Financial Performance - The total revenue for the year ended December 31, 2022, was RMB 23,071,897, an increase of 36.3% compared to RMB 16,977,281 in 2021[2] - Gross profit for the year was RMB 4,348,882, representing a gross margin of approximately 18.9%[2] - The net profit attributable to shareholders for the year was RMB 1,326,211, a slight increase from RMB 1,295,445 in the previous year[2] - The company reported a total inter-segment sales of RMB 3,764,213 thousand, which was eliminated in the total revenue calculation[10] - The total profit before tax was RMB 2,180,657 thousand, showcasing the company's operational efficiency[10] - The company's revenue for 2022 was RMB 23,071,897 thousand, an increase of 36.3% compared to RMB 16,977,281 thousand in 2021[12] - Other income and gains totaled RMB 187,293 thousand in 2022, up from RMB 169,368 thousand in 2021, representing an increase of 10.3%[12] - The company's pre-tax profit for 2022 was RMB 1,326,211 thousand, compared to RMB 1,295,445 thousand in 2021, showing a slight increase[18] - The total tax expense for 2022 was RMB 372,482 thousand, a decrease from RMB 406,514 thousand in 2021, indicating a reduction of 8.4%[15] - Net profit for the year increased by RMB 37 million or approximately 2% from about RMB 1,771 million in FY2021 to approximately RMB 1,808 million in FY2022[46] Assets and Liabilities - The company reported total assets of RMB 27,867,176, up from RMB 25,508,667 in 2021, indicating a growth of 9.3%[3] - The total liabilities increased to RMB 18,299,348 from RMB 17,545,573, reflecting a rise of 4.3%[4] - The asset-liability ratio improved from 75.01% in FY2021 to 72.02% in FY2022, indicating better capital management[47] - As of December 31, 2022, the group's debt amounted to approximately RMB 5,556,000,000, representing about 45.04% of total debt maturing within one year, down from 56.31% the previous year[56] - The group's debt-to-equity ratio decreased from approximately 75.01% as of December 31, 2021, to about 72.02% as of December 31, 2022[56] Cash Flow and Investments - The company’s cash and cash equivalents rose to RMB 1,469,765, compared to RMB 893,116 in the previous year, marking an increase of 64.5%[3] - The group regularly reviews its financial investments and cash flow forecasts to manage liquidity risks[56] - The group aims to maintain a balance between liquidity and flexibility through the use of bank overdrafts and loans[56] Dividends and Shareholder Returns - The proposed dividend for the year will be disclosed in the financial statements, indicating a commitment to returning value to shareholders[2] - The proposed final dividend for 2022 is RMB 0.25 per share, compared to RMB 0.19 per share in 2021, which is an increase of 31.6%[16] - The board proposed a final dividend of RMB 0.25 per share for the year ended December 31, 2022, compared to RMB 0.19 per share for the previous year[51] Operational Highlights - The company plans to continue expanding its product offerings, focusing on differentiated products such as urea and methanol[6] - The company aims to enhance its market presence through strategic investments and potential acquisitions in the fertilizer sector[6] - The company continued to expand production capacity and geographic reach, contributing to record revenue and profitability[25] - The company is focusing on optimizing product structure and enhancing marketing strategies to improve profitability in the automotive urea segment[27] - The company plans to further enhance its production capabilities and diversify its product offerings in response to market demands[25] Cost and Expenses - The cost of goods sold for 2022 was RMB 18,723,015 thousand, compared to RMB 12,873,163 thousand in 2021, reflecting a rise of 45.5%[13] - Sales and distribution expenses rose from approximately RMB 476 million in FY2021 to about RMB 529 million in FY2022, primarily due to increased employee costs of RMB 48 million and warehouse rental costs of RMB 5 million[42] - General and administrative expenses increased from approximately RMB 935 million in FY2021 to about RMB 1,072 million in FY2022, largely due to an increase in compensation of RMB 108 million for core technical talent and other expenses[43] - Financial costs rose from approximately RMB 583 million in FY2021 to about RMB 662 million in FY2022, attributed to increased interest-bearing loans[44] Employee and Governance - The group had 9,313 employees as of December 31, 2022, an increase from 8,698 employees the previous year[62] - The group is committed to adhering to the corporate governance code and has complied with all relevant rules during the year[60] - There were no significant contingent liabilities or major litigations as of December 31, 2022[57] - The group has not engaged in any purchase, sale, or redemption of its own securities during the year ended December 31, 2022[62]

[Overall Performance Overview](index=1&type=section&id=Overall%20Performance%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group achieved robust revenue and profit growth in the first nine months of 2022, with total revenue up 49% and consolidated net profit up 14%, driven by favorable market conditions 2022 First Nine Months Key Financial Data | Metric | First Nine Months of 2022 | First Nine Months of 2021 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Unaudited Consolidated Revenue | Approx. RMB 17.516 billion | Approx. RMB 11.762 billion | +49% | | Unaudited Consolidated Net Profit | Approx. RMB 1.584 billion | Approx. RMB 1.394 billion | +14% | | Total Comprehensive Income Attributable to Owners of the Parent | Approx. RMB 1.141 billion | Approx. RMB 1.020 billion | +12% | - The primary macroeconomic drivers for performance growth include the ongoing impacts of geopolitical factors, environmental policies, and the pandemic, which collectively pushed up global food prices, subsequently driving up prices for fertilizers and coal chemical products[1](index=1&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) The Group successfully released high-quality production capacity and accelerated industrial chain transformation through the renovation and upgrade of the Xinxiang base and the expansion of the Xinjiang coal mine, enhancing market competitiveness - The renovation and upgrade projects for the second and third plants at the Xinxiang base, along with the expansion project for Xinjiang Tianxin Coal Mine, have successively commenced operations, effectively releasing high-quality production capacity and promoting diversified development of coal chemical products[1](index=1&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Urea](index=2&type=section&id=Urea) Urea business revenue increased by 50%, driven by both sales volume (+25%) and average selling price (+21%), though gross margin declined to 31.3% due to a 28% rise in coal costs Urea Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | +50% (to RMB 5.121 billion) | | Average Selling Price | +21% | | Sales Volume | +25% (to 2,021,000 tons) | | Average Production Cost | +28% | | Gross Margin | -4.0 percentage points (from 35.3% to 31.3%) | [Automotive Urea Solution](index=2&type=section&id=Automotive%20Urea%20Solution) Automotive urea solution revenue grew 16% from moderate price and volume increases, but gross margin fell to 22.3% due to rising costs Automotive Urea Solution Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | +16% (to RMB 417 million) | | Average Selling Price | +8% | | Sales Volume | +7% | | Gross Margin | -5.7 percentage points (from 28% to 22.3%) | [Compound Fertilizer](index=2&type=section&id=Compound%20Fertilizer) Compound fertilizer revenue surged 70% due to significant increases in both average selling price (+38%) and sales volume (+23%), with gross margin slightly improving to 14.8% Compound Fertilizer Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | +70% (to RMB 4.790 billion) | | Average Selling Price | +38% | | Sales Volume | +23% (to 1,519,000 tons) | | Gross Margin | +0.5 percentage points (from 14.3% to 14.8%) | [Methanol](index=3&type=section&id=Methanol) Methanol revenue increased 42%, but a 34% rise in production costs, far exceeding the 12% price increase, resulted in a gross loss with margin dropping to -1% Methanol Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | +42% (to RMB 1.736 billion) | | Average Selling Price | +12% | | Sales Volume | +26% | | Average Production Cost | +34% | | Gross Margin | -16 percentage points (from 15% to -1%) | [Dimethyl Ether (DME)](index=3&type=section&id=Dimethyl%20Ether%20%28DME%29) Dimethyl ether revenue increased 7% driven by a 14% price hike, but a 35% surge in production costs led to a significant gross margin decline to 3% Dimethyl Ether (DME) Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | +7% (to RMB 1.056 billion) | | Average Selling Price | +14% | | Average Production Cost | +35% | | Gross Margin | -14 percentage points (from 17% to 3%) | [Melamine](index=3&type=section&id=Melamine) Melamine revenue remained flat, with sales volume down 3% due to export restrictions, and gross margin decreased to 53% despite a 23% rise in production costs Melamine Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | -0.2% (to RMB 805 million) | | Sales Volume | -3% | | Average Production Cost | +23% | | Gross Margin | -7 percentage points (from 60% to 53%) | - The primary reason for the decline in sales volume was the ongoing impact of the Russia-Ukraine conflict and escalating EU sanctions against Russia, leading to restricted exports to Russia[7](index=7&type=chunk) [Furfuryl Alcohol](index=4&type=section&id=Furfuryl%20Alcohol) Furfuryl alcohol revenue and sales volume declined by 5.6% and 7% respectively due to weak demand, with gross margin sharply falling to 4% from increased raw material costs Furfuryl Alcohol Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | -5.6% (to RMB 520 million) | | Sales Volume | -7% | | Average Sales Cost | +15% | | Gross Margin | -11 percentage points (from 15% to 4%) | [Pharmaceutical Intermediates](index=4&type=section&id=Pharmaceutical%20Intermediates) Pharmaceutical intermediates revenue decreased 14% due to weaker domestic and international demand, with both selling price and sales volume declining, leading to a gross margin drop to 14.6% Pharmaceutical Intermediates Business Performance (First Nine Months of 2022 vs First Nine Months of 2021) | Metric | Year-on-Year Change | | :--- | :--- | | Sales Revenue | -14% (to RMB 321 million) | | Average Selling Price | -10% | | Sales Volume | -4% | | Gross Margin | -6.1 percentage points (from 20.7% to 14.6%) | [Outlook](index=4&type=section&id=Outlook) [Market Outlook](index=4&type=section&id=Market%20Outlook) The company anticipates continued tight energy supply and high coal prices, supporting stable to upward fertilizer prices, while national focus on food security will boost demand for efficient and eco-friendly fertilizers - The tight supply-demand situation for energy, both domestically and internationally, is expected to continue, with coal prices remaining high, providing cost support for fertilizer prices and showing a stable to upward trend[10](index=10&type=chunk) - The nation's renewed emphasis on food security during the 20th Party Congress is expected to boost demand for efficient and environmentally friendly fertilizers, driving rapid transformation and upgrading of the fertilizer industry[10](index=10&type=chunk) [Corporate Strategy and Project Progress](index=5&type=section&id=Corporate%20Strategy%20and%20Project%20Progress) The company will prioritize technological innovation and efficient fertilizer development, adjust methanol production, and despite Q3 profit decline and Q4 transport challenges, new projects are progressing as planned - The company's strategy includes: adhering to technological innovation and product upgrading, strengthening research and development of efficient fertilizers; and addressing the methanol market downturn through flexible adjustments and extending the industrial chain[11](index=11&type=chunk) - In the third quarter of 2022, the Group's total profit decreased quarter-on-quarter due to domestic COVID-19 outbreaks and maintenance at the Xinjiang base. In the fourth quarter, ongoing pandemic impacts and transport restrictions may lead to increased inventory, affecting performance[11](index=11&type=chunk) - Project progress: The Xinjiang base's Gansu Jinchang compound fertilizer project has been completed and commenced operations; the Xinxiang base's 700,000 tons/year green manufacturing urea project is expected to be completed and operational in the first half of the following year[11](index=11&type=chunk)

Financial Performance - The unaudited consolidated revenue for the first half of 2022 increased by approximately RMB4,641 million or 61% to approximately RMB12,214 million compared to RMB7,573 million for the same period in 2021[8]. - The unaudited consolidated net profit for the first half of 2022 rose by approximately RMB415 million or 47% to approximately RMB1,304 million from RMB889 million in the first half of 2021[8]. - Revenue from urea sales increased by approximately RMB1,364 million or 66% to approximately RMB3,438 million, driven by a 23% increase in sales volume and a 35% increase in average selling price year on year[9]. - Revenue from urea solution for vehicles increased by approximately RMB54 million or 23% to approximately RMB290 million, with a 12% rise in average selling price and a 10% increase in sales volume year on year[10]. - Revenue from compound fertilisers surged by approximately RMB1,782 million or 90% to approximately RMB3,763 million, supported by a 31% increase in sales volume and a 45% increase in average selling price year on year[11]. - Profit for the period increased by approximately RMB415 million or 47% from RMB889 million in 1H2021 to RMB1,304 million in 1H2022, mainly due to an increase in gross profit and other income[34]. - Gross profit for the period was RMB 3,060,098, representing a 44.5% increase compared to RMB 2,117,960 in the prior year[86]. - Profit for the period reached RMB 1,304,459, up 46.6% from RMB 889,431 in the previous year[86]. Production and Capacity - The Group's production capacity reached a new milestone with the commissioning of the third production base in Jiangxi Jiujiang and upgrades to the second and third plants in Henan Xinxiang[8]. - The DMF Project at Jiangxi Base, with an annual output of 100,000 tons, is in trial production and expected to officially commence in Q3 2022[42]. - The Tianxin Coal Mine in Xinjiang Base has entered trial production, with safety production license expected by the end of 2022[42]. Cost and Expenses - Sales and distribution expenses increased by approximately RMB128 million or 33% from RMB383 million in 1H2021 to RMB511 million in 1H2022, primarily due to increased sales volume leading to higher employee salaries and commissions[30]. - General and administrative expenses rose by approximately RMB262 million or 64% from RMB407 million in 1H2021 to RMB669 million in 1H2022, mainly due to increased compensation for core technical talents and enhanced management capabilities[31]. - Finance costs increased by approximately RMB53 million or 19% from RMB282 million in 1H2021 to RMB335 million in 1H2022, attributed to higher amounts and average interest rates of interest-bearing borrowings[32]. - The cost of inventories sold rose to RMB 9,153,788 in 2022, up from RMB 5,455,087 in 2021, marking an increase of about 67.5%[120]. - Employee benefit expenses surged to RMB 1,043,537 in 2022, compared to RMB 593,423 in 2021, representing an increase of approximately 76%[120]. Financial Position - The gearing ratio improved to 70.98% as of June 30, 2022, down from 75.01% as of December 31, 2021, indicating better capital management[40]. - Net debt increased to approximately RMB15,808 million as of June 30, 2022, compared to RMB15,556 million as of December 31, 2021[40]. - Total capital increased to approximately RMB6,462 million as of June 30, 2022, up from RMB5,182 million as of December 31, 2021[40]. - Total liabilities increased to RMB 19,618,542 from RMB 17,545,291 as of December 31, 2021[90]. - Total equity increased to RMB 9,536,357,000 as of June 30, 2022, up from RMB 7,961,382,000, representing a growth of approximately 19.7% year-over-year[93]. Market Conditions - In the first half of 2022, global demand for chemical fertilizers was strong due to food security policies and the impacts of the Russia-Ukraine conflict, leading to high prices[42]. - The Group expects a decline in chemical fertilizer prices in the second half of 2022 due to off-season agricultural demand, but prices will be supported by tight supply conditions in the international energy and urea markets[42]. Shareholder Information - As of June 30, 2022, Ms. Yan Yunhua held 254,465,000 shares, representing approximately 20.74% of the Company's issued share capital[46]. - Pioneer Top Holdings Limited, a beneficial owner, held 413,007,999 shares, accounting for 33.63% of the Company's issued share capital[50]. Corporate Governance - The Company confirmed compliance with the Model Code for Securities Transactions by Directors, with all directors adhering to the required standards during the six months ended June 30, 2022[75]. - The Company has established written guidelines for relevant employees regarding securities transactions, with no incidents of non-compliance noted during the six months ended June 30, 2022[79]. - The Company has complied with all provisions of the Corporate Governance Code as of June 30, 2022[78]. Cash Flow and Investments - Cash flows generated from operations for the six months ended June 30, 2022, were RMB 1,808,832,000, an increase from RMB 1,462,959,000 in the same period of 2021, reflecting a growth of approximately 23.6%[96]. - The total cash flows used in investing activities were RMB 1,565,096,000, compared to RMB 1,681,465,000 in the previous year, indicating a decrease of about 6.9%[96]. - The company issued new shares worth RMB 56,500,000 during the reporting period[94]. Risk Management - The Group's major market risks include changes in average selling prices of key products and fluctuations in raw material costs, primarily coal[55]. - The Group maintains strict control over outstanding receivables, with overdue balances regularly reviewed by senior management, minimizing credit risk[139]. - The Group does not hold any collateral or other credit enhancements over its trade receivables, indicating a diversified customer base with no significant concentration of credit risk[139].

Financial Performance - For Q1 2022, China XLX Fertiliser Ltd. reported unaudited consolidated revenue of approximately RMB 5.39 billion, an increase of RMB 2.23 billion or 71% compared to Q1 2021's revenue of approximately RMB 3.15 billion[1]. - The company's unaudited net profit for Q1 2022 was approximately RMB 520 million, up RMB 243 million or 88% from approximately RMB 277 million in Q1 2021[1]. Urea Sales - Urea sales revenue increased by approximately RMB 723 million or 84% to about RMB 1.58 billion in Q1 2022, driven by a 34% rise in average selling price and a 37% increase in sales volume[2]. - The sales volume of urea in Q1 2022 was approximately 646,000 tons, while the gross margin decreased by 7 percentage points to about 29.9% due to a 49% increase in average production costs[2]. Compound Fertilizer Sales - Compound fertilizer sales revenue rose by approximately RMB 654 million or 79% to about RMB 1.48 billion, with sales volume increasing to 504,000 tons[4]. - The gross margin for compound fertilizers improved by 3 percentage points to 18.5% in Q1 2022, attributed to higher average selling prices[4]. Methanol Sales - Methanol sales revenue increased by approximately RMB 219 million or 82% to about RMB 487 million, with sales volume growth supported by new capacity from the Jiujiang base[5]. - The gross margin for methanol significantly decreased by 17 percentage points to approximately 3.7% due to a 56% rise in average production costs[5]. Future Outlook and Projects - The company anticipates continued high fertilizer prices due to global energy and food price increases, alongside a focus on optimizing product structure and enhancing R&D for new fertilizer products[10]. - The company plans to commence trial production of a 100,000-ton DMF project at its Jiangxi base by the end of June 2022 and expects the first phase of the Gansu Jinchang compound fertilizer project to be completed by the end of 2022[11].

Financial Performance - The Group achieved revenue of approximately RMB 16,815 million, representing a 61% year-on-year increase[16]. - Net profit for the Group was approximately RMB 1,769 million, reflecting a 238% year-on-year growth[16]. - Overall gross profit margin increased by 5 percentage points year-on-year to approximately 26%, driven by rising prices of products such as urea, methanol, melamine, and DME[45]. - Urea sales revenue increased by approximately RMB 1.879 billion or 61% from RMB 3.08 billion in FY2020 to approximately RMB 4.959 billion in FY2021, driven by a 16% increase in sales volume and a 39% increase in average selling price[63]. - Revenue from methanol sales surged by approximately RMB 1,245 million or 242% from approximately RMB 514 million in FY2020 to approximately RMB 1,759 million in FY2021, with average selling price and sales volume increasing by 53% and 124% YoY, respectively[69]. - Revenue from dimethyl ether (DME) increased by approximately RMB 691 million or 92% from RMB 748 million in FY2020 to approximately RMB 1,439 million in FY2021, with average selling price and sales volume rising by 39% and 38% YoY, respectively[69]. - Revenue from compound fertilizers increased by approximately RMB 596 million or 19% from approximately RMB 3,158 million in FY2020 to approximately RMB 3,754 million in FY2021, driven by a 22% increase in average selling price, despite a 3% decrease in sales volume to 1,569,000 tons[68]. Production Capacity and Efficiency - The total production capacity of the company reached 3 million tons of fertilizers, with a focus on differentiated products such as controlled release urea and water-soluble fertilizers[9]. - The Group's production capacity and efficiency reached a new milestone with the commissioning of the Third Production Base in Jiangxi and the completion of renovation projects in Henan[61]. - The third main production base, Jiujiang XLX, successfully commenced operations, marking the completion of the nationwide production base layout[21]. - Xinjiang XLX launched a fully-automated metering system "Wisdom," enhancing the Group's intelligence standards[26]. Strategic Development and Innovation - The company aims to maximize the value of syngas and strengthen its leading position in the chemical fertilizer industry[4]. - The company has established a strategic development plan that includes the development of new energy and new chemical materials alongside its core fertilizer business[4]. - The company has established partnerships with research institutions to develop innovative fertilizer products, enhancing its competitive edge[9]. - The Group plans to continue implementing a high-quality development strategy based on technological innovation to maintain its leading position in energy efficiency and safety[55]. - The Group's strategic objectives include establishing a comprehensive product system with outstanding cost performance in the fertilizer field and creating advantages in the chemical industry through low cost and high quality[57]. Corporate Governance and Management - The company is committed to improving its corporate governance and internal supervision processes[12]. - The company has a strong board of independent non-executive directors, enhancing governance and oversight[150]. - The independent directors have diverse backgrounds in finance, law, and academia, contributing to a well-rounded leadership team[152]. - The Board of Directors is responsible for setting corporate strategies and monitoring management performance to enhance shareholder value[189]. - The Company has established specialized committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, to assist in discharging its duties effectively[196]. Financial Management and Investor Relations - The company is committed to fair and accurate information disclosure to maintain investor trust and engagement[180]. - The Company conducted nearly 100 roadshow promotions through a combination of online and offline channels to communicate with investors and share positive news[182][183]. - The Company published 38 documents on the stock exchange's website in 2021, detailing performance, operational status, financial information, and voluntary disclosures[182]. - The proposed final dividend for the year ended December 31, 2021, is RMB 0.19 per share, up from RMB 0.10 per share in 2020, reflecting a 90% increase[114]. Operational Risks and Market Environment - The Group's operational risks include fluctuations in average selling prices of key products and changes in raw material costs, primarily coal[117][119]. - The Group is exposed to commodity price risk due to fluctuations in product sale prices and raw material costs[120]. - The favorable environment for development is supported by national energy policy adjustments and rising food prices, enhancing the Group's core competitiveness[54]. - The Group anticipates further sales growth driven by increasing demand for fertilizers in agriculture, supported by rising global food prices and domestic policies[110][111]. Human Resources and Leadership - The company employed 8,698 staff as of December 31, 2021, an increase from 8,257 in 2020[139]. - The management team has extensive experience in various roles within the fertilizer industry, contributing to strategic decision-making[161]. - The leadership team includes professionals with advanced degrees and significant industry experience, ensuring informed management[158][159]. - The company has a history of promoting from within, with executives having long tenures in various roles within the organization[145][147].

[Company Overview](index=1&type=section&id=Company%20Overview) [Company Basic Information and Development Strategy](index=1&type=section&id=Company%20Basic%20Information%20and%20Development%20Strategy) China XLX Fertiliser Ltd. outlines its 'fertilizer first, chemical and fertilizer combined' strategy, focusing on clean coal chemical upgrades and team dedication - Company Name: **China XLX Fertiliser Ltd.**[1](index=1&type=chunk) - Stock Code: **1866**[1](index=1&type=chunk) - Development Strategy: Focus on upgrading clean coal chemicals, ensuring leadership in the fertilizer business, and moderately developing new energy and material chemical products to form a 'fertilizer first, chemical and fertilizer combined' industrial structure[3](index=3&type=chunk)[4](index=4&type=chunk) [Corporate Information](index=4&type=section&id=Corporate%20Information) [Board of Directors and Management](index=4&type=section&id=Board%20of%20Directors%20and%20Management) This section lists the company's board members, committee compositions, key executives, auditors, legal advisors, and principal bankers - Chairman of the Board: **LIU Xingxu**[7](index=7&type=chunk) - Chief Executive Officer: **MA Tongsheng**[8](index=8&type=chunk) - Chairman of the Audit Committee: **ONG Kian Guan**[7](index=7&type=chunk) - Auditor: **Ernst & Young LLP**[8](index=8&type=chunk) [Registration and Contact Information](index=5&type=section&id=Registration%20and%20Contact%20Information) The company's registered office is in Singapore, with its principal place of business in Xinxiang Economic Development Zone, Henan Province, China - Registered Office: **80 Robinson Road 02-00, Singapore 068898**[8](index=8&type=chunk) - Head Office and Principal Place of Business in China: **Xinxiang Economic Development Zone, Henan Province, China**[9](index=9&type=chunk) - Company Website: **www.chinaxlx.com.hk**[9](index=9&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [(I) Business Review](index=7&type=section&id=%28I%29%20BUSINESS%20REVIEW) In H1 2021, the company achieved significant performance growth with total revenue up **53%** to **RMB 7.573 billion** and net profit up **237%** to **RMB 889 million**, driven by economic recovery and new production capacity 2021 H1 Key Financial Indicators | Indicator | 2021 H1 (RMB thousands) | 2020 H1 (RMB thousands) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 7,573,000 | 4,940,000 | 53% | | Consolidated Net Profit | 889,000 | 264,000 | 237% | | Total Comprehensive Income Attributable to Owners of the Parent | 646,000 | 180,000 | 259% | Key Product Sales Performance (2021 H1 vs 2020 H1) | Product | Revenue (RMB millions) | YoY Growth (%) | Sales Volume Change (%) | Average Selling Price Change (%) | Gross Margin (2021) | Gross Margin (2020) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Urea | 2,074 | 32% | 8% | 23% | 35.4% | 26.8% | +8.6 | | Automotive Urea Solution | 236 | -8% | Slight decrease | Not applicable | 35.8% | 37.6% | -2 | | Compound Fertilizer | 1,981 | 13% | 5% | 8% | 15% | 17.4% | -2.4 | | Methanol | 733 | 355% | 190% | 57% | 19.7% | -2.3% | +22 | | Dimethyl Ether (DME) | 618 | 79% | 45% | 24% | 23.2% | 5.7% | +17.5 | | Melamine | 535 | 69% | 1% | 67% | 62.1% | 30.9% | +31.2 | | Furfuryl Alcohol | 335 | 48% | 1% | 46% | 13.4% | 13.1% | +0.3 | | Pharmaceutical Intermediates | Not applicable | No comparable data | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Key Expense Changes (2021 H1 vs 2020 H1) | Expense Category | 2021 H1 (RMB millions) | 2020 H1 (RMB millions) | Change (RMB millions) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Other income, net | 34 | 80 | -46 | -58% | | Selling and distribution expenses | 383 | 301 | +82 | +27% | | General and administrative expenses | 407 | 317 | +90 | +28% | | Finance costs | 282 | 202 | +80 | +40% | | Income tax expense | 191 | 58 | +133 | +229% | | Profit for the period | 889 | 264 | +625 | +237% | [(II) Financial Review](index=13&type=section&id=%28II%29%20FINANCIAL%20REVIEW) As of June 30, 2021, the Group's gearing ratio was **74.66%**, a slight decrease from year-end 2020, aligning with the company's policy to maintain it below **90%** Gearing Ratio | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Net Debt | 14,312,754 | 12,932,245 | | Total Capital | 4,858,525 | 4,330,126 | | Capital and Net Debt | 19,171,279 | 17,262,371 | | Gearing Ratio | 74.66% | 74.92% | - The Group's policy is to maintain the gearing ratio below **90%**[20](index=20&type=chunk)[22](index=22&type=chunk) [(III) Material Acquisition and Disposal](index=14&type=section&id=%28III%29%20MATERIAL%20ACQUISITION%20AND%20DISPOSAL) As of the end of the reporting period, the Group did not undertake any material acquisition or disposal activities - As of the end of the reporting period, the Group had no material acquisitions or disposals[23](index=23&type=chunk) [(IV) Prospects](index=14&type=section&id=%28IV%29%20PROSPECTS) The company anticipates stable urea industry development in H2, with sustained high demand and chemical prices due to rising international energy costs and "dual carbon" policies - Market Environment: New agricultural reform policies and "dual carbon" policies favor industry leaders, while rising international energy and global food prices will drive up urea demand and chemical product prices[23](index=23&type=chunk) - Strategic Focus: Leverage three production bases to strengthen "low-cost + differentiated" competitive advantages, expand development space, and extend the industrial chain while consolidating existing chemical product advantages[23](index=23&type=chunk) - Project Progress: The fixed-bed upgrade projects for the second and third plants are expected to be completed and operational in Q4 this year, further enhancing technological and cost advantages and expanding market share[23](index=23&type=chunk) [(V) Directors' and Chief Executive's Interests in Shares](index=15&type=section&id=%28V%29%20DIRECTORS%27%20AND%20CHIEF%20EXECUTIVE%27S%20INTERESTS%20IN%20SHARES) As of June 30, 2021, this section details the long positions in company shares held by directors and the chief executive, with Mr. Liu Xingxu and Ms. Yan Yunhua holding significant stakes through investment holding companies Directors' and Chief Executive's Interests in Shares (Long Position) | Name | Personal Interest (shares) | Corporate Interest (shares) | Total Interest (shares) | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Mr. Liu Xingxu | 600,000 | 413,007,999 | 413,607,999 | 35.30% | | Ms. Yan Yunhua | 300,000 | 276,465,000 | 276,765,000 | 23.62% | | Mr. Ong Kian Guan | 100,000 | – | 100,000 | 0.01% | | Mr. Ma Tongsheng | 8,000 | – | 8,000 | 0.00% | - Mr. Liu Xingxu holds corporate interests through Pioneer Top Holdings Limited and possesses voting rights and daily management control over the company[30](index=30&type=chunk) - Ms. Yan Yunhua holds corporate interests through Go Power Investments Limited and possesses voting rights and daily management control over the company[31](index=31&type=chunk) [(VI) Substantial Shareholders' Interests in Shares](index=17&type=section&id=%28VI%29%20SUBSTANTIAL%20SHAREHOLDERS%27%20INTERESTS%20IN%20SHARES) As of June 30, 2021, Pioneer Top Holdings Limited and Go Power Investments Limited were the company's substantial shareholders, holding **35.25%** and **23.60%** of the issued share capital, respectively Substantial Shareholders' Interests in Shares (Long Position) | Name of Substantial Shareholder | Capacity | Number of Issued Ordinary Shares | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Pioneer Top | Beneficial owner | 413,007,999 | 35.25% | | Go Power | Beneficial owner | 276,465,000 | 23.60% | - Pioneer Top is beneficially owned by Mr. Liu Xingxu (42%) and held in trust for 7 beneficiaries (58%), with Mr. Liu Xingxu holding voting rights in Pioneer Top regarding the company[38](index=38&type=chunk) - Go Power is beneficially owned by Ms. Yan Yunhua (12.74%) and held in trust for over 1,000 beneficiaries (87.26%), with Ms. Yan Yunhua holding voting rights in Go Power regarding the company[38](index=38&type=chunk) [(VII) Supplementary Information](index=19&type=section&id=%28VII%29%20SUPPLEMENTARY%20INFORMATION) This section provides supplementary information on the company's operational and financial risks, contingent liabilities, litigation, asset charges, significant investment plans, share options, audit committee work, corporate governance, directors' securities trading compliance, employee information, and corporate communication policy [1. Operational and Financial Risks](index=19&type=section&id=1.%20OPERATIONAL%20AND%20FINANCIAL%20RISKS) The Group faces market and commodity price risks from fluctuations in product average selling prices, raw material costs, interest rates, and exchange rates, while managing liquidity by adjusting loan structures and securing long-term bank credit - Key Market Risks: Changes in average product selling prices, raw material (primarily coal) costs, interest rates, and exchange rates[39](index=39&type=chunk) - Liquidity Risk: As of June 30, 2021, approximately **55.48%** of debt matures within one year; the Group is adjusting its loan structure and has secured sufficient long-term bank credit[40](index=40&type=chunk) - Gearing Ratio Risk: As of June 30, 2021, it was **74.66%**, a **0.3 percentage point** decrease from December 31, 2020, meeting the policy target of below **90%**[42](index=42&type=chunk) [2. Contingent Liabilities](index=21&type=section&id=2.%20CONTINGENT%20LIABILITIES) As of June 30, 2021, the Group had no material contingent liabilities - As of June 30, 2021, the Group had no material contingent liabilities[42](index=42&type=chunk) [3. Material Litigation and Arbitration](index=21&type=section&id=3.%20MATERIAL%20LITIGATION%20AND%20ARBITRATION) As of June 30, 2021, the Group was not involved in any material litigation or arbitration - As of June 30, 2021, the Group was not involved in any material litigation or arbitration[42](index=42&type=chunk) [4. Charge on the Group's Assets](index=21&type=section&id=4.%20CHARGE%20ON%20THE%20GROUP%27S%20ASSETS) As of June 30, 2021, the Group had no other asset charges beyond those disclosed in the report - As of June 30, 2021, there were no other charges beyond those disclosed in this report[42](index=42&type=chunk) [5. Significant Investments](index=21&type=section&id=5.%20SIGNIFICANT%20INVESTMENTS) The Group made no significant investments during the six months ended June 30, 2021 - The Group made no significant investments during the six months ended June 30, 2021[42](index=42&type=chunk) [6. Future Plans for Material Investments or Capital Assets](index=22&type=section&id=6.%20FUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20OR%20CAPITAL%20ASSETS) As of June 30, 2021, the Group had no other future plans for material investments or capital assets - As of June 30, 2021, the Group had no other plans for material investments or capital assets[43](index=43&type=chunk) [7. Options](index=22&type=section&id=7.%20OPTIONS) The Group has not established any share option scheme - The Group has no share option scheme[43](index=43&type=chunk) [8. Audit Committee](index=22&type=section&id=8.%20AUDIT%20COMMITTEE) The Audit Committee reviewed the Group's accounting principles, standards, internal controls, and reporting matters, and approved the interim results for the six months ended June 30, 2021 - The Audit Committee reviewed the accounting principles and standards adopted by the Group, and discussed and reviewed internal controls and reporting matters[43](index=43&type=chunk) - The Audit Committee reviewed the interim results for the six months ended June 30, 2021[43](index=43&type=chunk) [9. Compliance with the Code on Corporate Governance Practices](index=22&type=section&id=9.%20COMPLIANCE%20WITH%20THE%20CODE%20ON%20CORPORATE%20GOVERNANCE%20PRACTICES) The company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules for the six months ended June 30, 2021 - The company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules for the six months ended June 30, 2021[43](index=43&type=chunk) [10. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=22&type=section&id=10.%20COMPLIANCE%20WITH%20THE%20MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS%20OF%20LISTED%20ISSUERS) The Board confirmed that, after inquiry with all directors, all directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2021 - The Board confirmed that, for the six months ended June 30, 2021, all directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers[43](index=43&type=chunk) [11. Compliance with the Written Guidelines for Securities Transactions by Relevant Employees of the Company](index=23&type=section&id=11.%20COMPLIANCE%20WITH%20THE%20WRITTEN%20GUIDELINES%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20RELEVANT%20EMPLOYEES%20OF%20THE%20COMPANY) The company has established written guidelines for employee securities transactions, and no non-compliance was found for the six months ended June 30, 2021 - The company has established written guidelines governing securities transactions by relevant employees who may possess inside information[44](index=44&type=chunk) - For the six months ended June 30, 2021, the company found no instances of non-compliance by relevant employees with the written guidelines[44](index=44&type=chunk) [12. Purchase, Sales or Redemption of the Company's Securities](index=23&type=section&id=12.%20PURCHASE%2C%20SALES%20OR%20REDEMPTION%20OF%20THE%20COMPANY%27S%20SECURITIES) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2021 - For the six months ended June 30, 2021, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[45](index=45&type=chunk) [13. Change in Directors' Information Under Rule 13.51B(1) of the Listing Rules](index=23&type=section&id=13.%20CHANGE%20IN%20DIRECTORS%27%20INFORMATION%20UNDER%20RULE%2013.51B%281%29%20OF%20THE%20LISTING%20RULES) Since the publication of the company's 2020 annual report, Mr. Li Shengxiao has been appointed as an independent director of Kuaijishan Shaoxing Wine Co., Ltd - Mr. Li Shengxiao has served as an independent director of Kuaijishan Shaoxing Wine Co., Ltd. (a company listed on the Shanghai Stock Exchange) since May 2021[46](index=46&type=chunk) [14. Employees and Remuneration Policy](index=24&type=section&id=14.%20EMPLOYEES%20AND%20REMUNERATION%20POLICY) As of June 30, 2021, the Group had **8,690** employees, with remuneration determined by market conditions and individual performance, including medical insurance, life insurance, and discretionary bonuses - As of June 30, 2021, the Group had **8,690** employees (June 30, 2020: **7,728** employees)[49](index=49&type=chunk) - Employee remuneration is determined considering market conditions and individual performance, with benefits including medical insurance, life insurance, and discretionary bonuses[49](index=49&type=chunk) [15. Disclosure on the Websites of the SEHK and the Company](index=24&type=section&id=15.%20DISCLOSURE%20ON%20THE%20WEBSITES%20OF%20THE%20SEHK%20AND%20THE%20COMPANY) This interim report has been published on the websites of The Stock Exchange of Hong Kong Limited and the company - This report is published on the SEHK website (http://www.hkexnews.hk) and the company's website (http://www.chinaxlx.com.hk)[49](index=49&type=chunk) [16. Corporate Communications](index=24&type=section&id=16.%20CORPORATE%20COMMUNICATIONS) The company has confirmed shareholders' preferences for the language version and receipt method of corporate communications, offering free printed copies and allowing shareholders to change their choices at any time - The company has confirmed shareholders' preferences for the language version (English and/or Chinese) and receipt method (printed copy or website) of corporate communications, including annual reports and interim reports[49](index=49&type=chunk)[51](index=51&type=chunk) - Shareholders may request printed copies of corporate communications or change their language and receipt method choices at any time[50](index=50&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) [2021 H1 Condensed Consolidated Comprehensive Income](index=26&type=section&id=2021%20H1%20Condensed%20Consolidated%20Comprehensive%20Income) For the six months ended June 30, 2021, the company's revenue significantly increased by **53%** to **RMB 7.573 billion**, gross profit doubled to **RMB 2.118 billion**, profit for the period surged by **237%** to **RMB 889 million**, and basic and diluted earnings per share were **RMB 55.1 cents** Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,573,047 | 4,939,764 | | Cost of sales | (5,455,087) | (3,877,460) | | Gross profit | 2,117,960 | 1,062,304 | | Other income, net | 34,455 | 79,962 | | Selling and distribution expenses | (383,218) | (301,242) | | General and administrative expenses | (406,912) | (316,774) | | Finance costs | (281,902) | (201,949) | | Profit before tax | 1,080,383 | 322,301 | | Income tax expense | (190,952) | (58,033) | | Profit for the period | 889,431 | 264,268 | | Profit attributable to owners of the parent | 645,561 | 180,143 | | Earnings per share (RMB cents) | 55.1 | 15.38 | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [2021 H1 Condensed Consolidated Financial Position](index=27&type=section&id=2021%20H1%20Condensed%20Consolidated%20Financial%20Position) As of June 30, 2021, the company's total assets increased to **RMB 23.416 billion**, with property, plant, and equipment being the largest component; total current liabilities were **RMB 10.725 billion**, resulting in a net current liability of **RMB 5.621 billion**, and total equity increased to **RMB 7.163 billion** Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 18,311,418 | 16,775,969 | | Property, plant and equipment | 16,612,862 | 15,000,465 | | Total current assets | 5,104,292 | 4,179,123 | | Total assets | 23,415,710 | 20,955,092 | | **Liabilities** | | | | Total current liabilities | 10,725,223 | 8,557,366 | | Total non-current liabilities | 5,527,404 | 5,973,352 | | Total liabilities | 16,252,627 | 14,530,718 | | **Equity** | | | | Total equity | 7,163,083 | 6,424,374 | | Net current liabilities | (5,620,931) | (4,378,244) | [Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [2021 H1 Condensed Consolidated Changes in Equity](index=30&type=section&id=2021%20H1%20Condensed%20Consolidated%20Changes%20in%20Equity) For the six months ended June 30, 2021, the Group's total equity increased from **RMB 6.424 billion** at the beginning of the year to **RMB 7.163 billion**, primarily due to profit for the period of **RMB 889 million**, partially offset by dividends paid of **RMB 117 million** Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | June 30, 2021 (RMB thousands) | January 1, 2021 (RMB thousands) | | :--- | :--- | :--- | | Share capital | 1,194,686 | 1,194,686 | | Statutory reserve | 200,307 | 200,307 | | Other reserves | 2,217,760 | 2,217,760 | | Specific reserve | 4,599 | 4,599 | | Retained profits | 1,441,480 | 913,081 | | Equity attributable to owners of the parent | 5,058,832 | 4,530,433 | | Non-controlling interests | 2,104,251 | 1,893,941 | | Total equity | 7,163,083 | 6,424,374 | | Profit for the period | 889,431 | Not applicable | | 2020 final dividend paid | (117,162) | Not applicable | [Condensed Consolidated Statement of Cash Flows](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [2021 H1 Condensed Consolidated Cash Flows](index=31&type=section&id=2021%20H1%20Condensed%20Consolidated%20Cash%20Flows) For the six months ended June 30, 2021, net cash generated from operating activities significantly increased to **RMB 1.293 billion**, net cash used in investing activities was an outflow of **RMB 1.681 billion** primarily for property, plant, and equipment, and net cash generated from financing activities was **RMB 529 million**, with cash and cash equivalents at period-end of **RMB 823 million** Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Cash Flow Category | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,293,023 | 583,940 | | Net cash used in investing activities | (1,681,465) | (2,019,920) | | Net cash generated from financing activities | 529,033 | 1,742,425 | | Net increase/(decrease) in cash and cash equivalents | 140,591 | 306,445 | | Cash and cash equivalents at end of period | 822,632 | 1,190,893 | - Expenditure on property, plant and equipment items amounted to **RMB 1.676 billion**[66](index=66&type=chunk) - Proceeds from loans and borrowings were **RMB 4.186 billion**, and repayment of loans and borrowings was **RMB 3.334 billion**[66](index=66&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=33&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [1. Corporate Information](index=33&type=section&id=1.%20CORPORATE%20INFORMATION) This note reiterates the company's Singapore incorporation and HKEX listing, with its primary business being investment holding and its subsidiaries engaged in manufacturing and trading differentiated products like urea, compound fertilizers, and methanol - The company was incorporated in Singapore on July 17, 2006, and its shares are listed on the Main Board of the Hong Kong Stock Exchange[70](index=70&type=chunk)[72](index=72&type=chunk) - Its principal business is investment holding, with subsidiaries primarily engaged in the production and sale of differentiated products such as urea, compound fertilizers, methanol, melamine, dimethyl ether, furfuryl alcohol, and pharmaceutical intermediates[70](index=70&type=chunk)[72](index=72&type=chunk) [2.1 Basis of Preparation](index=33&type=section&id=2.1%20BASIS%20OF%20PREPARATION) The financial statements are prepared in accordance with Singapore Financial Reporting Standards (International) and International Financial Reporting Standards, using the historical cost convention and presented in RMB - The financial statements are prepared in accordance with Singapore Financial Reporting Standards (International) and International Financial Reporting Standards[71](index=71&type=chunk)[73](index=73&type=chunk) - They are prepared on a historical cost basis, except for equity investments at fair value through profit or loss which are measured at fair value[71](index=71&type=chunk)[73](index=73&type=chunk) - The financial statements are presented in RMB, with all amounts rounded to the nearest thousand[71](index=71&type=chunk)[73](index=73&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=34&type=section&id=2.2%20CHANGES%20IN%20ACCOUNTING%20POLICIES%20AND%20DISCLOSURES) The Group adopted amendments to IFRS 16 'Leases' (COVID-19-Related Rent Concessions) and related amendments to IFRS 9, IAS 39, etc., with no significant impact expected on the financial statements - Adopted amendments to IFRS 16 'Leases': COVID-19-Related Rent Concessions (early adoption), effective from April 1, 2021[75](index=75&type=chunk) - Adopted related amendments to IFRS 9 'Financial Instruments' and other standards: Interest Rate Benchmark Reform – Phase 2, effective from January 1, 2021[75](index=75&type=chunk) - The directors expect that the adoption of these other standards and interpretations will not have a significant impact on the financial statements in the period of initial application[75](index=75&type=chunk) [3. Operating Segment Information](index=35&type=section&id=3.%20OPERATING%20SEGMENT%20INFORMATION) The Group is organized into eight reportable operating segments by product, including urea, compound fertilizer, methanol, melamine, furfuryl alcohol, dimethyl ether, automotive urea solution, and pharmaceutical intermediates, with segment results including directly attributable and reasonably allocated items, but assets and liabilities are not disclosed by segment due to allocation difficulties - The Group has eight reportable operating segments: urea, automotive urea solution, compound fertilizer, methanol, melamine, furfuryl alcohol, dimethyl ether (DME), and pharmaceutical intermediates[77](index=77&type=chunk) - Segment results include items directly attributable and allocated on a reasonable basis, while unallocated items primarily include other income, expenses, selling and distribution expenses, general and administrative expenses, finance costs, and income tax expense[77](index=77&type=chunk) 2021 H1 Segment Revenue and Profit | Segment | Revenue (RMB thousands) | Segment Profit (RMB thousands) | | :--- | :--- | :--- | | Urea | 2,074,145 | 734,642 | | Compound Fertilizer | 1,981,427 | 296,880 | | Methanol | 733,016 | 144,084 | | Melamine | 535,472 | 332,747 | | Furfuryl Alcohol | 335,303 | 44,997 | | Dimethyl Ether | 618,177 | 143,526 | | Automotive Urea Solution | 236,026 | 84,419 | | Pharmaceutical Intermediates | 267,479 | 61,545 | | Others | 792,002 | 275,120 | | Total | 7,573,047 | 2,117,960 | [4. Revenue and Other Income/(Expenses), Net](index=37&type=section&id=4.%20REVENUE%20AND%20OTHER%20INCOME%2F%28EXPENSES%29%2C%20NET) The Group's revenue for H1 2021 primarily derived from goods sales, totaling **RMB 7.573 billion**, while other income, net, significantly decreased to **RMB 34.455 million** from **RMB 79.962 million** in the prior period, mainly due to increased losses from the disposal of property, plant, and equipment Revenue and Other Income/(Expenses), Net (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Revenue from sales of goods | 7,573,047 | 4,939,764 | | Total other income | 71,520 | 90,351 | | Total other expenses | (37,065) | (10,389) | | Other income, net | 34,455 | 79,962 | - The decrease in other income, net, was primarily due to a loss of approximately **RMB 24.829 million** from the disposal of property, plant and equipment items, compared to a profit of approximately **RMB 14.092 million** in the prior period[88](index=88&type=chunk) [5. Finance Costs](index=39&type=section&id=5.%20FINANCE%20COSTS) For the six months ended June 30, 2021, the Group's finance costs amounted to **RMB 281.9 million**, primarily consisting of interest expenses on bank loans, bank overdrafts, and other borrowings Finance Costs (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank loans, bank overdrafts and other borrowings repayable within five years | 281,902 | 201,949 | [6. Profit Before Tax](index=39&type=section&id=6.%20PROFIT%20BEFORE%20TAX) For the six months ended June 30, 2021, the Group's profit before tax was **RMB 1.080 billion**, after deducting costs of inventories sold, depreciation of property, plant and equipment, depreciation of right-of-use assets, and employee benefit expenses Profit Before Tax Deductions (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 5,455,087 | 3,877,460 | | Depreciation of property, plant and equipment | 457,440 | 365,229 | | Depreciation of right-of-use assets | 18,743 | 24,098 | | Total employee benefit expenses | 593,423 | 405,610 | [7. Income Tax Expense](index=40&type=section&id=7.%20INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2021, the Group's income tax expense was **RMB 191 million**, a significant increase primarily due to higher profits, with the company subject to a **17%** income tax rate in Singapore and its PRC subsidiaries to **25%**, with ten high-tech enterprises enjoying a preferential **15%** rate - Income tax expense was **RMB 190,952,000**, a significant increase from **RMB 58,033,000** in the prior period, mainly due to increased profit[94](index=94&type=chunk) - The Singapore income tax rate is **17%**[92](index=92&type=chunk) - PRC subsidiaries are subject to an income tax rate of **25%**, with ten high-tech enterprises enjoying a preferential tax rate of **15%**[92](index=92&type=chunk)[93](index=93&type=chunk) [8. Dividend](index=40&type=section&id=8.%20DIVIDEND) For the six months ended June 30, 2021, the company declared a final dividend of **RMB 117 million** for the year ended December 31, 2020, but did not propose or declare any interim dividend - A final dividend of **RMB 117,162,000** for the year ended December 31, 2020, was declared during the six months ended June 30, 2021[94](index=94&type=chunk) - The company did not propose or declare any interim dividend for the six months ended June 30, 2021[94](index=94&type=chunk) [9. Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=41&type=section&id=9.%20EARNINGS%20PER%20SHARE%20ATTRIBUTABLE%20TO%20ORDINARY%20EQUITY%20HOLDERS%20OF%20THE%20COMPANY) For the six months ended June 30, 2021, basic and diluted earnings per share attributable to ordinary equity holders of the company significantly increased to **RMB 55.1 cents** from **RMB 15.38 cents** in the prior period, with no potential dilutive ordinary shares Earnings Per Share (For the six months ended June 30) | Indicator | 2021 (RMB cents) | 2020 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 55.1 | 15.38 | - Earnings per share are calculated based on the Group's profit for the period attributable to ordinary equity holders of the company, divided by the weighted average number of **1,171,621,000** ordinary shares outstanding during the period[96](index=96&type=chunk)[98](index=98&type=chunk) - There were no potential dilutive ordinary shares for the six months ended June 30, 2021 and 2020, thus diluted earnings per share are equal to basic earnings per share[96](index=96&type=chunk)[98](index=98&type=chunk) [10. Property, Plant and Equipment, Prepaid Land Lease Payments and Coal Mining Rights](index=41&type=section&id=10.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%2C%20PREPAID%20LAND%20LEASE%20PAYMENTS%20AND%20COAL%20MINING%20RIGHTS) During the period, the Group paid approximately **RMB 1.676 billion** for the acquisition of property, plant and equipment, land use rights, and coal mining rights, and received approximately **RMB 4.386 million** from the disposal of related items Property, Plant and Equipment Related Transactions (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Payments for acquisition of property, plant and equipment, land use rights and coal mining rights | 1,675,569 | 1,903,125 | | Proceeds from disposal of property, plant and equipment items | 4,386 | 16,348 | [11. Prepayments](index=41&type=section&id=11.%20PREPAYMENTS) As of June 30, 2021, the Group's total prepayments amounted to **RMB 729 million**, primarily comprising deposits paid to suppliers, with non-current prepayments reduced to zero Prepayments (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Non-current prepayments (acquisition of plant and equipment) | – | 120,060 | | Current prepayments (deposits paid to suppliers) | 728,748 | 491,662 | | Other prepayments | – | 22,519 | | Total | 728,748 | 514,181 | [12. Equity Investments at Fair Value Through Profit or Loss](index=42&type=section&id=12.%20EQUITY%20INVESTMENTS%20AT%20FAIR%20VALUE%20THROUGH%20PROFIT%20OR%20LOSS) As of June 30, 2021, the Group's total equity investments at fair value through profit or loss amounted to **RMB 22.846 million**, including unlisted Chinese equity investments and listed Singaporean and Hong Kong equity investments Equity Investments at Fair Value Through Profit or Loss (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Non-current unlisted equity investments (China) | 6,708 | 6,708 | | Current listed equity investments (Singapore) | 2,210 | 2,271 | | Current listed equity investments (Hong Kong) | 13,928 | 13,821 | | Total | 22,846 | 22,800 | [13. Inventories](index=42&type=section&id=13.%20INVENTORIES) As of June 30, 2021, the Group's total inventories amounted to **RMB 1.020 billion**, primarily composed of raw materials, components and spare parts, work-in-progress, and finished goods, with provision made for inventory write-downs Inventory Composition (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 411,944 | 431,402 | | Components and spare parts | 230,046 | 167,678 | | Work-in-progress | 25,406 | 16,432 | | Finished goods | 355,306 | 379,753 | | Provision for inventory write-downs | (3,116) | (3,116) | | Total | 1,019,586 | 992,149 | [14. Trade and Bills Receivables](index=43&type=section&id=14.%20TRADE%20AND%20BILLS%20RECEIVABLES) As of June 30, 2021, the Group's total trade and bills receivables significantly increased to **RMB 1.132 billion** from **RMB 743 million** at year-end 2020, with trade receivables typically settled within 30 to 90 days and bills receivables within 90 to 180 days, and no significant concentration of credit risk Trade and Bills Receivables (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 440,263 | 204,032 | | Bills receivables | 691,470 | 539,360 | | Total | 1,131,733 | 743,392 | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Within 1 month | 181,454 | 119,892 | | 1 to 3 months | 201,598 | 31,829 | | 3 to 6 months | 32,692 | 37,092 | | 6 to 12 months | 18,775 | 9,314 | | Over 12 months | 5,744 | 5,905 | | Total | 440,263 | 204,032 | - Trade receivables are interest-free and generally settled within 30 to 90 days; bills receivables are interest-free and generally settled within 90 to 180 days[106](index=106&type=chunk) [15. Cash and Cash Equivalents and Pledged Time Deposits](index=44&type=section&id=15.%20CASH%20AND%20CASH%20EQUIVALENTS%20AND%20PLEDGED%20TIME%20DEPOSITS) As of June 30, 2021, the Group's cash and cash equivalents amounted to **RMB 823 million**, with pledged time deposits of **RMB 868 million**, and most cash and bank balances denominated in RMB and held with reputable banks Cash and Cash Equivalents and Pledged Time Deposits (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Time deposits | 867,980 | 706,035 | | Less: Pledged time deposits | (867,980) | (706,035) | | Bank balances | 822,632 | 682,041 | | Cash and cash equivalents | 822,632 | 682,041 | - As of June 30, 2021, cash and bank balances denominated in RMB amounted to **RMB 692,912,000**[111](index=111&type=chunk) - RMB is not freely convertible into other currencies but is convertible through authorized banks[111](index=111&type=chunk) [16. Trade Payables](index=45&type=section&id=16.%20TRADE%20PAYABLES) As of June 30, 2021, the Group's total trade payables significantly increased to **RMB 1.004 billion** from **RMB 509 million** at year-end 2020, with the majority aged between 1 and 3 months Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Within 1 month | 261,797 | 169,569 | | 1 to 3 months | 629,195 | 109,120 | | 3 to 6 months | 41,516 | 65,384 | | 6 to 12 months | 28,445 | 121,958 | | Over 12 months | 42,852 | 42,947 | | Total | 1,003,805 | 508,978 | - Trade payables are interest-free, typically settled within 30 to 90 days, and denominated in RMB[115](index=115&type=chunk) [17. Interest-Bearing Bank and Other Borrowings](index=46&type=section&id=17.%20INTEREST-BEARING%20BANK%20AND%20OTHER%20BORROWINGS) As of June 30, 2021, the Group's total interest-bearing bank and other borrowings increased to **RMB 10.081 billion** from **RMB 9.348 billion** at year-end 2020, comprising **RMB 5.593 billion** in current borrowings and **RMB 4.488 billion** in non-current borrowings, primarily from bank loans and leasing companies Interest-Bearing Bank and Other Borrowings (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | **Current** | | | | Bank loans (secured) | 97,000 | 283,214 | | Bank loans (unsecured) | 4,833,850 | 3,527,013 | | Loans from leasing companies/finance lease payables | 662,162 | 327,433 | | Total current | 5,593,012 | 4,137,660 | | **Non-current** | | | | Bank loans (secured) | 540,000 | 540,000 | | Bank loans (unsecured) | 3,547,290 | 4,115,925 | | Loans from leasing companies/finance lease payables | 400,800 | 554,134 | | Total non-current | 4,488,090 | 5,210,059 | | **Total** | 10,081,102 | 9,347,719 | - Secured bank loans of **RMB 637 million** are collateralized by certain property, plant and equipment items of the Group[119](index=119&type=chunk) - Bank loans and finance lease payables have maturity dates ranging from within one year to over five years[118](index=118&type=chunk) [18. Major Non-Cash Transaction – Interest Capitalisation](index=48&type=section&id=18.%20MAJOR%20NON-CASH%20TRANSACTION%20%E2%80%93%20INTEREST%20CAPITALISATION) During the review period, the Group capitalized **RMB 38.953 million** in interest expenses to property, plant and equipment Interest Capitalisation (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Capitalized interest expense | 38,953 | 49,545 | [19. Contingent Liabilities](index=48&type=section&id=19.%20CONTINGENT%20LIABILITIES) As of the end of the reporting period, the Group had no material contingent liabilities - As of the end of the reporting period, the Group had no material contingent liabilities[122](index=122&type=chunk) [20. Commitments](index=48&type=section&id=20.%20COMMITMENTS) As of June 30, 2021, the Group's total capital commitments (contracted but not provided for) amounted to **RMB 2.903 billion**, primarily for buildings, plant, and machinery, in addition to other commitments of **RMB 450 million** for raw material purchases Capital Commitments (Contracted but not provided for) (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Buildings | 820,426 | 1,083,528 | | Plant and machinery | 2,068,566 | 2,536,334 | | Coal mines | 14,485 | 12,727 | | Total | 2,903,477 | 3,632,589 | Other Commitments (As of June 30) | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Purchase of raw materials | 450,167 | 833,238 | [21. Related Party Transactions](index=49&type=section&id=21.%20RELATED%20PARTY%20TRANSACTIONS) During the period, the Group engaged in transactions with related parties, including sales of utilities and steam, operating lease income, and equipment service fee expenses, and disclosed the total remuneration of directors and key management personnel Related Party Transactions (For the six months ended June 30) | Transaction Type | Related Party | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | :--- | | Sales of utilities and steam | Xinxiang XLX Chemical Equipment Co., Ltd. | 168 | 688 | | Operating lease income | Xinxiang XLX Chemical Equipment Co., Ltd. | 158 | 84 | | Purchase of equipment and service fees | Xinxiang XLX Chemical Equipment Co., Ltd. | 29,409 | 32,218 | Remuneration of Directors and Key Management Personnel (For the six months ended June 30) | Remuneration Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Directors' fees | 525 | 525 | | Salaries and bonuses | 2,864 | 2,792 | | Contributions to defined contribution plans | 204 | 167 | | Total remuneration paid to key management personnel | 3,593 | 3,484 | [22. Seasonality of Operations](index=50&type=section&id=22.%20SEASONALITY%20OF%20OPERATIONS) Sales of compound fertilizers exhibit seasonal fluctuations, typically reaching peak demand during the second and third quarters of each year due to seasonal climate conditions - Sales of compound fertilizers fluctuate seasonally, with demand typically peaking in the second and third quarters of the year[131](index=131&type=chunk)