Company Information [Company Overview and Principal Businesses](index=4&type=section&id=Company%20Overview%20and%20Principal%20Businesses) Aowei Holdings Limited, formerly Hengshi Mining Investment Limited, listed on the HKEX in 2013, primarily engages in iron ore mining and green building materials production and sales in Hebei, China - The company was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **November 28, 2013**, with stock code **1370**[13](index=13&type=chunk) - The Group's core businesses are divided into two segments: (i) **iron ore business**, including iron ore, rich powder, and iron concentrate; and (ii) **green building materials business**, primarily producing and selling construction sand and aggregate[13](index=13&type=chunk) - The Group owns and operates **three iron mines**, all located in Hebei Province, China, which has the highest steel production and iron ore consumption[13](index=13&type=chunk) Financial Highlights [Key Financial Indicators for H1 2024](index=7&type=section&id=Key%20Financial%20Indicators%20for%20H1%202024) For the six months ended June 30, 2024, group revenue decreased 9.0% to RMB 323.7 million, gross profit significantly declined 44.4%, and loss attributable to equity holders narrowed to RMB 50.6 million | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 323.7 million | RMB 355.8 million | -9.0% | | Gross Profit | RMB 46.7 million | RMB 83.9 million | -44.4% | | Gross Margin | 14.4% | 23.6% | -9.2 percentage points | | Loss Attributable to Equity Holders | RMB 50.6 million | RMB 65.7 million | -23.0% | | Basic Loss Per Share | RMB 0.03 | RMB 0.04 | -25.0% | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024[23](index=23&type=chunk)[81](index=81&type=chunk) Management Discussion and Analysis [Business Review](index=8&type=section&id=Business%20Review) In H1 2024, iron ore prices weakened due to real estate downturn and weak steel demand, leading to decreased production and sales in both iron ore and green building materials segments, resulting in an overall loss despite cost controls [Iron Ore Business](index=8&type=section&id=Iron%20Ore%20Business) Iron ore prices were pressured by China's real estate market adjustments and shrinking steel demand, leading to a decline in the Group's iron concentrate production and sales, though average unit cash operating cost decreased due to cost control - In H1 2024, the Platts 62% iron ore price index fell from a high of **US$143.95/ton** at the beginning of the year to **US$106.7/ton**, with port inventories increasing **17.2%** YoY, indicating an oversupply in the market[25](index=25&type=chunk) Iron Concentrate Production and Sales | Business Segment | Item | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Iron Concentrate | Production (thousand tons) | 337.53 | 381.93 | -11.6% | | | Sales (thousand tons) | 358.26 | 395.38 | -9.4% | | | Average Selling Price (RMB/ton) | 856.06 | 778.79 | +9.9% | - Jihang Mining temporarily ceased operations during the reporting period as its open-pit iron ore extractable portion was largely depleted, leading to zero production and sales, which is the main reason for the Group's overall production and sales decline[26](index=26&type=chunk)[27](index=27&type=chunk) Wang'ergou Mine & Shuanmazhuang Mine Operating Data | Wang'ergou Mine & Shuanmazhuang Mine | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Ore Mined (thousand tons) | 6,054.37 | 5,078.36 | +19.2% | | Iron Concentrate Production (thousand tons) | 337.53 | 281.66 | +19.8% | | Average Unit Cash Operating Cost (RMB/ton) | 670.87 | 691.57 | -3.0% | [Green Building Materials - Construction Sand and Aggregate Business](index=11&type=section&id=Green%20Building%20Materials%20-%20Construction%20Sand%20and%20Aggregate%20Business) During the reporting period, sand and aggregate business production and sales significantly declined due to heavy rain and road repairs, while average unit cash operating cost increased due to lower production and higher raw material costs Sand and Aggregate Operating Data | Business Segment | Item | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Total Sand & Aggregate | Production (thousand tons) | 466.21 | 1,775.71 | -73.7% | | | Sales (thousand tons) | 460.35 | 1,364.41 | -66.3% | | | Average Selling Price (RMB/ton) | 33.12 | 33.80 | -2.0% | | | Average Unit Cash Operating Cost (RMB/ton) | 22.10 | 18.60 | +18.9% | - The decline in production and sales is primarily attributed to: (1) contamination of Jingyuancheng Mining's finished goods inventory due to severe rainstorms in late July 2023; and (2) partial shutdown of Jihang Mining due to road facility damage and subsequent repairs[35](index=35&type=chunk) [Safety and Environmental Protection](index=12&type=section&id=Safety%20and%20Environmental%20Protection) The Group prioritizes safety and environmental protection, strictly adhering to relevant laws and regulations with a safety goal of "zero fatalities, zero serious injuries," and recorded no major incidents during the reporting period - During the reporting period, the Group's operations recorded no major safety or environmental incidents[37](index=37&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) In H1 2024, group revenue decreased 9.0% and gross profit significantly declined 44.4%, while administrative expenses and finance costs increased; however, loss for the period narrowed due to the absence of large asset impairment losses from the prior period and current income tax credit, though the gearing ratio rose to 45.1% [Revenue, Cost, and Gross Profit](index=12&type=section&id=Revenue,%20Cost,%20and%20Gross%20Profit) Revenue decreased 9.0% to RMB 323.7 million due to lower sales volume of iron concentrate and sand/aggregate, while gross profit significantly declined 44.4% to RMB 46.7 million, with gross margin falling to 14.4% - Revenue decreased **9.0%** to **RMB 323.7 million**, primarily due to lower production and sales volume of iron concentrate and sand/aggregate, partially offset by higher iron concentrate selling prices[38](index=38&type=chunk) - Gross profit decreased **44.4%** to **RMB 46.7 million**, with gross margin falling from **23.6%** to **14.4%** compared to the same period last year[40](index=40&type=chunk) [Operating Expenses and Finance Costs](index=13&type=section&id=Operating%20Expenses%20and%20Finance%20Costs) Distribution expenses decreased to RMB 0.8 million, administrative expenses increased 21.3% to RMB 59.7 million due to higher idle capacity costs, and finance costs rose 16.1% to RMB 30.7 million due to increased average bank borrowings - Administrative expenses increased **21.3%** YoY to **RMB 59.7 million**, primarily due to increased idle capacity costs recognized under management expenses[42](index=42&type=chunk) - Finance costs increased **16.1%** YoY to **RMB 30.7 million**, mainly due to a higher average balance of bank borrowings compared to the prior period[43](index=43&type=chunk) [Loss and Asset Position](index=13&type=section&id=Loss%20and%20Asset%20Position) Loss after tax for the period narrowed to RMB 50.6 million, a reduction of RMB 15.1 million from the prior period, primarily due to the absence of significant asset impairment losses and an income tax credit in the current period, while inventories, trade receivables, and payables all decreased - Loss for the period narrowed to **RMB 50.6 million**, primarily due to no impairment loss on property, plant and equipment in the current period, compared to a significant impairment in the prior period[45](index=45&type=chunk) - An income tax credit of approximately **RMB 1.7 million** was recorded, compared to an income tax expense of **RMB 25.7 million** in the prior period, mainly due to the reversal of an over-provision for current tax in prior years of approximately **RMB 21.0 million**[44](index=44&type=chunk) - As of June 30, 2024, inventories, trade and other receivables, and trade and other payables all decreased compared to year-end 2023[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, cash and cash equivalents increased to RMB 53.8 million, but total bank and other borrowings reached RMB 954.5 million, with RMB 517.0 million as current liabilities, leading to an increased gearing ratio of 45.1% and indicating liquidity pressure Liquidity and Capital Resources Overview | Indicator | June 30, 2024 | Dec 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | RMB 53.8 million | RMB 34.5 million | +RMB 19.3 million | | Bank and Other Borrowings | RMB 954.5 million | RMB 912.0 million | +RMB 42.5 million | | Gearing Ratio | 45.1% | 41.4% | +3.7 percentage points | - As of June 30, 2024, approximately **RMB 517.0 million** of the Group's bank and other borrowings were current liabilities, while cash and cash equivalents were only **RMB 53.8 million**, indicating liquidity pressure[54](index=54&type=chunk)[98](index=98&type=chunk) [Future Plans and Outlook](index=16&type=section&id=Future%20Plans%20and%20Outlook) The Group maintains a cautious outlook on the iron ore market, expecting continued oversupply, and plans to deepen cost reduction, improve and sell existing sand and aggregate inventory, potentially dispose of Jihang Mining's iron ore business, and focus on developing its green building materials segment to enhance profitability - The iron ore market is expected to remain in an **oversupply** situation in the second half, with price growth suppressed[60](index=60&type=chunk) - Strategic priorities include: deepening **cost reduction and efficiency improvements**, improving and selling affected sand and aggregate inventory, considering timely disposal of **Jihang Mining's iron ore business**, and vigorously developing the **green building materials sand and aggregate business**[60](index=60&type=chunk) Other Information [Directors' and Shareholders' Interests](index=17&type=section&id=Directors'%20and%20Shareholders'%20Interests) As of June 30, 2024, Mr. Li Yanjun (Chairman) and Mr. Li Ziwei (CEO) jointly held 72.25% equity interest, while Huarong International Financial Holdings Co., Ltd. and its ultimate controlling company held 50.73% due to security interests - Mr. Li Ziwei (Chief Executive Officer) and Mr. Li Yanjun (Chairman) are deemed to jointly hold interests in **1,181,480,000 shares**, representing **72.25%** of the issued shares[62](index=62&type=chunk)[63](index=63&type=chunk) - Fresh Idea Ventures Limited, an indirect wholly-owned subsidiary of Huarong International Financial Holdings Co., Ltd., holds security interests in **829,630,000 shares**, representing **50.73%** of the issued shares[66](index=66&type=chunk)[68](index=68&type=chunk) [Employees and Remuneration Policy](index=20&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2024, the Group had 797 employees, a decrease from the prior year, with total staff costs for the reporting period amounting to approximately RMB 39.1 million, down 13.1% YoY Employee and Staff Costs Overview | Indicator | June 30, 2024 | June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Employees | 797 | 988 | -19.3% | | Total Staff Costs | RMB 39.1 million | RMB 45.0 million | -13.1% | [Corporate Governance](index=19&type=section&id=Corporate%20Governance) During the reporting period, the company complied with the Listing Rules' Corporate Governance Code, with the Audit Committee reviewing the unaudited interim financial results, and maintained the required public float - The company adopted the Model Code, and all directors confirmed compliance throughout the reporting period[70](index=70&type=chunk) - The Audit Committee, comprising three independent non-executive directors, reviewed the interim financial results[79](index=79&type=chunk) [Other Disclosures](index=19&type=section&id=Other%20Disclosures) The company has not adopted any share option scheme, had no purchases, redemptions, or sales of listed securities, no significant legal proceedings, and no material post-balance sheet events during the reporting period, and the Board resolved not to declare an interim dividend - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024[81](index=81&type=chunk) - The Group was not involved in any significant legal proceedings or arbitration during the reporting period[82](index=82&type=chunk) - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[74](index=74&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group recorded revenue of RMB 323.7 million and gross profit of RMB 46.7 million, with loss before tax at RMB 52.3 million and loss for the period at RMB 50.6 million, narrowing from the prior period due to no significant asset impairment and an income tax credit Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Revenue | 323,731 | 355,846 | | Gross Profit | 46,672 | 83,928 | | Loss Before Tax | (52,316) | (39,661) | | Loss for the Period | (50,587) | (65,749) | | Basic Loss Per Share (RMB) | (0.03) | (0.04) | [Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were RMB 2.115 billion, total liabilities RMB 1.200 billion, and net assets RMB 914.9 million, with net current liabilities of RMB 323.6 million indicating short-term repayment pressure Condensed Consolidated Statement of Financial Position | Item (RMB '000) | June 30, 2024 (Unaudited) | Dec 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 1,712,433 | 1,783,902 | | Current Assets | 402,547 | 417,109 | | **Total Assets** | **2,114,980** | **2,201,011** | | Current Liabilities | 726,177 | 757,886 | | Non-current Liabilities | 473,862 | 477,528 | | **Total Liabilities** | **1,200,039** | **1,235,414** | | **Net Assets** | **914,941** | **965,597** | | **Net Current Liabilities** | **(323,630)** | **(340,777)** | [Condensed Consolidated Statement of Changes in Equity](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total equity decreased from RMB 965.6 million at year-start to RMB 914.9 million, primarily due to the RMB 50.6 million loss recorded during the period - As of January 1, 2024, total equity was **RMB 965.6 million**[88](index=88&type=chunk) - During the reporting period, total equity decreased to **RMB 914.9 million** due to a loss for the period of **RMB 50.6 million** and exchange differences[88](index=88&type=chunk)[89](index=89&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, operating cash flow turned positive with a net inflow of RMB 26.2 million, while investing activities resulted in a net outflow of RMB 18.4 million and financing activities a net inflow of RMB 11.6 million, leading to a period-end cash and cash equivalents balance of RMB 53.8 million Condensed Consolidated Statement of Cash Flows | Item (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 26,158 | (98,181) | | Net Cash Used in Investing Activities | (18,393) | (26,053) | | Net Cash from Financing Activities | 11,644 | 128,247 | | Net Increase in Cash and Cash Equivalents | 19,409 | 4,013 | | Cash and Cash Equivalents at Period-End | 53,822 | 60,085 | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation and Principal Accounting Policies](index=30&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) Financial statements are prepared on a going concern basis despite significant uncertainties, including a loss for the period, current liabilities exceeding current assets, and substantial short-term borrowings, with confidence relying on expected loan renewals, asset realization, and financial support from major shareholders - During the reporting period, the Group incurred a loss of **RMB 50.6 million**, with current liabilities exceeding current assets by approximately **RMB 323.6 million**, and borrowings due within one year totaling approximately **RMB 517.0 million** while cash and cash equivalents were only approximately **RMB 53.8 million**, indicating significant uncertainties that may cast substantial doubt on its ability to continue as a going concern[98](index=98&type=chunk) - Directors believe preparing financial statements on a going concern basis is appropriate, primarily relying on: (1) successful renewal of maturing bank loans; (2) ability to realize non-current assets if necessary; and (3) commitment from executive directors and major shareholders Mr. Li Yanjun and Mr. Li Ziwei to provide sufficient financial support[98](index=98&type=chunk) [Revenue and Segment Information](index=32&type=section&id=Revenue%20and%20Segment%20Information) All Group revenue is derived from the mining segment in China, primarily from iron concentrate sales, with the former medical segment having ceased operations in 2023 Revenue by Type of Goods | Type of Goods (RMB '000) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Iron Concentrate | 306,694 | 307,922 | | Sand and Aggregate | 17,037 | 47,924 | | **Total** | **323,731** | **355,846** | - All revenue is derived from the **mining segment** in China, and the medical segment, which provided hospital management services, ceased operations in 2023[102](index=102&type=chunk)[103](index=103&type=chunk) [Key Statement of Profit or Loss Items](index=33&type=section&id=Key%20Statement%20of%20Profit%20or%20Loss%20Items) During the reporting period, finance costs, mainly bank borrowing interest, totaled RMB 30.7 million, an income tax credit of RMB 1.7 million was recorded due to prior year over-provision, basic loss per share was RMB 0.03, and no dividends were declared - Total finance costs were **RMB 30.72 million**, of which bank borrowing interest was **RMB 29.79 million**[105](index=105&type=chunk) - Income tax recorded a credit of **RMB 1.73 million**, mainly due to the reversal of an over-provision for China corporate income tax of **RMB 21.04 million** from prior years, partially offset by a current deferred tax expense of **RMB 19.31 million**[107](index=107&type=chunk) - The Board decided not to declare any dividend for the interim period[114](index=114&type=chunk) [Statement of Financial Position Items](index=39&type=section&id=Statement%20of%20Financial%20Position%20Items) As of period-end, the Group's net property, plant and equipment was RMB 1.10 billion, and construction in progress RMB 178.0 million; net trade receivables were RMB 101.0 million with 80% overdue, and total bank and other borrowings were RMB 954.5 million, including several renewed or new borrowings - Net trade receivables were **RMB 100.6 million**, of which receivables overdue by more than **180 days** totaled **RMB 80.6 million**, accounting for **80.1%** of the total, indicating high credit risk[123](index=123&type=chunk)[124](index=124&type=chunk) - During the reporting period, the Group renewed three bank borrowings totaling **RMB 327.0 million** and obtained two new borrowings totaling **RMB 80.0 million**[129](index=129&type=chunk)[130](index=130&type=chunk) - The Group still has buildings and plant with a total carrying amount of approximately **RMB 224.0 million** and leasehold land with a carrying amount of approximately **RMB 52.97 million** for which property ownership certificates have not yet been obtained[118](index=118&type=chunk)[119](index=119&type=chunk) [Commitments, Contingent Liabilities, and Related Party Transactions](index=44&type=section&id=Commitments,%20Contingent%20Liabilities,%20and%20Related%20Party%20Transactions) As of period-end, the Group had capital commitments of RMB 19.73 million and faces environmental regulatory uncertainties, while numerous material related party transactions, particularly bank borrowings secured by ultimate controllers, are crucial for the Group's financing - As of June 30, 2024, the Group had contracted but unprovided capital expenditure commitments of approximately **RMB 19.73 million**[133](index=133&type=chunk) - Multiple bank borrowings of the Group rely on related party guarantees; as of June 30, 2024, total bank borrowings secured by property mortgages or personal guarantees from ultimate controllers Mr. Li Yanjun, Mr. Li Ziwei, and their controlled companies (Hebei Aowei, Tongda) exceeded **RMB 673.0 million**[140](index=140&type=chunk)

Financial Performance - The group's revenue for the six months ended June 30, 2024, was approximately RMB 323.7 million, a decrease of about RMB 32.1 million or 9.0% compared to the same period last year[1]. - Gross profit for the same period was approximately RMB 46.7 million, down about RMB 37.3 million or 44.4%, with a gross margin of 14.4%[1][2]. - Loss attributable to equity holders for the period was approximately RMB 50.6 million, compared to a loss of RMB 65.7 million in the same period last year[1]. - Basic loss per share for the period was RMB 0.03, compared to RMB 0.04 per share in the same period last year (restated)[3]. - The company reported a net loss attributable to owners of RMB (50,587,000) for the six months ended June 30, 2024, an improvement from a loss of RMB (65,749,000) in the same period of 2023, representing a decrease in loss of about 23%[20]. - The group recorded a post-tax loss of approximately RMB 50.6 million, a reduction in loss of approximately RMB 15.1 million compared to the same period last year, primarily due to decreased sales volume of iron concentrate leading to lower gross profit[48]. Assets and Liabilities - The total non-current assets as of June 30, 2024, amounted to RMB 1,712.4 million, a decrease from RMB 1,783.9 million as of December 31, 2023[4]. - Current assets totaled RMB 402.5 million, down from RMB 417.1 million as of December 31, 2023[4]. - Current liabilities were RMB 726.2 million, compared to RMB 757.9 million as of December 31, 2023[4]. - The net asset value as of June 30, 2024, was RMB 914.9 million, down from RMB 965.6 million as of December 31, 2023[5][6]. - As of June 30, 2024, the company had cash and cash equivalents of only RMB 53,822,000 against borrowings due within one year of approximately RMB 516,992,000[8]. - The total liabilities ratio was approximately 45.1%, an increase of approximately 3.7% from the end of last year[57]. Revenue and Sales - Revenue from customer contracts for the six months ended June 30, 2024, was RMB 323,731,000, with iron concentrate contributing RMB 306,694,000 and sand and gravel aggregate contributing RMB 17,037,000[13]. - The company’s revenue for the same period in 2023 was RMB 355,846,000, indicating a decrease of approximately 9% year-over-year[14]. - The group reported a tax credit of approximately RMB 1.7 million for the period, compared to a tax expense of approximately RMB 25.7 million in the same period last year[47]. - The sales cost for the reporting period was approximately RMB 277.1 million, an increase of 1.9% compared to the previous year, attributed to a slight increase in unit sales costs[42]. Production and Operations - The production of iron concentrate for the first half of 2024 was approximately 337.5 thousand tons, representing a decrease of 11.6% compared to 381.93 thousand tons in the same period of 2023[32]. - The sales volume of iron concentrate in the first half of 2024 was about 358.3 thousand tons, a decline of 9.4% from 395.38 thousand tons in the same period of 2023[32]. - The average selling price of iron concentrate increased by 9.9% to RMB 856.06 per ton in the first half of 2024, compared to RMB 778.79 per ton in the same period of 2023[33]. - The production and sales of sand and gravel aggregates decreased significantly, with production down 73.7% to 466.21 thousand tons due to adverse weather conditions and infrastructure damage[38]. - The average unit cash operating cost for iron concentrate decreased by 3.0% to RMB 670.87 per ton, primarily due to lower unit costs in mining and dry selection processes[37]. Financing and Costs - Interest expenses for bank borrowings increased to RMB 29,785,000 for the six months ended June 30, 2024, compared to RMB 25,533,000 for the same period in 2023[15]. - The company’s financing costs totaled RMB 30,720,000 for the six months ended June 30, 2024, compared to RMB 26,469,000 for the same period in 2023, reflecting an increase in overall financing expenses[15]. - The administrative expenses increased by 21.3% to approximately RMB 59.7 million, primarily due to increased costs related to work stoppage losses[45]. Employee and Operational Changes - The total number of employees in the group is 797, a decrease from 988 employees in the same period of 2023[65]. - Total employee compensation and benefits amounted to approximately RMB 39.1 million, down from RMB 45.0 million in the same period of 2023[65]. - Employee costs totaled RMB 39,113,000 for the six months ended June 30, 2024, down from RMB 44,610,000 in the same period of 2023, showing a reduction of approximately 12.5%[18]. Strategic Initiatives - The company plans to actively negotiate with banks to renew borrowings as they come due to meet operational and financial needs[9]. - Major shareholders have committed to providing sufficient funds to enable the company to repay its debts and fulfill financial obligations if necessary[9]. - The group plans to enhance cost reduction and efficiency mechanisms, optimize production processes, and improve product quality to increase profitability amid a complex market environment[60]. - The company has adjusted its sales strategy and enhanced risk management to cope with the weak demand and declining prices in the iron ore market[32].

Receivables and Impairment Losses - The total trade receivables, notes receivable, and other receivables as of December 31, 2023, were approximately RMB 115,477,000, RMB 2,950,000, and RMB 31,602,000, respectively[10] - Credit loss provisions for trade receivables, notes receivable, and other receivables were approximately RMB 8,849,000, RMB 0, and RMB 3,469,000, respectively[10] - The impairment loss on trade receivables (net of reversal) included in the consolidated income statement for the year ended December 31, 2023, was approximately RMB 7,816,000[10] - The impairment loss on other receivables (net of reversal) included in the consolidated income statement for the year ended December 31, 2023, was approximately RMB 1,609,000[10] - The impairment assessment of trade receivables, notes receivable, and other receivables was identified as a key audit matter due to its significance to the consolidated financial statements and the involvement of significant estimates and judgments[12] - The company used a provision matrix for collective assessment of expected credit losses for trade receivables, notes receivable, and other receivables, based on historical default rates and forward-looking information[12] Property, Plant, and Equipment Impairment - The impairment assessment of property, plant, and equipment, construction in progress, and intangible assets was identified as a key audit matter due to its significance to the consolidated financial statements and the involvement of significant estimates and judgments[7] - The company engaged independent external valuation experts to assess the key assumptions and estimates used in determining the recoverable amount of cash-generating units, including future sales, operating costs, capital expenditures, and discount rates[7] - Sensitivity analysis was performed on the key assumptions and estimates used in cash flow forecasts to evaluate the impact of changes and to assess any indications of management bias[8] - Impairment losses on property, plant, and equipment, construction in progress, and intangible assets surged to RMB 298.731 million in 2023 from RMB 54.559 million in 2022[22] - Impairment losses amounted to RMB 372.0 million in 2023, including RMB 298.7 million for property, plant, and equipment, and construction in progress at Jiheng Mining[190] Financial Performance - Revenue for 2023 decreased to RMB 667.367 million from RMB 937.751 million in 2022, a decline of 28.8%[22] - Gross profit for 2023 was RMB 99.176 million, down from RMB 163.697 million in 2022, a decrease of 39.4%[22] - Net loss for 2023 was RMB 549.139 million, compared to a net profit of RMB 60.755 million in 2022[22] - Earnings per share (basic) from continuing and discontinued operations was a loss of RMB 0.34 in 2023, compared to a profit of RMB 0.04 in 2022[22] - The company reported a net loss of RMB 549,139 thousand for the year 2023, compared to a net profit of RMB 60,755 thousand in 2022[37][41] - The company recorded a loss of approximately RMB 549.1 million in 2023, compared to a profit of RMB 60.8 million in the previous year[102] - The company reported a net loss of approximately RMB 548.634 million from continuing operations for the year ended December 31, 2023, with current liabilities exceeding current assets by RMB 340.777 million[123] Assets and Liabilities - Total assets decreased to RMB 1,783.902 million in 2023 from RMB 1,937.017 million in 2022[24] - Cash and cash equivalents dropped to RMB 34.482 million in 2023 from RMB 56.086 million in 2022[24] - Bank borrowings increased to RMB 472.000 million in 2023 from RMB 337.000 million in 2022[24] - Net current liabilities increased to RMB 340.777 million in 2023 from RMB 212.241 million in 2022[24] - Non-current liabilities increased to RMB 477,528 thousand in 2023 from RMB 209,988 thousand in 2022, primarily due to a significant rise in bank loans to RMB 440,000 thousand from RMB 176,000 thousand[26] - The company's net asset value decreased to RMB 965,597 thousand in 2023 from RMB 1,514,788 thousand in 2022, reflecting a substantial decline in reserves[26] - Total equity value dropped to RMB 965,597 thousand in 2023 from RMB 1,514,788 thousand in 2022, indicating a significant reduction in retained earnings[26][41] - Current liabilities increased to RMB 757.886 million in 2023 from RMB 700.070 million in 2022[97] Cash Flow - Operating cash flow from continuing operations decreased significantly to a loss of RMB 524.79 million in 2023, compared to a profit of RMB 96.908 million in 2022[49] - Net cash generated from operating activities dropped to RMB 53.345 million in 2023 from RMB 193.509 million in 2022[49] - Cash used in investing activities increased to RMB 417.625 million in 2023, up from RMB 168.832 million in 2022, primarily due to deposits for equity tool acquisitions and pledged bank deposits[51] - Net cash from financing activities improved to RMB 342.727 million in 2023, compared to a net cash outflow of RMB 73.045 million in 2022, driven by new bank borrowings of RMB 914.5 million[51] - Cash and cash equivalents decreased by RMB 21.553 million in 2023, ending the year at RMB 34.482 million[51] - Depreciation expenses increased to RMB 30.942 million in 2023 from RMB 10.364 million in 2022[49] - Inventory decreased by RMB 68.829 million in 2023, contributing positively to operating cash flow[49] - Trade and other receivables decreased by RMB 64.527 million in 2023, improving cash flow compared to an increase of RMB 24.317 million in 2022[49] - Contract liabilities decreased by RMB 59.356 million in 2023, compared to an increase of RMB 33.598 million in 2022[49] Reserves and Equity - The statutory surplus reserve remained unchanged at RMB 84,556 thousand, as per Chinese regulations requiring 10% of post-tax profits to be allocated to this reserve[44] - The special reserve increased to RMB 30,971 thousand in 2023 from RMB 30,763 thousand in 2022, primarily due to allocations for safety production funds[45] - The exchange reserve decreased to RMB (12) thousand in 2023 from RMB 40 thousand in 2022, reflecting foreign exchange adjustments[46] - Other reserves remained unchanged at RMB (126,229) thousand, including adjustments from acquisitions and non-controlling interests[47] Accounting Policies and Standards - The company applied new International Financial Reporting Standards (IFRS) amendments in 2023, including amendments to IAS 8 regarding the definition of accounting estimates, which had no significant impact on the consolidated financial statements[71][72] - Amendments to IAS 12 regarding deferred tax related to assets and liabilities from single transactions were applied in 2023, with no significant impact on the consolidated financial statements[74][75] - The company has not yet applied temporary exceptions related to the OECD's Pillar Two model rules due to the absence of enacted or substantively enacted legislation in the jurisdictions where the company operates[75] - Amendments to IAS 1 and IFRS Practice Statement 2 regarding the disclosure of accounting policies were applied in 2023, affecting the disclosure of the company's accounting policies in the consolidated financial statements[77][78] - The company will disclose information related to Pillar Two income taxes when the legislation is enacted or substantively enacted, including qualitative and quantitative data[75] - The company's accounting policy changes due to the cancellation of the MPF-Long Service Payment offset mechanism in Hong Kong will take effect on May 1, 2025[80] - The company has retrospectively applied the Hong Kong Institute of Certified Public Accountants' guidance on the accounting treatment of the cancellation of the MPF-Long Service Payment (LSP) offset mechanism, resulting in more reliable and relevant information regarding the impact of the offset mechanism and its cancellation[81] - The company has adjusted its accounting policy to align with the Hong Kong Institute of Certified Public Accountants' guidance, which no longer considers employer MPF contributions as linked to employee services, leading to cumulative adjustments in service costs, interest expenses, and actuarial assumptions[83] - The application of the revised accounting standards had no material impact on the company's profit or loss for the years ended December 31, 2023, and December 31, 2022, nor on the financial position of the company and its subsidiaries as of those dates[84] - The company has not early adopted several new and revised International Financial Reporting Standards (IFRS) that have been issued but are not yet effective, including amendments related to asset sales or contributions between investors and their associates or joint ventures, lease liabilities in sale and leaseback transactions, and supplier financing arrangements[87] - The application of the 2020 and 2022 amendments to IAS 1 regarding the classification of liabilities as current or non-current will not result in a reclassification of the company's liabilities as of December 31, 2023[90] Operational Challenges and Strategies - The loss was primarily due to natural disasters, environmental production restrictions, and a decrease in the exploitable reserves of iron ore at Jihong Mining[102] - The company faced increased financing costs and impairment losses on property, plant, and equipment, as well as a deposit for the acquisition of a 0.614% stake in Cangzhou Bank[102] - The company is exploring alternative strategies and optimizing internal resources to reduce production and operational costs[104] - The company remains confident in improving its operational and financial performance despite the challenges faced in 2023[106] - The company plans to closely monitor market dynamics and explore the feasibility of underground mining at Jiheng Mining, while considering the possibility of divesting its iron ore business to improve financial performance[107] - The company is focusing on optimizing asset allocation and expanding its green building materials business, particularly in the sand and gravel aggregate sector, to enhance profitability and sustainability[107] - The company is increasing investments in safety and environmental protection, including upgrading technology and equipment, to comply with stricter regulations and reduce risks[115] - The company's major shareholders have committed to providing sufficient funds to ensure the company can meet its debt obligations and financial responsibilities[123] - The company ceased its medical business and liquidated related subsidiaries due to continuous losses and inability to find opportunities in the medical sector[183] Iron Ore Business Performance - The company's iron ore business recorded revenue of approximately RMB 584.0 million for the year ended December 31, 2023, a decrease of 28.2% compared to the previous year[141] - The company's iron concentrate production was approximately 726.2 thousand tons for the year ended December 31, 2023, a decrease of 31.0% compared to the previous year[141] - The company's iron concentrate sales volume was approximately 719.1 thousand tons for the year ended December 31, 2023, a decrease of 31.0% compared to the previous year[141] - The average unit cash operating cost of iron concentrate at Jingyuancheng was approximately RMB 699.0 per ton, and at Jiheng Mining, it was approximately RMB 527.3 per ton for the year ended December 31, 2023[141] - The company's iron ore business achieved a gross profit of approximately RMB 84.2 million, with a gross margin of 14.4% for the year ended December 31, 2023[141] - Jihong Mining's iron concentrate production decreased by 74.7% to 130.3 thousand tons in 2023 compared to 2022[143] - Jingyuancheng Mining's iron concentrate production increased by 10.7% to 595.9 thousand tons in 2023 compared to 2022[143] - The total iron concentrate production of the group decreased by 31.0% to 726.2 thousand tons in 2023 compared to 2022[143] - The average selling price of iron concentrate increased by 4.1% to RMB 812.2 per ton in 2023 compared to 2022[143] - The average unit cash operating cost of iron concentrate increased by 9.8% to RMB 668.2 per ton in 2023 compared to 2022[143] - The total iron ore reserves of the group compliant with JORC standards (2004 edition) amounted to 141,902 thousand tons as of December 31, 2023[147] - The total iron ore resources of the group compliant with JORC standards (2004 edition) amounted to 270,539 thousand tons as of December 31, 2023[147] - The annual mining capacity of Zhijiazhuang Mine is 2.4 million tons per year as of December 31, 2023[150] - The average unit cash operating cost of Zhijiazhuang Mine's iron concentrate increased by 24.5% to RMB 527.3 per ton in 2023 compared to 2022[151] - The average unit cash operating cost of Wangergou and Shuanmazhuang Mines' iron concentrate decreased by 11.0% to RMB 699.0 per ton in 2023 compared to 2022[156] Sand and Gravel Aggregate Business - The company's solid waste utilization project has a total processing capacity of approximately 6.4 million tons/year, with Jihang Mining's project contributing 3.7 million tons/year and Jingyuancheng Mining's project contributing 2.7 million tons/year[157] - In 2023, the company's sand and gravel aggregate production decreased by 27.5% year-over-year to approximately 2,763.7 thousand tons, while sales decreased by 34.2% to approximately 2,334.4 thousand tons[159] - The company's sand and gravel aggregate business generated revenue of approximately RMB 83.3 million, a decrease of 33.1% year-over-year, with a gross profit of RMB 15.1 million and a gross margin of 18.1%[159] - The company's average unit cash operating cost for sand and gravel aggregates was approximately RMB 23.6 per ton[159] - Total production of sand and gravel aggregates decreased by 27.5% to 2,763.7 thousand tons in 2023 compared to 3,813.6 thousand tons in 2022[182] - Total sales of sand and gravel aggregates decreased by 34.2% to 2,334.4 thousand tons in 2023 compared to 3,549.3 thousand tons in 2022[182] - Average unit cash operating cost for sand and gravel aggregates increased by 136.2% to RMB 23.6 in 2023 compared to RMB 10.0 in 2022[182] Expenses and Employee Benefits - Administrative expenses rose to RMB 132.397 million in 2023 from RMB 101.858 million in 2022, an increase of 30%[22] - Administrative expenses increased to RMB 132.4 million in 2023 from RMB 101.9 million in 2022 due to losses from mine shutdowns caused by heavy rain disasters[189] - Employee benefits expenses decreased to RMB 79.4 million in 2023 from RMB 98.4 million in 2022, with the number of full-time employees decreasing from 1,027 to 861[184] - Sales and distribution expenses decreased to RMB 3.1 million in 2023 from RMB 3.5 million in 2022[188] Market and Industry Trends - China's steel industry achieved a crude steel output of 1.019 billion tons in 2023, meeting the "flat control" policy target, but domestic consumption dropped to 933 million tons due to a significant decline in real estate development investment[113] - China's steel exports reached 90 million tons in 2023, a 36.2% increase year-over-year, driven by strong demand in international markets[113] - China's GDP exceeded RMB 126 trillion in 2023, a year-on-year increase of 5.2%[136] - China's total iron ore imports in 2023 were approximately 1.179 billion tons, an increase of 6% compared to the previous year[137] - The port inventory of imported iron ore was approximately 120 million tons at the end of December 2023, a decrease of 9.1% year-on-year[137] - The Platts 62% iron ore price index returned to the $130 mark during the reporting period[137] Financing and Loans - The company secured new loans totaling RMB 237 million from Chinese banks post-reporting period, with an annual interest rate of 9.23% and a repayment date of February 20, 2025[123] - The company expects to generate positive net operating cash flow for the year ending December 31, 2024[123] - The company is applying for an additional RMB 30 million loan from a Chinese bank to support its financial needs[123] - The company's financing costs for the reporting period were approximately RMB 57.1 million, an increase of RMB 29.4 million or 106.1% compared to the same period last year[200] Valuation and Capital - Jihong Mining's weighted average cost of capital (WACC) is estimated at 10.0% after tax and 13.1% before tax[193] - Jihong Mining recorded an impairment loss of approximately RMB 63.9 million for the deposit paid for the acquisition of a 0.614% equity stake in Cangzhou Bank[194] - The market-to-book ratio (average) for comparable companies used in Jihong Mining's valuation is 0.51[198] Miscellaneous - Aowei Holding Limited's shares were listed on the Hong Kong Stock Exchange on November 28, 2013, following a restructuring aimed at seeking a public listing[69] - The company's ultimate controlling parties are Hengshi International Investment Limited, Mr. Li Yanjun, and Mr. Li Ziwei, as of December 31, 2023[70] - Exchange rate differences from overseas operations resulted in a gain of RMB 388 thousand in 2023[39] - The company's total comprehensive income for 2023 was RMB 61,143 thousand, including the net loss and other comprehensive income[39]

Financial Performance - The group recorded a post-tax loss of approximately RMB 549.1 million, compared to a post-tax profit of RMB 60.8 million in the same period last year, primarily due to increased asset impairment, reduced gross profit, and higher administrative and financing costs[6]. - The group's revenue for the year ended December 31, 2023, was approximately RMB 667.4 million, a decrease of about RMB 270.4 million or 28.8% compared to the same period last year[46]. - The group's gross profit for the year was approximately RMB 99.2 million, a decrease of about RMB 64.5 million or 39.4% compared to the previous year[46]. - The loss attributable to equity holders of the company was approximately RMB 549.1 million, compared to a profit of RMB 60.8 million in the same period last year[46]. - The basic loss per share attributable to equity holders of the company was RMB 0.34, compared to a basic earnings per share of RMB 0.04 in the previous year[46]. - Total comprehensive loss for the year was RMB 549,191 thousand, compared to a comprehensive income of RMB 61,143 thousand in the previous year[64]. - The company reported a net loss from continuing operations of approximately RMB 548,634,000 for the year ending December 31, 2023[104]. - The group recorded a net loss from continuing operations of approximately RMB 548.634 million for the year ended December 31, 2023[155]. Costs and Expenses - The group's financing costs for the reporting period amounted to RMB 571 million, an increase of RMB 294 million or 106.1% compared to the same period last year[5]. - The cost of sales for the group during the reporting period was approximately RMB 568.2 million, a decrease of about RMB 205.9 million compared to the previous year[46]. - Administrative expenses for the reporting period amounted to RMB 132.4 million, an increase of approximately RMB 30.5 million compared to RMB 101.9 million in the same period last year[200]. - The group recognized an asset impairment loss of approximately RMB 298.7 million as of December 31, 2023, including a loss of RMB 200.0 million for fixed assets and RMB 98.7 million for construction in progress[178]. - Impairment losses recorded during the reporting period were approximately RMB 372.0 million, primarily based on the recoverable amounts of related assets at the end of the reporting period[200]. Assets and Liabilities - The group's total assets less current liabilities were RMB 1,443.1 million, down from RMB 1,724.8 million[48]. - Total equity decreased to RMB 965.6 million from RMB 1,514.8 million[49]. - Current liabilities increased to RMB 757.9 million from RMB 700.1 million[48]. - The company’s current liabilities exceed its current assets by approximately RMB 340,777,000 as of December 31, 2023[104]. - Non-current assets decreased to RMB 1,783,902 thousand in 2023 from RMB 1,937,017 thousand in 2022, a reduction of approximately 8%[66]. - Non-current liabilities rose to RMB 477,528 thousand in 2023 from RMB 209,988 thousand in 2022, indicating a significant increase[67]. Inventory and Trade Receivables - As of December 31, 2023, the group's inventory was approximately RMB 111.6 million, an increase of RMB 24.8 million or 28.6% year-on-year, mainly due to increased finished products of sand and gravel aggregates, iron concentrate, and iron ore[8]. - As of December 31, 2023, the total trade receivables amounted to RMB 106,628,000, an increase from RMB 90,369,000 in 2022[125]. - The trade receivables net amount as of December 31, 2023, was RMB 106.628 million, an increase from RMB 90.369 million in 2022[151]. Revenue Breakdown - Iron concentrate sales were RMB 584,027,000, down from RMB 813,190,000 in 2022, representing a decline of approximately 28%[107]. - The group’s iron ore business recorded revenue of approximately RMB 584.0 million, a decrease of about 28.2% compared to the same period last year, with a gross profit of approximately RMB 84.2 million and a gross margin of 14.4%[160]. - The group’s sand and gravel aggregate business generated revenue of approximately RMB 83.3 million, down approximately 33.1% year-on-year, achieving a gross profit of approximately RMB 15.1 million and a gross margin of 18.1%[168]. - The total revenue for the group was approximately RMB 667.4 million, a decrease of approximately RMB 270.4 million compared to the previous year, primarily due to lower sales volumes of iron concentrate and sand and gravel materials[173]. Financing and Borrowings - The group’s bank loans amounted to RMB 912.0 million as of December 31, 2023, an increase of RMB 399.0 million or 77.8% compared to the end of the previous year[42]. - The company successfully obtained new borrowings of RMB 237,000,000 from Chinese financial institutions to settle existing loans, with an annual interest rate of 9.23%[83]. - Bank borrowings increased to RMB 472,000 thousand in 2023 from RMB 337,000 thousand in 2022, an increase of about 40%[65]. Strategic Initiatives - The group plans to actively promote industrial transformation and upgrade by developing the green building materials business through new construction or acquisition of sand and gravel aggregate production lines[17]. - The group is actively promoting the comprehensive utilization of solid waste to enhance resource efficiency and support green industry transformation[166]. - The group has implemented multiple management mechanisms to enhance safety and environmental protection, aiming to minimize adverse impacts on employee health and the environment[171]. Employment and Workforce - The group employed 861 full-time employees as of December 31, 2023, down from 1,027 employees in the previous year, with employee benefits expenses amounting to approximately RMB 79.4 million[172]. Market Conditions - The iron ore market showed signs of recovery, with a total import of iron ore in China reaching approximately 117.9 million tons, a 6% increase year-on-year[133]. - The iron ore price index for 62% Fe reached over USD 130 during the reporting period, indicating a significant price recovery[133].

Financial Performance - For the six months ended June 30, 2023, the company reported total revenue of RMB 355,846,000, with a segment loss of RMB 34,771,000[23]. - The company incurred a pre-tax loss of RMB 40,072,000 for the six months ended June 30, 2023, compared to a loss of RMB 34,771,000 in the previous period[23]. - The company reported a loss attributable to equity holders of approximately RMB 65.7 million for the reporting period, compared to a profit of approximately RMB 44.7 million in the same period last year[102]. - The group's gross profit for the reporting period was approximately RMB 83.9 million, a decrease of about RMB 55.6 million or 39.9% compared to the same period last year, with a gross margin of 23.6%[106]. - The total sales cost for the reporting period was approximately RMB 271.9 million, a decrease of about RMB 125.7 million or 31.6% compared to the same period last year, mainly due to a reduction in iron concentrate sales volume[158]. - The company recorded a net loss after tax of approximately RMB 65.7 million, a decrease in profit of about RMB 110.5 million compared to the previous year[146]. Borrowings and Liabilities - The company's bank borrowings increased to RMB 341,500,000 as of June 30, 2023, compared to RMB 176,000,000 as of December 31, 2022, reflecting a growth of 94%[7]. - The group’s total liabilities increased due to new borrowings, with a significant portion secured against properties[59]. - The group's bank borrowings as of June 30, 2023, were RMB 818.5 million, an increase of approximately RMB 305.5 million or 59.6% compared to the end of last year[166]. - The group's total liabilities ratio as of June 30, 2023, was approximately 31.6%, an increase of about 10.4% compared to the end of last year[180]. - The group has no significant or contingent liabilities as of June 30, 2023[184]. Assets and Equity - The net asset value decreased to RMB 1,449,025,000 as of June 30, 2023, down from RMB 1,514,788,000 as of December 31, 2022, representing a decline of approximately 4.3%[7]. - The total equity as of June 30, 2023, was RMB 1,449,025,000, a decrease of 4.3% from RMB 1,514,788,000 as of December 31, 2022[7]. - The group's property, plant, and equipment net value as of June 30, 2023, was approximately RMB 1,443.9 million, an increase of RMB 241.9 million or 20.1% compared to the end of last year[175]. - The group's intangible assets, primarily mining rights, had a net value of approximately RMB 58.0 million as of June 30, 2023, down by about RMB 3.7 million from the end of last year[148]. Operational Efficiency and Management - The company is focused on maintaining effective management and internal processes to enhance operational integrity[2]. - The company aims to enhance management standards and improve work efficiency while controlling major capital expenditures in the second half of 2023[186]. - The management is monitoring interest rate risks and may consider hedging if necessary, although currently, there are no interest rate hedging policies in place[182]. - The company has maintained compliance with corporate governance codes as per the listing rules during the reporting period[2]. Environmental Responsibility - The company has strengthened its commitment to environmental responsibility by increasing investments in mine environmental management and has received provincial-level green mine certification[20]. - The company is in the process of applying for national/provincial-level green mine certification for its mining operations[20]. - The company has implemented self-restraint measures in mining operations to promote resource conservation and environmental protection[20]. - The group is actively promoting a green industry layout, focusing on the reuse of solid waste and ecological restoration, to mitigate operational risks in its mining business[186]. Production and Sales - The total production of iron concentrate was approximately 381.93 thousand tons, a decrease of about 32.8% year-on-year, while the sales volume was approximately 395.38 thousand tons, down 29.8% year-on-year[131]. - The average selling price of iron concentrate decreased by 6.8% to RMB 778.79 per ton compared to RMB 835.62 per ton in the previous year[114]. - The total mining cost was RMB 123.40 per ton, an increase of 10.02% from RMB 112.16 per ton in the previous year[138]. - The average cash operating cost for iron concentrate from Jingyuan City Mining was approximately RMB 691.6 per ton, while from Jiheng Mining it was approximately RMB 483.1 per ton[131]. Employee and Management Compensation - The total employee count as of June 30, 2023, was 988, down from 1,046 in the same period of 2022, with total employee compensation and benefits amounting to approximately RMB 45.0 million[197]. - The basic salary, allowances, and benefits for key management personnel totaled RMB 1.894 million for the six months ended June 30, 2023, compared to RMB 1.782 million in the previous year[80]. - The company’s management compensation is determined by the remuneration committee based on individual performance and market trends[77]. Market Conditions - The company faced a complex economic environment, implementing various measures to enhance operational efficiency and optimize asset allocation[112]. - The iron ore price index fluctuated, reaching a high of approximately USD 133.1 per ton in Q1 2023 and dropping to a low of approximately USD 97.4 per ton in Q2 2023, before rebounding to about USD 114.0 per ton in June[130]. - The company believes that China's economic resilience and potential will drive global economic growth, despite ongoing geopolitical and inflationary challenges[184].

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group's financial performance for the first half of 2023 shows a significant decline, turning from profit to loss with substantial decreases in revenue and gross profit, alongside an increase in per-share loss Key Financial Indicators for H1 2023 | Indicator | H1 2023 | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | approx. RMB 355.8 million | -33.8% | | Gross Profit | approx. RMB 83.9 million | -39.9% | | Gross Margin | 23.6% | - | | (Loss)/Profit Attributable to Equity Holders | Loss approx. RMB 65.7 million | Turned from Profit to Loss | | Basic (Loss)/Earnings Per Share | Loss RMB 0.04/share | Turned from Profit to Loss | | Interim Dividend | Not Recommended for Distribution | - | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, and detailed notes, highlighting the shift from profit to loss and changes in asset and liability structures [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the Group turned from a profit in the prior period to a loss, with revenue decreasing by 33.8% year-on-year to RMB 356 million and gross profit declining by 39.9% to RMB 83.93 million, primarily due to an impairment loss of RMB 37.39 million on property, plant, and equipment, resulting in a net loss of RMB 65.75 million compared to a profit of RMB 44.73 million in the same period last year Key Income Statement Data (For the six months ended June 30) | Item (RMB thousands) | 2023 (Unaudited) | 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 355,846 | 537,159 | | Gross Profit | 83,928 | 139,574 | | Impairment loss on property, plant and equipment | (37,391) | – | | (Loss)/Profit before tax | (40,072) | 67,465 | | (Loss)/Profit for the period | (65,749) | 44,731 | | Basic (Loss)/Earnings Per Share (RMB) | (0.04) | 0.03 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2023, the Group's total assets were approximately RMB 2.002 billion, with net assets (total equity) of approximately RMB 1.449 billion, notably indicating short-term liquidity pressure as current liabilities exceeded current assets by RMB 179 million Key Balance Sheet Data (RMB thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Non-current assets | 2,001,981 | 1,937,017 | | Current assets | 587,723 | 487,829 | | Current liabilities | 766,884 | 700,070 | | Net current liabilities | (179,161) | (212,241) | | Net assets | 1,449,025 | 1,514,788 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E6%B3%A8) The notes to the financial statements detail accounting policies, segment information, and the composition of various financial statement items, highlighting significant uncertainties regarding the Group's going concern, the fact that all revenue is derived from the mining segment in mainland China, and a substantial increase in finance costs due to increased bank borrowings [General Information and Basis of Preparation](index=5&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The company primarily engages in iron ore mining and green building materials businesses in China; although financial statements are prepared on a going concern basis, notes indicate significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern due to losses and current liabilities exceeding current assets, which directors deem appropriate given financial support commitments from major shareholders - The Group's principal activities include: (i) iron ore exploration, mining, beneficiation, and sales; (ii) hospital management services; and (iii) production and sales of green building materials (construction sand and aggregates)[122](index=122&type=chunk) - During the reporting period, the Group incurred a loss of **RMB 65.75 million**, with current liabilities exceeding current assets by approximately **RMB 179 million**, cash and equivalents of only **RMB 60.09 million**, and borrowings due within one year totaling **RMB 477 million**, indicating significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern[124](index=124&type=chunk) - The directors consider the preparation of financial statements on a going concern basis appropriate, primarily considering the possibility of renewing bank borrowings and the commitment of sufficient financial support from executive directors and major shareholders Mr. Li Yanjun and Mr. Li Ziwei[12](index=12&type=chunk)[125](index=125&type=chunk)[146](index=146&type=chunk) [Segment Information and Revenue](index=8&type=section&id=4.%20%E4%BE%86%E8%87%AA%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E7%9A%84%E6%94%B6%E7%9B%8A) The Group's revenue is entirely derived from the mining segment, with no revenue from the medical segment during the reporting period; the mining segment recorded a loss of RMB 34.36 million, with iron concentrate contributing RMB 308 million and sand and aggregates RMB 47.92 million as primary revenue sources by product type Segment Results (For the six months ended June 30, 2023, RMB thousands) | Segment | Revenue | Segment Results | | :--- | :--- | :--- | | Mining Segment | 355,846 | (34,360) | | Medical Segment | – | (411) | | **Total** | **355,846** | **(34,771)** | Revenue by Product Type (RMB thousands) | Product Type | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Iron Concentrate | 307,922 | 470,514 | | Sand and Aggregates | 47,924 | 66,645 | | **Total** | **355,846** | **537,159** | [Finance Costs](index=9&type=section&id=7.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs increased by 58.8% year-on-year from RMB 16.67 million in the prior period to RMB 26.47 million, primarily due to a rise in interest expenses on bank borrowings from RMB 14.96 million to RMB 25.53 million Details of Finance Costs (RMB thousands) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Interest expense on bank borrowings | 25,533 | 14,956 | | Interest expense on lease liabilities | 55 | 406 | | Others | 881 | 1,310 | | **Total** | **26,469** | **16,672** | [Dividends](index=11&type=section&id=11.%20%E8%82%A1%E6%81%AF) The Board has decided not to declare an interim dividend for the six months ended June 30, 2023 - The directors have decided not to declare any dividend for the interim period (2022: nil)[22](index=22&type=chunk)[156](index=156&type=chunk) [(Loss)/Earnings Per Share](index=12&type=section&id=12.%20%E6%AF%8F%E8%82%A1%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E7%9B%88%E5%88%A9) During the reporting period, the loss attributable to equity holders was RMB 65.75 million, resulting in a basic loss per share of RMB 0.04 based on a weighted average of 1.635 billion ordinary shares, compared to earnings per share of RMB 0.03 in the prior period; diluted loss per share is not presented as there are no potential dilutive ordinary shares Basic (Loss)/Earnings Per Share Calculation Data | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB thousands) | (65,749) | 44,731 | | Weighted average number of ordinary shares (thousands) | 1,635,330 | 1,635,330 | [Trade and Other Receivables](index=13&type=section&id=15.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of the period end, net trade and other receivables increased from RMB 318 million at the end of last year to RMB 404 million, with trade receivables (net of allowance) at RMB 105 million, primarily aged within 180 days Ageing Analysis of Trade Receivables (Net of allowance, RMB thousands) | Ageing | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | 0 to 30 days | 11,917 | 28,928 | | 31 to 90 days | 34,415 | 19,232 | | 91 to 180 days | 26,584 | 31,553 | | 181 to 365 days | 27,599 | 7,926 | | Over 365 days | 4,680 | 2,730 | | **Total** | **105,195** | **90,369** | [Management Discussion and Analysis](index=16&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) Management's discussion and analysis provides an overview of market conditions, detailed business segment performance, a financial review, and future strategic plans, addressing the challenges faced and outlining growth initiatives [Market Review and Business Review](index=16&type=section&id=%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) In H1 2023, China's economy rebounded with optimized pandemic policies, but weakening steel demand led to fluctuating iron ore prices; the Group recorded a loss due to significantly reduced iron concentrate production and sales (output -32.8%, sales -29.8%) from decreased extractable reserves at its main mining area (Jiheng Mining), coupled with lower selling prices and asset impairment - In terms of the macro market, iron ore prices in Q1 2023 rose supported by expectations, then faced downward pressure in Q2 due to weakening demand, before rebounding in June driven by favorable domestic policies[32](index=32&type=chunk) - The Group's performance decline was primarily influenced by multiple factors: decreased iron concentrate sales due to reduced extractable iron ore reserves at Jiheng Mining; lower gross margin from declining iron concentrate selling prices; and the recognition of an impairment loss on property, plant, and equipment[195](index=195&type=chunk) [Business Segment Performance](index=16&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The core iron ore business saw significant year-on-year declines in production and sales by 32.8% and 29.8% respectively, impacted by reduced reserves at Jiheng Mining; total sales for the green building materials business also fell by 28.7%, mainly due to a sharp drop in sales from Jingyuancheng Mining, with unit operating costs generally increasing across both segments [Iron Ore Business](index=16&type=section&id=%E9%90%B5%E7%A4%A6%E6%A5%AD%E5%8B%99) Total iron concentrate production and sales decreased by 32.8% and 29.8% year-on-year respectively, with Jiheng Mining's output sharply declining by 63.8% due to reduced resources, while Jingyuancheng Mining's output remained largely stable (-3.2%); regarding costs, Jiheng Mining saw increased unit fixed costs due to lower production, whereas Jingyuancheng Mining experienced a decrease in unit costs due to a lower stripping ratio Iron Concentrate Production and Sales Data (Thousand tons) | Item | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | **Total Production** | **381.93** | **567.95** | **-32.8%** | | Jiheng Mining Production | 100.27 | 277.04 | -63.8% | | Jingyuancheng Mining Production | 281.66 | 290.91 | -3.2% | | **Total Sales** | **395.38** | **563.08** | **-29.8%** | | Jiheng Mining Sales | 102.78 | 272.81 | -62.3% | | Jingyuancheng Mining Sales | 292.60 | 290.27 | 0.8% | Average Unit Cash Operating Cost of Iron Concentrate (RMB/ton) | Mine | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | Jiheng Mining (Zhijiazhuang Mine) | 483.07 | 400.79 | 20.53% | | Jingyuancheng Mining (Wang'ergou and Shuanmazhuang Mine) | 691.57 | 750.61 | -7.87% | [Green Building Materials Business](index=20&type=section&id=%E7%B6%A0%E8%89%B2%E5%BB%BA%E6%9D%90%EF%BC%8D%E5%BB%BA%E7%AF%89%E7%94%A8%E7%A0%82%E7%9F%B3%E9%AA%A8%E6%96%99%E6%A5%AD%E5%8B%99) Total sales volume for the sand and aggregates business decreased by 28.7% year-on-year, primarily due to an 81.3% sharp decline in machine-made sand sales from Jingyuancheng Mining; despite stable average selling prices (-0.3%), the average unit cash operating cost significantly increased by 70.6% year-on-year, mainly driven by rising raw material costs and unit fixed expenses such as electricity and material consumption Sand and Aggregates Production, Sales, and Cost Data | Item | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | Total Production (Thousand tons) | 1,775.71 | 1,989.65 | -10.8% | | Total Sales (Thousand tons) | 1,364.41 | 1,914.29 | -28.7% | | Average Selling Price (RMB) | 33.8 | 33.9 | -0.3% | | Average Unit Cash Operating Cost (RMB) | 18.60 | 10.9 | 70.6% | - The primary reasons for the increase in unit operating costs are: rising raw material costs at Jiheng Mining; and higher unit electricity consumption, machinery and material consumption, and equipment maintenance expenses at Jingyuancheng Mining due to lower production[91](index=91&type=chunk) [Financial Review](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Financial performance declined across the board, with revenue decreasing by 33.8% due to lower iron concentrate production, sales, and prices, leading to a reduced gross profit and a gross margin of 23.6%; finance costs rose by 58.8% due to increased borrowings, resulting in a net loss of RMB 65.7 million, while bank borrowings significantly increased, raising the debt ratio - Revenue decreased by **33.8%** to **RMB 356 million**, primarily due to a significant reduction in iron concentrate production and sales volume, as well as a decline in selling prices at Jiheng Mining[92](index=92&type=chunk) - Gross profit decreased to **RMB 83.9 million**, and gross margin fell to **23.6%**, mainly due to lower sales volume and prices of iron concentrate[93](index=93&type=chunk) - Finance costs increased by **58.8%** to **RMB 26.5 million**, primarily due to an increase in bank borrowing amounts[176](index=176&type=chunk) - A post-tax loss of **RMB 65.7 million** was recorded for the period, mainly due to a decrease in gross profit from iron concentrate sales and the recognition of an impairment loss on property, plant, and equipment compared to the same period last year[177](index=177&type=chunk) Key Financial Ratios and Status | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Bank Borrowings | RMB 818.5 million | RMB 513.0 million | | Debt Ratio (Bank Borrowings/Total Assets) | 31.6% | 21.2% (calculated) | | Cash and Cash Equivalents | RMB 60.1 million | RMB 56.1 million | [Future Plans and Outlook](index=25&type=section&id=%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83%E5%8F%8A%E5%B1%95%E6%9C%9B) Looking ahead to H2 2023, the Group will continue to reduce costs and enhance efficiency while vigorously developing its green building materials business to mitigate operational risks from diminishing iron ore reserves at Jiheng Mining; concurrently, to achieve new profit growth, the Group will actively seek investment and development opportunities in other industries - The core strategy is to continuously reduce costs and enhance efficiency, actively promote green industry layout, and develop the green building materials sand and aggregates business to reduce reliance on diminishing mineral resources[213](index=213&type=chunk) - To diversify investment risks and create new growth points, the Group will closely monitor favorable national policies, adjust its development strategy as appropriate, and seek investment opportunities in other industries[213](index=213&type=chunk) [Other Disclosures](index=26&type=section&id=%E5%85%B6%E4%BB%96%E4%BA%8B%E9%A0%85) As of the period end, the Group's employee count decreased year-on-year, and total remuneration declined; the company complies with corporate governance codes, and the audit committee has reviewed the financial statements; two significant post-balance sheet events occurred: heavy rainfall in Hebei affecting production, and a subsidiary's subscription for Cangzhou Bank shares; no interim dividend is distributed for this period [Employees and Remuneration Policy](index=27&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2023, the Group had 988 employees, a decrease from 1,046 in the prior period, with total remuneration and other benefits expenses for the first half of the year amounting to approximately RMB 45 million; the company provides regular and targeted training courses for its employees - As of June 30, 2023, the Group had **988** employees (1,046 in the prior period), with total remuneration expenses for the first half of the year approximately **RMB 45 million** (RMB 52.6 million in the prior period)[84](index=84&type=chunk) [Post-Balance Sheet Events](index=28&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Two significant post-reporting period events occurred: (1) from late July to early August 2023, extreme heavy rainfall in Hebei Province affected the normal production of Jingyuancheng Mining and Jiheng Mining, with recovery expected in September; and (2) on August 29, 2023, Jiheng Mining, an indirect wholly-owned subsidiary, agreed to subscribe for 50 million new shares of Cangzhou Bank for an amount not exceeding RMB 115 million - Continuous extreme heavy rainfall in Laiyuan County, Baoding City, Hebei Province, affected the normal production and operations of the company's two main subsidiaries, with recovery expected in September 2023[110](index=110&type=chunk) - On August 29, 2023, Jiheng Mining, a subsidiary of the Group, agreed to subscribe for **50 million** newly issued shares of Cangzhou Bank, with a subscription amount not exceeding **RMB 115 million**[235](index=235&type=chunk)

Financial Performance - In 2022, the company recorded revenue of approximately RMB 937.8 million, a decrease of about 21.3% compared to the previous year[23]. - Gross profit for 2022 was approximately RMB 163.7 million, down about 60.8%, with the gross margin declining from 35.0% to 17.5%[23]. - The net profit after tax was approximately RMB 60.8 million, representing a decrease of about 70.1% year-on-year[23]. - The company's revenue for 2022 was RMB 937.75 million, a decrease from RMB 1,191.74 million in 2021, representing a decline of approximately 21.2%[49]. - Gross profit for 2022 was RMB 163.70 million, down from RMB 417.24 million in 2021, indicating a significant drop of about 60.8%[49]. - The net profit for the year was RMB 60.76 million, compared to RMB 203.14 million in the previous year, reflecting a decrease of approximately 70%[49]. - The basic earnings per share for 2022 was RMB 0.04, down from RMB 0.12 in 2021, a decline of 66.7%[49]. Production and Sales - The company's iron concentrate production for 2022 was approximately 1,052.4 thousand tons, a decrease of about 6.2% compared to the previous year[31]. - Iron concentrate sales volume during the reporting period was approximately 1,042.3 thousand tons, down about 7.5% year-on-year[31]. - The total production of iron concentrate for the group was 1,052.4 thousand tons, a decrease of 6.2% compared to 1,121.9 thousand tons in 2021, while sales volume also dropped by 7.5% to 1,042.3 thousand tons[72]. - The average selling price of iron concentrate decreased by 20.7% to RMB 780.2 per ton, while the average unit cash operating cost increased by 4.1% to RMB 608.4 per ton[72]. Costs and Expenses - The average cash operating cost for iron concentrate at Jingyuan City was approximately RMB 785.0 per ton, while for Jiheng Mining it was approximately RMB 423.5 per ton[31]. - The total mining cost decreased to RMB 131.4 per ton, down 13.0% from RMB 151.1 per ton in the previous year[82]. - The total administrative expenses were approximately RMB 102.6 million, slightly increasing by RMB 0.1 million compared to RMB 102.5 million in the previous year[94]. - The financing costs for the reporting period were approximately RMB 27.7 million, a decrease of about RMB 6.9 million or 19.9% compared to the previous year[118]. - The group’s tax expenses were approximately RMB 35.4 million, a decrease of about RMB 39.6 million compared to the previous year, primarily due to reduced profits[107]. Market Conditions - The global economic recovery showed significant slowdown in 2022, with China's GDP growth at 3% compared to the previous year[26]. - The domestic crude steel production in China was approximately 1.013 billion tons in 2022, a year-on-year decrease of 4.3%[58]. - In the first half of 2022, iron ore prices fluctuated significantly due to a combination of macroeconomic policies, COVID-19 impacts, and rising operational costs, leading to a year-on-year decline in overall performance[61]. Strategic Initiatives - The company aims to enhance its competitiveness and risk resistance by promoting mine upgrades and accelerating the layout of green industries[29]. - The company plans to enhance safety and environmental management through increased funding and training, aiming to improve operational standards[36]. - The company is focusing on green building materials production by recycling tailings, which aligns with environmental sustainability goals[50]. - The company aims to accelerate the layout of green industries and explore the development of other derivative products through solid waste recycling to achieve zero emissions in mining production[62]. - The company plans to accelerate the layout of the green building materials industry through new construction to increase market share in response to the demand for construction materials in the Xiong'an New Area and surrounding regions[137]. - The company aims to achieve zero waste discharge by collaborating with authoritative institutions in the domestic solid waste building materials sector to develop high-quality solid waste mechanism sand production technology[137]. Corporate Governance and Management - The company is committed to high levels of corporate governance to optimize performance and protect shareholder interests[71]. - The company has implemented multiple management mechanisms to strengthen safety and environmental awareness among employees[36]. - The company has a strong emphasis on research and development of new products and technologies to support its growth strategy[146]. - The company is committed to improving its operational efficiency and management practices to drive future growth[146]. - The company has appointed a new executive director and CFO, Mr. Zuo Yuehui, effective March 29, 2023, who has over 18 years of experience in accounting and financial management[150]. - Mr. Sun Jianhua, the previous executive director and CFO, resigned effective March 29, 2023, after over 17 years of experience in financial and accounting management[147]. - The company has appointed Mr. Sun Tao as an executive director responsible for strategic planning and project initiation, who has over 18 years of experience in corporate management[151]. Legal and Compliance - There were no significant legal disputes or arbitration cases affecting the company as of December 31, 2022[69]. - The company has made arrangements for directors' liability insurance to protect against potential claims[184]. Shareholder Information - The company did not recommend the payment of a final dividend for the year ended December 31, 2022, consistent with the previous year[177]. - The board has adopted a dividend policy that retains sufficient cash reserves to meet operational needs and future growth, considering various factors including financial performance and cash flow[187]. - As of December 31, 2022, the company's distributable reserves amounted to RMB 863.6 million, subject to the regulations of the Cayman Islands and the company's articles of association[194]. Inventory and Receivables - The group’s inventory as of December 31, 2022, was approximately RMB 86.8 million, a decrease of about RMB 34.6 million or 28.5% compared to the previous year[113]. - Trade receivables and notes receivable amounted to approximately RMB 102.5 million, an increase of about RMB 17.3 million from RMB 85.2 million in the previous year, mainly due to an increase in receivable customer notes[121]. - Other receivables were approximately RMB 263.5 million, up by about RMB 26.5 million from RMB 237.0 million year-on-year, attributed to increased prepayments to construction service providers[121]. Capital Expenditure and Debt - As of December 31, 2022, total capital expenditure was approximately RMB 171.8 million, significantly higher than RMB 81.6 million in 2021[133]. - The company's debt ratio was approximately 21.2%, a decrease of about 1% compared to the previous year, calculated as total bank borrowings divided by total assets[141]. - The total bank borrowings amounted to RMB 337.0 million classified as current liabilities and RMB 176.0 million as non-current liabilities, with interest rates ranging from 3.2% to 9.23%[131]. - The overall financial condition of the company remains sound, with no significant changes in debt or contingent liabilities since December 31, 2022[131].

Financial Performance - Aowei Holding Limited reported its annual performance for the year ended December 31, 2022, in the announcement dated March 29, 2023[3]. - The independent auditor's report summary includes a disclaimer of opinion regarding the consolidated financial statements for the year ended December 31, 2022[1]. - The announcement clarifies that the content of the annual performance announcement remains unchanged except for the specified revisions[4]. Company Directors - The executive directors of the company include Mr. Li Yanjun, Mr. Li Ziwei, Mr. Zuo Yuehui, and Mr. Sun Tao[5]. - The independent non-executive directors consist of Mr. Huang Sile, Mr. Meng Likun, and Mr. Ge Xinjian[5].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何 部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 AOWEI HOLDING LIMITED 奧威控股有限公司 （於英屬處女群島註冊成立並於開曼群島存續之有限公司） （股份代號：1370） 截至2022年12月31日止年度之業績公告 財務摘要 本集團於報告期內的收入約為人民幣937.8百萬元，較去年同期減少約人民幣 254.0百萬元或21.3%。本集團於報告期內的銷售成本約為人民幣774.1百萬元，較 去年同期減少約人民幣0.4百萬元。本集團於報告期內的毛利約為人民幣163.7百 萬元，較去年同期減少約人民幣253.5百萬元或60.8%。 於報告期內，本公司權益持有人應佔溢利約為人民幣60.8百萬元，較去年同期相 比減少約人民幣142.3百萬元或70.1%。 於報告期內，本公司權益持有人應佔每股基本溢利為人民幣0.04元，較去年同期 相比減少約人民幣0.08元或66.7%。 ...

Financial Performance - For the six months ended June 30, 2022, the company's revenue was approximately RMB 537.2 million, a decrease of about RMB 68.7 million or 11.3% compared to the same period last year[14]. - The gross profit for the same period was approximately RMB 139.6 million, down by about RMB 112.2 million or 44.6%, resulting in a gross margin of approximately 26.0%[14][19]. - The profit attributable to equity holders for the reporting period was approximately RMB 44.7 million, a decrease of about RMB 100.3 million or 69.2% compared to the previous year[14]. - Basic earnings per share for equity holders were RMB 0.03, a decrease of RMB 0.06 compared to the same period last year[15]. - The group's revenue for the reporting period was approximately RMB 537.2 million, a decrease of about RMB 68.7 million or 11.3% compared to the same period last year, primarily due to a decline in iron concentrate prices[47]. - The group's gross profit for the reporting period was approximately RMB 139.6 million, down from RMB 251.8 million in the same period last year, resulting in a gross margin decrease of approximately 15.6% to 26.0%[49]. - The group recorded a net profit of approximately RMB 44.7 million for the reporting period, a decrease of about RMB 100.3 million compared to the same period last year, primarily due to a decline in gross profit[55]. - Basic earnings per share for the period was RMB 0.03, down from RMB 0.09 in the previous year[107]. - The mining segment generated revenue of RMB 537,159,000 for the first half of 2022, with a segment profit of RMB 71,103,000, compared to a profit of RMB 185,466,000 in the same period of 2021, indicating a significant decrease in profitability[148]. Cost and Expenses - The group's cost of sales for the reporting period was approximately RMB 397.6 million, an increase of about RMB 43.5 million or 12.3%, mainly due to an increase in sales volume of iron concentrate and aggregate[48]. - Distribution expenses for the reporting period were approximately RMB 0.3 million, a decrease of about RMB 5.8 million or 95.1%, due to a reduction in total sales volume[50]. - Administrative expenses for the reporting period were approximately RMB 52.3 million, an increase of about RMB 13.0 million or 33.1%, primarily due to higher professional service fees and wage costs[51]. - Financing costs for the reporting period were approximately RMB 16.7 million, a decrease of about RMB 1.2 million or 6.7%, mainly due to a reduction in bank borrowings[53]. - The company incurred financing costs of RMB 16,672,000 for the first half of 2022, a slight decrease from RMB 17,886,000 in the same period of 2021[151]. Production and Sales - The group produced approximately 568.0 thousand tons of iron concentrate in the first half of 2022, an increase of about 4.0% compared to the same period last year[28]. - The sales volume of iron concentrate was approximately 563.1 thousand tons, representing a 2.5% increase year-on-year[28]. - The average selling price of iron concentrate decreased by 20.73% to RMB 835.62 per ton compared to RMB 1,054.17 per ton in the previous year[29]. - The total ore extraction at Zhijiazhuang Mine was 993.47 thousand tons, a significant increase of 57.92% from 629.09 thousand tons in 2021[35]. - The total ore extraction at Wang'er Gully and Shuanmazhuang Mines was 4,823.55 thousand tons, a decrease of 3.43% from 4,994.76 thousand tons in 2021[41]. Financial Position - As of June 30, 2022, the group's cash balance was approximately RMB 63.1 million, a decrease of about RMB 41.0 million compared to the end of the previous year[63]. - The group's debt ratio as of June 30, 2022, was approximately 17.1%, a decrease of about 5.9% compared to the end of the previous year[66]. - The group's net value of property, plant, and equipment as of June 30, 2022, was approximately RMB 1,286.3 million, a decrease of RMB 28.6 million or 2.2% compared to the end of the previous year[56]. - The group's bank borrowings as of June 30, 2022, amounted to approximately RMB 177.0 million and RMB 247.0 million, secured by land use rights and properties from related parties and third parties[70]. - Total liabilities decreased to RMB 769,072 thousand from RMB 898,816 thousand at the end of 2021, indicating improved financial stability[112]. - Net assets increased to RMB 1,498,735 thousand as of June 30, 2022, compared to RMB 1,453,645 thousand at the end of 2021, reflecting a growth of 3.1%[114]. Market Conditions - The decline in revenue was primarily attributed to the drop in iron ore prices compared to the previous year[26]. - The company faced challenges due to the COVID-19 pandemic and fluctuations in the iron ore market, impacting supply chain operations[26]. - The Chinese economy grew by 2.5% year-on-year in the first half of 2022, amid complex global conditions[25]. - The management anticipates continued economic pressure due to global economic downturn, exchange rate risks, and inflation risks, and will maintain a prudent approach to business management and strategy[73]. Strategic Initiatives - The group plans to enhance cost reduction and efficiency improvement measures, focusing on budget control and capital expenditure management[73]. - The company aims to leverage opportunities in the construction of the Xiong'an New Area and Baoding, promoting comprehensive utilization projects of solid waste to enhance its market share in green building materials[73]. - The group will collaborate with domestic authoritative research institutions to develop other green building materials through solid waste recycling, aiming for zero emissions in mining production[74]. Employee and Management - The group had a total of 1,046 employees as of June 30, 2022, compared to 920 employees in the same period of 2021, indicating a growth of approximately 13.7%[93]. - Total employee compensation and benefits amounted to approximately RMB 52.6 million for the reporting period, up from approximately RMB 39.9 million in the same period of 2021, reflecting an increase of about 31.8%[93]. - The total remuneration for key management personnel was RMB 1,825,000 for the six months ended June 30, 2022, a decrease of 7.0% from RMB 1,962,000 for the same period in 2021[194]. Compliance and Governance - The board of directors confirmed compliance with the standard code for securities trading throughout the reporting period[87]. - The company maintained the required public float as per the listing rules throughout the reporting period[103]. - The audit committee reviewed the interim financial performance, which was unaudited but deemed to comply with applicable accounting principles and listing rules[102]. Environmental and Regulatory - The company has implemented regulations under the "Green Mine Construction Standards" since 2020, enhancing its environmental management and resource conservation efforts[186]. - The company is in the process of applying for national and provincial-level green mine titles, with one mine already awarded such a title in February 2021[186]. - The company has not identified any significant environmental liabilities that could adversely affect its financial position or operating results[182].