Jilin Province Chuncheng Heating Company Limited * 吉 林 省 春 城 熱 力 股 份 有 限 公 司 〔 於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司 〕 股份代號：1853 (1) 中期報告 -2 n * 篷 供 晨 別 目 錄 2 公司資料 4 中期財務概要 5 管理層討論與分析 14 企業管治報告 17 其他資料 20 合併資產負債表 23 合併利潤表 25 合併現金流量表 27 合併股東權益變動表 29 財務報表附註 59 釋義 公司資料 | --- | --- | --- | |-------------------------|----------------------------------|---------------------| | | | | | 公司信息 | | 監事 | | 中文名稱： | 吉林省春城熱力股份有限公司 | 仇建華先生 （主席） | | 英文名稱： | Jilin Province Chuncheng Heating | 張維女士 | | | Company Limited* | 李曉 ...

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 906.63 million, an increase of 0.92% compared to the same period in 2023[1]. - Profit before tax for the same period was RMB 200.62 million, representing a growth of 14.17% year-over-year[1]. - Net profit attributable to equity holders for the six months ended June 30, 2024, was RMB 148.14 million, an increase of 18.59% compared to the same period in 2023[1]. - Earnings per share for the six months ended June 30, 2024, was RMB 0.32, an increase of RMB 0.05 compared to the same period in 2023[1]. - Operating profit for the six months ended June 30, 2024, reached RMB 200.68 million, compared to RMB 175.72 million in 2023, indicating an increase of approximately 14.2%[6]. - Net profit for the six months ended June 30, 2024, was RMB 148.14 million, up from RMB 124.92 million in 2023, reflecting a growth of around 18.5%[7]. - Basic and diluted earnings per share for the six months ended June 30, 2024, were both RMB 0.32, compared to RMB 0.27 in 2023, marking an increase of approximately 18.5%[8]. - The company's total costs for the first half of 2024 were RMB 686,590,830.07, compared to RMB 672,736,557.40 in the same period of 2023, reflecting an increase of about 2.7%[13]. - The total income tax expense for the first half of 2024 was RMB 52,475,162.44, compared to RMB 50,787,451.54 in the first half of 2023, reflecting an increase of about 3.3%[19]. - Profit for the period for the six months ended June 30, 2024, was RMB 148.14 million, an increase of 18.59% from RMB 124.92 million in the same period of 2023, driven by reduced credit impairment losses and increased heating customer base[50]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 2,047.73 million, down from RMB 3,006.59 million as of December 31, 2023[3]. - Total current liabilities decreased to RMB 794.33 million from RMB 1,901.71 million as of December 31, 2023[4]. - Total non-current liabilities were RMB 115.41 million, slightly increased from RMB 115.04 million as of December 31, 2023[5]. - The company's equity attributable to owners increased to RMB 1,137.99 million from RMB 989.85 million as of December 31, 2023[5]. - The company's total assets as of June 30, 2024, amounted to approximately RMB 2.05 billion, while total liabilities were about RMB 909.74 million[12]. - Cash and cash equivalents as of June 30, 2024, were RMB 553.83 million, a decrease of 50.15% from RMB 1,111.04 million as of December 31, 2023, primarily due to cash flow timing differences[52]. - The group had interest-bearing bank and other borrowings totaling approximately RMB 35 million as of June 30, 2024, with a fixed interest rate of 3.9% per annum[54]. Operational Efficiency and Costs - The company experienced a significant reduction in financial expenses, with interest expenses decreasing from RMB 5.27 million in 2023 to RMB 1.72 million in 2024[6]. - The company's total construction and maintenance costs decreased from RMB 9,329,477.97 in the first half of 2023 to RMB 1,895,403.15 in the first half of 2024, a significant decline of approximately 79.7%[13]. - The gross profit for the six months ended June 30, 2024, was RMB 220.04 million, a decrease of 2.47% from RMB 225.62 million in the same period of 2023, attributed to rising labor and utility costs[46]. - Administrative expenses for the six months ended June 30, 2024, were RMB 43.23 million, a 1.77% increase from RMB 42.47 million in the same period of 2023, due to increased depreciation and personnel costs[47]. - Financial costs for the six months ended June 30, 2024, were RMB 1.72 million, a significant decrease of 67.35% from RMB 5.27 million in the same period of 2023, due to a reduction in total loans[48]. Heating Business Performance - The company is focused on expanding its heating services and enhancing its operational efficiency to drive future growth[9]. - Heating business revenue for the six months ended June 30, 2024, was RMB 900.32 million, an increase of RMB 20.98 million or 2.39% from RMB 879.34 million in the same period of 2023[29]. - The gross profit from the heating segment for the six months ended June 30, 2024, was approximately RMB 220.04 million, compared to RMB 225.62 million in 2023, showing a slight decrease[12]. - The number of heating customers served by the group was 552,448, up by 19,310 customers or 3.62% from 533,138 in the same period last year[29]. - As of June 30, 2024, the heating area of the group reached 67.437 million square meters, an increase of 2.301 million square meters or 3.53% compared to the same period in 2023[29]. Research and Development - Research and development expenses for the six months ended June 30, 2024, were RMB 804,993.79, up from RMB 758,975.06 in 2023, reflecting an increase of approximately 6.1%[6]. - The group developed an "Equipment Ledger Management System," with 90% of the development completed, expected to be launched in the second half of 2024[38]. - The group obtained one utility model patent and one invention patent, along with three software copyright certificates during the reporting period[38]. Corporate Governance and Compliance - The company has maintained high standards of corporate governance and has complied with relevant regulations during the reporting period[61]. - The audit committee has reviewed the interim results for the six months ended June 30, 2024, and agreed with the accounting treatment adopted by the company[62]. Future Plans and Strategies - The company plans to enhance heating quality and reduce energy consumption in the second half of 2024, focusing on low-emission boiler upgrades and smart heating system improvements[58]. - The company will continue to optimize heat resource allocation to address heating shortages in certain areas[58]. - The company is focused on innovation and safety in its development strategy to drive business growth[28].

Leasing and Related Party Transactions - The estimated value of the right-of-use assets under the leasing agreements is approximately RMB 7,945,000, with applicable percentage calculations exceeding 0.1% but below 5%[11] - The company has a framework agreement with its controlling shareholder, Chun Cheng Investment, for heat supply from September 15, 2021, to December 31, 2023, which includes independent contracts for heat purchase orders[16] - The company has entered into multiple leasing agreements with Chun Cheng Investment, with annual rents ranging from RMB 76,650 to RMB 1,000,000, covering various terms until 2025[20] - Chun Cheng Investment holds approximately 69.75% of the company's equity, making it the controlling shareholder[13] - The company has established a heat procurement framework agreement with Chun Cheng Investment from November 1, 2021, to December 31, 2023[17] - The company has confirmed that there are no breaches of non-competition agreements by the controlling shareholder[23] - Chun Cheng Investment holds approximately 69.75% of the company's total share capital, making it a related party in the transaction[57] Corporate Governance and Compliance - The company is committed to maintaining compliance with the Corporate Governance Code and has established internal management systems to ensure regulatory adherence[54] - Independent non-executive directors have reviewed related party transactions and confirmed compliance with pricing policies and agreements[23] - The company has maintained a high level of corporate governance standards, adhering to the principles outlined in the corporate governance code[65] - The board of directors consists of 8 members, including 4 executive directors, 1 non-executive director, and 3 independent non-executive directors[66] - All independent non-executive directors confirmed their independence and compliance with the independence guidelines as of December 31, 2023[70] - The company has implemented an anti-corruption policy to ensure compliance with listing rules and regulatory requirements[66] - The supervisory board participated in 4 training sessions during the reporting period to enhance their oversight capabilities[63] - The company has established a robust internal control and risk management system to monitor its operations and financial performance[73] - The company has confirmed the effectiveness of its risk management and internal control systems to the board and audit committee for the year ending December 31, 2023[148] Financial Performance and Outlook - The company reported a significant increase in revenue for the fiscal year ending December 31, 2023, reflecting a year-over-year growth of 15%[180] - User data showed a 20% increase in active users compared to the previous year, indicating strong customer engagement and retention[180] - The company has set a revenue guidance for the next fiscal year, projecting a growth rate of 10% to 12%[180] - New product launches are expected to contribute an additional $50 million in revenue over the next year[180] - The company is investing in new technology development, with a budget allocation of $10 million for R&D in the upcoming fiscal year[180] - Market expansion plans include entering two new regional markets, aiming for a 5% market share within the first year of operation[180] - The company is considering strategic acquisitions to enhance its market position, with potential targets identified in the industry[180] - Operational efficiency improvements are projected to reduce costs by 8% over the next year[180] Dividend Policy and Shareholder Communication - The board has approved a dividend policy to distribute no less than 30% of the annual distributable net profit to shareholders, subject to various considerations[102] - The proposed final dividend for the year ending December 31, 2023, is RMB 0.09 per share, totaling approximately RMB 420 million, consistent with the previous year's dividend[107] - The final dividend is subject to approval at the annual general meeting scheduled for May 17, 2024, with payment expected on July 5, 2024[107] - The company emphasizes compliance with tax regulations regarding dividend payments to H-share shareholders[111] - The company is committed to maintaining transparency and accuracy in its dividend distribution process[111] - The company has made efforts to ensure that its board composition reflects diversity in knowledge, skills, and industry backgrounds[117] - The company is committed to enhancing communication with shareholders through various channels, including annual general meetings and regular announcements[131] Risk Management and Internal Controls - The company has established a significant internal reporting system for confidential information and regulatory disclosures[149] - The board of directors is responsible for the preparation of the company's financial statements for the year ending December 31, 2023[54] - The external auditor's responsibilities regarding the financial statements are detailed in the audit report on pages 54 to 58 of the report[54] - The company has implemented a whistleblowing policy allowing employees and business partners to report concerns anonymously[150] - The company has a robust internal control system covering financial, operational, and compliance monitoring[54] - The board has reviewed the effectiveness of its risk management and internal control systems for the year ending December 31, 2023[148] Board Structure and Diversity - The board aims to achieve and maintain diversity in its composition, ensuring a balanced mix of skills and perspectives[117] - The nomination committee aims to improve gender diversity on the board by considering at least one qualified female senior management candidate for board membership[143] - The board has established strict selection criteria for board candidates, considering factors such as integrity, experience in the heating industry, and commitment to the company's interests[143] - The company has confirmed the effectiveness of its risk management and internal control systems to the board and audit committee for the year ending December 31, 2023[148]

Financial Performance - For the year ended December 31, 2023, the group's revenue was RMB 1,694.42 million, an increase of 2.40% compared to the same period in 2022[1]. - The group's profit before tax for the year ended December 31, 2023, was RMB 168.47 million, reflecting a growth of 1.71% year-on-year[1]. - The net profit attributable to equity holders for the year ended December 31, 2023, was RMB 120.96 million, representing a 5.49% increase compared to 2022[1]. - Earnings per share for the year ended December 31, 2023, was RMB 0.26, an increase of RMB 0.01 from the previous year[1]. - The total comprehensive income for 2023 is CNY 119,955,527.33, compared to CNY 114,510,477.46 in 2022, indicating an increase of about 4.0%[44]. - The total revenue for the year 2023 is CNY 168,471,784.48, compared to CNY 165,644,983.42 in 2022, showing an increase of approximately 1.1%[37]. - The group's gross profit for 2023 was RMB 265.89 million, up 15.28% from RMB 230.65 million in 2022[132]. - The group's net profit for 2023 was RMB 120.96 million, reflecting a growth of 5.49% compared to RMB 114.67 million in 2022, mainly due to an increase in heating area leading to higher revenue from heating services[137]. Assets and Liabilities - As of December 31, 2023, total assets amounted to RMB 3,006.59 million, a slight decrease from RMB 3,038.97 million in 2022[14]. - Total liabilities as of December 31, 2023, were RMB 2,016.75 million, down from RMB 2,127.07 million in the previous year[16]. - The company's total assets increased, with equity reaching RMB 989.85 million, up RMB 77.95 million from the previous year[112]. - As of December 31, 2023, the group held cash and cash equivalents of RMB 1,111.04 million, a 7.84% increase from RMB 1,030.24 million at the end of 2022, driven by an increase in cash generated from operating activities[139]. Heating Business - The heating business remains the core operation, with stable growth in overall profitability compared to the previous year[62]. - The company's heating business revenue for the year was RMB 1,570.73 million, with external customer sales contributing RMB 1,570.73 million[51]. - The group's heating business revenue for the year was RMB 1,570.73 million, an increase of RMB 32.31 million or 2.10% from RMB 1,538.42 million in 2022[86]. - The estimated heat purchase quota was 23,380,000 GJ, with actual consumption at 20,694,183 GJ, resulting in a utilization rate of 88.51%[68]. - The number of heating customers increased to 551,558, up by 18,190 customers or 3.41% from 2022[86]. - The group procured a total of 22.96 million gigajoules of heating energy, with 20.69 million gigajoules used for heating production[89]. Costs and Expenses - The company's operating cost for 2023 was RMB 1,428.53 million, a slight increase of 0.31% from RMB 1,424.06 million in 2022[102]. - The gross profit margin for 2023 was 15.69%, up from 13.94% in 2022, reflecting a 12.55% increase due to higher revenue from heating services[108]. - Labor costs for 2023 were RMB 146.36 million, a decrease of 3.76% from RMB 152.08 million in 2022[105]. - The group's maintenance and repair costs amounted to RMB 121.97 million, an increase of 47.88% compared to RMB 82.48 million in 2022, primarily due to an increase in external repair projects[128]. - The company's total other income for 2023 was RMB 30.52 million, a decrease of 12.23% from RMB 34.76 million in 2022, mainly due to reduced interest income[101]. Research and Development - Research and development expenses for the year were RMB 2.32 million, up from RMB 1.97 million in the previous year, indicating increased investment in innovation[8]. - The group obtained 7 utility model patents and 9 software copyrights during the reporting period[75]. - The group is developing an "Equipment Ledger Management System," with 90% of the PC and mobile functionalities completed, expected to launch in 2024[96]. Corporate Governance and Compliance - The group has complied with the corporate governance code and has established an audit committee as per the listing rules[180][185]. - The group will continue to deepen the integration of modern corporate systems and governance structures to improve internal control systems and enhance risk resistance capabilities[179]. - The group is obligated to withhold 10% corporate income tax for non-resident H-share shareholders when distributing dividends for the year ending December 31, 2023[187]. Future Plans and Strategies - The group plans to enhance service quality and expand its market share in the heating business while continuing to invest in smart heating technologies[149]. - The group aims to strengthen safety training and improve overall safety awareness among employees to ensure safe operations[150]. - The group plans to increase investment in environmental technology research and application to comply with national environmental standards[166]. - The company is actively pursuing technological innovation and collaboration to improve energy efficiency and reduce emissions[62]. Shareholder Information - The annual general meeting will be held on May 17, 2024[191]. - H shareholders must submit transfer documents by May 10, 2024, to be eligible to vote[194]. - The company is unaware of any shareholders waiving dividend arrangements for the year ending December 31, 2023[190]. - Shareholders are advised to consult tax advisors regarding tax implications of holding and disposing of H shares[189].

Financial Performance - The net cash flow from operating activities for the six months ended June 30, 2023, was negative RMB 381,497,069.28, an improvement compared to negative RMB 634,581,037.88 for the same period in 2022[23] - Cash received from sales of goods and services was RMB 77,680,224.87, down 37.2% from RMB 123,110,628.67 in the previous year[23] - The company reported a total revenue of 578,842.15 million for the first half of 2023[42] Liabilities and Assets - As of June 30, 2023, the total current liabilities amounted to RMB 1,079,872,118.35, a decrease from RMB 2,007,489,182.40 as of December 31, 2022, indicating a reduction of approximately 46.2%[19] - Total liabilities decreased from RMB 2,127,073,518.69 as of December 31, 2022, to RMB 1,191,539,710.25 as of June 30, 2023, reflecting a reduction of approximately 44%[19] - The company’s long-term liabilities totaled RMB 111,667,591.90 as of June 30, 2023, a decrease from RMB 119,584,336.29 at the end of 2022[19] Cash Flow - The company reported cash outflows from operating activities totaling RMB 491,948,939.82, significantly lower than RMB 817,698,621.59 in the prior year[23] - The company’s cash flow from investment activities was negative RMB 3,986,341.13, worsening from negative RMB 2,585,853.60 in the previous year[23] Tax Incentives - The company is benefiting from tax incentives, including a VAT exemption on heating fees collected from residents, effective from January 1, 2019, to the end of the 2020 heating season[55] - The corporate income tax rate for high-tech enterprises is set at 15%, with the company obtaining high-tech enterprise certification valid for three years from September 10, 2020[59] - For small and micro enterprises, the effective income tax rate is reduced to 2.5% for annual taxable income not exceeding 1 million, applicable from January 1, 2021, to December 31, 2022[62] - The company is subject to a 20% tax rate on taxable income exceeding 1 million but not exceeding 3 million, effective from January 1, 2022, to December 31, 2024[62] - The company has extended the execution period of certain tax incentives until the end of the 2023 heating season[66] - The company is classified under the productive service industry, allowing it to apply a 5% reduction on VAT payable based on deductible input tax[68] Accounts Receivable - As of June 30, 2023, accounts receivable amounted to 69,113,456.57, with specific provisions for expected credit losses detailed[65] - The total accounts receivable as of June 30, 2023, is CNY 101,433,145.62, compared to CNY 587,425,208.07 as of December 31, 2022, indicating a significant decrease[120] - The aging analysis of accounts receivable shows that 1-year or less accounts for RMB 139,864,272.18, representing 60% of total receivables[78] - The company’s bad debt provision ratio is approximately 29.72% based on the aging analysis of receivables[88] - The total expected credit loss provision for accounts receivable is CNY 197,909,715.32, with a provision ratio of 29.35%[102] - The aging analysis shows that accounts receivable under one year amount to CNY 82,393,762.18, with a provision of CNY 3,073,287.32, representing a 3.73% provision ratio[116] - The total accounts receivable as of June 30, 2023, is CNY 129,521,325.25, a decrease from CNY 199,672,999.06 as of December 31, 2022, representing a reduction of approximately 35%[174] - The provision for bad debts for accounts aged over five years is 100%, amounting to CNY 8,106,193.77[120] - The total bad debt provision as of June 30, 2023, is CNY 12,709,364.69, compared to CNY 4,492,775.05 as of December 31, 2022[122] Corporate Governance - The company has not engaged in any significant legal proceedings as of June 30, 2023, indicating a stable legal standing[15] - The company has not issued or granted any convertible securities, options, or warrants during the reporting period, maintaining a conservative capital structure[7] - The company has not reported any prior accounting errors that require retrospective restatement during the reporting period[105] - The company has not sold any investment properties, fixed assets, or intangible assets during the six months ending June 30, 2023[173] - The company has not changed its significant accounting policies or estimates during the reporting period[87] Business Strategy - The company continues to focus on heating supply and network construction as part of its core business strategy[44] - The company anticipates continued growth in its service offerings and market expansion in the coming periods[90] - The company’s revenue primarily comes from heating and transportation services, as well as engineering construction and maintenance[92] Accounting Practices - The company’s financial statements are prepared in accordance with the current accounting standards and relevant regulations[46] - The company adheres to the accounting standards, ensuring that financial statements accurately reflect its financial position and operating results[109] - The company recognizes network construction fees as revenue over a benefit period of 16 years, using the straight-line method[125] - The company’s engineering and maintenance services are recognized based on the progress of performance obligations, using the input method for revenue recognition[96]

Financial Performance - For the six months ended June 30, 2023, the group's other income and other gains net amounted to RMB 19.172 million, an increase of 25.05% compared to RMB 15.3309 million in the same period of 2022[3]. - The group's other gains for the six months ended June 30, 2023, were RMB 9.2239 million, representing a significant increase of 71.90% from RMB 5.3657 million in the same period of 2022, primarily due to increased government subsidies[4]. - The group reported a decrease in bank deposit interest income to RMB 9.8414 million, a slight decline of 0.03% from RMB 9.8446 million in the same period of 2022[4]. Cash Flow - As of June 30, 2023, the group held cash and cash equivalents of RMB 699.605 million, a decrease of 32.09% from RMB 1,030.2361 million as of December 31, 2022[4]. - The group experienced a net cash outflow from operating activities of RMB 381.4971 million during the reporting period[4]. - The group had a net cash inflow from financing activities of RMB 54.3496 million during the reporting period[4]. Financial Costs - The group's financial costs for the six months ended June 30, 2023, were RMB 5.2711 million, a substantial increase of 337.29% compared to RMB 1.2054 million in the same period of 2022, mainly due to an increase in total loans[12]. - The group incurred RMB 236.6142 million in cash payments for goods and labor during the reporting period[4]. Non-Operating Income - The group received RMB 0.1067 million in non-operating income for the six months ended June 30, 2023, a decrease of 11.53% from RMB 0.1206 million in the same period of 2022[4]. Adjustments and Accuracy - The adjustments made in the announcement do not affect the accuracy of other financial data included in the interim results announcement[5].

Financial Performance - Total revenue for the six months ended June 30, 2023, was approximately RMB 898.35 million, a slight increase from RMB 887.54 million in the same period of 2022, representing a growth of 1.0%[12] - Operating profit for the same period increased significantly to approximately RMB 175.72 million, compared to RMB 89.61 million in 2022, marking an increase of 96.5%[12] - Net profit for the six months ended June 30, 2023, was approximately RMB 124.92 million, up from RMB 63.76 million in 2022, reflecting a growth of 96.0%[14] - Basic and diluted earnings per share for the period were both RMB 0.27, compared to RMB 0.14 in the previous year, indicating a 92.9% increase[16] - The company's net profit attributable to equity holders for the six months ended June 30, 2023, was RMB 124.92 million, representing a significant increase of 95.92% from RMB 63.76 million in the same period of 2022[31] Assets and Liabilities - As of June 30, 2023, the total current assets decreased to RMB 1,101,885,383.67 from RMB 1,893,488,552.32 as of December 31, 2022, representing a decline of approximately 42%[4] - The total liabilities decreased to RMB 1,191,539,710.25 from RMB 2,127,073,518.69, indicating a reduction of approximately 44%[10] - The total assets decreased to RMB 2,186,361,885.50 from RMB 3,038,974,956.81, reflecting a decline of about 28%[10] - The company's total equity increased to RMB 994,822,175.25 from RMB 911,901,438.12, representing a growth of about 9%[10] Revenue and Costs - Operating costs decreased to approximately RMB 672.74 million from RMB 760.19 million, resulting in a cost reduction of about 11.5%[12] - The group's operating costs for the six months ended June 30, 2023, were RMB 672.74 million, a decrease of 11.50% from RMB 760.19 million in the same period of 2022[121] - The cost of purchased heat for the six months ended June 30, 2023, was RMB 416.32 million, a decrease of 12.79% from RMB 477.39 million in the same period of 2022, primarily due to lower purchase prices[122] Accounts Receivable - Accounts receivable increased to RMB 163,403,239.36 from RMB 139,825,918.08, showing a growth of about 17%[4] - The accounts receivable as of June 30, 2023, totaled RMB 232.52 million, with a provision for bad debts of RMB 69.11 million, resulting in a net accounts receivable of RMB 163.40 million[42] - The total accounts receivable as of June 30, 2023, was 232.52 million, an increase of 29.72% from 69.11 million on December 31, 2022[43] - The provision for bad debts for accounts receivable was 9.97% as of June 30, 2023, compared to 29.35% on December 31, 2022[43] Research and Development - Research and development expenses rose to approximately RMB 758.98 thousand from RMB 671.07 thousand, an increase of 13.0%[12] - The company has focused on technological innovation and the development of smart heating systems to enhance energy production efficiency and customer service quality[56] - The company plans to invest in intelligent heating research and application, utilizing AI algorithms to enhance energy efficiency and operational effectiveness[162] Market and Future Plans - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service delivery[19] - The company aims to promote high-quality development in the heating industry while aligning with carbon peak and carbon neutrality goals[56] - The company plans to enhance heating quality and reduce energy consumption in the second half of the year, focusing on network pipeline installation and heating facility renovation projects[138] Safety and Management - The company maintained a strong focus on safety management, with no major safety incidents reported during the reporting period[68] - Management expenses for the first half of 2023 amounted to RMB 42.47 million, up from RMB 40.93 million in the same period of 2022, primarily due to labor costs and depreciation[30] Engineering and Projects - The group has completed 32 engineering projects in the first half of 2023, including key projects such as the "Changchun Carbon Neutral Industry Leading Zone"[88] - The company engaged in seven design projects in the first half of the year, including infrastructure upgrades and heating network renovations[67] Awards and Recognition - The company received the "2023 Excellent Application Case in Data Management" award from the Jilin Provincial Digital Economy Development Promotion Association[71] - The "Smart Heating Big Data" system developed in collaboration with universities has entered the final stage and is now in use, recognized as an excellent application case in data management[90] Dividends and Share Issuance - The company did not recommend any interim dividend for the six months ended June 30, 2023, consistent with the previous year[36] - The company plans to publicly issue up to 155.5666 million A-shares, with the proposed listing on the Shenzhen Stock Exchange[173]

Financial Performance - In 2022, the company's total revenue was RMB 1,654.71 million, a slight increase of 0.31% compared to RMB 1,649.60 million in 2021[17]. - The company's operating costs increased by 7.53% to RMB 1,424.06 million in 2022, compared to RMB 1,324.28 million in 2021[21]. - Other income and net other gains for 2022 amounted to RMB 34.76 million, representing a 41.19% increase from RMB 24.62 million in 2021, driven by subsidies and interest income[20]. - The gross profit for 2022 decreased to RMB 230.65 million, a decline of 29.10% compared to RMB 325.32 million in 2021[33]. - The gross margin for 2022 was 13.94%, down from 19.72% in 2021, reflecting a decrease of 5.78%[39]. - The group's net profit for 2022 was RMB 114.67 million, a decrease of 6.59% from RMB 122.76 million in 2021, primarily due to rising coal and heating source prices[42]. - In 2022, the company achieved total operating revenue of RMB 1,654.71 million and a total profit of RMB 165.64 million[145]. - The total assets of the company as of December 31, 2022, amounted to RMB 3,038.97 million, with net assets attributable to shareholders of RMB 911.90 million[145]. Revenue Sources - The construction, maintenance, design, and other services generated revenue of RMB 116.29 million in 2022, down 23.77% from RMB 152.56 million in 2021, primarily due to the completion of the "Three Supplies and One Industry" project and a decrease in large project undertakings due to the pandemic[17][20]. - The engineering maintenance business saw a significant decline, with revenue dropping 39.78% to RMB 26.48 million in 2022 from RMB 43.98 million in 2021[19]. - Revenue from the heating business was RMB 1,538.42 million, up by RMB 41.38 million or 2.76% from RMB 1,497.04 million in 2021[149]. Cost and Expenses - The total operating cost for 2022 was RMB 1,424.06 million, up 7.53% from RMB 1,324.28 million in 2021[30]. - The cost of heat purchase increased by 18.45% to RMB 767.28 million in 2022, compared to RMB 647.79 million in 2021[25]. - Coal costs surged by 73.21% to RMB 62.66 million in 2022, up from RMB 36.18 million in 2021[28]. - Labor costs rose by 5.17% to RMB 152.07 million in 2022, compared to RMB 144.60 million in 2021[28]. - The company's maintenance and repair costs increased by 4.65% to RMB 82.48 million in 2022, from RMB 78.81 million in 2021[28]. - The input tax output cost rose by 14.43% to RMB 52.76 million in 2022, compared to RMB 46.11 million in 2021[29]. - Other costs significantly decreased by 65.40% to RMB 14.49 million in 2022, down from RMB 41.89 million in 2021, due to enhanced cost control[38]. - In 2022, the group's management expenses amounted to RMB 99.23 million, a decrease of 13.69% compared to RMB 114.97 million in 2021, primarily due to effective control of labor costs[42]. Innovation and Development - The company obtained 7 utility model patents and 5 software copyrights in 2022, reflecting its commitment to technological innovation and research[12]. - The company has initiated a smart heating facility renovation project, implementing phase one to enhance energy efficiency and user comfort[12]. - The company has actively explored new technologies and materials in the heating industry through independent research and collaboration with social organizations, aiming to maintain a leading position in smart heating[136]. - The company plans to enhance service quality and levels in construction, maintenance, and design services in 2023[55]. - The company aims to increase the proportion of clean energy heating and improve energy utilization efficiency in response to national policies[54]. Corporate Governance and Compliance - The company has established systems and allocated human resources to ensure ongoing compliance with regulatory requirements[72]. - The company has implemented comprehensive corporate governance measures to ensure management independence and avoid conflicts of interest among directors[125]. - The company has complied with all significant regulations and rules affecting its operations during the reporting period[72]. - The company has not engaged in any significant transactions or arrangements with directors or supervisors that could create conflicts of interest during the reporting period[116]. Shareholder Information - The company proposed a final dividend of RMB 0.09 per share for the year ended December 31, 2022, totaling approximately RMB 42 million, down from RMB 53.67 million in 2021[85]. - The company has not issued any convertible securities, options, warrants, or similar rights during the year ended December 31, 2022[72]. - The company has not pledged any shares by its controlling shareholders to secure debts[79]. - The company has maintained appropriate liability insurance for its directors and senior management, with no permitted indemnities provided as of the report date[77]. - The company has a registered capital of RMB 466.7 million and was listed on the Hong Kong Stock Exchange on October 24, 2019, making it the first heating enterprise to be listed there[136]. Employee Relations - The company has implemented a salary structure that combines basic salary, position salary, and performance-based incentives[50]. - The company is committed to providing a competitive compensation package and various promotion opportunities based on employee performance[189]. - The company has not paid any compensation to directors or supervisors as an incentive for joining the group or as severance pay during any year[112]. - The company is committed to complying with national labor laws and regulations in managing employee relations[50]. Market Position and Strategy - The group continues to focus on heating as its core business, with over 20 years of operational history in Changchun[60]. - The group plans to enhance cost control and internal supervision to improve market adaptability and increase the efficiency of smart heating network systems[45]. - The group will strengthen its core technology development and enhance market competitiveness to achieve high-quality development[55]. - The company intends to further optimize its market share in the heating business through technological innovation and collaboration[173]. Environmental and Safety Standards - The company continues to respond to the national "dual carbon" strategy by enhancing environmental protection measures and exploring clean energy applications[149]. - The company has maintained a clean heating model primarily based on combined heat and power generation to meet the heating needs of its service area[153]. - The company reported no major safety incidents during the year, and environmental indicators met national standards[172].

Financial Performance - For the year ended December 31, 2022, the company's revenue was RMB 1,654.71 million, representing a growth of 0.31% compared to the same period in 2021[2]. - For the same period, the company's profit before tax was RMB 165.64 million, a decrease of 0.86% year-over-year[2]. - The net profit attributable to equity holders was RMB 114.67 million, down 6.59% from the previous year[2]. - Earnings per share for the year were RMB 0.25, a decrease of RMB 0.01 compared to 2021[2]. - The total comprehensive income for the year was RMB 114,510,477.46, down from RMB 121,422,996.65 in the previous year, reflecting a decline of approximately 5.5%[16]. - The company's total revenue for 2022 was RMB 199,672,999.06, compared to RMB 232,178,489.39 in 2021, indicating a decrease of approximately 14%[43]. - The total revenue for 2022 was RMB 1,654,705,152.68, a slight increase from RMB 1,649,598,271.19 in 2021, representing a growth of 0.31%[94]. - The annual profit attributable to owners was RMB 114.67 million in 2022, down 6.59% from RMB 122.76 million in 2021, mainly due to rising coal and heat source prices[159]. Assets and Liabilities - As of December 31, 2022, total current assets amounted to RMB 1,893.49 million, an increase from RMB 1,584.03 million in 2021[4]. - Total current liabilities were RMB 2,007.49 million, compared to RMB 1,821.47 million in the previous year[6]. - Total liabilities amounted to RMB 2,127.07 million as of December 31, 2022[6]. - The company's total equity attributable to shareholders was RMB 911.90 million, up from RMB 848.02 million in 2021[8]. - The company's total assets increased to RMB 3,038,974,956.81 as of December 31, 2022, compared to RMB 2,802,176,394.46 at the end of 2021, representing a growth of about 8.4%[24]. - The company's total liabilities and shareholders' equity as of December 31, 2022, were RMB 1,954,158,726.87, compared to RMB 2,802,176,394.46 in 2021[25][26]. Operational Highlights - The company reported operating profit of RMB 164.52 million for the year[10]. - The revenue from the heating segment for the year was RMB 1,544,773,639.68, compared to RMB 1,503,069,365.91 in 2021, indicating an increase of approximately 2.8%[39]. - The overall profitability of the heating business increased compared to the previous year, despite rising coal and heating source prices[54]. - The company has expanded its heating service area to meet the increased demand, utilizing both purchased and self-generated heating sources[56]. - The heating area increased to approximately 65.21 million square meters, a growth of 5.53% from 61.79 million square meters in 2021, and the number of heating customers rose to 533,368, an increase of 5.02%[104]. - The company completed 135 engineering projects in the year, with 121 projects finished, emphasizing safety management during construction[114]. Costs and Expenses - The operating cost for 2022 was RMB 1,424.06 million, representing a 7.53% increase from RMB 1,324.28 million in 2021[125]. - The gross profit for 2022 was RMB 230.65 million, down 29.10% from RMB 325.32 million in 2021, with a gross margin of 13.94%[131][154]. - The company's purchase cost for heat in 2022 was RMB 767.28 million, an increase of 18.45% from RMB 647.79 million in 2021, primarily due to rising heat source prices[127]. - Labor costs in 2022 amounted to RMB 152.07 million, up 5.17% from RMB 144.60 million in 2021, mainly due to extended heating periods caused by COVID-19[128]. - The group's income tax expense for 2022 was RMB 50.98 million, an increase of 15.00% from RMB 44.33 million in 2021, attributed to an increase in taxable income[158]. Dividends and Shareholder Information - The board proposed a final dividend of RMB 0.09 per share (before tax) for the year ended December 31, 2022[2]. - The proposed final dividend for the year ending December 31, 2022, is RMB 0.09 per share, totaling approximately RMB 42 million, down from RMB 53.67 million in 2021[181]. - The annual general meeting is scheduled for May 19, 2023, where the dividend proposal will be subject to shareholder approval[185]. - The proposed final dividend is expected to be paid on July 7, 2023, pending approval at the annual general meeting[181]. Strategic Initiatives - The company continues to focus on its core heating business, including supply and transmission services, and is actively monitoring performance across its segments[34]. - The company is actively pursuing the digitalization and intelligent development of its heating systems[54]. - The company has developed new technologies, including a mobile app for users and a fuel statistics management system, enhancing operational efficiency[87]. - The company emphasizes the importance of technological innovation to support the development of "smart heating" and improve public welfare[198]. - The company is exploring new energy heating feasibility through research on "coal and biomass" co-firing experiments[117]. Awards and Recognition - The company received the "Best Infrastructure and Public Utilities Company" award at the 2022 Global Investment Trends Forum[90]. - The company received the "Most Investment Value Listed Company" award at the 12th Hong Kong International Financial Forum[121]. Governance and Management Changes - Liu Changchun resigned as chairman and non-executive director effective March 6, 2023, and Sun Huiyong was elected as a non-executive director on March 29, 2023[200]. - The company has been compliant with the Corporate Governance Code during the reporting period[199].

Financial Performance - For the six months ended June 30, 2022, the company's operating revenue was RMB 887.54 million, an increase of 2.56% compared to RMB 843.39 million for the same period in 2021[11]. - The total profit for the same period was RMB 89.71 million, a significant decrease of 47.3% from RMB 170.24 million in 2021[11]. - Net profit for the six months ended June 30, 2022, was RMB 63.76 million, down 49.3% from RMB 125.53 million in the previous year[11]. - Revenue from construction, maintenance, and design services for the first half of 2022 was RMB 22.54 million, a decrease of RMB 12.99 million or 36.56% compared to RMB 35.53 million in the same period of 2021[29]. - The company's heating service revenue was RMB 81,822.62 million, up 3.32% from RMB 79,196.76 million in the previous year[46]. - The gross profit for the six months ended June 30, 2022, was RMB 127.36 million, down 37.97% from RMB 205.31 million in the same period of 2021, primarily due to significant increases in coal prices and extended heating periods mandated by the government[56]. - The total comprehensive income for the period ended June 30, 2022, was RMB 63,762,348.25, a decrease of 49.1% compared to RMB 125,529,999.62 for the same period in 2021[1]. Operational Metrics - As of June 30, 2022, the total heating area served by the company was 62.07 million square meters, an increase of 3.10% from 60.20 million square meters in 2021[15]. - The number of heating customers served was 509,528, an increase of 0.74% from 505,788 customers in the same period last year[15]. - The estimated heat purchase quota for the first half of 2022 was approximately 13.28 million GJ, an increase from 13.13 million GJ in the same period of 2021[26]. - The actual consumption of heat in the first half of 2022 was 13.00 million GJ, up from 11.82 million GJ in the first half of 2021, indicating a utilization rate of 97.9% compared to 90% in 2021[26]. Assets and Liabilities - The total assets as of June 30, 2022, were RMB 231.94 million, down from RMB 289.44 million at the end of 2021[11]. - Total liabilities as of June 30, 2022, were RMB 136.85 million, a decrease from RMB 195.42 million at the end of 2021[11]. - As of June 30, 2022, the company reported current assets totaling RMB 1,071,797,537.77, a decrease from RMB 1,584,025,122.09 as of December 31, 2021, representing a decline of approximately 32.3%[127]. - The total liabilities decreased to RMB 1,368.46 million as of June 30, 2022, down 30.0% from RMB 1,954.16 million at the end of 2021[131]. Research and Development - The company obtained 8 utility model patents and 3 software copyrights during the reporting period, reflecting its commitment to innovation and technology development[39]. - The company has engaged in strategic collaborations with local universities to advance technology innovation and research projects[34]. - The company will continue to enhance its research and development capabilities in the heating sector and accelerate the implementation of research outcomes[82]. Cost Management - The company's operating costs for the six months ended June 30, 2022, were RMB 76,018.66 million, representing a 12.85% increase from RMB 67,361.46 million in the same period of 2021[50]. - The cost of purchased heat increased by 18.03% to RMB 46,658.24 million from RMB 39,529.35 million in the previous year, mainly due to rising coal procurement prices[54]. - The company reported a significant decrease in maintenance and repair costs, which fell by 35.28% to RMB 1,407.80 million from RMB 2,175.31 million in the previous year[54]. Corporate Governance - The company has established a modern corporate governance structure that includes effective checks and balances among the shareholders' meeting, board of directors, supervisory board, and senior management[86]. - The audit committee held two meetings during the reporting period to discuss various financial and internal control matters[93]. - The company has appointed three independent non-executive directors with appropriate professional qualifications[92]. Taxation and Financial Policies - The company benefits from a 15% corporate income tax rate as a high-tech enterprise, with the qualification certificate valid for three years[196]. - The company is exempt from value-added tax on heating fees collected from residents until the end of the 2020 heating period, as per government policy[191]. - The actual tax burden for Jilin Province Hengxin Electric Power Sales Co., Ltd. for the first half of 2022 was 2.5%[200]. Future Outlook - The company plans to continue upgrading its smart platform system and enhance heating service quality in the second half of 2022, focusing on energy conservation and user comfort[81]. - The company aims to promote the green and intelligent transformation of the heating industry in line with national carbon neutrality goals[14]. - The company is actively exploring new technologies and materials through independent research and collaboration with social organizations and universities[39].