Economic Outlook - In 2024, the global economy is expected to grow by 3.2%, lower than the 3.3% growth in 2023 and the 3.7% average growth in the first two decades of the 21st century[8] - China's GDP is projected to grow by 5.0% in 2024, contributing approximately 30% to global economic growth[8] - The average price of Brent crude oil in 2023 was $82.6 per barrel, a decrease of 18.3% compared to 2022, while the average price in 2024 is expected to be $80.8 per barrel, down 2.3% year-on-year[8] - The prices of most chemical products have declined throughout 2024, particularly in the second half of the year[8] Financial Performance - In 2024, the company achieved revenue of RMB 444.2 million, a decrease of 18.4% compared to RMB 544.1 million in 2023[10] - Gross profit for 2024 was RMB 143.0 million, down 25.3% from RMB 191.5 million in 2023[10] - Net profit for the year was RMB 10.3 million, a significant decline of 81.3% from RMB 55.2 million in 2023[10] - The company reported a 104.7% increase in revenue from sulfur recovery and volatile organic compound incineration equipment, rising from RMB 77.2 million in 2023 to RMB 158.1 million in 2024[16] - Revenue from catalytic cracking equipment decreased from RMB 319.3 million in 2023 to RMB 194.4 million in 2024, primarily due to delays in sales orders[17] - Revenue from process burners fell by 43.5%, from RMB 114.3 million in 2023 to RMB 64.6 million in 2024, due to the absence of large-scale orders[18] - Revenue from heat exchangers decreased by 18.8%, from RMB 33.4 million in 2023 to RMB 27.1 million in 2024, influenced by reduced market demand[19] Cost and Expenses - The company's sales cost decreased from RMB 352.6 million for the year ended December 31, 2023, to RMB 301.2 million for the year ended December 31, 2024, reflecting a reduction of approximately 14.6% due to fluctuations in market demand[21] - Gross profit fell by 25.3% from RMB 191.5 million in 2023 to RMB 143.0 million in 2024, with the gross margin decreasing by 3.0 percentage points to 32.2% due to intensified market competition[22] - Selling expenses rose from RMB 24.8 million in 2023 to RMB 27.4 million in 2024, attributed to an increase in the number of sales staff and higher salary levels[24] - General and administrative expenses increased from RMB 41.3 million in 2023 to RMB 50.4 million in 2024, mainly due to a rise in the number of management and administrative staff[25] - R&D expenses decreased from RMB 38.0 million in 2023 to RMB 31.6 million in 2024, primarily due to some engineers being reassigned to overseas sales contracts[26] Liquidity and Financial Position - Cash and cash equivalents amounted to RMB 129.9 million as of December 31, 2024, with the company relying on operating cash flow for its liquidity needs[31] - Total bank and other borrowings decreased by 13.7% from RMB 121.8 million as of December 31, 2023, to RMB 105.2 million as of December 31, 2024, due to repayments of bank loans[34] - The current ratio as of December 31, 2024, was 1.8, up from 1.6 as of December 31, 2023, indicating improved liquidity[36] - As of December 31, 2024, the company's debt-to-equity ratio decreased to 29.4% from 42.8% as of December 31, 2023, primarily due to the repayment of bank and other borrowings[37] - The company had no mortgaged assets as of December 31, 2024[38] Corporate Strategy and Development - The company plans to enhance its design and R&D capabilities to meet customer demands for energy conservation and emissions reduction[13] - A joint venture was established with Shanghai Lanrui Environmental Technology Co., Ltd. to focus on phosphorus pollution control and related waste treatment technologies[13] - The company is expanding its international market presence, having established an office in Dubai to enhance customer network and project opportunities in the Middle East[14] - The company plans to establish a joint venture with Shanghai Lanrui Environmental Energy Technology Co., Ltd. and Huangshan Ecological Environmental Group Co., Ltd., with an 80% stake in the joint venture[41] - The expected timeline for utilizing the net proceeds includes completion of production capacity expansion by June 30, 2026, and enhancement of R&D capabilities by December 31, 2025[48] Management and Governance - The company appointed Mr. Shao Song as Executive Director and Senior Vice President on March 15, 2023, responsible for sales, R&D, and major strategic decisions[54] - Ms. Wu Rui was appointed as Executive Director and Vice President (Administration) on March 15, 2023, overseeing corporate administration and strategic decision-making[55] - The company has a strong management team with over 20 years of experience in the industry, ensuring effective operational oversight and strategic direction[66] - The management team emphasizes the importance of independent oversight, with several independent non-executive directors appointed to provide independent judgment[59][60] - The company aims to leverage its experienced leadership to drive growth and improve financial performance in the coming years[67] Shareholder and Dividend Information - The company declared a final dividend of RMB 20,000,000, with a proposed dividend of RMB 0.04 per share, subject to shareholder approval[72] - For the fiscal year ending December 31, 2024, the company reported total available reserves of approximately RMB 865 million, of which RMB 200 million is proposed for the final dividend[79] - Revenue from the largest customer accounted for 23.9% of total revenue, while the top five customers contributed 52.3% of total revenue for the fiscal year ending December 31, 2024[89] Compliance and Risk Management - The company’s financial performance and position are subject to various risks, including reliance on government policies and the ability to secure new contracts[73] - The company has not violated any loan agreement terms that significantly impact its operations during the fiscal year ending December 31, 2024[84] - The company has established a comprehensive risk management and internal control system, including internal control environment, risk assessment, control activities, information communication, and monitoring mechanisms[181] - The board confirmed the effectiveness of the risk management and internal control systems, which aim to manage risks without completely eliminating them[180] Corporate Social Responsibility - The company made charitable donations of RMB 0.2 million during the fiscal year ending December 31, 2024, compared to none in the previous year[87] - The company has implemented anti-corruption measures and provides regular training to employees on relevant laws and policies[184] - The company has established a whistleblowing channel to encourage employees to report any misconduct related to corruption[184] Audit and Financial Reporting - The independent auditor's report confirms that the consolidated financial statements present a true and fair view of the group's financial position as of December 31, 2024[194] - The audit procedures included evaluating the impairment testing for trade receivables and contract assets, which was supported by existing evidence[198] - The board confirms its responsibility for preparing the financial statements for the year ending December 31, 2024, ensuring they reflect the company's financial position accurately[175]

Financial Performance - For the fiscal year ending December 31, 2024, the total revenue was RMB 444,188,000, a decrease from RMB 544,129,000 in the previous year, representing a decline of approximately 18.4%[4] - Gross profit for the year was RMB 142,974,000, with a gross margin of 32.2%, compared to RMB 191,548,000 and a gross margin of 35.2% in the previous year, indicating a decrease in profitability[4] - The net profit for the year was RMB 10,329,000, significantly lower than RMB 55,211,000 in the previous year, reflecting a decline of approximately 81.3%[6] - Adjusted net profit (non-HKFRS measure) was RMB 25,238,000, down from RMB 67,843,000 in the previous year, a decrease of about 62.9%[6] - Earnings per share for the year were RMB 2.38, compared to RMB 14.72 in the previous year, indicating a substantial drop in earnings per share[4] - Total comprehensive income for 2024 was CNY 13,018,000, compared to CNY 54,665,000 in 2023, reflecting a decline of approximately 76.2%[8] - The company reported a decrease in inventory from RMB 66,742,000 in 2023 to RMB 52,040,000 in 2024, a decline of approximately 22.1%[9] - The company’s cash and bank balances increased significantly from RMB 45,670,000 in 2023 to RMB 129,910,000 in 2024, an increase of approximately 184.5%[9] - The company’s total liabilities decreased from RMB 331,200,000 in 2023 to RMB 359,078,000 in 2024, indicating a reduction of about 8.3%[10] Revenue Breakdown - The sales of sulfur recovery equipment and volatile organic compound incineration equipment amounted to RMB 158,060,000 and RMB 77,218,000 respectively, while catalytic cracking equipment sales reached RMB 194,446,000 and RMB 319,266,000[15] - Revenue from sulfur recovery equipment and volatile organic compound incineration equipment increased by 104.7% from RMB 77.2 million to RMB 158.1 million due to an increase in sales orders[53] - Revenue from catalytic cracking equipment decreased from RMB 319.3 million to RMB 194.4 million, primarily due to customer requests to delay and postpone certain sales orders[54] - Revenue from artisanal burners decreased by 43.5% from RMB 114.3 million to RMB 64.6 million, as there were no large-scale orders in 2024 following significant orders completed in 2023[55] - Revenue from heat exchangers decreased by 18.8% from RMB 33.4 million to RMB 27.1 million, influenced by reduced overall sales orders due to market demand[56] Expenses and Costs - The company reported a significant increase in listing expenses, which were RMB 14,909,000 for the current year, compared to RMB 12,632,000 in the previous year[6] - Selling expenses increased to CNY 27,408,000 in 2024 from CNY 24,803,000 in 2023, marking an increase of approximately 10.4%[7] - Administrative expenses increased from RMB 41.3 million for the year ending December 31, 2023, to RMB 50.4 million for the year ending December 31, 2024, primarily due to an increase in the number of management and administrative personnel[63] - R&D expenses decreased from RMB 38.0 million for the year ending December 31, 2023, to RMB 31.6 million for the year ending December 31, 2024, mainly due to some engineers being reassigned to overseas sales contract roles[64] - Financial costs for the year ended December 31, 2024, totaled RMB 6,187,000, compared to RMB 5,921,000 for the previous year, reflecting an increase of approximately 4.5%[23] Strategic Initiatives - The company aims to enhance its market presence and explore new product development strategies in the upcoming fiscal year[2] - Future outlook includes a focus on operational efficiency and cost management to improve profitability[2] - The company is considering potential market expansion opportunities to drive revenue growth in the next fiscal year[2] - The management emphasizes the importance of strategic adjustments to navigate the current market challenges effectively[2] - The company plans to establish a joint venture in Huangshan, China, with a total capital commitment of RMB 120 million, representing 80% ownership[38] Corporate Governance - The company has adhered to all applicable corporate governance codes since its listing date, with minor deviations noted[84] - The audit committee has reviewed the accounting principles and policies adopted by the group, discussing internal controls and financial reporting matters[92] - The audit committee currently consists of three independent non-executive directors, ensuring compliance with listing rules[91] - The board will continue to assess the effectiveness of the corporate governance structure, including the separation of the roles of chairman and CEO[86] Market Outlook - The International Monetary Fund (IMF) projects global economic growth of 3.2% in 2024, down from 3.3% in 2023[39] - China's GDP is expected to grow by 5.0% in 2024, contributing approximately 30% to global economic growth[39] - The Chinese petrochemical industry achieved operating revenue of 16.3 trillion yuan in 2024, a year-on-year increase of 2.1%, while total profit decreased by 8.8% to 789.7 billion yuan[41] - The investment growth rate in the petrochemical industry in China has slowed, with investment in chemical raw materials and chemical manufacturing increasing by 8.6% in 2024, down from 13.0% in 2023[42] Shareholder Information - The company declared a dividend of RMB 20,000,000, with a proposed final dividend of RMB 0.04 per share, pending shareholder approval[31] - The annual general meeting for shareholders is scheduled for May 16, 2025[95] - The record date for shareholders to receive the proposed final dividend is May 27, 2025, with a suspension of share registration from May 23 to May 27, 2025[97]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 224,894,000, an increase from RMB 211,772,000 in the same period of 2023, representing a growth of 6.3%[11] - Gross profit for the same period was RMB 75,254,000, with a gross margin of 33.5%, down from a gross margin of 36.0% in 2023[11] - Net profit for the six months ended June 30, 2024, was RMB 11,525,000, compared to RMB 14,427,000 in 2023, reflecting a decrease of 20.0%[11] - Adjusted net profit (non-HKFRS measure) was RMB 19,441,000, down from RMB 21,968,000 in the previous year[11] - Basic and diluted earnings per share for the period were RMB 3.07, compared to RMB 3.85 in the same period last year[11] - For the six months ended June 30, 2024, the company reported a net profit of RMB 11.5 million, a decrease of 20.1% compared to RMB 14.4 million for the same period in 2023[20] - Adjusted net profit (non-HKFRS measure) for the same period was RMB 19.4 million, down 11.5% from RMB 22.0 million in 2023[13] - Revenue for the first half of 2024 was RMB 224.9 million, representing a year-on-year increase of 6.2% from RMB 211.8 million[20] - The gross profit for the same period was RMB 75.3 million, a decrease of 1.4% compared to RMB 76.3 million in 2023[20] - Profit before tax was RMB 15,515,000, down 22.1% from RMB 19,918,000 in the same period last year[97] - Total comprehensive income for the period was RMB 11,179,000, down 22.8% from RMB 14,449,000 year-over-year[97] Revenue Breakdown - Revenue from sulfur recovery and volatile organic compound incineration equipment surged by 86.8% from RMB 39.1 million in the first half of 2023 to RMB 73.1 million in the first half of 2024[26] - Revenue from catalytic cracking equipment decreased by 10.2% from RMB 147.7 million in the first half of 2023 to RMB 132.7 million in the first half of 2024[27] - The revenue from equipment manufacturing and sales included RMB 73,112,000 from sulfur recovery equipment and RMB 132,673,000 from volatile organic compound incineration equipment, compared to RMB 39,145,000 and RMB 147,679,000 respectively in the previous year[119] - The company reported a total of RMB 59,191,000 in sales of products recognized during the interim period, up from RMB 33,063,000 in the same period last year, indicating a significant increase of approximately 79%[121] Expenses and Costs - Selling expenses rose from RMB 13.2 million in the first half of 2023 to RMB 14.4 million in the first half of 2024, attributed to an increase in sales staff and salary levels[33] - Administrative expenses increased from RMB 17.1 million in the first half of 2023 to RMB 21.4 million in the first half of 2024, due to a rise in management and administrative staff[36] - R&D expenses decreased from RMB 16.4 million in the first half of 2023 to RMB 14.7 million in the first half of 2024, as some engineers were reassigned to overseas sales contracts[37] - Financial costs rose to RMB 2,836,000 for the six months ended June 30, 2024, compared to RMB 2,414,000 in 2023, indicating an increase of 17.5%[128] - Income tax expenses decreased to RMB 3,990,000 from RMB 5,491,000, a reduction of 27.3% year-over-year[129] Cash Flow and Financial Position - As of June 30, 2024, the company's cash and cash equivalents amounted to RMB 217 million[43] - The net cash used in operating activities for the six months ended June 30, 2024, was RMB (11,257,000), an improvement from RMB (25,757,000) in the same period of 2023, indicating a reduction of 56.3%[106] - Cash and cash equivalents decreased by RMB 23,984,000 during the six months ended June 30, 2024, compared to an increase of RMB 23,778,000 in the same period of 2023[106] - The company reported a net cash outflow from financing activities of RMB (9,752,000) for the six months ended June 30, 2024, compared to an inflow of RMB 51,844,000 in the same period of 2023[106] - The company's total liabilities decreased to RMB 296,876,000 from RMB 359,078,000 at the end of 2023[99] - The company's equity attributable to owners was RMB 286,334,000, down from RMB 295,155,000 at the end of 2023[101] - The company's total assets as of June 30, 2024, were RMB 295,155,000, reflecting an increase from RMB 240,490,000 as of January 1, 2023, representing a growth of approximately 22.7%[103] Shareholder Information - One Ideal Limited and Now Wealth Limited each hold 164,171,263 shares, representing 32.83% of the company[53] - TCT (BVI) Limited holds 328,342,526 shares, accounting for 65.66% of the company[53] - The shareholding structure indicates significant control by a few major shareholders, with One Ideal Limited and Now Wealth Limited being key stakeholders[54] - The company has adopted a post-IPO share option plan with a total of 50,000,000 options available for grant[58] - The maximum number of shares that can be issued under the post-IPO share option plan is capped at 10% of the total shares issued on the listing date[62] Corporate Governance and Compliance - The company has adopted the corporate governance code as a regular basis since the listing date, although certain principles were not applicable during the reporting period[76] - The audit committee has reviewed the interim financial information and believes it complies with applicable accounting standards and regulations[83] - The company confirmed compliance with the standard code for securities trading by all directors from the listing date to the date of this interim report[78] - The company is actively seeking suitable candidates to fill the vacancies of independent non-executive directors to comply with listing rules[79] Market and Economic Environment - The Chinese petrochemical industry achieved a revenue of RMB 8 trillion in the first half of 2024, with a year-on-year growth of 5.1%[19] - The investment growth rate in the petrochemical sector has slowed, with chemical raw materials and chemicals manufacturing investment increasing by 8.4%, down 5.5 percentage points from the previous year[19] - The international oil price showed a "V-shaped" trend in the first half of 2024, influenced by geopolitical factors and OPEC+ production decisions[18] - China's GDP grew by 5.0% year-on-year in the first half of 2024, indicating a stable economic environment despite various challenges[17] Other Information - The company has no significant capital commitments as of June 30, 2024[156] - The company has not reported any transfers between Level 1 and Level 2 inputs, nor any transfers into or out of Level 3 inputs during the interim period[117] - Government subsidies for the six months ended June 30, 2024, amounted to RMB 2,716,000, significantly up from RMB 713,000 in the same period of 2023, representing an increase of 280%[126] - Interest income increased to RMB 132,000 for the six months ended June 30, 2024, compared to RMB 101,000 in the prior year, reflecting a growth of 30.7%[126]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 224,894,000, an increase of 6.3% compared to RMB 211,772,000 for the same period in 2023[2] - Gross profit for the same period was RMB 75,254,000, resulting in a gross margin of 33.5%, down from 36.0% in the previous year[2] - Net profit for the six months ended June 30, 2024, was RMB 11,525,000, a decrease of 20% from RMB 14,427,000 in 2023[2] - Adjusted net profit (non-Hong Kong Financial Reporting Standards) was RMB 19,441,000, compared to RMB 21,968,000 in the prior year[2] - Basic and diluted earnings per share for the period were RMB 3.07, down from RMB 3.85 in the same period last year[2] - Total comprehensive income for the six months ended June 30, 2024, was RMB 11,179,000, compared to RMB 14,449,000 in 2023[5] - The company reported a decrease in operating profit before tax to RMB 15,515,000 from RMB 19,918,000 in the previous year[5] - The company reported a basic earnings per share of RMB 30.73 for the first half of 2024, down from RMB 38.39 in the same period of 2023, a decline of 20.1%[25] - Net income for the six months ended June 30, 2024, was RMB 11,525,000, down from RMB 14,427,000 in 2023, indicating a decrease of 20.9%[25] Expenses and Costs - The company incurred listing expenses of RMB 7,916,000 during the reporting period, compared to RMB 7,541,000 in the previous year[4] - Research and development expenses for the period were RMB 14,723,000, a decrease from RMB 16,396,000 in the same period last year[5] - The company’s total finance costs for the six months ended June 30, 2024, were RMB 2,836,000, compared to RMB 2,414,000 in 2023, reflecting an increase of 17.5%[21] - Sales expenses increased from RMB 13.2 million in the first half of 2023 to RMB 14.4 million in the same period of 2024, primarily due to an increase in the number of sales employees and overall salary levels[55] - Administrative expenses rose from RMB 17.1 million in the first half of 2023 to RMB 21.4 million in the same period of 2024, mainly due to an increase in the number of management and administrative staff, leading to higher salary and benefit expenses[56] - Financial costs increased from RMB 2.4 million in the first half of 2023 to RMB 2.8 million in the same period of 2024, mainly due to an increase in bank and other borrowings[58] Assets and Liabilities - As of June 30, 2024, total assets amounted to RMB 501,440 thousand, a decrease from RMB 568,089 thousand as of December 31, 2023, reflecting a decline of approximately 11.7%[7] - The net value of current assets was reported at RMB 204,564 thousand, down from RMB 209,011 thousand, indicating a decrease of about 2.1%[8] - The company reported a decrease in trade receivables from RMB 326,916 thousand to RMB 297,994 thousand, a decline of approximately 8.8%[7] - Non-current liabilities, including bank and other borrowings, increased to RMB 42,250 thousand from RMB 39,500 thousand, reflecting a rise of about 4.4%[9] - The cash and cash equivalents decreased from RMB 45,670 thousand to RMB 21,670 thousand, a significant drop of approximately 52.5%[7] - The company’s total liabilities decreased from RMB 359,078 thousand to RMB 296,876 thousand, indicating a reduction of about 17.3%[7] - The company’s total equity attributable to owners was RMB 286,634 thousand, down from RMB 295,155 thousand, reflecting a decrease of approximately 2.0%[9] - As of June 30, 2024, trade receivables amounted to RMB 278,330,000, a decrease from RMB 285,170,000 as of December 31, 2023, with a provision for impairment of RMB 10,891,000[28] - The total amount of notes receivable as of June 30, 2024, was RMB 30,555,000, down from RMB 50,939,000 as of December 31, 2023[28] Revenue Sources - Revenue from equipment manufacturing and sales reached RMB 224,894 thousand for the six months ending June 30, 2024, compared to RMB 211,772 thousand for the same period in 2023, representing an increase of approximately 6.1%[14] - The revenue from sulfur recovery equipment and volatile organic compound incineration equipment was RMB 73,112 thousand, significantly higher than RMB 39,145 thousand in the previous year, marking an increase of about 86.8%[14] - Revenue from catalytic cracking equipment decreased by 10.2% from RMB 147.7 million to RMB 132.7 million year-on-year due to delayed sales orders[48] - Revenue from heat exchangers plummeted by 70.2% from RMB 8.6 million to RMB 2.6 million year-on-year, attributed to a lack of significant sales orders during the reporting period[50] - Total other income and gains for the six months ended June 30, 2024, was RMB 3,191,000, compared to RMB 1,838,000 in 2023, an increase of 73.6%[19] Strategic Initiatives - The company plans to expand its market presence and invest in new technologies to enhance its product offerings in the upcoming quarters[10] - The company aims to enhance its design and R&D capabilities to improve product quality and market competitiveness, focusing on energy-saving and emission-reduction technologies[42] - The company plans to adjust its strategic focus to serve large domestic refinery renovation and maintenance projects, aiming to improve order quality[41] - The company is exploring new technologies and fields to diversify product applications and find new business growth points in response to green energy trends[42] - The company plans to strengthen market promotion in key regions and collaborate with local enterprises and government departments to enhance business coverage and influence[44] Corporate Governance - The company has adopted corporate governance principles and rules as a foundation for its corporate governance since the listing date[71] - The company has confirmed compliance with all applicable corporate governance rules since the listing date, except for the deviation regarding the separation of the roles of Chairman and CEO[72] - The Chairman and CEO roles are held by the same individual, which the board believes aids in effective strategy execution and promotes information exchange between management and the board[73] - The board will continue to review the effectiveness of the corporate governance structure to assess the need for separating the roles of Chairman and CEO[74] Market Context - In the first half of 2024, China's GDP grew by 5.0% year-on-year, with a quarter-on-quarter increase of 0.7% in Q2, marking eight consecutive quarters of positive growth[36] - The petrochemical industry in China achieved operating revenue of RMB 8 trillion in the first half of 2024, representing a year-on-year growth of 5.1%, while profits decreased by 1.6% to RMB 429.47 billion[38] - The investment growth rate in the petrochemical industry slowed to 8.4%, down by 5.5 percentage points compared to the same period last year, with upstream oil and gas exploration investment growth at only 0.9%, a decrease of 21.5 percentage points[39] - The international oil price exhibited a "V-shaped" trend in the first half of 2024, influenced by geopolitical factors, with fluctuations driven by Middle Eastern conflicts and OPEC+ production cuts[37] - The international market potential is significant, with an increasing number of overseas customers purchasing equipment from China due to competitive pricing and extensive manufacturing capabilities[43]