, and a lead-zinc beneficiation plant[96](index=96&type=chunk) - The disposal will enable the Group to monetize its valuable resources and reallocate its constrained resources to its strategic business units[96](index=96&type=chunk) [Capital Expenditures](index=48&type=section&id=Capital%20Expenditures) During the period, the Group incurred capital expenditures of approximately **RMB 23.2 million** for property, plant and equipment and approximately **RMB 4.5 million** for right-of-use assets, both showing significant changes from the prior period Capital Expenditures (RMB million) | Item | 2024 | 2023 | | :------------- | :----- | :----- | | Property, plant and equipment | 23.2 | 4.4 | | Right-of-use assets | 4.5 | 11.9 | - During the current and prior periods, there were no disposals of property, plant and equipment and right-of-use assets[97](index=97&type=chunk) [Liquidity and Financial Resources](index=49&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2024, equity attributable to owners of the Company increased by **20.3%** to **RMB 948.1 million**, and total assets grew by **46.3%** to **RMB 2.31 billion**, indicating a robust financial position with a net cash position of **RMB 147.3 million** and a gearing ratio of **0%** - As of June 30, 2024, equity attributable to owners of the Company increased to approximately **RMB 948.1 million**, an increase of approximately **20.3%** from approximately **RMB 788.0 million** as of December 31, 2023[98](index=98&type=chunk) - As of June 30, 2024, the Group's total assets increased to approximately **RMB 2.31 billion**, from approximately **RMB 1.58 billion** as of December 31, 2023[98](index=98&type=chunk) - The Group invests surplus cash in low-risk fixed deposits and high-quality debt securities to generate additional returns[98](index=98&type=chunk) - As of June 30, 2024, the Group held debt securities of approximately **RMB 9.4 million** (December 31, 2023: **RMB 8.9 million**)[98](index=98&type=chunk) - During the period, the Group funded its daily operations through internally generated cash flows[98](index=98&type=chunk) - As of June 30, 2024, the Group had unsecured bills payable with a principal amount of **HKD 37,360,000**, due on January 23, 2029, at an annual interest rate of **5%**[100](index=100&type=chunk) - The Group obtained a loan from a former shareholder of a subsidiary of CC Bong Logistics, for a term of eight years, interest-free for the first year, and an annual interest rate of **4.2%** thereafter[100](index=100&type=chunk) - As of June 30, 2024, the Group's bank and cash balances were approximately **RMB 274.8 million** (December 31, 2023: **RMB 508.6 million**)[100](index=100&type=chunk) [Treasury Policy](index=50&type=section&id=Treasury%20Policy) The Group maintains a conservative treasury policy to ensure ample liquidity, and to manage foreign currency risks from international supply chain trade, a dedicated task force monitors exchange rate fluctuations and implements foreign currency forward contract hedging strategies - The Group primarily conducts its ongoing business transactions in RMB and HKD, with surplus cash mostly invested in fixed deposits and high-quality debt securities denominated mainly in USD[101](index=101&type=chunk) - The Company has established a dedicated task force composed of industry experts to monitor foreign exchange fluctuations, assess risks, and formulate appropriate hedging strategies, utilizing leveraged foreign currency forward contracts to hedge foreign exchange risk[101](index=101&type=chunk) - As of June 30, 2024, the Group's outstanding foreign currency forward contracts were valued at approximately **RMB 368,000**[101](index=101&type=chunk) [Gearing Ratio](index=51&type=section&id=Gearing%20Ratio) As of June 30, 2024, the Company's net cash position was **RMB 147.3 million**, with a gearing ratio of **0%**, demonstrating a robust financial position - The Company signed a credit facility with Nanyang Commercial Bank in November 2023, allowing for borrowings of up to **USD 90 million**, with approximately **RMB 33.0 million** in letters of credit utilized[102](index=102&type=chunk) - As of June 30, 2024, the Company's net cash position was **RMB 147.3 million**[102](index=102&type=chunk) - As of June 30, 2024, the gearing ratio was **0%** (December 31, 2023: **0%**)[102](index=102&type=chunk) [Key Risks](index=51&type=section&id=Key%20Risks) The Group's business involves foreign exchange and credit risks; hedging strategies are employed to manage foreign exchange fluctuations from international operations, while credit risk, primarily from coal business trade receivables, is managed through strict controls and regular evaluations [Foreign Exchange Risk](index=51&type=section&id=Foreign%20Exchange%20Risk) The Group's business is primarily conducted in RMB, but international supply chain trade involves USD transactions, posing potential foreign currency risks; the company has established a task force to monitor exchange rate fluctuations and use foreign currency forward contracts for hedging - The Group's business is primarily conducted in RMB, but international supply chain trade business mainly involves USD transactions, posing potential foreign currency risks[104](index=104&type=chunk) - The Company has established a dedicated task force responsible for monitoring foreign exchange fluctuations, assessing risks, and formulating appropriate hedging strategies, utilizing foreign currency forward contracts to hedge currency fluctuations[104](index=104&type=chunk) [Credit Risk](index=52&type=section&id=Credit%20Risk) The Group faces credit risk in its coal business, mainly from trade and bills receivables; this risk is managed through strict controls, regular review of overdue balances, and provisions for expected credit losses - The Group faces credit risk in its coal business, primarily arising from trade and bills receivables in this business segment[106](index=106&type=chunk) - The Group is committed to strictly controlling its outstanding receivables, and management regularly reviews overdue balances[106](index=106&type=chunk) - As of June 30, 2024, a loss allowance of approximately **RMB 6.2 million** was made for the total trade and bills receivables[106](index=106&type=chunk) [Pledge of the Company's Assets, Commitments and Contingent Liabilities](index=52&type=section&id=Pledge%20of%20the%20Company%27s%20Assets%2C%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2024, the Group had no other significant contracted capital expenditures, commitments, or contingent liabilities, but approximately **RMB 33.0 million** in cash and cash equivalents were pledged to banks for letters of credit - As of June 30, 2024, approximately **RMB 33.0 million** (December 31, 2023: **RMB 34.0 million**) of cash and cash equivalents were pledged to banks for their letters of credit of approximately **RMB 33.0 million** (December 31, 2023: **RMB 34.0 million**)[107](index=107&type=chunk) - Save for those disclosed in Notes 21 and 22 to the interim condensed consolidated financial statements, as of June 30, 2024 and December 31, 2023, the Group had no other contracted capital expenditures, commitments, and significant contingent liabilities[107](index=107&type=chunk) [Dividends](index=53&type=section&id=Dividends) The directors do not recommend the payment of any interim dividend for the current period - The directors do not recommend the payment of any interim dividend for the current period (prior period: nil)[108](index=108&type=chunk) [Human Resources and Share Option Scheme](index=53&type=section&id=Human%20Resources%20and%20Share%20Option%20Scheme) As of June 30, 2024, the Group employed **895** employees, with total staff costs of approximately **RMB 41.8 million**, and no share options were granted, exercised, lapsed, or outstanding during the period Human Resources Overview | Indicator | June 30, 2024 | December 31, 2023 | | :--------- | :------------ | :------------- | | Number of employees | 895 | 820 | | Total staff costs (RMB million) | 41.8 | 25.7 | - Employee remuneration is primarily determined by their job nature, performance, and years of service with the Group, and includes discretionary bonuses, pensions, medical plans, and other social insurance[109](index=109&type=chunk) - As of June 30, 2024, and during the period, no share options were granted, exercised, lapsed, or outstanding[109](index=109&type=chunk) [Future Outlook and Prospects](index=53&type=section&id=Future%20Outlook%20and%20Prospects) Despite domestic coal market challenges, the Group remains committed to strategic adjustments and operational efficiency, achieving **1.9%** revenue growth and **19.7%** EPS growth; the Group has terminated its mining business to fully focus on coal supply chain operations, expanding warehousing capacity through acquisitions, and developing international markets and photovoltaic projects for sustainable growth and value creation - Total revenue for the period was **RMB 1.36 billion**, an increase of **1.9%** from the prior period[110](index=110&type=chunk) - Earnings per share were **RMB 6.08 cents** per share, a year-on-year increase of **19.7%** from the prior period[112](index=112&type=chunk) - The Group has monetized the Baiganhu project through the disposal of Hami Jin Hua, marking the end of its mining business and a full transition to the coal supply chain business[112](index=112&type=chunk) - Through the acquisitions of CC Bong Logistics and Mouton HK, the Group has expanded its coal supply chain management capabilities, which are expected to generate synergies and long-term growth opportunities[112](index=112&type=chunk) - The Group's expansion into international markets has significantly contributed approximately **RMB 82.6 million** in revenue[113](index=113&type=chunk) - To align with environmental goals and promote sustainable practices, the Group has commenced the development and construction of photovoltaic projects[113](index=113&type=chunk) - Looking ahead to the second half of 2024, the Chinese coal industry is expected to maintain profitability supported by peak demand and market stability[113](index=113&type=chunk) - The Board maintains a cautiously optimistic outlook for the core coal supply chain business, committed to exploring high-quality projects and opportunities to diversify business segments and locations[115](index=115&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=57&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2024, directors and chief executives held interests in the Company's shares, with Mr. Cui Yazhou holding **26.80%** through Tianyuan International Limited and Mr. Ye Xin holding **7.09%** through Fulian Holdings Limited Directors' Interests in Shares | Name / Company Name | Nature of Interest | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :-------------------- | :----------- | :------------- | :--------------------------- | | Tianyuan International Limited | Beneficial owner | 521,000,000 (L) | 26.80% | | Mr. Cui Yazhou | Controlled corporation interest | 521,000,000 (L) | 26.80% | | Fulian Holdings Limited | Beneficial owner | 137,792,017 (L) | 7.09% | | Mr. Ye Xin | Controlled corporation interest | 137,792,017 (L) | 7.09% | - Mr. Cui Yazhou is the legal and beneficial owner of the entire issued share capital of Tianyuan International Limited[117](index=117&type=chunk) - Mr. Ye Xin is the legal and beneficial owner of the entire issued share capital of Fulian Holdings Limited[117](index=117&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=58&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, excluding directors, Mr. Feng Yuantao was the largest shareholder, holding **15.77%** equity, with other major shareholders including China Clean Energy Technology Co., Ltd., Mr. Bong Chin Chung, and Baicheng International Group Limited Substantial Shareholders' and Other Persons' Interests in Shares | Name / Company Name | Nature of Interest | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :--------------

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 1,359,778 thousand, an increase of 1.1% compared to RMB 1,334,580 thousand for the same period in 2023[2] - Gross profit for the same period was RMB 129,629 thousand, representing a significant increase of 36.2% from RMB 95,155 thousand in the previous year[2] - Operating profit rose to RMB 140,153 thousand, up 49.5% from RMB 93,737 thousand in the prior period[2] - Net profit for the period was RMB 116,983 thousand, an increase of 42.3% compared to RMB 82,286 thousand in the previous year[2] - Basic and diluted earnings per share increased to RMB 6.08, up from RMB 5.08 in the same period last year[3] - The company's profit before tax was RMB 21,230,000 for the six months ended June 30, 2024, compared to RMB 13,884,000 in 2023, representing a growth of 53.1%[22] - The total tax expense for the six months ended June 30, 2024, was RMB 21,230,000, reflecting an increase from RMB 13,884,000 in 2023[22] - The total employee cost for the period was approximately RMB 41.8 million, compared to RMB 25.7 million in the previous period[89] - Basic earnings per share increased to RMB 6.08, up 19.7% from RMB 5.08 in the same period last year[25] Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 2,307,832 thousand, compared to RMB 1,577,780 thousand as of December 31, 2023, reflecting a growth of 46.3%[4] - Current assets increased to RMB 1,838,953 thousand, up from RMB 1,278,258 thousand at the end of 2023, indicating a growth of 43.9%[4] - Trade payables rose to RMB 961,740 thousand, an increase of 50.6% from RMB 637,851 thousand in the previous period[5] - Non-current liabilities totaled RMB 174,894 thousand, compared to RMB 43,551 thousand at the end of 2023, showing a significant increase[5] - Total equity increased to RMB 952,126 thousand, up from RMB 792,076 thousand at the end of 2023, reflecting a growth of 20.2%[5] Business Operations - The company operates primarily in the People's Republic of China, focusing on the extraction, processing, and sale of lead and zinc products, as well as coal trading and processing services[6] - The company has decided to minimize mining operations and focus resources on the coal supply chain business, which is now considered a single operating segment[16] - The coal business generated revenue of RMB 1,359,778,000 (unreviewed) for the six months ended June 30, 2024, compared to RMB 1,334,580,000 (unreviewed) for the same period in 2023, reflecting a growth of approximately 1.9%[17][18] - The revenue from coal trading and processing services was RMB 1,329,032,000 (unreviewed) for the six months ended June 30, 2024[17] - The company completed the acquisition of CC Bong Logistics Limited in January 2024, enhancing its coal service supply chain management capabilities with a total storage capacity of 1 million tons across two coal yards[51] Acquisitions and Investments - The acquisition of CCB Bong Logistics Limited was completed on January 24, 2024, for a total consideration of RMB 77,558,000, aimed at enhancing the company's coal trading and supply chain management capabilities[36] - The acquisition of Mouton Investment Limited was finalized on July 24, 2024, for a total consideration of HKD 40,333,333, which will enhance the company's coal service supply chain management[52] - The fair value of identifiable assets and liabilities acquired by CCB Logistics Limited amounts to RMB 97,629,000, with a bargain purchase gain of RMB 20,071,000 recognized in the business combination[37][38] - The company aims to leverage synergies from the acquisitions of CC Bong and Mouton HK to create long-term strategic growth opportunities in the coal industry[53] Market Conditions - In 2023, coal consumption accounted for 55.3% of China's total energy consumption, significantly higher than the global average[46] - In the first half of 2024, China's industrial raw coal production was 2.27 billion tons, a decrease of 1.7% compared to the same period last year[46] - Coal imports surged over 60% in 2023, with total coal and lignite imports reaching 25 million tons in the first half of 2024, an increase of 12.5% year-on-year[46] - The domestic coal market is experiencing a downward trend due to rising inventory levels and limited internal demand[58] - The coal industry in China is expected to enter a transitional and transformative period in the second half of 2024, with strong coal imports and domestic production recovery maintaining robust supply levels[94] Financial Management and Risks - The group faces various financial risks, including market risk (foreign exchange, interest rate, and price risks), credit risk, and liquidity risk[12] - The group has implemented a conservative treasury policy to ensure ample liquidity and effective financial management[80] - The group has a strong liquidity position and is confident in obtaining sufficient resources to meet operational funding needs[79] - The group maintains a healthy financial position, investing surplus cash in low-risk deposits and high-quality debt securities to provide additional returns to shareholders[77] Corporate Governance - The company is committed to maintaining high standards of corporate governance and has taken appropriate steps to adopt and comply with its corporate governance code[109] - The audit committee, consisting of three independent non-executive directors, has reviewed the financial reporting procedures and internal controls during the period[111] - The company has not appointed a CEO position; the duties are performed by other executive directors and senior management[109] Shareholder Information - Major shareholders include Tian Yuan International Limited and Mr. Choi, each holding 521,000,000 shares, representing 26.80% of the company's issued share capital[96] - Other significant shareholders include Mr. Feng Yuan Tao with 306,522,040 shares (15.77%) and China Clean Energy Technology Limited with 170,000,000 shares (8.74%)[98]

Financial Performance - The group sold Hami Jiatai for RMB 18 million, recording a gain of approximately RMB 1.04 million from the sale[1]. - Administrative expenses for the year amounted to RMB 41.4 million, an increase of 80.5% from RMB 22.9 million in the previous year, primarily due to legal fees from acquisition activities and increased office rental costs[2]. - Financial income for the year was approximately RMB 5.4 million, up from RMB 1.5 million in the previous year, mainly from interest earned on bank cash[3]. - Income tax expenses for the year were approximately RMB 31.0 million, a decrease from RMB 35.0 million in the previous year, with the main tax provision in China being RMB 30.5 million[5]. - The company recorded a gross profit of approximately RMB 211.4 million, remaining relatively stable compared to the previous year[55]. - The coal business generated revenue of RMB 2.851 billion with an operating profit of RMB 211.9 million, resulting in an operating profit margin of 7.4%[58]. - The company recorded other operating losses of approximately RMB 2.4 million this year, compared to other operating income of approximately RMB 4.7 million in the previous year, primarily due to expected credit losses on financial assets[69]. - The company did not recommend any final dividend for the year, consistent with the previous year[104]. - The company reported a significant increase in revenue, achieving a total of $X million for the fiscal year, representing a Y% growth compared to the previous year[157]. Acquisitions and Investments - The group acquired 100% of Margaux Investment Limited, which includes coal storage of 250,000 tons and related machinery[6][23]. - The company completed the acquisition of Margaux HK and CC Bong Logistics to enhance its coal business value chain, providing additional storage and blending services[55]. - The acquisition of Margaux HK was completed in September 2023 for a total consideration of approximately RMB 50.6 million, enhancing the company's coal business value chain through additional storage and blending services[80]. - The company agreed to acquire 100% of CC Bong Logistics for a total consideration of HKD 100 million, with part of the payment made through the issuance of new shares[83]. - The acquisition of Shanxi Fanpo Clean Energy Technology Co., Ltd. was completed in January 2022 for approximately RMB 9.6 million, with an additional 5% stake acquired in February 2023 for RMB 500,000[78]. - The company has allocated more resources to develop its coal business since 2021, resulting in significant progress and achievements over the past two years[65]. - The company is expanding its business scope into international supply chain trade to leverage emerging opportunities in the coal supply chain industry[145]. Coal Business Performance - The coal business segment contributed approximately RMB 2.85 billion to the group's revenue in 2023, compared to RMB 2.01 billion in 2022[38]. - The average price of coal, measured by the China Coal Index 5500K, decreased from RMB 1,210 per ton at the beginning of the year to RMB 928 per ton by December 29, 2023[46]. - The cumulative raw coal production for the year was approximately 4.66 billion tons, representing a year-on-year increase of about 2.9%[105]. - The coal mining and washing industry's operational revenue was approximately RMB 3,167.19 billion, a year-on-year decrease of 12.9%[46]. - The company’s coal business revenue increased from approximately RMB 860 million in 2019 to RMB 2.01 billion in 2022, achieving a remarkable growth rate of about 41.5% to approximately RMB 2.85 billion in the current year[65]. - The company aims to enhance its vertical integration capabilities through expanded supply chain management, positioning itself to capitalize on the growth opportunities in the coal industry[142]. Operational Efficiency and Strategy - The company aims to enhance the green development of its mining division through the sale of Hami Jiatai and the introduction of business partners for the management of the Baiguan Lake mine[1]. - The group continues to improve the competitiveness and operational efficiency of its coal supply chain platform[32]. - The company plans to continue seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocation[50]. - The company aims to balance resource development with ecological protection through partnerships in the mining sector[53]. - The company has implemented strict controls over its outstanding receivables and regularly reviews overdue balances[100]. - The company aims to explore and develop other promising projects to diversify its business segments and regions, enhancing its operational efforts[146]. Market Outlook and Economic Context - In 2023, China's GDP grew approximately 5.2% year-on-year, with industrial enterprises achieving operational revenue of about RMB 1,200,363 billion, a year-on-year increase of approximately 1%[33]. - China's raw coal production reached approximately 414 million tons in December 2023, a year-on-year increase of about 1.9%, with total annual production of approximately 4.66 billion tons, up 2.9% year-on-year[33]. - The long-term outlook for the coal industry remains optimistic, supported by increasing electricity demand and coal-fired generation capacity despite environmental regulations[138]. - The coal market is anticipated to experience stable demand growth in 2024, while supply flexibility may remain limited, posing challenges for safe coal production[141]. - The company is committed to environmental management and has initiated photovoltaic project development to promote low-carbon integration with coal-based energy[145]. Financial Position and Assets - As of December 31, 2023, total assets increased by 81.7% to RMB 1.58 billion, compared to RMB 868.4 million the previous year[90]. - The company's equity attributable to owners rose to RMB 788 million, reflecting a 37.6% increase from RMB 572.5 million as of December 31, 2022[90]. - The company maintained a strong cash position with bank and cash balances of approximately RMB 508.6 million as of December 31, 2023, up from RMB 369.3 million the previous year[94]. - The asset-liability ratio remained at 0% as of December 31, 2023, consistent with the previous year[96]. - The total employee cost for the year was approximately RMB 858 million, an increase from RMB 595 million in the previous year, with the number of employees rising to 820 from 743[104]. Risk Management and Compliance - The management believes that the costs associated with hedging arrangements for foreign exchange risks will outweigh the benefits, and thus no hedging activities are currently in place[99]. - The company continues to monitor foreign exchange risks and may take prudent measures if necessary[99]. - The company acknowledges that past performance is not indicative of future results, highlighting inherent risks and uncertainties in forward-looking statements[147]. - The company may face potential liabilities from new environmental laws and regulations in the future[131].

Revenue and Growth - The coal trading revenue from external customers in China for the year ended December 31, 2023, was RMB 2,850,951 thousand, an increase from RMB 2,014,276 thousand in 2022, representing a growth of approximately 41.3%[7] - The total revenue from coal sales was RMB 2,763,320 thousand, while coal processing services generated RMB 25,022 thousand and coal supply chain services contributed RMB 62,609 thousand[4] - The total coal production for the year is approximately 4.66 billion tons, representing a year-on-year growth of about 2.9%[66] - The company reported a significant increase in coal imports, which totaled approximately 474 million tons for the year, reflecting a year-on-year growth of 61.8%[23] - The total revenue from coal services, including processing and supply chain, amounted to RMB 2,850,951,000 in 2023, up from RMB 2,009,246,000 in 2022, representing a growth of around 42%[149] Financial Performance - The company's net foreign exchange income for the year was RMB 3,432 thousand, a decrease from RMB 11,435 thousand in the previous year, indicating a decline of approximately 70%[8] - The company reported a net profit for the year 2023 of RMB 173,224 thousand, a decrease from RMB 180,678 thousand in 2022[128] - The company's profit before tax for 2023 was RMB 204,258 thousand, compared to RMB 215,641 thousand in 2022[128] - The total comprehensive income for the year was RMB 170,377 thousand, down from RMB 178,768 thousand in the previous year[135] - The company's basic and diluted earnings per share for 2023 were RMB 9, compared to RMB 10.1 in 2022[135] Expenses and Costs - The cost of inventory recognized as an expense was RMB 2,311,038 thousand, up from RMB 1,760,641 thousand in 2022, reflecting an increase of about 31.2%[12] - Administrative expenses for the year amounted to approximately RMB 41.4 million, an increase from RMB 22.9 million in the previous year, primarily due to legal fees from acquisitions and increased office rental costs[31] - The average sales cost increased due to the temporary reliance on external resources to meet the growing demand for coal products, resulting in a gross profit of approximately RMB 2.114 billion, remaining relatively stable compared to the previous year[55] Acquisitions and Investments - The company acquired 100% of the issued share capital of Margaux Investment Limited and CC Bong Logistics Limited during the year, enhancing its operational capabilities[21] - The acquisition of Margaux Investment Limited was completed on September 2023 for a total consideration of approximately RMB 50.6 million[121] - The acquisition of CC Bong Logistics is set for December 29, 2023, with a total consideration of HKD 100,000,000[124] - The acquisition of CC Bong Logistics is expected to enhance the company's coal business value chain by providing additional storage and coal distribution services, with a final purchase price of RMB 84.3 million[96] Market and Economic Conditions - The GDP growth in China for the year was approximately 5.2%, with the fourth quarter showing a similar growth rate, indicating a positive economic environment for coal demand[22] - The coal production and import volume in China have steadily increased, leading to a rise in domestic coal supply, while the demand for coal storage has eased compared to the previous year[24] - The National Development and Reform Commission has issued guidelines for the signing and performance of medium- and long-term coal contracts for 2024, enhancing flexibility in contract signing and ensuring energy supply stability[40] Compliance and Governance - The company aims to maintain high levels of corporate governance and has adopted appropriate measures to comply with the listing rules of the Hong Kong Stock Exchange[46] - The company emphasizes the importance of compliance with regulatory requirements in its operations in China and Hong Kong[89] - The company has adopted a standard code for securities trading by directors, confirming compliance throughout the year[75] Future Outlook - The company anticipates stable growth in coal demand in 2024, with supply challenges potentially impacting safe production, while coal prices are expected to continue fluctuating within a narrower range[36] - The company plans to strategically expand into international supply chain trading in 2024, aiming to diversify revenue sources and reduce reliance on any single market or product[86] - The company is actively exploring ways to broaden its coal business scope to enhance operational conditions and optimize business structure[86] Assets and Liabilities - As of December 31, 2023, the company's equity attributable to owners increased by 37.6% to RMB 788 million, while total assets rose by 81.7% to RMB 1.58 billion[103] - Total liabilities increased significantly to RMB 785,714,000 in 2023 from RMB 296,650,000 in 2022, representing a growth of approximately 164%[140] - The company's total current assets increased to RMB 1,278,258 thousand in 2023 from RMB 605,278 thousand in 2022[129] Employee and Operational Metrics - The total employee cost for the year was approximately RMB 85.8 million, up from RMB 59.5 million in the previous year, reflecting an increase in the number of employees from 743 to 820[110] - The group has a strong cash flow generated from operations, primarily used to cover operating expenses during the year[107] - The group anticipates sufficient resources to meet operational funding needs moving forward[107]

Revenue Growth - The coal trading segment generated revenue of RMB 1,279,197,000 for the six months ended June 30, 2023, compared to RMB 712,176,000 for the same period in 2022, representing an increase of approximately 79.5%[32] - Total revenue for the group reached RMB 1,334,580,000 for the six months ended June 30, 2023, up from RMB 780,204,000 in the previous year, marking a growth of about 71.1%[32] - The coal business contributed revenue of RMB 1.33 billion in the current period, compared to RMB 780 million in the previous year, reflecting a significant increase[95] - Revenue for the period increased by approximately 71.1% to about RMB 1.33 billion from approximately RMB 780 million in the previous period, mainly driven by a revenue increase of about RMB 560 million from the coal business[119] - The coal business segment reported a revenue growth of approximately 71.7% compared to the same period last year, indicating successful capitalizing on market opportunities[171] Financial Performance - The net foreign exchange gain amounted to RMB 6,787,000 for the first half of 2023, compared to RMB 6,169,000 in the same period of 2022, reflecting an increase of approximately 10%[34] - The group reported a total of RMB 15,401,000 in other income for the first half of 2023, compared to RMB 130,000 in the same period of 2022[34] - The group’s basic earnings per share remained unchanged as there were no dilutive potential ordinary shares in issue during the reporting period[43] - The group reported a net other income of approximately RMB 154 million, up from RMB 76 million in the previous period, mainly from unrealized exchange gains and government subsidies[122] - The income tax expense for the period was approximately RMB 13.9 million, compared to RMB 5.2 million in the previous period[148] Capital Expenditures and Investments - The group incurred capital expenditures of approximately RMB 4,388,000 for property, plant, and equipment during the six months ended June 30, 2023, down from RMB 11,645,000 in the previous year[45] - The company has capital commitments of RMB 9,269 thousand for property and equipment as of June 30, 2023, compared to RMB 9,910 thousand as of December 31, 2022[65] - The company completed the acquisition of 95% of Shanxi Fanpo for RMB 9.6 million in January 2022 and acquired the remaining 5% for RMB 500,000 in February 2023, making it a wholly-owned subsidiary[115] - The acquisition of Margaux Investment Limited for HKD 41.847 million aims to vertically integrate and expand the coal business, enhancing existing coal trading and supply chain management services[92] - The acquisition of the remaining 5% equity in Shanxi Fanpo was completed for RMB 500,000, making it a wholly-owned subsidiary[126] Assets and Liabilities - As of June 30, 2023, total other receivables and prepayments, net amount to RMB 93,184 thousand, a significant increase from RMB 31,947 thousand as of December 31, 2022, representing a growth of 191.5%[50] - Trade receivables and notes amounted to RMB 370,563 thousand as of June 30, 2023, compared to RMB 183,893 thousand as of December 31, 2022, indicating an increase of 101.5%[69] - Other payables and accrued expenses totaled RMB 88,505 thousand as of June 30, 2023, up from RMB 57,187 thousand as of December 31, 2022, reflecting a rise of 54.6%[74] - The company reported trade payables of RMB 596,451 thousand as of June 30, 2023, compared to RMB 167,354 thousand as of December 31, 2022, showing a substantial increase of 256.5%[73] - As of June 30, 2023, the equity attributable to the owners of the company increased to RMB 654.6 million, a rise of approximately 14.3% from RMB 572.5 million on December 31, 2022[156] Market Conditions and Outlook - Domestic raw coal production for the first half of 2023 was approximately 2.3 billion tons, a year-on-year growth of about 4.4%, while raw coal imports surged to approximately 220 million tons, marking a year-on-year increase of about 93%[87] - The national coal price index for 5500K coal decreased from RMB 791 per ton at the beginning of the period to RMB 731 per ton by the end of June 2023, indicating downward pressure on coal prices due to lower domestic demand[88] - The demand for coal is expected to remain strong, supported by the anticipated growth in electricity consumption, projected at around 6% for 2023[89] - The long-term outlook for the coal industry in China remains optimistic, with projected annual electricity consumption growth of 4.4% from 2021 to 2025[175] - The company remains optimistic about the prospects of its core business, particularly in the coal sector, for the second half of 2023[197] Strategic Initiatives - The company plans to continue seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocations[94] - The company is actively exploring the feasibility of resuming mining operations to capitalize on future growth opportunities in the Chinese economy[193] - The company is reallocating more resources to its coal business to seize opportunities in the thriving coal industry[194] - The company aims to diversify its revenue sources and reduce reliance on a single market or product through the expansion of its coal business[195] - The company has adopted a cautious strategic approach to manage potential risks while seizing opportunities in the market[193]

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佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全 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。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 滙力資源（集團）有限公司（「本公司」）董事（「董事」）會（「董事會」）謹宣佈本公司及 其附屬公司（統稱「本集團」）截至二零二三年六月三十日止六個月（「本期間」）的 未經審核中期簡明合併業績，連同二零二二年同期（「先前期間」）的比較數字如 下： ...

Coal Business Expansion - The group expanded its coal business into Hainan, China, and diversified into coal processing and supply chain services, marking a significant milestone [19]. - The acquisition of 95% equity in Shanxi Fanpo Clean Energy Technology Co., Ltd. was completed through a wholly-owned subsidiary [19]. - The company completed the acquisition of Shanxi Fanpo in January 2022, expanding its upstream operations in the coal industry and diversifying its revenue sources [28]. - The company is actively seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocation [29]. - The company is focusing on its coal business as a strategic segment, reallocating resources accordingly [121]. - The company is expanding its coal business scope to diversify revenue streams and mitigate adverse market conditions, aiming to improve operational status and optimize business structure [93]. - The company is focused on expanding its coal trading business, leveraging the expertise of its management team in this sector [108]. Financial Performance - The revenue from the coal mining and washing industry grew by approximately 16.9% year-on-year, reaching RMB 6.8 trillion in 2022 [19]. - In 2022, the company's coal trading business generated revenue of approximately RMB 2.01 billion, an increase of about 37.5% compared to RMB 1.46 billion in 2021 [30]. - The company's revenue increased by approximately 37.0% to about RMB 2.02 billion from RMB 1.47 billion in the previous year, primarily due to a RMB 540 million increase in coal business revenue [44]. - Gross profit surged nearly 19 times to approximately RMB 2.12 billion from RMB 107 million in the previous year, driven by higher average selling prices and sales volume of coal products [44]. - Operating profit for the coal business reached RMB 2.01 billion with an operating profit margin of 10.5%, compared to RMB 1.46 billion and a margin of 0.27% in the previous year [48]. Resource Management - As of December 31, 2022, the total controlled nickel resources amounted to 9,430 tons with a grade of 0.71% [9]. - The total controlled copper resources were 3,150 tons with a grade of 0.24% as of December 31, 2022 [9]. - The total zinc resources at the Baiganhu project were 251,450 tons with a grade of 6.49% [9]. - The total lead resources at the Baiganhu project were 156,580 tons with a grade of 4.03% [9]. - The company holds two mining licenses and two exploration licenses in Xinjiang, China, and is evaluating the feasibility of production and seeking potential partners for development [35]. Market Conditions - National coal production recorded a year-on-year increase of approximately 9% in 2022, driven by stable power generation demand and reduced coal imports [19]. - The coal import volume is projected to decrease by about 9.2% year-on-year to approximately 29 million tons in 2022 due to various geopolitical factors [20]. - The long-term contract fulfillment rate for coal is expected to reach 100% in 2023, up from 90% in 2022, which may tighten supply in the short term [24]. - The company anticipates that electricity demand will continue to grow, with an expected annual growth rate of 4.4% from 2021 to 2025, supporting long-term coal market health [27]. - In 2023, the coal supply-demand structural imbalance is expected to worsen, potentially driving up coal prices due to stricter supply regulations requiring a minimum supply guarantee rate of 75% for thermal coal [94]. Corporate Governance - The company has appointed independent directors with extensive experience in finance and investment, strengthening its governance structure [110]. - The management team includes professionals with significant experience in public offerings and financial management, which may benefit future fundraising efforts [113]. - The company is committed to maintaining high standards of corporate governance and financial transparency [112]. - The board consists of eight directors, including four executive directors and three independent non-executive directors [185]. - The company has established mechanisms to ensure the board receives independent opinions and advice [189]. Employee Management - The group employed 743 employees as of December 31, 2022, a significant increase from 46 employees in the previous year [85]. - Total employee costs for the year were approximately RMB 59.5 million, up from RMB 9.0 million in the prior year [85]. Environmental and Social Responsibility - The company has complied with all relevant environmental laws and regulations in China, with no environmental claims or penalties reported during the year [132]. - The company is focusing on green development in its mining operations to balance resource development and ecological protection [46]. Debt and Financial Management - The company has fully repaid a loan of RMB 65 million that was extended for a total of 36 months [38]. - A loan agreement for HKD 22.6 million (approximately RMB 18.5 million) was established, which was fully repaid by December 2022 [41]. - The group maintained a debt-to-equity ratio of 0% as of December 31, 2022, consistent with the previous year [72]. Strategic Outlook - The group acknowledges a cautious outlook due to ongoing global inflation and geopolitical tensions, impacting market predictability [86]. - The board maintains a cautiously optimistic outlook for the core coal business, focusing on sustainable development and exploring cooperative mining opportunities to maximize resource value [96]. - The company plans to actively pursue potential acquisition opportunities to capture market opportunities in China and diversify its revenue base [96].

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。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 有 關 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 全 年 業 績 公 告 之 補 充 公 告 茲 提 述 滙 力 資 源（集 團）有 限 公 司（連 同 其 附 屬 公 司 統 稱「本 集 團」）日 期 為 二 零 二三年三月二十八日的公告（「公告」），內容有關本集團截至二零二二年十二月 三十一日（「本年度」）止年度的年度業績。除另有界定者外，本公告所用詞彙與 公告所界定者具相同涵義。 除該等公告所提供的資料外，董事會謹此澄清，董事不建議就本年度派付任何 未期股息（先前年度：無）。 承董事會命 滙力資源（集團）有限公司 ...

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佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全 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。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 年 度 業 績 公 佈 滙力資源（集團）有限公司（「本公司」）董事（「董事」）會（「董事會」）謹宣佈本公司及 其附屬公司（統稱「本集團」）截至二零二二年十二月三十一日止年度的合併業 績，連同過往財政年度的比較數字。 合併全面收益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 人民幣千元 人民幣千元 收益 3 2,015,009 1,470,396 ...

Financial Performance - The company reported revenue of RMB 780,204,000 for the six months ended June 30, 2022, representing a 70.4% increase from RMB 457,893,000 in the same period of 2021[9]. - Gross profit for the same period was RMB 29,558,000, compared to RMB 5,507,000 in 2021, indicating a significant improvement in profitability[9]. - The operating profit for the six months ended June 30, 2022, was RMB 25,614,000, recovering from an operating loss of RMB 5,896,000 in the previous year[9]. - The net profit for the period was RMB 20,683,000, a turnaround from a net loss of RMB 7,182,000 in the same period of 2021[9]. - The company reported a total comprehensive income of RMB 17,760,000 for the six months ended June 30, 2022, compared to a loss of RMB 6,719,000 in the previous year[11]. - The company recorded other income of RMB 7,627,000 for the period, significantly up from RMB 560,000 in the previous year[9]. - The group reported a profit attributable to equity holders of RMB 20,955,000 for the six months ended June 30, 2022, compared to a loss of RMB 7,152,000 in the same period of 2021[60]. - Basic and diluted earnings per share for the six months ended June 30, 2022, were RMB 1.29, compared to a loss per share of RMB 0.44 in the same period of 2021[60]. - The group’s total tax expense for the six months ended June 30, 2022, was RMB 5,231,000, compared to RMB 1,338,000 in the same period of 2021, representing a significant increase[54]. Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 628,904,000, an increase of 12.5% from RMB 558,586,000 as of December 31, 2021[12][14]. - Non-current assets increased to RMB 262,904,000, up 21.3% from RMB 216,821,000 in the previous year[12][14]. - Current assets totaled RMB 366,000,000, reflecting a rise of 7.1% compared to RMB 341,765,000 as of December 31, 2021[12][14]. - Total liabilities reached RMB 218,165,000, representing a 31.2% increase from RMB 166,274,000 in the prior year[14]. - The company reported a cumulative loss of RMB (381,502,000) as of June 30, 2022, compared to RMB (402,223,000) at the end of the previous year[14]. - The company’s total equity increased to RMB 410,739,000, up from RMB 392,312,000, marking a growth of 4.4%[14]. Business Operations - The company is engaged in coal trading and processing, as well as mining and sales of nickel, copper, lead, and zinc products in China[20]. - The company has not conducted any mining production or capital expenditures related to development and mining activities during the reporting period[7][8]. - The company continues to focus on expanding its coal trading and processing capabilities within China, leveraging its established supply chain management[35]. - The financial services segment is expected to grow as the company enhances its service offerings in the energy sector[35]. - The company is actively seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocation[99]. Coal Business Performance - For the six months ended June 30, 2022, the coal business segment generated revenue of RMB 777,160,000, a significant increase from RMB 455,104,000 for the same period in 2021, representing a growth of approximately 70.8%[43][46]. - The revenue from coal trading was RMB 712,176,000, while coal processing services contributed RMB 28,829,000 and coal supply chain services added RMB 36,155,000[47]. - The operating profit for the coal business segment was RMB 28,180,000, while the financial services segment reported an operating profit of RMB 2,560,000[39]. - The coal business segment experienced a revenue growth of approximately 70.8% compared to the previous period, demonstrating successful diversification and risk management strategies by the company[141]. Acquisitions and Investments - The acquisition of 95% equity in Shanxi Fanpo was completed on January 5, 2022, for a total consideration of RMB 9,599,000[79]. - Shanxi Fanpo contributed approximately RMB 150,087,000 in revenue and RMB 3,841,000 in profit to the group from the acquisition date to the reporting period end[82]. - The group plans to diversify its revenue sources and expand its business portfolio through the acquisition of Shanxi Fanpo, which operates in the coal sales and washing industry[79]. - The group recognized a bargain purchase gain of approximately RMB 3,081,000 from the acquisition of Shanxi Fanpo[82]. Financial Risks and Management - The company’s business is exposed to various financial risks, including market risk, credit risk, and liquidity risk, with no use of derivatives for hedging or trading purposes[28]. - The group’s expected credit loss for trade receivables was RMB 6,500,000, indicating a focus on managing credit risk[39]. - The group is committed to strict control over outstanding receivables, with management regularly reviewing overdue balances[64]. - The group has not recognized any impairment on trade receivables as of June 30, 2022, indicating effective credit risk management[134]. Market Conditions - The coal mining industry in China saw a revenue increase of 60.8% year-on-year, reaching RMB 16,570.6 billion from January to May 2022[91]. - The daily production of raw coal reached a historical high of 12.77 million tons in March 2022, following the implementation of coal supply guarantee policies[92]. - The total coal imports in China decreased by 13.6% year-on-year, amounting to 95.95 million tons due to export bans and geopolitical tensions[92]. - The price index for NCEI 5500K coal rose from RMB 750 per ton in January 2022 to RMB 807 per ton in February 2022, before stabilizing at RMB 770 per ton from March to June 2022[96]. Corporate Governance - The company has revised its articles of association to comply with the updated listing rules effective from January 1, 2022[164]. - The company has adopted corporate governance practices in line with the updated code effective from January 1, 2022[166]. - The audit committee, consisting of three independent non-executive directors, reviewed the interim results[170]. - The interim results have not been audited but have been reviewed by the audit committee[170]. Shareholder Information - Affinitiv Mobile Ventures Ltd. and China Huarong Overseas Investment Holdings Co., Limited each hold 320,000,000 shares, representing 19.75% of the company's issued share capital[151]. - The total number of shares available for issuance under the share option scheme is 162,000,000, which is approximately 10% of the total issued shares as of June 30, 2022[157]. - The new share option scheme adopted on May 28, 2021, will remain effective for 10 years until May 27, 2031[154]. - The share option plan aims to incentivize and reward participants for their contributions to the group and to attract and retain talent[155].