Financial Performance - For the year ended December 31, 2020, the profit attributable to the owners of the company was HKD 25,860,000, down from HKD 34,530,000 in 2019, reflecting a decrease of approximately 25.3%[22] - Total revenue for 2020 was HKD 443,550,000, an increase of 26.0% compared to HKD 352,021,000 in 2019[12] - The gross profit for 2020 was HKD 90,428,000, down from HKD 104,564,000 in 2019, indicating a decline of about 13.5%[12] - The operating profit before interest, tax, depreciation, and amortization was HKD 59,303,000, compared to HKD 73,264,000 in the previous year, a decrease of approximately 19.1%[12] - The company reported a net financing cost of HKD 35,039,000, which increased significantly from HKD 19,554,000 in 2019[12] - The significant revenue increase was primarily driven by a substantial rise in supply chain management and trading business, which generated HKD 229,550,000, largely due to the launch of cement and non-ferrous metal trading in the second half of 2020[49] - The construction services revenue decreased by HKD 100,780,000 due to slow project progress caused by the COVID-19 pandemic in the first half of 2020[49] - Revenue from integrated logistics services decreased by HKD 28,090,000 to HKD 34,580,000, accounting for approximately 7.8% of total revenue for the year[58] - Revenue from property business increased to HKD 13,460,000, up from HKD 8,620,000, representing approximately 3.0% of total revenue[61] - Construction revenue decreased to HKD 25,690,000 from HKD 126,470,000, accounting for approximately 5.8% of total revenue[63] Operational Highlights - Container throughput for 2020 was 593,009 TEUs, a decrease from 612,028 TEUs in 2019[15] - The market share in terms of revenue was 38% in 2020, down from 44% in 2019[16] - The total container throughput for Wuhan Yangluo Port for the year ended December 31, 2020, was 642,131 TEUs, an increase of 30,103 TEUs or approximately 4.9% compared to 612,028 TEUs in 2019[51] - Local cargo throughput decreased by approximately 9.3% to 316,915 TEUs, while transshipment cargo increased by approximately 23.8% to 325,216 TEUs[51] - The market share of Wuhan Yangluo Port increased to approximately 43.6% in 2020, up from 38.0% in 2019, primarily due to the closure of competing ports during the pandemic[56] Strategic Initiatives - The company plans to continue leveraging its port operations and government subsidies to enhance profitability in the future[22] - The company signed a cooperation agreement with Wuhan Economic Development Port Co., Ltd. to integrate operations, launching the first daily waterway shuttle service in the Yangtze River's upper reaches on April 22, 2020, enhancing logistics efficiency and reducing costs[23] - The direct container shipping route from Wuhan to Japan officially commenced on May 9, 2020, marking the first international container shipping line in the Yangtze River's upper reaches, which is a significant milestone[23] - On November 26, 2020, the company launched the Wuhan-Huai'an-Xuzhou container shipping route, the first full container shipping line connecting the Yangtze River's upper reaches with the Grand Canal, facilitating logistics and reducing costs for the region[24] - The company remains optimistic about the future of China's port industry and plans to continue developing integrated port services, multi-modal logistics, and infrastructure construction to build a leading logistics ecosystem[25] - The company aims to expand its business by integrating solid waste treatment and resource regeneration in the Yangtze River basin, focusing on environmental industry investments and operations[25] Financial Position - The total outstanding interest-bearing borrowings as of December 31, 2020, was HKD 456,490,000, down from HKD 493,470,000 in 2019[80] - The net cash inflow from operating activities for the year was HKD 8,640,000, a decrease from HKD 49,870,000 in 2019[80] - The company's cash and cash equivalents totaled HKD 38,180,000 as of December 31, 2020, compared to HKD 93,330,000 in 2019[80] - The net capital debt ratio as of December 31, 2020, was 0.5 times, down from 0.6 times in 2019[80] - As of December 31, 2020, the group's net current liabilities increased to HKD 384,150,000 from HKD 249,090,000 in 2019, with current assets at HKD 250,480,000, down from HKD 350,640,000 in 2019, resulting in a current ratio of 0.4, down from 0.6 in 2019[81] Governance and Management - The board consists of three executive directors, two non-executive directors, and three independent non-executive directors, with diverse experience across various industries[117] - The company has maintained high standards of corporate governance, ensuring accountability and transparency in management practices[131] - The board consists of eight members, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[133] - The company has adopted the corporate governance code as per the listing rules, complying with all provisions for the year ended December 31, 2020[132] - The audit committee consists of three independent non-executive directors and one non-executive director, overseeing the group's financial performance and risk management systems[142] - The nomination committee evaluates the board's structure and composition annually, considering factors such as gender, age, and professional experience[143] Environmental, Social, and Governance (ESG) Focus - The report period covers from January 1, 2020, to December 31, 2020, focusing on environmental, social, and governance performance[183] - The company emphasizes the importance of environmental, social, and governance (ESG) reporting, stating that it should reflect the performance without bias and should be based on measurable key performance indicators[188] - The company aims to create long-term value for stakeholders while maintaining high service quality and operational standards, focusing on sustainable development[189] - The company has identified 21 potential ESG issues that impact the environment and society through its operations, based on the ESG reporting guidelines[198] - The company is committed to energy savings, reducing greenhouse gas emissions, and providing a safe and healthy work environment for employees[190]

Revenue and Profitability - Revenue decreased by approximately 33.6% to HKD 75,230,000 compared to HKD 113,300,000 in the same period last year, primarily due to the COVID-19 pandemic affecting operations in Hubei Province and other regions in China[10]. - The company reported a loss of HKD 10,251,000 for the period, compared to a profit of HKD 14,045,000 in the previous year[7]. - Basic and diluted loss per share was HKD 0.47, compared to earnings of HKD 0.79 per share in the same period last year[7]. - The loss attributable to the company's owners for the period was HKD 8,150,000, a decrease of 159.5% compared to a profit of HKD 13,690,000 in the previous period[12]. - The group reported a net loss of HKD 10,251,000 for the six months ended June 30, 2020, compared to a profit of HKD 14,045,000 in the same period of 2019[89]. - The company's revenue for the six months ended June 30, 2020, was HKD 75,230,000, a decrease of HKD 38,070,000 or approximately 33.6% compared to HKD 113,300,000 for the same period in 2019[61]. Operational Performance - The overall container throughput at Wuhan Yangluo Port decreased by approximately 29.0% to 205,878 TEUs, down from 290,082 TEUs in the same period last year[10]. - The revenue from integrated logistics services decreased by approximately HKD 20,060,000, while revenue from terminal services dropped by about HKD 7,830,000 due to a decline in container throughput[10]. - The local cargo throughput decreased by approximately 29.8% to 125,171 TEUs, while transshipment cargo throughput fell by about 27.7% to 80,707 TEUs[10]. - The group expects to increase container throughput at Wuhan Yangluo Port due to the management of all containers and cargo from the Economic Development Port, which will enhance competitiveness and overall revenue[18]. - The group aims to achieve a container throughput of 5 million TEU at Wuhan Port by 2025, in line with government targets for the port to become a "billion-ton port" and a core container hub in the Yangtze River basin[87]. Strategic Initiatives - The company is focusing on developing logistics bases in Central China and expanding its market presence[2]. - The collaboration agreement with Wuhan Economic Development Port Company aims to enhance management and operational processes at the port over an eight-year period[16]. - The company is expanding its port-related services, including bonded warehouses and logistics services at Wuhan Yangluo Port, to diversify revenue sources[29]. - The strategic development of Sayang Port aims to create synergies with Wuhan Yangluo Port, enhancing its position as a logistics center along the Yangtze River[40]. - The company signed a cooperation agreement for integrated operations with Jingkai Port to enhance competitiveness and reduce harmful competition among ports[83]. Financial Position - The group's total assets as of June 30, 2020, were HKD 1,150,914,000, a decrease from HKD 1,229,745,000 as of December 31, 2019[104]. - The net asset value as of June 30, 2020, was HKD 816,116,000, down from HKD 842,326,000 at the end of 2019, reflecting a decline of 3.1%[110]. - The total equity attributable to owners of the company as of June 30, 2020, was HKD 671,519,000, down from HKD 693,073,000 at the end of 2019, representing a decrease of 3.1%[111]. - The group's total liabilities were HKD 912,067,000 as of June 30, 2020[129]. Cash Flow and Liquidity - The cash flow from operating activities for the six months ended June 30, 2020, was a net outflow of HKD 20,086,000, compared to a net inflow of HKD 7,200,000 for the same period in 2019[110]. - Cash and cash equivalents decreased by HKD 45,338,000 during the six months ended June 30, 2020, resulting in a balance of HKD 46,728,000[110]. - The company incurred a net cash outflow from investing activities of HKD 9,709,000 for the six months ended June 30, 2020, compared to HKD 9,471,000 in the prior year[110]. - Current liabilities net amount stood at HKD 293,455,000, raising concerns about the group's ability to continue as a going concern[118]. - The group expects to generate positive cash flow in the next twelve months from the reporting date[118]. Market Conditions and Future Outlook - Future outlook indicates a slow economic recovery, impacting overall business volume and performance[10]. - The company expects domestic trade business growth to offset losses from reduced foreign trade due to the international pandemic impact[81]. - The group continues to focus on the development of green smart ports and ecological industrial chains in Hubei Province, supported by local government policies[85]. Employee and Operational Costs - Employee costs decreased to HKD 23,947,000 in 2020 from HKD 31,617,000 in 2019, reflecting a reduction of about 24.5%[147]. - The group's administrative expenses decreased to HKD 21,243,000 in the first half of 2020 from HKD 23,093,000 in the same period of 2019, indicating cost control efforts[90]. Investment and Development - The company has invested in the development of Shipaigang, a mixed-use port area in Hubei province, covering approximately 25 square kilometers, to expand geographical coverage and create synergies between ports[42]. - The completion of the first phase of Hannan Port is expected to enhance the throughput capacity of Wuhan Yangluo Port, meeting the growing demand for logistics services in Wuhan[39]. - The company plans to develop Hannan Port into a multi-purpose port, currently in the early construction phase, to further expand its operational capabilities[39]. Compliance and Governance - The board approved the publication of the interim financial statements on August 28, 2020, which were reviewed by the audit committee[114]. - The group adopted new and revised International Financial Reporting Standards, which did not have a significant impact on the financial performance and position for the period[121].

Financial Performance - Revenue for the year ended December 31, 2019, was HKD 352.0 million, an increase of 34.1% from HKD 262.5 million in 2018[11] - Gross profit for 2019 was HKD 104.6 million, down 19.9% from HKD 130.9 million in 2018[11] - Operating profit before interest, tax, depreciation, and amortization was HKD 73.3 million, a decrease of 37.1% compared to HKD 116.4 million in the previous year[11] - Net profit attributable to owners of the company for 2019 was HKD 34.5 million, a decline of 51.5% from HKD 71.3 million in 2018[11] - The net profit attributable to the owners for the year ended December 31, 2019, was HKD 34,530,000, a decrease from HKD 71,260,000 in 2018[20] - Profit attributable to owners of the company decreased by approximately 51.5% to HKD 34.53 million, with earnings per share dropping to HKD 0.020 from HKD 0.0413 in 2018[66] - Other income fell by approximately 45.0% to HKD 18.1 million, primarily due to a reduction in government grants[62] - The average rate for local cargo was RMB 216 per TEU (approximately HKD 238), a decrease of about 0.9% from RMB 218 per TEU (approximately HKD 260) in 2018[53] Operational Highlights - Container throughput for 2019 was 593,009 TEUs, representing a market share of 38%[14] - The company significantly enhanced operational capacity and efficiency at Yangluo Port after the customs department lifted restrictions on the handling of domestic and foreign trade containers[20] - Local cargo throughput increased by 8.0% to 349,231 TEUs in 2019, while transshipment cargo decreased by 2.5% to 262,797 TEUs[47] - The total throughput of Wuhan Yangluo Port for the year ended December 31, 2019, was 612,028 TEUs, an increase of 19,019 TEUs or approximately 3.2% compared to 593,009 TEUs for the year ended December 31, 2018[50] - The market share of Wuhan Yangluo Port decreased to approximately 38.0% for the year ended December 31, 2019, down from 40.7% in 2018, primarily due to competition from neighboring ports[52] Strategic Initiatives - The company plans to expand its logistics base in Central China, leveraging the Yangtze River for enhanced shipping capabilities[2] - The company is focusing on new technology development to improve operational efficiency and service offerings[19] - The company plans to integrate operations with Wuhan Economic Development Port to reduce competition and enhance service quality[23] - The company aims to expand its logistics ecosystem by providing comprehensive port services, multi-modal logistics, and infrastructure development[23] - The company anticipates continued growth in freight volume in China, particularly along the Yangtze River Economic Belt, supported by government policies and initiatives like the Belt and Road Initiative[79] Market and Economic Outlook - Future guidance indicates a cautious outlook due to market volatility but aims for steady growth in revenue and operational improvements[19] - The GDP of Hubei Province is projected to grow by approximately 7.8% in 2019, surpassing the national average by 1.8 percentage points[22] - The company has a positive outlook on the future of the Wuhan port business, supported by favorable government policies aimed at expanding container transport scale[83] Financial Position and Cash Flow - As of December 31, 2019, the group recorded a net cash inflow from operating activities of HKD 49,870,000, a decrease from HKD 130,930,000 in 2018[84] - The total outstanding interest-bearing borrowings amounted to HKD 493,470,000 as of December 31, 2019, compared to HKD 428,620,000 in 2018[84] - The group's cash and cash equivalents totaled HKD 93,330,000 as of December 31, 2019, significantly up from HKD 15,170,000 in 2018[84] - The net capital debt ratio was 0.6 times as of December 31, 2019, down from 0.7 times in 2018[84] - The group's current liabilities net amount was HKD 249,090,000 as of December 31, 2019, a significant decrease from HKD 389,600,000 in 2018[85] Corporate Governance - The board consists of three executive directors, two non-executive directors, and three independent non-executive directors, ensuring diverse leadership[120] - The company has adopted the corporate governance code as per the listing rules, maintaining compliance throughout the fiscal year ending December 31, 2019[136] - The roles of the chairman and CEO are clearly separated to enhance independence and ensure checks and balances within the management structure[140] - The company emphasizes high standards of corporate governance, accountability, and transparency in its operations[135] - The audit committee consists of three independent non-executive directors and one non-executive director, ensuring compliance with corporate governance standards[145] Environmental, Social, and Governance (ESG) Initiatives - The report covers the performance and measures in environmental, social, and governance aspects for the year 2019[180] - The company aims to enhance data collection and reporting systems related to environmental management and social responsibility[180] - The company has established an ESG framework, with the board responsible for formulating ESG strategies and assessing related risks[188] - The company is committed to energy savings and reducing greenhouse gas emissions as part of its corporate social responsibility initiatives[188] - The company identified 15 key environmental, social, and governance (ESG) issues that impact its operations and stakeholders[199]

Financial Performance - Revenue for the six months ended June 30, 2019, decreased by approximately 10.2% to HKD 113,298,000 compared to HKD 126,111,000 in the same period of 2018[9] - Gross profit fell by 23.5% to HKD 43,134,000, with a gross margin of 38.1%, down from 44.7% in the previous year[11] - Net profit attributable to shareholders decreased to HKD 14,045,000, resulting in basic and diluted earnings per share of HKD 0.79, compared to HKD 1.30 in 2018[9] - EBITDA decreased by approximately 45.9% to HKD 30,920,000, impacted by a reduction in gross profit and other income[13] - The profit attributable to the company's owners decreased by 38.8% to HKD 13,690,000 for the period, compared to HKD 22,360,000 in the same period of 2018[15] - The company reported a net profit before tax of HKD 21,737,000, compared to HKD 40,506,000 in the prior year, a decline of about 46.3%[17] - Total comprehensive income for the period was HKD 11,465,000, down from HKD 14,337,000 in the prior year[65] - The net profit for the period was HKD 141,779,000, showing a significant growth from HKD 139,749,000 in the same period last year[81] - The group’s total profit for the period was HKD 14,045 million, demonstrating resilience amid market conditions[119] Revenue Breakdown - The revenue from integrated logistics services decreased to HKD 33,060,000, accounting for approximately 29.2% of total revenue, down from 35.4% in the previous year[46] - The revenue from property business decreased to HKD 3,530,000, representing about 3.1% of total revenue, down from 14.2% in the prior year[47] - Total revenue for the six months ended June 30, 2019, was HKD 113,298 million, with significant contributions from the terminal and related services segment at HKD 66,508 million, and integrated logistics services at HKD 34,931 million[119] Operational Metrics - The overall container throughput increased by approximately 5.4% to 290,082 TEUs, driven by an 11.8% increase in local cargo throughput[11] - Market share for container throughput in Wuhan decreased from 40.7% to 37.1% due to competition from neighboring ports[13] - The average rate for local cargo was RMB 210 (HKD 245), a decrease of approximately 0.5% compared to RMB 211 (HKD 260) in the previous year[43] - The average rate for transshipment cargo increased by approximately 10.0%, reaching RMB 55 (HKD 64) compared to RMB 50 (HKD 61) in the prior year[43] Strategic Initiatives - The company plans to enhance competitiveness by adjusting service rates to align with neighboring ports[11] - Future strategies include expanding logistics services and exploring government support for logistics center development[13] - The company plans to expand its geographical coverage and create synergies between Wuhan Yangluo Port and Hannan Port, enhancing its competitive position in the logistics market[26] - The group remains optimistic about the port business in China, expecting continued growth in freight volume, particularly along the Yangtze River Economic Belt[56] - Strategic cooperation has been established with the Hubei Provincial Port and Shipping Administration to develop green port projects, which will bring strategic investment and support overall corporate development[58] Asset and Liability Management - Total assets as of June 30, 2019, were HKD 1,384,677,000, compared to HKD 1,369,568,000 at the end of 2018, reflecting a slight increase[71] - The company's total liabilities decreased from HKD 579,937,000 at the end of 2018 to HKD 486,688,000 as of June 30, 2019[74] - The group’s lease liabilities as of June 30, 2019, amounted to HKD 1,671,000, with HKD 628,000 due within one year[183] Compliance and Governance - The company is required to disclose interests and short positions of directors and senior executives in accordance with the Securities and Futures Ordinance[199] - The company maintains a register of interests and short positions as mandated by Section 352 of the Securities and Futures Ordinance[199] - The company adheres to the standards set out in the Listing Rules Appendix 10 regarding securities trading by directors[199] - The disclosure includes interests that are deemed to be owned under the Securities and Futures Ordinance[199] Financial Reporting Standards - The implementation of IFRS 16 "Leases" has been adopted, which may impact the financial presentation but has no significant effect on the current period's performance[92] - The group has adopted the modified retrospective approach for IFRS 16, meaning comparative information has not been restated[100] - Management must make significant judgments and estimates when preparing interim financial information, which may differ from actual results[113]

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The report details core corporate governance and operational information, including board members, committee members, compliance officer, company secretary, auditor, legal counsel, principal bankers, and registered office - Mr. Yan Zhi serves as the Chairman and Non-executive Director, and the auditor is Grant Thornton Hong Kong Limited[7](index=7&type=chunk) [Financial Highlights](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company achieved steady performance growth in 2018 despite intense competition, with revenue increasing by 12.0% and profit attributable to owners by 6.7% 2018 Annual Financial Performance Summary (HKD Thousands) | Indicator | 2018 (HKD Thousands) | 2017 (HKD Thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 262,505 | 234,446 | +12.0% | | **Gross Profit** | 130,877 | 108,778 | +20.3% | | **Operating Profit** | 116,381 | 129,734 | -10.3% | | **Profit Before Income Tax** | 106,120 | 95,812 | +10.8% | | **Profit Attributable to Owners of the Company** | 71,259 | 66,795 | +6.7% | - Despite intense competition, the company achieved steady performance growth in 2018, with revenue increasing by **12.0%** year-on-year and profit attributable to owners increasing by **6.7%** year-on-year[10](index=10&type=chunk)[18](index=18&type=chunk) - From a five-year trend, the company's container throughput, revenue, and profit attributable to owners all showed continuous growth, but market share slightly decreased to **40.7%** in 2018[13](index=13&type=chunk)[44](index=44&type=chunk) [Chairman's Statement](index=9&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman highlights the successful transfer from GEM to the Main Board as a significant milestone, enhancing the Group's image and share liquidity, laying a foundation for future growth - The Chairman emphasized that the successful transfer from GEM to the Main Board was a significant milestone, enhancing the Group's image and share liquidity, laying a foundation for future growth[18](index=18&type=chunk) - In 2018, the net profit attributable to owners of the company reached **HKD 71.26 million**, primarily contributed by property leasing at Hannan Port, terminal operations at Wuhan Yangluo Port and General Port, integrated logistics services, and fair value gains on investment properties[18](index=18&type=chunk) - Looking ahead, the Group is optimistic about the prospects of China's inland port business but anticipates continued intense competition from adjacent ports in the Yangluo Port area before forming a joint venture with them; the Group will continue to adopt consistent pricing strategies with competitors and enhance service quality[21](index=21&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth review of the Group's operations, financial performance, future strategies, and key risks [Business Review](index=11&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section details the Group's core business of investing, developing, and operating multiple ports along the Yangtze River in Hubei Province, China, and providing related logistics services, focusing on the strategic positioning, business progress, and synergistic effects of Wuhan Yangluo Port, General Port, Hannan Port, Shayang Port, and Shipai Port, while also diversifying into municipal engineering contracting and supply chain management - The Group's core asset is Wuhan Yangluo Port, located in the middle reaches of the Yangtze River, serving as a crucial transshipment hub for surrounding provinces and cities[25](index=25&type=chunk) - Hannan Port Phase I is completed, and Phase II General Port is in the preliminary construction stage, aiming to create synergy with Yangluo Port to meet Wuhan's logistics demands[29](index=29&type=chunk)[30](index=30&type=chunk) - Shayang Port and Shipai Port commenced commercial operations in 2018, with supporting logistics centers and storage yards under construction, expected to be completed sequentially in 2019, aiding the Group in expanding its bulk and general cargo business[31](index=31&type=chunk)[34](index=34&type=chunk) - The Group diversified its business and extended its industrial chain by establishing Zhongji Tongshang Engineering and Tongshang Supply Chain, entering municipal engineering contracting and supply chain management and trading respectively[35](index=35&type=chunk)[36](index=36&type=chunk) [Operating Results](index=14&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) In 2018, the Group's total revenue increased by 12.0% year-on-year to HKD 263 million, driven by growth in terminal services, integrated logistics, and supply chain trading businesses; total container throughput grew by 16.3%, but market share slightly decreased to 40.7% due to intense competition, leading to a reduction in average rates; gross profit margin improved from 46.4% to 49.9% primarily due to increased government subsidies; profit attributable to owners increased by 6.7% to HKD 71.26 million 2018 Revenue Segment Breakdown (HKD Thousands) | Segment | 2018 | 2017 | Growth Rate | | :--- | :--- | :--- | :--- | | Terminal Services | 99,008 | 86,660 | 14.2% | | Integrated Logistics Services | 83,665 | 76,453 | 9.4% | | Property Business | 34,538 | 33,426 | 3.3% | | Supply Chain Management and Trading Business | 24,002 | 18,765 | 27.9% | | **Total** | **262,505** | **234,446** | **12.0%** | 2018 Container Throughput (TEUs) | Cargo Type | 2018 (TEUs) | 2017 (TEUs) | Growth Rate | | :--- | :--- | :--- | :--- | | Local Cargo | 323,477 | 289,341 | 11.8% | | Transshipment Cargo | 269,532 | 220,737 | 22.1% | | **Total** | **593,009** | **510,078** | **16.3%** | - Despite increased throughput, Wuhan Yangluo Port's market share decreased from **42.8%** to approximately **40.7%** due to intense competition from adjacent ports; to counter competition, average rates for local and transshipment cargo decreased by approximately **2.2%** and **6.1%** respectively[44](index=44&type=chunk)[45](index=45&type=chunk) - Gross profit margin increased from **46.4%** to **49.9%**, primarily due to increased government grants associated with higher throughput, offsetting some service costs[51](index=51&type=chunk) - Profit attributable to owners of the company increased by **6.7%** to **HKD 71.26 million**, with earnings per share of **4.13 HK cents**; profit growth was mainly driven by increased fair value gains on investment properties, partially offset by a higher tax rate[55](index=55&type=chunk) [Future Outlook](index=17&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B%E8%A7%80%E5%AF%9F) The Group is optimistic about China's port business prospects, especially the development of inland ports along the Yangtze River Economic Belt; to address competition, the Group is negotiating a joint venture with competitors in the Yangluo Port area to unify operational management, while continuing to expand business coverage through Hannan Port, Shayang Port, and Shipai Port, and collaborating with the government to promote green port construction for long-term growth - To eliminate vicious competition, the Group has entered into a joint venture agreement with neighboring port operators in the Yangluo Port area, aiming to establish a joint venture company to unify market development, pricing, scheduling, and settlement, with terms still under negotiation[59](index=59&type=chunk) - The company name changed from "China Infrastructure Port" to "China Merchants Group" to reflect its expanded business scope to include integrated services such as port construction and operation, logistics, port-side processing trade, and infrastructure investment[56](index=56&type=chunk) - The Group has entered into a strategic cooperation framework agreement with the Hubei Provincial Port and Waterway Administration to jointly construct green ports, LNG-powered vessels, and refueling stations along the Han River, promoting a green ecological industrial chain[60](index=60&type=chunk) [Financial Resources and Liquidity](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91) The Group primarily relies on internal resources, shareholder loans, and bank borrowings for funding operations; as of the end of 2018, the Group's net gearing ratio improved to 0.7 times from the previous year, however, net current liabilities significantly increased to HKD 390 million, and the current ratio decreased to 0.3 times, indicating increased short-term repayment pressure Key Financial Position Indicators as of End of 2018 (HKD Thousands) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Total Outstanding Interest-Bearing Borrowings | 428,620 | 542,780 | | Cash and Cash Equivalents | 15,170 | 37,940 | | Net Current Liabilities | 389,600 | 96,590 | | Current Ratio | 0.3 times | 0.7 times | | Net Gearing Ratio | 0.7 times | 0.8 times | - The significant increase in net current liabilities was primarily due to a decrease in trade receivables and an increase in trade payables and short-term bank borrowings[64](index=64&type=chunk) [Principal Risks and Uncertainties](index=21&type=section&id=%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E7%A2%BA%E5%AE%9A%E6%80%A7) This section outlines the Group's main risks, including operational risks (e.g., equipment failure, adverse weather), business risks (e.g., intense price competition), industry risks (cyclicality, alternative transportation modes), human resources risks, project delay risks, financial risks (high capital expenditure), and credit and inventory risks associated with the newly expanded supply chain business - Business Risk: Intense price competition exists in the Yangluo Port area, and the Group's reduction in rates to maintain competitiveness may affect gross profit margin; negotiations to form a joint venture to eliminate competition are ongoing[79](index=79&type=chunk) - Development Risk: Port construction projects like Hannan Port Phase II require substantial capital expenditure and may face completion delays and cost overruns due to various unforeseen factors[85](index=85&type=chunk) - Supply Chain Business Risk: The newly launched supply chain management and trading business faces customer credit risk (untimely collection of payments) and inventory risk (customer order cancellations)[91](index=91&type=chunk)[92](index=92&type=chunk) [Staff Information](index=23&type=section&id=%E5%93%A1%E5%B7%A5%E8%B3%87%E6%96%99) As of the end of 2018, the Group had 482 full-time employees, a slight decrease from 485 in 2017; the vast majority (479) are located at the main operating sites in Hubei Province, with 3 employees in the Hong Kong office handling financial matters 2018 Employee Distribution as of End of Year | Region | 2018 Headcount | 2017 Headcount | | :--- | :--- | :--- | | Hong Kong | 3 | 3 | | Hubei Province | 479 | 482 | | **Total** | **482** | **485** | [Directors and Senior Management](index=24&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1) The report provides detailed biographies of the board members and senior management team - Chairman Mr. Yan Zhi possesses extensive investment and management experience in the logistics industry and various other sectors, also holding key positions in several listed companies including Zall Smart Commerce (2098.HK)[99](index=99&type=chunk) - Executive Director and Chief Executive Officer Mr. Xie Bingmu has over **30 years** of experience in China's port and container terminal business[101](index=101&type=chunk) [Corporate Governance Report](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) The company successfully transferred from GEM to the Main Board on January 29, 2018, and adopted the Corporate Governance Code under the Main Board Listing Rules - The company successfully transferred from the Stock Exchange's GEM to the Main Board on **January 29, 2018**, and adopted the Corporate Governance Code under the Main Board Listing Rules[112](index=112&type=chunk) - The company clearly delineates the roles of the Chairman (Mr. Yan Zhi) and Chief Executive Officer (Mr. Xie Bingmu) to ensure a balance of power; the Chairman focuses on the Group's overall strategy, while the Chief Executive Officer is responsible for daily management[115](index=115&type=chunk) - The Board has established an Audit Committee, Remuneration Committee, and Nomination Committee, primarily composed of independent non-executive directors, responsible for overseeing financial reporting, risk management, remuneration policies, and director nominations[117](index=117&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - The Board conducted an annual review of the Group's risk management and internal control systems and engaged external consultant Grant Thornton Advisory Services Limited for evaluation, deeming the systems sound and adequate[142](index=142&type=chunk) [Environmental, Social and Governance Report](index=38&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) During the reporting period, the Group had no significant environmental violations and achieved its target of reducing greenhouse gas emissions by 2%; it prioritized employee health and safety with no fatalities, and significantly increased training investment; the Group also established supplier screening mechanisms and anti-corruption policies, with no related complaints or concluded corruption lawsuits 2018 Key Environmental Performance Indicators | Indicator | 2018 Fiscal Year | | :--- | :--- | | Greenhouse Gas Emissions (kg CO2e) | 3,048,392 | | Electricity Consumption (kWh) | 3,184,597 | | Total Water Consumption (cubic meters) | 34,911 | | Domestic Waste (kg) | 122,044 | - During the reporting period, the Group had no significant environmental violations and achieved its target of reducing greenhouse gas emissions by **2%**[156](index=156&type=chunk)[178](index=178&type=chunk) - Regarding employees, the Group prioritizes health and safety, with no fatalities during the reporting period; investment in employee training significantly increased, with an average of **5 hours** of training per employee, a **100%** year-on-year increase[156](index=156&type=chunk)[217](index=217&type=chunk) - In terms of operations, the Group established a supplier screening mechanism and formulated an anti-corruption policy, with no related complaints or concluded corruption lawsuits during the reporting period[220](index=220&type=chunk)[229](index=229&type=chunk) [Directors' Report](index=63&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) The Board does not recommend a dividend for the year ended December 31, 2018; as of year-end, Chairman Mr. Yan Zhi held approximately 74.81% of the company's issued shares through his controlled corporations; the report also discloses related party transactions with the controlling shareholder and his controlled companies - The Board does not recommend the payment of a dividend for the year ended **December 31, 2018**[253](index=253&type=chunk) - As of the end of 2018, Chairman Mr. Yan Zhi held approximately **74.81%** of the company's issued shares through corporations controlled by him[269](index=269&type=chunk) - During the reporting period, the Group's top five customers accounted for **41.8%** of total revenue, with the largest customer accounting for **15.8%**; the top five suppliers accounted for **41.6%** of total purchases, with the largest supplier accounting for **11.6%**[277](index=277&type=chunk) - Related party transactions with controlling shareholder Mr. Yan Zhi and his controlled companies were disclosed, including interest-free loans from Mr. Yan and ongoing related party transactions for subleasing office premises to Zall Hong Kong, which were exempted under the Listing Rules[289](index=289&type=chunk)[290](index=290&type=chunk) [Independent Auditor's Report](index=73&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) Grant Thornton Hong Kong Limited issued an unmodified opinion on the Group's consolidated financial statements, affirming that they present a true and fair view of the Group's financial position and performance; key audit matters included the valuation of investment properties and going concern, with the auditor finding management's assessments and assumptions reasonable - The auditor, Grant Thornton Hong Kong Limited, issued an unmodified opinion on the Group's consolidated financial statements, deeming them to truly and fairly reflect the Group's financial position and performance[318](index=318&type=chunk) - Key audit matters were "Valuation of Investment Properties" and "Going Concern"; the auditor reviewed management's assessments and assumptions in these areas and found them to have a reasonable basis[322](index=322&type=chunk)[323](index=323&type=chunk)[327](index=327&type=chunk) - Regarding the going concern issue, the report noted that the Group had net current liabilities of **HKD 390 million** at the end of 2018, but management assessed that, based on expected positive operating cash flows, financial support commitments from the major shareholder, and good banking relationships, the Group has sufficient resources to continue as a going concern[328](index=328&type=chunk)[378](index=378&type=chunk) [Consolidated Financial Statements](index=78&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's comprehensive financial performance, position, and cash flows for the reporting period [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=78&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the Group's revenue, costs, expenses, and profit for the 2018 fiscal year; total revenue was HKD 263 million, a 12.0% year-on-year increase; profit attributable to owners of the company was HKD 71.26 million, a 6.7% year-on-year increase 2018 Consolidated Statement of Profit or Loss Key Data (HKD Thousands) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Revenue | 262,505 | 234,446 | | Gross Profit | 130,877 | 108,778 | | Fair Value Change of Investment Properties | 41,718 | 14,278 | | Profit Before Income Tax | 106,120 | 95,812 | | Profit for the Year | 79,217 | 76,176 | | Profit Attributable to Owners of the Company | 71,259 | 66,795 | [Consolidated Statement of Financial Position](index=79&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement lists the Group's assets, liabilities, and equity as of the end of 2018; total assets were HKD 1.56 billion, and total equity was HKD 773 million; notably, current liabilities (HKD 580 million) significantly exceeded current assets (HKD 190 million), resulting in net current liabilities of HKD 390 million Consolidated Statement of Financial Position Summary as of End of 2018 (HKD Thousands) | Item | 2018 | 2017 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 1,369,568 | 1,219,401 | | Current Assets | 190,338 | 268,893 | | **Total Assets** | **1,559,906** | **1,488,294** | | **Liabilities and Equity** | | | | Current Liabilities | 579,937 | 365,478 | | Non-current Liabilities | 207,083 | 388,642 | | **Total Liabilities** | **787,020** | **754,120** | | **Total Equity** | **772,886** | **734,174** | [Consolidated Statement of Cash Flows](index=81&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement reflects the Group's cash inflows and outflows for the 2018 fiscal year; operating activities generated net cash inflow of HKD 131 million, while investing and financing activities recorded net cash outflows of HKD 56.64 million and HKD 96.57 million respectively, leading to a net decrease in cash and cash equivalents of HKD 22.28 million for the year 2018 Consolidated Statement of Cash Flows Summary (HKD Thousands) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 130,929 | 22,333 | | Net Cash Used in Investing Activities | (56,636) | (176,569) | | Net Cash (Used in)/Generated from Financing Activities | (96,572) | 139,183 | | **Net Decrease in Cash and Cash Equivalents** | **(22,279)** | **(15,053)** | | Cash and Cash Equivalents at End of Year | 15,167 | 37,943 | [Particulars of Major Properties](index=163&type=section&id=%E4%B8%BB%E8%A6%81%E7%89%A9%E6%A5%AD%E8%B3%87%E6%96%99) The report lists the Group's major properties held for investment purposes, including the completed Hannan Port Phase I Ro-Ro berth and Zall Ecological Industrial City, and the Hanjiang Port Logistics Center under construction, expected to be completed by December 2019 - The report lists the Group's major properties held for investment purposes, including the completed Hannan Port Phase I Ro-Ro berth and Zall Ecological Industrial City, as well as the Hanjiang Port Logistics Center under construction, which is expected to be completed by **December 2019**[764](index=764&type=chunk) [Financial Summary](index=164&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides a five-year financial overview of the Group's key performance indicators, including revenue, profit attributable to owners, total assets, and total equity, demonstrating overall growth trends Five-Year Financial Summary (HKD Thousands) | Indicator | 2014 | 2015 | 2016 | 2017 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 186,482 | 190,110 | 207,032 | 234,446 | 262,505 | | Profit Attributable to Owners of the Company | 44,451 | 52,628 | 68,913 | 66,795 | 71,259 | | Total Assets | 1,176,141 | 990,417 | 1,231,818 | 1,488,294 | 1,559,906 | | Total Equity | 415,396 | 431,698 | 603,792 | 734,174 | 772,886 |