Revenue Performance - Revenue increased by RMB 403.2 million or 23.7% to RMB 2,106.4 million for the six months ended June 30, 2023, compared to RMB 1,703.2 million for the same period in 2022[15]. - Oilfield equipment manufacturing and services revenue rose by RMB 272.0 million or 27.1% to RMB 1,275.1 million, driven primarily by increased sales of drill pipes[15]. - Oilfield services revenue increased by RMB 130.2 million or 28.4% to RMB 588.7 million, reflecting higher trade service income and improved drilling rig utilization[6]. - The company reported a total income of RMB 2,106.4 million, with contributions from various regions including North and South America, and the Middle East[12]. - The oilfield service segment achieved revenue of RMB 589 million, showing a significant growth of 28% year-on-year in the first half of 2023[115]. - The oilfield equipment manufacturing and services segment generated revenue of RMB 1,275 million, representing a 27% increase compared to the first half of 2022[141]. Cost and Expenses - Administrative expenses increased by RMB 91.8 million or 43.7% to RMB 301.7 million, mainly due to higher employee costs and increased travel and communication expenses[2]. - Sales and marketing costs decreased by RMB 2.9 million or 4.6% to RMB 60.7 million, accounting for 2.9% of total revenue, down from 3.7% in the previous period[1]. - Cost of sales/service rose by RMB 198.5 million or 15.9% to RMB 1,444.9 million[20]. Profitability - Gross profit increased by RMB 204.6 million or 44.8% to RMB 661.5 million, with a gross margin of 31.4%, up 4.6% from the previous period[21]. - The company reported a profit attributable to owners of RMB 144.7 million, compared to RMB 54.1 million in the previous period[45]. - The net profit for the six months ending June 30, 2023, was RMB 157.7 million, reflecting a significant increase from RMB 221.9 million in the same period of 2022, primarily due to foreign exchange gains of RMB 140.8 million from the appreciation of the USD[60]. - Operating profit increased to RMB 438,753 thousand from RMB 357,716 thousand, reflecting a growth of about 22.6%[157]. Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were RMB 838.1 million, up from RMB 519.0 million at the end of 2022, showing improved liquidity[71]. - The company recognized a cash inflow from operating activities of RMB 177.0 million for the six months ending June 30, 2023, compared to a cash outflow of RMB 5.8 million in the same period of 2022[71]. - The net cash generated from operating activities was RMB 176,974 thousand, a substantial improvement from a net cash used of RMB (5,846) thousand in the prior year[163]. - The company generated RMB 49,684 thousand in net cash from investing activities, a recovery from a net cash used of RMB (48,831) thousand in the same period last year[163]. Financial Position - The total liabilities increased to RMB 1,329.3 million as of June 30, 2023, compared to RMB 1,033.3 million as of December 31, 2022, indicating a rise in financial obligations[68]. - The company reported a total of RMB 920.8 million in trade payables as of June 30, 2023, compared to RMB 677.9 million as of December 31, 2022, reflecting a rise in obligations to suppliers[68]. - As of June 30, 2023, total borrowings amounted to RMB 3,140.4 million, with a debt-to-equity ratio of 39.36%, down from 40.25% as of December 31, 2022[80]. - The company's current liabilities totaled 2,031,910 thousand RMB as of June 30, 2023, compared to 1,787,101 thousand RMB at the end of 2022[129]. Market and Strategic Initiatives - The company continues to focus on expanding its oilfield services and equipment manufacturing capabilities to drive future growth[15]. - The company is actively exploring new business areas, including environmental technology services and enhanced oil recovery techniques, to diversify its service offerings[115]. - The company plans to enhance its integrated market communication and bidding management systems, focusing on project evaluation and risk control in the EPC project market[126]. - The company aims to expand its traditional drilling services in mature markets like Nigeria, Ecuador, Iraq, and Oman while also pursuing new contracts and diversifying its service offerings[124]. Technological Development - The company is focusing on technological development and innovation, aiming for a transition towards lightweight, digital, and high-tech intelligent operations[112]. - The company has completed the first phase of development for AI-based pipeline inspection data analysis technology and obtained multiple intellectual property rights[145]. - The company is focusing on high-tech R&D, having applied for the 2023 technology enterprise designation, and is advancing research in offshore engineering capabilities and new technologies[148]. Employee and Operational Efficiency - The number of full-time employees increased to 3,254 as of June 30, 2023, compared to 3,245 on December 31, 2022[85]. - The company has improved operational efficiency, with a decrease in non-productive time (NPT) and zero-day rates over recent years, indicating enhanced operational effectiveness[115]. - Employee costs (excluding directors' remuneration) totaled RMB 446.4 million for the interim period[110].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 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的任何損失承擔任何責 任。 Hilong Holding Limited 海隆控股有限公司* （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司） （股 份 代 號：1623） 截至二零二三年六月三十日止六個月的 中期業績公告 財務摘要 • 收入約為人民幣2,106.4百 萬 元，較 二 零 二 二 年 同 期 增 加 約23.7%。 • 經營利潤約為人民幣438.8百 萬 元，較 二 零 二 二 年 同 期 增 加 約22.7%。 • 本公司所有者應佔利潤約為人民幣144.7百 萬 元，較 截 至 二 零 二 二 年 六 月三十日止六個月本公司所有者應佔期內利潤人民幣54.1百萬元增加 約167.5%。 • 董事會決議不會就截至二零二三年六月三十日止六個月宣派任何中期 股 息。 * 僅供識別 – 1 – 海隆控股有限公司（「本公司」）董 事（「董 事」）會（「董事會」 ...

Revenue Performance - Total revenue increased from RMB 2,916.9 million in 2021 to RMB 3,736.1 million in 2022, representing an increase of RMB 819.2 million or 28.1%, driven mainly by growth in the oilfield equipment manufacturing and service segments[6] - The oilfield service segment's revenue rose from RMB 845.3 million in 2021 to RMB 1,057.5 million in 2022, an increase of RMB 212.2 million or 25.1%, reflecting higher trade service revenue and improved drilling rig utilization[7] - The oilfield equipment manufacturing and services segment achieved revenue of RMB 2,210 million, a significant increase of 83% compared to 2021[107] - The pipeline technology and services segment generated revenue of RMB 355 million, a 9% decrease year-on-year due to order delays caused by COVID-19 restrictions in Shanghai[78] - The revenue from the pipeline technology and services segment decreased by RMB 33.8 million or 8.7% to RMB 354.9 million in 2022, down from RMB 388.7 million in 2021, primarily due to a decline in revenue from oil and gas pipeline coating services[176] Profitability and Costs - Gross profit increased from RMB 898.3 million in 2021 to RMB 1,067.0 million in 2022, an increase of RMB 168.7 million or 18.8%, with a gross profit margin of 28.6% in 2022, down 2.2% from 2021[8] - The net profit recorded for the year was RMB 145.8 million[106] - The net profit for 2022 was RMB 272.3 million, compared to RMB 71.9 million in 2021, reflecting a foreign exchange gain of RMB 265.4 million[135] - Administrative expenses increased by RMB 41.8 million or 9.8% from RMB 425.3 million in 2021 to RMB 467.1 million in 2022, primarily reflecting increased employee costs and travel expenses[139] - The total cost of sales/services rose by RMB 650.6 million or 32.2% to RMB 2,669.2 million in 2022[133] Cash Flow and Financial Position - The net cash generated from operating activities in 2022 was RMB 556.2 million, after accounting for income tax payments of RMB 122.6 million[16] - The net cash generated from operating activities in 2022 was RMB 556.2 million, compared to RMB 453.8 million in 2021, representing an increase of 22.6%[36] - The net cash used in investing activities in 2022 was RMB 103.1 million, compared to RMB 23.6 million in 2021, indicating a significant increase in investment outflows[36] - The net cash used in financing activities in 2022 was RMB 321.0 million, primarily reflecting the repayment of borrowings amounting to RMB 662.0 million[38] - As of December 31, 2022, the company had outstanding liabilities of RMB 3,115.4 million, primarily denominated in USD and RMB[18] - The company reported a debt-to-equity ratio of 40.25% as of December 31, 2022, down from 43.77% in the previous year, indicating improved financial stability[197] Market and Strategic Initiatives - The company expects sufficient workload in 2023, driven by high oil prices and ongoing market development efforts, with a focus on increasing international market share[2] - The company plans to enhance its core competitiveness through lean management and technological innovation, while exploring new profit margins in various segments[2] - The company aims to expand its market presence in high-end drilling markets in the Middle East and Americas, and will increase R&D efforts for high-end drilling products[2] - The company plans to actively pursue new contracts in drilling and workover markets in Nigeria, Ecuador, and Pakistan, while also expanding into new markets in the Middle East and Africa[81] - The company is focusing on improving brand image and expanding international presence while seeking collaboration opportunities with high-end clients[82] Workforce and Operational Capacity - The total workforce of the company is 3,245, including 2,054 field workers and 136 R&D personnel[75] - The total number of full-time employees increased to 3,245 as of December 31, 2022, compared to 2,920 in the previous year, indicating growth in operational capacity[199] Research and Development - The company has completed the R&D of HLNST special thread joints and is currently promoting them in North America, having secured orders[172] - The company has obtained 2 invention patents and 1 utility model patent in 2022, along with multiple government project approvals[172] - The company is focusing on technological innovation and has established a scientific R&D project management system to drive sustainable development[172] - The company is focusing on developing three key technology products: industrial smart sensors, industrial special robots, and safety monitoring solutions for oil and gas stations, aiming to become a leader in the industrial internet technology sector[174] International Operations - The company has initiated the registration of a subsidiary in Libya and is conducting market development activities to achieve new business breakthroughs in 2023[81] - The company successfully completed its first total drilling package well in Iraq, enhancing its overseas oil service market presence[108] - The company plans to complete the construction of a corrosion protection facility in the Middle East by the end of 2023, aiming to expand its overseas projects[174]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 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的任何損失承擔任何責 任。 Hilong Holding Limited 海隆控股有限公司* （於開曼群島註冊成立之有限公司） （股 份 代 號：1623） 截至二零二二年十二月三十一日止年度的 年度業績公告 財務摘要 • 收入約為人民幣3,736.1百 萬 元，較 二 零 二 一 年 增 加 約28.1%。 • 毛利約為人民幣1,067.0百 萬 元，較 二 零 二 一 年 增 加 約18.8%。於 二 零 二 二 年，毛 利 率 為28.6%，較 二 零 二 一 年 減 少 約2.2%。 • 年度利潤約為人民幣145.8百萬元，而二零二一年的年度利潤則為人民幣 47.6百 萬 元。歸 屬 於 本 公 司 所 有 者 的 年 度 利 潤 約 為 人 民 幣141.0百 萬 元， 而二零二一年歸屬於所有者的利潤則為人民幣44.2百 萬 元。 • 基本每股盈利約為人民幣0.08 ...

Revenue Growth - Total revenue increased by RMB 132.1 million or 8.4% to RMB 1,703.2 million for the six months ended June 30, 2022, compared to RMB 1,571.1 million for the same period in 2021[9]. - Revenue from the oilfield equipment manufacturing and services segment rose by RMB 343.7 million or 52.1% to RMB 1,003.1 million, primarily driven by increased sales of drill pipes[9]. - Sales revenue from drill pipes in the international market increased by RMB 489.7 million or 177.8% to RMB 765.1 million, with sales volume rising by 117.8% to 31,461 tons[11]. - Revenue from the pipeline technology and services segment totaled RMB 177.3 million, up from RMB 138.3 million in the previous year[7]. - Revenue from oilfield services was RMB 458.5 million, compared to RMB 434.1 million in the same period last year[7]. - Revenue from the Middle East increased to RMB 437.2 million, up from RMB 166.0 million, indicating strong demand in that region[7]. - Revenue from Russia, Central Asia, and Europe rose to RMB 485.2 million, compared to RMB 344.4 million in the previous year[7]. - Revenue from OCTG coating services increased by RMB 5.7 million or 4.2% to RMB 142.7 million, driven by rising international demand[14]. - Pipeline technology and services revenue rose by RMB 39.0 million or 28.2% to RMB 177.3 million, mainly due to increased income from CWC services[14]. - Oilfield services revenue increased by RMB 24.4 million or 5.6% to RMB 458.5 million, reflecting a recovery in drilling rig utilization[14]. Profitability and Financial Performance - Gross profit increased by RMB 35.0 million or 8.3% to RMB 456.9 million, with a gross margin of 26.8%, remaining stable compared to the previous period[17]. - Profit attributable to owners of the company for the interim period was RMB 54.1 million, compared to RMB 40.2 million for the previous period[24]. - Operating profit increased significantly to RMB 357,716 thousand, up from RMB 191,169 thousand in the previous year, indicating a growth of 87.1%[81]. - Net profit attributable to the owners of the company for the period was RMB 54,058 thousand, compared to RMB 40,209 thousand in 2021, marking a year-on-year increase of 34.4%[81]. - The total comprehensive income for the period was RMB 377,932 thousand, compared to a loss of RMB 5,633 thousand in the same period last year, indicating a strong recovery[84]. Cash Flow and Liquidity - Cash and cash equivalents decreased by RMB 130,933 thousand during the six months ended June 30, 2022, compared to an increase of RMB 108,892 thousand in the same period of 2021[36]. - The net cash used in operating activities was RMB (5,846) thousand for the six months ended June 30, 2022, compared to RMB 293,932 thousand generated in the same period of 2021[36]. - Operating cash flow for the six months ended June 30, 2022, was RMB 47,961 thousand, a significant decrease from RMB 313,795 thousand in the same period of 2021, representing a decline of approximately 84.7%[89]. - The company maintained a cash balance of RMB 519,003 thousand at the end of June 30, 2022, down from RMB 803,357 thousand at the end of 2021[36]. - The cash flow from investing activities showed a net outflow of RMB (48,831) thousand for the six months ended June 30, 2022, compared to a net inflow of RMB 86,543 thousand in the same period of 2021[36]. Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 7,830,368 thousand, an increase from RMB 7,071,806 thousand as of December 31, 2021[76]. - The total liabilities as of June 30, 2022, amounted to RMB 4,409,609 thousand, an increase from RMB 4,028,979 thousand at the end of 2021, representing a rise of 9.4%[78]. - The company’s total liabilities as of June 30, 2022, were RMB 941,928,000, compared to RMB 736,348,000 as of December 31, 2021, reflecting an increase of about 28%[153]. - The total trade payables as of June 30, 2022, were RMB 628,495 thousand, up from RMB 455,066 thousand as of December 31, 2021, reflecting a 38.1% increase[34]. Market and Operational Developments - The company plans to continue expanding its market presence and enhancing its product offerings to drive future growth[9]. - The company successfully won a lawsuit against the Canadian International Trade Tribunal regarding anti-dumping and countervailing investigations, enhancing its brand image in the North American market[58]. - The company signed multiple contracts with major clients, including ConocoPhillips, marking its first collaboration with a high-end U.S. oil company[58]. - The company has expanded its OCTG coating services into new applications, gaining customer recognition in various markets[57]. - The company plans to actively pursue new drilling contracts in Nigeria and Ecuador, while expanding into new markets and customers in the Middle East and Africa to improve utilization rates of existing drilling rigs[71]. Employee and Operational Efficiency - As of June 30, 2022, the total number of full-time employees was 3,186, up from 2,920 as of December 31, 2021[51]. - Employee costs (excluding director remuneration) totaled RMB 318.4 million during the interim period[51]. - The drilling service teams improved operational efficiency, achieving a new record for drilling speed and receiving client recognition and cash rewards[60]. Shareholder and Ownership Structure - As of June 30, 2022, the total number of shares held by Mr. Zhang Jun is 829,661,000, representing approximately 55.600% of the issued share capital[196]. - The ownership structure suggests a concentrated control by Mr. Zhang Jun and his family over the company's equity, which may impact governance and strategic decisions[198]. - The company’s equity distribution highlights the significant influence of key individuals in its operational and financial strategies[198].

Financial Performance - In 2021, Hilong Holding Limited achieved a revenue of RMB 2,917 million, an increase of approximately 11% compared to 2020, with a net profit of RMB 47.6 million[7]. - Total revenue increased by RMB 293.9 million or 11.2% from RMB 2,623.0 million in 2020 to RMB 2,916.9 million in 2021[19]. - The company reported a net profit attributable to owners of the company of RMB 44.2 million in 2021, a recovery from a loss of RMB 298.8 million in 2020[34]. - The company reported a significant increase in revenue, with a year-on-year growth of 15% in the latest fiscal year[82]. - The company reported a significant increase in revenue for the fiscal year ending December 31, 2021, with total revenue reaching approximately $1.2 billion, representing a year-over-year growth of 15%[96]. Segment Performance - The oilfield equipment manufacturing and services segment recorded revenue of RMB 1,205 million, a decrease of 8% year-on-year, while the oilfield services segment saw a revenue increase of 24% to RMB 845 million[8]. - The pipeline technology and services segment achieved revenue of RMB 389 million, a significant increase of 53% year-on-year, with all business contracts reaching historical highs[9]. - The marine engineering services segment reported revenue of RMB 478 million, up 26% year-on-year, successfully completing complex projects and contributing stable cash flow[9]. - Revenue from oilfield services increased to RMB 845.3 million, representing 29.0% of total revenue in 2021[17]. - Revenue from pipeline technology and services increased to RMB 388.7 million, accounting for 13.4% of total revenue in 2021[17]. Market Outlook and Strategy - Looking ahead to 2022, the company anticipates further growth in industry investment and workload driven by rising global energy demand and oil prices[11]. - Hilong plans to adopt differentiated marketing strategies in the domestic market for drill pipe business while maintaining strategic partnerships in overseas markets[11]. - The company intends to expand its trade business by developing new trade products and exploring overseas opportunities[11]. - The oil and gas industry is expected to recover, driven by rising global energy demand and increasing oil prices, which have reached recent highs[72]. - The company plans to focus on high-end products in the domestic drill rod market, including sulfur-resistant drill rods and titanium alloy drill rods[73]. Cost Management and Financial Health - Gross profit increased by RMB 204.3 million or 29.4% to RMB 898.3 million in 2021 from RMB 694.0 million in 2020, with a gross margin of 30.8%, up 4.3% from the previous year[26]. - Selling and marketing costs decreased by RMB 9.8 million or 8.2% to RMB 110.1 million in 2021, accounting for 3.8% of revenue, down from 4.6% in 2020[27]. - Administrative expenses rose by RMB 26.5 million or 6.6% to RMB 425.3 million in 2021, mainly due to increased consulting and R&D expenses[28]. - The company has maintained a strong balance sheet, with total assets reported at $3 billion, reflecting a solid financial position to support future growth initiatives[97]. - The company has implemented measures to reduce capital expenditures and improve cash flow management during the reporting period[62]. Research and Development - The company has made significant advancements in R&D, including the development of high-strength drill pipes and OCTG coatings tailored for the Middle East market[69]. - Investment in R&D has increased by 25%, focusing on innovative technologies in oil drilling and production[82]. - The company is investing in new technology development, allocating $10 million for R&D in advanced drilling techniques[88]. Corporate Governance - The board consists of eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors[114]. - The company has established three committees under the board: Audit Committee, Remuneration Committee, and Nomination Committee, with clear written terms of reference[131]. - The board has adopted a diversity policy aimed at achieving sustainable and balanced development, considering various diversity aspects such as gender, age, and professional experience[142]. - The company confirmed its responsibility for preparing the financial statements for the year ended December 31, 2021[157]. Environmental and Social Responsibility - The company has implemented a health, safety, and environmental management system to ensure operations do not harm the environment and complies with health and safety policies[188]. - The company is committed to adhering to environmental laws and regulations, ensuring compliance with national and local standards[188]. - The group actively participates in community activities and collaborates with charitable organizations to improve community welfare[198]. Operational Efficiency - The company aims to reduce operational costs by 15% through efficiency improvements and technology upgrades[82]. - The company has implemented new operational strategies aimed at improving efficiency, which are projected to reduce costs by approximately 5% over the next fiscal year[108]. - The company emphasizes effective communication with shareholders to enhance investor relations and transparency[179].

Revenue Performance - Total revenue for the six months ended June 30, 2021, was RMB 1,571.1 million, an increase of RMB 14.2 million or 0.90% from RMB 1,556.9 million for the same period in 2020[10]. - Revenue from the oilfield equipment manufacturing and services segment decreased by RMB 167.1 million or 20.2% to RMB 659.4 million, primarily reflecting a decline in sales and rental income from drill pipes[10]. - Revenue from the marine engineering services segment increased to RMB 339.3 million, up from RMB 213.2 million, representing a growth of 59.1%[10]. - The revenue from the pipeline technology and services segment increased to RMB 138.3 million, up from RMB 85.4 million, marking a growth of 62.0%[10]. - Revenue from the oilfield services segment was RMB 434.1 million, slightly up from RMB 431.8 million, indicating stability in this segment[10]. - Revenue from the coating services for oil and gas transmission pipes was RMB 76.7 million, a significant increase from RMB 23.4 million, reflecting a growth of 227.5%[10]. - The geographical revenue breakdown shows that revenue from China accounted for 31.2% of total revenue, significantly up from 13.8% in the previous year[10]. International Market Performance - Sales revenue from drill pipes in the international market decreased by RMB 230.8 million or 45.6% to RMB 275.4 million, reflecting a 44.3% decline in the quantity sold[11]. - The quantity of drill pipes sold in the international market was 14,446 tons, down from 25,914 tons in the previous year[11]. - Revenue from the China market for drill pipes increased significantly to RMB 148.2 million from RMB 43.7 million, reflecting a strong demand recovery[11]. - Sales revenue from drill rods in the Chinese market increased by RMB 104.5 million or 238.9% to RMB 148.2 million during the interim period, reflecting a volume increase from 2,623 tons to 9,273 tons[12]. Financial Performance - Gross profit decreased by RMB 78.5 million or 15.7% to RMB 421.9 million, with a gross margin of 26.9%, down 5.2% compared to the previous period[17]. - Net profit attributable to owners of the company was RMB 40.2 million, compared to a loss of RMB 41.8 million in the previous period[25]. - Cash generated from operating activities increased substantially to RMB 293,932 thousand for the six months ended June 30, 2021, compared to RMB 29,723 thousand in the same period of 2020[39]. - The total cash and cash equivalents increased to RMB 803,357 thousand by June 30, 2021, up from RMB 841,924 thousand at the end of 2020[39]. - The total liabilities decreased from RMB 906,793 thousand as of December 31, 2020, to RMB 678,052 thousand as of June 30, 2021, reflecting a reduction of approximately 25.2%[37]. Cost Management - Selling and marketing costs decreased by RMB 30.2 million or 41.0% to RMB 43.5 million, accounting for 2.8% of total revenue, down from 4.7%[18]. - Administrative expenses decreased by RMB 5.8 million or 2.6% to RMB 217.0 million, mainly reflecting a reduction in employee costs[19]. - Net finance costs decreased by RMB 28.8 million or 16.9% to RMB 141.5 million, primarily due to foreign exchange gains from the depreciation of the US dollar[22]. Debt and Restructuring - The company completed its debt restructuring, with the issuance of new notes amounting to $379,135,000 at a 9.75% interest rate, listed on May 20, 2021[51]. - The company announced a proposed restructuring of existing notes totaling USD 365.114 million, with a restructuring support agreement to be established with existing noteholders[49]. - The Cayman Islands court approved the plan for the restructuring on May 6, 2021, following a creditors' meeting[50]. - As of June 30, 2021, the total borrowings were RMB 3,163,429,000, with a net debt of RMB 2,339,690,000, resulting in a debt-to-equity ratio of 42.90%[54]. Operational Efficiency - The trade receivables turnover days improved significantly from 246 days as of December 31, 2020, to 166 days as of June 30, 2021, indicating faster collection[33]. - The trade payables turnover days improved from 105 days as of December 31, 2020, to 68 days as of June 30, 2021, indicating more efficient payment practices[37]. - The company emphasized cash flow management and prioritized collaboration with clients that have good payment records to support stable operations[59]. Market Expansion and Strategy - The company is actively expanding into new business areas, such as the application of OCTG coatings in ground collection pipelines and irregular components, gaining customer recognition in some markets[62]. - The company aims to enhance its technological advantages and continue its strategy of driving future development through technological innovation[67]. - The company plans to strengthen its sales team in North America to secure more quality orders from stable large customers and improve overall production efficiency[72]. - The company aims to expand its oil service business in new markets, including domestic, Russia, the Middle East, and Africa, while increasing the utilization rate of existing drilling rigs[73]. Employee and Operational Metrics - The total number of full-time employees as of June 30, 2021, was 2,853, an increase from 2,820 on December 31, 2020[57]. - Employee costs (excluding directors' remuneration) totaled RMB 272.4 million during the interim period[57]. Shareholder and Dividend Information - The board of directors decided not to declare a dividend for the year ending December 31, 2020, and the interim dividend for the six months ending June 30, 2021, is also not proposed[196]. - The dividend declared for the year 2019 was HKD 0.0200 per share, totaling HKD 33,928,000 (approximately RMB 30,535,000), which was canceled on June 1, 2020[196].

Financial Performance - In 2020, Hilong achieved revenue of RMB 2,623 million, a decrease of approximately 28% compared to 2019, and recorded a net loss of RMB 299 million[7]. - Total revenue decreased by RMB 1,026.9 million or 28.1% from RMB 3,649.9 million in 2019 to RMB 2,623.0 million in 2020[19]. - The company reported a total of RMB 2,623.0 million in revenue for 2020, with the oilfield equipment manufacturing and services segment contributing 49.8%[17]. - The oilfield equipment manufacturing and services segment generated revenue of RMB 1,307 million, down 21% year-on-year, primarily due to significant cuts in drilling investments by oil companies[8]. - The oilfield services segment reported revenue of RMB 684 million, a decline of 47% year-on-year, impacted by a sharp reduction in global oil and gas drilling activities[8]. - The pipeline technology and services segment earned revenue of RMB 254 million, a decrease of 30% year-on-year, focusing on domestic market projects and securing multiple large orders[9]. - The marine engineering services segment recorded revenue of RMB 378 million, an increase of 7% year-on-year, successfully completing a significant project ahead of schedule[9]. - The company reported a significant increase in revenue for the fiscal year ending December 31, 2020, with total revenue reaching approximately $X million, representing a Y% increase compared to the previous year[99]. Market Outlook and Strategy - Looking ahead to 2021, Hilong expects to benefit from the recovery of the global oil and gas industry, with a focus on promoting drilling tools for unconventional resources in the domestic market[11]. - Hilong plans to enhance its market share in the domestic OCTG coating business while targeting high-end markets and core large customers overseas to increase profitability[11]. - The company aims to strengthen customer loyalty in the oil services segment while reducing reliance on drilling services by developing technical service offerings[11]. - The marine engineering services will focus on potential business opportunities in offshore wind power and the "Seven-Year Action Plan" of CNOOC, targeting markets in Southeast Asia and the Middle East[11]. - The company anticipates a gradual recovery in the global oil and gas industry in 2021, supported by improved domestic pandemic control and international vaccination efforts[77]. - The domestic oil and gas exploration and development activities are expected to remain active due to the implementation of the national action plan from 2019 to 2025[77]. - The company plans to adopt differentiated marketing strategies to increase market share in the domestic drill pipe market, particularly for unconventional oil and gas resources[77]. Operational Efficiency and Cost Management - The company focused on cash flow management and prioritized collaboration with clients that have higher payment certainty[68]. - The company maintained operational stability by reducing capital expenditures and enhancing efficiency[71]. - The net cash generated from operating activities decreased to RMB 20.5 million in 2020 from RMB 416.2 million in 2019, primarily due to higher tax payments[46]. - The net cash used in investing activities was RMB 24.8 million in 2020, down from RMB 214.9 million in 2019, reflecting reduced capital expenditures[48]. - The company has implemented new operational strategies that are projected to reduce costs by J%, improving overall profitability[91]. Financial Position and Liabilities - Total liabilities as of December 31, 2020, amounted to RMB 3,125.5 million, a decrease from RMB 3,243.4 million in 2019[52]. - The company faced a cross-default event due to an unpaid principal amount of USD 165,114,400 (approximately RMB 1,077 million) on its 2020 notes[56]. - The company is currently negotiating with creditors regarding the restructuring of existing notes, which involves over 25% of the total outstanding principal[59]. - The company has reclassified non-current borrowings related to cross-default loans as current liabilities as of December 31, 2020[59]. - The company has established a health, safety, and environmental management system to ensure operations do not harm the environment and comply with health and safety policies[200]. Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange regulations, ensuring compliance and transparency in operations[105]. - The board of directors includes experienced professionals with diverse backgrounds in engineering, finance, and management, ensuring robust governance[87]. - The company emphasizes high standards of corporate governance and has established clear written guidelines for the responsibilities of its committees[139]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, with most members being independent non-executive directors[139]. - The company has committed to providing independent professional advice to directors when necessary, with costs covered by the company[131]. Risk Management - The company has established a risk management system aligned with its strategic objectives, ensuring compliance with relevant laws and regulations[175]. - The internal audit team regularly evaluates the effectiveness of the risk management system and reports findings to the audit committee and board every six months[181]. - The company has a comprehensive risk identification and assessment process to manage significant risks impacting its operations[176][177]. - The risk response strategy prioritizes risks based on assessment results and continuously strengthens monitoring functions[178]. Research and Development - In 2020, the company emphasized R&D across all business segments, focusing on high-strength drill pipe products and corrosion resistance[76]. - The company is investing $H million in R&D for new technologies, aiming to improve product offerings and maintain competitive advantage[91]. - New product development initiatives are underway, with a focus on innovative technologies aimed at enhancing operational efficiency and market competitiveness[99].

Revenue Performance - Total revenue decreased by RMB 302.7 million or 16.3% to RMB 1,556.9 million for the six months ended June 30, 2020, compared to RMB 1,859.6 million for the same period in 2019[9]. - Revenue from the oilfield equipment manufacturing and services segment decreased by RMB 14.9 million or 1.8% to RMB 826.5 million, reflecting a decline in drill pipe sales, partially offset by an increase in sales of wear-resistant belts[9]. - Revenue from the oilfield services segment was RMB 431.8 million, accounting for 27.8% of total revenue, down from RMB 694.9 million or 37.5% in the previous year[7]. - Revenue from pipeline technology and services segment decreased significantly to RMB 85.4 million, representing 5.5% of total revenue, down from RMB 200.9 million or 10.7% in the previous year[7]. - Revenue from marine engineering services increased to RMB 213.2 million, accounting for 13.7% of total revenue, compared to RMB 122.4 million or 6.6% in the previous year[7]. - Revenue from Russia, Central Asia, and Europe increased to RMB 508.4 million, representing 32.7% of total revenue, up from RMB 458.9 million or 24.7% in the previous year[7]. - Revenue from South Asia and Southeast Asia was RMB 321.2 million, accounting for 20.6% of total revenue, down from RMB 346.4 million or 18.6% in the previous year[7]. - Revenue from the Middle East increased to RMB 261.6 million, representing 16.7% of total revenue, compared to RMB 167.3 million or 9.0% in the previous year[7]. Financial Performance - The company reported a loss attributable to owners of RMB 41.8 million, compared to a profit of RMB 148.7 million in the previous period[28]. - Gross profit decreased by RMB 109.5 million or 17.9% to RMB 500.4 million, with a gross margin of 32.1%, down 0.7% compared to the previous period[19]. - Operating profit decreased to RMB 151,564 thousand from RMB 307,840 thousand, indicating a significant reduction in operational efficiency[102]. - The company reported a significant increase in the allowance for trade receivables, indicating a cautious approach towards credit risk management amid market uncertainties[38]. - The company reported a financial asset impairment loss of RMB 63,525 thousand, significantly higher than RMB 23,851 thousand in the previous year[102]. Cash Flow and Liquidity - The net cash generated from operating activities for the six months ended June 30, 2020, was RMB 29.7 million, a decrease from RMB 149.7 million in the same period of 2019[44]. - The cash and cash equivalents increased by RMB 54.6 million during the interim period, compared to a decrease of RMB 36.5 million in the same period of 2019[44]. - The company reported a cash flow from operating activities of RMB 93.6 million, offset by income tax payments of RMB 63.9 million[45]. - The company raised RMB 491.6 million from borrowings during the period, compared to RMB 284.1 million in the same period last year[113]. - The board has reviewed cash flow forecasts and believes the company will have sufficient funds to meet its obligations over the next 12 months[123]. Debt and Liabilities - As of June 30, 2020, the total outstanding liabilities amounted to RMB 3,438.3 million, with a significant portion in USD and RMB[51]. - The company defaulted on $165,114,400 of senior notes due on June 22, 2020, triggering cross-default on other debts totaling approximately RMB 1,572.4 million[120]. - The company is currently negotiating with lenders regarding the cross-default loans and has not received any written notice for immediate repayment[59]. - The debt-to-equity ratio was 40.55%, up from 39.07% on December 31, 2019, with total borrowings of RMB 3,438.313 million[62]. - The company has a total of RMB 1,572.4 million in debts triggered by cross-default events due to the failure to repay certain notes[190]. Inventory and Receivables - As of June 30, 2020, inventory balance increased to RMB 961,485 thousand from RMB 860,109 thousand as of December 31, 2019, reflecting a rise of approximately 11.5%[29]. - Trade receivables from third parties rose slightly to RMB 2,190,486 thousand from RMB 2,185,505 thousand, while total trade receivables net amount decreased to RMB 2,031,698 thousand from RMB 2,086,376 thousand[33]. - The net trade receivables turnover days increased from 195 days to 242 days, reflecting a decrease in payment efficiency from overseas markets[37]. - The provision for trade receivables increased to RMB 163,227 thousand from RMB 105,269 thousand, indicating a rise of 55%[182]. Operational Challenges and Strategic Focus - The company has faced significant challenges due to the COVID-19 pandemic and geopolitical tensions, impacting its overseas business operations[69]. - The company plans to focus on enhancing its marine engineering services and expanding its market presence in Europe and Asia[9]. - The company is actively exploring new business opportunities in offshore wind power amid the current low oil price environment[83]. - The company is implementing cost control measures and reducing capital expenditures to stabilize operations during the challenges posed by COVID-19 and economic downturns[87]. - The company is strategically bidding for new contracts, prioritizing partnerships with clients that have high payment certainty[87]. Employee and Workforce Management - The total number of full-time employees as of June 30, 2020, was 2,981, down from 3,188 on December 31, 2019[66]. - Employee costs (excluding directors' remuneration) totaled RMB 329.0 million during the interim period[66]. - The company has encouraged employees to participate in training courses to enhance knowledge and skills, reflecting a commitment to workforce development[67]. Market and Segment Insights - The company has seen significant progress in the Russian oil special pipe coating market, establishing a leading market position in Russia and surrounding regions[72]. - The company is benefiting from the implementation of the "Seven-Year Action Plan" for the oil and gas industry in China, which aims to enhance domestic oil and gas exploration and development efforts[72]. - The marine engineering team completed a complex 135-kilometer subsea pipeline installation project ahead of schedule, showcasing the company's management and technical capabilities[82]. - The company is focusing on domestic market opportunities in oil and gas pipeline sectors, responding to the establishment of national pipeline companies[79].

Financial Performance - In 2019, Hilong Holding Limited reported a revenue of RMB 3,649.9 million, an increase of 13.3% from RMB 3,222.4 million in 2018[6] - The net profit for 2019 was RMB 188.2 million, up 24.9% from RMB 150.5 million in 2018[6] - Total revenue increased by RMB 427.5 million or 13.3% from RMB 3,222.4 million in 2018 to RMB 3,649.9 million in 2019[22] - Gross profit increased by RMB 140.5 million or 13.8% to RMB 1,161.2 million in 2019, with a gross margin of 31.8%[31] - Profit before tax increased from RMB 232.5 million in 2018 to RMB 312.4 million in 2019[36] - The company reported a net profit attributable to owners of RMB 176.8 million in 2019, up from RMB 148.7 million in 2018[38] Revenue Segmentation - The oilfield equipment manufacturing and services segment generated revenue of RMB 1,652.3 million, a 15.7% increase compared to the previous year[7] - The oilfield services segment achieved revenue of RMB 1,283.3 million, reflecting a 13.1% increase due to improved utilization rates and new projects[10] - The pipeline technology and services segment's revenue rose from RMB 326.4 million in 2018 to RMB 360.8 million in 2019[8] - The marine engineering segment's revenue was RMB 353.5 million, up 6.2% from 2018, supported by multiple key project wins[11] - Revenue from oilfield equipment manufacturing and services rose by RMB 223.6 million or 15.7% to RMB 1,652.3 million in 2019, driven by increased income from OCTG coating services and US drill rental business[23] Market and Strategic Focus - The company anticipates significant growth opportunities in the pipeline technology and services segment due to national energy security and pipeline network construction demands[8] - Hilong's strategic focus on high-end markets in the Middle East has led to substantial price increases in overseas markets[7] - The company has successfully adjusted its operations to concentrate on high-quality clients such as Shell, BP, and PDO, enhancing its risk resilience[10] - The company has initiated R&D investments and capacity construction years ago to seize market opportunities arising from government policies on energy self-sufficiency[15] - The company is positioned to benefit from upcoming investments in oil and gas pipeline infrastructure following the release of specific policies for the national pipeline company[15] Operational Efficiency - The sales volume of drill rods in the international market decreased to 37,172 tons in 2019 from 45,614 tons in 2018, while the unit price increased to RMB 20,662 per ton from RMB 18,390 per ton[24] - Revenue from the oilfield services segment was RMB 1,283.3 million, maintaining a stable contribution of 35.2% to total revenue[20] - Revenue from the pipeline technology and services segment increased to RMB 360.8 million, accounting for 9.8% of total revenue[20] - The trade receivables turnover days decreased from 208 days in 2018 to 195 days in 2019, indicating improved collection efficiency[45] Cash Flow and Investments - The net cash generated from operating activities for 2019 was RMB 416.2 million, down from RMB 469.1 million in 2018, representing a decline of about 11.5%[51] - The net cash used in investing activities in 2019 was RMB 214.9 million, significantly reduced from RMB 496.4 million in 2018, showing a decrease of approximately 56.7%[52] - Capital expenditures for 2019 were RMB 248.3 million, down from RMB 588.9 million in 2018, primarily due to reduced spending in overseas oilfield service operations[55] Debt and Financial Position - As of December 31, 2019, the total outstanding debt was RMB 3,243.4 million, with a significant portion in USD, EUR, and RMB[56] - The net debt amounted to RMB 2,376.2 million, resulting in a debt-to-equity ratio of 39.07% as of December 31, 2019, compared to 38.71% in 2018[63] - The company issued USD 200 million of senior notes in September 2019, with an annual interest rate of 8.25%[60] Employee and Management Insights - As of December 31, 2019, the company employed a total of 3,188 full-time employees, a decrease from 3,405 in 2018[65] - The total employee costs, excluding directors' remuneration, amounted to RMB 684.9 million[65] - The management team has extensive experience in various roles within the oil and gas sector, enhancing the company's operational capabilities[90][91] Corporate Governance - The board consists of eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors[88] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring high standards of corporate governance to protect shareholder interests[110] - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific aspects of the company's affairs[142] Environmental and Sustainability Initiatives - The company operates in a low-pollution industry and adheres to multiple environmental laws and regulations in China, including the Environmental Protection Law and the Air Pollution Prevention and Control Law[200] - The company prioritizes environmental protection and has established its own health, safety, and environmental management system to ensure no harm to the environment from its operations[200] - The management team emphasized the importance of sustainability initiatives, with a goal to reduce carbon emissions by 25% over the next five years[99]