本公告由中國納泉能源科技控股有限公司（「本公司」，連同其附屬公司統稱「本集 團」）根據香港聯合交易所有限公司證券上市規則（「上市規則」）第13.09(2)(a)條及證 券及期貨條例（香港法例第571章）第XIVA部內幕消息條文（定義見上市規則）作出。 本公司董事（「董事」）會（「董事會」）謹此知會本公司股東（「股東」）及有意投資者，根 據本集團未經審核綜合管理賬目的初步審閱，本集團預期於截至二零二五年六月三 十日止六個月（「二零二五年中期」）錄得虧損淨額不超過約人民幣25,000,000元，而 截至二零二四年六月三十日止六個月的虧損淨額約為人民幣15,070,000元。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部 分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 China Nature Energy Technology Holdings Limited 中國納泉能源科技控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1597） 盈利警告 本集團二零二五年中期的虧損主要原因(i)儲能 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國納泉能源科技控股有限公司 呈交日期: 2025年8月1日 第 2 頁 共 10 頁 v 1.1.1 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01597 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 750,000,000 | HKD | | 0.01 | HKD | | 7,500,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 750,000,000 | HKD | | 0.01 | HKD | | 7,5 ...

Research and Development - The Group reported a significant focus on R&D, integration, manufacturing, and sales of high-voltage pitch control systems for wind turbines, with a product range covering sophisticated models for 2–9 MW series[7] - The Group plans to cautiously invest resources in the research and development of energy storage products and systems, aiming to establish a comprehensive energy storage supply chain[56] Energy Storage Business - The energy storage business is a core area, leveraging advanced technologies such as IoT and AI, with a modern factory in Wuxi covering 13,000 square meters for stable battery assembly[10] - The Company has signed cooperation agreements with CCCC Industrial Investment Holding Limited and others for comprehensive energy storage business development[10] - The company plans to enhance its energy storage business and establish a stable supply chain, aiming to develop it as a new profit growth point[32] - In 2024, the company recognized two order projects in energy storage integration, indicating progress in this core business area[51] - The revenue from the energy storage business in 2024 amounted to approximately RMB 68.7 million, representing an increase of approximately RMB 40 million or approximately 136% from 2023, attributed to customer recognition of the energy storage system[66] - The gross profit margin of the energy storage business in 2024 was approximately –12%, a decrease of 38% from approximately 26% in 2023, primarily due to high labor and raw material costs[79] - The cost of sales for the energy storage business in 2024 was approximately RMB 77.1 million, an increase of RMB 55.1 million from approximately RMB 22 million in 2023, driven by increased material and labor costs[75] Financial Performance - In 2024, the company's revenue decreased to RMB 148,280,000, a decline of 48% compared to RMB 284,075,000 in 2023[22] - The gross loss was RMB 8,968,000, compared to a gross profit of RMB 26,945,000 in 2023, representing a 133% decline[22] - Loss attributable to shareholders increased to RMB 34,733,000, a 242% increase from RMB 10,144,000 in 2023[22] - The Group's total revenue for 2024 was approximately RMB 148.3 million, a decrease of approximately RMB 135.8 million or 47.8% from 2023, primarily due to a reduction in the number of slurry transformers delivered and a decline in operation and maintenance business[59] - The revenue from pitch control systems in 2024 was approximately RMB 53.7 million, a decrease of approximately RMB 163.9 million or approximately 75% from 2023, due to a reduction in orders[61] - The revenue from wind farm operation and maintenance business in 2024 was approximately RMB 10 million, representing a decrease of approximately RMB 10 million or approximately 48% from 2023[65] - The Group recorded a net loss of approximately RMB39.4 million in 2024, an increase of approximately RMB26.9 million from the net loss of approximately RMB12.5 million in 2023, primarily due to increased market competition affecting gross profit in the pitch control systems and energy storage business[90] Market Position and Partnerships - The Company has established stable partnerships with major wind power manufacturers, including Envision Energy and CRRC Group, enhancing its market position[7] - The focus on integrated energy projects, including wind power storage and smart micro-grids, showcases the Group's commitment to innovative solutions[10] - The establishment of new subsidiaries, such as Jiangsu Nature Hongyuan New Energy Technology Co., Ltd., indicates strategic market expansion efforts[6] Corporate Governance - The Company has adopted the Corporate Governance Code as the basis for its corporate governance practices and has complied with all applicable code provisions during the year ended December 31, 2024[178] - The composition of the Board includes Executive Directors, Non-executive Directors, and Independent Non-executive Directors, ensuring a diverse governance structure[195] - The Company has established a whistleblowing channel for employees and other contacts to anonymously report concerns about possible improprieties[184] - The Board meets at least four times a year, ensuring that all Directors have the opportunity to include matters in the agenda for discussion[197] - The Company emphasizes integrity and compliant operation as the foundation of corporate development, continuously improving compliance management systems[179] Management and Personnel - Mr. Li has over 18 years of experience in the wind power industry, having served as general manager and chairman of CECEP Wind-power Investment Corporation[154] - Ms. Wu has more than 20 years of experience in finance management, previously managing finances at Nanjing Powder Metallurgy Factory and Shanghai Nature Power Technology Co., Ltd.[161] - Mr. Kang has over 20 years of experience in strategic management and investor relations for large state-owned and multinational companies[148] - The Group employed a total of 160 employees as of December 31, 2024, an increase from 151 employees in 2023[112] Operational Efficiency - The Group has automated production capabilities with 2 production lines and 6 test benches, ensuring efficient manufacturing processes[7] - The gearing ratio improved to approximately 44% in 2024, a decrease of 6% from 50% in 2023, mainly due to optimization of supply chain management[99] - Capital expenditures in 2024 totaled approximately RMB7 million, significantly down from approximately RMB26 million in 2023, primarily for the purchase of energy storage production equipment[102] Cash Flow and Liabilities - Cash and cash equivalents decreased to RMB 58,202,000, down 23% from RMB 75,921,000 in 2023[24] - Total liabilities reduced to RMB 176,135,000, a 31% decrease from RMB 256,785,000 in 2023[24] - The Group's cash and cash equivalents for 2024 amounted to approximately RMB51 million, a decrease of approximately RMB5 million or approximately 8.9% from approximately RMB56 million in 2023, primarily due to operating losses[101] Foreign Exchange Risk - The company primarily operates in China, with its main business settled in RMB, but it has confirmed foreign currency assets and liabilities, mainly in USD, which expose it to foreign exchange risk[122] - The management has not entered into any forward foreign exchange contracts to hedge against foreign exchange risk but will continue to monitor and take prudent measures to mitigate this risk[122]

Financial Performance - The total revenue for the year ended December 31, 2024, was RMB 148,280,000, a decrease of 47.8% compared to RMB 284,075,000 in 2023[4] - The gross loss for the year was RMB 8,968,000, compared to a gross profit of RMB 26,945,000 in the previous year, indicating a significant decline in profitability[4] - The operating loss increased to RMB 38,880,000 from RMB 8,639,000 in 2023, reflecting a worsening operational performance[4] - The net loss for the year was RMB 39,428,000, compared to a net loss of RMB 12,482,000 in 2023, representing an increase in losses by 216.5%[4] - Basic and diluted loss per share was RMB 0.139, compared to RMB 0.041 in the previous year, indicating a deterioration in shareholder value[4] - The company reported a total loss of RMB 42,080,000 for the year ended December 31, 2024, compared to a profit of RMB 11,661,000 in 2023[19] - The group recorded a gross loss of approximately RMB 9 million in 2024, a decrease of RMB 36 million or 133% from a gross loss of RMB 27 million in 2023, mainly due to intense market competition and rising raw material costs[52] - The group reported a net loss of approximately RMB 39.4 million in 2024, an increase of RMB 26.9 million from a net loss of RMB 12.5 million in 2023, primarily due to declining gross margins in the variable pitch control system and energy storage businesses[59] Asset and Liability Management - Non-current assets decreased to RMB 133,747,000 from RMB 141,226,000, showing a decline in long-term asset value[6] - Current assets decreased significantly to RMB 264,592,000 from RMB 377,113,000, indicating liquidity challenges[6] - Total liabilities decreased to RMB 168,534,000 from RMB 244,078,000, reflecting a reduction in financial obligations[6] - The company's equity attributable to shareholders decreased to RMB 223,237,000 from RMB 257,892,000, indicating a decline in net worth[7] - The asset-liability ratio for the group in 2024 is approximately 44%, a decrease of 6% from 50% in 2023, mainly due to optimized supply chain management[61] Revenue Breakdown - The sales of pitch control systems and related components generated revenue of RMB 53,669,000 in 2024, down 75.3% from RMB 217,569,000 in 2023[18] - The energy storage business saw significant growth, with revenue increasing to RMB 68,686,000 in 2024 from RMB 29,114,000 in 2023, representing a growth of 135.5%[18] - In 2024, the company's total revenue was approximately RMB 148.3 million, a decrease of about RMB 135.8 million or 47.8% compared to 2023, primarily due to a reduction in the delivery of blade transformers and maintenance services[47] - The sales revenue from the blade control system and related components in 2024 was approximately RMB 53.7 million, a decrease of about RMB 163.9 million or 75% compared to 2023, due to a decline in orders received and delivered[49] - The energy storage business achieved a revenue of approximately RMB 68.7 million in 2024, an increase of about RMB 40 million or 136% compared to 2023, reflecting customer recognition of the energy storage systems[49] Cost Management - Employee costs decreased from RMB 36,103,000 in 2023 to RMB 34,258,000 in 2024, reflecting a reduction of approximately 5.1%[5] - The cost of inventory recognized as an expense dropped significantly from RMB 246,037,000 in 2023 to RMB 148,019,000 in 2024, a decrease of about 39.9%[26] - The company's sales cost for 2024 was approximately RMB 157 million, a decrease of about RMB 100 million or 39% compared to 2023[50] - In 2024, the sales cost of the energy storage business is approximately RMB 77.1 million, an increase of RMB 55.1 million compared to RMB 22 million in 2023, primarily due to increased material and labor costs driven by higher revenue in the energy storage segment[51] Operational Highlights - The company continues to focus on the research, development, and sales of pitch control systems and related components, as well as energy storage business[10] - The company delivered 494 sets of blade control system products in 2024, a decrease of 73% compared to the previous year[41] - The annual operating hours of the company's wind farm in 2024 were 2,407 hours, with a total wind power generation of 46.47 million kWh[42] - The company has made progress in energy storage integration, with two project orders secured and the self-developed "1P104S Pack project" advancing smoothly[44] - The company aims to establish a complementary supply chain for energy storage products and systems to enhance its competitive advantage[45] Other Financial Information - Other income for 2024 was RMB 1,642,000, a decrease of 56.3% from RMB 3,756,000 in 2023[21] - The company incurred net financing costs of RMB 3,200,000 in 2024, compared to RMB 3,022,000 in 2023[19] - The company received government subsidies totaling RMB 113,000 in 2024, up from RMB 78,000 in 2023, reflecting support for technology development[22] - The net loss from foreign exchange was RMB 72,000 in 2024, compared to a loss of RMB 237,000 in 2023[23] - The company recorded a deferred tax expense of RMB (3,357,000) in 2024, compared to RMB (915,000) in 2023, indicating an increase in deferred tax liabilities[27] - The group’s other income in 2024 is approximately RMB 1.6 million, a decrease of RMB 2.4 million from RMB 4 million in 2023, mainly due to reduced VAT refunds[54] - The group’s administrative and other operating expenses decreased to approximately RMB 25 million in 2024 from RMB 31 million in 2023, a reduction of RMB 6 million due to lower labor costs and expenses[56] Shareholder Information - The company has not declared or paid any dividends for the years ending December 31, 2024, and 2023[29] - The board does not recommend the payment of a final dividend for the year ending December 31, 2024 (2023: none) [76] - The average number of ordinary shares outstanding remained constant at 250,000,000 for both 2024 and 2023[28] - The annual general meeting will be held on June 27, 2025, with a notice to be published in due course [79] - Share transfer registration will be suspended from June 24, 2025, to June 27, 2025, to qualify for voting at the annual general meeting [80] - The annual results announcement will be published on the company's website and the stock exchange website, with the annual report to be sent to shareholders as applicable [81] Audit and Compliance - The audit committee has reviewed the annual performance and the consolidated financial statements for the year ending December 31, 2024, prepared in accordance with international financial reporting standards [77] - The group's auditor, KPMG, confirmed that the figures in the preliminary announcement align with the audited consolidated financial statements for the year ending December 31, 2024 [78] - The group has no significant contingent liabilities as of December 31, 2024[65]

[Corporate Information](index=2&type=section&id=Corporate%20Information) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Cheng Liquan as Chairman and Mr. Cheng Lifu as CEO [Board of Directors](index=2&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Cheng Liquan as Chairman and Mr. Cheng Lifu as CEO - The Board of Directors includes executive directors Cheng Liquan (Chairman) and Cheng Lifu (CEO), non-executive directors Li Hao and Cheng Liqin, and independent non-executive directors Hong Peiyu, Kang Jian, and Li Shusheng[2](index=2&type=chunk) [Committee Composition](index=2&type=section&id=Committees) The company has established Audit, Nomination, and Remuneration Committees to ensure effective corporate governance, with independent non-executive directors participating in each - Ms. Hong Peiyu chairs the Audit Committee, Mr. Cheng Liquan chairs the Nomination Committee, and Mr. Li Shusheng chairs the Remuneration Committee[2](index=2&type=chunk) [Key Contacts and Office Locations](index=2&type=section&id=Key%20Contacts%20%26%20Locations) The company maintains principal places of business in China and Hong Kong, with details on its share registrar and independent auditor, stock code 1597, and listing date of October 20, 2020 - The company's principal place of business in China is Wuxi, Jiangsu Province, and in Hong Kong is Wong Chuk Hang[3](index=3&type=chunk) - The independent auditor is KPMG, with stock code **1597** and listing date of **October 20, 2020**[3](index=3&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) For the six months ended June 30, 2024, the company experienced significant declines in revenue and gross profit, leading to a substantial increase in loss attributable to shareholders, alongside reduced cash and cash equivalents, and a decrease in total liabilities, net debt, and total equity Financial Highlights for the Six Months Ended June 30, 2024 (RMB thousands) | Indicator | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | Revenue | 49,241 | 123,806 | -60% | | Gross profit | 43 | 9,608 | -100% | | Gross profit margin | 0.09% | 8% | -99% | | Loss attributable to shareholders | -15,070 | -5,467 | -176% | | Loss per share (RMB) | -0.053 | -0.018 | -194% | Balance Sheet Highlights as of June 30, 2024 (RMB thousands) | Indicator | June 30, 2024 | December 31, 2023 | Change % | | :--- | :--- | :--- | :--- | | Cash and cash equivalents and pledged deposits | 47,375 | 75,921 | -38% | | Total debt | 218,130 | 256,785 | -15% | | Net debt | 170,755 | 180,864 | -6% | | Total equity | 246,466 | 261,554 | -6% | [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's performance in core business areas such as wind power and energy storage, outlining future development strategies and financial position [Business Review](index=5&type=section&id=Business%20Review) The company, a wind power and pitch control system solution provider, also invests in and operates electrochemical energy storage systems, maintaining cooperation with key clients in pitch control, stable wind power operations, and securing two energy storage orders during the period - The company's main businesses include wind power and pitch control system solutions, along with the R&D, production, and integration of electrochemical energy storage system products[5](index=5&type=chunk)[8](index=8&type=chunk) - The pitch control system business serves five of China's top ten wind turbine manufacturers, delivering **187 sets** of products covering **2MW to 7MW** models in the first half[11](index=11&type=chunk)[13](index=13&type=chunk) - The Duolun Wind Farm operated for **1,160 hours** and generated **22.64 million kWh** in the first half[12](index=12&type=chunk)[14](index=14&type=chunk) - In the first half, the energy storage business established a core team, commenced plant operations, secured **2** orders, and gained customer recognition[17](index=17&type=chunk)[19](index=19&type=chunk) [Industry Overview](index=6&type=section&id=Industry%20Overview) The global energy system is decarbonizing, with wind and solar power gradually replacing fossil fuels; China targets 25% non-fossil energy consumption and over 1.2 billion kW of wind and solar capacity by 2030, driving rapid growth in wind power and electrochemical energy storage, which saw a **61.87% CAGR** from 2018-2022 - The global energy system is moving towards decarbonization, with wind and solar power gradually replacing fossil fuels[6](index=6&type=chunk)[9](index=9&type=chunk) - China aims for **25%** non-fossil energy consumption and over **1.2 billion kW** of wind and solar installed capacity by **2030**[6](index=6&type=chunk)[9](index=9&type=chunk) - Global newly installed electrochemical energy storage capacity achieved a **61.87%** compound annual growth rate between **2018 and 2022**[7](index=7&type=chunk)[9](index=9&type=chunk) [Pitch Control System Integration, Manufacturing and Sales](index=7&type=section&id=Pitch%20Control%20System%20Related%20Integration%2C%20Manufacture%20and%20Sales) The company develops, manufactures, and sells customized pitch control systems and core components, expanding its client base from Envision Energy to include leading wind turbine manufacturers like Goldwind and Sany Heavy Energy, delivering **187 sets** of **2MW to 7MW** products in the first half - The company's clients include leading wind turbine manufacturers such as Goldwind, Sany Heavy Energy, CRRC Group, Sinovel Wind, and Shanghai Electric[10](index=10&type=chunk)[13](index=13&type=chunk) - For the six months ended June 30, 2024, a total of **187 sets** of pitch control system products were delivered, covering **2MW to 7MW** models[11](index=11&type=chunk)[13](index=13&type=chunk) [Wind Power Generation](index=7&type=section&id=Wind%20Power%20Generation) Since 2015, the company has operated the Duolun Wind Farm in Inner Mongolia with a total installed capacity of **19.5 MW**, which generated **22.64 million kWh** over **1,160 operating hours** for the six months ended June 30, 2024 - The Duolun Wind Farm has a total installed capacity of **19.5 MW**, equipped with **13** wind turbines[12](index=12&type=chunk)[14](index=14&type=chunk) - In the first half, the Duolun Wind Farm operated for **1,160 hours**, generating **22.64 million kWh**[12](index=12&type=chunk)[14](index=14&type=chunk) [Wind Farm Operation and Maintenance](index=8&type=section&id=Wind%20Farm%20Operation%20and%20Maintenance) The company provides aftermarket wind farm operation and maintenance services, including routine O&M, pitch control system upgrades, and consumables supply; the Lingqiu project's transaction has not yet closed due to pending administrative procedures and forest land use approvals - Services include routine wind farm operation and maintenance, pitch control system upgrades, and consumables supply[15](index=15&type=chunk)[18](index=18&type=chunk) - The sale of the Lingqiu distributed wind farm project remained uncompleted as of June 30, 2024, primarily due to unfulfilled closing conditions related to administrative procedures and forest land use approvals[16](index=16&type=chunk)[18](index=18&type=chunk) [Energy Storage](index=8&type=section&id=Energy%20Storage) Energy storage is a core business, offering products, solutions, modules, system equipment, and smart platforms; in the first half of 2024, the company focused on R&D, production, and integration of energy storage systems, forming a core team, commissioning a plant, and securing **2** orders - The energy storage business offers energy storage products and solutions, modules, packs and system equipment, EMS, and smart energy cloud platforms[17](index=17&type=chunk)[19](index=19&type=chunk) - In the first half of 2024, the energy storage business established a core team, completed plant renovation and production line commissioning, and secured **2** orders[17](index=17&type=chunk)[19](index=19&type=chunk) [Group Outlook](index=9&type=section&id=Outlook%20of%20the%20Group) The Group will continue to focus on new energy, maintaining its market share and leadership in pitch control systems, stabilizing wind power generation and O&M, while strengthening its energy storage team, R&D, client development, and supply chain to establish energy storage as a core business - The Group will continue to focus on the new energy power sector, maintaining its market share and leading position in pitch control systems[20](index=20&type=chunk)[23](index=23&type=chunk) - It will strengthen its energy storage team and product R&D, deeply develop energy storage clients, and establish extensive energy storage industry supply chain resources[20](index=20&type=chunk)[23](index=23&type=chunk) - The goal is to rapidly develop energy storage into a core business for the Group[20](index=20&type=chunk)[23](index=23&type=chunk) [Financial Position and Operating Results](index=9&type=section&id=Financial%20Position%20and%20Operating%20Results) In the first half of 2024, the Group's total revenue decreased by **60%** year-on-year to **RMB 49 million**, primarily due to reduced orders in the pitch control system business; while cost of sales declined with fewer orders, gross profit and margin fell sharply, leading to a significant loss of **RMB 15 million** for the period, mainly impacted by reduced sales volume and fixed costs - In the first half of 2024, the Group's total revenue was **RMB 49 million**, a **60%** year-on-year decrease, primarily due to reduced sales orders in the pitch control system business[22](index=22&type=chunk)[25](index=25&type=chunk) - The loss for the period was approximately **RMB 15 million**, an increase of approximately **RMB 10 million** compared to the loss of approximately **RMB 5 million** in the first half of 2023[43](index=43&type=chunk)[49](index=49&type=chunk) [Revenue](index=9&type=section&id=Revenue) Total revenue for the first half of 2024 was **RMB 49 million**, a **60%** year-on-year decrease, with pitch control system revenue down **81%**, wind power and O&M revenues down **19%** and **32%** respectively, while energy storage revenue significantly increased to **RMB 14 million** Revenue Breakdown by Business Segment for the First Half of 2024 (RMB thousands) | Business | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | Sales of pitch control systems and related components | 19,921 | 103,021 | -81% | | Sales of wind power | 7,704 | 9,523 | -19% | | Wind farm operation and maintenance business | 7,319 | 10,711 | -32% | | Energy storage business | 14,297 | 551 | +2494% | | **Total** | **49,241** | **123,806** | **-60%** | - The decrease in pitch control system business revenue was primarily due to delays in wind power project approvals and commencement, temporary insufficient market demand, and reduced orders[27](index=27&type=chunk)[29](index=29&type=chunk) - The decrease in wind power generation revenue was mainly due to reduced national electricity consumption, limiting grid-connected power[27](index=27&type=chunk)[29](index=29&type=chunk) - Energy storage business revenue significantly increased and is currently in an expansion phase[30](index=30&type=chunk)[33](index=33&type=chunk) [Cost of Sales](index=11&type=section&id=Cost%20of%20Sales) Cost of sales for the first half of 2024 was **RMB 49 million**, a **57%** year-on-year decrease, primarily due to fewer pitch control system orders; pitch control system cost of sales fell **75%**, wind farm O&M costs decreased, wind power generation costs remained stable, and energy storage cost of sales was **RMB 15 million** - Cost of sales for the first half of 2024 was approximately **RMB 49 million**, a **57%** year-on-year decrease, mainly due to reduced pitch system orders[31](index=31&type=chunk)[34](index=34&type=chunk) - Pitch control system business cost of sales was approximately **RMB 25 million**, a **75%** year-on-year decrease[31](index=31&type=chunk)[34](index=34&type=chunk) - Energy storage business cost of sales was approximately **RMB 15 million**[32](index=32&type=chunk)[34](index=34&type=chunk) [Gross Profit and Gross Profit Margin](index=12&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) In the first half of 2024, the Group's gross profit was nearly zero (**RMB 0 million**), a **100%** year-on-year decrease, with the overall gross margin falling to **0%**; the pitch control system business reported a negative gross profit, with its margin dropping from **3%** to **-24%** due to reduced sales volume and stable fixed costs, while wind power gross profit declined and energy storage gross margin was **-3%** - The Group's gross profit for the first half of 2024 was approximately **RMB 0 million**, a **100%** year-on-year decrease, with an overall gross margin of **0%**, a decrease of approximately **8%** year-on-year[35](index=35&type=chunk)[37](index=37&type=chunk) - The pitch control system business gross profit was approximately **RMB -5 million**, with its gross margin decreasing from **3%** in the first half of 2023 to **-24%** in the first half of 2024, primarily due to reduced sales volume while fixed costs remained stable[35](index=35&type=chunk)[37](index=37&type=chunk) - The energy storage business gross margin was approximately **-3%**, mainly due to insufficient business volume leading to higher unit fixed costs[36](index=36&type=chunk)[37](index=37&type=chunk) [Other Income](index=13&type=section&id=Other%20Revenue) Other income for the first half of 2024 was approximately **RMB 1 million**, remaining largely consistent with the same period last year - Other income for the first half of 2024 was approximately **RMB 1 million**, largely consistent with the first half of 2023[38](index=38&type=chunk)[44](index=44&type=chunk) [Selling and Distribution Expenses](index=13&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the first half of 2024 were approximately **RMB 4 million**, a year-on-year increase of **RMB 1 million**, primarily due to increased business promotion fees and personnel during the energy storage business expansion phase - Selling and distribution expenses for the first half of 2024 were approximately **RMB 4 million**, a year-on-year increase of **RMB 1 million**[39](index=39&type=chunk)[45](index=45&type=chunk) - The increase was primarily due to increased business promotion fees and personnel during the energy storage business expansion phase[39](index=39&type=chunk)[45](index=45&type=chunk) [Administrative and Other Operating Expenses](index=13&type=section&id=Administrative%20and%20Other%20Operating%20Expenses) Administrative and other operating expenses for the first half of 2024 were approximately **RMB 12 million**, remaining largely consistent with the same period last year - Administrative and other operating expenses for the first half of 2024 were approximately **RMB 12 million**, largely consistent with the first half of 2023[40](index=40&type=chunk)[46](index=46&type=chunk) [Finance Costs](index=13&type=section&id=Finance%20Costs) Finance costs for the first half of 2024 were approximately **RMB 2 million**, a year-on-year increase of **RMB 1 million**, primarily due to increased borrowings for energy storage projects - Finance costs for the first half of 2024 were approximately **RMB 2 million**, a year-on-year increase of **RMB 1 million**[41](index=41&type=chunk)[47](index=47&type=chunk) - The increase was primarily due to increased borrowings for energy storage projects[41](index=41&type=chunk)[47](index=47&type=chunk) [Gearing Ratio](index=13&type=section&id=Gearing%20Ratio) As of June 30, 2024, the Group's gearing ratio was **47%**, consistent with December 31, 2023 - As of June 30, 2024, the Group's gearing ratio was **47%**, consistent with December 31, 2023[42](index=42&type=chunk)[48](index=48&type=chunk) [Loss for the Reporting Period](index=13&type=section&id=Loss%20for%20the%20Reporting%20Period) As of June 30, 2024, the Group's loss for the period was approximately **RMB 15 million**, an increase of approximately **RMB 10 million** compared to the **RMB 5 million** loss in the first half of 2023; loss attributable to owners of the Company was approximately **RMB 13 million**, a year-on-year increase of approximately **RMB 9 million** - As of June 30, 2024, the Group's loss for the period was approximately **RMB 15 million**, a year-on-year increase of approximately **RMB 10 million**[43](index=43&type=chunk)[49](index=49&type=chunk) - Loss attributable to owners of the Company was approximately **RMB 13 million**, a year-on-year increase of approximately **RMB 9 million**[50](index=50&type=chunk)[54](index=54&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Source) The Group's working capital primarily stems from operating cash flow, existing cash and cash equivalents, bank loans, and net proceeds from listing; directors believe the Group has sufficient working capital, with pledged bank deposits and cash equivalents at approximately **RMB 47 million** (down **RMB 29 million** year-on-year) and interest-bearing bank and other borrowings at approximately **RMB 94 million** (up **RMB 25 million** year-on-year) as of June 30, 2024 - The Group's working capital sources include cash flow from operating activities, existing cash and cash equivalents, bank loans, and net proceeds from listing[51](index=51&type=chunk)[55](index=55&type=chunk) - As of June 30, 2024, pledged bank deposits and cash equivalents amounted to approximately **RMB 47 million**, a decrease of approximately **RMB 29 million** from December 31, 2023[52](index=52&type=chunk)[55](index=55&type=chunk) - As of June 30, 2024, interest-bearing bank and other borrowings were approximately **RMB 94 million**, an increase of approximately **RMB 25 million** from December 31, 2023[52](index=52&type=chunk)[55](index=55&type=chunk) [Cash Flows](index=14&type=section&id=Cash%20Flows) As of June 30, 2024, the Group's cash and cash equivalents were approximately **RMB 37 million**, a decrease of approximately **RMB 19 million** from December 31, 2023, primarily due to the settlement of payables for pitch control system raw materials - As of June 30, 2024, the Group's cash and cash equivalents were approximately **RMB 37 million**, a decrease of approximately **RMB 19 million** from December 31, 2023[53](index=53&type=chunk)[56](index=56&type=chunk) - The decrease was primarily due to the settlement of payables for pitch control system raw materials[53](index=53&type=chunk)[56](index=56&type=chunk) [Capital Expenditures](index=15&type=section&id=Capital%20Expenditures) Capital expenditures for the first half of 2024 were approximately **RMB 3 million**, a year-on-year decrease of **RMB 17 million**, mainly due to payments for energy storage project construction and new plant renovation in the prior year - Capital expenditures for the first half of 2024 were approximately **RMB 3 million**, a year-on-year decrease of approximately **RMB 17 million**[57](index=57&type=chunk)[62](index=62&type=chunk) - The decrease was primarily due to payments for energy storage project construction and new plant renovation in the prior year[57](index=57&type=chunk)[62](index=62&type=chunk) [Contingent Liabilities](index=15&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[58](index=58&type=chunk)[63](index=63&type=chunk) [Pledge of Group Assets](index=15&type=section&id=Pledge%20of%20Assets%20by%20the%20Group) As of June 30, 2024, bank loans of approximately **RMB 10 million** were secured by intellectual property of the Group's subsidiaries, and these loans remain outstanding - Bank loan balances of approximately **RMB 10 million** are secured by intellectual property of the Group's subsidiaries[59](index=59&type=chunk)[64](index=64&type=chunk) - As of June 30, 2024, these bank loans remained outstanding[59](index=59&type=chunk)[64](index=64&type=chunk) [Human Resources](index=15&type=section&id=Human%20Resources) As of June 30, 2024, the Group employed **174** staff, an increase from **151** as of December 31, 2023, with all employees having signed labor contracts - As of June 30, 2024, the Group employed a total of **174** staff (December 31, 2023: **151** staff)[60](index=60&type=chunk)[65](index=65&type=chunk) - All employees have signed labor contracts clearly stipulating their positions, responsibilities, remuneration, benefits, training, confidentiality obligations, and other matters[60](index=60&type=chunk)[65](index=65&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Significant Investments and Capital Assets](index=15&type=section&id=Significant%20Investment%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures%2C%20and%20Future%20Plans%20for%20Significant%20Investments%20and%20Capital%20Assets) Except as disclosed in this interim report, for the six months ended June 30, 2024, the Group had no significant investments or material acquisitions or disposals of subsidiaries, associates, and joint ventures - For the six months ended June 30, 2024, the Group had no significant investments or material acquisitions or disposals of subsidiaries, associates, and joint ventures[61](index=61&type=chunk)[65](index=65&type=chunk) [Potential Risk Exposures](index=16&type=section&id=Potential%20Risk%20Exposures) The Group faces policy uncertainty, financial risks, and foreign exchange risks; the new energy sector is policy-driven, and policy changes may impact business; accounts receivable and bill collection face uncertainty, prompting strengthened management; foreign exchange risk primarily arises from non-RMB assets, which management will continuously monitor and prudently manage - The new energy sector is highly policy-driven, and policy changes may lead to decreased demand or investment in areas such as pitch control systems, new energy investments, and energy storage[66](index=66&type=chunk)[69](index=69&type=chunk) - Financial risks are mainly reflected in insufficient cash flow and uncertainty in the collection of accounts receivable and bills receivable; the Group will strictly implement accounts receivable management and credit policies[67](index=67&type=chunk)[70](index=70&type=chunk) - Foreign exchange risk primarily arises from cash and cash equivalents denominated in HKD or USD, which management will continuously monitor and prudently manage[68](index=68&type=chunk)[71](index=71&type=chunk) [Corporate Governance and Other Information](index=16&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, director securities trading compliance, share movements, share option scheme, interests of directors and substantial shareholders, audit committee review of interim results, and dividend policy [Corporate Governance](index=16&type=section&id=Corporate%20Governance) The Board is committed to achieving high corporate governance standards, emphasizing accountability and transparency; the company has adopted and complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules for the six months ended June 30, 2024 - The Board is committed to achieving high corporate governance standards, emphasizing accountability and transparency[72](index=72&type=chunk)[76](index=76&type=chunk) - The company has adopted the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules and complied with all applicable code provisions for the six months ended June 30, 2024[73](index=73&type=chunk)[76](index=76&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=17&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed compliance for the six months ended June 30, 2024 - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[74](index=74&type=chunk)[77](index=77&type=chunk) - All directors have confirmed compliance with the Model Code for the six months ended June 30, 2024[74](index=74&type=chunk)[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[75](index=75&type=chunk)[78](index=78&type=chunk) [Changes in Information of Directors, Chief Executive and Senior Management of the Company](index=18&type=section&id=Changes%20in%20the%20Information%20of%20Directors%20and%20Chief%20Executive%20and%20Senior%20Management%20of%20the%20Company) Mr. Chen Xi resigned as the company's Deputy General Manager of Technology on April 30, 2024; since the publication of the 2023 annual report, there have been no changes in the information of directors and chief executive requiring disclosure under Listing Rule 13.51B(1) - Mr. Chen Xi resigned as the company's Deputy General Manager of Technology on **April 30, 2024**[79](index=79&type=chunk)[82](index=82&type=chunk) - Since the publication of the 2023 annual report, there have been no changes in the information of directors and chief executive requiring disclosure under Listing Rule 13.51B(1)[79](index=79&type=chunk)[82](index=82&type=chunk) [Share Option Scheme](index=18&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on July 16, 2021, to incentivize eligible participants, with exercise prices no less than the higher of the closing price or par value, and a total not exceeding **10%** of the issued share capital on the adoption date; no share options were granted as of June 30, 2024 - The company adopted a share option scheme on **July 16, 2021**, to provide incentives or rewards to eligible participants[80](index=80&type=chunk)[83](index=83&type=chunk) - The exercise price of share options shall not be less than the higher of the closing price or par value of the shares, with the total number not exceeding **10%** of the issued share capital on the adoption date (i.e., **25,000,000 shares**)[85](index=85&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) - As of June 30, 2024, no share options had been granted under the share option scheme[88](index=88&type=chunk)[90](index=90&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=20&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2024, Mr. Cheng Liquan held **187,500,000 shares**, representing **75%** of the company's share capital, through his controlled corporation, Hongyuan BVI, of which he also beneficially owns **100%** Directors' Interests in the Company (as of June 30, 2024) | Director Name | Capacity | Number of Shares Held/Interested | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Cheng Liquan | Interest in controlled corporation | 187,500,000 (L) | 75% | Directors' Interests in Associated Corporations of the Company (as of June 30, 2024) | Director Name | Name of Associated Corporation | Capacity | Number of Shares Held/Interested | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Cheng Liquan | Hongyuan Limited (Hongyuan BVI) | Beneficial owner | 1 | 100% | - Mr. Cheng Liquan is deemed to be interested in all shares held by Hongyuan BVI[91](index=91&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=23&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, substantial shareholder Hongyuan BVI held **187,500,000 shares**, representing **75%** of the company's share capital; Ms. Zhou Xuan, spouse of Mr. Cheng Liquan, is also deemed to have the same interest Substantial Shareholders' Interests in the Company (as of June 30, 2024) | Shareholder Name/Name | Number of Shares Held/Interested | Percentage of Shareholding | | :--- | :--- | :--- | | Hongyuan BVI | 187,500,000 (L) | 75% | | Ms. Zhou Xuan | 187,500,000 (L) | 75% | - Hongyuan BVI is wholly owned by Mr. Cheng Liquan, and Ms. Zhou Xuan, as Mr. Cheng Liquan's spouse, is deemed to have the same interest[93](index=93&type=chunk) [Audit Committee and Review of Interim Results](index=24&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The company has established an Audit Committee in accordance with the Corporate Governance Code, comprising three independent non-executive directors with Ms. Hong Peiyu as Chair; the committee has discussed accounting principles and policies with management and reviewed the unaudited interim condensed consolidated financial statements and interim report for the six months ended June 30, 2024 - The Audit Committee comprises three independent non-executive directors, with Ms. Hong Peiyu serving as Chair[95](index=95&type=chunk)[98](index=98&type=chunk) - The Audit Committee has discussed accounting principles and policies with management and reviewed the unaudited interim condensed consolidated financial statements and interim report for the six months ended June 30, 2024[95](index=95&type=chunk)[98](index=98&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[96](index=96&type=chunk)[99](index=99&type=chunk) [Consolidated Statement of Profit or Loss](index=24&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the company's revenue significantly decreased by **60%** year-on-year to **RMB 49,241 thousand**, resulting in near-zero gross profit; operating loss and loss before tax expanded considerably, with a loss for the period of **RMB 15,070 thousand** and loss attributable to equity holders of the company at **RMB 13,343 thousand** Consolidated Statement of Profit or Loss Summary (for the six months ended June 30, 2024, RMB thousands) | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 49,241 | 123,806 | | Cost of sales | (49,198) | (114,198) | | Gross profit | 43 | 9,608 | | Other income | 830 | 925 | | Other net (losses)/gains | (10) | 41 | | Selling and distribution expenses | (4,338) | (3,441) | | Administrative and other operating expenses | (11,513) | (10,848) | | Loss from operations | (14,988) | (3,715) | | Net finance costs | (1,714) | (1,277) | | Loss before taxation | (16,702) | (4,992) | | Income tax | 1,632 | (475) | | Loss for the period | (15,070) | (5,467) | | Loss attributable to equity holders of the Company | (13,343) | (4,417) | | Loss attributable to non-controlling interests | (1,727) | (1,050) | | Basic and diluted loss per share (RMB) | (0.053) | (0.018) | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=25&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the company reported a loss for the period of **RMB 15,070 thousand**; net other comprehensive income was a negative **RMB 18 thousand**, primarily due to exchange differences on translation of financial statements of entities with non-RMB functional currencies, resulting in a total comprehensive loss of **RMB 15,088 thousand** for the period Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (for the six months ended June 30, 2024, RMB thousands) | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Loss for the period | (15,070) | (5,467) | | Other comprehensive income (after tax): | | | | Exchange differences on translation of financial statements at company level | 205 | 768 | | Exchange differences on translation of financial statements of entities with non-RMB functional currencies | (223) | (779) | | Other comprehensive income for the period | (18) | (11) | | Total comprehensive income for the period | (15,088) | (5,478) | | Attributable to equity holders of the Company | (13,361) | (4,428) | | Attributable to non-controlling interests | (1,727) | (1,050) | [Consolidated Statement of Financial Position](index=26&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the company's total assets less current liabilities were **RMB 256,270 thousand**, a decrease from the end of 2023; non-current assets slightly decreased, while inventories within current assets significantly increased, and trade and other receivables substantially decreased; current liabilities saw an increase in bank and other borrowings and a decrease in trade and other payables Consolidated Statement of Financial Position Summary (as of June 30, 2024, RMB thousands) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 120,520 | 125,672 | | Contract assets | 13,955 | 13,831 | | Other receivables | 300 | 600 | | Deferred tax assets | 3,161 | 1,123 | | **Total non-current assets** | **137,936** | **141,226** | | **Current assets** | | | | Assets held for sale | 7,048 | 7,048 | | Inventories | 49,555 | 12,989 | | Contract assets | 42,465 | 36,874 | | Trade and other receivables | 154,778 | 218,922 | | Loans to related parties and a third party | 25,439 | 25,359 | | Cash and cash equivalents | 36,701 | 55,824 | | Pledged deposits | 10,674 | 20,097 | | **Total current assets** | **326,660** | **377,113** | | **Current liabilities** | | | | Bank loans and other borrowings | 93,606 | 68,561 | | Trade and other payables | 110,754 | 169,749 | | Lease liabilities | 2,954 | 4,310 | | Contract liabilities | 806 | 995 | | Current taxation | 206 | 463 | | **Total current liabilities** | **208,326** | **244,078** | | **Net current assets** | **118,334** | **133,035** | | **Total assets less current liabilities** | **256,270** | **274,261** | | **Non-current liabilities** | | | | Trade and other payables | 835 | 2,093 | | Lease liabilities | 8,969 | 10,614 | | **Total non-current liabilities** | **9,804** | **12,707** | | **Net assets** | **246,466** | **261,554** | | **Total equity** | **246,466** | **261,554** | [Consolidated Statement of Changes in Equity](index=28&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, the company's total equity decreased from **RMB 261,554 thousand** at the end of 2023 to **RMB 246,466 thousand**, primarily due to a loss for the period of **RMB 15,070 thousand**, with **RMB 13,343 thousand** attributable to equity holders of the Company Consolidated Statement of Changes in Equity Summary (for the six months ended June 30, 2024, RMB thousands) | Indicator | Share capital | Share premium | Other reserves | PRC statutory reserve | Exchange reserve | Retained profits | Total | Non-controlling interests | Total equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at December 31, 2023 | 2,168 | 95,992 | 31,646 | 9,490 | (1,278) | 129,985 | 268,003 | 3,662 | 261,554 | | Loss for the period | — | — | — | — | — | (13,343) | (13,343) | (1,727) | (15,070) | | Other comprehensive income | — | — | — | — | (18) | — | (18) | — | (18) | | Total comprehensive income | — | — | — | — | (18) | (13,343) | (13,361) | (1,727) | (15,088) | | Balance at June 30, 2024 | 2,168 | 95,992 | 31,646 | 9,490 | (1,296) | 116,642 | 244,531 | 1,935 | 246,466 | [Condensed Consolidated Cash Flow Statement](index=30&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2024, net cash outflow from operating activities was **RMB 37,620 thousand**, net cash outflow from investing activities was **RMB 2,953 thousand**, and net cash inflow from financing activities was **RMB 21,284 thousand**; cash and cash equivalents at period-end totaled **RMB 36,701 thousand**, a decrease of **RMB 19,289 thousand** from the beginning of the period Condensed Consolidated Cash Flow Statement Summary (for the six months ended June 30, 2024, RMB thousands) | Cash flow category | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (37,620) | 107 | | Net cash used in investing activities | (2,953) | (19,637) | | Net cash generated from financing activities | 21,284 | 5,468 | | Net decrease in cash | (19,289) | (14,062) | | Cash at January 1 | 55,824 | 43,911 | | Effect of exchange rate changes | 166 | 554 | | Cash at June 30 | 36,701 | 30,403 | [Notes to the Unaudited Interim Financial Report](index=31&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides notes to the unaudited interim financial report, covering general information, basis of preparation, changes in accounting policies, revenue and segment reporting, other income, loss before taxation, income tax, loss per share, property, plant and equipment, inventories, trade and other receivables, related party loans, cash and cash equivalents, bank loans, trade and other payables, dividends, capital commitments, and material related party transactions [General Information](index=31&type=section&id=General%20Information) China Naoquan Energy Technology Holdings Limited was incorporated in the Cayman Islands on November 28, 2019, and listed on the Main Board of HKEX on October 20, 2020; the Group primarily engages in R&D, integration, manufacturing, and sales of pitch control systems and related components, wind power generation, wind farm operation and maintenance, and energy storage businesses in China - The company was incorporated in the Cayman Islands on **November 28, 2019**, and listed on the Main Board of the HKEX on **October 20, 2020**[111](index=111&type=chunk)[114](index=114&type=chunk) - The Group's main businesses include R&D, integration, manufacturing, and sales of pitch control systems and related components, wind power generation, wind farm operation and maintenance, and energy storage businesses[111](index=111&type=chunk)[114](index=114&type=chunk) [Basis of Preparation](index=32&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with applicable disclosure provisions of the HKEX Listing Rules and IAS 34, approved for issue on August 28, 2024; it adopts the same accounting policies as the 2023 annual financial statements but does not include full financial statement information required by IFRS - The interim financial report is prepared in accordance with the HKEX Listing Rules and IAS 34, and was approved for issue on **August 28, 2024**[112](index=112&type=chunk)[114](index=114&type=chunk) - The report adopts the same accounting policies as the 2023 annual financial statements but does not include the complete financial statement information required by IFRS[112](index=112&type=chunk)[115](index=115&type=chunk) - The interim financial report is unaudited; the 2023 comparative financial information is extracted from the audited annual financial statements, for which the auditor's report was unqualified[117](index=117&type=chunk) [Changes in Accounting Policies](index=34&type=section&id=Changes%20in%20Accounting%20Policies) Revisions issued by the IASB, including amendments to IAS 1 and IFRS 16, have no significant impact on the Group's performance or financial position for the current or prior periods; the Group has not early adopted any new standards or interpretations not yet effective - Revisions issued by the IASB, including amendments to IAS 1 and IFRS 16, have no significant impact on the Group's performance or financial position for the current or prior periods[118](index=118&type=chunk)[120](index=120&type=chunk) - The Group has not early adopted any new standards or interpretations not yet effective[118](index=118&type=chunk)[120](index=120&type=chunk) [Revenue and Segment Reporting](index=34&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's main businesses include pitch control systems, wind power generation, wind farm operation and maintenance, and energy storage; total revenue for the first half of 2024 was **RMB 49,241 thousand**, a **60%** year-on-year decrease, with pitch control system revenue sharply down **81%** and energy storage revenue significantly up; all Group revenue and non-current assets originate from China, thus no geographical information is presented Disaggregation of Revenue from Contracts with Customers by Business Segment (for the six months ended June 30, 2024, RMB thousands) | Business | 2024 | 2023 | | :--- | :--- | :--- | | Sales of pitch control systems and related components | 19,921 | 103,021 | | Sales of wind power | 7,704 | 9,523 | | Wind farm operation and maintenance business | 7,319 | 10,711 | | Energy storage business | 14,297 | 551 | | **Total** | **49,241** | **123,806** | - The Group is managed by business segments, including sales of pitch control systems and related components, sales of wind power, wind farm operation and maintenance business, and energy storage business[125](index=125&type=chunk) - All Group revenue and non-current assets are derived from China, thus no geographical information is presented[134](index=134&type=chunk)[135](index=135&type=chunk) [Other Income and Other Net Gain/(Loss)](index=41&type=section&id=Other%20Revenue%20and%20Other%20Net%20Gain%2F%28Loss%29) Other income for the first half of 2024 was **RMB 830 thousand**, primarily comprising VAT refunds and government grants; other net loss was **RMB 10 thousand**, mainly consisting of net exchange gains and other items Other Income (for the six months ended June 30, 2024, RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | VAT refunds | 789 | 884 | | Government grants | 6 | 25 | | Others | 35 | 16 | | **Total** | **830** | **925** | Other Net (Losses)/Gains (for the six months ended June 30, 2024, RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net exchange gains | 17 | 66 | | Others | (27) | (25) | | **Total** | **(10)** | **41** | - VAT refunds include refunds from software product sales (**RMB 17 thousand** in 2024) and wind power sales (**RMB 772 thousand** in 2024)[137](index=137&type=chunk)[138](index=138&type=chunk) [Loss Before Taxation](index=42&type=section&id=Loss%20Before%20Taxation) Loss before taxation for the first half of 2024 was **RMB 16,702 thousand**, a significant increase from **RMB 4,992 thousand** in the prior year, primarily impacted by higher net finance costs and cost of sales components such as inventory costs and depreciation expenses Net Finance Costs (for the six months ended June 30, 2024, RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Interest expense on bank loans | 381 | 240 | | Interest expense on loans from third parties | 827 | 826 | | Interest expense on loans from a related party | 500 | — | | Interest expense on lease liabilities | 329 | 348 | | Interest income | (323) | (137) | | **Net finance costs** | **1,714** | **1,277** | Other Items (for the six months ended June 30, 2024, RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Cost of inventories recognized as an expense | 44,917 | 108,166 | | Depreciation expense — owned property, plant and equipment | 5,305 | 4,135 | | Depreciation expense — right-of-use assets | 2,937 | 2,801 | | (Reversal of)/provision for loss allowance on contract assets and trade and other receivables | (8) | 160 | - The increase in net finance costs was primarily due to increased borrowings for energy storage projects[41](index=41&type=chunk)[47](index=47&type=chunk) [Income Tax](index=44&type=section&id=Income%20Tax) Income tax for the first half of 2024 was **RMB 1,632 thousand** (2023: **RMB 475 thousand**), primarily comprising PRC corporate income tax provision and the origination and reversal of deferred tax Income Tax (for the six months ended June 30, 2024, RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Current tax — Provision for PRC corporate income tax for the year | 406 | 1,200 | | Deferred tax — Origination and reversal of temporary differences | (2,038) | (725) | | **Total** | **(1,632)** | **475** | - PRC income tax provision is calculated based on the respective applicable corporate income tax rates of the subsidiaries located in the PRC[150](index=150&type=chunk) [Loss Per Share](index=44&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2024, basic loss per share expanded to **RMB 0.053**, compared to **RMB 0.018** in the prior year; diluted loss per share was the same as basic loss per share due to the absence of potentially dilutive ordinary shares - Basic loss per share is calculated based on the loss attributable to ordinary equity holders of the Company of **RMB 13,343 thousand** and the weighted average of **250,000,000** ordinary shares in issue[148](index=148&type=chunk)[151](index=151&type=chunk) - Basic loss per share was **RMB 0.053** (2023: **RMB 0.018**)[100](index=100&type=chunk) - Diluted loss per share was the same as basic loss per share due to the absence of potentially dilutive ordinary shares[149](index=149&type=chunk)[151](index=151&type=chunk) [Property, Plant and Equipment](index=45&type=section&id=Property%2C%20Plant%20and%20Equipment) In the first half of 2024, the Group's cost of additions to property, plant and equipment was **RMB 3,090 thousand**, a significant decrease from **RMB 16,988 thousand** in the prior year; no items of property, plant and equipment were disposed of during the period - In the first half of 2024, the Group's cost of additions to property, plant and equipment was **RMB 3,090 thousand** (2023: **RMB 16,988 thousand**)[152](index=152&type=chunk)[155](index=155&type=chunk) - No items of property, plant and equipment were disposed of during the period[152](index=152&type=chunk)[155](index=155&type=chunk) [Inventories](index=45&type=section&id=Inventories) For the six months ended June 30, 2024, a decrease in the amount of inventories recognized as an expense in profit or loss of **RMB 927 thousand** was recognized - For the six months ended June 30, 2024, a decrease in the amount of inventories recognized as an expense in profit or loss of **RMB 927 thousand** was recognized[153](index=153&type=chunk)[156](index=156&type=chunk) [Trade and Other Receivables](index=45&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2024, total trade and other receivables amounted to **RMB 155,078 thousand**, a decrease from **RMB 219,522 thousand** at the end of 2023; net trade receivables and bills receivable were **RMB 140,998 thousand**, with **RMB 82,005 thousand** due within one year; electricity price surcharges receivable were **RMB 64,134 thousand**, which directors believe are fully recoverable Trade and Other Receivables (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade receivables and bills receivable, net of loss allowance | 140,998 | 212,660 | | Prepayments | 2,124 | 2,150 | | Other receivables (current) | 11,656 | 4,112 | | Other receivables (non-current) | 300 | 600 | | **Total** | **155,078** | **219,522** | Ageing Analysis of Trade Receivables and Bills Receivable (as of June 30, 2024, RMB thousands) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within one year | 82,005 | 165,718 | | Over one year but within two years | 12,051 | 12,376 | | Over two years but within three years | 12,376 | 14,136 | | Over three years but within four years | 14,136 | 20,430 | | Over four years but within five years | 20,430 | — | | **Total** | **140,998** | **212,660** | - As of June 30, 2024, electricity price surcharges receivable included in trade and other receivables amounted to **RMB 64,134 thousand**, which the directors consider fully recoverable[162](index=162&type=chunk)[163](index=163&type=chunk) [Loans to Related Parties and a Third Party](index=48&type=section&id=Loans%20to%20Related%20Parties%20and%20a%20Third%20Party) As of June 30, 2024, total loans to related parties and a third party amounted to **RMB 25,439 thousand** (net of loss allowance), which are interest-free, unsecured, and repayable no later than December 31, 2024 Loans to Related Parties and a Third Party (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Loans to related parties | 24,300 | 24,300 | | Loans to a third party | 1,330 | 1,250 | | Less: Loss allowance | (191) | (191) | | **Total** | **25,439** | **25,359** | - The loans are interest-free, unsecured, and repayable no later than **December 31, 2024**[166](index=166&type=chunk)[168](index=168&type=chunk) [Cash and Cash Equivalents and Pledged Deposits](index=49&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) As of June 30, 2024, bank balances were **RMB 36,701 thousand**, and pledged deposits were **RMB 10,674 thousand**; cash and cash equivalents in Mainland China amounted to **RMB 28,666 thousand**, subject to foreign exchange control rules Cash and Cash Equivalents (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank balances | 36,701 | 55,824 | Pledged Deposits (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Pledged deposits for issuance of bills payable | 10,674 | 20,097 | - Cash and cash equivalents in Mainland China amounted to **RMB 28,666 thousand**, and remittances to outside the PRC are subject to foreign exchange control rules and regulations[169](index=169&type=chunk)[171](index=171&type=chunk) [Bank Loans and Other Borrowings](index=50&type=section&id=Bank%20Loans%20and%20Other%20Borrowings) As of June 30, 2024, total bank loans and other borrowings increased to **RMB 93,606 thousand** from **RMB 68,561 thousand** at the end of 2023, comprising short-term bank loans of **RMB 44,695 thousand**, loans from third parties of **RMB 28,911 thousand**, and loans from a related party of **RMB 20,000 thousand** Bank Loans and Other Borrowings (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank loans | 44,695 | 19,700 | | Loans from third parties | 28,911 | 28,861 | | Loans from a related party | 20,000 | 20,000 | | **Total** | **93,606** | **68,561** | - Short-term bank loans are due within one year or on demand[174](index=174&type=chunk) - Loans from third parties bear interest at **3.5% to 7%** per annum, are unsecured, and have no fixed repayment terms or are repayable within one year[176](index=176&type=chunk)[177](index=177&type=chunk) - Loans from a related party bear interest at **5%** per annum, are unsecured, and have a one-year term[178](index=178&type=chunk)[180](index=180&type=chunk) [Trade and Other Payables](index=51&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2024, total trade and other payables decreased to **RMB 111,589 thousand** from **RMB 171,842 thousand** at the end of 2023, comprising trade payables of **RMB 59,357 thousand**, bills payable of **RMB 10,294 thousand**, and other payables of **RMB 41,103 thousand** Trade and Other Payables (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade payables (current) | 59,357 | 77,581 | | Bills payable | 10,294 | 45,846 | | Other payables (current) | 41,103 | 46,322 | | Trade payables (non-current) | 835 | 2,093 | | **Total** | **111,589** | **171,842** | Ageing Analysis of Trade Payables (as of June 30, 2024, RMB thousands) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 3 months | 27,297 | 48,946 | | 3 to 6 months | 24,931 | 26,138 | | 6 to 12 months | 6,466 | 1,691 | | Over 12 months | 663 | 806 | | **Total** | **59,357** | **77,581** | Other Payables (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Interest payable | 29,786 | 28,459 | | Staff related costs payable | 2,215 | 4,853 | | Advances from disposal of a joint venture | 5,133 | 5,133 | | Others | 3,969 | 7,877 | | **Total** | **41,103** | **46,322** | [Dividends](index=53&type=section&id=Dividends) For the six months ended June 30, 2024, no dividends were paid or declared by the company - For the six months ended June 30, 2024, no dividends were paid or declared by the company[185](index=185&type=chunk)[188](index=188&type=chunk) [Capital Commitments](index=53&type=section&id=Capital%20Commitments) As of June 30, 2024, and December 31, 2023, there were no significant capital commitments outstanding and not provided for - As of June 30, 2024, and December 31, 2023, there were no significant capital commitments outstanding and not provided for[186](index=186&type=chunk)[189](index=189&type=chunk) [Material Related Party Transactions](index=53&type=section&id=Material%20Related%20Party%20Transactions) For the six months ended June 30, 2024, Mr. Cheng Lifu, an executive director of the company, and his spouse, Ms. Cheng Ning, provided guarantees for bank facilities granted to the Group, totaling **RMB 29,562 thousand** Material Related Party Transactions (as of June 30, 2024, RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Guarantees provided to banks for bank facilities granted | 29,562 | 17,900 | - Mr. Cheng Lifu, an executive director of the company, and his spouse, Ms. Cheng Ning, provided guarantees for bank facilities granted to the Group[190](index=190&type=chunk)[191](index=191&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 49,241 thousand, a decrease of 60.3% compared to RMB 123,806 thousand for the same period in 2023[2] - The gross profit for the same period was RMB 43 thousand, significantly down from RMB 9,608 thousand in 2023, indicating a drastic decline in profitability[2] - Operating loss for the six months was RMB 14,988 thousand, compared to a loss of RMB 3,715 thousand in the previous year, reflecting a worsening operational performance[2] - The net loss for the period was RMB 15,070 thousand, which is a 174.5% increase from the net loss of RMB 5,467 thousand in 2023[2] - Basic and diluted loss per share for the period was RMB 0.053, compared to RMB 0.018 in the same period last year[2] - The company reported a total comprehensive loss of RMB 15,088 thousand for the period, compared to RMB 5,478 thousand in 2023, indicating a significant increase in overall losses[3] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 464,596 thousand, down from RMB 518,339 thousand as of December 31, 2023, indicating a decrease of 10.4%[4] - Current liabilities increased to RMB 208,326 thousand from RMB 244,078 thousand, a decrease of 14.6%[4] - The company's cash and cash equivalents decreased to RMB 36,701 thousand from RMB 55,824 thousand, a decline of 34.3%[4] - Non-current assets decreased to RMB 137,936 thousand from RMB 141,226 thousand, a decline of 2.0%[4] - Trade receivables and notes receivable, net of loss provisions, amounted to RMB 140,998,000 as of June 30, 2024, compared to RMB 212,660,000 as of December 31, 2023[28] - Trade payables decreased to RMB 59,357 million as of June 30, 2024, from RMB 77,581 million as of December 31, 2023, a reduction of approximately 23.4%[39] - Other payables decreased to RMB 41,103 million as of June 30, 2024, down from RMB 46,322 million as of December 31, 2023, reflecting a decline of about 11.5%[41] Revenue Breakdown - The revenue from the sales of pitch control systems and related components was RMB 19,921 thousand, down 80.7% from RMB 103,021 thousand year-over-year[10] - The energy storage business saw significant growth, with revenue increasing to RMB 14,297 thousand from RMB 551 thousand, representing a growth of 2,493.1%[10] - Total revenue for the first half of 2024 was approximately RMB 49.24 million, a decrease of 60% compared to RMB 124 million in the first half of 2023, primarily due to a reduction in sales orders for the pitch control system[55] - Revenue from the pitch control system business in the first half of 2024 was approximately RMB 19.92 million, a decrease of about RMB 83 million or approximately 81% compared to the same period in 2023[56] - The company reported a gross profit of approximately RMB 0 million for the first half of 2024, a decrease of approximately 100% from RMB 10 million in the first half of 2023, resulting in a gross margin of 0%[59] - The energy storage business generated revenue of approximately RMB 14.3 million in the first half of 2024, significantly up from RMB 0.55 million in the same period of 2023[55] Expenses and Costs - The cost of inventory recognized as an expense for the six months ended June 30, 2024, was RMB 44,917,000, down from RMB 108,166,000 in 2023[22] - Sales and distribution expenses increased to approximately RMB 4 million in the first half of 2024 from RMB 3 million in the same period of 2023, primarily due to increased promotional costs for the energy storage business[61] - The group incurred capital expenditures of approximately RMB 3 million in the first half of 2024, a decrease of about RMB 17 million from RMB 20 million in the first half of 2023[69] Financing and Cash Flow - The net financing cost for the six months ended June 30, 2024, was RMB 1,714,000, compared to RMB 1,277,000 for the same period in 2023[21] - As of June 30, 2024, cash and cash equivalents in mainland China amounted to RMB 28,666 million, a decrease from RMB 44,573 million as of December 31, 2023, reflecting a decline of approximately 35.7%[33] - Pledged deposits for notes payable were RMB 10,674 million as of June 30, 2024, down from RMB 20,097 million as of December 31, 2023, representing a decrease of about 46.9%[34] - Total bank loans and other borrowings increased to RMB 93,606 million as of June 30, 2024, compared to RMB 68,561 million as of December 31, 2023, marking an increase of approximately 36.5%[35] - As of June 30, 2024, the group had bank and other borrowings of approximately RMB 94 million, an increase of about RMB 25 million from RMB 69 million as of December 31, 2023[67] Strategic Focus and Market Position - The company has maintained deep cooperation with high-quality customers, expanding its market share in pitch control systems, now covering five of the top ten wind turbine manufacturers in China[48] - The company plans to strengthen its energy storage team and enhance research and development of energy storage products and systems, aiming to make energy storage a core business[53] - The company is focused on maintaining its market share in the pitch control system and stabilizing its mature wind power generation and operation and maintenance business[54] - The group faces risks related to policy uncertainty that could adversely affect demand in the wind power and energy storage sectors[72] Employee and Corporate Governance - The group employed 174 staff as of June 30, 2024, an increase from 151 employees as of December 31, 2023[71] - The board does not recommend the distribution of an interim dividend for the six months ended June 30, 2024[79] - The group has no significant contingent liabilities as of June 30, 2024[69] - The group has not purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2024[75] - The company has not declared or paid any dividends for the six months ended June 30, 2024[42] Accounting and Compliance - The company did not adopt any new accounting standards or interpretations that would significantly impact the financial statements for the current accounting period[3] - The group has not entered into any forward foreign exchange contracts to hedge foreign exchange risks as of June 30, 2024[74]

Financial Performance and Management - The Group's capital expenditure for 2023 amounted to approximately RMB 26.4 million, a significant increase from RMB 6.5 million in 2022, primarily for the acquisition of energy storage production lines and other fixed assets[2]. - The Group incurred short-term borrowings of RMB 9.9 million during the year, with RMB 8 million secured against the intellectual property of a subsidiary[3]. - The Group's financial performance is significantly influenced by policy changes in the new energy power industry, which could lead to reduced demand and impact operational performance[7]. - The Group's financial management practices ensure sufficient working capital to meet current and future operational and financial needs[1]. - The company does not have a predetermined dividend payout ratio, and any future dividends will depend on the board's discretion based on operational performance, cash flow, and financial condition[71]. Human Resources and Employment - As of December 31, 2023, the Group employed a total of 151 employees, a decrease from 218 employees as of December 31, 2022[4]. - As of December 31, 2023, the Group had a total of 151 employees, with 10% of senior management and 34% of the total workforce being female[175]. - The Board comprises seven members, including two female Directors and five male Directors, with a diverse range of skills and experiences in various fields[171]. Governance and Compliance - The company has complied with all applicable code provisions under the Corporate Governance Code during the year ended December 31, 2023[54]. - The company has adopted the principles and code provisions set out in the Corporate Governance Code as the basis for its governance practices[54]. - The company is committed to sustainable development by enhancing compliance management systems[56]. - The company prohibits unauthorized use of confidential or inside information and regularly reminds directors and employees about compliance with securities dealing restrictions[92]. - The Company complied with relevant legal and regulatory requirements during the year, ensuring effective corporate governance practices[179]. Board Structure and Diversity - The Group's board composition includes a mix of executive and independent non-executive directors, ensuring diverse governance[37]. - The Company has adopted a Board Diversity Policy to enhance diversity at the Board level, recognizing its importance for competitive advantage[170]. - Diversity in the Board's composition is considered from various perspectives, including professional experience, gender, age, and cultural background[200]. - The Nomination Committee is responsible for reviewing Board composition and making recommendations on the appointment and succession planning of Directors[162]. - The Nomination Committee evaluates the qualifications of retiring Directors standing for re-election at the annual general meeting[196]. Risk Management and Internal Control - The board reviewed the risk management and internal control systems for the year ended December 31, 2023, and deemed them effective and adequate[90]. - The company has established internal guidelines and procedures to monitor and mitigate risks arising from daily operations, which are crucial for business sustainability[88]. - The Audit Committee's primary duties include reviewing the Group's financial information, overseeing the financial reporting system, and ensuring compliance with accounting standards and legal requirements[125]. - The Board monitors the Group's operational and financial performance to ensure sound internal control and risk management systems are in place[133]. Committees and Meetings - The Company has established an Audit Committee, which held two meetings during the year ended December 31, 2023, to review and discuss the annual financial performance and interim financial results[130]. - The Remuneration Committee held one meeting during the year and made recommendations on the remuneration packages of individual executive Directors and senior management[190]. - The Nomination Committee held one meeting during the year ended December 31, 2023, focusing on the structure, size, composition, and diversity of the Board[196]. - The Audit Committee held two meetings during the year to discuss financial reporting systems, risk management, and internal control systems[186]. Research and Development - The Group's commitment to research and development is reflected in its investment in new technologies and solutions for the new energy sector[11].

Financial Performance - The company reported a loss attributable to equity shareholders of approximately RMB 10.1 million for 2023, a decrease of about RMB 15.5 million compared to a profit of approximately RMB 5.4 million in 2022[2]. - The group recorded a net loss of approximately RMB 12.5 million in 2023, a decrease of about 17.9 million from a net profit of RMB 5.4 million in 2022, mainly due to expenses related to the energy storage business and reduced gross margins in pitch control systems[37]. - The basic and diluted loss per share for 2023 was RMB (0.041), compared to earnings of RMB 0.021 per share in 2022[62]. - The company reported a comprehensive loss before tax of RMB 11,661 thousand in 2023, compared to a profit of RMB 7,237 thousand in 2022[102]. - Operating loss for 2023 was RMB 8,639,000, compared to an operating profit of RMB 9,199,000 in 2022[62]. Revenue and Sales - The total revenue for the group in 2023 was RMB 284.1 million, an increase of 29% compared to RMB 219.9 million in 2022, primarily due to an increase in the number of delivered pitch control systems and growth in the energy storage business[32]. - Revenue from pitch control systems was approximately RMB 217.6 million in 2023, up by about RMB 44.7 million or approximately 26% from 2022, driven by an increase in orders received and delivered[34]. - Energy storage revenue surged to RMB 29.1 million in 2023, a significant increase from RMB 4 million in 2022, reflecting customer recognition of the energy storage solutions[35]. - Reportable segment revenue increased from RMB 219,949 thousand in 2022 to RMB 284,075 thousand in 2023, representing a growth of about 29%[102]. Costs and Expenses - The total cost of sales for 2023 was RMB 257 million, an increase of RMB 65 million from RMB 192 million in 2022[7]. - The gross profit for 2023 was approximately RMB 27 million, a decrease of about RMB 1 million or 2% from RMB 28 million in 2022, with the overall gross margin declining from 13% in 2022 to 9% in 2023[10]. - Administrative and other operating expenses for 2023 were approximately RMB 31 million, an increase of RMB 15 million from about RMB 16 million in 2022, primarily due to increased labor costs and expenses associated with the energy storage business[36]. - The company’s financial expenses for 2023 were approximately RMB 3 million, an increase of about 54% from RMB 2 million in 2022, mainly due to increased bank loans for new energy storage projects[15]. Assets and Liabilities - The asset-liability ratio for 2023 was approximately 50%, an increase of 39% from 11% in 2022, primarily due to an increase in bank loans and other borrowings[3]. - The group’s total assets less current liabilities amounted to RMB 274.3 million as of December 31, 2023, compared to RMB 272.8 million in 2022[45]. - The group had cash and cash equivalents of RMB 55.8 million as of December 31, 2023, an increase from RMB 43.9 million in 2022[45]. - Trade payables increased from RMB 126,632 thousand in 2022 to RMB 171,842 thousand in 2023, an increase of about 35.7%[96]. Government Support and Grants - The company received unconditional government subsidies of RMB 78,000 and RMB 4,267,000 for technology development and local economic contributions in 2023 and 2022, respectively[79]. - Government grants decreased significantly from RMB 4,267 thousand in 2022 to RMB 78 thousand in 2023, a decline of about 98.2%[103]. Future Plans and Investments - The company plans to strengthen its energy storage team and enhance research and development of energy storage products and systems in 2024, aiming to make energy storage a core business[30]. - The company plans to invest in the development of a new distributed wind farm in Lingqiu County, Datong City, Shanxi Province, using part of the IPO proceeds[146]. Corporate Governance and Management - The company emphasizes the importance of good corporate governance standards to protect shareholder interests and enhance corporate value[163]. - The company has maintained strict financial management and credit policies to mitigate risks associated with cash flow and accounts receivable[143]. Miscellaneous - The company has not declared or paid any dividends for both 2023 and 2022[115]. - The company has not engaged in any significant acquisitions or disposals during the fiscal year ending December 31, 2023[148]. - The company has confirmed that it has no foreign exchange hedging contracts in place, exposing it to currency risk primarily from USD-denominated assets and liabilities[156].

Financial Performance - For the six months ended June 30, 2023, the total revenue was RMB 108,166,000, an increase from RMB 73,063,000 in 2022, representing a growth of 47.9%[2] - For the six months ended June 30, 2023, the company's total revenue was approximately RMB 124 million, an increase of 37.8% compared to approximately RMB 90 million in the same period of 2022[37] - Revenue from the pitch control system business amounted to approximately RMB103 million, an increase of approximately RMB34 million or 50% compared to the first half of 2022[65] - Revenue from the wind power generation business for the first half of 2023 was approximately RMB10 million, showing a relatively small change compared to the same period in 2022[66] - Revenue from the wind farm operation and maintenance business was approximately RMB11 million, a decrease of approximately RMB1 million compared to the first half of 2022[68] - The gross profit for the same period was RMB 9.6 million, reflecting a decrease of 5% from RMB 10.1 million in the previous year[42] - The gross profit margin decreased to 8% from 11% year-on-year, indicating a decline of 3 percentage points[42] - The gross profit for the Group was approximately RMB 10 million, consistent with the first half of 2022, but the overall gross profit margin decreased by approximately 3 percentage points to 8%[104] - The gross profit margin for the pitch control system decreased from 4% in the first half of 2022 to 3% in the first half of 2023, mainly due to reduced selling prices to stabilize and capture market share[105] Liabilities and Financial Position - Total liabilities increased to RMB 235,133,000, a rise of 35.3% from RMB 173,723,000 in 2022[14] - Net liabilities reached RMB 185,824,000, reflecting a significant increase of 71.9% compared to RMB 108,106,000 in the previous year[14] - As of 30 June 2023, the Group's gearing ratio was 47%, an increase of approximately 8% from 39% as of 31 December 2022, primarily due to increased suppliers' credit payments[113] - The cash and cash equivalents of the Group as of 30 June 2023 were approximately RMB 30 million, a decrease of approximately RMB 14 million from RMB 44 million as of 31 December 2022, mainly due to payments for the acquisition of property, plant, and equipment for the energy storage project[122] - The Group's interest-bearing bank and other borrowings amounted to RMB42 million, an increase of approximately RMB3 million from RMB39 million as of 31 December 2022[145] Operational Highlights - The Group delivered a total of 881 sets of pitch control system products during the same period, including models ranging from 4 MW to 14 MW[21] - The semi-annual total wind power generated and admitted to the power grid from the Duolun Wind Farm was 29.07 million kWh, with utilization hours of 1,490 hours[26] - The Group's wind farm operated for 1,490 hours in the first half of 2023, generating a total wind power output of 29.07 million kWh[56] - The company delivered a total of 881 pitch control system products, covering models ranging from 4 MW to 14 MW[52] - The wind power generation business operates a centralized wind farm with a total installed capacity of 19.5 MW, generating power sold to the local grid[52] Market and Strategic Initiatives - The Group aims to deepen its domestic market share in the pitch control systems industry while enhancing R&D in the energy storage sector[33] - The overall wind power industry is expected to experience long-term high-speed development opportunities, driven by the trend towards decarbonization and the goal of achieving carbon neutrality by 2060[45] - The company aims to expand its market share in pitch control systems, having covered five out of the top ten turbine manufacturers in China[52] - The company anticipates a concentrated release of accumulated projects in the second half of the year due to seasonal characteristics of wind power construction[36] - The company continues to focus on the development and integration of customized pitch control systems, generating revenue from product sales and integration charges[48] Expenses and Cost Management - The cost of sales for the pitch control system business was approximately RMB100 million, representing an increase of approximately 52% from the first half of 2022[98] - The cost of sales for the Group's business segments amounted to approximately RMB114 million, an increase of approximately 43% from approximately RMB34 million in the first half of 2022[97] - Selling and distribution expenses for the first half of 2023 amounted to approximately RMB 3 million, an increase of RMB 1 million compared to RMB 2 million in the first half of 2022, mainly due to increased revenue and staffing costs[137] - For the six months ended 30 June 2023, the Group's administrative and other operating expenses increased to approximately RMB11 million, up from RMB8 million in the first half of 2022, representing a rise of approximately 37.5%[138] Human Resources and Management - The Group's operation and maintenance team was reduced to 3 persons, focusing on sales of consumables due to changes in the service fee settlement model[28] - The Group employed a total of 113 employees, a decrease from 218 employees as of 31 December 2022[149] - The company aims to recruit 70 additional service personnel to expand wind farm operation and maintenance services, with a budget of RMB 3.6 million[181] Governance and Compliance - The Company has complied with all applicable code provisions under the Corporate Governance Code during the six months ended June 30, 2023[185] - The Company has not purchased, sold, or redeemed any of its listed securities for the six months ended June 30, 2023[191] - The Company has conditionally adopted the Share Option Scheme to reward various stakeholders, including employees and suppliers[197] - The total number of shares that may be issued upon exercise of all share options under the Share Option Scheme is 25,000,000 shares, which represents 10% of the total issued share capital of the Company as of the Adoption Date[199]

Revenue and Profitability - The total customer contract revenue for the six months ended June 30, 2023, was RMB 123,806,000, representing a 38% increase from RMB 89,712,000 in the same period of 2022[2]. - Revenue from the sale of pitch control systems and related components reached RMB 103,021,000, up 50% from RMB 68,574,000 year-over-year[2]. - The company reported a segment profit of RMB 9,608,000 for the six months ended June 30, 2023, down from RMB 10,111,000 in the same period of 2022[17]. - For the six months ended June 30, 2023, the company reported a loss of RMB 5,467,000 compared to a profit of RMB 3,218,000 in the same period of 2022, representing a significant decline in performance[40]. - Revenue for the six months ended June 30, 2023, was RMB 123,806,000, an increase of 38% from RMB 89,712,000 in the same period of 2022[43]. - The gross profit for the group for the six months ended June 30, 2023, was approximately RMB 10 million, remaining consistent with the same period in 2022, while the overall gross margin was 8%, a decrease of about 3 percentage points compared to the previous year[63]. - The gross profit from the pitch control system business was approximately RMB 3 million, with a gross margin decrease from 4% in the first half of 2022 to 3% in the first half of 2023[69]. - The gross profit from the wind power business was approximately RMB 6 million, remaining flat compared to the first half of 2022[70]. Costs and Expenses - The cost of sales increased to RMB 114,198,000 for the six months ended June 30, 2023, compared to RMB 79,601,000 in the previous year, leading to a gross profit decrease to RMB 9,608,000 from RMB 10,111,000[43]. - The sales cost of the variable pitch control system business for the first half of 2023 was approximately RMB 100 million, an increase of about RMB 34 million or 52% compared to the same period in 2022, primarily due to increased orders[59]. - The total sales cost for the group for the six months ended June 30, 2023, was approximately RMB 114 million, an increase of about RMB 34 million or 43% compared to the same period in 2022, mainly due to increased costs from variable pitch system orders[61]. - The sales cost for the wind farm operation and maintenance business was approximately RMB 9 million, a decrease of about RMB 1 million compared to approximately RMB 10 million in the first half of 2022[71]. - Administrative and other operating expenses were approximately RMB 11 million for the first half of 2023, an increase of RMB 3 million from approximately RMB 8 million in the same period of 2022, primarily due to increased management costs associated with the energy storage business team[118]. - Sales and distribution expenses were approximately RMB 3 million for the first half of 2023, an increase of RMB 1 million compared to RMB 2 million in the first half of 2022, mainly due to increased personnel and packaging costs[117]. Assets and Liabilities - The total assets for the reportable segments as of June 30, 2023, amounted to RMB 420,968,000, an increase from RMB 342,736,000 as of December 31, 2022[9]. - The total non-current assets increased to RMB 129,920,000 as of June 30, 2023, from RMB 100,866,000 at the end of 2022, reflecting growth in property, plant, and equipment[46]. - Current liabilities rose to RMB 373,738,000 as of June 30, 2023, compared to RMB 340,860,000 at the end of 2022, indicating increased financial obligations[46]. - The total trade and other payables reached RMB 173,820,000 as of June 30, 2023, compared to RMB 126,632,000 as of December 31, 2022[100]. - The current trade payables increased significantly to RMB 95,355,000 as of June 30, 2023, from RMB 41,057,000 as of December 31, 2022[100]. - As of June 30, 2023, trade receivables amounted to RMB 165,659,000, an increase of approximately 15% from RMB 144,123,000 as of December 31, 2022[98]. - The accounts receivable for electricity price surcharges amounted to RMB 53,815,000 as of June 30, 2023, compared to RMB 46,942,000 as of December 31, 2022[99]. - The debt-to-asset ratio increased to 47% as of June 30, 2023, up from 39% as of December 31, 2022, reflecting an increase of approximately 8% due to supplier credit from business growth[106]. Cash Flow and Financing - The balance of pledged bank deposits and cash equivalents was approximately RMB 493 million, a decrease of about RMB 163 million from approximately RMB 656 million as of December 31, 2022[109]. - Total cash and cash equivalents were approximately RMB 30 million as of June 30, 2023, a decrease of about RMB 14 million from approximately RMB 44 million as of December 31, 2022, primarily due to payments for the acquisition of energy storage project properties, plants, and equipment[122]. - The net financing costs increased to RMB 1,277,000 for the six months ended June 30, 2023, compared to RMB 1,125,000 in the previous year[43]. - The company is closely monitoring cash flow and credit risk management to mitigate financial risks associated with customer payment uncertainties[112]. - The company has fully utilized the net proceeds from its fundraising as of June 30, 2023, with no significant changes to the planned use of proceeds[113]. Government Support and Subsidies - The company received government subsidies of RMB 25,000 and RMB 4,230,000 for technology development and local economic contributions for the periods ended June 30, 2023, and 2022, respectively[25]. - Other income for the first half of 2023 was approximately RMB 1 million, a decrease of about RMB 4 million from approximately RMB 5 million in the first half of 2022, mainly due to fewer government subsidies received[116]. Corporate Governance - The board is committed to achieving good corporate governance standards to protect shareholder interests and enhance corporate value[141]. - The audit committee has been established according to the corporate governance code and consists of three independent non-executive directors[143]. - The audit committee has discussed the accounting principles and policies adopted by the group and reviewed the unaudited interim consolidated financial statements for the six months ended June 30, 2023[144]. - The board includes two executive directors and three independent non-executive directors as of the announcement date[145]. Operational Insights - The company’s operational focus includes the development and sales of wind energy-related consulting services, although specific revenue figures for this segment were not disclosed[5]. - The energy management system (EMS) products have matured and achieved sales, while the energy storage system products have completed preliminary investment stages and are moving towards self-developed products and sales[55]. - The group aims to deepen its market share in the pitch control system sector while enhancing the research and development of core products in the energy storage industry[74]. - The group has maintained stable customer orders, ensuring stable operations despite the overall new installations in the wind power industry being slightly below expectations[75]. - The company adjusted its operational maintenance team size in April 2023, leading to a reduction in labor costs while retaining the supply team for consumables[54]. - The company has not completed the equity transfer of the Lingqiu project as of June 30, 2023, due to unfulfilled delivery conditions[53]. - The group delivered 881 sets of pitch control system products in the first half of 2023, covering models from 4 MW to 14 MW[82]. - The group has not declared or distributed any dividends for the six months ended June 30, 2023[79]. Employment and Staffing - The group employed 113 staff as of June 30, 2023, a decrease from 218 staff as of December 31, 2022[136]. Capital Expenditures - Capital expenditures for the first half of 2023 amounted to approximately RMB 20 million, an increase of RMB 18 million compared to RMB 2 million in the same period of 2022, mainly for payments related to the acquisition of energy storage project properties, plants, and equipment[123]. Losses and Earnings Per Share - The company reported a basic and diluted loss per share of RMB 0.018 for the six months ended June 30, 2023, compared to earnings of RMB 0.013 in the same period of 2022[43]. - The group reported a loss of approximately RMB 5 million for the six months ended June 30, 2023, a decrease of about RMB 8 million compared to a profit of approximately RMB 3 million in the same period of 2022[107]. - The group reported a loss attributable to owners of approximately RMB 4 million for the six months ended June 30, 2023, a decrease of about RMB 7 million compared to a profit of RMB 3 million in the same period of 2022[120].