Project Bids and Contracts - In the first half of 2022, the company submitted 128 bids with a success rate of approximately 17.2%, resulting in new project contracts worth approximately RMB 160.2 million[9] - The company won the bid for the Changchun Shuangyang District Shixi River Phase III landscape and urban street greening project with a bid price of approximately RMB 111.6 million[9] - In July 2022, the company successfully won a public works project with a contract amount of approximately RMB 25.2 million, leveraging its existing second-level qualification for municipal public engineering contracting[11] - The successful bid rate for new contracts dropped to approximately 17.2% in the first half of 2022, with new contract amounts totaling RMB 160.2 million, compared to a 20.0% success rate and RMB 287.8 million in the first half of 2021[14] - The company maintains its bidding capabilities while actively pursuing external project contracts[9] Revenue and Financial Performance - The company's revenue decreased by approximately 37.2% from RMB 362.1 million in the first half of 2021 to RMB 227.3 million in the first half of 2022, primarily due to the impact of COVID-19 lockdowns in Changchun[14] - The landscaping segment's revenue fell by about 26.4% from RMB 265.2 million in the first half of 2021 to RMB 195.3 million in the first half of 2022, mainly due to reduced construction periods caused by lockdowns[17] - The ecological restoration segment's revenue plummeted by approximately 72.6% from RMB 90.0 million in the first half of 2021 to RMB 24.7 million in the first half of 2022, attributed to fewer new contracts and completed large projects[18] - The company's gross profit decreased by approximately 53.7% from RMB 81.2 million in the first half of 2021 to RMB 37.6 million in the first half of 2022, with the gross margin dropping from about 22.4% to 16.5%[20] - The company reported a net loss of RMB 41,524 thousand for the six months ended June 30, 2022, compared to a profit of RMB 16,487 thousand in the prior year[70] Cost Management and Expenses - Administrative expenses decreased by approximately 30.6% from RMB 32.0 million in the first half of 2021 to RMB 22.2 million in the first half of 2022, due to a reduction in employee numbers and decreased operational costs during lockdowns[24] - Financing costs increased by approximately 13.3% from RMB 17.3 million in H1 2021 to RMB 19.6 million in H1 2022, primarily due to an increase in bank and other loan amounts[25] - The company plans to improve cash flow by accelerating invoicing and collection of trade receivables, actively participating in tenders, negotiating payment terms with suppliers, and reducing operating expenses[80] Corporate Strategy and Future Plans - The company plans to expand its ecological and smart business lines and aims to establish branches in Beijing, Shandong, and Guangzhou[11] - The company aims to enhance its credit rating to AAA and apply for national and provincial design awards to improve its design qualifications[11] - The company is committed to becoming a leading brand in ecological environment construction and cultural tourism industry operations, focusing on a comprehensive transformation driven by "design + operation"[13] - The company plans to focus on market expansion and new product development to improve future performance[69] - The company is in discussions with banks to renew short-term loans and secure additional financing[80] Shareholder and Governance Information - The board of directors recommended not to declare an interim dividend for the first half of 2022[41] - The company has adopted the corporate governance code as per the listing rules, ensuring the separation of roles between the chairman and the CEO[66] - The company emphasizes the importance of good corporate governance elements in its management structure and internal controls[66] - Shareholders must submit written notices for nominations at least seven days before the relevant meeting date[58] Impacts of COVID-19 - The COVID-19 pandemic has caused project delays and a reduction in new contracts, impacting the company's operational and financial conditions[142] - The company has implemented emergency measures to mitigate the impact of COVID-19, including reassessing suppliers and subcontractors, and negotiating payment extensions to improve cash management[142] - As of June 30, 2022, the company recorded additional impairment losses on contract assets and trade receivables due to the pandemic's effect on clients' repayment capabilities[142] - The company remains optimistic about controlling the pandemic and is closely monitoring the situation to take necessary emergency measures[142] Investments and Acquisitions - Acquired 20% equity in Tianjin Nankang for approximately RMB 4.72 million and completed the acquisition of 97% equity in Jilin Province Jinghe Design Engineering Co., Ltd. in July 2022[32] - The company completed the acquisition of 97% equity in Jilin Jinghe Design in July 2022, which has since become a subsidiary[65] - The remaining 3% equity of Jilin Jinghe Design was acquired for approximately RMB 0.38 million, equivalent to 3% of the net asset value as of December 31, 2020[65] Market Presence and User Engagement - The company plans to expand its market presence by entering three new provinces in China by the end of 2022, aiming for a market share increase of 5%[147] - User data showed an increase in active users, with a total of 1.2 million new users acquired in the last quarter, representing a growth rate of 20%[147] - Customer satisfaction ratings improved, with a reported increase of 12% in positive feedback from users in the latest survey[147] Financial Position and Assets - Net current assets decreased by approximately 20.0% from RMB 248.3 million as of December 31, 2021, to RMB 198.7 million as of June 30, 2022, primarily due to a loss of RMB 41.5 million in H1 2022[29] - Cash and cash equivalents decreased from approximately RMB 46.7 million as of December 31, 2021, to RMB 29.8 million as of June 30, 2022[29] - The company's total equity attributable to equity shareholders was RMB 545,935 thousand, down from RMB 585,311 thousand at the end of 2021[74] - The company reported a significant increase in impairment losses on trade and other receivables and contract assets, amounting to RMB 46,269 thousand compared to RMB 13,399 thousand in the previous year[69] Compliance and Audit - The interim financial report for the six months ended June 30, 2022, was reviewed by KPMG and approved by the company's audit committee[68] - The financial report has been reviewed and found to comply with International Accounting Standard 34, with no significant issues identified[145]

Financial Performance - The company's revenue for the year ended December 31, 2021, was RMB 896,747,000, a decrease of 10.5% compared to RMB 1,001,427,000 in 2020[24] - Gross profit for the same period was RMB 191,798,000, down 19.6% from RMB 238,432,000 in the previous year[24] - Net profit for the year was RMB 28,382,000, representing a decline of 58.8% from RMB 68,941,000 in the prior year[24] - Total comprehensive income for the year was RMB 31,219,000, down 56.3% from RMB 71,381,000 in 2020[24] - Basic and diluted earnings per share were RMB 0.10, a decrease from RMB 0.31 in the previous year[24] - The company's profit before tax decreased by 68.4% to RMB 31,415,000 from RMB 99,352,000 in 2020[24] - The gross profit margin declined from approximately 23.8% in fiscal year 2020 to about 21.4% in fiscal year 2021[50] - The net profit margin fell from 6.9% in 2020 to 3.1% in 2021, primarily due to reduced earnings[78] Market Conditions - In the fiscal year 2021, the overall domestic construction market experienced a slowdown, with the GDP growth rate at 8.1%, declining to 4.9% in Q3 and further to 4.0% in Q4[26] - The landscaping industry faces short-term challenges due to stricter regulations on special bonds and a sluggish real estate market, leading to increased competition[28][30] - The overall profit margin in the construction industry has declined, and the number of construction enterprises continues to increase, intensifying market competition[27] - The landscaping market in China is projected to reach approximately RMB 596.9 billion by 2024, with a compound annual growth rate of about 2.9% from 2019 to 2024[27] Business Development - The company has made significant progress in developing markets outside Jilin Province, securing new projects in regions such as Liaoning, Inner Mongolia, Tianjin, Chongqing, and Sichuan[25] - The company plans to enhance its qualifications through acquisitions and upgrades, focusing on obtaining Class I qualifications for municipal public engineering construction and Class A qualifications for architectural design by 2022[25] - The company is actively developing new products based on smart infrastructure and cultural tourism projects, laying the foundation for future growth[25] - The company aims to enhance its core competitiveness through continuous technological innovation and expand its market presence in ecological governance[44] - The company plans to focus on new infrastructure projects, new urbanization, and major infrastructure developments as key market opportunities[43] Employee and Management - Employee costs for the fiscal year 2021 amounted to RMB 108.1 million, with a total of 469 employees as of December 31, 2021[37] - The group has focused on continuous professional development for employees, providing regular training to enhance skills and technical expertise[39] - The management team has extensive experience in the construction industry, with key executives holding over 20 years of management experience[99][100] - The company has a strong management team with diverse backgrounds in finance, engineering, and construction, enhancing its operational capabilities[103] - The company is committed to enhancing its corporate governance practices to comply with the corporate governance code[108] Risk Management - The group is committed to risk management, evaluating major risks such as investment and liquidity risks, with no significant internal control deficiencies reported[36] - The group faces various business risks, including economic conditions and changes in local government spending, which could impact demand for landscaping and ecological restoration projects[87] - The company has implemented policies to ensure sales are made to customers with appropriate credit records, limiting credit risk exposure[91] - The group regularly monitors its liquidity position to maintain sufficient cash reserves and comply with loan covenants[92] Corporate Governance - The company is committed to maintaining high governance standards with a diverse board composition, including independent directors with extensive industry experience[104] - The company has adopted the corporate governance code as per the listing rules, ensuring accountability and transparency in internal management practices[108] - The board includes members with significant experience in municipal engineering and environmental projects, aligning with the company's strategic focus[104] - The company has a structured internal control system to maintain high standards of corporate governance[108] Financial Position - Non-current assets increased by 4.7% to RMB 383,441,000 from RMB 366,237,000 in 2020[24] - Current assets rose by 10.0% to RMB 1,869,412,000 compared to RMB 1,699,903,000 in the previous year[24] - The company's net asset value increased by 22.9% to RMB 594,761,000 from RMB 483,810,000 in 2020[24] - The total debt as of December 31, 2021, was approximately RMB 504.6 million, an increase from RMB 480.0 million in 2020[76] - The current ratio improved from 1.1 in 2020 to 1.2 in 2021, indicating better short-term liquidity[79] Shareholder Engagement - The company aims to maintain transparency and continuous dialogue with shareholders through effective communication[130] - The company did not recommend the payment of dividends for the fiscal year 2021[137] - As of December 31, 2021, the company had no reserves available for distribution to shareholders, compared to zero reserves in 2020[143] Stock Option Plan - The stock option plan aims to provide incentives to contributors to the company and its subsidiaries[147] - The stock option plan is effective from the date of shareholder approval until the tenth anniversary of the listing date, allowing for a maximum of 27,500,000 shares to be issued, which is 10% of the total shares issued post-listing[150][161] - The plan allows for the granting of stock options to full-time or part-time employees, consultants, and other qualified participants as determined by the board[147] - The company has not granted any stock options under the plan since its establishment[148]