香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CHINA XLX FERTILISER LTD. * 1866 截至二零二三年九月三十日止九個月未經審核業務更新公告 中國心連心化肥有限公司（「本公司」）之董事會（「董事會」謹此宣佈，本公司及其附屬公司 （「本集團」）截至二零二三年九月三十日止九個月（「二零二三年首九個月」）的未經審核業 務更新。 前三季度，受原料成本支撑不足，供過於求的市場格局影響，煤化工相關產品價格震盪 下行，對本集團化肥及化工品價格造成負面影響，但本集團結合市場需求，根據「以肥為 基 肥化並舉」的發展戰略，持續加大柔性調節，最大程度降低市場波動對業績帶來的不利 影響。進入第三季度，隨著成本支撐漸強，各產品價格環比窄幅上漲，業績指標明顯改 善。同時，本集團資產負債率及有息負債總額持續降低，資產結構進一步優化。 本集團二零二三年首九個月的未經審核綜合收入由截至二零二二年九月三十日止九個月 （「二零二二年首九個月」）的約人民幣17,5 ...

Financial Performance - The unaudited consolidated revenue for 1H2023 decreased by approximately RMB155 million or 1% to approximately RMB12,059 million from RMB12,214 million in 1H2022[17]. - The unaudited consolidated net profit for 1H2023 decreased by approximately RMB526 million or 40% to approximately RMB778 million from RMB1,304 million in 1H2022[17]. - The total comprehensive income attributable to the owners of the parent decreased by approximately RMB414 million or 43% to approximately RMB546 million in 1H2023 from RMB960 million in 1H2022[17]. - Profit for the period decreased by approximately RMB526 million or 40% from RMB1,304 million in 1H2022 to approximately RMB778 million in 1H2023, primarily due to a decrease in gross profit[33]. - Profit before tax decreased to RMB 925,758, a decline of 42.4% compared to RMB 1,606,295 in the previous year[88]. - Basic and diluted earnings per share were 44.8 RMB cents, a decrease from 78.2 RMB cents in the same period of 2022[88]. - For the six months ended June 30, 2023, the group reported a profit of RMB 546,194,000, compared to RMB 959,576,000 for the same period in 2022, reflecting a decrease of approximately 43%[96]. Revenue Breakdown - Revenue from urea sales increased by approximately RMB80 million or 2% YoY, reaching approximately RMB3,518 million for 1H2023, driven by a 13% increase in sales volume despite a 10% decrease in average selling price[19]. - Revenue from vehicle urea solution sales decreased by approximately RMB65 million or 22% YoY to approximately RMB225 million for 1H2023, attributed to a 5% decrease in average selling price and a 19% decrease in sales volume[19]. - Revenue from compound fertilisers decreased by approximately RMB555 million or 15% YoY to approximately RMB3,208 million for 1H2023, due to a 5% decrease in sales volume and a 10% decrease in average selling price[20]. - Revenue from methanol sales decreased by approximately RMB184 million or 16% YoY to approximately RMB977 million for 1H2023, resulting from a 9% decrease in average selling price and an 8% decrease in sales volume[20]. - Revenue from melamine sales decreased by approximately RMB175 million or 30% YoY to approximately RMB412 million for 1H2023, primarily due to a 34% decrease in average selling price[21]. - Revenue from medical intermediate products increased by approximately RMB77 million or 35% YoY to approximately RMB299 million for 1H2023, supported by an 8% increase in average selling price and a 25% increase in sales volume[21]. - Sales revenue of liquid ammonia increased by approximately RMB186 million or 20% from RMB931 million in 1H2022 to approximately RMB1,117 million in 1H2023, driven by a 50% YoY increase in sales volume[23]. Cost and Profitability - Gross profit margin for urea sales decreased by approximately 6 percentage points from 35% in 1H2022 to 29% in 1H2023, primarily due to a larger decline in average selling price compared to cost[19]. - Gross profit margin for compound fertilisers decreased by approximately 4 percentage points to 12% in 1H2023 from 16% in 1H2022, mainly due to the decline in average selling price[20]. - Despite a gross profit margin of methanol decreasing to -1.7% in 1H2023, the marginal profit contribution reached 13% through improved self-conversion and product structure adjustments[21]. - Gross profit margin for melamine products decreased by approximately 22 percentage points from 58% in 1H2022 to 36% in 1H2023, driven by a significant drop in average selling price[21]. - The gross profit margin of medical intermediate products decreased by approximately 1 percentage point from 17% in 1H2022 to 16% in 1H2023, attributed to a 10% YoY increase in average raw material costs[22]. - The gross profit margin of liquid ammonia decreased by approximately 16 percentage points from 36% in 1H2022 to 20% in 1H2023, mainly due to a decrease in average selling price[23]. Expenses and Costs Management - Selling and distribution expenses decreased by approximately RMB18 million or 5% from RMB329 million in 1H2022 to RMB311 million in 1H2023[28]. - General and administrative expenses decreased by approximately RMB12 million or 2% from RMB652 million in 1H2022 to RMB640 million in 1H2023, despite increases in R&D and environmental protection expenses[29]. - Finance costs decreased by approximately RMB11 million or 3% from RMB335 million in 1H2022 to RMB324 million in 1H2023, mainly due to a decrease in average interest rates[33]. - Income tax expense decreased by approximately RMB154 million or 51% from RMB302 million in 1H2022 to RMB148 million in 1H2023, due to a decline in profits and preferential tax rates for high-tech enterprises[33]. Strategic Initiatives - The company adheres to a development strategy of "Fertiliser as foundation, fertiliser and chemical side by side" and an operating strategy of "low-cost and differentiation"[9]. - The Group aims to achieve high-efficiency, high-end, lean development as part of its core mission[7]. - The company is committed to enhancing key capabilities, including technological research and development and marketing differentiation[10]. - The strategic positioning principle emphasizes never deviating from the main course and establishing the position as "Industry No.1"[10]. - The Group anticipates a rebound in energy prices and global food prices, which will support fertilizer prices in the second half of the year[37]. - The Group plans to enhance innovation capabilities and promote new high-efficiency fertilizers to strengthen product competitiveness[37]. - The Group aims to balance project funding with operational cash flows to reduce both interest and liability indicators[37]. Market Conditions - The supply and demand situation in the fertiliser market trended soft, with coal prices under pressure, leading to a decline in fertiliser prices[16]. - The chemical product market remained in a downturn, with downstream demand recovery falling short of expectations, impacting the Group's results negatively[16]. - Future outlook remains positive with expectations of stable demand in the fertilizer and chemical markets, supporting ongoing production and sales efforts[108]. Corporate Governance and Compliance - The Company complied with all provisions of the Corporate Governance Code for the six months ended June 30, 2023[68]. - The Audit Committee reviewed the accounting principles and internal control matters for the interim results for the six months ended June 30, 2023[67]. - The company adopted new accounting standards effective from January 1, 2023, with no material impact on financial performance[107]. Shareholder Information - Directors and chief executives hold significant shares, with Mr. Liu Xingxu owning 415,877,999 shares, representing 33.86% of the company's issued share capital[40]. - Ms. Yan Yunhua holds 256,265,000 shares, accounting for 20.86% of the company's issued share capital[40]. - As of June 30, 2023, no other directors or chief executives had interests in the shares or debentures of the Company beyond those disclosed[42]. Employee and Management Compensation - For the six months ended June 30, 2023, the total compensation paid to key management personnel was RMB 26,071,000, an increase from RMB 25,805,000 in 2022, reflecting a growth of 1.03%[178]. - Directors' fees increased to RMB 825,000 in 2023 from RMB 525,000 in 2022, representing a significant increase of 57.14%[178]. - Performance-related bonuses for the period were RMB 22,650,000, up from RMB 22,150,000 in the previous year, indicating a growth of 2.26%[178].

Financial Performance - For the six months ended June 30, 2023, the revenue was RMB 12,059,121 thousand, a decrease of 1.26% compared to RMB 12,213,886 thousand for the same period in 2022[2] - Gross profit for the period was RMB 2,110,699 thousand, down 26.2% from RMB 2,861,627 thousand in the previous year[2] - Profit before tax decreased to RMB 925,758 thousand, representing a decline of 42.4% from RMB 1,606,295 thousand in the prior year[2] - Net profit for the period was RMB 777,559 thousand, a decrease of 40.3% compared to RMB 1,304,459 thousand in the same period last year[3] - Basic and diluted earnings per share were RMB 44.8, down from RMB 78.2 in the previous year[3] - The company reported a net profit of RMB 777,559,000 for the six months ended June 30, 2023, down from RMB 1,304,459,000 in the same period of 2022, indicating a decline of approximately 40%[19] - The unaudited consolidated net profit for the first half of 2023 decreased by approximately RMB 526 million or 40% to about RMB 778 million compared to the first half of 2022[44] Assets and Liabilities - Total assets as of June 30, 2023, were RMB 27,505,718 thousand, a slight decrease from RMB 27,867,176 thousand at the end of 2022[5] - Current liabilities totaled RMB 9,792,575 thousand, down from RMB 10,540,755 thousand in the previous year[5] - Total equity increased to RMB 9,877,545 thousand from RMB 9,567,828 thousand at the end of 2022[7] - Non-current assets rose to RMB 22,445,724 thousand, compared to RMB 21,636,289 thousand at the end of 2022[4] - The company’s total liabilities increased, reflecting ongoing investments and operational costs, although specific figures were not disclosed in the provided content[19] - As of June 30, 2023, the company's net debt amounted to RMB 15,323,122,000, a decrease from RMB 16,007,783,000 as of December 31, 2022, reflecting a reduction in financial leverage[61] - The asset-liability ratio improved to 70.50% as of June 30, 2023, down from 72.02% at the end of 2022, indicating better capital management[67] Revenue and Sales Performance - For the six months ended June 30, 2023, the company reported total revenue of RMB 9,877,545 thousand, an increase from RMB 9,567,828 thousand for the same period in 2022, representing a growth of approximately 3.2%[9] - Urea sales revenue increased by approximately RMB 80 million or 2% to about RMB 3,518 million in the first half of 2023, driven by a 13% increase in sales volume[45] - The sales revenue of automotive urea solution decreased by approximately RMB 65 million or 22% to about RMB 225 million in the first half of 2023, due to a 5% and 19% decrease in average selling price and sales volume, respectively[46] - The sales revenue of compound fertilizer decreased by approximately RMB 555 million or 15% to RMB 3,208 million in the first half of 2023, primarily due to a 5% decrease in sales volume and a 10% decrease in average selling price[47] - Methanol sales revenue fell by approximately RMB 184 million or 16% to RMB 977 million in the first half of 2023, attributed to a 9% decrease in average selling price and an 8% decrease in sales volume[48] - The sales revenue of melamine decreased by approximately RMB 175 million or 30% to RMB 412 million in the first half of 2023, primarily due to a 34% decrease in average selling price, despite a 6% increase in sales volume[50] - The sales revenue of pharmaceutical intermediates increased by RMB 77 million or 35% to RMB 299 million in the first half of 2023, driven by an 8% increase in average selling price and a 25% increase in sales volume[51] - The sales revenue of liquid ammonia rose by approximately RMB 186 million or 20% to RMB 1,117 million in the first half of 2023, due to a 50% increase in sales volume, although partially offset by a 20% decrease in average selling price[52] Operational Strategy and Future Plans - The company plans to continue expanding its product offerings, focusing on differentiated products such as urea, compound fertilizers, and methanol, which are key to its growth strategy[11] - The company plans to complete the 700,000-ton urea project at the Xinxiang base in Q4 2023, enhancing production capacity[62] - The company is also developing a 1 million-ton ecological fertilizer project at the Huludao base, expected to be operational by the end of 2023[62] - The company is focusing on enhancing its R&D capabilities for new high-efficiency fertilizers to establish a competitive advantage through product differentiation[62] - The company is committed to enhancing its market presence through strategic expansions and potential acquisitions in the fertilizer and chemical sectors[11] Employee and Compensation - As of June 30, 2023, the group employed 9,817 staff, an increase from 9,313 employees as of December 31, 2022[74] - Employee compensation is determined based on market conditions and individual performance, with additional benefits including medical and life insurance[74] - The performance of marketing personnel was affected by a decline in overall business performance this year[74] Risk Management and Legal Standing - The company is actively monitoring market risks, including fluctuations in product prices and raw material costs, to mitigate financial exposure[63] - The company has not encountered any significant contingent liabilities or major litigation as of June 30, 2023, indicating a stable legal standing[68] Share Repurchase - The company has repurchased 8,543,000 shares, representing 0.7% of the total issued share capital, at a total cost of HKD 36,246,000 from January 1 to June 1, 2023[72] - The company repurchased a total of 9,358,000 shares, representing 0.76% of the total issued share capital as of June 30, 2023, with a total cost of HKD 39,154,000 (excluding transaction fees)[73] - The highest repurchase price during the period was HKD 4.5 per share, while the lowest was HKD 3.41 per share[73]

Financial Proceeds and Utilization - The net proceeds from the placement and subscription amounted to approximately HKD 359,110,000 (equivalent to about RMB 298,000,000) [1] - Approximately HKD 144,000,000 (equivalent to about RMB 118,000,000) was allocated for repaying bank loans to strengthen the financial position of the group [3] - The company confirmed that the net proceeds were fully utilized as per the intended purposes without significant changes or delays [4] Investments in Production Bases - The company invested approximately HKD 98,000,000 (equivalent to about RMB 80,000,000) in establishing a production base in Jinchang, Gansu Province, China [3] - An investment of approximately HKD 117,000,000 (equivalent to about RMB 96,000,000) was made for the construction of a production base in Jiujiang, Jiangxi Province, China [3] Board of Directors - The board of directors consists of experienced executives, including Liu Xingxu as the chairman [5]

Financial Performance - In Q1 2023, the company's unaudited consolidated revenue increased by approximately RMB 8.93 billion or 17% to approximately RMB 62.79 billion compared to Q1 2022's revenue of about RMB 53.86 billion[2] - The company's unaudited net profit for Q1 2023 decreased by approximately RMB 0.58 billion or 11% to approximately RMB 4.62 billion, down from about RMB 5.20 billion in Q1 2022[2] Sales Revenue by Product - Urea sales revenue in Q1 2023 rose by approximately RMB 3.7 billion or 23% to about RMB 19.53 billion, with sales volume increasing by 19% to approximately 768,000 tons[3] - Compound fertilizer sales revenue in Q1 2023 increased by approximately RMB 0.83 billion or 6% to about RMB 15.60 billion, driven by a 5% increase in sales volume to 530,000 tons[5] - Methanol sales revenue in Q1 2023 increased by approximately RMB 0.41 billion or 9% to about RMB 5.28 billion, with sales volume rising by 13%[6] - The sales revenue of pharmaceutical intermediates in Q1 2023 rose by approximately RMB 0.28 billion or 24% to RMB 1.44 billion, driven by a 50% increase in sales volume[8] - The sales revenue of automotive urea solution in Q1 2023 decreased by approximately RMB 0.11 billion or 9% to about RMB 1.05 billion, primarily due to an 11% drop in sales volume[4] Gross Profit Margin Analysis - The gross profit margin for urea in Q1 2023 increased by 2 percentage points to 30%, compared to approximately 28% in Q1 2022[3] - The gross profit margin for compound fertilizer in Q1 2023 decreased by 3.4 percentage points to 11.7%, impacted by a 19% rise in raw material costs[5] - The gross profit margin for pharmaceutical intermediates in Q1 2023 decreased by 4.4 percentage points to 15%[8] - The gross profit margin for urea decreased by 1.9 percentage points to 28% due to reclassification of transportation costs[11] - The gross profit margin for automotive urea solution decreased by 5.3 percentage points to 31.6% after adjustments[11] - The gross profit margin for compound fertilizer decreased by 3.4 percentage points to 15.1% following the reclassification[11] - The gross profit margin for methanol decreased by 1.1 percentage points to 2.6% after adjustments[11] - The gross profit margin for melamine decreased by 4.1 percentage points to 59.4% due to the reclassification of transportation costs[11] Market and Production Developments - The international energy supply and demand has shifted to a looser state, leading to a significant decline in coal prices, which has insufficiently supported fertilizer prices, resulting in a downward trend[9] - The company's new production capacity of 700,000 tons of urea at the Xinxiang base is expected to commence production in the second half of this year[9] - The first phase of the Liaoning Huludao base project is anticipated to be completed and put into operation in the third quarter of this year[9] - The company aims to enhance its market share of high-efficiency fertilizers through technological innovation and collaboration with research institutions like the Chinese Academy of Sciences[9] - The company is committed to enhancing its technological development in wastewater, waste gas, and waste residue recycling to improve circular economy benefits[9]

Corporate Strategy and Development - The company aims to become China's most respected fertilizer enterprise group, focusing on high-efficiency and high-end development[7]. - The company reported a commitment to a low-cost and differentiated operating strategy, enhancing competitiveness and profitability[8]. - The company operates under a strategic principle of preventing and controlling development risks, ensuring compliance with laws and regulations[9]. - The company has a strategic focus on maintaining strong financial health and operational efficiency to support growth initiatives[115]. - The development strategy focuses on "fertilizer as the foundation" while simultaneously expanding into the chemical sector, establishing a robust industrial system[45]. - The Group's strategy includes consolidating its fertilizer business while promoting differentiated urea and compound fertilizers, and enhancing R&D for high-efficiency fertilizers[83]. - The company is committed to enhancing its competitive edge through continuous improvement and adaptation to market trends[113][115]. - The company is actively exploring opportunities for international expansion to diversify its revenue streams[123]. Technological Innovation and R&D - The company has developed a nitrogen fertilizer efficient utilization innovation center and a National Enterprise Technology Centre, emphasizing its commitment to technological advancement[16]. - The company has collaborated with the Chinese Academy of Sciences to develop and promote high-efficiency fertilizer products, achieving differentiation in its product offerings[14]. - The company is actively involved in research and development to innovate new products and technologies in the fertilizer industry[113][115]. - The company aims to leverage new technologies in fertilizer production to improve efficiency and sustainability[123]. Financial Performance - Revenue for 2022 increased by 36% to RMB 23,072 million compared to RMB 16,977 million in 2021[23]. - Gross profit rose to RMB 4,349 million in 2022, up 6% from RMB 4,104 million in 2021, while cost of sales increased by 45%[23]. - Net profit for 2022 was RMB 1,808 million, a slight increase of 2% from RMB 1,771 million in 2021[23]. - Basic and diluted earnings per share decreased by 0.8% to 109.67 RMB cents in 2022 from 110.57 RMB cents in 2021[23]. - Dividend per share increased by 32% to 25 RMB cents in 2022 from 19 RMB cents in 2021[23]. - The gearing ratio improved from 75.01% in 2021 to 72.02% in 2022, indicating a reduction in net debt relative to total capital[77]. - Net debt increased to approximately RMB 16,007 million in 2022 from RMB 15,556 million in 2021, reflecting higher borrowings[77]. Market Position and Expansion - China XLX's urea production ranked first in the industry, while synthetic ammonia production ranked fourth, showcasing its competitive position in the market[44]. - The successful commissioning of the Jiangxi XLX Compound Fertiliser Tower Project enhanced the company's influence in the southern market[30]. - The successful commissioning of the Gansu XLX Tower Granulation Compound Fertiliser Project has laid a solid foundation for further market expansion in the northwestern region[40]. - The company plans to produce 10 million tons of "urea + compound fertilizer" by the end of the 14th Five-Year Plan, aiming to achieve a leading position in the industry[49]. - The company is diversifying into the downstream coal chemical industry, developing products such as methanol, dimethyl ether, and rare gases, to balance the seasonal nature of fertilizer profitability[48]. Environmental Sustainability - The company has implemented new coal gasification technology across all production facilities, enhancing environmental sustainability[16]. - The three major bases in Henan, Xinjiang, and Jiangxi were recognized as "A-class Enterprise for Environmental Protection Performance" and included in the "Green Factory" list, enhancing the company's commitment to green development[44]. - In 2022, XLX Group was awarded the honorary title of "Energy Carbon Demonstration Enterprise" in Henan Province[34]. - In 2022, China XLX achieved a comprehensive energy consumption of 1,182.6 kilograms of standard coal per ton of ammonia, ranking first in the industry and maintaining its status as the energy efficiency leader for 11 consecutive years[44]. Governance and Compliance - The Company has complied with all provisions of the Corporate Governance Code during the year ended December 31, 2022[98]. - The Audit Committee has reviewed the accounting principles and standards adopted by the Group for the year ended December 31, 2022[97]. - The Company is committed to maintaining high standards of corporate governance and transparency in its operations[122]. - The Company emphasizes timely, fair, and accurate information disclosure to enhance transparency and communication with the capital market[143]. - The Board has established various committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, primarily composed of independent non-executive directors[166]. Human Resources and Workforce - As of December 31, 2022, the Group had 9,313 employees, an increase from 8,698 in 2021, reflecting a growth of approximately 7.1%[104]. - The Group provides staff benefits including medical and life insurance, and grants discretionary incentive bonuses based on performance[104]. - The gender ratio in the Board is 14.29% female (1 member) and 85.71% male (6 members) as of the annual report date[196]. - The gender ratio in senior management is also 14.29% female (1 member) and 85.71% male (6 members)[196]. - Overall workforce gender ratio is 26.18% female (2,438 employees) and 73.82% male (6,875 employees)[196]. - The Board aims to improve gender diversity across all levels of the Group[195]. Investor Relations - The Company conducted nearly a hundred roadshow promotions through a combination of online and offline channels to engage with investors[141]. - Approximately 300 investors and analysts were engaged through various investor relations activities throughout the year[145]. - The Company maintained a proactive approach in investor relations despite reduced on-site visits due to the COVID-19 pandemic[145]. - The Company organized regular results announcement meetings to share strategic planning and operational updates with investors[141]. Risk Management - The Group's liquidity risk is monitored, with regular reviews of financial investments and cash flow projections to maintain a balance between funding continuity and flexibility[89]. - The Group faces market risks including fluctuations in average selling prices of key products and changes in raw material costs, primarily coal[87]. - The Group's risk management and internal control systems are integrated into business planning and monitoring processes[199]. - The Audit Committee conducts an annual review of the effectiveness of the Group's risk management and internal control systems[200].

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]

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].