股 票 研 究 华润建材科技(1313) 评级: 增持 [当前价格 Table_CurPrice] :(港元) 1.44 华南复价验证区域格局,盈利与估值或修复 ——华润建材科技更新报告 | [table_Authors] 鲍雁辛 ( 分析师 ) | 花健 祎 ( 分析师 ) | 巫恺洋 ( 研究助理 ) | |-----------------------------------------|------------------------|---------------------------| | 0755-23976830 | 0755-23976858 | 0755-23976666 | | baoyanxin@gtjas.com | huajianyi@gtjas.com | wukaiyang028675@gtjas.com | | S0880513070005 | S0880521010001 | S0880123070145 | 本报告导读: 广西水泥前期提价落实情况良好,两广市场盈利有望企稳回升,公司作为两广区域龙 头充分受益,有望迎来盈利及估值修复。 投资要点: 维持"增持"评级。伴随区 ...

建材 华润建材科技(1313) 评级: 增持 [当前价格 Table_CurPrice] :(港元) 1.44 2024.06.26 股 票 研 究 华南复价验证区域格局,盈利与估值或修复 ——华润建材科技更新报告 | [table_Authors] 鲍雁辛 ( 分析师 ) | 花健 祎 ( 分析师 ) | 巫恺洋 ( 研究助理 ) | |-----------------------------------------|------------------------|---------------------------| | 0755-23976830 | 0755-23976858 | 0755-23976666 | | baoyanxin@gtjas.com | huajianyi@gtjas.com | wukaiyang028675@gtjas.com | | S0880513070005 | S0880521010001 | S0880123070145 | 本报告导读: 广西水泥前期提价落实情况良好,两广市场盈利有望企稳回升,公司作为两广区域龙 头充分受益,有望迎来盈利及估值修复。 投资要点 ...

海 外 研 证券研究报告 究 ＃industryId＃ 水泥 ＃investSuggestion＃ ＃01313 .HK ＃华dy润Com建pa材ny＃科 技 港股通（沪/深） dyStockco ＃ 买入 ( i维nve持stS ） d e＃ 水 泥销量逆势＃提title＃升 ，骨料放量 uggesti on gC e＃ ha n ＃createTime1＃ 2024年 5月 6日 投资要点 公 ＃市场ma数rk据et Data＃ ＃summary＃ 事件：公司披露Q1业绩：营收同比下降5.6%至47.9亿元（单位人民币，下同）， 司 日期 20240506 归母净利润亏损2887万元。 跟 收盘价（港元） 1.37 踪 总股本（亿股） 70 点评：传统淡季&南方雨季频繁，水泥需求更弱，Q1行业基本处于亏损状态。 报 流通股本（亿股） 70 ——量：更注重份额保持，Q1公司出货量表现优于行业。全国水泥Q1产量同比 告 净资产（亿元） 487 -11.8%，公司水泥&熟料出货量同比+5.2%至1303万吨，广东出货量同比+9.1%， 总资产（亿元） 803 广西出货量同比基本持平。 每股净资产（元） 6.97 ...

Revenue Performance - Revenue for the three months ended March 31, 2024, was RMB 4,788.4 million, a decrease of 5.6% compared to RMB 5,070.2 million for the same period in 2023[2] - The consolidated revenue for the period reached RMB 4,788,400,000, a decrease of 5.6% compared to RMB 5,070,200,000 in the same period last year[15] Profitability - Gross profit for the period was RMB 661.5 million, up from RMB 607.5 million in the previous year[4] - The consolidated gross profit for the period was RMB 661,500,000, an increase of 8.9% from RMB 607,500,000 in the same period last year[18] - The consolidated gross profit margin improved to 13.8%, up 1.8 percentage points from 12.0% in the same period last year[18] - The company reported a pre-tax loss of RMB 14.5 million, significantly improved from a loss of RMB 45.1 million in the previous year[4] - Other income decreased to RMB 56.3 million from RMB 70.5 million year-on-year[4] Net Loss - The net loss attributable to the company's owners for the period was RMB 28.9 million, compared to a loss of RMB 30.0 million in the same period last year[2] - The company reported a loss attributable to owners of RMB 28,900,000 for the period, compared to a loss of RMB 30,000,000 in the same period last year[19] Assets and Liabilities - The total assets attributable to the company's owners were RMB 72,921.6 million, with a debt-to-equity ratio of 39.3%, compared to 36.9% in the previous year[2] Share Performance - Basic loss per share remained at RMB 0.004 for both periods[4] Inventory and Cash Flow - Inventory increased to RMB 2,318.6 million from RMB 1,896.0 million year-on-year[5] - Cash and bank balances decreased to RMB 1,711.7 million from RMB 2,603.7 million[5] Dividend - The company has not declared an interim dividend for the current period, consistent with the previous year[2] - The company did not recommend any dividend payment for the period ending March 31, 2023[14] Sales Volume and Revenue Breakdown - The sales volume of cement was 12,637 thousand tons, with an average selling price of RMB 245.8 per ton, resulting in revenue of RMB 3,106,631,000[16] - The sales volume of clinker was 396 thousand tons, with an average selling price of RMB 197.8 per ton, generating revenue of RMB 78,433,000[16] - The sales volume of concrete was 2,305 thousand cubic meters, with an average selling price of RMB 354.9 per cubic meter, leading to revenue of RMB 817,997,000[16] - The sales volume of aggregates was 14,158 thousand tons, with an average selling price of RMB 37.4 per ton, resulting in revenue of RMB 529,515,000[16] Regional Sales Performance - The sales performance by region showed Guangdong with 5,854 thousand tons sold, generating revenue of RMB 1,514,920,000[17]

Company Overview - The total number of issued shares of China Resources Building Materials Technology Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[5]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[5]. - The company changed its name from China Resources Cement Holdings Limited to China Resources Building Materials Technology Holdings Limited on November 3, 2023[5]. - The company is the holding entity for all cement and concrete operations of China Resources Group, which was established on March 13, 2003[4]. - The company has undergone significant changes in its corporate structure, including privatization and re-listing, impacting its operational strategy[4]. Financial Performance - The Group's turnover for 2023 was RMB 25,549.6 million, a decrease from RMB 36,929.2 million in 2022[55]. - The profit attributable to owners of the Company for 2023 was RMB 643.8 million, down from RMB 1,612.6 million in 2022[55]. - The Group's EBITDA for 2023 was RMB 4,082.0 million, compared to RMB 4,418.8 million in 2022[55]. - The consolidated turnover for the year ended 31 December 2023 amounted to RMB 25,549.6 million, representing a decrease of 12.9% compared to the previous year[58]. - The consolidated profit attributable to owners of the Company for the year ended 31 December 2023 was RMB 643.8 million, a decrease of 60.1% year-on-year[58]. - Basic earnings per share for the year was RMB 0.092[58]. - The total distribution for the year ended 31 December 2023 will be HK$0.047 per share, down from HK$0.129 per share in 2022[59]. - An interim dividend of HK$0.041 per share was declared for 2023, compared to HK$0.12 per share in 2022[58]. - The final dividend recommended for the year ended 31 December 2023 is HK$0.006 per share, down from HK$0.009 per share in 2022[58]. Production Capacity and Operations - The Group operates 101 cement grinding lines and 49 clinker production lines, with annual production capacities of 90.2 million tons of cement and 63.3 million tons of clinker respectively[33]. - The concrete batching plants have an annual production capacity of 38.4 million cubic meters[33]. - The Group's annual production capacity for concrete is supported by 63 concrete batching plants[33]. - The Group owns a total of 74 cement grinding lines, 30 clinker production lines, and 20 concrete batching plants, with total annual production capacities of 64.7 million tons of cement, 37.0 million tons of clinker, and 8.5 million m³ of concrete[35]. - The Group's facilities are strategically located to optimize production and distribution efficiency[33]. Market and Sales - The Group's products are primarily used in infrastructure projects such as railways, highways, subways, bridges, airports, ports, dams, hydroelectric power stations, and nuclear power stations[33]. - The main sales regions for the Group's products include Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan[33]. - The Group's aggregates business is being vigorously developed to increase market share and accelerate project construction[112]. - The Group's aggregates projects are positioned as a key profit contributor, enhancing construction, operation, and sales capabilities[115]. Environmental and Regulatory Compliance - The Group's emission concentrations of nitrogen oxides, particulate matters, and sulphur dioxide are better than the national standard limits of pollutant emissions[36]. - The Chinese government aims for 50% of cement clinker production capacity in key regions to complete ultra-low emissions transformation by the end of 2025, and 80% by the end of 2028[74]. - The Group's competitiveness in energy saving and carbon reduction is crucial for sustainable development, with ongoing efforts to promote alternative fuels and improve energy efficiency[109]. - The Group has implemented a "Four-Year Action Plan for Energy Saving and Carbon Reduction" to enhance operational management and control in basic building materials[112]. Research and Development - The Group continued to increase investment in research and development, promoting the upgrade of cement production lines and the application of grinding aids for raw materials[90]. - The Group's research and development team consists of 607 technology talents, including 5 professor-level senior engineers and 17 doctorate holders[159]. - The Group has initiated research on new materials, including silicon-based materials, basalt materials, and energy storage battery materials, to support enterprise transformation[161]. - The Group established the Engineered Stone Technology and Engineering Innovation Center in June 2023, enhancing its research and development capabilities[167]. Strategic Initiatives - The Group revised its "Fourteenth Five-Year Plan" development strategy, focusing on a business portfolio of "4+1" including cement, aggregates, concrete, engineered stone, and new materials[100]. - In 2024, the Group aims to enhance core competitiveness through increased R&D investment and promote green and intelligent upgrades in traditional industries[102]. - The Group's annual management theme for 2024 is "strengthening the foundations and grasping upgrades, technological innovation promotes transformation"[102]. Human Resources and Talent Development - As of December 31, 2023, the Group employed a total of 17,939 employees, a decrease from 19,046 employees as of December 31, 2022[165]. - The Group's average age of managerial staff is approximately 47 years, with 84% holding university degrees or above[166]. - The Group's focus on talent development is based on the "3+1" talent team cultivation plan, which includes special talent training programs[166]. Logistics and Supply Chain - The Group's annual shipping capacity along the Xijiang River was approximately 39.9 million tons, ensuring stable logistics capabilities for business operations[120]. - The Group controlled the operation of 30 silo terminals with a total annual capacity of approximately 30.9 million tons, primarily located in the Pearl River Delta Region of Guangdong[120]. - The Group implemented measures to reduce shipping costs through optimizing tender schemes and introducing multiple logistics providers[120]. Customer Satisfaction and Brand Development - The customer satisfaction rate reached 98.19% in 2023, reflecting a year-on-year increase of 0.57%[128]. - The Group established 19 brand flagship stores and 5 specialty stores to enhance the "Runpin" brand image and product system[128]. - The Group's "Runpin" brand received multiple industry awards, including the "Most Impetuous Enterprise Award" and the "Golden Orchid Award" in the ceramic tile adhesives sector[143].

股 票 研 究 [Table_industryInfo] 建材 [ Table_Main[华I Tnaf 润bol]e 建_Ti材tle]科 技（1313） [评Tab级le_：Inv est] 增持 当前价格（港元）： 1.19 积极销售政策体现，骨料有望贡献更明显 2024.03.29 海 ——华润建材科技 2023年年报点评 [ 交Ta易bl数e_M据a rket] 外 鲍雁辛(分析师) 花健祎(分析师) 52周内股价区间（港元） 1.19-4.02 当前股本（百万股） 6,983 公 0755-23976830 0755-23976858 当前市值（百万港元） 8,310 司 baoyanxin@gtjas.com huajianyi@gtjas.com 证书编号 S0880513070005 S0880521010001 （ [ Table_PicQuote] 中 本报告导读： 52周内股价走势图 公司销售政策转向积极已经在销量中体现，前期较大体量骨料产能布局开始逐步释 国 华润建材科技 恒生指数 放，业绩贡献将逐步明显。 香 5% 摘要： 港 -10% [T able维_S持um“m增ar持y] ...

Financial Performance - Revenue for 2023 decreased by 12.9% to RMB 25,549.6 million compared to RMB 29,332.4 million in 2022[2] - Net profit attributable to the company's owners dropped by 60.1% to RMB 643.8 million from RMB 1,612.6 million in 2022[2] - Gross profit for 2023 was RMB 3,761.954 million, down from RMB 4,616.301 million in 2022[4] - Basic earnings per share for 2023 were RMB 0.092, a significant decrease from RMB 0.231 in 2022[5] - The company's pre-tax profit for 2023 was RMB 1,897,264 thousand, compared to RMB 1,942,553 thousand in 2022[14] - The company's basic earnings per share for 2023 were RMB 643,821 thousand, a significant decrease from RMB 1,612,583 thousand in 2022[19] - The company's comprehensive revenue for the year ended December 31, 2023, was RMB 25,549,600,000, a decrease of 12.9% compared to RMB 29,332,400,000 in the previous year (restated)[61] - The company's comprehensive gross profit in 2023 was RMB 3,762 million, a decrease of 18.5% compared to RMB 4,616.3 million in 2022[65] - The comprehensive gross profit margin in 2023 was 14.7%, a decrease of 1.0 percentage points compared to 15.7% in 2022[65] - The company's net profit margin in 2023 was 2.4%, a decrease of 2.9 percentage points compared to 5.3% in 2022[70] - The actual tax rate in 2023 was 32.3%, compared to 18.2% in 2022[69] - The company's joint ventures generated a profit of RMB 46.6 million in 2023, compared to a loss of RMB 60.8 million in 2022[69] Assets and Liabilities - Total assets increased by 1.3% to RMB 72,792.2 million as of December 31, 2023, compared to RMB 71,855.9 million in 2022[2] - Fixed assets increased to RMB 31,172.910 million in 2023 from RMB 28,109.417 million in 2022[6] - Cash and bank balances stood at RMB 2,603.664 million as of December 31, 2023, up from RMB 1,948.876 million in 2022[6] - Total current liabilities decreased to RMB 10,979.935 million in 2023 from RMB 13,673.142 million in 2022[6] - The company's equity attributable to owners increased slightly by 0.6% to RMB 44,108.5 million in 2023[2] - The gearing ratio rose to 36.9% in 2023 from 33.5% in 2022[2] - Non-current liabilities increased to RMB 16,065,133 thousand in 2023, up from RMB 12,922,681 thousand in 2022, primarily due to an increase in bank loans[7] - Total equity remained stable at RMB 45,747,169 thousand in 2023, compared to RMB 45,260,117 thousand in 2022[7] - Trade receivables decreased to RMB 1,719,622 thousand in 2023 from RMB 2,591,078 thousand in 2022[21] - Trade payables increased to RMB 2,978,619 thousand in 2023 from RMB 2,895,815 thousand in 2022[23] - Total accounts receivable as of December 31, 2023, amounted to RMB 2,978,619 thousand, compared to RMB 2,895,815 thousand in 2022[24] - Total bank and other borrowings as of December 31, 2023, were RMB 16,281,438 thousand, compared to RMB 14,679,372 thousand in 2022[73] - Fixed-rate and floating-rate bank and other borrowings as of December 31, 2023, were RMB 3,184,300,000 and RMB 13,097,100,000, respectively[73] - Unused bank loan facilities as of December 31, 2023, amounted to RMB 22,076,200,000[74] - Non-RMB denominated debt accounted for 13% of the company's total debt as of December 31, 2023[75] - The company's net current liabilities as of December 31, 2023, were RMB 3,289,700,000[75] Segment Performance - Revenue from the cement segment decreased to RMB 19,435,964 thousand in 2023 from RMB 23,729,742 thousand in 2022[13] - Revenue from the concrete segment decreased to RMB 3,425,643 thousand in 2023 from RMB 4,539,637 thousand in 2022[13] - Revenue from the aggregates and other segment increased to RMB 3,550,216 thousand in 2023 from RMB 1,825,588 thousand in 2022[13] - Total revenue for 2023 was RMB 25,549,648 thousand, down from RMB 29,332,435 thousand in 2022[13] - Segment performance for cement was RMB 814,698 thousand in 2023, compared to RMB 129,434 thousand for concrete and RMB 815,636 thousand for aggregates and other[13] - The company's cement, clinker, concrete, and aggregate external sales decreased by 5,400,000 tons, 400,000 tons, 1,500,000 cubic meters, and increased by 30,500,000 tons, respectively, compared to 2022, representing decreases of 7.5%, 12.2%, 13.6%, and an increase of 201.5%[61] - Cement sales volume in 2023 was 66,728 thousand tons, a decrease of 7.5% compared to 72,110 thousand tons in 2022[62] - The average selling price of cement in 2023 was RMB 273.9 per ton, a decrease of 11.2% compared to RMB 308.4 per ton in 2022[63] Operational Metrics - The company's cement, clinker, and concrete production line utilization rates for 2023 were 71.8%, 81.0%, and 25.9%, respectively, compared to 81.6%, 90.5%, and 29.3% in 2022[36] - The company's clinker production capacity remained at approximately 1.6 million tons per year, while cement production capacity increased to approximately 2.1 million tons per year after technical upgrades[35] - The company reduced standard coal consumption per ton of clinker by 4.34 kg through energy-saving and carbon-reduction initiatives[37] - The company's total concrete production capacity decreased by approximately 50,000 cubic meters in 2023 due to acquisitions, disposals, and capacity adjustments[35] - The company achieved a 33% clinker production capacity meeting the GB16780 first-level energy consumption standard, totaling 20.67 million tons[37] - The company added 36.3 million tons of limestone resources through the acquisition of mining rights in Hunan[35] - The company's coal procurement volume in 2023 was approximately 6.6 million tons, with 82%, 10%, and 8% sourced from northern China, surrounding production bases, and overseas, respectively[39] - The average coal purchase price in 2023 was RMB 929 per ton, a decrease of 12.7% compared to RMB 1,064 per ton in 2022[64] Strategic Initiatives and Future Plans - The company revised its "14th Five-Year Plan" development strategy, focusing on cement, aggregates, concrete, artificial stone, and new materials[79] - The company plans to accelerate the layout of strategic emerging industries and promote green development in 2024[79] - The company aims to increase R&D investment to drive green and intelligent upgrades in traditional businesses[79] - The company is committed to leading digital transformation and building a world-class building materials technology enterprise[79] - The company plans to increase the proportion of imported coal procurement and conduct annual price inquiries with Australian mining companies in 2024[40] - Capital expenditure for expansion plans as of December 31, 2023, was approximately RMB 5,508,000,000, with expected payments of RMB 4,822,800,000 in 2024[77] ESG and Corporate Governance - The company's ESG performance was rated at a five-star level, ranking 13th in the "China ESG Listed Companies Pioneer 100" list[32] - The company's Huarun Cement (Tianyang) Co., Ltd. was recognized as a "Lighthouse Factory" by the World Economic Forum, representing the highest level of intelligent manufacturing and digitalization in the global manufacturing industry[33] - The company has complied with the applicable code provisions of the Corporate Governance Code, except for Code Provision C.2.1, which was rectified on April 18, 2023, with the appointment of Mr. Jing Shiqing as the new President and Executive Director[80] - The company did not repurchase, sell, or redeem any of its listed securities during the year[81] - The Board proposed a final dividend of HKD 0.006 per share for the year ended December 31, 2023, compared to HKD 0.009 per share in 2022, with a total distribution of HKD 0.047 per share for 2023 (2022: HKD 0.129 per share)[82] - The final dividend will be paid in HKD by default, with an option for shareholders to receive it in RMB based on the exchange rate published by the People's Bank of China on May 24, 2024[82] - The company will suspend share transfer registration from May 21 to May 24, 2024, and from June 3 to June 7, 2024, for the final dividend distribution[83] - The annual report for the year ended December 31, 2023, has been reviewed by the company's audit committee[84] - The company expressed gratitude to its directors, management team, employees, shareholders, customers, suppliers, and other stakeholders for their contributions and support[85] - As of the announcement date, the executive directors include Mr. Ji Youhong and Mr. Jing Shiqing, with non-executive and independent non-executive directors also listed[86] Market and Industry Trends - China's GDP grew by 5.2% in 2023, reaching RMB 126.1 trillion[25] - National fixed asset investment (excluding rural households) increased by 3.0% to RMB 50.3 trillion in 2023[25] - Guangdong's GDP reached RMB 13.6 trillion in 2023, with a growth rate of 4.8%[25] - National infrastructure investment (excluding power, heat, gas, and water production) rose by 5.9% in 2023[25] - Railway fixed asset investment increased by 7.5% to RMB 764.5 billion in 2023[25] - National real estate development investment decreased by 9.6% to RMB 11.1 trillion in 2023[26] - National cement production decreased by 0.7% to approximately 2.02 billion tons in 2023[27] - Guangdong's cement production was approximately 143 million tons in 2023, a decrease of 5.8%[27] - National clinker production capacity increased by 24.9 million tons with 17 new clinker production lines added[28] - Guangdong added 1 clinker production line, increasing clinker production capacity by 1.6 million tons[28] - Guangxi added 2 clinker production lines, increasing clinker production capacity by 3.3 million tons[28] - Guizhou added 2 clinker production lines, increasing clinker production capacity by 2.5 million tons[28] - Hunan added 2 clinker production lines, increasing clinker production capacity by 2.8 million tons[28] - By the end of 2025, 50% of clinker production capacity in key regions is targeted to complete ultra-low emission transformation[28] - By the end of 2028, 80% of clinker production capacity nationwide is targeted to complete ultra-low emission transformation[28] Innovation and Technology - The company successfully acquired mining rights for limestone resources in Guangxi and Guangdong, expanding clinker and aggregate resources[31] - The company's new dry-process clinker production line in Hunan was successfully ignited after technical, energy consumption, and environmental upgrades[31] - The company's precast concrete component projects are expected to reach an annual design capacity of 1.4 million cubic meters upon completion[31] - The company's artificial stone Oracle EBS system has been successfully piloted and is operating stably at Dongguan and Laibin factories[52] - The company has implemented 3 AI algorithms in its advanced control and quality management systems across multiple bases[52] - The company has completed information system coverage for 19 new bases in aggregates and new materials, achieving business digitization and management standardization[52] - The company's smart logistics system has been promoted and implemented in 10 aggregate bases and 1 cement base, achieving unmanned weighing and semi-automated loading, improving shipping efficiency[54] - The company's digital transformation project for marketing has been fully launched in major regions, covering 100% of cement, aggregate, concrete, and tile adhesive businesses, with artificial stone business also being promoted online[55] - The company holds 323 valid patents, including 60 invention patents and 263 utility model patents, with 32 new patents authorized in 2023, an increase of 11.0% compared to the previous year[57] - The company has 607 scientific and technological talents, including 2 group-level leading talents, 6 company-level leading talents, 6 company-level backbone talents, and 26 company-level young talents[56] Sales and Distribution - The company's e-commerce platform had a cumulative shipment volume of approximately 180 million tons, with 35,000 registered users, 517 carriers, and 87,000 vehicles (ships) as of December 31, 2023[55] - The company's e-commerce platform had a cumulative delivery business volume of 294,000 tons and a credit line of approximately RMB 1.36 billion as of December 31, 2023[55] - The company's sales and distribution expenses in 2023 were RMB 506.2 million, an increase of 11.2% compared to RMB 455.3 million in 2022[66] - The company's general and administrative expenses in 2023 were RMB 2,322.1 million, a decrease of 4.9% compared to RMB 2,440.7 million in 2022[67] - The company's "Runfeng" brand terminal coverage rate reached 92.2%, with 3 new brand image stores added, and customer satisfaction increased by 0.57% to 98.19%[44] - The company's new strategic customers in 2023 contributed over RMB 24 million in contract value, with 15 new projects signed totaling over RMB 40 million[49] Production and Capacity - The company's aggregate business has a planned annual production capacity of approximately 14.75 million tons through subsidiaries and 1.36 million tons through joint ventures and associates[46] - The company has 6 concrete prefabricated component projects with a total planned annual production capacity of approximately 1.4 million cubic meters[47] - The company's Guangdong Fengkai autoclaved aerated concrete block and panel production line project has a planned annual production capacity of 400,000 cubic meters for panels and 200,000 cubic meters for blocks[47] - The company's inorganic artificial stone production capacity will reach 26.1 million square meters annually after all ongoing projects are completed[48] - The company's new intelligent inorganic artificial stone production line in Laibin, Guangxi, has a planned annual capacity of 6 million square meters, with the first phase (3 million square meters) operational since December 2023[48] - The company's Hubei Chongyang calcium oxide project has a resource reserve of approximately 84 million tons, with a planned annual production capacity of 250,000 tons, expected to be operational by 2024[50] - The company's Guangxi Guigang high-end calcium-based project has a resource reserve of approximately 110 million tons, with planned annual production capacities of 500,000 tons of calcium oxide and 100,000 tons of calcium hydroxide, expected to be operational by 2024[50] - The company's Guangxi Tianyang cement production base achieved a 24% reduction in CO2 emissions, a 105% increase in per capita cement production, and a 56% reduction in unplanned equipment downtime[52] - The company's Guangxi Tianyang cement production base improved quality stability by 25% and reduced average customer delivery time by 39%[52] Logistics and Supply Chain - The company's annual transportation capacity in the Xijiang River Basin is approximately 39.9 million tons, with 30 transit warehouses mainly located in the Guangdong Pearl River Delta region, with an annual transit capacity of about 30.9 million tons[41] - The company's nuclear cement is supplied to 5 nuclear power projects in Zhejiang, Fujian, Guangdong, and Hainan, with new supply to the Hainan Changjiang Nuclear Power Phase II project[42] - The company's "Runfeng" brand low-heat cement has been successfully applied in hydropower stations and railway construction projects in Yunnan, including the Sichuan-Tibet Railway project[43] Human Resources - The company's total employee costs for 2023 were RMB 3,056,899 thousand, slightly lower than RMB 3,071,704 thousand in 2022[17] - The company employed 17,939 full-time employees as of December 31, 2023, with 343 working in Hong Kong and 17,596 in mainland China[58] - The company's management team consists of 481 members, with 86% male and 14% female, and 84% holding a university degree or above[59] Other Financial Metrics - Interest income for 2023 was RMB 77,759 thousand, while financial expenses were RMB 535,814 thousand[13] - Interest income for 2023 was RMB 77,759 thousand, a decrease from RMB 100,419 thousand in

Financial Performance - For the nine months ended September 30, 2023, the company's revenue was HKD 17,892.7 million, a decrease of 26.1% compared to HKD 24,196.1 million for the same period in 2022[2] - The profit attributable to the company's owners for the same period was HKD 710.2 million, down 61.3% from HKD 1,837.5 million in 2022[2] - Basic earnings per share for the nine months ended September 30, 2023, were HKD 0.102, compared to HKD 0.263 for the same period in 2022[4] - The gross profit for the nine months was HKD 2,408.2 million, down from HKD 3,820.3 million in 2022[4] - The total revenue for the period was HKD 17,892,700,000, representing a decrease of 26.1% from HKD 24,196,100,000 in the previous year[13] - The gross profit for the period was HKD 2,408,200,000, down 37.0% from HKD 3,820,300,000 year-on-year, with a gross margin of 13.5%, down from 15.8%[16] Assets and Equity - The total assets as of September 30, 2023, were HKD 80,672.5 million, a slight increase of 0.1% from HKD 80,613.8 million at the end of 2022[2] - The company's equity attributable to owners was HKD 48,198.3 million, down 2.1% from HKD 49,233.4 million[2] - The total equity attributable to owners decreased to HKD 48,198.3 million from HKD 49,233.4 million[7] Debt and Liabilities - The debt-to-equity ratio increased to 39.8% from 33.4% in the previous year[2] - Non-current liabilities increased to HKD 18,436.7 million from HKD 14,466.7 million in the previous year[6] Sales and Revenue Breakdown - Cement sales volume was 45,555,000 tons with an average selling price of HKD 324.2 per ton, resulting in revenue of HKD 14,767,883,000, compared to 52,534,000 tons and HKD 363.1 per ton in the previous year[14][15] - The average selling price of clinker was HKD 276.7 per ton, with a total revenue of HKD 493,134,000 from a sales volume of 1,782,000 tons[14] - The average selling price of concrete was HKD 423.0 per cubic meter, generating revenue of HKD 2,631,664,000 from a sales volume of 6,222,000 cubic meters[14] Dividends - The interim dividend declared was HKD 0.041 per share for the six months ended June 30, 2023, down from HKD 0.12 per share for the same period in 2022[12] - The company did not recommend any dividend for the three months ended September 30, 2023, consistent with the same period in 2022[12] Currency Impact - The company experienced a depreciation of approximately 5.9% in the RMB against the HKD compared to the same period last year[13] Gross Margins - The cement gross margin was 14.1%, down from 16.2% in the previous year, while the gross margins for clinker and concrete were 5.3% and 11.2%, respectively[16]

Company Overview - The total number of issued shares of China Resources Cement Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[4]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[3]. - The registered office is located in the Cayman Islands, while the principal place of business is in Hong Kong[10]. - The company operates as the holding entity for all cement and concrete operations of China Resources Group, emphasizing its strategic importance in the construction materials sector[3]. - The company has a dedicated investor relations consultant to manage communications with stakeholders[10]. Financial Performance - For the six months ended June 30, 2023, the Group reported a turnover of HK$12,172.6 million, a decrease of 24.5% compared to the same period last year[26][30]. - The profit attributable to owners of the Company for the same period was HK$620.9 million, down 65.6% year-on-year, with basic earnings per share of HK$0.089[26][30]. - The consolidated turnover for the first half of 2023 amounted to HK$12,172.6 million, representing a decrease of 24.5% from HK$16,116.5 million in the same period last year[123]. - Gross profit for the period was HK$1,902,495, down 42.4% from HK$3,302,684 in the previous year[182]. - Basic earnings per share decreased to HK$0.089, down 65.5% from HK$0.258 in the same period last year[182]. Production Capacity and Operations - As of June 30, 2023, the Group operates 101 cement grinding lines with an annual production capacity of 90.1 million tons and 49 clinker production lines with a capacity of 63.6 million tons[16]. - The Group has 63 concrete batching plants with an annual production capacity of 38.5 million cubic meters[16]. - The Group's total annual production capacities include 64.7 million tons of cement, 37.0 million tons of clinker, and 8.5 million m³ of concrete, with attributable capacities of 22.3 million tons of cement, 12.1 million tons of clinker, and 3.9 million m³ of concrete[19][20]. - The Group's facilities are supported by a well-established logistics network including waterways, railways, and roads[15]. - The Group's business includes limestone excavation, cement, clinker, and concrete production, sales, and distribution[15]. Market and Economic Context - In the first half of 2023, China's GDP grew by 5.5% year-on-year to RMB59.3 trillion, with national fixed asset investment increasing by 3.8% to RMB24.3 trillion[39]. - Infrastructure investment in China rose by 7.2% year-on-year in the first half of 2023, with road and waterway investments growing by 9.8%[41]. - The real estate market showed signs of stabilization, with total sales area decreasing by 5.3% to 600 million square meters, while sales revenue increased by 1.1% to RMB6.3 trillion[41]. Corporate Governance - The report outlines the company's corporate governance structure, including various committees such as the Audit Committee and Risk and Compliance Committee[9]. - The interim report for the six months ended June 30, 2023, was reviewed by the Audit Committee[180]. Environmental and Social Responsibility - The Group's emission concentrations of nitrogen oxides, particulate matters, and sulphur dioxide are better than national pollutant emission standards, reflecting its commitment to corporate social responsibility[20][21]. - The Group is committed to promoting green and low-carbon transformation in line with national policies to achieve carbon peaking and neutrality goals[53]. - The Chinese government emphasized the importance of production safety and occupational health to ensure sustainable development in the building materials industry[53]. Strategic Initiatives - The company is focused on expanding its market presence and enhancing operational efficiencies through strategic initiatives[6]. - The Group is actively enhancing research and development of new products, materials, and technologies to seize new business opportunities and promote sustainable development[20][21]. - The Group's strategic focus includes digital transformation, innovation in research and development, and enhancing operational efficiency and quality[75]. Dividends and Shareholder Information - The Group plans to distribute an interim dividend of HK$0.041 per share, totaling approximately HK$286.3 million, compared to HK$838 million in the previous year[30]. - No shares were repurchased, sold, or redeemed by the company or its subsidiaries during the reporting period[180]. Financial Management and Liabilities - The Group had net current liabilities of HK$1,836.8 million as of June 30, 2023, but is confident in meeting its financial obligations due to sufficient cash reserves and available banking facilities[153]. - Bank loans amounted to HK$19,183.2 million as of June 30, 2023, compared to HK$15,836.6 million at the end of 2022[144]. - The Group adopts robust treasury policies, with centralized management of financing and investment activities to ensure liquidity needs are met[150]. Research and Development - The Group's research and development team consists of 329 technology talents, including 66 dedicated R&D personnel and 68 specialists in intelligentization and digitalization[115]. - The Group actively engaged in research on new materials such as silicon-based materials and perovskite solar cells to support technological transformation[117]. Awards and Recognition - The Group's efforts in technological innovation were recognized with awards in April, including first, second, and third prizes in the State-owned Enterprise Digital Scenario Innovation Competition[67]. - The Group's "Runpin" inorganic engineered stone has received industry recognition and awards, including the "Building Materials Science and Technology Progress Award" from the China Building Materials Federation[102].

[Performance Overview](index=1&type=section&id=I.%20Performance%20Overview) [Condensed Consolidated Performance Overview](index=1&type=section&id=Condensed%20Consolidated%20Performance%20Overview) The Group's H1 2023 saw significant declines in revenue and profit attributable to owners, with basic EPS and interim dividends falling and the gearing ratio rising Key Financial Data for H1 2023 (Unaudited) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,172.6 | 16,116.5 | (24.5)% | | Profit Attributable to Owners of the Company | 620.9 | 1,804.5 | (65.6)% | | Basic Earnings Per Share (HKD) | 0.089 | 0.258 | - | | Interim Dividend Per Share (HKD) | 0.041 | 0.12 | - | | Total Assets | 81,656.8 | 80,613.8 (Dec 31, 2022) | 1.3% | | Equity Attributable to Owners of the Company | 48,174.8 | 49,233.4 (Dec 31, 2022) | (2.2)% | | Gearing Ratio | 41.2% | 33.4% (Dec 31, 2022) | 7.8 percentage points | | Net Asset Value Per Share - Book (HKD) | 6.90 | 7.05 (Dec 31, 2022) | (2.1)% | [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's H1 2023 revenue and gross profit significantly declined, leading to substantial reductions in profit before tax and profit for the period, with profit attributable to owners down 65.6% Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,172,621 | 16,116,525 | (24.5)% | | Cost of Sales | (10,270,126) | (12,813,841) | (19.8)% | | Gross Profit | 1,902,495 | 3,302,684 | (42.4)% | | Other Income | 564,232 | 581,555 | (3.0)% | | Selling and Distribution Expenses | (243,897) | (275,955) | (11.6)% | | General and Administrative Expenses | (1,098,808) | (1,233,506) | (10.9)% | | Exchange Gains (Losses) | 1,886 | (67,510) | Significant improvement | | Finance Costs | (295,642) | (171,161) | 72.7% | | Share of Results of Associates | (27,819) | 11,805 | Turned from profit to loss | | Share of Results of Joint Ventures | 32,200 | (26,220) | Turned from loss to profit | | Profit Before Tax | 834,647 | 2,121,692 | (60.7)% | | Taxation | (244,475) | (357,708) | (31.6)% | | Profit for the Period | 590,172 | 1,763,984 | (66.6)% | | Profit for the Period Attributable to Owners of the Company | 620,931 | 1,804,538 | (65.6)% | | Basic Earnings Per Share (HKD) | 0.089 | 0.258 | (65.5)% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets slightly increased, net current liabilities significantly improved, while equity attributable to owners slightly decreased and non-current liabilities rose Condensed Consolidated Statement of Financial Position (As at Period End) | Metric | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 69,931,717 | 70,792,481 | (1.2)% | | Current Assets | 11,725,053 | 9,821,282 | 19.4% | | Current Liabilities | 13,561,875 | 15,306,813 | (11.4)% | | Net Current Liabilities | (1,836,822) | (5,485,531) | 66.5% (Improvement) | | Total Assets Less Current Liabilities | 68,094,895 | 65,306,950 | 4.3% | | Non-current Liabilities | 18,328,367 | 14,466,682 | 26.7% | | Equity Attributable to Owners of the Company | 48,174,845 | 49,233,446 | (2.2)% | | Total Equity | 49,766,528 | 50,840,268 | (2.1)% | [Notes to the Financial Statements](index=5&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Appendix 16 of the HKEX Listing Rules and HKAS 34 - The condensed consolidated financial statements are prepared in accordance with Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[7](index=7&type=chunk) [Principal Accounting Policies](index=5&type=section&id=Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain items measured at fair value, and adopted revised standards effective January 1, 2023, with no significant impact - The financial statements are prepared principally under the historical cost convention, except for investment properties, equity investments at fair value through other comprehensive income, and certain trade receivables[8](index=8&type=chunk) - The Group has first applied the amendments to Hong Kong Financial Reporting Standards issued by the HKICPA and mandatorily effective from January 1, 2023, including the definition of accounting estimates and deferred tax related to assets and liabilities arising from a single transaction, with no significant impact on the amounts reported or disclosures in the financial statements[8](index=8&type=chunk) [Segment Information](index=5&type=section&id=Segment%20Information) The Group's operating and reportable segments are cement and concrete, with H1 2023 showing significant profit from cement but a loss from concrete, as reviewed by internal management reports - The Group's operating and reportable segments are cement and concrete, with all revenue derived from the sale of goods, recognized upon delivery[9](index=9&type=chunk) Segment Results and Revenue (For the Six Months Ended June 30) | Metric | 2023 Cement (HKD Thousand) | 2023 Concrete (HKD Thousand) | 2022 Cement (HKD Thousand) | 2022 Concrete (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | External Sales Revenue | 10,497,190 | 1,675,431 | 13,247,514 | 2,869,011 | | Segment Results | 1,325,406 | (87,338) | 2,084,043 | 11,613 | [Finance Costs](index=7&type=section&id=Finance%20Costs) The Group's H1 2023 total finance costs significantly increased by 72.7% year-on-year, primarily due to higher interest on bank loans and asset acquisition payables Breakdown of Finance Costs (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank loans | 288,395 | 177,068 | 62.9% | | Interest on loans from an indirect holding company | - | 13,516 | (100.0)% | | Interest on loans from non-controlling shareholders | 5,441 | 5,680 | (4.1)% | | Environmental restoration provision | 15,584 | - | - | | Payables for acquisition of assets | 37,634 | 13,300 | 183.0% | | Lease liabilities | 5,515 | 5,511 | 0.1% | | Subtotal | 352,569 | 215,075 | 63.9% | | Amount capitalized as property, plant and equipment | (56,927) | (43,914) | 29.6% | | **Total Finance Costs** | **295,642** | **171,161** | **72.7%** | [Profit Before Tax](index=7&type=section&id=Profit%20Before%20Tax) In H1 2023, the Group's profit before tax significantly decreased, positively impacted by reduced impairment losses on bad debts, but offset by increased staff costs, depreciation, and decreased interest income Adjustments to Profit Before Tax (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total staff costs | 1,487,670 | 1,449,261 | 2.6% | | Impairment losses on bad debts | 82,789 | 183,653 | (54.9)% | | Reversal of impairment losses on other receivables | (28,312) | - | - | | Amortisation of mining rights | 150,392 | 114,080 | 31.8% | | Depreciation of property, plant and equipment | 1,078,261 | 987,675 | 9.2% | | Depreciation of right-of-use assets | 114,103 | 99,388 | 14.8% | | Short-term lease payments | 9,465 | 13,623 | (30.5)% | | Variable lease payments - motor vehicles | 152,375 | 257,788 | (40.9)% | | Gain on disposal of a subsidiary | - | (239,072) | (100.0)% | | Interest income | (49,297) | (80,600) | (38.8)% | [Taxation](index=8&type=section&id=Taxation) The Group's H1 2023 total taxation decreased by 31.6% year-on-year, mainly due to reduced PRC corporate income tax and deferred tax, with the effective tax rate significantly rising to 29.3% Breakdown of Taxation (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax | 351,108 | 667,229 | (47.4)% | | Hong Kong profits tax | 8,554 | 9,710 | (11.9)% | | PRC corporate income tax | 342,554 | 657,519 | (47.9)% | | Deferred tax | (106,633) | (309,521) | 65.5% (Decrease) | | Hong Kong deferred tax | 274 | (956) | Turned from negative to positive | | PRC deferred tax | (106,907) | (308,565) | 65.3% (Decrease) | | **Total Taxation** | **244,475** | **357,708** | **(31.6)%** | | Effective tax rate | 29.3% | 16.9% | 12.4 percentage points | | Adjusted effective tax rate | 27.7% | 19.5% | 8.2 percentage points | - Hong Kong profits tax is calculated at a rate of **16.5%**, while PRC corporate income tax is calculated at **25%**, including a **5%** dividend withholding tax and deferred tax on estimated distributed profits[16](index=16&type=chunk) [Earnings Per Share](index=8&type=section&id=Earnings%20Per%20Share) Basic earnings per share attributable to owners of the Company decreased by 65.5% year-on-year due to a significant decline in profit Basic Earnings Per Share Calculation (For the Six Months Ended June 30) | Metric | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 620,931 | 1,804,538 | (65.6)% | | Weighted average number of shares | 6,982,937,817 | 6,982,937,817 | 0.0% | | **Basic Earnings Per Share (HKD)** | **0.089** | **0.258** | **(65.5)%** | - Diluted earnings per share is not presented as the Company has no unissued potential ordinary shares[17](index=17&type=chunk) [Trade Receivables](index=9&type=section&id=Trade%20Receivables) As of June 30, 2023, the Group's total trade receivables increased by 14.3% year-on-year, with a significant increase in the 0-90 day aging category Breakdown and Aging Analysis of Trade Receivables | Item | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables from third parties | 3,174,983 | 2,806,745 | 13.1% | | Trade receivables from related parties | 141,351 | 93,915 | 50.5% | | **Total Trade Receivables** | **3,316,334** | **2,900,660** | **14.3%** | | **Aging Analysis** | | | | | 0 to 90 days | 2,151,923 | 1,371,303 | 56.9% | | 91 to 180 days | 190,183 | 425,260 | (55.3)% | | 181 to 365 days | 505,213 | 582,207 | (13.3)% | | Over 365 days | 469,015 | 521,890 | (10.2)% | - The Group grants customers an average credit period of 0 to 60 days from the invoice date[18](index=18&type=chunk) [Trade Payables](index=9&type=section&id=Trade%20Payables) As of June 30, 2023, the Group's total trade payables decreased by 7.8% year-on-year, with a slight decrease in the 0-90 day aging category Breakdown and Aging Analysis of Trade Payables | Item | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables to third parties | 2,883,007 | 3,134,309 | (8.0)% | | Trade payables to related parties | 103,806 | 107,498 | (3.4)% | | **Total Trade Payables** | **2,986,813** | **3,241,807** | **(7.8)%** | | **Aging Analysis** | | | | | 0 to 90 days | 2,821,425 | 3,037,448 | (7.1)% | | 91 to 180 days | 70,515 | 119,481 | (41.0)% | | 181 to 365 days | 71,068 | 74,628 | (4.7)% | | Over 365 days | 23,805 | 10,250 | 132.2% | - The Group typically obtains credit periods of 30 to 90 days from its suppliers[21](index=21&type=chunk) [Dividend Policy](index=10&type=section&id=IV.%20Dividend%20Policy) [Interim Dividend](index=10&type=section&id=Interim%20Dividend) The Board declared an interim dividend of **HKD 0.041** per share for H1 2023, a significant decrease from the prior year, with shareholders having the option to receive it in HKD or RMB cash Interim Dividend Overview | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Interim Dividend Per Share | HKD 0.041 | HKD 0.12 | | Total Amount | Approx. HKD 286,300,000 | Approx. HKD 838,000,000 | | Payment Date | October 27, 2023 | - | | Dividend Currency Option | HKD (default) or RMB (RMB 0.03764284 per share) | - | - Shareholders must submit the dividend currency election form by 4:30 p.m. on October 13, 2023, otherwise they will automatically receive the dividend in HKD[23](index=23&type=chunk) [Closure of Register of Members](index=10&type=section&id=Closure%20of%20Register%20of%20Members) To determine interim dividend entitlements, the Company will suspend share transfer registration from September 18 to 22, 2023, requiring shareholders to complete transfers by September 15, 2023 - The register of members will be closed from Monday, September 18, 2023, to Friday, September 22, 2023[24](index=24&type=chunk) - To qualify for the interim dividend, all share transfer documents, accompanied by the relevant share certificates, must be lodged with the Company's share registrar no later than 4:30 p.m. on Friday, September 15, 2023[24](index=24&type=chunk) [Business Environment and Industry Analysis](index=11&type=section&id=V.%20Business%20Environment%20and%20Industry%20Analysis) [Business Environment](index=11&type=section&id=Business%20Environment) In H1 2023, China's economy recovered with **5.5% GDP growth**, increased fixed asset and infrastructure investments, a stabilizing real estate market despite declining sales, and proactive government policies for urban renewal and rural revitalization H1 2023 China Macroeconomic Indicators | Metric | H1 2023 | Y-o-Y Change (%) | | :--- | :--- | :--- | | Gross Domestic Product | RMB 59.3 Trillion | 5.5% | | National Fixed Asset Investment (excluding rural households) | RMB 24.3 Trillion | 3.8% | | National Infrastructure Investment (excluding electricity, heat, gas, and water production and supply) | - | 7.2% | | National Fixed Asset Investment in Highways and Waterways | Approx. RMB 1.5 Trillion | 9.8% | | National Fixed Asset Investment in Railways | RMB 304.9 Billion | 6.9% | | National Commercial Housing Sales Area | 600 Million Sqm | (5.3)% | | National Commercial Housing Sales Value | RMB 6.3 Trillion | 1.1% | | National Real Estate Development Investment | RMB 5.9 Trillion | (7.9)% | | New Housing Construction Area | 500 Million Sqm | (24.3)% | | Housing Completion Area | 340 Million Sqm | 19.0% | - The Chinese government adhered to the general principle of seeking progress while maintaining stability, accelerated the construction of a new development pattern, promoted high-quality development, and saw an overall economic recovery[25](index=25&type=chunk) - The government increased fiscal policy efforts, issuing new special bonds of **RMB 3.8 trillion**, with approximately **RMB 2.17 trillion** issued in H1, prioritizing support for major national strategies and project construction[27](index=27&type=chunk) - The People's Bank of China lowered the reserve requirement ratio by **0.25 percentage points** and reduced the Loan Prime Rate (LPR) to lower financing costs for the real economy and promote stable and healthy development of the real estate market[27](index=27&type=chunk) [Industry Overview](index=13&type=section&id=Industry%20Overview) In H1 2023, national cement output increased by **1.3%**, with varied regional production and new clinker capacity, while the government continued to promote green transformation, energy efficiency, industrial restructuring, and new building material R&D H1 2023 National and Key Regional Cement Output | Region | Cement Output (Ten Thousand Tons) | Y-o-Y Change (%) | | :--- | :--- | :--- | | National | Approx. 950 Million Tons | 1.3% | | Guangdong | 6,670 | 0.5% | | Guangxi | 4,780 | 3.3% | | Fujian | 3,790 | (5.1)% | | Hainan | 730 | (6.8)% | | Yunnan | 4,740 | 3.1% | | Guizhou | 2,710 | (3.8)% | | Shanxi | 2,090 | (4.1)% | | Hunan | 3,600 | 1.5% | - Nine new clinker production lines were added nationwide, increasing annual clinker capacity by approximately **12.9 million tons**, primarily in Guangxi, Guizhou, and Hunan[28](index=28&type=chunk) - The Chinese government is promoting ultra-low emission upgrades in the cement industry, targeting **50%** of clinker capacity in key regions to complete upgrades by end of 2025, and striving for **80%** nationwide by end of 2028[28](index=28&type=chunk) - The 'Guidance on Building a Carbon Peak and Carbon Neutrality Standard System' and 'Energy Efficiency Benchmark and Baseline Levels for Key Industrial Sectors (2023 Edition)' were issued, requiring **25** key sectors, including cement, to complete energy efficiency upgrades by end of 2025[29](index=29&type=chunk) - The 'Notice on Regulating and Improving Sand and Gravel Mining Management' was issued, requiring the maintenance of good mining order and promotion of green development of mineral resources[30](index=30&type=chunk) - The 'Outline for Building a Quality Power' proposes accelerating R&D and application of new building materials such as high-strength, high-durability, recyclable, and green environmental materials, vigorously developing green building materials[30](index=30&type=chunk) [Business Operations and Transformation](index=15&type=section&id=VI.%20Business%20Operations%20and%20Transformation) [Transformation and Innovation](index=15&type=section&id=Transformation%20and%20Innovation) The Group, guided by its '14th Five-Year Plan' strategic blueprint, reorganized its business into four segments, achieving breakthroughs, increasing R&D, promoting green and digital transformation, and gaining industry recognition - The Group's business was re-segmented into four major business sectors: basic building materials, structural building materials, functional building materials, and new materials, actively seizing opportunities to enter new regions such as Hunan, Hubei, and Shandong[31](index=31&type=chunk) - In basic building materials, the Group successfully bid for mining rights to the Longmashan Limestone Mine in Nanning, Guangxi, and the Maoping Mining Area Limestone Mine for cement in Meizhou, Guangdong, expanding aggregate and cement limestone resources[31](index=31&type=chunk) - In structural building materials, the Group has **6** precast concrete component projects, with a designed annual production capacity expected to reach approximately **1.4 million cubic meters** upon full completion[31](index=31&type=chunk) - In functional building materials, the Group optimized its artificial stone business, established a standardized product system, and expanded its inorganic artificial stone production line[31](index=31&type=chunk) - The Group continued to increase R&D investment, advancing clinker production line grate cooler upgrades, optimizing high-efficiency pre-decomposition systems, applying raw material grinding aids, conducting solid waste trials and alternative fuel projects, and promoting photovoltaic power generation[32](index=32&type=chunk) - Actively promoting the application of pure electric mining vehicles, autonomous driving, and digital mines to advance green mine construction[32](index=32&type=chunk) - Awarded first, second, and third prizes in the first 'State-owned Enterprise Digital Scene Innovation Professional Competition' organized by the Chinese government, and the artificial stone project won the Gold Award for Quality Stone Decoration Engineering at the 6th 'Huabiao Cup'[32](index=32&type=chunk) [Production Capacity](index=16&type=section&id=Production%20Capacity) In H1, the Group added limestone resources in Hunan and increased cement capacity, while total annual concrete capacity remained unchanged, but capacity utilization rates for cement, clinker, and concrete all decreased - Hunan Liangtian Cement Co., Ltd. won mining rights, adding **36.3 million tons** of limestone resources, and increased annual cement production capacity to approximately **2.1 million tons** through technological upgrades[33](index=33&type=chunk) - One concrete mixing plant was newly commissioned, two were suspended, and total annual production capacity remained consistent with end-2022[33](index=33&type=chunk) Capacity Utilization Rate (For the Six Months Ended June 30) | Product | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Cement | 63.6% | 69.9% | (6.3) | | Clinker | 78.9% | 87.1% | (8.2) | | Concrete | 21.3% | 28.8% | (7.5) | [Cost Management](index=17&type=section&id=Cost%20Management) In H1, the Group focused on 'systematic reshaping and high-quality development,' deepening operational excellence, implementing energy-saving and carbon reduction initiatives, and effectively lowering coal procurement and logistics costs through optimized procurement and logistics management - The Group comprehensively deepened operational excellence, built a 'grand operation management system,' steadily implemented energy-saving and carbon reduction action plans, and promoted the application of new technologies and innovative achievements[35](index=35&type=chunk) - In mine management, safety and intelligent automation levels were enhanced through controlled blasting, slope management, pure electric mining vehicles, autonomous driving, and digital mine applications[35](index=35&type=chunk) Coal Procurement and Cost Data (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total coal procurement | Approx. **4.6 million tons** | Approx. **4.3 million tons** | 7.0% | | Average coal procurement price | **HKD 1,152 per ton** | **HKD 1,166 per ton** | (1.2)% | | Average calorific value of coal | **5,195 Kcal per Kg** | - | 0.2% | | Unit coal consumption per ton of clinker produced | **134.2 Kg** | **140.9 Kg** | (4.7)% | | Average coal cost per ton of clinker produced | **HKD 154.5** | **HKD 164.3** | (6.0)% | - Overall logistics costs showed a downward trend, achieved by optimizing shipping tender plans, introducing multiple logistics providers for competition, and calculating two-way vehicle and bulk cement transportation costs[37](index=37&type=chunk) - The Group has an annual transportation capacity of approximately **38.6 million tons** in the Xijiang River basin, controls **35** transit warehouses with an annual transit capacity of approximately **31.9 million tons**, consolidating its leading position in South China[37](index=37&type=chunk) [Marketing](index=19&type=section&id=Marketing) In H1, the Group continued to promote specialized products, increased brand investment to enhance 'Runfeng' brand coverage, and expanded into the functional building materials market with the 'Runpin' brand - Continuously and deeply promoting specialized products such as nuclear power cement, road Portland cement, and medium-low heat cement, leveraging differentiated competitive advantages[38](index=38&type=chunk) - The 'Runfeng' brand's terminal coverage rate increased by **2 percentage points** year-on-year to **92%**, and customer appreciation events were upgraded to feature both 'Runfeng' and 'Runpin' brands[39](index=39&type=chunk) - 'Runpin,' as a unified brand for functional building materials, expanded brand exposure by participating in professional exhibitions, operating the 'Runpin Hui' showroom, and engaging in online media integrated communication[39](index=39&type=chunk) [New Business Development](index=20&type=section&id=New%20Business%20Development) The Group actively pursued new business opportunities, with rapid growth in aggregate business, continuously increasing asset and revenue contributions. Prefabricated construction progressed steadily, functional building materials enhanced competitiveness, and new material industries like calcium-based and basalt were actively planned - Aggregate business achieved rapid development, with new business asset and revenue contributions continuously increasing, further enriching high-quality aggregate mine resource reserves[40](index=40&type=chunk)[41](index=41&type=chunk) Aggregate Capacity Overview | Item | Resource Reserves (Ten Thousand Tons) | Planned Annual Capacity (Ten Thousand Tons) | Estimated Commissioning Time | | :--- | :--- | :--- | :--- | | Longmashan Limestone Mine, Nanning, Guangxi | Approx. **7.6 million** | Approx. **500 thousand** | Before end of 2023 | | Anshun Aggregate Concrete Project, Guizhou | - | Approx. **200 thousand** | Completed and commissioned | | Maoping Mining Area Aggregate, Meizhou, Guangdong | Approx. **1.2 million** | Approx. **130 thousand** | End of 2024 | | **Operating Annual Aggregate Capacity (Subsidiaries)** | - | Approx. **8.34 million** | As of June 30, 2023 | | **Operating Annual Aggregate Capacity (Share of Associates)** | - | Approx. **310 thousand** | As of June 30, 2023 | | **Controlled Annual Aggregate Capacity Upon Full Completion (Subsidiaries)** | - | Estimated **14.64 million** | - | | **Controlled Annual Aggregate Capacity Upon Full Completion (Share of Associates/Joint Ventures)** | - | Estimated **1.36 million** | - | - Prefabricated construction business progressed steadily, with Guangdong Zhizhu Jiangmen Precast Concrete Component Project officially in production, designed annual capacity of approximately **50,000 cubic meters**. The Group owns a total of **6** precast concrete component projects, with a designed annual capacity expected to reach approximately **1.4 million cubic meters** upon full completion[42](index=42&type=chunk) - The first phase of the autoclaved aerated concrete block and panel production line project in Fengkai, Guangdong, has commenced trial production, with designed annual capacity of approximately **400,000 cubic meters** for panels and **200,000 cubic meters** for blocks[43](index=43&type=chunk) - In functional building materials, Dongguan Global Classic's expanded inorganic artificial stone production line project has commenced operation, with a planned annual capacity of approximately **1.5 million square meters**, enhancing competitiveness through technological innovation and marketing system optimization[44](index=44&type=chunk) - New materials business actively planned for calcium-based, basalt fiber, and new energy materials, with Hubei Chongyang Calcium Oxide Project and Guangxi Guigang Calcium-based Project both acquiring mining rights, expected to commence production in **2024**[45](index=45&type=chunk) [Digital Transformation](index=22&type=section&id=Digital%20Transformation) The Group continuously advanced digitalization and intelligent construction, building benchmark smart factories, promoting advanced control systems, and achieving digital transformation in artificial stone, logistics, and marketing to enhance operational efficiency and service quality - Building a benchmark full-process smart factory for the cement industry at the Tianyang District cement production base in Guangxi, and a standardized, platform-based lighthouse factory at the Fengkai County cement production base in Guangdong[46](index=46&type=chunk) - The Oracle EBS system for the artificial stone industry was piloted and launched at Dongguan Global Classic, achieving online and refined management of the entire value chain for the stone business[46](index=46&type=chunk) - Actively promoting **5G** technology applications, advancing China Resources' '5G+Industrial Internet' integrated innovation applications, and developing **1** '5G handheld industrial terminal product'[46](index=46&type=chunk) - The all-in-one card smart logistics system was launched across **6** aggregate bases, enabling unattended weighbridges and improving dispatch efficiency and pickup service quality[47](index=47&type=chunk) - The digital transformation project for marketing models was fully launched across major regional cement and tile adhesive businesses, achieving **100%** coverage, with e-commerce platforms accumulating a total shipment volume of approximately **140 million tons**[47](index=47&type=chunk) [Research and Development and Innovation](index=23&type=section&id=Research%20and%20Development%20and%20Innovation) The Group continuously increased R&D investment, built a professional scientific and technological talent team, developed multiple new technologies and products, particularly advancing in solid waste disposal, energy saving, carbon reduction, and carbon utilization, while actively planning for emerging industries and establishing a comprehensive scientific innovation system - As of end-June 2023, the Group had **329** scientific and technological talents, including **66** full-time R&D personnel and **68** intelligent and digital professionals[48](index=48&type=chunk) - Developed a rotary kiln for disposing of heavy, difficult-to-burn, medium-low calorific value solid waste such as municipal solid waste, and a stepping furnace for disposing of light, loose, flammable biomass solid waste[48](index=48&type=chunk) - Researched and promoted the application of raw material roller press and cement grinding energy-saving and carbon reduction technologies, developed in-situ CO2 self-enrichment process re-engineering technology and high-carbon sequestration non-autoclaved aerated concrete products, and built a carbon utilization research platform[48](index=48&type=chunk) - Actively planning for new industries such as silicon-based materials, basalt materials, energy storage battery materials, perovskite solar cells, and aerogel materials[49](index=49&type=chunk) - Organized the 'Runfeng Cup' Innovation Competition and Science and Technology Innovation Forum, formulated incentive mechanisms for scientific research projects, and co-established the 'China Resources Group Energy Saving and Environmental Protection Technology Innovation Alliance' with China Resources Environmental Technology Co., Ltd. and East China University of Science and Technology[49](index=49&type=chunk) [Employee Information](index=24&type=section&id=VII.%20Employee%20Information) [General Information](index=24&type=section&id=General%20Information) As of June 30, 2023, the Group's total full-time employees numbered **18,351**, a slight decrease from end-2022. The management team is predominantly male, mostly holding university degrees or higher, with an average age of approximately **47**, and the Group implements a job-value-based compensation mechanism Employee Headcount and Functional Distribution | Item | June 30, 2023 | December 31, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total full-time employees | 18,351 | 19,046 | (3.6)% | | Hong Kong employees | 350 | 344 | 1.7% | | PRC employees | 18,001 | 18,702 | (3.7)% | | **By Function** | | | | | Management | 482 | 472 | 2.1% | | Finance, Administration and Others | 2,318 | 2,486 | (6.8)% | | Production personnel | 10,489 | 10,941 | (4.1)% | | Technical personnel | 4,374 | 4,426 | (1.2)% | | Marketing personnel | 688 | 721 | (4.5)% | - Among senior and middle management, **87%** are male and **13%** are female; **83%** hold university degrees or above, with an average age of approximately **47**[51](index=51&type=chunk) - The Group has established a compensation distribution mechanism based on job value, combined with performance contribution, individual capabilities, and talent development[52](index=52&type=chunk) [Financial Performance Review](index=25&type=section&id=VIII.%20Financial%20Performance%20Review) [Revenue](index=25&type=section&id=Revenue) The Group's H1 2023 consolidated revenue decreased by **24.5%** year-on-year, primarily due to RMB depreciation against HKD and declines in sales volume and average selling prices of cement, clinker, and concrete products - The Group's functional currency is RMB, with financial data denominated in HKD, and RMB depreciated by approximately **6.3%** against HKD during the period[53](index=53&type=chunk) Product Revenue, Sales Volume, and Average Selling Price (For the Six Months Ended June 30) | Product | 2023 Sales Volume (Thousand Tons/Cubic Meters) | 2023 Average Selling Price (HKD/Ton/Cubic Meter) | 2023 Revenue (HKD Thousand) | 2022 Sales Volume (Thousand Tons/Cubic Meters) | 2022 Average Selling Price (HKD/Ton/Cubic Meter) | 2022 Revenue (HKD Thousand) | Sales Volume Change (%) | Price Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 28,521 | 357.1 | 10,185,884 | 30,669 | 406.2 | 12,457,738 | (7.0)% | (12.1)% | | Clinker | 1,023 | 304.3 | 311,306 | 2,041 | 386.9 | 789,776 | (49.9)% | (21.3)% | | Concrete | 3,803 | 440.5 | 1,675,431 | 5,392 | 532.1 | 2,869,011 | (29.5)% | (17.2)% | | **Total** | - | - | **12,172,621** | - | - | **16,116,525** | - | - | - Approximately **82.8%** of cement products were of 42.5 grade or higher (H1 2022: **83.9%**), and approximately **29.4%** were sold in bags (H1 2022: **27.3%**)[55](index=55&type=chunk) [Cost of Sales](index=26&type=section&id=Cost%20of%20Sales) In H1 2023, coal's share of the Group's cost of sales increased, but average coal cost per ton of clinker decreased due to lower coal procurement prices and improved unit coal consumption. Electricity costs slightly declined, with cost savings from waste heat power generation Composition of Consolidated Cost of Sales (Excluding Related Party Cement Sales) | Cost Category | H1 2023 Share | H1 2022 Share | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Coal | 38.3% | 34.1% | 4.2 | | Electricity | 10.8% | 9.7% | 1.1 | | Materials | 24.4% | 31.2% | (6.8) | | Other costs | 26.5% | 25.0% | 1.5 | - The average electricity cost per ton of cement decreased by **0.5%** from **HKD 36.4** to **HKD 36.2**, with electricity consumption per ton of cement at **71.7 kWh** (H1 2022: **72.1 kWh**)[58](index=58&type=chunk) - Waste heat power generation equipment generated a total of **711.3 million kWh**, accounting for approximately **29.9%** of required electricity consumption, saving costs of approximately **HKD 415 million**[58](index=58&type=chunk) - Repair and maintenance costs included in the cost of sales for cement products amounted to **HKD 351.9 million**, a **39.7%** decrease from the prior year[58](index=58&type=chunk) [Gross Profit and Gross Profit Margin](index=27&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's H1 2023 consolidated gross profit decreased by **42.4%** year-on-year, with the consolidated gross profit margin falling by **4.9 percentage points** to **15.6%**, primarily due to lower product selling prices and sales volumes Gross Profit and Gross Profit Margin (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit (HKD Million) | 1,902.5 | 3,302.7 | (42.4)% | | Consolidated Gross Profit Margin | 15.6% | 20.5% | (4.9) | | Cement Gross Profit Margin | 16.7% | 22.0% | (5.3) | | Clinker Gross Profit Margin | 7.7% | 21.8% | (14.1) | | Concrete Gross Profit Margin | 10.4% | 13.8% | (3.4) | - The decrease in consolidated gross profit and gross profit margin was primarily due to lower product selling prices and sales volumes during the period compared to H1 2022[59](index=59&type=chunk) [Other Income](index=27&type=section&id=Other%20Income) The Group's H1 2023 other income slightly decreased by **3.0%** year-on-year Other Income (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 564.2 | 581.6 | (3.0)% | [Selling and Distribution Expenses](index=27&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's H1 2023 selling and distribution expenses decreased by **11.6%** year-on-year, primarily due to lower sales volume, but increased as a percentage of consolidated revenue Selling and Distribution Expenses (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 243.9 | 276.0 | (11.6)% | | As a percentage of consolidated revenue | 2.0% | 1.7% | 0.3 percentage points | - The decrease in selling and distribution expenses was primarily due to lower sales volume during the period compared to H1 2022[60](index=60&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) The Group's H1 2023 general and administrative expenses decreased by **10.9%** year-on-year, partly due to reduced impairment losses on bad debts, but increased as a percentage of consolidated revenue General and Administrative Expenses (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 1,098.8 | 1,233.5 | (10.9)% | | Decrease in impairment losses on bad debts | 100.9 | - | - | | As a percentage of consolidated revenue | 9.0% | 7.7% | 1.3 percentage points | - The decrease in general and administrative expenses was partly due to a **HKD 100.9 million** reduction in impairment losses on bad debts compared to the prior year[61](index=61&type=chunk) [Share of Results of Associates](index=28&type=section&id=Share%20of%20Results%20of%20Associates) The Group's H1 2023 share of results of associates turned from a profit to a loss year-on-year, primarily impacted by losses from associates in Fujian, Yunnan, and Guangdong Share of Results of Associates (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total share of results of associates | (27.8) | 11.8 | Turned from profit to loss | | Inner Mongolia associate | 22.4 | 72.4 | (69.0)% | | Fujian associate | (38.7) | (11.1) | 248.6% (Loss widened) | | Yunnan associate | 24.7 | (30.9) | Turned from loss to profit | | Guangdong associate | (24.1) | (12.6) | 91.3% (Loss widened) | [Share of Results of Joint Ventures](index=28&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures) The Group's H1 2023 share of results of joint ventures turned from a loss to a profit year-on-year Share of Results of Joint Ventures (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total share of results of joint ventures | 32.2 | (26.2) | Turned from loss to profit | [Taxation](index=28&type=section&id=Taxation_Review) The Group's H1 2023 effective tax rate significantly increased to **29.3%**, with the adjusted effective tax rate also rising Effective Tax Rate (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Effective tax rate | 29.3% | 16.9% | 12.4 | | Adjusted effective tax rate | 27.7% | 19.5% | 8.2 | [Net Profit Margin](index=28&type=section&id=Net%20Profit%20Margin) The Group's H1 2023 net profit margin significantly decreased by **6.1 percentage points** to **4.8%** Net Profit Margin (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Net Profit Margin | 4.8% | 10.9% | (6.1) | [Liquidity and Financial Resources](index=28&type=section&id=IX.%20Liquidity%20and%20Financial%20Resources) [Sources of Funds](index=28&type=section&id=Sources%20of%20Funds) The Group's sources of funds primarily include internal funds, bank loans, loans from related parties, issuance of equity securities, and cash flows from operations - The Group's sources of funds primarily include internal funds, bank loans, loans from related parties, issuance of equity securities, and cash flows generated from operations[64](index=64&type=chunk) [Bank and Other Borrowings](index=28&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2023, the Group's total bank and other borrowings increased, with a higher proportion of floating-rate borrowings. The Group holds substantial unutilized bank loan facilities and complies with relevant financial covenants Bank and Other Borrowings Overview | Metric | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank loans | 19,183,161 | 15,836,585 | 21.1% | | Loans from related parties | 650,737 | 596,678 | 9.1% | | **Total Borrowings** | **19,833,898** | **16,433,263** | **20.7%** | | Fixed-rate borrowings | 5,234,500 | 5,365,400 | (2.4)% | | Floating-rate borrowings | 14,599,400 | 11,067,900 | 31.9% | | HKD denominated borrowings | 2,300,000 | 2,300,000 | 0.0% | | RMB denominated borrowings | 16,165,937 | 12,624,846 | 28.0% | | Repayable within one year | 3,959,986 | 4,548,117 | (12.9)% | | Unutilized bank loan facilities (RMB) | **RMB 19.4947 billion** | - | - | - The Group's unsecured bank loan facilities amounted to **HKD 2.3 billion** and **RMB 35.0607 billion**, of which **RMB 19.4947 billion** remained unutilized[66](index=66&type=chunk)[67](index=67&type=chunk) - The Group complies with the financial covenants in its bank loan agreements regarding China Resources (Holdings) Company Limited holding no less than **35%** of shares and a net gearing ratio not exceeding **180%**[68](index=68&type=chunk) [Pledge of Assets](index=30&type=section&id=Pledge%20of%20Assets) As of June 30, 2023, the Group had not pledged any assets - As at June 30, 2023, the Group had not pledged any assets[70](index=70&type=chunk) [Contingent Liabilities](index=30&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group provided bank loan guarantees for associates and joint ventures, a portion of which had been utilized Contingent Liabilities Overview | Item | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Bank loan facility guarantees granted to associates and joint ventures | 2,740,200,000 | 2,109,200,000 | | Amount of guarantees utilized | 1,466,800,000 | 1,360,300,000 | [Future Plans and Capital Expenditure](index=30&type=section&id=Future%20Plans%20and%20Capital%20Expenditure) The Group has substantial future capital expenditure plans, primarily for expansion, to be funded through borrowings and internal resources Expected Future Capital Expenditure | Item | Amount (HKD) | | :--- | :--- | | Capital expenditure contracted but not provided for | Approx. **HKD 7.9707 billion** | | Total capital expenditure payments for H2 2023 | Approx. **HKD 2.9377 billion** | | Total capital expenditure payments for the year ending December 31, 2024 | Approx. **HKD 7.3847 billion** | - Future capital expenditure will be funded by borrowings and internally generated funds[71](index=71&type=chunk) [Strategy and Outlook](index=31&type=section&id=X.%20Strategy%20and%20Outlook) The Group anticipates China's economy to continue stable progress, with government policies in transportation, real estate, and rural revitalization driving medium-to-long-term demand for the building materials sector. The Company will focus on 'systematic reshaping and high-quality development,' optimizing industrial chain layout, accelerating digital and intelligent transformation, increasing R&D investment, and strengthening its '4+1' core businesses to enhance industry leadership - The Chinese government is accelerating the construction of a strong transportation network, with significant increases in railway, highway, waterway, and airport mileage expected by **2027**, driving demand for the building materials industry[72](index=72&type=chunk) - Real estate policies will be timely adjusted and optimized to meet rigid and improved housing demands, actively promoting the construction of affordable housing, urban village renovation, and 'dual-use' public infrastructure[72](index=72&type=chunk) - The rural revitalization strategy will drive infrastructure construction such as rural roads, water supply, power grids, and dilapidated housing renovation, effectively boosting demand for cement and other building materials[72](index=72&type=chunk) - Infrastructure interconnectivity in the Guangdong-Hong Kong-Macao Greater Bay Area will continue to advance, with significant increases in operating and under-construction railway mileage, supporting medium-to-long-term demand for the regional building materials industry[73](index=73&type=chunk) - The Group will focus on the annual theme of 'systematic reshaping and high-quality development,' optimizing industrial chain layout, accelerating digital and intelligent transformation, increasing innovation R&D investment, and expediting strategic emerging industry planning[73](index=73&type=chunk) - In the future, the Group will strengthen and optimize basic and functional building materials businesses, integrate structural building materials, incubate new materials businesses, focusing on '4+1' businesses: cement, aggregates, concrete, artificial stone, and new materials[73](index=73&type=chunk) - Continuously deepening the three core capabilities of 'lowest system cost, regional market leadership, and innovation-driven development,' constantly strengthening operational excellence, enhancing R&D capabilities, accelerating green development, and leading the industry's digital and intelligent transformation[73](index=73&type=chunk) [Other Information](index=32&type=section&id=XI.%20Other%20Information) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code provisions in Appendix 14 of the Listing Rules during the reporting period - The Company has complied with the applicable requirements of the code provisions ('Corporate Governance Code') set out in Part 2 of Appendix 14 to the Listing Rules[74](index=74&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries repurchased, sold or redeemed any of the Company's listed securities during the period[75](index=75&type=chunk) [Review of Interim Report](index=33&type=section&id=Review%20of%20Interim%20Report) The Company's interim report has been reviewed by the Audit Committee - The Company's interim report for the period (with unaudited condensed consolidated financial statements) has been reviewed by the Company's Audit Committee[75](index=75&type=chunk) [Acknowledgement](index=33&type=section&id=Acknowledgement) The Chairman of the Board expressed gratitude to the directors, management team, all employees, shareholders, customers, suppliers, business partners, and other stakeholders for their support to the Group - The Chairman of the Board expressed gratitude for the contributions and hard work of the directors, management team, and all employees, and sincerely thanked shareholders, customers, suppliers, business partners, and other stakeholders for their continued trust and unwavering support[76](index=76&type=chunk) [Publication of Interim Report on HKEX and Company Website](index=33&type=section&id=Publication%20of%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) The Company's interim report will be published on the HKEXnews website and the Company's website in due course - The Company's interim report for the period will be published on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.crcement.com) in due course[77](index=77&type=chunk)