Financial Performance - Revenue increased by approximately 9.8% to HKD 396,529,000 (2023: HKD 361,301,000) [10] - Gross profit decreased by 20.7% to HKD 61,613,000, with a gross margin of 15.5% (2023: 21.5%) [10] - Profit attributable to owners decreased by 17.4% to HKD 12,694,000 (2023: HKD 15,360,000) [11] - The total profit for 2024 was HKD 12,895,000, a decrease of 6.5% compared to the previous year [20] - The revenue from comprehensive logistics services increased by 30.8% to HKD 49,990,000, compared to HKD 38,230,000 in 2023, accounting for 12.6% of total revenue [37] - The revenue from supply chain management and trading business rose by 16.8% to HKD 184,797,000, driven by strong demand for rice and broken rice trading [33] - Property business revenue decreased by 5.6% to HKD 12,034,000, representing about 3.0% of total revenue [42] - Other income increased by approximately 71.5% to HKD 37,934,000, primarily due to the sale of a subsidiary and compensation income from past construction contracts [45] Operational Highlights - The company launched new direct shipping routes, including "Indonesia - Wuhan," enhancing logistics efficiency and reducing costs [16] - The company completed the export of 1,367 standard containers of automobiles and 1,600 standard containers of lithium batteries, representing year-on-year increases of 3.2% and 7%, respectively [16] - The company’s core business segments, including port operations and supply chain services, showed stable growth [16] - The container throughput reached 900,342 TEUs, an increase of 200 TEUs from the previous year [20] - The total container throughput at Wuhan Yangluo Port increased by approximately 0.1% to 900,342 TEUs, with local cargo throughput rising by 14.2% to 366,412 TEUs [34] - The market share of the group in the container throughput in Wuhan was approximately 25.7% for the year ended December 31, 2024, down from 32% in 2023 [36] Strategic Initiatives - The company is positioned as a key player in the "Belt and Road" initiative, connecting central and western regions with global markets [14] - The group plans to develop Hannan Port into the largest logistics hub in Central China, focusing on automotive logistics and multi-modal transport [29] - The group aims to enhance supply chain management and trade services to strengthen connections with upstream suppliers and downstream customers [31] - The group is focused on creating a modern supply chain system centered around Yangluo Port, integrating port, trade, warehousing, and logistics services [32] Governance and Management - Ms. Yu Ling appointed as a non-executive director since January 2025, with over 16 years of experience in financial management and investment management [76] - The company is expanding its market presence through strategic appointments and leveraging the expertise of its board members [78][80] - The board includes members with qualifications from prestigious institutions, enhancing governance and strategic decision-making capabilities [79] - The company is focused on improving financial management and operational efficiency through experienced leadership [76][77][78] - The company has appointed three independent non-executive directors, with at least one possessing appropriate professional accounting qualifications, in compliance with listing rules [94] Risk Management - The company faces cyclical risks, including overcapacity and intense price competition, with many companies historically failing to earn profits [64] - Financial risks arise from the need for substantial funding for infrastructure development, particularly for projects like the Hannan Port Phase II [68] - The company must maintain sufficient working capital levels to support its business model, as insufficient capital could adversely affect operations [73] - The board believes the group has a sufficient and effective risk management and internal control system to address significant financial, operational, compliance, and IT control risks [120] Environmental, Social, and Governance (ESG) Initiatives - The ESG report aims to transparently disclose the group's performance and commitments in environmental, social, and governance aspects over the past year [137] - The group emphasizes energy savings, greenhouse gas reduction, and providing training and development opportunities for employees [146] - The company reported a significant reduction in nitrogen oxides (NOX), sulfur oxides (SOX), and particulate matter (PM) emissions by approximately 99.15%, 15.73%, and 99.27% respectively compared to the previous year [157] - The company has implemented a series of environmental management goals to monitor progress in environmental protection efforts, ensuring compliance with relevant laws and regulations [155] - The company has established waste classification and recycling facilities in the office to enhance recycling rates and reduce waste disposal [166] Employee Welfare and Safety - The company has a total of 321 employees, with a gender ratio of approximately 79% male and 21% female [185] - In 2024, the company organized 83 safety training sessions to enhance employee safety awareness [186] - There were zero fatalities or work-related injuries reported in the past three years [188] - The company strictly adheres to various labor laws and regulations to protect employee rights and ensure a fair working environment [182] - Employees are entitled to various paid leave types, including statutory holidays, marriage leave, bereavement leave, maternity leave, and annual leave [184] Supplier and Procurement Practices - The company has established a standardized procurement procedure to ensure transparency and fairness in supplier selection [193] - A total of 182 suppliers were engaged, with 179 from China, 2 from Hong Kong, and 1 from Switzerland [194] - The company has not encountered any significant non-compliance incidents related to service quality during the reporting period [195] - There were no complaints received regarding the company's services during the reporting period [196]

Financial Performance - Revenue increased by approximately 9.8% to HKD 396,529,000 (2023: HKD 361,301,000) [2] - Gross profit decreased by 20.7% to HKD 61,613,000 (2023: HKD 77,653,000), with a gross margin of 15.5% (2023: 21.5%) [2] - Profit for the year decreased by approximately 6.5% to HKD 12,895,000 (2023: HKD 13,788,000) [2] - Profit attributable to owners of the company decreased by 17.4% to HKD 12,694,000 (2023: HKD 15,360,000) [2] - Total comprehensive income for the year amounted to a loss of HKD 14,383,000 (2023: loss of HKD 13,983,000) [5] - The company’s interest expenses for 2024 were HKD 11,357,000, a decrease from HKD 15,898,000 in 2023, indicating a reduction of approximately 28.5% [29][30] - Net profit attributable to owners decreased by 17.4% to HKD 12,694,000, with basic and diluted earnings per share of HKD 0.74 [69] Revenue Breakdown - Revenue from customer contracts for the year is reported as HKD 396,529,000, an increase from HKD 361,301,000 in the previous year, representing a growth of approximately 9.8% [23] - The revenue breakdown shows that terminal services generated HKD 110,647,000, while integrated logistics services contributed HKD 49,990,000, indicating stable performance in these segments [23] - The company’s revenue for 2024 reached HKD 396,529,000, representing a 9.8% increase compared to the previous year [45] - Revenue from integrated logistics services rose by 30.8% to HKD 49,990,000, primarily due to increased business volume at Wuhan Yangluo Port [58] - Supply chain management and trading business revenue increased by 16.8% to HKD 184,797,000, driven by strong demand for rice and broken rice trading [58] - Property business revenue decreased by 5.6% to HKD 12,034,000, contributing approximately 3.0% to total revenue [64] Assets and Liabilities - Non-current assets decreased to HKD 1,145,615,000 (2023: HKD 1,208,189,000) [6] - Current liabilities increased to HKD 293,414,000 (2023: HKD 384,421,000) [7] - Net current liabilities amounted to approximately HKD 132,000,000 as of December 31, 2024 [12] - Cash and cash equivalents amounted to approximately HKD 58,662,000, while total interest-bearing borrowings were HKD 251,614,000 [70] - Current liabilities net increased to HKD 131,644,000, with a current ratio of 0.6 [71] Dividends and Shareholder Returns - The board of directors did not recommend a final dividend for the year ended December 31, 2024 (2023: nil) [2] - The company did not recommend any dividend payment for the fiscal year ending December 31, 2024, consistent with the previous year [35] - No dividends are recommended for the year ending December 31, 2024, consistent with 2023 [81] Operational Developments - The company completed the integration of Yangluo Port's phases one to three, optimizing port logistics resources [46] - The company established new regional shipping routes, enhancing its logistics capabilities and expanding its service area [48] - The company signed agreements with three new container management clients, expected to bring an additional 340-600 TEUs monthly [49] - The company has established a logistics center adjacent to Shayang Port, consisting of seven warehouses and an office building, intended for rental income generation [53] - The company has integrated its operations at Yangluo Port, eliminating price competition and leveraging synergies since acquiring controlling interest in 2022 [59] Future Outlook and Strategy - The group expects to generate sufficient cash flow over the next twelve months from the reporting date [15] - The group has confirmed financial support from Hubei Port Group for the next twelve months if needed [15] - The group has no significant uncertainties regarding its ability to continue as a going concern for at least the next twelve months [13] - The company plans to develop Hannan Port into the largest logistics hub in Central China, focusing on automotive logistics and multi-modal transport [52] - The company aims to enhance its supply chain management and trading operations to strengthen connections with upstream suppliers and downstream customers [54] - The company is focused on creating a modern supply chain system that integrates port, trade, warehousing, and logistics services [55] Governance and Compliance - The company adheres to high standards of corporate governance to enhance corporate value and accountability [85] - The audit committee has reviewed and confirmed the accounting principles and practices adopted by the group for the year ending December 31, 2024 [87] - The financial figures for the year ending December 31, 2024, have been agreed upon by the auditor, but no assurance opinion was expressed [88] - The annual performance announcement and report will be published on the Hong Kong Stock Exchange website and the company's website [89]

| --- | --- | --- | |-------|--------------------|-------| | | | | | | | | | | | | | | Utilize the Golden | | | | | | | | Waterway along | | | | | | | | Yangtze River to | | 中國通商集團有限公司 China Infrastructure & Logistics Group Ltd. | --- | |-------| | | | | 中期業績報告 Interim Report 2024 INTERIM REPORT 中國通商 中國通商集團有限公司 China Infrastructure & Logistics Group Ltd. (於開曼群島註冊成立之有限公司) 股份代號 : 1719 依托長江黃金水道 建設華中航運中心 發展中部物流基地 2024 2024 中期業績報告 目錄 公司資料 2 財務摘要 4 管理層討論及分析 5 未來展望 18 中期財務資料 20 其他資料 56 1 中國通商集團有限公司 2024年中期報告 公司資料 ...

Financial Performance - Revenue decreased by approximately 15.9% to about HKD 157,177,000 compared to HKD 186,813,000 in the previous period[2] - Gross profit decreased by approximately 14.4% to about HKD 37,420,000, with a slight increase in gross margin to 23.8% from 23.4% in the previous period[2] - Profit for the period increased by approximately 129.3% to about HKD 3,393,000, compared to HKD 1,480,000 in the previous period[2] - Profit attributable to owners of the company increased by approximately 196.7% to about HKD 3,468,000 from HKD 1,169,000 in the previous period[2] - Basic earnings per share attributable to owners of the company was approximately HKD 0.2 cents, up from HKD 0.07 cents in the previous period[4] - The group reported a profit before tax of HKD 5,489 thousand for the six months ended June 30, 2024, compared to HKD 260 thousand for the same period in 2023, indicating a significant increase in profitability[15][17] - The company's profit before tax for the six months ended June 30, 2024, was HKD 3,468,000, compared to HKD 1,169,000 for the same period in 2023, representing a significant increase[25] - Other income increased by approximately 175.0% to about HKD 8,128,000, mainly due to a gain of approximately HKD 4,901,000 from the sale of a subsidiary's equity[55] Assets and Liabilities - Total assets decreased to HKD 1,168,889,000 from HKD 1,208,189,000 as of December 31, 2023[5] - Non-current assets decreased to HKD 1,031,782,000 from HKD 1,106,796,000 as of December 31, 2023[8] - The company reported a net asset value of HKD 814,880,000, down from HKD 864,757,000[8] - The net current liabilities of the group as of June 30, 2024, amount to approximately HKD 137 million, raising concerns about the group's ability to continue as a going concern[11] - The company's total liabilities decreased to HKD 114,022,000 as of June 30, 2024, from HKD 110,210,000 at the end of 2023, a reduction of about 3.3%[32] - The group had total outstanding interest-bearing borrowings of approximately HKD 316,603,000 as of June 30, 2024, down from approximately HKD 375,434,000 as of December 31, 2023[62] - The group’s current liabilities net amount was approximately HKD 137,107,000 as of June 30, 2024, compared to approximately HKD 101,393,000 as of December 31, 2023[62] Cash Flow and Financing - Cash and cash equivalents increased to HKD 67,590,000 from HKD 56,648,000[5] - Interest expenses for the six months ended June 30, 2024, totaled HKD 6,393 thousand, a decrease from HKD 8,204 thousand in the same period of 2023, reflecting a reduction in financing costs[20] - The group expects to generate sufficient cash flow over the next twelve months, supported by financial backing from Hubei Port Group[11] Dividends and Shareholder Returns - The board of directors did not recommend the payment of an interim dividend for the period, compared to zero in the previous period[2] - The company did not declare any dividends for the six months ended June 30, 2024, consistent with the previous year[27] - No interim dividend declared for the six months ending June 30, 2024 (previous period: none)[71] Operational Highlights - In the first half of 2024, the company handled a total cargo throughput of 8.56 billion tons, representing a year-on-year growth of 4.6%, with container throughput increasing by 8.5% to 16.2 million TEUs[41] - The company has introduced a new full-container transportation service, successfully completing the loading of 1,468 vehicles, totaling 1,072 TEUs, in the first half of 2024[41] - The company has established a new direct shipping route from Wuhan to Ho Chi Minh City, Vietnam, enhancing its logistics capabilities and service quality[39] - The company is actively developing new markets, including the stone material market in Macheng, which has led to a stable weekly export source to Busan, South Korea[41] - The company has achieved a collaboration with local steel companies, resulting in the completion of 62 bulk carrier operations, with a total cargo handling volume of 101,300 tons in the first half of 2024[41] - The company has implemented new technologies to enhance operational efficiency, including the use of remote control systems for gantry cranes and green energy vehicles[39] Market and Competitive Position - The market share of Yangluo Port increased to approximately 47.9% during the period, up from 31.6% in the previous period, primarily due to an increase in local container volume[51] - Revenue from comprehensive logistics services rose to approximately HKD 28,141,000, accounting for about 17.9% of total revenue, compared to 13.5% in the previous period[52] - Property business revenue increased to approximately HKD 6,262,000, representing 4.0% of total revenue, up from 2.8% in the previous period[53] Future Outlook - The company anticipates that the shipping rates will stabilize in the second half of 2024, driven by the traditional peak season for domestic trade and rising external trade rates[39] - The group aims to enhance operational efficiency through smart port innovations and the integration of logistics services, focusing on a comprehensive port logistics system[59] - The group plans to expand its capital operations to drive financial value creation and mitigate investment risks[59] Compliance and Governance - The company has complied with the corporate governance code as per the listing rules for the six months ending June 30, 2024[73] - The company has adopted the standard code for securities transactions by directors, confirming compliance during the six months ending June 30, 2024[74] - The audit committee has reviewed the company's financial reporting, internal controls, and risk management systems for the six months ending June 30, 2024[76]

Corporate Governance - The Nomination Committee held two meetings in the year ending December 31, 2023, to review the board's structure, size, composition, and the effectiveness of the diversity policy[2]. - The board has delegated corporate governance responsibilities to the Audit Committee, which includes reviewing and monitoring compliance with legal and regulatory requirements[3]. - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with the standards set forth in the listing rules[8]. - All directors confirmed compliance with the code of conduct and relevant regulations during the year ending December 31, 2023[8]. - The board has established procedures for directors to seek independent professional advice at the company's expense[9]. - The company has provided all directors with training on their responsibilities and relevant regulations, ensuring they are aware of good corporate governance practices[9]. - The independent non-executive directors attended all meetings, demonstrating strong engagement in corporate governance[6]. - The board diversity policy is in place to ensure a balanced composition in terms of skills, experience, and perspectives, with annual discussions on measurable diversity goals[20]. - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with all relevant provisions as of December 31, 2023[132]. - The board is committed to maintaining high standards of corporate governance and accountability, ensuring transparency in operations[155]. - The company has a whistleblowing policy to encourage reporting of concerns related to operations, ensuring independent opinions are considered[161]. - The nomination committee is chaired by the board chairman, with a majority of independent non-executive directors, to assess the effectiveness of governance mechanisms[162]. - The company emphasizes the importance of independent opinions and has conducted annual reviews of its governance mechanisms to ensure effectiveness[162]. - The company has established appropriate insurance to protect its directors and senior officers against potential liabilities arising from company activities[167]. - The company has a clear division of roles between the chairman and the CEO to enhance independence and ensure checks and balances[167]. - The company has a policy for the re-election of directors, ensuring that at least one-third of the board retires at each annual general meeting[183]. Financial Performance - For the year ended December 31, 2023, the group's revenue was HKD 361,301,000, an increase of approximately 13.1% compared to HKD 319,535,000 in 2022[53]. - The revenue from terminal and related businesses grew by 15.0% to HKD 152,042,000, primarily due to increased container throughput at Yangluo Port[53]. - Supply chain management and trading business revenue surged by 34.9% to HKD 158,281,000, accounting for approximately 43.8% of total revenue[65]. - The gross profit decreased by 9.0% to HKD 77,653,000, with a gross profit margin of 21.5%, down from 26.7% in 2022[66]. - The profit attributable to the company's owners decreased by HKD 5,415,000 or approximately 26.1% to HKD 15,360,000 for the year ended December 31, 2023, compared to HKD 20,775,000 in 2022[77]. - The basic and diluted earnings per share attributable to the company's owners were HKD 0.89, a decrease of 25.8% from HKD 1.20 in the previous year[77]. - Other income increased by approximately 305.0% to HKD 22,117,000 for the year ended December 31, 2023, compared to HKD 6,201,000 in 2022[79]. - The group recorded a fair value loss on investment properties of HKD 993,000, compared to a fair value gain of HKD 25,785,000 in 2022[68]. - The net asset value of the group as of December 31, 2023, was HKD 864,757,000, down from HKD 881,566,000 in 2022[107]. - The total outstanding interest-bearing borrowings of the group as of December 31, 2023, amounted to HKD 375,434,000, a decrease from HKD 427,293,000 in 2022[107]. Operational Performance - The container throughput reached 900,142 TEUs, representing a year-on-year increase of 12.3%[35]. - CFS dismantling and assembly business significantly grew, completing 18,661 TEUs, up 10% from the previous year[35]. - The overall cargo throughput of inland ports in China reached 3.8 billion tons, a year-on-year increase of 14.2%[39]. - Revenue from container handling, storage, and other services increased by 46.4% to HKD 37,161,000 from HKD 25,384,000[49]. - The comprehensive logistics services revenue decreased by 37.4% to HKD 38,230,000 from HKD 61,067,000[49]. - The total throughput at Yangluo Port increased by about 12.3% to 900,142 TEUs, with local cargo throughput decreasing by 4.8% and transshipment cargo increasing by 24.7%[61]. - The rental income from warehouses and yards at Wuhan Hannan Port increased by 43.2% to HKD 12,748,000, representing about 3.5% of total revenue[65]. - The company aims to build a comprehensive port logistics system, focusing on core industries such as port construction and operation, port and warehouse leasing, and logistics services[28]. - The company is expanding its integrated service system to include comprehensive port processing trade and infrastructure investment, aiming to create the largest inland port logistics system in China[28]. - The company aims to develop Hannan Port into a multi-business platform, enhancing logistics services and creating synergies with Wuhan Yangluo Port[43]. Risk Management - The internal control and risk management systems have been confirmed as effective and sufficient, with no significant failures reported, ensuring compliance with relevant laws and regulations[18]. - The group faces significant cash flow risks if it encounters difficulties in collecting receivables, which could adversely impact its financial condition[102]. - The competitive landscape in the supply chain management industry is intense and fragmented, potentially affecting the group's ability to attract and retain customers[101]. - The group is exposed to operational risks, including delays in the completion of development and construction projects[116]. - The group may face inventory accumulation risks if customers cancel orders, which could negatively impact its financial status[120]. - The group has significant investments in properties, including port and warehouse facilities, which are influenced by the economic performance of Hubei Province[100]. Human Resources - The company employed 357 full-time staff as of December 31, 2023, down from 369 in 2022, maintaining good labor relations[91]. - The group aims to enhance employee skills and knowledge through targeted training and development programs[111]. - The group is at risk of not being able to attract and retain key employees due to talent competition in its operational regions[115]. Strategic Initiatives - The company is focused on a three-pronged growth strategy: "internal-driven growth," "smart reform," and "innovation," to enhance service quality and market expansion[28]. - The company plans to further invest in the Wuhan area to enhance its port business, leveraging its strategic location along the Yangtze River[36]. - The introduction of new business in pebble-to-container conversion is expected to generate an additional annual income of nearly RMB 500,000[35]. Board and Management - The board consists of seven members responsible for formulating business strategies and monitoring the group's performance[158]. - The management team is dedicated to enhancing corporate value and accountability to protect shareholder interests[156]. - The company appointed Mr. Zou Guoqiang as an independent non-executive director in May 2022, with extensive experience in financial management and corporate governance[125]. - Mr. Fu Xinping has been an independent non-executive director since May 2022, and is a professor at Wuhan University of Technology, contributing expertise in transportation management[127]. - The company appointed Mr. Qiao Yun as the General Manager since May 2022, who has extensive experience in logistics services[144]. - Mr. Xu Ao Ling has been serving as a non-executive director since May 2022 and has been involved in financial management within the Hubei Port Group since 2021[144]. Audit and Remuneration - The remuneration committee held three meetings during the year to review the company's remuneration policies, including the compensation structure for directors and senior management[169]. - The audit committee conducted three meetings during the year, reviewing interim and annual performance, risk management reports, and internal control systems[188]. - The company has adopted a whistleblowing policy allowing employees to report misconduct or malpractice confidentially to the audit committee[173]. - The company has appointed an independent professional firm to conduct internal audits of its internal control systems[188]. - The remuneration committee's responsibilities include assisting in the formulation of transparent remuneration policies and ensuring no director participates in determining their own remuneration[186].

Revenue and Profitability - Revenue increased by approximately 13.1% to HKD 361,301,000 (2022: HKD 319,535,000) [1] - Profit for the year decreased by approximately 34.1% to HKD 13,788,000 (2022: HKD 20,913,000) [1] - Profit attributable to owners of the company decreased by 26.1% to HKD 15,360,000 (2022: HKD 20,775,000) [1] - The company reported a total comprehensive income of HKD 22,117,000 for the year [25] - The total comprehensive income for the year ended December 31, 2023, was a loss of 13,983 thousand HKD, compared to a loss of 62,685 thousand HKD in 2022 [137] - The company’s net assets amounted to HKD 864,757,000, a decrease from HKD 881,566,000 in the previous year, reflecting a decline of approximately 1.9% [178] - The company’s diluted earnings per share for the year were calculated based on the reported financial data, reflecting the overall performance of the business [197] Gross Profit and Margins - Gross profit decreased by 9.0% to HKD 77,653,000 (2022: HKD 85,371,000), with a gross margin of 21.5% (2022: 26.7%) [1] - Gross profit decreased by 9.0% to HKD 77,653,000 in 2023, down from HKD 85,371,000 in 2022, resulting in a gross margin of 21.5% compared to 26.7% in the previous year [73] - The fair value loss on investment properties for the year was HKD 993,000, a significant decline from a fair value gain of HKD 25,785,000 in 2022 [74] Cash Flow and Liabilities - The company recorded a net cash flow sufficient to continue operations for the next twelve months [12] - The net current liabilities of the group were approximately HKD 101.4 million as of December 31, 2023 [38] - As of December 31, 2023, the net current liabilities decreased to HKD 100,526,000 from HKD 239,082,000 in 2022, with current assets increasing to HKD 283,028,000 from HKD 200,515,000 [77] - The total outstanding interest-bearing borrowings amounted to HKD 375,434,000 as of December 31, 2023, down from HKD 427,293,000 in 2022 [106] - The company’s total liabilities were HKD 384,421,000, compared to HKD 439,597,000 in the previous year, showing a reduction of about 12.6% [178] Dividends - The board does not recommend the payment of a final dividend for the year ended December 31, 2023 (2022: Nil) [1] - The company does not recommend the payment of dividends for the year ended December 31, 2023, consistent with the previous year [54] Operational Performance - Operating profit for the year was HKD 39,244,000 (2022: HKD 54,366,000) [6] - The total throughput at Wuhan Yangluo Port increased by approximately 12.3% to 900,142 TEUs in 2023, compared to 801,537 TEUs in 2022 [69] - The total container throughput at Wuhan Port for the year 2023 was 2,790,000 TEUs, an increase from 2,700,000 TEUs in 2022, with a market share of approximately 32% in the region [70] - Comprehensive logistics service revenue decreased by 37.4% to HKD 38,230,000 for the year ended December 31, 2023, accounting for approximately 10.6% of total revenue [100] Strategic Initiatives - The company is actively seeking opportunities related to the construction of the Hannan Bridge and surrounding logistics services to enhance economic benefits [65] - The company aims to establish a bulk grain trade distribution center centered in Wuhan, enhancing its supply chain management and trade services [67] - The company plans to enhance capital operations to drive financial value creation and mitigate investment risks, focusing on a supply chain trade model centered around grain categories [81] - The company is exploring the integration of water transport with logistics industries, including the development of a port-based grain trade delivery platform [81] - The company plans to develop Shipaigang into a mixed-use port area covering approximately 25 square kilometers, enhancing geographical coverage and creating synergies between ports [95] Other Income and Expenses - Other income increased by approximately 305.0% to HKD 22,117,000, driven by government grants, sale of subsidiary interests, and foreign exchange gains [103] - The company recognized government grants primarily related to operational and development activities, which are unconditional or have conditions that have been met [167] Taxation - The company did not recognize any provision for Hong Kong profits tax due to tax losses [26] - The effective corporate tax rate for the company’s subsidiaries in China remains at 25% [168]

Revenue and Profitability - Revenue increased by approximately 43.8% to HKD 186,810,000 for the six months ended June 30, 2023, compared to HKD 129,920,000 for the same period in 2022[11]. - The company reported a net profit attributable to shareholders of HKD 1,169,000 for the six months ended June 30, 2023, down from HKD 23,641,000 in the same period last year[15]. - The company’s basic and diluted earnings per share decreased to HKD 0.07 from HKD 1.37 in the previous year[15]. - Profit for the period decreased by approximately 93.5% to HKD 1,480,000 (compared to HKD 22,750,000 in the same period of 2022) due to various offsetting factors[38]. - Profit attributable to the owners of the company decreased by 95.1% to HKD 1,170,000 (compared to HKD 23,640,000 in the same period of 2022)[38]. - The gross profit for the six months ended June 30, 2023, was HKD 43,720,000, a decrease of HKD 4,440,000 from HKD 48,160,000 in the same period of 2022, resulting in a gross margin decline to 23.4% from 37.1%[61]. Operational Performance - Overall container throughput at Wuhan Yangluo Port increased by approximately 45.6% to 483,268 TEUs, up from 331,890 TEUs in the same period last year[11]. - The local cargo container volume increased by approximately 3%, while transshipment containers surged by approximately 81.2% due to the introduction of new transit routes[58]. - The market share of the Group's container throughput in Wuhan increased from 29.0% as of December 31, 2022, to 31.6% as of June 30, 2023, primarily due to an increase in transshipment container volume handled by the Group[38]. - The Group has been developing port-related services, including agency and integrated logistics services, to broaden revenue sources[46]. - The Group's operational efficiency improvements led to a reduction in general, administrative, and other operating expenses (excluding depreciation and amortization) by HKD 3,900,000 during the period[38]. Strategic Developments - New shipping routes were established, including direct water transport to Russia and several regional routes, enhancing the turnover efficiency of goods in Hubei province[20]. - The company plans further investments in the Wuhan area to capitalize on its strategic importance in the Yangtze River Economic Belt[22]. - The company aims to optimize port logistics resources through the integration of Yangluo Port phases one, two, and three, enhancing synergy in port operations[21]. - Hannan Port is being developed into a multi-business platform, providing terminal, warehousing, and logistics services, including roll-on/roll-off and bulk cargo transportation[50]. - The company aims to establish a bulk grain trading distribution center centered in Wuhan, leveraging its extensive experience in managing multiple ports and a solid network of customers and suppliers[66]. Financial Position - The total assets of the group amounted to HKD 1,541,193,000, with liabilities totaling HKD 700,166,000, resulting in a net asset position of HKD 841,027,000[80]. - The group reported a fair value change of investment properties of HKD (6,893) thousand for the six months ended June 30, 2023, compared to a gain of HKD 25,785 thousand for the previous year[112]. - The company reported a net asset value of HKD 841,027,000 as of June 30, 2023, down from HKD 881,566,000 at the end of 2022[168]. - The group’s total liabilities increased from HKD 168,758 thousand to HKD 157,694 thousand, indicating a shift in financial obligations[118]. - The company expects to generate sufficient cash flow over the next twelve months to support its operations and meet financial obligations[105]. Future Outlook - The group’s future outlook includes plans for market expansion and potential acquisitions to enhance service offerings and operational efficiency[72]. - The company maintains an optimistic outlook for the future of its port business in Wuhan, supported by favorable government policies[188]. - The company aims to enhance its service quality and market expansion through a three-pronged approach focusing on internal growth, smart reforms, and innovation[187]. - The company plans to gradually improve capital operations to drive financial value creation and mitigate investment risks[200]. Challenges and Risks - The average exchange rate depreciation of the Renminbi impacted terminal revenue, which decreased by approximately HKD 1,280,000 despite local cargo container and average rates increasing[11]. - Other income decreased by 51.5% to HKD 2,820,000, down from HKD 5,820,000 in the same period of 2022, mainly due to a reduction in government grants received by certain subsidiaries[62]. - The group reported a loss of HKD 3,986,000 in the logistics segment, while the integrated logistics segment generated a profit of HKD 12,306,000[79]. - The company reported a significant increase in overdue receivables over 90 days, rising from HKD 21,194 thousand to HKD 38,350 thousand, an increase of approximately 80.9%[117].

Financial Performance - Total revenue for the six months ended June 30, 2023, was HKD 186,813,000, representing a 43.8% increase from HKD 129,924,000 for the same period in 2022[16]. - Revenue from supply chain management and trading business surged to HKD 81,442,000, a 222.0% increase from HKD 25,293,000 in the previous year[15]. - The group’s comprehensive logistics services revenue decreased to HKD 25,140,000, accounting for approximately 13.5% of total revenue, down from 22.5% in the previous year[21]. - Property business revenue increased to HKD 5,310,000, representing 2.8% of total revenue, compared to 3.5% in the previous year[22]. - The company's earnings per share attributable to shareholders for the six months ended June 30, 2023, was 0.07 HKD, a significant decrease from 1.37 HKD in the same period of 2022[45]. - The company's profit attributable to owners decreased by 95.1% to HKD 1,170,000 (previous period: HKD 23,640,000)[139]. - Gross profit decreased by 9.2% to HKD 43,720,000 (previous period: HKD 48,160,000), with a gross margin dropping to 23.4% (previous period: 37.1%)[143]. - The group reported a loss attributable to shareholders of 3.99 million HKD in the property business segment for the six months ended June 30, 2023[63]. - The group recorded a fair value loss of HKD 6,890,000 on investment properties for the six months ended June 30, 2023, compared to a fair value gain of HKD 28,840,000 in the same period of 2022[194]. Operational Highlights - The number of transshipment containers handled rose significantly by 81.2% to 327,536 TEUs, compared to 180,756 TEUs in the same period last year[18]. - Container throughput at Wuhan Yangluo Port increased by approximately 45.6% to 483,268 TEUs, up from 331,890 TEUs in the same period last year[175]. - The market share of the group in the Yangluo Port area increased from 29.0% as of December 31, 2022, to 31.6% as of June 30, 2023, primarily due to an increase in transshipment container volume[190]. - The logistics business segment generated revenue of 81.44 million HKD, contributing significantly to the overall revenue growth[63]. - The group has developed comprehensive logistics services, including bonded warehousing, customs clearance, and distribution at Wuhan Yangluo Port[154]. - The company is focused on establishing a bulk grain trade distribution center centered in Wuhan, leveraging its supply chain management capabilities[160]. - The group aims to gradually improve port operation efficiency through the integration of smart port innovations and multi-modal transport development[46]. Cash Flow and Financial Position - Cash and cash equivalents decreased by HKD 21,804,000 during the period, compared to an increase of HKD 160,055,000 in the previous year[35]. - The group’s operating cash flow showed a net outflow of HKD 10,514,000, contrasting with a net inflow of HKD 3,744,000 in the same period last year[35]. - Cash and cash equivalents totaled HKD 61,710,000 as of June 30, 2023, compared to HKD 86,300,000 as of December 31, 2022, indicating a decrease of 28.5%[84]. - The net asset value as of June 30, 2023, was 841.03 million HKD, down from 881.57 million HKD as of the same date in 2022[53]. - The total equity of the group as of June 30, 2023, was HKD 841,030,000 (previous period: HKD 881,570,000)[128]. - The group reported a net current liability of HKD 216,270,000 as of June 30, 2023, compared to HKD 239,080,000 as of December 31, 2022[112]. - The group had total outstanding interest-bearing borrowings of HKD 413,260,000 as of June 30, 2023, down from HKD 427,290,000 as of December 31, 2022[84]. - The net capital debt ratio as of June 30, 2023, was 0.5 times (previous period: 0.4 times)[123]. Strategic Initiatives - The group plans to further invest in the Wuhan area to enhance its port business, aligning with the development of the Yangtze River Economic Belt[10]. - The group aims to optimize green and smart development of ports, contributing to the construction of a modern high-quality national comprehensive transportation network[26]. - The company plans to leverage the construction of the Hannan Bridge to enhance logistics services and create a distribution center for imported goods[184]. - The company aims to develop Shipaiko Port into a mixed-use port area, covering approximately 25 square kilometers, to expand its geographical reach[185]. - The company will continue to seek suitable opportunities for investment or acquisition of significant capital assets to enhance its operational profitability[130]. - The group is focusing on the development of new products and technologies to expand its market presence and enhance operational capabilities[46]. Governance and Compliance - The company has maintained compliance with corporate governance codes and standards during the reporting period[133]. - The group has appointed a new auditor, Guo Fu Hao Hua (Hong Kong) CPA Limited, following the resignation of its previous auditor after 15 years[177].

Financial Performance - The revenue from discontinued operations for the year ended December 31, 2021, was HKD 7,320,000, derived from the sale of Zhongji Tongshang Engineering[1]. - As of December 31, 2022, the group's net capital debt ratio was 0.4 times, consistent with the previous year[4]. - The company reported a total of 30 administrative and personnel expenses, maintaining consistency in operational costs[10]. - The company allows shareholders to choose between cash or stock dividends, enhancing shareholder value[60]. Governance and Management - The board of directors regularly reviews the group's overall strategy and operational and financial performance, ensuring they are informed of the latest business and financial conditions[21]. - The company has appointed two executive directors, two non-executive directors, and three independent non-executive directors as of the report date[11]. - The audit committee monitors the relationship with independent auditors and reviews the group's half-yearly and annual performance, ensuring effective risk management and internal controls[27]. - The company has a nomination committee responsible for reviewing the board's structure and composition annually, ensuring alignment with corporate strategy[28]. - The board held a total of 6 meetings during the year, with the chairman attending all meetings[49]. - The audit committee conducted 4 meetings to review financial performance, risk management reports, and internal control systems[44]. - The board confirmed that the internal control and risk management systems are effective and sufficient, with no significant deficiencies reported[55]. - The company has adopted a code of conduct for directors regarding securities trading, ensuring compliance with the highest standards[50]. - The board has the final decision-making authority on all matters related to candidates recommended for shareholder meetings[41]. - The company has established a policy for corporate governance, which is reviewed regularly to ensure compliance[32]. - The board is responsible for maintaining a robust internal control and risk management system to protect the group's assets and shareholders' interests[37]. - The company has a commitment to corporate governance practices, ensuring that all directors are aware of their responsibilities and relevant regulations[51]. - The board has adopted a diversity policy to ensure appropriate balance in skills, experience, and perspectives among board members[56]. Risk Management and Compliance - The company faces operational risks including equipment failures, labor disputes, adverse weather, and reliance on third-party transportation services, which could disrupt operations and lead to revenue losses[9]. - The company engaged an independent professional firm for risk management and internal control assessments, ensuring the effectiveness of the internal control system[54]. - The company is committed to enhancing its risk management and internal control systems based on recommendations from independent assessments[54]. - The group actively monitors compliance with climate-related regulations to mitigate financial and reputational risks[151]. - The company has established internal policies to ensure compliance with labor laws and to provide a supportive and inclusive work environment for its 369 employees, with a gender ratio of approximately 78% male and 22% female[138]. - The company has maintained strict anti-corruption policies, with no convictions or disciplinary actions related to corruption reported during the period[192]. Environmental, Social, and Governance (ESG) Initiatives - The group has established an ESG framework to manage environmental, social, and governance risks effectively[74]. - The company emphasizes high transparency and timely information for shareholders and investors to make informed investment decisions[64]. - The company is committed to enhancing its ESG reporting system to improve data collection and reporting quality over time[92]. - The company actively manages its environmental and social impacts to enhance sustainability and transparency[98]. - The company has implemented environmental management goals to monitor progress in environmental protection efforts[84]. - The company is focused on integrating environmental considerations into core business operations to minimize pollution[84]. - The company has implemented various energy-saving measures, including strict temperature controls for air conditioning and encouraging the use of video conferencing[125][127]. - The company has implemented various water-saving measures, including the use of wet and dry cleaning machines and high-pressure faucets, to cultivate water-saving awareness among employees[129]. - The company has committed to green development practices and exploring innovative ways to reduce environmental impact[130]. - The company has prioritized suppliers with sustainable development practices to mitigate potential environmental and social risks in the supply chain[163]. Employee Engagement and Development - The company emphasizes the importance of employee training and development to achieve business goals and enhance skills[142]. - The company has established a comprehensive employee handbook and management systems to ensure fair treatment and a balanced work-life environment[134]. - The company has implemented health and safety measures, including regular disinfection of workplaces and encouraging vaccination among employees[140]. - The company encourages employee participation in social welfare activities, reflecting its commitment to corporate social responsibility[170]. - The total number of employees decreased from 389 in the previous year to 369 in 2022, representing a reduction of approximately 5.14%[200]. - The employee turnover rate improved significantly from 12.34% in 2021 to 6.50% in 2022, indicating better employee retention[200]. - 40% of employees received training during the reporting period, with an average training time of 2.7 hours per employee[161]. Sustainability Metrics - Total greenhouse gas emissions amounted to 5,425.86 tons of CO2 equivalent, with a density of approximately 14.70 tons of CO2 equivalent per employee[108]. - Direct greenhouse gas emissions (Scope 1) were approximately 1,939.54 tons of CO2 equivalent, with a density of 5.26 tons of CO2 equivalent per employee[121]. - Indirect greenhouse gas emissions (Scope 2) were approximately 3,458.09 tons of CO2 equivalent, with a density of 9.37 tons of CO2 equivalent per employee[121]. - Total energy consumption was 11,819.55 thousand kWh, with a density of 32.03 thousand kWh per employee, representing an increase of about 25% from the previous year[114][124]. - Water consumption in 2022 was reported at 39,319.00 cubic meters, a decrease from 43,643.84 cubic meters in 2021, representing a decline of about 10%[174]. - The total amount of non-hazardous waste generated in 2022 was 1.55 tons, a significant reduction from 2.99 tons in 2021, indicating a decrease of approximately 48.2%[174]. - The company has implemented strict safety measures and training programs, resulting in zero work-related fatalities over the past four years[180].

Revenue and Profitability - The group's revenue increased by approximately 29.0% to HKD 319,540,000 for the year ended December 31, 2022, compared to HKD 247,670,000 in 2021[6] - Gross profit rose by 57.2% to HKD 85,370,000, with a gross profit margin of 26.7%, compared to 21.9% in 2021[6] - The annual profit decreased by approximately 17.0% to HKD 20,910,000 (2021: HKD 25,180,000) due to various factors including a reduction in other income by HKD 23,820,000 and a decrease in general and administrative expenses by HKD 38,960,000[21] - Profit attributable to the owners of the company decreased by 25.9% to HKD 20,780,000 (2021: HKD 28,040,000)[22] - The total comprehensive income for the year 2022 was a loss of HKD 62,685,000, compared to a gain of HKD 62,843,000 in 2021[105] - The company reported a net loss from continuing operations of HKD 6,201,000 for 2022, down from a profit of HKD 30,025,000 in 2021, indicating a significant decrease in profitability[148] Container Throughput and Operations - The overall container throughput at Wuhan Yangluo Port increased by about 11.3% to 801,537 TEUs, up from 720,021 TEUs in 2021[6] - The total container throughput of Wuhan Yangluo Port for the year ended December 31, 2022, was 801,537 TEUs, an increase of 81,516 TEUs or approximately 11.3% compared to 720,021 TEUs for the year ended December 31, 2021[65] - Local cargo throughput increased by approximately 18.2% to 337,042 TEUs, while transshipment cargo throughput increased by approximately 6.8% to 464,495 TEUs[66] - The container throughput at Yangluo Port increased, contributing to an increase in revenue from terminal services by HKD 20,610,000[64] Supply Chain Management and Trading - Revenue from supply chain management and trading significantly increased by HKD 49,180,000 due to the launch of rice and broken rice trading operations starting September 2022[6] - Revenue from supply chain management and trading business increased to HKD 117,320,000, accounting for approximately 36.7% of total revenue, up from 27.5% in the previous year[71] - The supply chain management and trading business accounted for HKD 71,598,000 or 22% of total revenue, with a single customer contributing more than 10% of the revenue for the first time[156] Financial Position and Liabilities - The total current liabilities decreased to HKD 239,080,000 from HKD 292,830,000 in the previous year, with current assets increasing to HKD 200,520,000 from HKD 150,080,000[82] - As of December 31, 2022, the total outstanding interest-bearing borrowings amounted to HKD 427,290,000, an increase from HKD 350,980,000 in 2021[99] - The company’s total liabilities decreased from HKD 734,782,000 in 2021 to HKD 734,782,000 in 2022, remaining stable year-over-year[144] - The total liabilities decreased to HKD 159,190,000 from HKD 185,817,000, a reduction of 14.4%[192] Trading Suspension and Resumption - The company’s shares were suspended from trading on March 28, 2022, due to failure to meet the minimum public float requirement[10] - The company received a letter from the stock exchange on June 28, 2022, outlining the requirements for resuming trading, including meeting the minimum public float of 25%[11] - The company applied to resume trading on the stock exchange starting from October 3, 2022, after fulfilling the resumption guidance[12] - The company is responsible for formulating a resumption action plan to address the trading suspension issues before the deadline of September 27, 2023[11] Strategic Developments - The company has been developing port-related services, including bonded warehouses and logistics services, to diversify revenue sources[17] - Wuhan Yangluo Port has established new shipping routes, including direct container shipping lines to Japan and South Korea, enhancing its position as a key transshipment hub[16] - The company is focused on strategic measures to promote waterway transshipment to Shanghai and direct shipping to Japan, South Korea, and Russia[16] - The company plans to invest further in the Wuhan area to capitalize on the strategic importance of the Yangtze River Economic Belt[32] - The company aims to create synergies between Yangluo Port and HanNan Port to provide more cost-effective solutions for customers[59] Employee Compensation and Remuneration - The total remuneration paid to employees for the year reached HKD 52,260,000, down from HKD 76,690,000 in 2021[2] - The company’s board has designated a remuneration committee to review and determine the compensation of directors and senior management[2] Cash Flow and Investments - The net cash inflow from operating activities for the year ended December 31, 2022, was HKD 16,330,000, compared to HKD 17,990,000 in the previous year[81] - The company’s cash and cash equivalents increased to HKD 86,298,000 in 2022 from HKD 31,127,000 in 2021, showing a growth of approximately 177%[126] - The company reported a total investment property value of HKD 851,229,000 as of December 31, 2022, compared to HKD 895,932,000 the previous year, a decrease of 5.0%[187] Taxation and Government Grants - The company has ceased to enjoy tax incentives, with a corporate tax rate of 25% applicable from January 1, 2023[151] - The company’s government grants received decreased significantly from HKD 26,440,000 in 2021 to HKD 4,181,000 in 2022, a drop of approximately 84%[148]