L-T 河北建設集團股份有限公司 HEBEI CONSTRUCTION GROUP CORPORATION LIMITED (於中華人民共和國註冊成立的股份有限公司) (股份代號：1727) ２０２４ 中期報告 TT 4 目 錄 公司資料 2 財務概要 4 業務概覽 5 管理層討論與分析 20 其他事項 27 股本變動及股東資料 30 董事、監事及高級管理人員情況 35 中 期 合 併 資 產 負 債 表（未 經 審 核） 36 中 期 合 併 利 潤 表（未 經 審 核） 38 中 期 合 併 所 有 者 權 益 變 動 表（未 經 審 核） 40 中 期 合 併 現 金 流 量 表（未 經 審 核） 42 公 司 資 產 負 債 表（未 經 審 核） 44 公 司 利 潤 表（未 經 審 核） 46 公 司 所 有 者 權 益 變 動 表（未 經 審 核） 47 公 司 現 金 流 量 表（未 經 審 核） 49 財務報表附註 51 釋 義 90 公司資料 2 下文載列本公司基本資料： | --- | --- | |--------------------------------------------- ...

[Announcement Information](index=1&type=section&id=Announcement%20Information) Hebei Construction Group Co., Ltd. released its unaudited interim consolidated results for the six months ended June 30, 2024 - Hebei Construction Group Co., Ltd. announced its unaudited interim consolidated results for the six months ended June 30, 2024[1](index=1&type=chunk) - The company's stock code is 1727, and the announcement date is August 26, 2024[1](index=1&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) This section provides an overview of the company's key financial metrics for the first half of 2024, including revenue, net profit, and earnings per share 2024 H1 Financial Highlights | Indicator | June 30, 2024 (RMB) | Same Period 2023 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 11.015 billion yuan | (Not provided) | Decreased by 26% | | Net Profit | 121 million yuan | (Not provided) | Increased by 9% | | Earnings Per Share | 0.07 yuan | 0.07 yuan | Unchanged | [Business Review](index=3&type=section&id=Business%20Review) This section reviews the company's construction engineering contracting business, including new contracts, in-progress, and completed projects - The company primarily engages in construction engineering contracting, including building construction, infrastructure construction, and specialized and other construction engineering[4](index=4&type=chunk) 2024 H1 New Contract Value Overview | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 13.960 | 14.335 | Decreased by 2.62% | | Beijing-Tianjin-Hebei Region Share | 88.91% | 91.24% | Decreased by 2.33 percentage points | | Other Regions Share | 11.09% | 8.76% | Increased by 2.33 percentage points | [Company Business Overview](index=3&type=section&id=Company%20Business%20Overview) The company is a leading non-state-owned construction group in China, with core businesses in building construction, infrastructure construction, and specialized and other construction engineering 2024 H1 New Contract Value by Business Segment | Business Segment | 2024 Share | 2023 Share | Change | | :--- | :--- | :--- | :--- | | Building Construction Engineering | 55.98% | 53.54% | Increased by 2.44 percentage points | | Infrastructure Construction Engineering | 18.77% | 32.21% | Decreased by 13.44 percentage points | | Specialized and Other Construction Engineering | 25.25% | 14.25% | Increased by 11.00 percentage points | [Building Construction Business](index=4&type=section&id=Building%20Construction%20Business) The company primarily provides services as a general contractor for residential, public, industrial, and commercial building projects - The company acts as a general contractor, responsible for all major aspects of building construction projects, including construction, foundation, curtain wall, decoration, and fire protection engineering[7](index=7&type=chunk) New Contract Value and Segment Share for Building Construction Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 7.815 | 7.675 | Increased by 1.82% | | Residential Building Engineering Share | 34.54% | 27.18% | Increased by 7.36 percentage points | | Public Building Engineering Share | 46.87% | 50.97% | Decreased by 4.10 percentage points | | Industrial Building Engineering Share | 18.59% | 21.74% | Decreased by 3.15 percentage points | | Commercial Building Engineering Share | 0.00% | 0.11% | Decreased by 0.11 percentage points | [Infrastructure Construction Business](index=4&type=section&id=Infrastructure%20Construction%20Business) The company provides construction engineering contracting services for municipal and transportation infrastructure projects, primarily for local governments - The infrastructure construction business primarily serves municipal and transportation projects, with local governments as main clients[8](index=8&type=chunk) New Contract Value and Segment Share for Infrastructure Construction Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 2.620 | 4.617 | Decreased by 43.25% | | Municipal Infrastructure Construction Engineering Share | 62.43% | 69.91% | Decreased by 7.48 percentage points | | Transportation Infrastructure Construction Engineering Share | 37.57% | 30.09% | Increased by 7.48 percentage points | [Specialized and Other Construction Engineering Contracting Business](index=5&type=section&id=Specialized%20and%20Other%20Construction%20Engineering%20Contracting%20Business) The company undertakes projects with professional qualifications in mechanical and electrical installation, steel structure construction, and decoration - The specialized and other construction engineering contracting business covers areas such as mechanical and electrical installation, steel structure construction, and decoration[9](index=9&type=chunk) New Contract Value and Segment Share for Specialized and Other Construction Engineering Contracting Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 3.525 | 2.042 | Increased by 72.62% | | Mechanical and Electrical Installation Share | 25.20% | 35.37% | Decreased by 10.17 percentage points | | Steel Structure Share | 0.17% | 4.10% | Decreased by 3.93 percentage points | | Decoration and Renovation Share | 5.25% | 23.73% | Decreased by 18.48 percentage points | | Other Construction Business Share | 69.38% | 36.79% | Increased by 32.59 percentage points | [Representative New Contracts](index=6&type=section&id=Representative%20New%20Contracts) This section highlights key new contracts signed in H1 2024, primarily in Hebei Province, across various construction types - Representative new contracts are mainly concentrated in Hebei Province, including residential buildings, public buildings, mechanical and electrical installations, and water conservancy and hydropower projects[10](index=10&type=chunk) - The EPC general contract for the North China Electric Power University Science and Technology Industrial Park supporting infrastructure project has a contract value of **RMB 1.370 billion**[10](index=10&type=chunk) [Representative Projects Under Construction](index=7&type=section&id=Representative%20Projects%20Under%20Construction) This section showcases various ongoing projects across multiple provinces and construction types, including public, residential, and infrastructure - Projects under construction are widely distributed in Hebei Province and other provinces and cities, including Xinjiang, Inner Mongolia, Beijing, Shandong, Jiangsu, Tibet, Anhui, Heilongjiang, Chongqing, Qinghai, Guizhou, and Zhejiang[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) - The China Academy of Chinese Medical Sciences Guang'anmen Hospital Baoding Hospital project has an executed contract value of **RMB 1.943 billion**, the largest among the listed projects[11](index=11&type=chunk) - The EPC general contract for the Innovation Manufacturing Industrial Park Infrastructure Project has an executed contract value of **RMB 1.362 billion**[16](index=16&type=chunk) [Representative Completed Projects](index=14&type=section&id=Representative%20Completed%20Projects) This section lists representative completed projects, including university buildings, urban renewal, and industrial parks, with varying contract values - Completed projects cover public buildings, residential buildings, industrial buildings, municipal infrastructure construction, and other construction businesses[18](index=18&type=chunk) - The China Western (Guangyuan) Green Home Furnishing Industrial City Start-up Zone Construction Project has an executed contract value of **RMB 1.050 billion**[18](index=18&type=chunk) [Scientific Research Achievements and Awards](index=15&type=section&id=Scientific%20Research%20Achievements%20and%20Awards) This section provides an overview of the company's technological advancements, platform development, and intellectual property achievements in H1 2024 - In the first half of 2024, the company's scientific and technological work achieved significant progress in research and development, platform construction, and intellectual property[20](index=20&type=chunk) - Eight construction science and technology plan projects and 15 new technology application demonstration projects were approved by the Hebei Provincial Department of Housing and Urban-Rural Development, along with five science and technology plan projects by the Hebei Provincial Construction Industry Association[20](index=20&type=chunk) - The company received one 2023 Hebei Provincial Science and Technology Cooperation Award and 28 2024 Hebei Provincial Construction Industry Science and Technology Progress Awards, including three first prizes[20](index=20&type=chunk) - As of the end of June 2024, 70 new patents were authorized (including 4 invention patents), and 32 new patent applications were filed[20](index=20&type=chunk) [Future Outlook](index=16&type=section&id=Future%20Outlook) This section outlines the company's strategic focus on strengthening organization, enhancing cash flow, expanding markets, fostering innovation, and improving project quality - The company will focus on strengthening organizational construction and various system operations to continuously increase cash flow sufficiency and navigate economic cycles[22](index=22&type=chunk) - It will continue to intensify regional and industry market development, strictly control market entry, and ensure high-quality projects[22](index=22&type=chunk) - The company will vigorously promote innovative and entrepreneurial organizations, explore new upstream and downstream areas, and support young talent in unleashing their creativity[22](index=22&type=chunk) - It will continuously improve project delivery quality, standardize construction site safety production and VIS image building, and actively strive for high-quality projects at all levels[22](index=22&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance, including revenue, costs, profits, and key financial positions - In the first half of 2024, the company's revenue decreased by **RMB 3.933 billion** to **RMB 11.015 billion**, primarily due to a decline in revenue from the construction engineering contracting segment[23](index=23&type=chunk) - Net profit increased by approximately **RMB 9.69 million** to **RMB 121 million**[34](index=34&type=chunk) 2024 H1 Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Current Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Quick Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Gearing Ratio | 93.5% | 92.1% | Increased by 1.4 percentage points | | Return on Assets (non-annualized) | 0.2% | 0.2% | Unchanged | | Return on Equity (non-annualized) | 1.9% | 2.6% | Decreased by 0.7 percentage points | [Revenue, Cost of Sales, and Gross Profit](index=17&type=section&id=Revenue%2C%20Cost%20of%20Sales%2C%20and%20Gross%20Profit) H1 2024 revenue decreased, primarily due to a decline in the construction engineering contracting segment, impacting all major business lines - The decrease of **RMB 3.894 billion** in revenue from the construction engineering contracting segment was the main reason for the overall revenue decline[23](index=23&type=chunk) Operating Performance of Construction Engineering Contracting Segment (H1 2024 vs H1 2023) | Business | 2024 Revenue (RMB billion yuan) | 2024 Cost (RMB billion yuan) | 2024 Gross Margin (%) | 2023 Revenue (RMB billion yuan) | 2023 Cost (RMB billion yuan) | 2023 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Building Construction | 6.984 | 6.628 | 5.1 | 9.430 | 8.985 | 4.7 | | Infrastructure Construction | 3.099 | 2.880 | 7.1 | 4.109 | 3.846 | 6.4 | | Specialized and Other Construction | 0.725 | 0.686 | 5.4 | 1.163 | 1.109 | 4.6 | | **Total** | **10.808** | **10.194** | **5.7** | **14.702** | **13.940** | **5.2** | - Building construction business revenue decreased by **RMB 2.446 billion**, affected by a sluggish real estate market and slower project progress[24](index=24&type=chunk) - Infrastructure construction business revenue decreased by **RMB 1.010 billion**, mainly due to slower growth in infrastructure investment and fewer new contracts signed[24](index=24&type=chunk) - Specialized and other construction business revenue decreased by **RMB 438 million** due to fewer new projects[25](index=25&type=chunk) [Selling Expenses](index=18&type=section&id=Selling%20Expenses) Selling expenses for H1 2024 were RMB 0.97 million, showing a minor increase year-on-year Selling Expenses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 0.97 | (Not provided) | Minor increase | [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses decreased in H1 2024, mainly due to reduced staff remuneration, benefits, and social insurance Administrative Expenses | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 212 | (Not provided) | Decreased by 67.57 | - The decrease in administrative expenses was primarily attributable to reduced staff remuneration, benefits, and social insurance expenses[27](index=27&type=chunk) [Research and Development Expenses](index=18&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased in H1 2024, primarily due to fewer new R&D projects initiated Research and Development Expenses | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | R&D Expenses | 33.22 | (Not provided) | Decreased by 36.10 | - The decrease in R&D expenses was mainly due to fewer new R&D projects initiated during the reporting period[28](index=28&type=chunk) [Credit Impairment Losses](index=18&type=section&id=Credit%20Impairment%20Losses) Credit impairment losses decreased in H1 2024, mainly due to reduced bad debt provisions for high-risk customers Credit Impairment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Credit Impairment Losses | 76.76 | (Not provided) | Decreased by 10.28 | - The decrease in credit impairment losses was primarily due to a reduction in bad debt provisions for customers with significant default risks during the period[29](index=29&type=chunk) [Asset Impairment Losses](index=18&type=section&id=Asset%20Impairment%20Losses) Asset impairment loss reversals increased in H1 2024, primarily due to lower original contract asset values from decreased revenue Asset Impairment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Asset Impairment Loss Reversal | 36.78 | 9.67 | Increased by 27.11 | - The increase in asset impairment loss reversals was mainly due to a decrease in the original value of contract assets resulting from lower revenue, which in turn reduced the new provision for bad debts on contract assets[30](index=30&type=chunk) [Investment Losses](index=19&type=section&id=Investment%20Losses) Investment losses decreased in H1 2024, mainly due to reduced losses from long-term equity investments accounted for using the equity method Investment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Investment Losses | 1.90 | 8.38 | Decreased by 6.48 | - The decrease in investment losses was primarily due to a reduction in losses from long-term equity investments accounted for using the equity method[32](index=32&type=chunk) [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) Income tax expense decreased in H1 2024, primarily due to some subsidiaries utilizing prior year deductible losses Income Tax Expense | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 35.09 | 45.78 | Decreased by 10.69 | - The decrease in income tax expense was mainly due to certain subsidiaries utilizing deductible losses from previous years[33](index=33&type=chunk) [Net Profit](index=19&type=section&id=Net%20Profit) Net profit for H1 2024 increased to RMB 121 million, up by approximately RMB 9.69 million year-on-year Net Profit | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Net Profit | 121 | (Not provided) | Increased by 9.69 | [Liquidity, Financial Resources, and Capital Structure](index=19&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) The Group primarily funds operations through cash generated from operating activities and interest-bearing borrowings - The Group primarily funds its operations through cash generated from operating activities and interest-bearing borrowings[34](index=34&type=chunk) Cash and Cash Equivalents | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 4.840 | 6.528 | Decreased by 1.688 | [Cash and Bank Balances](index=19&type=section&id=Cash%20and%20Bank%20Balances) Cash and bank balances decreased as of June 30, 2024, primarily due to net cash outflow from operating activities Cash and Bank Balances | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 6.143 | 7.689 | Decreased by 1.546 | - The decrease in cash and bank balances was primarily due to net cash outflow from operating activities[35](index=35&type=chunk) [Financial Policy](index=19&type=section&id=Financial%20Policy) The Group regularly monitors cash flow and balances to maintain optimal liquidity for operations and growth strategies - The Group regularly monitors cash flow and cash balances, striving to maintain optimal liquidity levels to support operations and growth strategies[36](index=36&type=chunk) - In the future, the Group intends to continue funding its operations through cash generated from operating activities and interest-bearing borrowings[36](index=36&type=chunk) [Long-term Equity Investments](index=19&type=section&id=Long-term%20Equity%20Investments) Long-term equity investments decreased as of June 30, 2024, mainly due to the disposal of an investment in Rongcheng County Hengda Construction Investment Co., Ltd Long-term Equity Investments | Indicator | June 30, 2024 (RMB million yuan) | December 31, 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Long-term Equity Investments | 470 | 501 | Decreased by 30.77 | - The decrease in long-term equity investments was primarily due to the disposal of the long-term equity investment in Rongcheng County Hengda Construction Investment Co., Ltd. during the period[37](index=37&type=chunk) [Accounts Receivable and Long-term Receivables](index=20&type=section&id=Accounts%20Receivable%20and%20Long-term%20Receivables) Net accounts receivable decreased as of June 30, 2024, while long-term receivables (including current portion) showed a minor decrease Accounts Receivable and Long-term Receivables | Indicator | June 30, 2024 (RMB billion yuan/million yuan) | December 31, 2023 (RMB billion yuan/million yuan) | Change (RMB billion yuan/million yuan) | | :--- | :--- | :--- | :--- | | Net Accounts Receivable | 7.164 | 7.479 | Decreased by 314 million yuan | | Long-term Receivables (incl. current portion) | 219 | 222 | Decreased by 2.58 million yuan | [Other Receivables](index=20&type=section&id=Other%20Receivables) Other receivables increased as of June 30, 2024, with a minor overall change Other Receivables | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Other Receivables Balance | 2.408 | 2.298 | Increased by 0.110 | [Contract Assets and Contract Liabilities for Construction Services](index=20&type=section&id=Contract%20Assets%20and%20Contract%20Liabilities%20for%20Construction%20Services) Net contract assets decreased due to lower revenue, while contract liabilities increased due to new projects with advance payments Contract Assets and Contract Liabilities | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Net Contract Assets | 40.494 | 42.108 | Decreased by 1.614 | | Contract Liabilities | 6.937 | 6.704 | Increased by 0.233 | - The decrease in contract assets was primarily due to lower revenue during the reporting period[41](index=41&type=chunk) - The increase in contract liabilities was mainly due to new projects undertaken during the period that received advance payments for engineering work[41](index=41&type=chunk) [Investments in Other Equity Instruments](index=20&type=section&id=Investments%20in%20Other%20Equity%20Instruments) Carrying value of investments in other equity instruments increased due to fair value appreciation from market conditions Investments in Other Equity Instruments | Indicator | June 30, 2024 (RMB million yuan) | December 31, 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Carrying Value of Investments in Other Equity Instruments | 594 | 589 | Increased by 5.40 | - The increase was primarily due to the fair value appreciation of some investments in other equity instruments held, influenced by market conditions[42](index=42&type=chunk) [Borrowings](index=20&type=section&id=Borrowings) Interest-bearing borrowings slightly increased as of June 30, 2024 Interest-bearing Borrowings | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Interest-bearing Borrowings | 5.941 | 5.736 | Increased by 0.205 | [Bills Payable and Accounts Payable](index=20&type=section&id=Bills%20Payable%20and%20Accounts%20Payable) Accounts payable decreased due to lower project volumes and increased cash payments, while bills payable increased due to higher proportion of bill payments Bills Payable and Accounts Payable | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Accounts Payable Balance | 30.776 | 34.488 | Decreased by 3.712 | | Bills Payable Balance | 1.219 | 1.036 | Increased by 0.184 | - The decrease in accounts payable was mainly due to lower project volumes and an increased proportion of cash payments for major materials and subcontracting[43](index=43&type=chunk) - The increase in bills payable was primarily due to the Group increasing the proportion of payments made via bills[43](index=43&type=chunk) [Capital Expenditures](index=21&type=section&id=Capital%20Expenditures) Capital expenditures decreased in H1 2024, primarily due to no significant purchases of fixed assets or construction in progress Capital Expenditures | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Capital Expenditures | 15 | (Not provided) | Decreased by 36 | - The decrease in capital expenditures was mainly due to no significant purchases of fixed assets or construction in progress during the reporting period[44](index=44&type=chunk) [Capital Commitments](index=21&type=section&id=Capital%20Commitments) The Group had no significant capital commitments as of June 30, 2024 - As of June 30, 2024, the Group had no significant capital commitments[44](index=44&type=chunk) [Financial Ratios](index=21&type=section&id=Financial%20Ratios) As of June 30, 2024, current and quick ratios both increased, while the gearing ratio slightly rose and return on equity decreased 2024 H1 Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Current Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Quick Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Gearing Ratio | 93.5% | 92.1% | Increased by 1.4 percentage points | | Return on Assets (non-annualized) | 0.2% | 0.2% | Unchanged | | Return on Equity (non-annualized) | 1.9% | 2.6% | Decreased by 0.7 percentage points | [Significant Acquisitions or Disposals](index=21&type=section&id=Significant%20Acquisitions%20or%20Disposals) The Group had no significant acquisitions or disposals during the reporting period - The Group had no significant acquisitions or disposals during the reporting period[45](index=45&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) Contingent liabilities include bank credit financing guarantees to third parties and contingent liabilities from pending litigations or arbitrations Contingent Liabilities | Type | Amount (RMB million yuan) | | :--- | :--- | | Bank credit financing guarantees to third parties | 655 | | Contingent liabilities from pending litigations or arbitrations | 44 | [RMB Exchange Rate Fluctuations and Exchange Risk](index=22&type=section&id=RMB%20Exchange%20Rate%20Fluctuations%20and%20Exchange%20Risk) The Group has no significant foreign exchange fluctuation risk as most business and bank loans are transacted in RMB, with no hedging policy in place - The Group's vast majority of business and all bank loans are transacted in RMB, thus there is no significant foreign exchange fluctuation risk[48](index=48&type=chunk) - The Group currently has no hedging policy against foreign exchange risk[48](index=48&type=chunk) [Significant Subsequent Events](index=22&type=section&id=Significant%20Subsequent%20Events) The Group had no significant subsequent events as of the announcement date - As of the date of this announcement, the Group had no significant subsequent events[48](index=48&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) This section covers dividend policy, corporate governance, securities dealings by directors and supervisors, share transactions, and audit committee review - The Board does not recommend an interim dividend for the first half of 2024[48](index=48&type=chunk) - The company is committed to maintaining high corporate governance standards, complies with the Corporate Governance Code, and has reviewed its interim results[48](index=48&type=chunk) [Dividends](index=22&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[48](index=48&type=chunk) [Corporate Governance Practices](index=22&type=section&id=Corporate%20Governance%20Practices) The company is committed to high corporate governance standards and has complied with all code provisions of the Corporate Governance Code - The company is committed to achieving and maintaining a high level of corporate governance and has established an effective corporate governance structure[48](index=48&type=chunk) - For the six months ended June 30, 2024, the company has complied with all code provisions of the Corporate Governance Code[48](index=48&type=chunk) [Securities Transactions by Directors and Supervisors](index=23&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Supervisors) The company adopted the Model Code for securities transactions by directors and supervisors, and all confirmed compliance during the period - The company has adopted the Model Code as the code of conduct for directors and supervisors in dealing in the company's securities[50](index=50&type=chunk) - All directors and supervisors confirmed compliance with the required standards set out in the Model Code during the reporting period[50](index=50&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period, and held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[51](index=51&type=chunk) - As of the end of the reporting period, neither the company nor its subsidiaries held any treasury shares[51](index=51&type=chunk) [Audit Committee Review of Interim Results](index=23&type=section&id=Audit%20Committee%20Review%20of%20Interim%20Results) The Audit Committee reviewed and confirmed the Group's interim results announcement and unaudited interim financial statements - The company's Audit Committee has reviewed and confirmed the Group's interim results announcement and unaudited interim financial statements for the six months ended June 30, 2024[52](index=52&type=chunk) - The Audit Committee members include Ms. Shen Lifeng (Chairperson), Mr. Li Baoyuan, Ms. Chen Xin, and Mr. Chen Yisheng[52](index=52&type=chunk) [Interim Consolidated Statement of Financial Position](index=24&type=section&id=Interim%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the Group's consolidated financial position, including total assets, liabilities, and equity, as of June 30, 2024 Interim Consolidated Statement of Financial Position Key Data (RMB thousand yuan) | Item | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Current Assets | 55,123,491 | 58,298,210 | -3,174,719 | | Total Non-current Assets | 6,532,017 | 6,587,387 | -55,370 | | **Total Assets** | **61,655,508** | **64,885,597** | **-3,230,089** | | **Liabilities** | | | | | Total Current Liabilities | 52,098,989 | 55,795,695 | -3,696,706 | | Total Non-current Liabilities | 3,201,036 | 2,862,046 | +338,990 | | **Total Liabilities** | **55,300,025** | **58,657,741** | **-3,357,716** | | **Equity** | | | | | Total Equity Attributable to Owners of the Parent | 6,180,966 | 6,047,329 | +133,637 | | Non-controlling Interests | 174,517 | 180,527 | -6,010 | | **Total Equity** | **6,355,483** | **6,227,856** | **+127,627** | [Interim Consolidated Statement of Profit or Loss](index=26&type=section&id=Interim%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the Group's consolidated financial performance, including revenue, costs, and net profit, for the six months ended June 30, 2024 Interim Consolidated Statement of Profit or Loss Key Data (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 11,015,171 | 14,948,567 | -3,933,396 | | Cost of Sales | 10,365,625 | 14,145,504 | -3,779,879 | | Selling Expenses | 967 | 488 | +479 | | Administrative Expenses | 212,043 | 279,616 | -67,573 | | Research and Development Expenses | 33,224 | 69,325 | -36,101 | | Finance Costs | 178,624 | 180,874 | -2,250 | | Investment Income | (1,900) | (8,382) | +6,482 | | Credit Impairment Losses | (76,763) | (87,044) | +10,281 | | Asset Impairment Losses | 36,784 | 9,672 | +27,112 | | Operating Profit | 157,082 | 157,071 | +11 | | Total Profit | 155,973 | 156,976 | -1,003 | | Income Tax Expense | 35,094 | 45,785 | -10,691 | | **Net Profit** | **120,879** | **111,191** | **+9,688** | | Net Profit Attributable to Owners of the Parent | 126,889 | 116,796 | +10,093 | | Basic and Diluted Earnings Per Share (yuan/share) | 0.07 | 0.07 | Unchanged | [Notes to the Financial Statements](index=28&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and breakdowns for various items in the financial statements - The financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting issued by the Ministry of Finance and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58](index=58&type=chunk) [Basis of Preparation of Financial Statements](index=28&type=section&id=Basis%20of%20Preparation%20of%20Financial%20Statements) The financial statements are prepared in accordance with CAS 32 and HKEX Listing Rules, presented on a going concern basis - The financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting issued by the Ministry of Finance and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58](index=58&type=chunk) - These financial statements are presented on a going concern basis[58](index=58&type=chunk) [Accounts Receivable and Long-term Receivables](index=28&type=section&id=Accounts%20Receivable%20and%20Long-term%20Receivables) Accounts receivable primarily from construction contracts with 1-3 month credit terms, and long-term receivables from BOT water supply services - Accounts receivable primarily consists of receivables from construction contracting business, with credit terms typically ranging from 1 to 3 months and no interest charged[59](index=59&type=chunk) Accounts Receivable Aging Analysis (RMB thousand yuan) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 5,695,664 | 6,323,895 | | 1 to 2 years | 1,434,845 | 1,246,093 | | 2 to 3 years | 719,675 | 668,913 | | Over 3 years | 837,989 | 687,655 | | **Total** | **8,688,173** | **8,926,556** | | Less: Provision for bad debts on accounts receivable | 1,523,683 | 1,447,583 | | **Total** | **7,164,490** | **7,478,973** | - Long-term receivables primarily represent receivables from build-operate-transfer (BOT) water supply services, which will be settled in installments over a period of 1 to 25 years[61](index=61&type=chunk) [Accounts Payable](index=29&type=section&id=Accounts%20Payable) Accounts payable are non-interest bearing, with the majority due within one year - Accounts payable are non-interest bearing, with the aging period calculated from the date of purchase recognition[63](index=63&type=chunk) Accounts Payable Aging Analysis (RMB thousand yuan) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 20,779,256 | 23,269,785 | | 1 to 2 years | 6,641,392 | 8,134,270 | | 2 to 3 years | 1,785,633 | 1,714,512 | | Over 3 years | 1,569,888 | 1,369,488 | | **Total** | **30,776,169** | **34,488,055** | [Operating Revenue](index=30&type=section&id=Operating%20Revenue) H1 2024 operating revenue was RMB 11.015 billion, primarily from construction engineering contracts in mainland China Operating Revenue Composition (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Principal Business Revenue | 10,808,378 | 14,702,101 | | Other Business Revenue | 206,793 | 246,466 | | **Total** | **11,015,171** | **14,948,567** | - Revenue from contracts with customers primarily originates from building construction engineering, infrastructure construction engineering, and specialized and other construction engineering[67](index=67&type=chunk) - The main operating region is China (excluding Hong Kong, Macau, and Taiwan), with revenue recognized primarily over a period of time[67](index=67&type=chunk) [Income Tax Expense](index=33&type=section&id=Income%20Tax%20Expense) H1 2024 income tax expense was RMB 35.09 million, calculated at 25% of estimated taxable income in China Income Tax Expense Composition (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Current Income Tax Expense | 57,793 | 71,214 | | Deferred Income Tax Expense | (22,699) | (25,429) | | **Total** | **35,094** | **45,785** | - The Group's income tax is accrued at 25% of the estimated taxable income derived within China[73](index=73&type=chunk) [Earnings Per Share](index=33&type=section&id=Earnings%20Per%20Share) Basic and diluted EPS for H1 2024 remained at RMB 0.07, calculated based on net profit attributable to ordinary shareholders Earnings Per Share (yuan/share) | Indicator | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Basic Earnings Per Share (continuing operations) | 0.07 | 0.07 | - Net profit attributable to ordinary shareholders of the company was **RMB 126,889 thousand**, and the weighted average number of ordinary shares outstanding was 1,761,383,500 shares[76](index=76&type=chunk) - The Group has no dilutive potential ordinary shares, therefore, diluted earnings per share are equal to basic earnings per share[76](index=76&type=chunk) [Dividends](index=34&type=section&id=Dividends) No interim dividend was proposed for the six months ended June 30, 2024 - No interim dividend was proposed for the six months ended June 30, 2024[77](index=77&type=chunk) [Definitions](index=35&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used throughout the report - This section provides definitions for key terms and abbreviations used in the report[78](index=78&type=chunk)[79](index=79&type=chunk) - "The Company" refers to Hebei Construction Group Co., Ltd., whose H shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 15, 2017 (stock code: 1727)[78](index=78&type=chunk) - "Reporting Period" refers to the six-month period from January 1, 2024, to June 30, 2024[79](index=79&type=chunk)

Financial Performance - In 2023, the company achieved a revenue of RMB 33.493 billion, a decrease of 16% compared to 2022[24] - The net profit for 2023 was RMB 158 million, down 50% from the previous year[24] - The earnings per share for 2023 was RMB 0.10, reflecting a decline of 47% year-over-year[24] - Total revenue for 2023 was RMB 172.92 billion, a decrease of 38.9% from RMB 282.95 billion in 2022[29] - The company reported a significant drop in residential construction revenue from RMB 90.80 billion in 2022 to RMB 36.26 billion in 2023[29] - The revenue from the housing construction business was RMB 20.491 billion, with a gross margin of 4.2%, compared to RMB 26.204 billion and a gross margin of 3.2% in 2022[85] - The infrastructure construction business revenue decreased by RMB 346 million, attributed to the completion of several large-scale projects during the reporting period[87] - In 2023, the company's total revenue decreased by approximately RMB 6.513 billion to RMB 33.493 billion, primarily due to a decline in revenue from the construction engineering contracting segment by RMB 6.193 billion[84] Contracts and Projects - The total new contracts signed in 2023 amounted to RMB 31.964 billion, compared to RMB 43.732 billion in the previous year[26] - New contracts signed in 2023 totaled RMB 319.64 billion, down 26.9% from RMB 437.32 billion in 2022[40] - The housing construction segment generated RMB 172.92 billion in new contracts, representing 54.10% of total new contracts, down from 64.70% in 2022[40] - Infrastructure construction contracts amounted to RMB 104.36 billion, a decrease from RMB 116.93 billion in 2022[42] - New contracts in the transportation infrastructure sector increased to RMB 22.14 billion in 2023, up from RMB 11.39 billion in 2022[61] - The company secured major contracts including RMB 5.61 billion for the Dongwangcaozhuang renovation project in Hebei Province[46] - The total contract amount for the innovative manufacturing industrial park infrastructure project reached RMB 13.62 billion[54] - The company secured a significant contract for the construction of the Baoding City South Second Ring Road network, valued at RMB 8.81 billion[49] - The company is actively involved in the construction of the Beijing New Airport Administrative Complex with a contract value of RMB 6.35 billion[69] Market and Strategic Focus - The company aims to leverage the recovery of the Chinese economy and the opportunities in the Beijing-Tianjin-Hebei region for future growth[8] - The company is focusing on expanding its infrastructure and public construction projects to enhance revenue stability[42] - The company is focusing on expanding its market presence and enhancing its technological capabilities through new projects and innovations[80] - The company aims to strengthen market development in key cities such as Xiong'an New Area, Shijiazhuang, and Tangshan in 2024[81] - The company is exploring partnerships with local governments to secure more public works contracts, targeting a 30% increase in such projects[199] Awards and Recognition - The company won multiple awards, including 2 national decoration awards and 1 provincial quality engineering award[15] - The company has received 104 provincial-level quality engineering awards, indicating a strong commitment to quality in its projects[77] - The company has been recognized with 34 provincial construction industry technology advancement awards, showcasing its commitment to innovation[77] Research and Development - A total of 191 new patents were applied for in 2023, with 152 patents granted, including 11 invention patents, bringing the total effective patents to 1,238[96] - Research and development expenses for 2023 were RMB 148 million, a decrease of RMB 20 million compared to 2022, indicating stable R&D investment[129] - New technology development initiatives are underway, with an investment of 500 million RMB allocated for R&D in sustainable construction methods[199] Financial Position and Capital Structure - As of December 31, 2023, cash and cash equivalents amounted to approximately RMB 7.689 billion, a decrease of RMB 1.434 billion from the end of 2022[111] - The net value of accounts receivable as of December 31, 2023, was RMB 7.48 billion, a slight decrease of approximately RMB 33.7 million compared to the end of 2022[136] - The company's long-term equity investments as of December 31, 2023, were RMB 501 million, a decrease of RMB 15 million from the end of 2022[113] - The net value of contract assets as of December 31, 2023, was RMB 42.108 billion, a decrease of approximately RMB 809 million due to project progress[116] - The company provided guarantees resulting in contingent liabilities of RMB 678 million as of December 31, 2023[124] - The capital debt ratio improved to 92.1% as of December 31, 2023, down from 97.1% at the end of 2022[139] - The return on assets (ROA) was 0.2% for the year ending December 31, 2023, compared to 0.5% in the previous year[139] - The return on equity (ROE) decreased to 2.6% in 2023 from 5.2% in 2022[139] Human Resources - The total number of full-time employees decreased to 8,128 as of December 31, 2023, down from 9,104 a year earlier[142] Future Outlook - Future outlook indicates a targeted revenue growth of 10% for the next fiscal year, driven by increased infrastructure investments[199] - The company plans to pursue strategic acquisitions to enhance its capabilities, with a budget of 1 billion RMB earmarked for potential targets in the next year[199] - Overall, the company remains committed to its long-term growth strategy, emphasizing innovation and market expansion as key drivers[199]

Financial Performance - In 2023, the company's revenue was RMB 33.493 billion, a decrease of 16% compared to 2022[4] - The net profit for 2023 was RMB 158 million, down 50% from the previous year[4] - Earnings per share for 2023 were RMB 0.10, reflecting a decline of 47% year-over-year[4] - Total operating income for 2023 was RMB 33,492,866,000, down 16.5% from RMB 40,006,018,000 in 2022[35] - The total comprehensive income attributable to the parent company for 2023 was RMB 52,527,000, significantly lower than RMB 301,109,000 in 2022, marking an 82.5% decrease[13] - Total revenue for 2023 reached RMB 33,471,799 thousand, a decrease from RMB 39,969,607 thousand in 2022, representing a decline of approximately 16.4%[40] - The company reported a gross profit margin of approximately 5.36% for 2023, compared to 5.93% in 2022[11] Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 64.886 billion, down from RMB 67.632 billion in 2022[6] - Current assets totaled RMB 58.298 billion, a decrease from RMB 61.126 billion in the previous year[6] - The company's total liabilities were RMB 58.658 billion, down from RMB 61.464 billion in 2022[9] - The total liabilities, including accounts payable, were RMB 34,488,055,000 in 2023, down from RMB 36,587,127,000 in 2022[30] - The capital debt ratio improved to 92.1% in 2023 from 97.1% in 2022[110] - Cash and cash equivalents as of December 31, 2023, were approximately RMB 6.528 billion, down from RMB 8.488 billion at the end of 2022[94] Equity and Investments - The total equity attributable to shareholders increased to RMB 6.047 billion from RMB 5.995 billion in 2022[9] - Long-term equity investments decreased by RMB 15 million to RMB 501 million as of December 31, 2023[98] - The company successfully acquired 51% of Zhongwei Construction Engineering Co., Ltd. for RMB 51.51 million, with the agreement signed on March 19, 2024[112] Revenue Sources - Revenue from housing construction projects was RMB 20,490,784 thousand in 2023, down from RMB 26,203,970 thousand in 2022, a decrease of about 22.0%[40] - Infrastructure construction revenue was RMB 9,683,182 thousand in 2023, compared to RMB 10,029,152 thousand in 2022, reflecting a decline of approximately 3.4%[40] - The company recognized revenue of RMB 4,829,215 thousand from contract liabilities in 2023, an increase from RMB 4,594,190 thousand in 2022, representing a growth of about 5.1%[44] Expenses - Research and development expenses for 2023 were RMB 148 million, slightly down from RMB 150 million in 2022[11] - Management expenses for 2023 were RMB 528 million, a reduction of RMB 43 million from 2022, primarily due to lower salary expenses[84] - The company’s income tax expenses for 2023 were RMB 833,807,000, an increase of 17.4% from RMB 709,929,000 in 2022[31] Contracts and Projects - The new contract amount for 2023 was RMB 31.964 billion, a decrease of 27.0% from RMB 43.732 billion in 2022[65] - The uncompleted contract amount as of 2023 was RMB 59.849 billion, down from RMB 69.722 billion in the previous year, representing a decline of 14.5%[65] - The new contracts in the housing construction segment amounted to RMB 17.292 billion in 2023, a significant drop of 38.9% from RMB 28.295 billion in 2022[69] - The infrastructure construction segment secured new contracts worth RMB 10.436 billion, down 10.5% from RMB 11.693 billion in 2022[71] Future Outlook and Strategy - The company anticipates 2024 to be a critical year for achieving its "14th Five-Year Plan" goals, focusing on healthy development amidst global economic challenges[113] - The company aims to enhance market development in key cities such as Xiong'an New Area, Shijiazhuang, and Tangshan in 2024[124] - The company will continue to focus on safety production and improve project site management standards[124] - The company emphasizes the importance of innovation and efficiency improvement in its operations[125] Governance and Compliance - The company has adhered to all corporate governance codes and regulations as of December 31, 2023[127] - The company has appointed Ernst & Young as its auditor for the financial year ending December 31, 2023[130] Dividends - The company plans not to distribute dividends for the year ending December 31, 2023[63] - The board recommends not to declare a final dividend for the year ending December 31, 2023[125]

Financial Performance - For the period from January 1, 2023, to June 30, 2023, the company reported a revenue of RMB 1,341,190,000, representing an increase from RMB 1,322,986,000 in the same period of 2022, reflecting a growth of approximately 1.4%[27] - The company’s cash flow from operating activities for the first half of 2023 was RMB 1,357,694,000, compared to RMB 1,335,809,000 in the same period of 2022, showing a slight increase[27] - Total revenue for the first half of 2023 was RMB 149.49 billion, a decrease of 9.9% compared to RMB 165.00 billion in the same period of 2022[198] - Net profit for the first half of 2023 was RMB 1.11 billion, down 27.9% from RMB 1.54 billion in the same period of 2022[198] - Earnings per share for the first half of 2023 were RMB 0.07, a decrease of RMB 0.02 compared to RMB 0.09 in the same period of 2022[198] Liabilities and Borrowings - The company’s fixed-rate long-term borrowings increased to RMB 1,607,008,000 as of June 30, 2023, compared to RMB 1,480,547,000 at the end of 2022, marking an increase of about 8.6%[14] - The company’s total liabilities increased to RMB 1,515,885,000 as of June 30, 2023, compared to RMB 1,435,906,000 at the end of 2022, reflecting a growth of approximately 5.6%[14] - As of June 30, 2023, the group provided guarantees for bank loans amounting to RMB 698,191,000, a decrease from RMB 718,941,000 as of December 31, 2022[1] Related Party Transactions - The company provided engineering construction services to related parties amounting to RMB 40,119,000 during the first half of 2023, up from RMB 22,573,000 in the same period of 2022, indicating an increase of approximately 77.5%[35] - The company’s related party transactions included significant contracts with Baoding Zhicheng Real Estate Development Co., amounting to RMB 14,752,000 in the first half of 2023, compared to RMB 7,058,000 in the same period of 2022, indicating a growth of approximately 108.5%[36] - The total receivables from related parties as of June 30, 2023, amounted to RMB 181,198,000, an increase from RMB 156,049,000 as of December 31, 2022[143] Project and Contract Updates - The company has ongoing projects in various sectors, including construction and real estate, which are expected to drive future revenue growth[36] - The company has ongoing contracts in various projects, including RMB 7.68 billion for the construction of the Second Hospital of Hebei Medical University and RMB 4.32 billion for the Cangzhou Vocational Education Park project[166] - The company has ongoing projects with a total contract value of RMB 9.54 billion for the Botou Longtun New City renovation project and RMB 6.12 billion for the Hengshui Yongjin Peninsula project, both located in Hebei Province[78] Technology and Innovation - The company received 2 awards for technological advancement from the Hebei Provincial Government in 2022, including key research on concrete damage mechanisms and frost prevention technology for cold region traffic tunnels[67] - As of June 30, 2023, the company has granted 49 new patents, including 2 invention patents, and filed 62 new patent applications, with 13 being invention patents[69] - The group achieved notable progress in technology development and intellectual property applications during the first half of 2023[133] Management and Governance - The company’s board approved the financial statements on August 28, 2023, indicating a commitment to transparency and governance[167] - The company is committed to maintaining high corporate governance standards as outlined in the Corporate Governance Code[169] - The company has appointed new directors and supervisors effective June 26, 2023, to strengthen its leadership team[173] Market and Strategic Focus - The company is actively exploring market expansion opportunities and new technology developments to enhance its competitive position in the industry[36] - The company is focused on expanding its market presence through strategic projects in Hebei Province and Inner Mongolia, enhancing its operational footprint[166] - The company continues to focus on municipal and transportation infrastructure projects, which are primarily contracted by local governments[193]

[Company Overview and Financial Summary](index=2&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Financial Summary](index=2&type=section&id=Financial%20Summary) The company reported **RMB 14.949 billion** in revenue and **RMB 111 million** in net profit for H1 2023, with basic EPS at **RMB 0.07** Key Financial Indicators for H1 2023 | Indicator | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (billion yuan) | 14.949 | 16.589 | -9.9% | | Net Profit (million yuan) | 111 | 154 | -27.9% | | EPS (yuan) | 0.07 | 0.09 | -0.02 | [Business Review](index=3&type=section&id=Business%20Review) [Overview of New Contracts Signed](index=3&type=section&id=Overview%20of%20New%20Contracts%20Signed) New contracts signed in H1 2023 decreased by **32.47%** to **RMB 14.335 billion**, with shifts in segment and regional contributions New Contracts Signed Overview for H1 2023 (billion yuan) | Indicator | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total New Contracts | 14.335 | 21.229 | -32.47% | New Contracts Signed by Business Segment | Business Segment | H1 2023 Share | H1 2022 Share | | :--- | :--- | :--- | | Building Construction | 53.54% | 71.59% | | Infrastructure Construction | 32.21% | 19.91% | | Specialized and Other Construction | 14.25% | 8.50% | New Contracts Signed by Region | Region | H1 2023 Share | H1 2022 Share | | :--- | :--- | :--- | | Beijing-Tianjin-Hebei | 91.24% | 79.24% | | Other Regions | 8.76% | 20.76% | [Building Construction Business](index=4&type=section&id=Building%20Construction%20Business) New contracts for building construction declined to **RMB 7.675 billion** in H1 2023, with public building projects comprising the largest share at **50.97%** Building Construction New Contracts Signed (billion yuan) | Indicator | H1 2023 | H1 2022 | | :--- | :--- | :--- | | New Contracts Signed | 7.675 | 15.197 | Composition of Building Construction New Contracts Signed | Segment | H1 2023 Share | H1 2022 Share | | :--- | :--- | :--- | | Residential Buildings | 27.18% | 29.58% | | Public Buildings | 50.97% | 57.23% | | Industrial Buildings | 21.74% | 12.52% | | Commercial Buildings | 0.11% | 0.67% | [Infrastructure Construction Business](index=4&type=section&id=Infrastructure%20Construction%20Business) Infrastructure construction new contracts grew by **9.25%** to **RMB 4.617 billion** in H1 2023, driven by municipal and transportation projects Infrastructure Construction New Contracts Signed (billion yuan) | Indicator | H1 2023 | H1 2022 | | :--- | :--- | :--- | | New Contracts Signed | 4.617 | 4.226 | Composition of Infrastructure Construction New Contracts Signed | Segment | H1 2023 Share | H1 2022 Share | | :--- | :--- | :--- | | Municipal Infrastructure | 69.91% | 89.97% | | Transportation Infrastructure | 30.09% | 10.03% | [Specialized and Other Construction Engineering Contracting Business](index=5&type=section&id=Specialized%20and%20Other%20Construction%20Engineering%20Contracting%20Business) Specialized and other construction new contracts rose by **13.07%** to **RMB 2.042 billion** in H1 2023, with electromechanical installation showing strong growth at **35.37%** Specialized and Other Construction New Contracts Signed (billion yuan) | Indicator | H1 2023 | H1 2022 | | :--- | :--- | :--- | | New Contracts Signed | 2.042 | 1.806 | Composition of Specialized and Other Construction New Contracts Signed | Segment | H1 2023 Share | H1 2022 Share | | :--- | :--- | :--- | | Electromechanical Installation | 35.37% | 9.97% | | Steel Structure | 4.10% | 1.22% | | Decoration and Renovation | 23.73% | 25.91% | | Other Construction Business | 36.79% | 62.90% | [Representative Engineering Projects](index=5&type=section&id=Representative%20Engineering%20Projects) The company executed multiple regionally impactful projects across diverse sectors and provinces, including residential, public, industrial, transportation, and municipal infrastructure - Representative new contracts include large-scale projects such as the Guangzhou Baiyun International Airport Phase III Expansion Project (contract value **RMB 681 million**) and Baoding South Second Ring Road Pipeline Renovation Project (contract value **RMB 881 million**)[172](index=172&type=chunk) - Representative ongoing projects include the China Academy of Chinese Medical Sciences Guang'anmen Hospital Baoding Hospital Project (executed contract value **RMB 1.943 billion**) and Innovation Manufacturing Industrial Park Infrastructure Project (executed contract value **RMB 1.362 billion**)[180](index=180&type=chunk)[195](index=195&type=chunk) - Representative completed projects include Beijing BAIC Off-road Vehicle Shanty Town Renovation Resettlement Housing Project (executed contract value **RMB 385 million**) and National Highway G205 Yanshan County Bypass Reconstruction Project (executed contract value **RMB 290 million**)[34](index=34&type=chunk) [Scientific Research Achievements and Awards](index=14&type=section&id=Scientific%20Research%20Achievements%20and%20Awards) [Scientific Research Achievements and Awards](index=14&type=section&id=Scientific%20Research%20Achievements%20and%20Awards) The company achieved significant technological innovation in H1 2023, securing provincial awards, advancing projects, and expanding its patent portfolio with **62** new applications and **49** new grants - Received **2** provincial government science and technology progress awards and **34** Hebei Province construction industry science and technology progress awards for 2022[18](index=18&type=chunk) - As of June 2023, **62** new patent applications (including **13** invention patents) and **49** new authorized patents (including **2** invention patents) were filed[18](index=18&type=chunk)[36](index=36&type=chunk) - **201** enterprise-level R&D projects were initiated in H1 2023, with R&D activities progressing in an orderly manner[63](index=63&type=chunk) - Completed the re-evaluation of the National Enterprise Technology Center and the assessment of the National Prefabricated Building Industrial Base for technology platform development[184](index=184&type=chunk) [Future Outlook](index=15&type=section&id=Future%20Outlook) [Future Outlook](index=15&type=section&id=Future%20Outlook) The company plans to focus on market development, engineering, operations, and talent in H2, consolidating its Baoding base while expanding into Hebei and Xiong'an - Market Development: Consolidate Baoding headquarters, expand into other cities and counties in Hebei, prioritize Xiong'an New Area market, and promote provincial business development[207](index=207&type=chunk) - Engineering Construction: Accelerate transformation from a traditional contractor to a comprehensive construction engineering service provider and municipal service provider[228](index=228&type=chunk) - Operational Management: Promote centralized procurement to reduce costs and increase efficiency[228](index=228&type=chunk) - Talent Cultivation: Steadfastly promote the rejuvenation of cadres and build a scientific talent pipeline[38](index=38&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) [Operating Performance Analysis](index=16&type=section&id=Operating%20Performance%20Analysis) Total revenue declined to **RMB 14.949 billion** in H1 2023 due to building construction, while gross margin slightly improved to **5.2%**, and net profit fell to **RMB 111 million** Operating Performance by Business Segment (billion yuan) | Business Segment | 2023 H1 Revenue | 2023 H1 Gross Margin | 2022 H1 Revenue | 2022 H1 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Building Construction | 9.430 | 4.7% | 11.318 | 4.5% | | Infrastructure Construction | 4.109 | 6.4% | 3.543 | 6.1% | | Specialized and Other Construction | 1.163 | 4.6% | 1.205 | 5.3% | | **Total** | **14.702** | **5.2%** | **16.066** | **4.9%** | - Building construction business revenue decreased by **RMB 1.888 billion**, primarily due to the prolonged downturn in the real estate market[231](index=231&type=chunk) - Infrastructure construction business revenue increased by **RMB 566 million**, mainly due to several new large-scale infrastructure projects during the period[67](index=67&type=chunk) - Investment income shifted from **RMB 25.1 million** in the prior period to an investment loss of **RMB 8.4 million**, primarily due to reduced dividends from investee companies[213](index=213&type=chunk) [Expense Analysis](index=17&type=section&id=Expense%20Analysis) R&D expenses significantly increased to **RMB 69 million**, credit impairment losses rose by **RMB 53 million**, while asset impairment losses reversed by **RMB 9.7 million** - R&D expenses totaled **RMB 69 million**, a year-on-year increase of **RMB 47 million**, primarily due to new construction technology R&D projects[212](index=212&type=chunk) - Credit impairment losses amounted to **RMB 87 million**, a year-on-year increase of **RMB 53 million**, mainly due to the aging of certain accounts receivable[234](index=234&type=chunk) - Asset impairment losses reversed by **RMB 9.7 million**, compared to a loss of **RMB 135 million** in the prior period, primarily due to fewer new defaulting customers[235](index=235&type=chunk) [Balance Sheet Analysis](index=18&type=section&id=Balance%20Sheet%20Analysis) Total assets decreased to **RMB 61.950 billion** as of June 30, 2023, with declines in cash and contract assets, and a significant reduction in accounts payable - Cash and cash equivalents were **RMB 7.926 billion**, a decrease of **RMB 1.197 billion** from the end of 2022, primarily due to net cash outflow from operating activities[45](index=45&type=chunk) - Net contract assets were **RMB 38.937 billion**, a decrease of approximately **RMB 3.98 billion** from the end of 2022, mainly due to lower revenue during the reporting period[218](index=218&type=chunk) - Accounts payable amounted to **RMB 30.585 billion**, a decrease of **RMB 6.002 billion** from the end of 2022, primarily due to reduced project volume and increased cash payments to suppliers[76](index=76&type=chunk) - Interest-bearing borrowings were approximately **RMB 6.291 billion**, an increase from **RMB 5.989 billion** at the end of 2022[75](index=75&type=chunk) [Key Financial Ratios](index=20&type=section&id=Key%20Financial%20Ratios) Current and quick ratios remained at **1.0x**, while the debt-to-capital ratio increased to **100.3%**, and profitability ratios declined as of June 30, 2023 Key Financial Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Ratio (x) | 1.0 | 1.0 | | Quick Ratio (x) | 1.0 | 1.0 | | Debt-to-Capital Ratio | 100.3% | 97.1% | | Return on Assets (Non-annualized) | 0.2% | 0.5% | | Return on Equity (Non-annualized) | 1.8% | 5.2% | [Other Information](index=21&type=section&id=Other%20Information) [Dividend Policy](index=21&type=section&id=Dividend%20Policy) The Board does not recommend an interim dividend payment for the six months ended June 30, 2023 - The Board does not recommend the distribution of an interim dividend for 2023[54](index=54&type=chunk)[149](index=149&type=chunk) [Human Resources](index=21&type=section&id=Human%20Resources) The Group's full-time employees decreased to **8,638**, while the company maintains a performance-oriented compensation system and focuses on talent development - As of June 30, 2023, the Group had **8,638** full-time employees, a decrease of **466** from the beginning of the year[53](index=53&type=chunk) - The company established a three-level, four-tier, five-stage employee education and training system, supporting career development through 'one-on-one mentorship' and '358 Talent Development Program' models[53](index=53&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) The company complied with corporate governance codes, amended its Articles of Association, and had its interim results reviewed by the Audit Committee - The company complied with all code provisions of the Corporate Governance Code during the reporting period[224](index=224&type=chunk) - The company's Articles of Association were revised and became effective on **June 26, 2023**, after approval by the annual general meeting of shareholders[111](index=111&type=chunk) - The company's Audit Committee reviewed and confirmed the interim results announcement and unaudited interim financial statements for the six months ended **June 30, 2023**[85](index=85&type=chunk) [Interim Consolidated Financial Statements](index=23&type=section&id=Interim%20Consolidated%20Financial%20Statements) [Interim Consolidated Balance Sheet](index=23&type=section&id=Interim%20Consolidated%20Balance%20Sheet) As of June 30, 2023, total assets were **RMB 61.950 billion**, total liabilities **RMB 55.676 billion**, and total equity **RMB 6.274 billion** Key Balance Sheet Items (thousand yuan) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **61,949,786** | **67,631,850** | | Current Assets | 55,336,332 | 61,125,891 | | Non-current Assets | 6,613,454 | 6,505,959 | | **Total Liabilities** | **55,675,803** | **61,464,375** | | Current Liabilities | 52,908,369 | 58,770,320 | | Non-current Liabilities | 2,767,434 | 2,694,055 | | **Total Equity** | **6,273,983** | **6,167,475** | [Interim Consolidated Income Statement](index=25&type=section&id=Interim%20Consolidated%20Income%20Statement) Operating revenue reached **RMB 14.949 billion** in H1 2023, resulting in an operating profit of **RMB 157 million** and a net profit of **RMB 111 million** Key Income Statement Items (thousand yuan) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Operating Revenue | 14,948,567 | 16,589,225 | | Operating Costs | 14,145,504 | 15,712,887 | | Operating Profit | 157,071 | 217,090 | | Total Profit | 156,976 | 215,737 | | **Net Profit** | **111,191** | **154,111** | | Net Profit Attributable to Parent Company Shareholders | 116,796 | 159,234 | | Basic EPS (yuan) | 0.07 | 0.09 | [Notes to the Financial Statements](index=27&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes detail key financial items, including revenue sources, aging of receivables and payables, and income tax accrual at a **25%** rate H1 2023 Revenue Breakdown by Product Type (thousand yuan) | Main Product Type | Revenue | | :--- | :--- | | Building Construction Engineering | 9,430,063 | | Infrastructure Construction Engineering | 4,109,392 | | Specialized and Other Construction Engineering | 1,162,646 | | Goods Sales and Other | 215,423 | | Sewage and Reclaimed Water Treatment | 19,595 | | **Total** | **14,937,119** | - Accounts receivable credit terms are typically **1 to 3 months**, non-interest bearing, with approximately **66%** of receivables due within **1 year** as of June 30, 2023[92](index=92&type=chunk)[162](index=162&type=chunk) - Accounts payable are non-interest bearing and typically settled within agreed terms, with approximately **63%** due within **1 year** as of June 30, 2023[99](index=99&type=chunk)[120](index=120&type=chunk)

Financial Performance - In 2022, the company achieved a revenue of RMB 40.006 billion, a decrease of 16% compared to 2021[24] - The net profit for 2022 was RMB 315 million, recovering from a net loss of RMB 358 million in 2021[24] - Earnings per share for 2022 were RMB 0.19, compared to a loss per share of RMB 0.20 in 2021[24] - The total new contract value in 2022 was RMB 43.732 billion, down from RMB 48.183 billion in 2021[28] - The uncompleted contract value as of the end of 2022 was RMB 69.722 billion, compared to RMB 73.274 billion in the previous year[39] - The asset-liability ratio has shown a steady decline, indicating improved financial stability[69] - The company achieved a net profit of RMB 315 million for the year, with a steady increase in profit margin[69] Contract and Project Details - The company signed contracts for housing construction projects amounting to RMB 28.295 billion, accounting for 64.70% of total contracts[28] - Infrastructure construction contracts totaled RMB 11.693 billion, representing 26.74% of total contracts[28] - The new contract value from the housing construction business was RMB 28.295 billion, a decrease of 7.5% from RMB 30.664 billion in the previous year[30] - The new contract value from the infrastructure construction business in 2022 was RMB 11.693 billion, a decrease from RMB 12.595 billion in 2021[44] - The new contract value from the professional and other construction engineering business was RMB 3.744 billion, down 23.8% from RMB 4.924 billion in 2021[46] - The municipal infrastructure construction projects contributed RMB 10.554 billion, representing 90.26% of the new contracts in the infrastructure sector[45] - The company signed 583 new projects with a total contract amount of RMB 43.732 billion, maintaining a stable overall scale[64] Social Responsibility and Community Engagement - The company contributed RMB 1.102 billion in taxes and provided over 150,000 job positions to the community[18] - The company actively pursued social responsibility, donating over RMB 10 million to society[18] Innovation and Technology - The company received 207 new patents, including 7 invention patents in 2022[6] - The company is focused on expanding its capabilities in electromechanical installation and steel structure construction, which are key areas for future growth[33] - The company has a focus on technological innovation, as seen in the "Annual Production of 100,000 Pieces of 4-6 Inch Silicon Carbide Monocrystalline Substrate Standard Factory" project with a contract amount of RMB 156 million[59] Corporate Governance - The board of directors has reviewed the company's annual performance and financial statements for the year ended December 31, 2022, prepared in accordance with Chinese accounting standards[72] - The company has maintained compliance with corporate governance codes and established a governance system covering various aspects, including board composition and communication with shareholders[91] - The company has not experienced any changes in auditors over the past three years, maintaining the same auditing firm for its financial reports[74] - The company has established a nomination committee to propose candidates for directors and senior management positions[129] - The company has adopted a corporate governance policy that outlines the powers and responsibilities of the board of directors[111] - The company has established policies to ensure that potential successors meet the existing diversity criteria of the board[160] Risk Management and Internal Control - The company is committed to risk management and structural adjustments to respond to economic cycles effectively[70] - The company has a risk management and internal control evaluation plan that is monitored and assessed by the board[139] - The board confirmed the effectiveness of the risk management and internal control systems, which were reviewed at least once a year[194] - The company established a comprehensive internal control and risk management system to enhance operational management and risk prevention capabilities[195] - A comprehensive risk assessment and internal control evaluation were conducted in 2022, covering the headquarters and its subsidiaries[196] Shareholder Engagement - Shareholders holding 10% or more of the company's shares have the right to request the board to convene an extraordinary general meeting[162] - Shareholders can propose agenda items for the annual general meeting if they hold 3% or more of the company's shares[167] - The company is committed to maintaining transparency and timely communication with shareholders regarding significant developments[177] - The company’s shareholder communication policy has been reviewed and deemed effective in protecting investor interests[177]

Financial Performance - The company's total revenue in 2022 decreased by approximately RMB 7.822 billion to RMB 40.006 billion, primarily due to a decline in revenue from the construction contracting segment by RMB 7.871 billion[6]. - The company's net profit for 2022 was RMB 315 million, an increase of approximately RMB 674 million compared to the previous year[14]. - The company reported operating profit of RMB 439.90 million in 2022, compared to an operating loss of RMB 489.81 million in 2021[44]. - The net profit for 2022 was RMB 315.44 million, recovering from a net loss of RMB 358.17 million in 2021[51]. - The total revenue for 2022 was RMB 40.006 billion, a decrease of 16.4% from RMB 47.828 billion in 2021[87]. - The main business income for 2022 was RMB 39.135 billion, down from RMB 47.006 billion in 2021, representing a decline of 16.4%[87]. - The total comprehensive income attributable to the parent company’s shareholders for 2022 was RMB 301,109 thousand, compared to a loss of RMB 306,487 thousand in 2021[80]. - The company reported a total profit of RMB 428.881 million for 2022, a recovery from a loss of RMB 495.297 million in 2021[110]. Revenue Breakdown - The new contracts signed in the infrastructure construction business amounted to RMB 11.693 billion in 2022, down from RMB 12.595 billion in the previous year[21]. - The new contracts in the professional and other construction contracting business totaled RMB 3.744 billion in 2022, a decrease from RMB 4.924 billion in 2021[24]. - The total new contracts signed in 2022 amounted to RMB 43.732 billion, a decrease from RMB 48.183 billion in 2021[34]. - New contracts in the housing construction segment totaled RMB 28.295 billion, down from RMB 30.664 billion in the previous year[36]. - Revenue from the housing construction business fell by RMB 4.279 billion, attributed to the completion of major projects and increased fixed costs due to pandemic-related work stoppages, resulting in a decrease in gross margin[28]. - Infrastructure construction revenue decreased by RMB 1.979 billion, with the completion of high-margin projects contributing to the decline in both revenue and gross margin[30]. Expenses and Costs - In 2022, the company's R&D expenses amounted to RMB 150 million, an increase of RMB 7.4 million compared to 2021, reflecting a higher investment in R&D[1]. - The company's management expenses for 2022 were RMB 571 million, an increase of RMB 35 million compared to 2021, indicating stable operational costs[8]. - The company's income tax expense for 2022 was RMB 113 million, an increase of RMB 251 million compared to 2021, primarily due to the generation of net profit[13]. - The total operating costs for 2022 were RMB 39.094 billion, down from RMB 45.955 billion in 2021, reflecting a decrease of 14.9%[92]. - The income tax expense for 2022 was RMB 155.767 million, compared to RMB 378.888 million in 2021, indicating a significant reduction[110]. Assets and Liabilities - The company's cash and cash equivalents as of December 31, 2022, were approximately RMB 8.488 billion, compared to RMB 8.307 billion at the end of 2021[15]. - The company's long-term equity investments as of December 31, 2022, were RMB 516 million, a decrease of RMB 6 million compared to the end of 2021[18]. - The company's total assets as of December 31, 2022, were RMB 67.632 billion, compared to RMB 66.947 billion at the end of 2021[41]. - Total liabilities as of December 31, 2022, amounted to RMB 61.46 billion, slightly up from RMB 61.07 billion in 2021[52]. - Current liabilities totaled RMB 58.77 billion, down from RMB 59.33 billion in the previous year[52]. - The accounts payable balance as of December 31, 2022, was RMB 36.587 billion, a decrease of RMB 1.35 billion or 4% compared to the end of 2021[120]. - The capital debt ratio as of December 31, 2022, was 97.1%, up from 93.3% in 2021[122]. - The group's interest-bearing borrowings amounted to approximately RMB 5.989 billion, an increase from RMB 5.479 billion in 2021[119]. Future Outlook and Strategy - The company plans to continue focusing on market expansion and new product development in the upcoming fiscal year[51]. - The company aims to focus on green construction and smart building technologies, aligning with industry trends and exploring new economic growth points[146]. - The company plans to continue expanding its market presence, particularly in the Beijing-Tianjin-Hebei region, leveraging its strong reputation and management capabilities[133]. Corporate Governance - The board has recommended not to distribute a final dividend for the year ended December 31, 2022[148]. - The company has appointed Ernst & Young Hua Ming as the auditor for the annual financial report for the year ending December 31, 2022[150]. - The annual performance announcement will be published on the Hong Kong Stock Exchange and the company's website[151]. - The company is committed to maintaining high corporate governance standards to meet business needs and shareholder requirements[153]. - The company has adopted the standards for directors and supervisors conducting securities transactions as a code of conduct[154].

Financial Performance - As of June 30, 2022, the revenue was RMB 16.589 billion, a decrease of 16.9% compared to the same period in 2021[7]. - As of June 30, 2022, the net profit was RMB 154 million, down 32.7% year-on-year[7]. - The earnings per share as of June 30, 2022, was RMB 0.09, a decrease of RMB 0.04 compared to 2021[7]. - In 2022, the total revenue was RMB 42.26 billion, a decrease of 19.14% from RMB 52.25 billion in 2021[21]. - The company's net profit for the first half of 2022 was RMB 154 million, a decrease of approximately RMB 75 million compared to the same period last year[78]. - Operating revenue for the period from January 1 to June 30, 2022, was RMB 16,589,225 thousand, a decrease of 16.9% compared to RMB 19,970,407 thousand in the same period of 2021[155]. - Net profit attributable to shareholders of the parent company for the same period was RMB 159,234 thousand, down 32.8% from RMB 236,829 thousand in the prior year[158]. - The total profit for the period was RMB 215,737 thousand, a decline of 23.5% compared to RMB 282,080 thousand in the previous year[155]. - The company reported a net profit margin of 0.94% for the first half of 2022, down from 1.15% in the same period of 2021[158]. Contract and Project Details - The new contract value for the first half of 2022 was RMB 21.229 billion, a decrease of 3.1% from RMB 21.908 billion in the same period last year[11]. - The proportion of new contracts from housing construction was 71.59% in 2022, up from 67.81% in 2021[14]. - The new contract value from infrastructure construction was RMB 4.226 billion in the first half of 2022, down from RMB 5.225 billion in the same period last year[19]. - The new contract value from housing construction was RMB 15.197 billion, an increase from RMB 14.855 billion in the previous year[15]. - The proportion of new contracts from public building projects increased to 57.23% in 2022, compared to 30.28% in 2021[16]. - The company primarily generates revenue from construction contracting services, including housing and infrastructure projects[10]. - The company is a leading non-state-owned construction group in China, focusing on various construction projects[10]. - The largest new contract in residential construction was for the Longtun New City project, valued at RMB 9.54 billion, located in Hebei Province[24]. - The total contract amount for public buildings included RMB 19.43 billion for the China Academy of Chinese Medical Sciences Hospital[27]. - The total contract amount for municipal infrastructure construction was RMB 7.25 billion for the Baoding City River System Comprehensive Management project[29]. Research and Development - The company has initiated 167 enterprise-level R&D projects in the first half of 2022, with R&D expenses amounting to RMB 25.46 million for 230 projects in 2021[48]. - Research and development expenses for the first half of 2022 amounted to RMB 22 million, an increase of RMB 8 million compared to the same period in 2021, due to new construction technology R&D projects[71]. - The company has received 93 new patents, including 3 invention patents, and filed 65 new patent applications by the end of June 2022[51]. - The company has been recognized with 22 awards for technological progress in the construction industry in Hebei Province[49]. Financial Position and Cash Flow - As of June 30, 2022, the company's cash and cash equivalents were approximately RMB 7.055 billion, a decrease of RMB 1.755 billion from the end of 2021, primarily due to cash outflow from operating activities[81]. - The company's operating revenue for the six months ended June 30, 2022, decreased by approximately RMB 3.381 billion to RMB 16.589 billion, primarily due to a decline in construction contracting business by RMB 3.525 billion[64]. - The housing construction business contributed RMB 11.318 billion in revenue, down RMB 1.951 billion compared to the same period last year, mainly due to the completion of several large projects[66]. - The infrastructure construction business revenue decreased by RMB 1.220 billion year-on-year, attributed to the completion of certain projects[68]. - Cash inflow from operating activities decreased to RMB 26,265,200 thousand, down 11% from RMB 29,757,767 thousand in the same period last year[166]. - Cash outflow from operating activities decreased to RMB 28,199,740 thousand, down 11% from RMB 31,628,734 thousand in the same period last year[166]. - Net cash flow from operating activities was negative at RMB (1,934,540) thousand, compared to RMB (1,870,967) thousand in the same period last year[166]. - Cash inflow from investment activities decreased significantly to RMB 13,690 thousand, down 54% from RMB 29,906 thousand in the same period last year[169]. - Cash inflow from financing activities was RMB 1,717,162 thousand, down 36% from RMB 2,671,568 thousand in the same period last year[169]. Shareholder Information - The total issued share capital of the company as of June 30, 2022, is RMB 1,761,383,500, consisting of 1,761,383,500 shares[128]. - The company did not declare a final dividend for the year ended December 31, 2021, to ensure stable operations and long-term benefits for shareholders[123]. - The company did not recommend an interim dividend for the six months ended June 30, 2022[124]. - As of June 30, 2022, Mr. Li Baoyuan directly held 1,300,000,000 shares, representing 73.80% of the total shares in the company[131]. - Mr. Li Baoyuan is viewed as having an interest in 1,300,000,000 shares through Ganbao Investment[132]. - Ganbao Investment directly held 5.54% of the company's shares as of June 30, 2022[132]. - A total of 146 individuals collectively held 60.39% of Zhongru Investment's shares and agreed to follow Ganbao Investment's decisions[137]. Asset and Liability Overview - As of June 30, 2022, the total assets amounted to RMB 62,716,628 thousand, a decrease from RMB 66,947,253 thousand as of December 31, 2021, representing a decline of approximately 6.5%[150][153]. - The total liabilities were RMB 56,698,819 thousand as of June 30, 2022, down from RMB 61,074,661 thousand at the end of 2021, indicating a reduction of about 7.3%[153]. - The company's contract assets decreased to RMB 37,526,593 thousand from RMB 39,658,331 thousand, a decline of about 5.4%[150]. - The total current liabilities decreased to RMB 54,271,037 thousand from RMB 59,330,829 thousand, representing a reduction of approximately 8.5%[153]. - The company's long-term borrowings increased significantly to RMB 2,420,373 thousand from RMB 1,729,252 thousand, an increase of about 40%[153]. Corporate Governance and Compliance - The financial statements are prepared in accordance with the Ministry of Finance's accounting standards and are consistent with the previous year's financial statements[192][195]. - The company’s subsidiary Hebei Zhongbao New Material Manufacturing Co., Ltd. was deregistered during the reporting period, but the consolidation scope remains consistent with the previous year[196]. - The company has no arrangements for directors or their family members to benefit from purchasing shares or debt securities[140].

Financial Performance - In 2021, Hebei Construction Group achieved operating revenue of RMB 47.828 billion, representing a year-on-year growth of 19%[5] - The company recorded a net loss of RMB 358 million due to increased impairment provisions totaling RMB 1.92 billion, primarily related to individual losses from certain real estate developers[5] - The net loss for 2021 was RMB 0.358 billion, a decrease of 148% compared to 2020[15] - The company's revenue for 2021 increased by approximately RMB 7.678 billion to RMB 47.828 billion, primarily due to a RMB 7.502 billion increase in revenue from the construction engineering contracting segment[78] - Management expenses for 2021 were RMB 536 million, a slight increase of RMB 35 million from 2020, indicating stability[83] - Research and development expenses decreased to RMB 76 million in 2021, down RMB 18 million from 2020, due to the completion of previous projects[84] - Credit impairment losses rose to RMB 623 million in 2021, an increase of RMB 679 million from 2020, attributed to deteriorating credit conditions of certain real estate clients[85] - Cash and cash equivalents as of December 31, 2021, were approximately RMB 8.810 billion, an increase of RMB 357 million from the end of 2020[93] - The net value of accounts receivable as of December 31, 2021, was RMB 7.740 billion, an increase of approximately RMB 2.313 billion from the end of 2020[98] - Other receivables amounted to RMB 2.618 billion as of December 31, 2021, reflecting a 7% increase from the previous year[101] - As of December 31, 2021, the net value of contract assets was RMB 42.163 billion, an increase of approximately RMB 1.64 billion compared to the end of 2020[102] - As of December 31, 2021, contract liabilities amounted to RMB 6.007 billion, a decrease of approximately RMB 85.9 million compared to the end of 2020[102] - The balance of accounts payable as of December 31, 2021, was RMB 37.937 billion, an increase of RMB 2.911 billion, representing a growth rate of 8% compared to the end of 2020[105] - The group's bank borrowings as of December 31, 2021, were approximately RMB 5.479 billion, an increase from RMB 5.186 billion at the end of 2020[104] - Capital expenditures for 2021 were approximately RMB 254 million, a decrease of RMB 443 million compared to 2020[107] - The current ratio as of December 31, 2021, was 1.0, down from 1.1 at the end of 2020[109] - The debt-to-equity ratio was 93.3% as of December 31, 2021, compared to 80.5% at the end of 2020[109] - The return on assets was -0.6% for 2021, down from 1.2% in 2020[109] Contracts and Projects - The new contract amount signed in 2021 was RMB 48.183 billion, maintaining stability compared to the previous year while optimizing market structure with a significant reduction in real estate project proportion[5] - The total uncompleted contract amount as of 2021 was RMB 73.274 billion, down from RMB 81.705 billion in 2020[19] - In the housing construction sector, the new contract amount in 2021 was RMB 30.664 billion, a decrease of 23% from RMB 40.127 billion in 2020[22] - The infrastructure construction sector saw a new contract amount of RMB 12.595 billion in 2021, a slight decrease from RMB 13.011 billion in 2020[24] - The professional and other construction engineering sector's new contract amount was RMB 4.924 billion in 2021, an increase of 42% from RMB 3.483 billion in 2020[28] - The housing construction business accounted for 63.64% of the total new contracts signed in 2021[20] - The municipal infrastructure construction projects represented 62.25% of the new contracts in the infrastructure sector in 2021[27] - The company secured new contracts totaling RMB 14.5 billion for the Pingfangxiang Huangqu New Village Phase IV housing project in Beijing[31] - The Jinan Tianqiao District North Lake Core Area construction project in Shandong has a contract value of RMB 10.78 billion[31] - The Zhengzhou Zhongyuan Country Garden Phase II project has a contract amount of RMB 4.49 billion[31] - The company is involved in the construction of the Hebei Medical University Second Hospital with a contract value of RMB 7.68 billion[31] - The company has a contract for the construction of the Hohhot Second Hospital relocation project valued at RMB 7.11 billion[31] - The company is engaged in the construction of the Shenzhou Cultural Media Center in Zhejiang with a contract amount of RMB 5.64 billion[31] - The company has secured a contract worth RMB 4.38 billion for the Minfeng County Public Railway Logistics Park project in Xinjiang[34] - The company is working on the Beijing New Airport Education and Research Base project with a contract value of RMB 7.17 billion[40] - The company has ongoing projects including the Yutian County Hospital relocation project valued at RMB 6.73 billion in Hebei[40] - The company is involved in the construction of the Knowledge City Medical City project in Guangdong with a contract amount of RMB 12.60 billion[40] - The total contract amount for the project in Beijing's Fangshan District is 4.58 billion RMB[45] - The total contract amount for the emergency material storage and cold chain logistics project in Shandong Province is 3.00 billion RMB[47] - The total contract amount for the construction of the food reserve warehouse in Hangzhou is 3.56 billion RMB[49] - The total contract amount for the municipal infrastructure project in Baoding is 7.40 billion RMB[50] Innovation and Technology - The company applied for 232 new patents and was granted 253 patents in 2021, including 9 invention patents[9] - The company completed 11 standards and regulations in 2021, and received 20 provincial-level construction methods[60] - The company was awarded 232 new national patents in 2021, including 37 invention patents[60] - The company aims to enhance its capabilities in ecological restoration, environmental improvement, and pollution control, aligning with national policies and carbon neutrality goals[75] - The company will continue to implement Building Information Modeling (BIM) technology training and promote its application in complex construction projects[75] - The company has established a quality technology system and implements a three-level management model for technology innovation management[62] - The company aims to achieve high-quality development by focusing on the construction of a quality life city in Baoding, leveraging its unique advantages and opportunities[72] - In 2021, the company was approved for 1 project under the Ministry of Housing and Urban-Rural Development's scientific and technological plan, 16 projects under Hebei Province's construction technology research plan, and 31 projects under the 27th batch of new technology application demonstration projects in Hebei Province[63] - The company has a total of 314 ongoing research projects and 93 various demonstration projects, focusing on high-tech content and significant promotion value[63] Awards and Recognition - Hebei Construction Group was awarded the "Advanced Collective in Poverty Alleviation" by the Hebei Provincial Committee and Government for its outstanding performance in poverty alleviation efforts[9] - The company has created 25 projects that won the Luban Award and participated in 16 Luban Award projects[56] - In 2021, the company received 23 awards for technological progress from the Hebei construction system[59] - The company has received 2 National Quality Engineering Awards and 134 provincial-level quality engineering awards in 2021[65][67] Employee and Management - The total number of employees exceeded 10,000, with approximately 1,100 new hires, including over 280 senior engineers and 410 intermediate engineers[5] - As of December 31, 2021, the group had 9,064 full-time employees, an increase from 8,773 employees at the end of 2020[119] - The company's employee situation is detailed in pages 169 to 184 of the report, highlighting the importance of employees for sustainable development[162] - No changes in the positions of directors, supervisors, and senior management personnel during the reporting period[183] - The remuneration of directors and supervisors includes salary, retirement plan contributions, discretionary bonuses, housing, and other allowances[188] - The biographies of directors, supervisors, and senior management personnel are detailed in the report[184] - The service contracts for directors and supervisors are effective from the date of appointment until the end of the current board term[186] Compliance and Governance - The company has implemented internal controls to ensure compliance with relevant laws and regulations[139] - The company’s compliance with major laws and regulations includes adherence to labor laws and environmental protection laws[138] - The company’s board believes it has complied with relevant laws and regulations in significant aspects[139] - The company’s annual report provides detailed insights into its environmental, social, and governance performance[135] - The company is subject to a 10% withholding tax on dividends paid to foreign non-resident corporate shareholders[148] - The company’s operations are primarily conducted within China, adhering to local laws and regulations[136] Customer and Supplier Relations - The top five customers accounted for approximately 5% of the total revenue for the year ended December 31, 2021[156] - The top five suppliers accounted for approximately 15% of the cost of sales for the year ended December 31, 2021[157] - The company has established long-term stable relationships with over 600 clients, many of whom have collaborated with the company for more than 30 years[160] - The company has maintained good cooperation with major customers and suppliers through various communication channels, including phone, email, and in-person meetings[161] - The company’s construction engineering contracting clients include universities, hospitals, civil aviation departments, and large real estate companies in China[160] Dividend Policy - The company proposed a final dividend of RMB 0.14 per share for the year ended December 31, 2021, which was distributed to shareholders on July 16, 2021[143] - The board recommended not to distribute a final dividend for the year ended December 31, 2021[144] - The company’s dividend policy allows the board to propose dividend distributions based on financial performance and cash flow considerations[147]