Group 1 - The stock of Hailong Holdings (01623.HK) has surged over 80% [1]

Market Overview - The A-share market opened with mixed performance, with the Shanghai Composite Index up 0.04% at 3474.63 points, while the Shenzhen Component Index and the ChiNext Index fell by 0.04% and 0.03% respectively [2][3] - The Hong Kong market saw the Hang Seng Index rise by 0.17% and the Hang Seng Tech Index increase by 0.28%, with notable gains in companies like Far East Horizon and Kingstone Pharmaceuticals [4] Sector Performance - Advanced packaging, semiconductor, and power sectors showed strength, while tax refund stores, recombinant protein, and CPO concepts opened lower [1] - The storage chip sector led gains, with companies like Jingzhida rising over 7% following news of Changxin Memory's listing guidance [1] - Shipping and port concepts also performed well, with Ningbo Ocean and Ningbo Shipping both rising over 3% amid news of Houthi attacks on Red Sea merchant ships [1] Monetary Policy - The central bank conducted a 690 billion yuan reverse repurchase operation with a rate of 1.40%, while 1310 billion yuan of reverse repos are set to mature today [5] Currency Exchange - The RMB against the USD was adjusted down by 28 basis points to a midpoint of 7.1534, with the onshore closing price at 7.1747 [6]

[Supplementary Announcement on 2024 Annual Results and Annual Report](index=1&type=section&id=Supplementary%20Announcement%20on%202024%20Annual%20Results%20and%20Annual%20Report) [Introduction and Background](index=1&type=section&id=Introduction%20and%20Background) This announcement provides supplementary information regarding the auditor Crowe's disclaimer of opinion on the Group's consolidated financial statements for the year ended December 31, 2024, as presented in the company's 2024 annual report - This announcement clarifies the auditor Crowe's **disclaimer of opinion** on the company's financial statements in the 2024 annual report[3](index=3&type=chunk) [Basis for Disclaimer of Opinion](index=1&type=section&id=Basis%20for%20Disclaimer%20of%20Opinion) Auditor Crowe issued a disclaimer of opinion due to significant uncertainties regarding the Group's ability to continue as a going concern, primarily stemming from substantial current liabilities, including overdue loan notes, far exceeding cash and cash equivalents - The auditor's inability to express an opinion stems from the potential interplay and cumulative effect of multiple uncertainties casting significant doubt on the Group's **going concern** ability[4](index=4&type=chunk)[5](index=5&type=chunk) Selected Current Liabilities and Cash Position | Item | Amount (RMB) | Notes | | :--- | :--- | :--- | | Loan Notes | 2,261,082,000 | Due and unpaid as of November 18, 2024 | | Bank and Other Borrowings | 425,382,000 | Repayable within 12 months | | **Total Selected Current Liabilities** | **2,686,464,000** | | | Cash and Cash Equivalents | 721,631,000 | Significantly lower than debts due | [Management and Audit Committee's Response and Views](index=2&type=section&id=Management%20and%20Audit%20Committee's%20Response%20and%20Views) Despite liquidity pressures, both management and the Audit Committee deem it appropriate to prepare financial statements on a going concern basis, with management optimistic about plans for debt restructuring, new financing, and improved internal cash flow, a judgment the Audit Committee concurs with after review [Management's Assessment of Going Concern and Mitigation Measures](index=2&type=section&id=Management's%20Assessment%20of%20Going%20Concern%20and%20Mitigation%20Measures) Management has developed detailed plans to alleviate liquidity pressure, including debt restructuring discussions with noteholders, seeking new financing, and improving operating cash flow through accelerated receivables collection and strict cost control, believing these measures will ensure the company's going concern for at least the next 12 months - Management has formulated three key measures to address the liquidity crisis: **1. Engaging with noteholders to seek support for maturity extensions. 2. Pursuing new financing sources to fulfill financial obligations. 3. Accelerating accounts receivable collection and effectively controlling costs and expenses**[8](index=8&type=chunk) - Based on expectations of successful debt restructuring, securing new financing, and improved internal cash flow, management considers the preparation of financial statements on a **going concern basis** appropriate[6](index=6&type=chunk) [Audit Committee's View](index=2&type=section&id=Audit%20Committee's%20View) The Audit Committee assessed the appropriateness of management's use of the going concern basis for financial statement preparation through discussions with management and auditors, review of cash flow forecasts, and obtaining legal and financial advisor opinions, ultimately concurring with management's position - The Audit Committee evaluated and ultimately endorsed management's decision to prepare financial statements on a **going concern basis** through multiple steps, including discussions with management and auditors, reviewing cash flow forecasts, and obtaining legal and financial advisor opinions[7](index=7&type=chunk) [Latest Developments and Outlook](index=3&type=section&id=Latest%20Developments%20and%20Outlook) Despite a winding-up petition received in May 2025, management remains confident in achieving a debt restructuring agreement, having implemented measures since April 2025 to accelerate receivables collection and control costs, expecting improved operating cash flow in H2 2025 to resolve the root cause of the auditor's disclaimer - The company faces a **winding-up petition** filed on May 27, 2025, which management intends to vigorously oppose while actively pursuing debt restructuring negotiations[9](index=9&type=chunk) - The company has implemented specific measures to improve cash flow, including accelerating accounts receivable collection and suspending non-essential expenditures, with positive effects anticipated in the **second half of 2025**[10](index=10&type=chunk) - Management believes that upon completion of the restructuring, the capital structure will be significantly improved, resolving liquidity issues and the underlying reasons for the auditor's **disclaimer of opinion**[10](index=10&type=chunk)

Financial Performance - In 1H 2022, the company achieved a total revenue of RMB 1,703 million and a net profit of RMB 56 million[11, 15] - Gross profit increased from RMB 422 million in 1H 2021 to RMB 457 million in 1H 2022, with a stable gross profit margin of 26.8%[15, 33] - Total cost increased from RMB 1,150 million in 1H 2021 to RMB 1,246 million in 1H 2022[35, 37] Business Segment Highlights - Oilfield Equipment Manufacturing & Services segment revenue reached RMB 1,003 million, driven by increased market demand and significant growth in drill pipe and OCTG coating services[18, 19] - Oilfield Services segment achieved stable growth with revenue of RMB 459 million, benefiting from increased capital expenditure in the upstream industry[21, 22] - Line Pipe Technology and Services segment experienced significant revenue growth, reaching RMB 177 million, with more contracts signed in line pipe coating and CWC businesses compared to 1H 2021[24, 25] - Offshore Engineering Services segment revenue declined to RMB 64 million due to the completion of the Bangladesh pipeline laying project[27, 28] Regional Revenue Breakdown - In 1H 2022, China accounted for 58.9% of the company's revenue, while North & South America contributed 10.4%, Russia, Central Asia & Europe 17.0%, Africa 6.2%, Middle East 13.6%, and South & Southeast Asia 25.7%[31] Capital Structure - Cash and cash equivalents decreased from RMB 629 million at the end of 2021 to RMB 519 million as of June 30, 2022[39] - Total assets increased from RMB 7,072 million at the end of 2021 to RMB 7,830 million as of June 30, 2022[39] - Total liabilities increased from RMB 4,029 million at the end of 2021 to RMB 4,410 million as of June 30, 2022[39]

Financial Performance - Hilong achieved a total revenue of RMB 3,736 million in 2022, a 28.1% increase compared to RMB 2,917 million in 2021[13, 20] - The company's net profit increased significantly by 204.2% from RMB 48 million in 2021 to RMB 146 million in 2022[20] - Gross profit increased by 18.8% from RMB 898 million in 2021 to RMB 1,067 million in 2022, while the gross profit margin slightly declined from 30.8% to 28.6%[20, 46] Segment Revenue - Oilfield Equipment Manufacturing and Services generated RMB 2,210 million in revenue[24] - Drill pipes and other products within this segment reported substantial revenue increase due to increased market demand[17, 25] - Oilfield Services achieved stable growth with a segment revenue of RMB 1,057 million[29] - Line Pipe Technology and Services reported a segment revenue of RMB 355 million, a slight decline compared to the previous year[34, 35] - Offshore Engineering Services experienced a decline in segment revenue, reaching RMB 114 million[39] Regional Revenue - China accounted for 29.3% of the company's revenue in 2022[43] - The Middle East contributed 25.5% to the total revenue[43] - North & South America accounted for 16.2% of the revenue[43] Costs and Capital Structure - Total cost increased from RMB 2,019 million in 2021 to RMB 2,669 million in 2022, with raw materials constituting 58% of the total cost[49, 51, 52] - Cash and cash equivalents increased from RMB 629 million to RMB 778 million[54] - The gearing ratio (Net Debt/Total Capital) decreased from 44% to 40%[55]

2019年全年业绩路演 2023 Interim Results Presentation Disclaimer The presentation material contains forward-looking statements. Such forward-looking statements are subject to various risks, uncertainties and assumptions, certain of which are not under our control, causing actual results and growth which may differ materially from these direct or indirect forward-looking statements. Forward-looking events and relevant development discussed herein may differ from the expectation of Hilong Holding Limited (the "Compan ...

Financial Performance - In 2023, the company achieved total revenue of RMB 4,251.5 million and a net profit of RMB 171.5 million[16] - Revenue increased by 38.4% from 2022 to 2023[12, 16] - Net profit increased by 55.3% from 2022 to 2023[12, 16] - Gross profit increased from RMB 685 million in 2022 to RMB 915 million in 2023[16, 32] Segment Performance - Oilfield Equipment Manufacturing & Services revenue increased by 37.5%[13, 20] - Oilfield Services revenue increased by 10.5%[14, 25] - Offshore Engineering Services revenue increased significantly by 311.9%[15, 27] Business Development & Strategy - The company is focusing on high-tech specialized integrated EPCIC turkey service business model in Offshore Engineering Services[15] - The company is strengthening R&D and digital transformation across all segments[15, 20, 25, 27] - The company is focusing on US/Canada and Middle East markets for Oilfield Equipment Manufacturing & Services[45] - The company aims to further develop business model of existing drilling and workover service, technical service and oilfield trade service, elevate Integrated turnkey project service[46]

Financial Highlights - Hilong achieved a revenue of approximately RMB 2,465.6 million, a 33.5% increase compared to 1H2023[11] - The company's net profit reached about RMB 46.0 million, representing a 70.4% increase compared to 1H2023[11] - Gross profit increased by 32.7% from RMB 436 million in 1H2023 to RMB 578 million in 1H2024[13] Segment Performance - Oilfield Equipment Manufacturing & Services segment revenue increased by 2.1% compared to 1H2023, reaching RMB 1,133 million[12, 17] - Oilfield Services segment revenue increased by 56.9%, reaching RMB 923 million due to the development of the High-tech Integrated Turnkey Project business model[12, 20] - Offshore Engineering Services segment revenue increased significantly by 175.6%, reaching RMB 410 million[12, 23] Business Development & Strategy - Hilong is transforming into a high-tech specialized integrated EPCIC turkey offshore services provider, actively exploring business opportunities in Southeast Asia, the Middle East, West Africa, and South America[12] - The company is focusing on high-end markets in the US/Canada and the Middle East, providing high value-added drilling tools and strengthening the development of differentiated high technology drilling tools[40] - Hilong is enhancing existing drilling and workover service businesses, integrated technical services, and oilfield trading services, with a significant increase in trading volume[12] Financial Position - Cash and cash equivalents stood at RMB 610 million as of June 30, 2024[31] - Total assets amounted to RMB 8,113 million as of June 30, 2024[31]

Financial Performance - In 2024, the company achieved a revenue of approximately RMB 4668 million, a 9.8% increase compared to 2023[9] - Net profit was about RMB 30 million, an 82.4% decrease compared to 2023[9] - Gross profit increased by 22.5% from RMB 915 million to RMB 1,122 million[11] - Revenue from oilfield equipment manufacturing & services accounted for 45.6% of total revenue in 2024[26] - Oilfield services contributed 27.5% to the total revenue in 2024[26] - Offshore engineering services accounted for 20.6% of the total revenue in 2024, with a revenue increase of 105.9%[9, 26] Business Segments - Oilfield equipment manufacturing & services segment revenue was RMB 1,133 million[15] - Oilfield services segment revenue was RMB 923 million, with a 35.2% increase[9, 19] - Offshore engineering services segment revenue increased to RMB 964 million[22] Business Development & Technology - The company is transforming into high-tech specialized integrated EPCIC turkey offshore services[9] - The company is focusing on high-end markets and customers with higher technology drilling tools[16] - The company is continuously developing High-tech Integrated Turnkey Project business model[9]

Financial Performance - In 2024, the company recorded revenue of RMB 4,668.3 million, an increase of 9.8% compared to 2023[4] - Total revenue increased by RMB 416.8 million or 9.8% from RMB 4,251.5 million in 2023 to RMB 4,668.3 million in 2024, driven by growth in oilfield services and marine engineering services[15] - The oilfield services segment achieved revenue of RMB 1,579.9 million, reflecting a growth of 35.2% compared to 2023[7] - The marine engineering services segment reported revenue of RMB 963.8 million, marking a significant increase of 105.9% year-on-year[8] - The oilfield equipment manufacturing and services segment generated revenue of RMB 2,124.7 million, a decrease of 18.7% year-on-year[5] - Revenue from oilfield equipment manufacturing and services decreased by RMB 489.7 million or 18.7% from RMB 2,614.4 million in 2023 to RMB 2,124.7 million in 2024, primarily due to a decline in drill pipe sales[16] - The company reported a total income from oilfield services of RMB 1,579.9 million, representing 33.8% of total revenue in 2024[15] - Oilfield services segment revenue increased by RMB 411.0 million or 35.2% from RMB 1,168.9 million in 2023 to RMB 1,579.9 million in 2024[19] - Marine engineering services segment revenue surged by RMB 495.6 million or 105.9% from RMB 468.2 million in 2023 to RMB 963.8 million in 2024[19] Operational Efficiency and Management - The company has strengthened cash flow management and implemented proactive financial measures to enhance overall operational efficiency[4] - The company has established a scientific management approach to enhance operational efficiency and cash flow management[45] - The company is focused on enhancing its core competitiveness in oilfield services through improved technical capabilities and research levels[11] - The company is committed to technological innovation and digital management transformation to overcome traditional business development bottlenecks[11] - The company is focused on digital transformation and automation in its operations to improve efficiency and reduce production costs[49] Market Expansion and Strategy - The company aims to expand its business in the Middle East, Southeast Asia, and South America, capitalizing on opportunities from overseas oil companies[9] - The company plans to enhance its high-value drill tool products and automate its production lines, focusing on high-end market demands in regions like the Middle East and North America[10] - The company will actively pursue new contracts in international markets such as Nigeria, Ecuador, Brazil, and Kuwait, while diversifying its service offerings[11] - The company aims to enhance its market reputation by promoting high-value drill products tailored to high-end customer needs in regions like the Middle East and North America[51] - The company is actively expanding into new markets and developing new technologies to support long-term growth[45] Financial Health and Risks - The annual profit attributable to the owners of the company decreased from RMB 148.7 million in 2023 to RMB 28.3 million in 2024[28] - The net financial cost increased by RMB 98.2 million or 62.3% to RMB 255.9 million in 2024, mainly due to reduced repurchase note income[25] - Trade receivables increased to RMB 2,620.8 million in 2024 from RMB 2,397.4 million in 2023, with trade receivables turnover days rising from 146 days to 154 days[30][31] - The company's cash and cash equivalents totaled RMB 721.6 million as of December 31, 2024, down from RMB 840.4 million in 2023, while net borrowings decreased to RMB 1,964.9 million from RMB 2,023.5 million[33] - The company faces risks from fluctuations in domestic and international oil and gas prices, which could significantly impact its business and financial performance[164] Corporate Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange, ensuring compliance with all applicable rules[82] - The board consists of a balanced mix of executive and non-executive directors, promoting independent judgment in decision-making[87] - The company is committed to high ethical standards and transparency, aiming to maximize shareholder returns and maintain high-quality products and services[84] - The company has implemented measures to remind all directors of the importance of compliance with trading rules, especially during blackout periods[85] - The company has established a risk management system that involves all employees and focuses on major business and high-risk areas[134] Leadership and Management Team - The company has a strong management team with extensive experience in the oil sector, including Mr. Gao Zhihai, who has been with the group since June 2005[74] - The company reported a significant leadership change, with Mr. Daliang resigning as Executive President effective October 15, 2024[80] - The company appointed Mr. Zhang Jun as the co-CEO effective December 23, 2024, bringing over 29 years of experience in the oil industry[74] - The management team includes professionals with advanced degrees and certifications, enhancing the company's governance and operational capabilities[75][76] Community Engagement and Social Responsibility - The company actively participates in community activities and collaborates with charitable organizations to enhance community welfare[163] - The company is committed to providing a safe and harmonious work environment for its employees, recognizing them as its most valuable asset[164] - The group has adhered to environmental laws and regulations, ensuring compliance with standards for emissions and waste management, with no significant costs incurred during the reporting period[156] Internal Controls and Risk Management - The company has made significant progress in addressing identified internal control deficiencies through the appointment of an internal control consultant[136] - An internal audit team has been established to regularly assess the effectiveness of the risk management and internal control systems, reporting results every six months[137] - The audit committee is responsible for monitoring and reviewing the effectiveness of the risk management and internal control systems[129] Shareholder Communication - The company has established multiple channels for ongoing dialogue with shareholders, ensuring timely and transparent communication[145] - The company provides shareholders with contact information for inquiries, including phone numbers and email addresses[147] - All company communications, including annual reports and financial summaries, are made available in both Chinese and English to facilitate understanding[149]