Financial Performance - The company's revenue for the fiscal year 2024 was RMB 2,575.4 million, a decrease of 11.8% compared to RMB 2,920.7 million in 2023[9][10] - Gross profit fell to RMB 172.0 million, representing a decline of 48.3% from RMB 333.0 million in the previous year[9][12] - Net profit for the year decreased by 55.5% to RMB 86.4 million, down from RMB 194.1 million in 2023[9][14][22] - The basic earnings per share dropped to RMB 13.6, compared to RMB 30.6 in the previous fiscal year[9] - Revenue fell by approximately RMB 345.3 million or 11.8% to about RMB 2,575.4 million, down from approximately RMB 2,920.7 million, primarily due to a decline in the average selling price of urea[28] - The average selling price of urea decreased by approximately RMB 347 per ton or 15.9% to about RMB 1,842 per ton, compared to approximately RMB 2,189 per ton for the previous year[29] - Urea revenue decreased by approximately RMB 263.2 million or 10.5% to about RMB 2,247.8 million, attributed to the drop in average selling price[29] - The gross margin fell from approximately 11.4% for the year ended December 31, 2023, to about 6.7% for the reporting period[34] - The net profit for the year decreased by approximately RMB 107.7 million or 55.5% from about RMB 194.1 million for the year ended December 31, 2023, to about RMB 86.4 million for the reporting period[41] Sales and Market Dynamics - Urea sales volume increased compared to last year, partially offsetting the impact of declining average selling prices[22] - The company faced significant challenges due to a sharp decline in urea prices and weak domestic demand, exacerbated by export restrictions[21][22] - The sales volume of urea increased by approximately 6.4% during the reporting period, despite the decline in revenue[29] - The company expects a gradual recovery in the Chinese urea market, driven by adjustments in production surplus and a rebound in product demand[25] - The company expects the Chinese urea market to gradually recover by 2025, despite ongoing challenges from global economic conditions and local policy changes[44] Operational Efficiency and Innovation - The company implemented several technical upgrades to existing production facilities, enhancing operational efficiency and reducing carbon emissions[22] - The company is actively upgrading its product lines to meet stricter market standards and customer demands, focusing on technological innovation and quality improvement[23] - The company plans to enhance operational efficiency and increase technological innovation to navigate future uncertainties and create long-term value for stakeholders[25] - The company is investing $50 million in research and development for new technologies aimed at enhancing product efficiency[62] - The company is investing $30 million in research and development for new technologies aimed at enhancing user experience[71] Governance and Compliance - The board proposed a final dividend of HKD 0.036 per ordinary share for the year ended December 31, 2024, totaling approximately HKD 22.4 million, down from HKD 49.7 million in 2023[55] - The company has adopted a share option scheme to incentivize eligible participants, including employees, based on their contributions[50] - The board has established effective communication policies with shareholders, encouraging participation in annual meetings[89] - The company has established governance practices to ensure compliance with applicable laws, rules, and regulations[104] - The board is committed to providing balanced and clear assessments in all statutory and regulatory communications[108] Employee and Organizational Structure - As of December 31, 2024, the group employed 1,252 employees, a decrease from 1,292 employees as of December 31, 2023[50] - Total employee costs, including director remuneration, amounted to RMB 159.3 million for the reporting period, up from RMB 134.9 million for the year ended December 31, 2023[50] - The gender ratio of employees as of December 31, 2024, is 77% male and 23% female, reflecting the industrial nature of the business[174] - The company has maintained good relationships with employees, suppliers, and customers, with an acceptable employee turnover rate[184][185][186] Strategic Planning and Future Outlook - The company aims to enhance its market position and shareholder value through capacity expansion, improving product quality, and exploring acquisition opportunities[45] - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies[61] - Market expansion plans include entering three new international markets by the end of the fiscal year, targeting a 10% increase in market share[63] - New product launches are expected to contribute an additional $50 million in revenue in the upcoming year[70] Risk Management and Internal Controls - The company has established risk management procedures to address and manage all significant risks related to its business[169] - The company maintains a reasonable and effective internal control system, as confirmed by the board through the audit committee[109] - The audit committee regularly reviews the effectiveness of the internal control system[109] - An external professional firm was engaged to review the internal control system for effectiveness and efficiency, with no significant deficiencies identified[169] Corporate Social Responsibility - The company made charitable donations of approximately RMB 120,000 during the year ended December 31, 2024[195] - The company continues to update internal policies and plans to prevent environmental risks and ensure compliance with applicable standards and regulations[182]

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 2,575,397, a decrease of 11.8% compared to RMB 2,920,711 in 2023[4] - Gross profit for the same period was RMB 172,047, down 48.7% from RMB 332,961 in 2023[4] - Net profit for the year was RMB 86,413, representing a decline of 55.6% from RMB 194,107 in the previous year[4] - Basic and diluted earnings per share decreased to RMB 13.6 from RMB 30.6, a drop of 55.7%[4] - Urea sales contributed RMB 2,247,802,000, down from RMB 2,510,964,000, reflecting a decline of 10.5%[15] - The company's profit decreased significantly from approximately RMB 194.1 million for the year ended December 31, 2023, to about RMB 86.4 million, a reduction of RMB 107.7 million or 55.5%[57] - Total revenue fell from approximately RMB 2,920.7 million to about RMB 2,575.4 million, a decrease of RMB 345.3 million or 11.8%[45] - The average selling price of urea decreased by approximately RMB 347 per ton or 15.9%, from RMB 2,189 per ton to RMB 1,842 per ton[45] - Urea revenue declined by approximately RMB 263.2 million or 10.5%, from RMB 2,511.0 million to RMB 2,247.8 million[45] - The gross profit decreased from approximately RMB 333.0 million to about RMB 172.0 million, a reduction of RMB 160.9 million or 48.3%[50] - The company's gross margin decreased from approximately 11.4% to about 6.7%[50] Assets and Liabilities - Non-current assets totaled RMB 1,035,733, an increase from RMB 985,424 in 2023[6] - Current assets decreased to RMB 987,279 from RMB 1,115,787, a decline of 11.5%[6] - Current liabilities decreased significantly to RMB 174,646 from RMB 294,146, a reduction of 40.5%[7] - Total equity attributable to owners of the company increased to RMB 1,804,473 from RMB 1,758,498, reflecting a growth of 2.6%[7] - Inventory as of December 31, 2024, was RMB 85,869,000, down from RMB 114,774,000 in 2023, reflecting a decrease of approximately 25.2%[30] - Trade receivables increased to RMB 5,636,000 as of December 31, 2024, compared to RMB 4,130,000 in 2023, representing an increase of 36.5%[31] - Other receivables, net of impairment losses, totaled RMB 214,979,000 as of December 31, 2024, compared to RMB 194,396,000 in 2023, indicating an increase of 10.7%[34] - Trade payables decreased significantly to RMB 32,738,000 as of December 31, 2024, from RMB 68,674,000 in 2023, a reduction of approximately 52.4%[36] - The total amount of accrued expenses was RMB 26,553,000 for the year ended December 31, 2024, compared to RMB 22,381,000 in 2023, reflecting an increase of 18.8%[38] - As of December 31, 2024, the group reported net assets of approximately RMB 1,811.0 million, an increase from RMB 1,767.2 million as of December 31, 2023[58] - The group had cash and bank balances of approximately RMB 702.1 million as of December 31, 2024, down from RMB 797.8 million as of December 31, 2023[59] - The group has no interest-bearing bank borrowings, resulting in a debt-to-equity ratio of 0% as of December 31, 2024[59] Expenses - Administrative expenses rose to RMB 77,584, up from RMB 73,994 in the previous year, indicating a 6.5% increase[4] - Employee benefits expenses, including salaries and bonuses, rose to RMB 159,347,000 from RMB 134,906,000, an increase of 18.1%[21] - The total employee cost for the reporting period was approximately RMB 159.3 million, an increase from RMB 134.9 million for the year ended December 31, 2023[66] - The total remuneration for key management personnel was RMB 1,121,000 for the year ended December 31, 2024, down from RMB 1,356,000 in 2023, a decrease of 17.4%[40] Other Income and Expenses - The company reported a foreign exchange gain of RMB 6,552 from overseas operations, compared to RMB 3,515 in 2023[4] - The net loss from foreign exchange was RMB 7,604,000, increasing from RMB 5,117,000 in 2023[17] - The total income from bank interest increased to RMB 13,225,000, compared to RMB 7,141,000 in 2023, a growth of 85.5%[15] - Government grants recognized as other income amounted to RMB 1,949,000, compared to RMB 3,476,000 in 2023, a decrease of 44.0%[16] - Other income increased by approximately RMB 18.5 million or 104.3%, from RMB 17.8 million to RMB 36.3 million[51] - The income tax expense decreased by approximately RMB 37.9 million or 50.9%, from RMB 74.5 million to RMB 36.6 million[56] Dividends - The final dividend for the year ended December 31, 2023, was HKD 0.08 per share, totaling HKD 49,675,520, paid on June 7, 2024[26] - The proposed final dividend for the year ending December 31, 2024, is HKD 0.036 per share, totaling HKD 22,353,984, subject to shareholder approval[26] - The board proposed a final dividend of HKD 0.036 per ordinary share, totaling approximately HKD 22.4 million, down from HKD 49.7 million in 2023[71] Future Outlook and Plans - The group anticipates a gradual recovery in the Chinese urea market by 2025, influenced by global economic conditions and local policy changes[60] - The group plans to enhance production capacity and improve product quality while expanding its value chain into urea-related products[61] Corporate Governance - The audit committee, chaired by Mr. Wu Shiliang, consists of independent non-executive directors and has reviewed the accounting principles and standards adopted by the group[74] - The financial statements for the year ending December 31, 2024, have been verified by Hong Kong Lixin Dehao CPA Limited, confirming consistency with the audited financial statements[75] - The board has adopted the corporate governance code as per the listing rules and confirmed compliance throughout the reporting period[76] - The company has implemented a strict code of conduct for directors' securities trading, ensuring compliance with the standard code throughout the reporting period[77] - The final results announcement and annual report will be published on the Hong Kong Stock Exchange and the company's website[78] - The board expresses gratitude to the management, employees, shareholders, and clients for their support and hard work[79]

乐 12 DONGGUANG CHEMICAL LIMITED 東 光 化 工 有 限 公 司 ( 於 関 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號 : 1702 东 光 化 I 2024 中 期 報 告 目錄 公司資料 2 管理層討論與分析 4 其他資料 13 中期簡明綜合財務報表審閱報告 19 簡明綜合損益及其他全面收益表 21 簡明綜合財務狀況表 22 簡明綜合權益變動表 24 簡明綜合現金流量表 26 中期簡明綜合財務報表附註 28 東光化工有限公司 1 宛 光 化 n 公司資料 | --- | --- | |--------------------------------|-------------------------------------------| | | | | | | | 董事會 | 公司秘書 | | 執行董事 | 鄭承熙先生（ HKICPA （非執業）， CAANZ ） | | 王春萌先生 （主席） 王治河先生 | 授權代表 | | 孫祖善先生 徐希江先生 | （就上市規則而言） | | 非執行董事 | 王治河先生 鄭承熙先生 | | | | 陳繼敏女士 獨立非 ...

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 1,337,234 thousand, a decrease of 17.4% compared to RMB 1,619,754 thousand for the same period in 2023[2] - Gross profit increased to RMB 143,427 thousand, up 15.3% from RMB 124,413 thousand in the previous year[2] - Profit before tax rose to RMB 125,439 thousand, representing a 25.0% increase from RMB 100,335 thousand in the prior year[2] - Net profit for the period was RMB 89,795 thousand, an increase of 20.5% compared to RMB 74,457 thousand in the same period last year[2] - Basic earnings per share increased to RMB 14.5, up from RMB 11.4, reflecting a growth of 27.2%[2] Assets and Liabilities - Total non-current assets amounted to RMB 1,006,197 thousand, an increase from RMB 985,424 thousand as of December 31, 2023[3] - Current assets decreased to RMB 1,033,404 thousand from RMB 1,115,787 thousand at the end of 2023, a decline of 7.4%[3] - Current liabilities decreased significantly to RMB 183,318 thousand from RMB 294,146 thousand, a reduction of 37.7%[4] - Total equity attributable to owners of the company increased to RMB 1,809,498 thousand from RMB 1,758,498 thousand, reflecting a growth of 2.9%[4] Sales and Revenue Breakdown - Urea sales contributed RMB 1,159,211,000, down from RMB 1,372,940,000, reflecting a decline of 15.5% year-over-year[10] - The revenue from automotive urea solution products dropped from approximately RMB 104 million to approximately RMB 54.5 million, a decrease of about RMB 49.5 million or 47.6%[35] - The revenue from methanol decreased from approximately RMB 72.6 million to approximately RMB 66.5 million, a decline of about RMB 6.1 million or 8.4%[36] - The revenue from other products decreased from approximately RMB 70.2 million to approximately RMB 57.1 million, a decline of about RMB 13.1 million or 18.7%[38] Costs and Expenses - The cost of goods sold for the six months ended June 30, 2024, was RMB 1,193,807,000, down from RMB 1,495,341,000, indicating a decrease of 20.2%[15] - Employee benefits expenses, including salaries and wages, rose to RMB 49,640,000 from RMB 46,333,000, an increase of 5.0%[15] - Administrative expenses decreased by approximately RMB 3.1 million or 12.6% to about RMB 21.5 million, mainly due to reduced maintenance and repair costs[42] Other Income and Losses - Other losses for the six months ended June 30, 2024, totaled RMB (7,837,000), compared to RMB (6,571,000) for the same period in 2023[12] - Bank interest income increased to RMB 9,488,000 from RMB 3,355,000, marking a significant increase of 182.5% year-over-year[10] - Other income rose by approximately RMB 4.7 million or 48.0% to about RMB 14.5 million, mainly due to increased bank interest income[41] - Net other losses increased by approximately RMB 1.2 million or 18.2% to about RMB 7.8 million, primarily due to investment losses recognized at fair value[42] Tax and Dividends - The company's income tax expense for the six months ended June 30, 2024, was RMB 35,644,000, an increase of 37.8% compared to RMB 25,878,000 for the same period in 2023[16] - The company approved a final dividend of HKD 0.08 per share, totaling approximately HKD 49,675,520 (equivalent to about RMB 45,181,000) for the year ended December 31, 2023[18] - The board decided not to declare an interim dividend for the reporting period[56] Employment and Governance - As of June 30, 2024, the group employed 1,302 employees, an increase from 1,292 employees as of December 31, 2023[54] - Total employee costs, including director remuneration, amounted to RMB 64.0 million for the reporting period, compared to RMB 61.2 million for the six months ended June 30, 2023[54] - The company has adopted a code of corporate governance and confirmed compliance throughout the reporting period[58] - All directors confirmed adherence to the standards of the code governing securities transactions during the reporting period[59] Market Outlook and Strategy - The outlook for the Chinese urea market indicates challenges and opportunities, with demand from the agricultural sector expected to remain a key support[48] - The company plans to improve production processes, reduce costs, and enhance product quality in line with industry trends towards green and low-carbon products[49] - The company implemented several technical innovation projects, including energy-saving and carbon-reduction upgrades to urea production equipment, enhancing its market competitiveness and customer loyalty[32] Audit and Compliance - The audit committee reviewed the interim performance and found no discrepancies in the accounting treatments and principles adopted by the group[57] - The interim results announcement is available on the Hong Kong Stock Exchange and the company's website[60]

Corporate Governance - The board has established procedures for directors to seek independent professional advice when necessary, with costs covered by the company[1]. - Significant transactions involving major shareholders or directors will be reviewed at board meetings, allowing for principle approvals and further processing through written resolutions if applicable[1]. - The company ensures timely provision of sufficient information to the board and its committees, facilitating regular and informal contact between directors and management[1]. - The management is responsible for providing adequate explanations and information to the board for informed evaluations of financial and other data presented for approval[9]. - All directors receive monthly updates on the company's performance, conditions, and prospects, ensuring they can fulfill their responsibilities effectively[9]. - The board is committed to providing balanced, clear, and easily understandable assessments in all statutory and regulatory communications regarding the group's status[11]. - The company secretary plays a crucial role in supporting the board, ensuring effective communication among members and adherence to policies and procedures[5]. - The board is responsible for evaluating the nature and extent of risks acceptable in achieving strategic objectives, ensuring effective risk management and internal control systems are in place[11]. - The company has adopted the corporate governance code effective for the year ending December 31, 2023, ensuring compliance with relevant regulations[48]. Risk Management and Internal Control - The company maintains a reasonable, robust, and effective internal control system as assessed by the board[12]. - The board conducts annual reviews of the internal control system, including financial monitoring and risk management functions[14]. - There were no significant changes in the nature and severity of major risks since the last review, including environmental, social, and governance risks[16]. - The company has established an internal audit function, which is reviewed annually for necessity[18]. - A whistleblowing policy and system have been adopted, allowing confidential reporting of concerns regarding misconduct[18]. - The audit committee's responsibilities include specific duties as outlined in the corporate governance code effective for the year ending December 31, 2023[20]. - The audit committee has the authority to seek independent professional advice as needed to fulfill its responsibilities, with costs covered by the company[26]. - The board confirmed its responsibility for the overall internal control framework, acknowledging that the system cannot eliminate all errors and violations, providing reasonable but not absolute assurance against significant misstatements or losses[40]. - As of December 31, 2023, the internal control and risk management systems for financial, operational, and compliance risks were deemed sufficient and effective by the board and audit committee[41]. - An external professional company was engaged to review the group's internal control and risk management functions, identifying weaknesses and recommending measures to mitigate risks[40]. - The audit committee reviews the effectiveness of measures taken based on recommendations from external auditors and professional companies[41]. - The company has established risk management procedures to address all significant risks related to its business[104]. - The board believes that the risk management and internal control systems are reasonable, effective, and adequate as of December 31, 2023[107]. Financial Reporting and Audit - The independent auditor's report will outline the auditor's responsibilities regarding the financial statements, ensuring transparency and accountability[11]. - The audit committee has discussed and reviewed the financial performance for the year ending December 31, 2023[22]. - The company ensures transparency in financial reporting and maintains appropriate relationships with auditors[24]. - The audit committee reviewed the adequacy and effectiveness of the internal control system and provided recommendations to improve risk management[80]. - The audit committee discussed issues encountered during the interim and annual audits and any matters the auditors deemed necessary to discuss[79]. - The audit committee monitored the company's financial statements and reviewed key financial reporting judgments[79]. - The external auditor's fee for audit services was RMB 1,729,000[94]. Remuneration and Compensation - The company disclosed its director remuneration policy and provided details of senior management compensation by salary level in the annual report[31]. - The total compensation for Mr. Wang Zhihe was RMB 1,320,000, which includes a salary of RMB 634,000[60]. - The total compensation for Mr. Sun Zushan was RMB 638,000, with a salary of RMB 312,000[60]. - The total compensation for Mr. Xu Xijiang was RMB 432,000, with a salary of RMB 106,000[60]. - The total compensation for Mr. Wang Chunmeng was RMB 236,000, with a salary of RMB 73,000[60]. - The total compensation for Mr. Wu Shiliang was RMB 163,000, with no additional benefits[60]. - The total compensation for Ms. Lin Xiuxiang was RMB 163,000, with no additional benefits[60]. - The total compensation for Mr. Liu Jincheng was RMB 163,000, with no additional benefits[60]. - The remuneration committee has conducted an annual review of the compensation for all directors and senior management to ensure alignment with their responsibilities and the company's performance[58]. - The remuneration policy aims to provide appropriate rewards to encourage performance improvement and recognize individual contributions to the company's success[58]. - The remuneration committee members abstained from voting on matters related to their own compensation[59]. Shareholder Engagement - The board is responsible for maintaining ongoing dialogue with shareholders, particularly through the annual general meeting[32]. - The company has ensured that the chairman and committee chairs attended the annual general meeting to answer shareholder questions[36]. - The company has ensured that the voting procedures at the annual general meeting were clearly explained to shareholders[36]. - The company has a policy for shareholders to express their opinions and seek clarifications during the annual general meeting[95]. - The company encourages shareholder participation in the annual general meeting, with notices and related documents sent according to regulations[111]. - The company ensures high transparency in communications with shareholders regarding performance and prospects[89]. Board Composition and Diversity - The Nomination Committee is responsible for identifying qualified candidates for the board and making recommendations for appointments[64]. - The committee reviews the performance of directors annually and assesses the overall effectiveness of the board[69]. - The board has adopted a diversity policy aimed at ensuring a balanced skill set and diverse perspectives among its members[70]. - The company aims to maintain a diverse board in terms of skills, professional experience, and gender, without setting measurable targets at this time[69]. - The Nomination Committee has conducted a performance review of the board for the year ending December 31, 2023, and found no significant issues[69]. - The company has established a director nomination policy that outlines selection criteria and procedures to ensure a balanced skill set and leadership continuity[70]. - The board's composition is reviewed to ensure it meets the business needs and market environment changes[66]. - Independent non-executive directors are evaluated for their independence and contributions to the board[66]. - The company ensures that all directors are re-elected at least every three years, with new appointees standing for election at the next annual general meeting[69]. - The Nomination Committee will regularly review measurable targets to ensure the effectiveness of the board's diversity policy[70]. Corporate Social Responsibility - The company is committed to environmental protection and corporate social responsibility, continuously updating internal policies to prevent environmental risks[122]. - The group made charitable donations of approximately RMB 120,000 during the year ended December 31, 2023[175]. Share Capital and Financial Performance - The total issued share capital of the company as of December 31, 2023, is approximately $62,094, divided into 620,944,000 ordinary shares with a par value of $0.0001 each[117]. - The company has not issued any bonds during the fiscal year ending December 31, 2023[118]. - The company’s total revenue is primarily derived from the sales of urea products, which significantly impacts profit margins and profitability due to fluctuations in average selling prices and coal procurement costs[120]. - The company aims to diversify its product categories to mitigate risks associated with reliance on a single product and continuously improve production efficiency to reduce unit production costs[120]. - Sales to the top five customers accounted for about 22% of the total annual sales for the year ended December 31, 2023[188]. - Purchases from the top five suppliers represented approximately 31% of the total annual purchases, with the largest supplier accounting for about 12%[188]. Compliance and Legal Matters - The company has complied with relevant laws and regulations that significantly impact its business and operations during the fiscal year ending December 31, 2023[123]. - The company confirmed compliance with non-competition agreements for the year ended December 31, 2023[156]. - The board confirmed that there are no significant uncertainties affecting the group's ability to continue as a going concern[92]. - The company has not made any changes to its constitutional documents for the year ending December 31, 2023[99]. - There were no related party transactions that constituted connected transactions for the year ended December 31, 2023[152]. - The company had no interest-bearing bank borrowings as of December 31, 2023[172]. - The board confirmed that there were no claims made against directors during the year ended December 31, 2023[161]. - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2023[179]. - There were no management or administrative contracts related to the company's business in effect during the year ended December 31, 2023[157]. Stock Options - The stock option plan allows for a total of 62,000,000 shares to be issued, representing approximately 9.98% of the company's issued share capital as of the board report date[182]. - The stock option plan is valid for ten years from the adoption date, with approximately three years remaining[182]. - No stock options have been granted, exercised, or canceled under the stock option plan since its adoption up to December 31, 2023[187]. - The maximum number of shares that can be issued under the stock option plan, if exercised, cannot exceed 30% of the issued shares at any time[182]. - The stock option exercise price will be determined by the board but cannot be lower than the highest of the closing price on the offer date or the average closing price over the preceding five business days[186]. - The company is eligible to revise the general scheme limit of the stock option plan with shareholder approval, not exceeding 10% of the issued shares at the time of approval[182].

Financial Performance - The company's profit decreased slightly from approximately RMB 202.1 million for the year ended December 31, 2022, to approximately RMB 194.1 million, a reduction of about RMB 8.0 million or 4.0% due to increased administrative expenses [23]. - Revenue fell from approximately RMB 3,130.8 million for the year ended December 31, 2022, to approximately RMB 2,920.7 million, a decrease of about RMB 210.1 million or 6.7%, primarily due to a drop in the average selling price of urea [23]. - The company's net profit for the year ended December 31, 2023, was RMB 190,080,000, a decrease of 2.3% from RMB 194,380,000 in 2022 [99]. - Total revenue for the year ended December 31, 2023, was RMB 2,920,711,000, a decrease of 6.7% from RMB 3,130,781,000 in 2022 [91]. - Profit before tax for the year was RMB 268,643,000, down from RMB 276,226,000 in 2022, reflecting a decrease of 2.1% [82]. - Net profit for the year was RMB 194,107,000, compared to RMB 202,139,000 in 2022, representing a decline of 4.0% [82]. - Earnings per share for the year was RMB 30.6, down from RMB 31.3 in the previous year, indicating a decrease of 2.2% [82]. Revenue and Sales - Urea sales revenue decreased by approximately RMB 116.5 million or 4.4% to about RMB 2,511.0 million, with a slight increase in sales volume of about 4.0% [47]. - Methanol revenue decreased by approximately RMB 20.8 million or 13.7% to about RMB 130.7 million, primarily due to a reduction in sales volume [48]. - Revenue from the sale of automotive urea solution decreased by approximately RMB 34.6 million or 17.4% to about RMB 164.1 million, compared to approximately RMB 198.7 million for the year ended December 31, 2022 [161]. - Revenue from other products decreased by approximately RMB 38.2 million or 24.9% to about RMB 114.9 million, primarily due to reduced market demand for liquid ammonia and decreased average selling prices for liquefied natural gas [162]. - The total cost of sales decreased by approximately RMB 213.4 million or 7.6% to about RMB 2,587.8 million, mainly due to a reduction in raw material costs [142]. Expenses and Costs - Administrative expenses increased by approximately RMB 20.8 million or 39.1% to about RMB 74.0 million, mainly due to higher employee salaries and maintenance costs [29]. - Distribution expenses increased by approximately RMB 0.5 million or 13.9% to about RMB 4.1 million for the reporting period, primarily due to higher employee salaries and benefits [52]. - Total employee costs for the reporting period were approximately RMB 134.9 million, compared to RMB 129.2 million for the year ended December 31, 2022 [171]. Assets and Liabilities - The company's total trade payables as of December 31, 2023, were RMB 48,137 thousand for 0 to 90 days, compared to RMB 29,605 thousand for the same period in 2022 [18]. - The total current liabilities increased to RMB 294.1 million from RMB 212.1 million in the previous year, reflecting a rise in trade payables and contract liabilities [66]. - The net assets of the group increased to RMB 1,767.2 million as of December 31, 2023, compared to RMB 1,620.4 million in the previous year [66]. - Non-current assets decreased to RMB 985.4 million from RMB 1,057.0 million in the previous year, primarily due to a decline in property, plant, and equipment [65]. - Trade receivables decreased to RMB 4.1 million from RMB 9.8 million in the previous year, indicating a reduction in credit sales [65]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.08 per share for the year ended December 31, 2023, totaling approximately HKD 49.7 million, unchanged from the previous year [61]. - The company declared a final dividend of HKD 0.08 per share, totaling HKD 49,675,520, which was paid on June 9, 2023 [127]. Other Financial Information - The company reported a foreign exchange loss of RMB 5,117,000 for the year, compared to a loss of RMB 2,298,000 in 2022, reflecting increased volatility [77]. - Other income for the year was RMB 17,785,000, significantly higher than RMB 9,882,000 in 2022, showing a positive trend [91]. - Other net losses decreased by approximately RMB 2.4 million or 53.3% to about RMB 2.1 million, mainly due to increased net revenue from waste sales [51]. - The company recognized an impairment loss of RMB 5,368,000 due to the unlikelihood of recovering a deposit from a supplier following a court ruling [131]. Strategic Focus and Future Plans - The company aims to maintain flexibility and adaptability in response to commodity price fluctuations and global economic uncertainties, emphasizing strategic planning and continuous innovation [149]. - The group aims to expand shareholder value by increasing production capacity, enhancing product quality, and exploring acquisition opportunities for sustainable development [168]. - The group plans to establish strategic relationships and identify acquisition opportunities to address future challenges and provide more efficient and environmentally friendly products [168]. Employment and Workforce - The group employed 1,292 employees as of December 31, 2023, a slight decrease from 1,312 employees as of December 31, 2022 [171].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,619,754, a decrease from RMB 1,720,310 for the same period in 2022, representing a decline of approximately 5.9%[19] - Gross profit for the six months ended June 30, 2023, was RMB 124,413, down from RMB 250,434 in the previous year, indicating a significant decrease of about 50.3%[19] - Net profit for the period was RMB 74,457, compared to RMB 151,020 in the same period last year, reflecting a decline of approximately 50.7%[19] - Basic earnings per share for the six months ended June 30, 2023, was RMB 11.4, down from RMB 23.8 in the previous year, a decrease of about 52.0%[19] - The company reported a net profit of RMB 70,775,000 for the six months ended June 30, 2023, compared to RMB 147,895,000 for the same period in 2022, indicating a decrease of 52.2%[63] - The company's profit for the six months ended June 30, 2023, decreased by approximately RMB 76.5 million or 50.7% to about RMB 74.5 million, primarily due to a reduction in overall gross profit and a decline in gross margin[78] - Revenue for the same period decreased by approximately RMB 100.5 million or 5.8% to about RMB 1,619.8 million, mainly attributed to a drop in the average selling price of urea[78] Assets and Liabilities - Total current assets as of June 30, 2023, amounted to RMB 831,831, an increase from RMB 812,144 as of December 31, 2022, representing a growth of approximately 2.1%[4] - Total non-current assets as of June 30, 2023, were RMB 1,033,124, down from RMB 1,056,971 as of December 31, 2022, indicating a decrease of about 2.2%[4] - Total liabilities decreased to RMB 176,866 as of June 30, 2023, from RMB 212,096 as of December 31, 2022, a reduction of approximately 16.5%[4] - Cash and bank balances increased to RMB 624,022 as of June 30, 2023, compared to RMB 535,466 as of December 31, 2022, reflecting an increase of about 16.6%[4] - The total equity attributable to the owners of the company as of June 30, 2023, was RMB 1,644,386, up from RMB 1,608,533 as of December 31, 2022, representing an increase of about 2.2%[6] - Trade receivables as of June 30, 2023, amounted to RMB 8,792 million, down from RMB 9,784 million as of December 31, 2022[66] - Trade payables decreased from RMB 50,062 million as of December 31, 2022, to RMB 39,935 million as of June 30, 2023[70] - Other payables and accrued expenses increased from RMB 74,545 million as of December 31, 2022, to RMB 77,851 million as of June 30, 2023[71] Revenue Breakdown - Sales of urea amounted to RMB 1,372,940,000, down from RMB 1,429,775,000, reflecting a decline of 4.0% year-over-year[53] - The average selling price of urea decreased by approximately 13.8% to about RMB 2,213 per ton compared to RMB 2,566 per ton in the same period of 2022[78] - Methanol revenue decreased by approximately RMB 5.1 million or 6.6% to about RMB 72.6 million, with the average selling price dropping by approximately 9.8% to about RMB 1,686 per ton[84] - Urea sales revenue decreased by approximately RMB 56.9 million or 4.0% to about RMB 1,372.9 million, primarily due to a drop in average selling price from RMB 2,566 per ton to RMB 2,213 per ton, a decline of 13.8%[103] - The average selling price of automotive urea solution increased by approximately RMB 178 per ton or 10.5% to RMB 1,876 per ton, contributing to a slight revenue increase of 0.9% to RMB 104.0 million[102] Expenses and Costs - The cost of sales increased by approximately RMB 25.4 million or 1.7% to about RMB 1,495.3 million, mainly due to rising electricity and manufacturing costs[107] - The company’s employee benefits expenses totaled RMB 61,226,000, a slight decrease from RMB 61,781,000 in the same period last year[46] - Administrative expenses decreased by approximately RMB 5.3 million or 17.7% to about RMB 24.6 million, mainly due to a reduction in provisions for other receivables[87] - The company reported a decrease in current tax expenses to RMB 22,377,000 from RMB 56,579,000 year-over-year[48] - Income tax expenses decreased by approximately RMB 35 million or 57.5% to about RMB 25.9 million for the reporting period[136] Investments and Capital Expenditures - The company’s capital expenditures for property, plant, and equipment were approximately RMB 42,690,000 for the six months ended June 30, 2023, compared to RMB 35,094,000 for the same period in 2022[63] - The group has committed capital expenditures of RMB 31,113 million for property, plant, and equipment as of June 30, 2023, compared to RMB 20,566 million as of December 31, 2022[75] Financial Reporting and Standards - The financial statements were prepared based on the same accounting policies adopted in the 2022 annual financial statements, with no significant impact from new standards effective from January 1, 2023[23] - The interim financial statements have not been audited but were reviewed by Hong Kong Lixin Dehao CPA Limited according to the relevant review standards[25] - The company does not expect any significant impact from the new or revised International Financial Reporting Standards on its interim financial statements[30] - The management's significant judgments and estimates in applying the accounting policies remain consistent with those used in the 2022 annual financial statements[39] - The interim financial statements do not include all the information required for complete financial statements under International Financial Reporting Standards[24] - The company anticipates that the new accounting standards will affect disclosures in its annual results for the year ending December 31, 2023[33] Other Information - The company reported a foreign exchange gain of RMB 9,099 for the period, compared to RMB 6,343 in the previous year, an increase of approximately 43.8%[19] - The company incurred a foreign exchange loss of RMB 10,613,000 for the six months ended June 30, 2023, compared to a loss of RMB 8,807,000 in the previous year[43] - The group has no significant debt as of June 30, 2023, maintaining a debt ratio of 0%[114] - The outlook for the second half of 2023 indicates potential challenges and opportunities in the urea and chemical industry due to fluctuating raw material prices and international market changes[115] - The group plans to enhance shareholder value by increasing production capacity, improving product quality, and exploring strategic acquisition opportunities[116] - The group had no significant investments or acquisitions during the reporting period[122] - The board decided not to declare an interim dividend for the reporting period[125] - The group has no formal foreign exchange hedging policy but monitors foreign exchange risks[141]

Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 2,801,167,000, an increase from RMB 2,422,121,000 in 2021, representing a growth of approximately 15.6%[26]. - The profit attributable to the owners of the company for the year ended December 31, 2022, was RMB 194,380,000, down from RMB 266,081,000 in 2021, indicating a decrease of about 27.0%[30]. - Total revenue for the year ended December 31, 2022, was approximately RMB 3,130.8 million, an increase of 8.7% from RMB 2,880.9 million in 2021[95]. - Net profit for the year decreased by approximately RMB 73.4 million or 26.7% to about RMB 202.1 million from approximately RMB 275.6 million for the year ended December 31, 2021[81]. - Gross profit for the year was RMB 329,614 thousand, compared to RMB 458,813 thousand in the previous year, indicating a decrease of about 28.14%[153]. Revenue Breakdown - The company's revenue increased by approximately RMB 249.8 million or 8.7% to about RMB 3,130.8 million compared to the year ended December 31, 2021, which was approximately RMB 2,880.9 million[81]. - Urea revenue increased by 15.2% to RMB 2,627.5 million, while automotive urea solution revenue decreased by 24.2% to RMB 198.7 million[95]. - Revenue from urea increased by approximately RMB 345.9 million or 15.2% to about RMB 2,627.5 million, despite a slight decrease in sales volume by about 2.2% due to COVID-19 impacts[87]. - Revenue from automotive urea solution decreased by approximately RMB 63.6 million or 24.2% to about RMB 198.7 million, primarily due to reduced demand amid COVID-19 outbreaks[88]. - Methanol revenue decreased by 5.1% to RMB 151.5 million, despite an average selling price increase of 2.6% to approximately RMB 1,860 per ton[97]. Expenses and Costs - The company's total tax expenses for the year ended December 31, 2022, were RMB 74,087,000, down from RMB 109,072,000 in 2021, representing a decrease of approximately 32.1%[20]. - The company's administrative expenses and financing costs decreased compared to the year ended December 31, 2021, mainly due to reduced provisions for other receivables and decreased interest on bank borrowings[81]. - Selling costs increased by 15.6% to approximately RMB 2,801.2 million, primarily due to rising raw material, labor, and electricity costs[99]. - The overall gross profit and gross profit margin decreased due to an increase in sales costs, primarily driven by rising raw material costs[84]. - The company reported employee benefit expenses of RMB 142,019,000 for the year ended December 31, 2022, up from RMB 121,491,000 in 2021, which is an increase of about 16.9%[26]. Assets and Liabilities - The company's total assets as of December 31, 2022, amounted to RMB 1,620,428 thousand, an increase from RMB 1,479,011 thousand in 2021, showing a growth of about 9.55%[149]. - Current liabilities decreased to RMB 212,096 thousand from RMB 322,596 thousand in 2021, a reduction of approximately 34.36%[149]. - Trade payables as of December 31, 2022, amounted to RMB 50,062 thousand, a decrease from RMB 54,380 thousand as of December 31, 2021[60]. - Other payables decreased to RMB 60,066 thousand from RMB 70,756 thousand year-on-year[61]. - The company had no interest-bearing bank borrowings as of December 31, 2022, resulting in a debt-to-asset ratio of 0%[114]. Dividends and Shareholder Returns - The company reported a final dividend of HKD 0.08 per share for the year ended December 31, 2022, totaling HKD 49,675,520, down from HKD 62,094,400 in 2021[35]. - The proposed final dividend is HKD 0.08 per ordinary share, totaling approximately HKD 49.7 million, down from HKD 62.1 million in the previous year[134]. Future Outlook and Strategy - The group anticipates steady growth in domestic fertilizer demand, supported by the gradual recovery of the global economy and the implementation of new infrastructure projects in China[121]. - The group plans to continue its growth strategy by increasing production capacity, enhancing product quality, and expanding its value chain to include urea-related products[123]. - The company plans to continue expanding its market presence and invest in new product development to drive future growth[161]. - The company has maintained a focus on innovation and market expansion, actively developing new products such as automotive urea solution[91]. Compliance and Standards - The company has not adopted any new or revised international financial reporting standards that would have a significant impact on its financial statements[31]. - The company plans to adopt new or revised international financial reporting standards upon their effective date, which may affect its financial statements in the future[32]. - The company has adopted new or revised International Financial Reporting Standards (IFRS) effective from January 1, 2023, which may impact future financial reporting[38]. Miscellaneous - The company has not identified any significant adverse impact from COVID-19 on its financial performance as of December 31, 2022[40]. - The company’s subsidiaries in the Cayman Islands, Samoa, and the British Virgin Islands are not subject to income tax, contributing to tax efficiency[33]. - The company’s eligible small and micro enterprises can benefit from a reduced corporate income tax rate of 10% on 25% of their income if their taxable income is below RMB 1 million[34]. - The group has capital commitments of approximately RMB 20.6 million as of December 31, 2022, compared to RMB 18.2 million as of December 31, 2021[125]. - There were no significant acquisitions or disposals of subsidiaries or associates during the reporting period[128]. - The group has no significant contingent liabilities as of December 31, 2022[131].

Revenue and Profit - For the six months ended June 30, 2022, the company's revenue increased by approximately RMB 429.9 million or 32.8% to approximately RMB 1,720.3 million, primarily due to the rise in average selling price of urea[13] - The profit for the same period rose by approximately RMB 8.7 million or 6.1% to approximately RMB 151.0 million, attributed to increased overall gross profit and reduced administrative expenses and financing costs[13] - Revenue from urea products rose by approximately RMB 379.3 million or 36.1% to about RMB 1,429.8 million, driven by the increased average selling price[17] - The company reported revenue of RMB 1,720,310 thousand for the six months ended June 30, 2022, an increase from RMB 1,295,407 thousand in the same period of 2021, representing a growth of approximately 32.8%[72] - Urea sales contributed RMB 1,429,775,000, up from RMB 1,050,468,000, reflecting a growth of 36%[103] - The net profit attributable to the owners of the company was RMB 151,020 thousand, up from RMB 142,338 thousand year-on-year, reflecting a growth of approximately 6.0%[72] Cost and Expenses - The company has implemented effective cost control measures, which have positively impacted its financial performance during the reporting period[12] - Administrative expenses decreased by approximately RMB 9.3 million or 23.7% to approximately RMB 29.9 million, mainly due to a reduction in provisions for other receivables[27] - Financing costs decreased by approximately RMB 8.3 million or 89.4% to approximately RMB 1.0 million, due to reduced interest expenses from bank loans[30] - Gross profit increased by approximately RMB 7.5 million or 3.1% to approximately RMB 250.4 million, driven by higher average selling prices of urea products[24] - Gross margin decreased from approximately 18.8% to 14.6% due to a higher percentage increase in sales costs compared to revenue growth[24] Market and Product Performance - The average selling price of urea increased by approximately 33.1% to about RMB 2,567 per ton, compared to RMB 1,928 per ton in the same period of 2021[13] - Revenue from automotive urea solution decreased by approximately RMB 7.0 million or 6.3% to about RMB 103.1 million, mainly due to reduced demand caused by COVID-19 outbreaks[18] - The average selling price of automotive urea solution increased by approximately 25.8% to about RMB 1,698 per ton, compared to RMB 1,350 per ton in the same period of 2021[18] - Revenue from methanol increased by approximately RMB 6.0 million or 8.3% to about RMB 77.7 million, due to a rise in average selling price[20] - Revenue from other products, including liquid ammonia, increased by approximately RMB 46.6 million or 73.8% to about RMB 109.7 million, driven by higher market demand[21] Financial Position - As of June 30, 2022, the group had net assets of approximately RMB 1,575.6 million, an increase from approximately RMB 1,479.0 million as of December 31, 2021[34] - The group had cash and bank balances of approximately RMB 460.0 million as of June 30, 2022, compared to approximately RMB 425.1 million as of December 31, 2021[35] - The company’s total assets as of June 30, 2022, amounted to RMB 1,817,788 thousand, compared to RMB 1,840,529 thousand as of December 31, 2021, showing a decrease of about 1.2%[74] - Current assets increased to RMB 706,100 thousand from RMB 692,351 thousand, marking a growth of approximately 2.0%[74] - Current liabilities decreased significantly to RMB 204,343 thousand from RMB 322,596 thousand, a reduction of approximately 36.7%[74] - The total equity attributable to the owners of the company was RMB 1,568,730 thousand as of June 30, 2022, up from RMB 1,465,957 thousand as of December 31, 2021, an increase of about 7%[80] Employee and Management - As of June 30, 2022, the total employee cost was approximately RMB 61.8 million, an increase from RMB 54.1 million for the six months ended June 30, 2021[43] - The company employed 1,286 employees as of June 30, 2022, compared to 1,285 employees as of December 31, 2021[43] - The total remuneration for key management personnel was RMB 648 thousand for the six months ended June 30, 2022, a decrease from RMB 689 thousand for the same period in 2021[137] Shareholder Information - The company’s major shareholder, Mr. Wang Zhihe, holds 460,000,000 shares, representing approximately 74.08% of the total issued shares as of June 30, 2022[45] - Sino-Coal Holding owns 279,680,000 shares, accounting for approximately 45.04% of the total issued shares[49] - Bloom Ocean holds 180,320,000 shares, representing approximately 29.04% of the total issued shares[49] - The company’s total issued share capital remained at 620,944 thousand shares as of June 30, 2022, unchanged from previous periods[134] Dividends and Investments - The board decided not to declare an interim dividend for the reporting period[60] - The company did not recommend an interim dividend for the six months ended June 30, 2022, compared to no dividend in the same period of 2021[117] - The company has not made any significant acquisitions or disposals of subsidiaries or associates during the reporting period[57] - No significant investments were held by the company during the reporting period[58] Other Financial Information - The company reported a decrease in trade receivables by RMB 3,530 thousand for the six months ended June 30, 2022, compared to an increase of RMB 15,385 thousand in the same period of 2021[83] - The company paid dividends amounting to RMB 51,465 thousand during the six months ended June 30, 2022, compared to RMB 25,843 thousand in the same period of 2021, representing an increase of approximately 99.5%[85] - The company reported a decrease in inventory by RMB 22,932 thousand for the six months ended June 30, 2022, compared to a decrease of RMB 29,497 thousand in the same period of 2021[83] - The company had no short-term bank loans secured as of June 30, 2022, compared to RMB 96,000 thousand in secured loans as of December 31, 2021[131] Compliance and Audit - The financial statements are prepared in accordance with International Accounting Standards and have been authorized for publication on August 26, 2022[88] - The financial statements have not been audited but have been reviewed by a local accounting firm[91] - The company reported no breaches of financial covenants as of June 30, 2022, ensuring compliance with loan agreements[133] COVID-19 Impact - The impact of COVID-19 on the company's operations has been moderate, with no significant adverse effects identified as of June 30, 2022[99]

Financial Performance - Revenue for the fiscal year 2021 reached RMB 2,880.9 million, representing a 47.3% increase from RMB 1,956.0 million in 2020[16] - Gross profit for 2021 was RMB 458.8 million, a significant increase of 95.5% compared to RMB 234.6 million in 2020[18] - Net profit for the year was RMB 275.6 million, reflecting a growth of 117.9% from RMB 126.5 million in the previous year[20] - Basic earnings per share increased to RMB 42.9, up from RMB 20.2 in 2020[16] - Total revenue increased by approximately RMB 924.9 million or 47.3% from RMB 1,956.0 million in 2020 to RMB 2,880.9 million during the reporting period[26] - The main revenue contributions came from urea (79%), methanol (6%), and newly developed automotive urea solution products (9%) during the reporting period[26] - Revenue from automotive urea solution sales surged by approximately RMB 227.4 million or 652.5% from RMB 34.9 million in 2020 to RMB 262.3 million during the reporting period[29] - The total revenue from urea was approximately RMB 2,281.7 million, reflecting a 37.5% increase from approximately RMB 1,659.9 million in the previous year[41] Production and Capacity - The company has an annualized design capacity of approximately 1.1 million tons of urea[5] - The company operates two production facilities equipped with advanced technology in Hebei Province[5] - The company has successfully implemented a project for the annual production of 500,000 tons of automotive urea, with the first phase of 300,000 tons already operational since December 2019[29] Cost and Expenses - The cost of sales rose by approximately RMB 700.7 million or 40.7% to approximately RMB 2,422.1 million, mainly due to increases in raw material, labor, and electricity costs[45] - The income tax expense rose by approximately RMB 64.1 million or 142.4% to approximately RMB 109.1 million, primarily due to an increase in profit before tax[56] Financial Stability - As of December 31, 2021, the group's net assets were approximately RMB 1,479.0 million, an increase from RMB 1,234.1 million as of December 31, 2020[58] - The group's cash and bank balances amounted to approximately RMB 425.1 million as of December 31, 2021, compared to RMB 367.1 million as of December 31, 2020, reflecting a growth of 15.5%[59] - The debt ratio as of December 31, 2021, was 6.5%, significantly down from 23.6% as of December 31, 2020, indicating improved financial stability[61] - The group recorded a significant reduction in interest-bearing bank borrowings, totaling RMB 96.0 million as of December 31, 2021, down from RMB 291.0 million as of December 31, 2020[59] Governance and Management - The company has a strong board composition with independent directors possessing extensive experience in financial management and accounting[82] - The operational management is led by a team with over 51 years of experience, ensuring effective oversight of the group's operations[77] - The technical management team has over 40 years of experience, focusing on production management in the coal-based fertilizer sector[79] - The company has established a robust governance structure with independent non-executive directors to ensure accountability and transparency[82] - The company has established a shareholder communication policy to ensure effective contact with shareholders[102] - The board has held at least one meeting with independent non-executive directors without the presence of other directors during the year ending December 31, 2021[102] Strategic Focus and Future Outlook - The company anticipates increased demand for urea due to government policies aimed at ensuring food security and the ongoing industrialization under the "14th Five-Year Plan"[33] - The group anticipates stable and healthy development in the urea industry, driven by increased demand for food security and industrial needs in 2022[62] - The company is strategically located near major transportation networks, facilitating cost-effective coal supply and product delivery[6] Corporate Governance Practices - The company has established procedures for directors to seek independent professional advice at the company's expense[102] - The company has adopted the standards set forth in the Listing Rules Appendix 10 for the conduct of securities trading by its directors, ensuring compliance with the guidelines[126] - The company has established a nomination committee chaired by the board chairman or an independent non-executive director, with a majority of independent non-executive directors as members[112] - The company has mechanisms in place to ensure that directors are aware of their duties and the business activities of the group[121] Internal Control and Risk Management - The internal control system of the group is regularly reviewed by the board through the audit committee, confirming its effectiveness in financial, operational, compliance, and risk management[152] - The audit committee's responsibilities include reviewing the effectiveness of internal controls and risk management processes, as outlined in the corporate governance report[158] - Management regularly reviews business operations to identify significant business risk areas and appropriate measures to control and mitigate those risks[194]