Financial Performance - Revenue for the six months ended June 30, 2024, was HK$611,913,000, an increase of 21% compared to HK$505,380,000 for the same period in 2023[8] - Gross profit for the period was HK$259,097,000, representing a gross margin of approximately 42.4%[8] - Profit before tax increased to HK$95,654,000, up 16.6% from HK$82,049,000 in the prior year[8] - Profit for the period attributable to owners of the company was HK$50,828,000, a rise from HK$48,288,000 in the same period last year[8] - Total comprehensive income for the period reached HK$72,772,000, an increase of 21.5% compared to HK$59,823,000 in the same period last year[10] - Profit for the same period amounted to approximately HK$79.9 million, reflecting a year-on-year increase of 16.7%[126] Expenses and Costs - Selling and distribution expenses increased to HK$23,203,000 from HK$15,205,000, reflecting a rise in operational costs[8] - Finance costs rose to HK$4,038,000, compared to HK$1,901,000 in the same period last year[8] - The company reported other income of HK$1,048,000, down from HK$2,399,000 in the previous year[8] - Profit before tax for the six months ended June 30, 2024, was impacted by research and development costs of HK$12,848,000, down from HK$15,308,000 in the previous year[43] Assets and Liabilities - Total current assets amounted to HK$516,660,000, with cash and cash equivalents at HK$190,880,000[13] - Net current assets stood at HK$313,880,000, indicating a solid liquidity position[13] - Total equity increased to HK$637,728,000, up from HK$569,278,000, representing a growth of 12%[14] - Non-current liabilities decreased to HK$39,081,000 from HK$48,295,000, showing a reduction of 19.1%[14] - The company’s reserves increased to HK$466,624,000, up from HK$424,291,000, reflecting a growth of 10%[14] Market and Strategic Focus - The company is focused on expanding its market presence and enhancing its product offerings in the inspection sector[8] - Future outlook includes continued investment in new technologies and potential market expansion strategies[8] - The company continues to focus on market expansion and new product development strategies to drive future growth[10] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[20] Shareholder Information - Earnings per share attributable to ordinary equity holders of the company were HK$9.62 (basic) and HK$9.59 (diluted), compared to HK$9.10 and HK$9.07 respectively in the previous year[10] - The proposed final cash dividend is HK$0.0174 per share for the year ended December 31, 2023, with no interim dividend declared for the six months ended June 30, 2024[48] - The number of issued and fully paid ordinary shares increased from 541,631,000 as of December 31, 2023, to 541,987,000 as of June 30, 2024[85] Employee and Management Compensation - Key management personnel compensation for the six months ended June 30, 2024, totaled HK$4,616,000, compared to HK$3,486,000 for the same period in 2023, reflecting an increase of 32.4%[116] - The Company operates a share option scheme effective from May 5, 2017, aimed at providing incentives to retain employees and achieve business objectives[89] Acquisitions and Investments - The acquisition of Shibiao Testing (Tianjin) Co., Ltd. was completed on 4 May 2023 for a consideration of HK$2,602,000, aimed at accelerating the achievement of the Company's strategic objectives[106] - The total cash outflow arising from the acquisition of Shibiao Testing was HK$2,327,000 after accounting for cash acquired[109] ESG and Sustainability Initiatives - The Company has expanded its business scope from traditional energy to clean energy, environmental protection, and climate change, aligning with ESG-related sectors[130] - The Company emphasizes ESG-oriented development as a core part of its "3+X" strategy, contributing to the green and low-carbon transition of the industry[135] - The clean energy business focuses on wind and solar power, providing testing services that enhance the stability of power generation through data collection and maintenance[141] Convertible Bonds and Financing - The principal amount of the Convertible Bonds is HK$50,000,000, with an issue price of 100% in cash[183] - The company redeemed HK$50 million of convertible bonds in cash on June 11, 2024, using internal resources due to a strong financial position and ample cash flow[200] - The amendments to the Convertible Bonds will take effect on June 28, 2023[188]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.88 per share [3][2]. Core Insights - The company reported a revenue of HKD 610 million for H1 2024, representing a year-on-year increase of 21.1%. Net profit reached HKD 80 million, up 16.7%, while net profit attributable to shareholders was HKD 51 million, an increase of 5.3% [2][1]. - The overseas business has seen significant growth, with a 47.2% increase in revenue, contributing to 47% of total revenue. The company is actively expanding its international presence, particularly in the energy sector, which is expected to enhance overall performance [2][1]. - The company's "3+X" strategy focuses on core businesses such as coal testing, oil testing, and non-energy bulk testing, which provide strong cash flow to support emerging ESG and carbon asset businesses. The company aims to capitalize on the dual carbon and green development trends [2][1]. Summary by Sections Financial Performance - For H1 2024, the company achieved a revenue of HKD 610 million, a 21.1% increase year-on-year. The net profit was HKD 80 million, up 16.7%, and the net profit attributable to shareholders was HKD 51 million, reflecting a 5.3% increase [2][1]. - The overseas revenue reached HKD 270 million, marking a substantial growth of 47.2%, while the Greater China region saw a more modest growth of 5.8% to HKD 340 million [2][1]. Strategic Initiatives - The company is implementing a "3+X" strategy, focusing on its main businesses while also developing ESG and carbon asset services. This approach is expected to provide a competitive edge in the market [2][1]. - The company is actively recruiting talent in the ESG sector to bolster its capabilities and prepare for future growth in this area [2][1]. Valuation Metrics - The target price of HKD 2.88 corresponds to a price-to-earnings (PE) ratio of 14.9x for 2024, 11.5x for 2025, and 8.8x for 2026, indicating a favorable valuation outlook [2][3].

Financial Performance - The company's revenue increased from approximately HKD 505.4 million for the six months ended June 30, 2023, to approximately HKD 611.9 million, representing a growth of 21.1%[1]. - The profit for the period rose from approximately HKD 68.5 million to approximately HKD 79.9 million, reflecting a growth of 16.7%[1]. - The profit attributable to owners of the company increased from approximately HKD 48.3 million to approximately HKD 50.8 million, marking a growth of 5.3%[1]. - The gross profit for the period was approximately HKD 259.1 million, compared to HKD 230.8 million in the same period last year, indicating an increase of 12.2%[3]. - The total comprehensive income for the period amounted to HKD 72.8 million, up from HKD 59.8 million in the previous year, representing a growth of 21.5%[4]. - Basic earnings per share increased to 9.62 HKD cents from 9.10 HKD cents, reflecting a growth of 5.7%[4]. - Total revenue for the six months ended June 30, 2024, reached HKD 611,913,000, a 21% increase from HKD 505,380,000 for the same period in 2023[12]. - The company reported a pre-tax profit of HKD 20,329,000 for the six months ended June 30, 2024, compared to HKD 27,237,000 for the same period in 2023, indicating a decrease of 25%[14]. - Basic and diluted earnings per share for the six months ended June 30, 2024, were HKD 0.0962, compared to HKD 0.1000 for the same period in 2023, a decline of 4%[17]. - The company's income tax expense for the six months ended June 30, 2024, was HKD 15,739,000, compared to HKD 13,552,000 for the same period in 2023, representing an increase of 16%[15]. Assets and Liabilities - The company's total assets as of June 30, 2024, were approximately HKD 880.1 million, compared to HKD 894.5 million as of December 31, 2023[5]. - Trade receivables increased to approximately HKD 225.5 million from HKD 208.8 million, showing a growth of 8.0%[5]. - Cash and cash equivalents decreased to approximately HKD 190.9 million from HKD 227.3 million, a decline of 16.0%[5]. - As of June 30, 2024, the total current liabilities decreased to HKD 203,330,000 from HKD 276,962,000 as of December 31, 2023, representing a reduction of approximately 26.5%[6]. - The net current assets increased to HKD 313,880,000 as of June 30, 2024, compared to HKD 247,140,000 as of December 31, 2023, reflecting a growth of about 27%[6]. - Total assets less current liabilities rose to HKD 676,809,000 from HKD 617,573,000, indicating an increase of approximately 9.5%[6]. - Non-current liabilities decreased to HKD 39,081,000 as of June 30, 2024, down from HKD 48,295,000 as of December 31, 2023, a decline of about 19%[6]. - The total equity increased to HKD 637,728,000 as of June 30, 2024, compared to HKD 569,278,000 as of December 31, 2023, marking an increase of approximately 12%[6]. - The company's reserves grew to HKD 466,624,000 as of June 30, 2024, up from HKD 424,291,000 as of December 31, 2023, which is an increase of about 10%[6]. - As of June 30, 2024, the total liabilities net amount is HKD 32,169,000, compared to HKD 7,043,000 as of December 31, 2023, indicating a significant increase in net liabilities[40]. Operational Highlights - The company has expanded its international presence, with 75 overseas branches and laboratories across 18 countries, enhancing its competitive advantage in the TIC industry[23]. - The company is actively involved in energy cooperation under the "Belt and Road" initiative, contributing to energy security and stability in the region[24]. - The company has successfully diversified its services into clean energy, environmental protection, and climate change sectors, expanding its business scope beyond traditional energy[23]. - The company operates 75 service points globally and holds 18 types of professional qualifications, covering over 50 major commodities and natural resource categories in trade assurance services[25]. - The company has been designated as a quality inspection organization by the Shanghai Futures Exchange for aluminum oxide futures, enhancing its brand credibility in the non-ferrous metals sector[26]. - The company has completed the application work to become a designated inspection organization for scrap steel and is actively involved in drafting national standards for scrap steel[27]. - The company is expanding its clean energy business, focusing on wind and solar power generation, and providing quality inspection services to enhance operational stability[28]. - The company offers a wide range of environmental protection services, including ecological monitoring and leak detection, contributing to low-carbon emission reduction efforts[29]. - The company provides comprehensive technical consulting services in low-carbon and sustainable development, assisting clients in achieving carbon neutrality goals[29]. Strategic Initiatives - The company aims to enhance its ESG management standards and focus on green low-carbon investment opportunities[30]. - The company plans to accelerate investments aligned with its ESG strategy, focusing on sustainable growth potential[30]. - The traditional business continues to solidify while emerging businesses are developing rapidly, contributing positively to overall revenue growth[35]. - The company emphasizes continuous improvement in service quality and operational efficiency to enhance profitability[36]. Workforce and Governance - The company has a total of 3,184 employees as of June 30, 2024, an increase from 2,660 employees as of June 30, 2023, indicating a growth in workforce[43]. - The board of directors includes eight members, with four executive directors and three independent non-executive directors[50]. - The company has established an audit committee in accordance with the Listing Rules, consisting of three independent non-executive directors[48]. - The company has implemented a credit risk management policy, ensuring transactions are conducted only with recognized and reputable counterparties[41]. - The company has adopted prudent financial policies to maintain a healthy capital structure and liquidity, ensuring sufficient cash flow to meet obligations[37]. Dividend and Shareholder Information - The company plans to pay a final cash dividend of HKD 0.0174 per share for the year ending December 31, 2023, approved by shareholders on June 18, 2024[16]. - The board of directors decided not to declare an interim dividend for the six months ended June 30, 2024, compared to HKD 0.0269 per share for the same period in 2023[44]. Compliance and Reporting - The company has complied with the Standard Code regarding securities trading by directors throughout the reporting period[46]. - The interim financial results announcement and interim report are available on the Hong Kong Stock Exchange and the company's website[48]. - There were no significant acquisitions or disposals of subsidiaries, joint ventures, or associates during the six months ended June 30, 2024[42]. - No purchases, sales, or redemptions of the company's listed securities were made during the reporting period[47].

Company Overview - China Leon Inspection Holding Limited was listed on the Main Board of the Stock Exchange in 2016, becoming the first international leading inspection and testing company in Hong Kong[12]. - The company operates 72 branches and professional laboratories globally, providing services in over 50 types of commodities and natural resources[12]. - The company serves a wide range of industries, including power generation, petrochemicals, chemicals, and building materials, both domestically and internationally[20]. - The company has a significant shareholder, China Inspection and Certification Group, which indirectly holds more than 10% of the issued share capital through its subsidiary[58]. Business Focus Areas - The company focuses on four key areas: commodity services, clean energy, environmental protection, and climate change, supporting global industry leaders in achieving eco-friendly transformations[12]. - In the clean energy sector, the company offers quality inspection services for wind power and photovoltaic manufacturing, enhancing the stability of power generation[13]. - The company provides environmental protection consulting and monitoring services, including environmental impact assessments and soil pollution investigations[17]. - The company is focusing on clean energy testing services, particularly in wind and solar power, and is expanding its customer base in the energy transition sector[126]. Sustainable Development and ESG - The company emphasizes sustainable development and fairness in its operations, aiming to facilitate better global trade flows[12]. - The company is committed to long-term sustainable development and enhancing its professional service capacity in commodity services[12]. - The company aims to fill gaps in carbon emission reduction data, contributing to carbon neutrality efforts[17]. - The company is focused on enhancing ESG management and improving ratings through its consulting services[18]. - The Group's ESG-oriented development strategy is a key priority, with initiatives categorized into ESG-Friendly, ESG+, and ESG-Focused to promote sustainable practices[107]. Financial Performance - The Group recorded revenue of HK$1,118.5 million in 2023, representing a year-on-year increase of 18.5%[94]. - Profit for the year reached HK$122.2 million, reflecting a year-on-year increase of 16.6%[94]. - Profit attributable to owners of the Company was HK$80.0 million, marking a year-on-year increase of 15.3%[94]. - The Group achieved net cash inflows from operating activities of approximately HK$175.1 million in 2023, slightly down from HK$176.4 million in 2022[169]. Management and Governance - The management team consists of eight directors, including four executive directors and three independent non-executive directors[24]. - The chairman and CEO, Mr. Li Xiangli, has over 34 years of experience in the energy testing and inspection field[29]. - The Company has a strong management team with extensive experience in energy and materials science, enhancing its competitive position in the market[36]. - The board includes independent non-executive directors responsible for providing independent advice and judgment[64]. Growth Strategies - The Group's strategic plan focuses on optimizing business landscape and enhancing ESG management, contributing to the green and low-carbon transition of the industry[81]. - The Group's "2+X" development strategy prioritizes ESG-oriented growth through three main dimensions: ESG-Friendly, ESG+, and ESG-Focused[81]. - The Group plans to actively seek mergers and acquisitions opportunities in the global TIC market to enhance synergies and strengthen customer loyalty[152]. - The Group's emerging businesses, including clean energy and climate change, rapidly developed through M&A activities under the "2+X" strategy, contributing significantly to revenue growth[159]. Market Position and Recognition - The Company was recognized as one of "Asia's 200 Best Under A Billion" by Forbes for the third consecutive year, highlighting its excellent governance and operational capabilities[82]. - The Group has successfully obtained qualifications as a designated quality inspection agency for 10 types of mineral metal futures from four major futures exchanges by the end of 2023[85]. - The Group's internal expert was selected as a Methodologies Expert for the UN's new carbon crediting mechanism, enhancing its influence in the global emission reduction market[82]. Environmental Initiatives - LDAR services are crucial for detecting and repairing leaks in various industrial sectors, helping to control raw material costs and reduce environmental pollution[17]. - The company has strengthened its environmental protection service offerings through leakage detection and repair services, which are crucial for achieving carbon neutrality[130]. - The climate change business achieved large-scale carbon trading for the first time, becoming one of the most important carbon asset traders in the Beijing carbon market[133]. Financial Position and Capital Management - As of December 31, 2023, the Group had cash and cash equivalents of HK$227.3 million, indicating a strong financial position[172]. - The gearing ratio was zero as cash and cash equivalents exceeded gross debt, consistent with 2022[190]. - The Group's capital management objectives remained unchanged, focusing on maintaining healthy capital ratios to support business operations and maximize shareholder value[180].

Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.0174 per share for the year ended December 31, 2023, compared to HKD 0.0272 per share in 2022, subject to shareholder approval[1] - The company declared and paid a final dividend of HKD 208,000 for 2022 and an interim dividend of HKD 296,000 for 2023[93] - The proposed final dividend for the year ended December 31, 2023, is HK$0.0174 per share, to be paid on or around July 15, 2024, subject to approval at the Annual General Meeting on June 18, 2024[192] - The company proposes to issue one new bonus share for every ten shares held by shareholders on the record date of July 2, 2024, subject to approval at the Annual General Meeting and by the Hong Kong Stock Exchange[165] - The company will suspend share transfer registration from June 26, 2024, to July 2, 2024, to ensure shareholders are entitled to the proposed final dividend and bonus shares[177] Financial Performance - Revenue increased by 18.5% from HKD 944.0 million in 2022 to HKD 1,118.5 million in 2023[40] - Net profit attributable to owners of the company rose by 15.3% to HKD 80.0 million in 2023 from HKD 69.4 million in 2022[45] - Basic earnings per share increased by 15.1% to 15.10 HK cents in 2023 from 13.12 HK cents in 2022[45] - Revenue increased to HKD 1,118,514 thousand in 2023 from HKD 944,014 thousand in 2022, representing an 18.5% growth[50] - Gross profit rose to HKD 480,130 thousand in 2023, up 17.3% from HKD 409,366 thousand in 2022[50] - Net profit attributable to the company's owners grew to HKD 80,048 thousand in 2023, a 15.3% increase from HKD 69,397 thousand in 2022[50] - Total comprehensive income for the year reached HKD 109,725 thousand in 2023, up 62.2% from HKD 67,639 thousand in 2022[51] - Revenue for the year reached HKD 1,118.5 million, a year-on-year increase of 18.5%[114] - Net profit for the year was HKD 122.2 million, up 16.6% year-on-year[114] - Profit attributable to the company's owners was HKD 80.0 million, a 15.3% increase compared to the previous year[114] - Revenue for 2023 was HKD 1,118,514 thousand, an increase of 18.5% compared to HKD 944,014 thousand in 2022[138] - The company maintained a strong cash position with cash and cash equivalents of HKD 222.3 million in 2022 and HKD 227.3 million in 2023[142] - The company's profit attributable to owners increased by 15.3% from HKD 69.4 million in 2022 to HKD 80.0 million in 2023[126] Global Expansion and Service Network - The company has established 72 branches and laboratories in multiple countries, including Singapore, Indonesia, Malaysia, India, Pakistan, Australia, Brunei, Bangladesh, Argentina, and South Africa, to enhance its global service capabilities[6] - The company's global marketing network and service capabilities for international clients were enhanced, improving overall profitability[42] - The company's service network expanded from major trade ports and hub cities in the Asia-Pacific region to emerging markets in South America and Africa[117] - The company operates 72 service points globally and holds 18 professional certifications, covering over 50 types of bulk commodities and natural resources[87] Research and Development (R&D) - R&D costs for the year ended December 31, 2023, amounted to approximately HKD 27,688,000, compared to HKD 26,745,000 in 2022[21] - The company's R&D costs for 2023 were HKD 27,970 thousand, up from HKD 26,883 thousand in 2022[98] - The company focused on R&D, particularly in the development of intelligent coal testing technology, which was recognized as internationally leading[131] ESG and Sustainability - The company's ESG-related businesses, such as clean energy, environmental protection, and climate change, developed rapidly, exceeding expectations[41] - The company is focusing on low-carbon and sustainable development, offering services such as carbon asset development, low-carbon technology consulting, and ESG consulting, helping clients achieve carbon neutrality goals[96] - The company is aligning with national energy development strategies, particularly in green and low-carbon transformation, and is actively contributing to the construction of a new power system[101] - The company achieved a breakthrough in carbon trading, becoming one of the most important carbon asset traders in the Beijing carbon market[134] - The company strengthened its environmental protection services, particularly through its LDAR business, which plays a key role in low-carbon emission reduction[133] - The company is focusing on ESG development strategies, including clean energy, environmental protection, and climate change, to support the green and low-carbon transformation of industries[150][151] - The company plans to accelerate investment plans aligned with its ESG strategy, focusing on green, low-carbon, and sustainable growth opportunities[151] Taxation - The company's subsidiaries in Hong Kong are subject to a 16.5% tax rate on estimated taxable profits, while a subsidiary in mainland China is subject to a 5% tax rate on dividend income[18] - A subsidiary in Singapore is subject to a 17% tax rate on estimated taxable profits[19] - The company's tax expense for the year totaled HKD 35,049 thousand in 2023, up from HKD 31,513 thousand in 2022[80] Corporate Governance - The company has adopted revised International Financial Reporting Standards (IFRS) for the first time in the current year's financial statements[24] - The company has adopted the "Corporate Governance Code" as outlined in Appendix C1 of the "Listing Rules" to enhance management standards and protect shareholder interests[196] - The Board of Directors will continue to review and monitor the company's practices to maintain high standards of corporate governance[197] - The company has adopted the "Standard Code" from Appendix C3 of the "Listing Rules" as a code of conduct for directors and employees regarding securities transactions[198] - The company's audit committee, consisting of three independent non-executive directors, has reviewed and discussed the annual consolidated financial statements for the year ended December 31, 2023, with management[183] - The company's directors have confirmed compliance with the Model Code for Securities Transactions throughout the year ended December 31, 2023[181] Operational Efficiency and Cost Management - The company implemented a refined operational management system, improving cost control and operational efficiency, which contributed to profit growth[127] - The company's sales cost for 2023 was HKD 638,384 thousand, compared to HKD 534,648 thousand in 2022[98] - Employee benefit expenses, including salaries and wages, increased to HKD 377,776 thousand in 2023 from HKD 322,616 thousand in 2022[98] Market and Industry Recognition - The company has been recognized for three consecutive years in Forbes' "Asia's 200 Best Under A Billion" list, highlighting its strong governance, operational capabilities, and business performance[7] - The company was designated as the quality inspection agency for industrial silicon and lithium carbonate futures by the Guangzhou Futures Exchange on May 16 and November 28, 2023, marking a significant milestone in the new energy testing sector[89] - The company was appointed as the quality inspection agency for coking coal, coke, and iron ore by the Dalian Commodity Exchange on June 30, 2023, reflecting high recognition of its professional capabilities and service quality in the energy bulk inspection field[94] - The company was designated as a testing institution for copper, aluminum, and zinc futures by the Shanghai Futures Exchange and for international copper futures by the Shanghai International Energy Exchange in August 2023[149] Financial Position and Assets - The company's equity attributable to owners totaled HKD 569,278,000, up from HKD 487,025,000 in the previous year[22] - Non-current liabilities decreased to HKD 48,295,000 from HKD 91,503,000[30] - The company's total non-current assets increased to HKD 370.4 million in 2023 from HKD 329.2 million in 2022[46] - The company's total current assets rose to HKD 524.1 million in 2023 from HKD 430.9 million in 2022[46] - Current liabilities increased to HKD 276,962 thousand in 2023, a 52.5% rise from HKD 181,560 thousand in 2022[53] - Trade payables grew to HKD 51,910 thousand in 2023, up 19.0% from HKD 43,622 thousand in 2022[53] - Contract liabilities more than doubled to HKD 8,029 thousand in 2023 from HKD 3,565 thousand in 2022[53] - Interest-bearing bank loans surged to HKD 48,530 thousand in 2023, an 83.5% increase from HKD 26,449 thousand in 2022[53] - Total assets less current liabilities increased to HKD 617,573 thousand in 2023, up 6.8% from HKD 578,528 thousand in 2022[53] - Net asset value grew to HKD 569,278 thousand in 2023, a 16.9% increase from HKD 487,025 thousand in 2022[53] - The company's leverage ratio is zero when the amount of cash and cash equivalents exceeds total liabilities[167] - The company's net surplus attributable to equity holders was HKD (7,043) thousand in 2023, compared to HKD (28,329) thousand in 2022, with net capital and liabilities increasing to HKD 417,458 thousand from HKD 349,939 thousand[147] Revenue Breakdown - Revenue from testing services increased to HKD 716,422 thousand in 2023, up 18.8% from HKD 602,972 thousand in 2022[61] - Revenue from the Greater China region was HKD 650,368 thousand in 2023, a 5.7% increase from HKD 615,313 thousand in 2022[61] - Revenue from Singapore and other countries/regions grew significantly to HKD 468,146 thousand in 2023, a 42.4% increase from HKD 328,701 thousand in 2022[61] - Revenue from the Greater China region increased to HKD 650,368 thousand in 2023 from HKD 615,313 thousand in 2022[75] - Revenue from Singapore and other countries/regions rose to HKD 468,146 thousand in 2023 from HKD 328,701 thousand in 2022[75] - Revenue from one major client accounted for 10.0% of the company's total revenue in 2023, down from 12.3% in 2022[77] Trade Receivables and Payables - Trade receivables and bills totaled HKD 208,841 thousand in 2023, up 21.2% from HKD 172,302 thousand in 2022[64] - Overdue trade receivables and bills amounted to HKD 46,474 thousand as of December 31, 2023, a 58.3% increase from HKD 29,358 thousand in 2022[66] - A subsidiary pledged trade receivables and bills of HKD 20,210 thousand as collateral for bank loans in 2023, compared to none in 2022[64] - The company's trade receivables and notes are non-interest bearing and are not backed by any collateral or credit enhancements[109] - The company's trade payables totaled HKD 51.91 million at the end of the reporting period, with 80.9% due within 3 months[111] - Trade payables increased to HKD 51,910 thousand in 2023 from HKD 43,622 thousand in 2022, while other payables and accruals decreased to HKD 71,155 thousand from HKD 72,993 thousand[147] Strategic Initiatives and Acquisitions - The company successfully acquired World Standard Testing, enhancing its bulk testing capabilities and solidifying its core competitive advantages[122] - The company has obtained designated quality inspection qualifications for 10 futures varieties across four major futures exchanges by the end of 2023[122] - The company upgraded its development strategy to "3+X," emphasizing clean energy, dual carbon, and ESG-related businesses[136] - The company expanded its international service network and deepened cooperation with key clients, enhancing customer loyalty and service quality[139] Risk Management - The company faces foreign exchange risk due to cash, receivables, payables, and interest-bearing bank loans denominated in currencies other than the functional currency of its entities, primarily HKD, USD, and SGD[188] - The company's credit risk for financial assets, including cash and cash equivalents, is equal to the carrying amount of these assets[169] Employee and Compensation - The company had 3,016 employees as of December 31, 2023, up from 2,528 in 2022, with compensation including base salary, bonuses, and cash subsidies, along with other benefits such as retirement plans and medical insurance[162] Miscellaneous - The company has not purchased, sold, or redeemed any of its listed securities during the year ended December 31, 2023[173] - The company has maintained the public float required by the Hong Kong Stock Exchange Listing Rules as of the date of the announcement[178] - The company's diluted earnings per share were calculated based on a profit of HKD 80.048 million and a weighted average number of 532,054,186 ordinary shares[108] - The company's diluted earnings per share increased due to the anti-dilutive effect of convertible bonds, which were excluded from the calculation of diluted earnings per share[144]

Financial Performance - Revenue for the six months ended June 30, 2023, was HK$505,380,000, representing a 17% increase from HK$431,761,000 in the same period of 2022[5] - Gross profit for the same period was HK$230,847,000, up 27% from HK$181,959,000 year-over-year[5] - Profit before tax increased to HK$82,049,000, a 50% rise compared to HK$54,562,000 in the prior year[5] - Profit for the period reached HK$68,497,000, reflecting a 50% increase from HK$45,565,000 in the previous year[5] - Basic earnings per share attributable to ordinary equity holders was 10.01 HK cents, compared to 7.45 HK cents in the same period last year[19] - Total comprehensive income for the period was HK$59,823,000, up from HK$40,177,000 in the prior year[19] - Profit attributable to owners of the Company for the same period was HK$48,288,000, up from HK$35,822,000, indicating a growth of about 35%[44] - Profit for the period attributable to owners of the Company was HK$48,288,000 for the six months ended 30 June 2023, compared to HK$35,822,000 for the same period in 2022, representing a growth of 34.4%[103] Assets and Liabilities - For the six months ended June 30, 2023, total assets amounted to HK$457,434,000, an increase from HK$430,899,000 as of December 31, 2022, representing a growth of approximately 6%[33] - The net current assets as of June 30, 2023, were HK$238,168,000, a decrease from HK$249,339,000 at the end of 2022, indicating a decline of about 4.5%[33] - The company reported a net asset value of HK$551,698,000 as of June 30, 2023, compared to HK$487,025,000 at the end of 2022, reflecting an increase of approximately 13.3%[34] - The total equity attributable to owners of the company increased to HK$424,856,000 as of June 30, 2023, compared to HK$378,268,000 at the end of 2022, representing a growth of approximately 12.3%[34] - The company reported cash and cash equivalents of HK$213,846,000 as of June 30, 2023, a decrease from HK$222,254,000 at the end of 2022, indicating a decline of about 3.8%[33] - The total liabilities decreased from HK$72,993,000 as of December 31, 2022, to HK$61,604,000 as of June 30, 2023, representing a decline of about 15.6%[181] Expenses and Income - Administrative expenses slightly increased to HK$113,814,000 from HK$112,979,000 year-over-year[5] - The company reported other income of HK$2,399,000, down from HK$6,887,000 in the same period last year[5] - Finance costs decreased to HK$1,901,000 from HK$2,153,000, indicating improved financial management[5] - Other income for the six months ended 30 June 2023 included interest income of HK$1,149,000 and government subsidies of HK$969,000[111] - The company reported a loss on foreign exchange difference of HK$519,000 for the period, compared to a gain of HK$145,000 in the previous year[111] Strategic Focus and Development - The company is focusing on expanding its ESG services, particularly in clean energy and environmental protection, under its "2+X" strategic framework[42] - The company aims to enhance its professional service capabilities in green low-carbon and energy-saving sectors, aligning with its ESG development strategy[42] - Future investment plans will prioritize potential mergers and acquisitions in green low-carbon sectors with sustainable growth potential[42] - The Company focuses on green low-carbon development as a new economic driver, aiming to capture emerging development opportunities in the market[43] - The Group actively seeks mergers and acquisitions opportunities in the global TIC market to enhance synergies and provide sustainable momentum for business expansion[43] Shareholder Returns - The company declared an interim dividend of HK$0.0269 per share for the six months ended 30 June 2023, compared to HK$0.022 per share for the same period in 2022[99] Acquisitions - The company acquired Shibiao Testing (Tianjin) Co., Ltd. on 4 May 2023, enhancing its environmental monitoring and testing services capabilities[79] - The Group's total consideration for the acquisition of Shibiao Testing was HK$2,602,000, with goodwill arising from the acquisition amounting to HK$3,140,000[125] - The net cash outflow arising from the acquisition of Shibiao Testing was HK$2,602,000 after accounting for cash equivalents acquired[125] - The Group acquired non-current assets worth HK$3,726,000 and current assets totaling HK$536,000 during the acquisition of Shibiao Testing[125] Other Financial Metrics - The gearing ratio is monitored based on total net debt divided by capital plus net debt, ensuring effective capital management[47] - The Group's credit risk arises from the default of counterparties, with maximum exposure equal to the carrying amounts of its financial assets[51] - The allowance for credit losses on trade receivables was HK$73,000 as of June 30, 2023, slightly down from HK$75,000 as of December 31, 2022[161] - The Group's prepayments increased significantly to HK$44,977,000 as of June 30, 2023, compared to HK$14,296,000 as of December 31, 2022[161] - The total trade payables as of June 30, 2023, were HK$36,196,000, down from HK$43,622,000 as of December 31, 2022, indicating a decrease of approximately 17.1%[176]

Financial Performance - The total revenue for the six months ended June 30, 2023, was HKD 505,380,000, representing a significant increase of 17% compared to HKD 431,761,000 for the same period in 2022[8]. - Total comprehensive income for the six months ended June 30, 2023, was HKD 59,823,000, representing an increase of 48.5% compared to HKD 40,177,000 for the same period in 2022[44]. - Profit attributable to equity holders of the company for the period was HKD 48,288,000, up from HKD 35,822,000 in the previous year, reflecting a growth of 34.7%[52]. - Profit for the period reached HKD 68.5 million, reflecting a year-on-year growth of 50.2%[68]. - The gross profit for the period was HKD 230.8 million, compared to HKD 182.0 million in the previous period, indicating a significant increase[93]. - The company reported a profit before tax of HKD 82.0 million for the six months ended June 30, 2023, up from HKD 54.6 million in the same period last year, reflecting a strong performance[93]. - Basic earnings per share increased to 10.01 HKD cents from 7.45 HKD cents, marking a rise of 34.2%[44]. - Diluted earnings per share also rose to 9.98 HKD cents from 7.44 HKD cents, indicating an increase of 34.2%[44]. Assets and Liabilities - As of June 30, 2023, the total assets amounted to HKD 582,320,000, an increase from HKD 578,528,000 as of December 31, 2022, reflecting a growth of approximately 0.5%[4]. - The company reported a net asset value of HKD 551,698,000 as of June 30, 2023, compared to HKD 487,025,000 at the end of 2022, reflecting an increase of approximately 13%[13]. - The total liabilities decreased to HKD 219,266,000 from HKD 181,560,000, indicating a reduction of about 18%[4]. - The total liabilities decreased from HKD 43,622,000 in December 2022 to HKD 36,196,000 as of June 30, 2023, representing a reduction of 17.7%[39]. - The company’s total assets and liabilities were managed effectively, with cash and cash equivalents exceeding total liabilities, resulting in a leverage ratio of zero[84]. Revenue Breakdown - The revenue from testing services reached HKD 305,166,000, up from HKD 279,920,000, indicating an increase of about 9%[8]. - The revenue from certification services increased to HKD 134,549,000, compared to HKD 111,025,000, marking a growth of approximately 21%[8]. - The company achieved revenue of HKD 505.4 million for the first half of 2023, representing a year-on-year increase of 17.0%[68]. - The company's revenue increased from approximately HKD 431.8 million for the six months ended June 30, 2022, to approximately HKD 505.4 million for the same period in 2023, representing a growth of 17.0%[112]. Cash Flow and Investments - The net cash and cash equivalents as of June 30, 2023, were HKD 213,846,000, a decrease from HKD 222,254,000 as of December 31, 2022[4]. - The company maintained a prudent financial policy, ensuring a healthy liquidity position throughout the review period[135]. - The company plans to accelerate investments aligned with its ESG strategy, focusing on potential acquisitions and investment opportunities in green low-carbon sectors[132]. Dividends - The company declared an interim dividend of HKD 0.0269 per share for the six months ended June 30, 2023, compared to HKD 0.022 per share in 2022, reflecting an increase of 22.5%[42]. - The interim dividend declared was HKD 0.0269 per share, an increase from HKD 0.022 per share for the six months ended June 30, 2022[98]. Research and Development - The company continues to increase its R&D efforts to enhance technological innovation capabilities in environmental protection services[63]. - The company has increased its R&D investment to enhance service efficiency and quality through the development of a digital testing platform for coal[100]. - The company is actively advancing inspection and testing technology innovations, particularly in solar thermal power testing, achieving significant results[62]. Market Position and Strategy - The company is positioned as a leader in the testing and inspection industry, with a market size expanding to nearly RMB 430 billion in 2022, and expects industry growth of approximately 10% during the 14th Five-Year Plan period[33]. - The company aims to capture new economic growth points focused on green and low-carbon initiatives, leveraging opportunities in the global TIC market[35]. - The company is actively expanding into clean energy, environmental protection, and climate change sectors as part of its "2+X" strategy, which has led to unexpected growth in customer base[81]. - The company is leveraging the booming TIC market and its advantages in niche sectors to strengthen its long-term growth strategy[58]. Corporate Governance and Compliance - The company has adopted corporate governance standards to enhance management quality and protect shareholder interests[88]. - The company has established an Audit Committee in compliance with Listing Rules 3.21 and 3.22, consisting of three independent non-executive directors[142]. - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the period[143]. Employee and Operational Growth - As of June 30, 2023, the company employed 2,660 staff, an increase from 2,327 employees as of June 30, 2022[139]. - The group continues to strengthen its professional service capabilities and enhance its laboratory layout to support market expansion[126]. - The group has implemented refined operational management systems to improve internal management and resource allocation, effectively enhancing operational efficiency[104]. ESG Initiatives - The company emphasizes its ESG development strategy as a core direction, implementing three main execution dimensions: ESG+, ESG-Focused, and ESG-Friendly[128]. - The company aims to enhance its ESG management standards and actively fulfill social responsibilities to establish industry benchmarks[132]. - The company plans to continue its focus on ESG initiatives, with systematic investments yielding initial results in sustainable capabilities[104].

Company Overview - China Leon Inspection Holding Limited was listed on the Main Board of the Stock Exchange in 2016, becoming the first international leading inspection and testing company in Hong Kong[11]. - The company operates 63 branches and professional laboratories globally, providing services in over 50 types of commodities and natural resources[11]. - The company focuses on four key areas: commodity services, clean energy, environmental protection, and climate change, offering 24/7 one-stop services[11]. - The company has achieved a global network expansion, serving major trading ports in the Asia Pacific and emerging markets in South America and Africa[11]. - The company holds 18 categories of professional qualification certifications worldwide, enhancing its credibility in the industry[11]. Clean Energy and Environmental Services - In the clean energy sector, the company provides quality inspection services for wind power and solar power generation, enhancing the stability of power generation through regular operation and maintenance[12][14]. - The company provides environmental protection consulting and monitoring services, including environmental impact assessments and soil pollution investigations[16]. - LDAR services are crucial for detecting and repairing leaks in various industrial sectors, helping to control raw material costs and reduce environmental pollution[16]. - The company offers comprehensive solutions for climate change, including carbon peak and neutrality advisory services and ESG technical consulting[17]. - The clean energy business served 16 leading customers in the new energy sector, supporting major wind and solar power generation projects[92]. - The environmental protection business maintained a 100% one-time pass rate in expert assessments for environmental protection facilities projects[92]. - The company secured nine new industry-leading customers in the climate change sector, providing technology consulting for methane emission reduction[94]. Financial Performance - The Group recorded revenue of HK$944.0 million in 2022, representing a year-on-year increase of 15.3%[83]. - Profit for the year reached HK$104.8 million, reflecting a year-on-year increase of 16.9%[83]. - Profit attributable to owners of the Company was HK$69.4 million, marking a year-on-year increase of 39.3%[83]. - The company's revenue increased by 15.3% from approximately HK$818.8 million in 2021 to approximately HK$944.0 million in 2022[111]. - Profit attributable to owners of the company rose by 39.3% from approximately HK$49.8 million in 2021 to approximately HK$69.4 million in 2022[112]. Management and Governance - The management team consists of eight directors, including four executive directors and three independent non-executive directors[21]. - The chairman and CEO, Mr. Li Xiangli, has over 33 years of experience in the energy testing and inspection field[26]. - The acting-in-concert deed among Mr. Li, Ms. Zhang, and Mr. Liu was established on January 31, 2016, to support decisions on material matters[31]. - The company has complied with all code provisions of the Corporate Governance Code throughout the year ended December 31, 2022, except for a deviation from code provision C.2.1[156]. - The board consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors[160]. Strategic Focus and Development - The company aims to empower global industry leaders to achieve eco-friendly and low-carbon transformation through its services[11]. - The company emphasizes sustainable development and fairness in its operations, continuously expanding its professional service capacity in commodity services[11]. - The company aims to actively seek mergers and acquisitions opportunities in the global TIC market to provide sustainable momentum for business expansion[105]. - The company emphasizes a unique mergers and acquisitions approach that aligns corporate culture with long-term vision[104]. - The company aims to assist customers in achieving a green and low-carbon transition with a full spectrum of services[99]. Cash Flow and Financial Position - Cash and cash equivalents rose from HK$150.6 million in 2021 to HK$222.3 million in 2022, indicating a strong cash position[117][122]. - Net cash inflows from operating activities were approximately HK$176.4 million in 2022, up from HK$134.7 million in 2021, primarily due to higher revenue generation[118][123]. - The group had net cash outflows used in financing activities of approximately HK$37.0 million in 2022, compared to HK$18.5 million in 2021[119][124]. - The gearing ratio was zero in 2022, as cash and cash equivalents exceeded gross debt, compared to a gearing ratio of 6.51% in 2021[137][138]. - The group maintained a healthy liquidity position throughout the year, ensuring sufficient cash and cash equivalents to meet operational needs[129][131]. Compliance and Risk Management - The company faces foreign exchange risk primarily from cash and cash equivalents and convertible bonds denominated in currencies other than the functional currencies of its entities, mainly HKD and USD[148]. - The company continuously monitors accounts receivable balances and assesses the creditworthiness of existing and potential customers[147]. - The company does not require collateral for its credit transactions[147]. - The company has established mechanisms to ensure independent views and inputs are available to the board, which are reviewed annually for effectiveness[161]. Recognition and Awards - The company has been recognized as one of "Asia's 200 Best Under A Billion" by Forbes for two consecutive years, highlighting its governance and operational capabilities[105].

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HAMA CHINA LEON INSPECTION HOLDING LIMITED 中国力鸿检验控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：1586 2022 Interim Report 中期報告 2 Corporate Information 公司資料 5 7 9 11 12 37 45 | --- | --- | --- | --- | --- | |-------|-----------------------------------------------------------------------------------|-------|-------|-------| | | | | | | | | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | | | | | | 簡明綜合損益及其他全面收益表 | | | | | | ...