[Financial Summary](index=1&type=section&id=Financial%20Summary) [Annual Performance Highlights](index=1&type=section&id=Annual%20Performance%20Highlights) The company achieved significant revenue growth of 22.5% to RMB 1.482 billion, turned a loss into a net profit of RMB 113 million, and improved its gearing ratio to 42.3% Key Financial Indicators for 2022 | Indicator | 2022 | 2021 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. RMB 1.482 billion | Approx. RMB 1.209 billion | +22.5% | | Gross Profit | Approx. RMB 342 million | Approx. RMB 248 million | +37.8% | | Profit/(Loss) for the year | Profit approx. RMB 113 million | Net loss approx. RMB 27 million | Turned loss into profit | | Basic Earnings/(Loss) Per Share | Approx. RMB 0.09 | Approx. (RMB 0.02) | Turned loss into profit | | Gearing Ratio | 42.3% | 48.0% | Decreased by 5.7 percentage points | - The Board decided not to recommend a final dividend for the reporting period[13](index=13&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total revenue grew 22.5% to RMB 1.482 billion, with gross profit up 37.8% to RMB 342 million, resulting in a net profit of RMB 113 million Summary of Consolidated Statement of Comprehensive Income (RMB) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | 1,481,644,241 | 1,209,270,875 | | Gross Profit | 341,850,613 | 248,139,133 | | Operating Profit | 187,037,964 | 42,166,251 | | Profit Before Income Tax | 161,017,910 | 14,118,021 | | Profit/(Loss) for the year attributable to owners of the Company | 112,742,520 | (26,816,529) | | Earnings/(Loss) Per Share - Basic and Diluted | 0.09 | (0.02) | - In 2022, the Group recognized a credit loss provision of **RMB 8.135 million** for trade receivables, compared to zero in 2021. Conversely, a credit loss provision of **RMB 66.4 million** for bill investments was recognized in 2021, with zero in 2022[15](index=15&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, total assets reached RMB 1.746 billion, net assets grew 8.1% to RMB 1.386 billion, and net current assets significantly improved to RMB 130 million Summary of Consolidated Statement of Financial Position (As at December 31, RMB) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Non-current Assets | 1,615,885,963 | 1,595,732,254 | | Current Assets | 990,790,481 | 810,316,923 | | Current Liabilities | 860,485,398 | 787,832,387 | | Non-current Liabilities | 360,357,987 | 336,186,920 | | Net Assets | 1,385,833,059 | 1,282,029,870 | [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [General Information and Basis of Preparation](index=5&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Group, an investment holding company, primarily produces and supplies industrial gases in China, with financial statements prepared in RMB under IFRS - The Group's principal business is the production and supply of industrial gases in China[19](index=19&type=chunk) - The financial statements are presented in RMB, despite the Company's functional currency being USD, to better present information to management for monitoring Group performance[9](index=9&type=chunk) [Independent Investigation](index=5&type=section&id=Independent%20Investigation) An independent investigation found former Chairman Mr. Chen made unauthorized loans of RMB 118 million and a HKD 80 million bill investment, which were unrecoverable, impaired, and written off in 2022 - The investigation involved three loans totaling **RMB 118 million** and a bill investment of **HKD 80 million** (approximately **RMB 66.4 million**), all conducted by former Chairman Mr. Chen without Board approval[53](index=53&type=chunk)[27](index=27&type=chunk)[55](index=55&type=chunk) - Mr. Chen claimed the loans were to attract IPO investors and the investment was for higher returns, but neither involved due diligence nor complied with internal financial control procedures[32](index=32&type=chunk)[33](index=33&type=chunk)[60](index=60&type=chunk) - Due to long-term overdue status and unrecoverability, the **RMB 118 million** loans were fully provided for in 2020, and the **RMB 66.4 million** bill investment was fully provided for in 2021; both amounts were formally written off in 2022[66](index=66&type=chunk)[39](index=39&type=chunk)[67](index=67&type=chunk) - The Board concluded that despite forensic accountants finding no direct evidence of management overreach beyond the Xijieai agreement, Mr. Chen's and Mr. Bai's actions constituted management overreach due to the unauthorized nature of the transactions[85](index=85&type=chunk) [Segment Information, Revenue and Expenses](index=13&type=section&id=Segment%20Information%2C%20Revenue%20and%20Expenses) The Group operates in industrial gases and LNG services, with industrial gases contributing most revenue and gross profit, while 67.8% of total revenue came from one major customer Segment Results for 2022 and 2021 (RMB) | Segment | 2022 Revenue | 2022 Gross Profit | 2021 Revenue | 2021 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Supply of Industrial Gases | 1,194,342,987 | 334,105,185 | 1,047,227,064 | 242,720,623 | | Liquefied Natural Gas and Gas Transportation Services | 305,207,749 | 7,745,428 | 181,881,285 | 5,418,510 | - The Group's revenue is highly concentrated, with **RMB 1.005 billion** from its largest customer in 2022, accounting for **67.8%** of total revenue[73](index=73&type=chunk) Major Expenses by Nature (RMB) | Expense Item | 2022 | 2021 | | :--- | :--- | :--- | | Consumption of Utilities | 796,860,170 | 717,011,666 | | Consumption of Raw Materials and Low-Value Consumables | 186,939,664 | 105,151,805 | | Depreciation of Property, Plant and Equipment | 124,107,610 | 111,614,153 | | Employee Benefit Expenses | 58,384,236 | 54,041,647 | [Income Tax Expense](index=17&type=section&id=Income%20Tax%20Expense) Income tax expense increased 17.9% to RMB 48.28 million in 2022, driven by higher subsidiary profits and preferential tax rates for high-tech enterprises Composition of Income Tax Expense (RMB) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Current Tax | 31,152,096 | 31,965,302 | | Deferred Tax | 17,123,294 | 8,969,248 | | **Total Income Tax Expense** | **48,275,390** | **40,934,550** | - Tangshan Tanggang Gas Co., Ltd. and Luannan Tanggang Gas Co., Ltd., subsidiaries of the Group, enjoy a preferential income tax rate of **15%** as recognized high-tech enterprises[79](index=79&type=chunk) - The Group obtained **RMB 16.65 million** in super tax deductions through R&D activities, significantly higher than **RMB 4.99 million** in 2021[78](index=78&type=chunk)[113](index=113&type=chunk) [Notes to Key Statement of Financial Position Items](index=19&type=section&id=Notes%20to%20Key%20Statement%20of%20Financial%20Position%20Items) Trade receivables increased to RMB 567 million with an RMB 8.14 million impairment, while prior-year unrecoverable loans and bill investments totaling RMB 184.4 million were fully written off - Trade receivables increased from **RMB 427 million** to **RMB 567 million**, with **91.6%** aged within 6 months. A new impairment provision of **RMB 8.135 million** was recognized this year[117](index=117&type=chunk)[151](index=151&type=chunk) - The **RMB 118 million** loans issued in 2020, after full impairment provision, were written off during 2022[120](index=120&type=chunk)[152](index=152&type=chunk) - The **RMB 66.4 million** bill investment made in 2021, after full impairment provision, was written off during 2022[128](index=128&type=chunk)[121](index=121&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=24&type=section&id=Business%20Review%20and%20Outlook) In 2022, the Group's revenue grew 22.5% driven by customer capacity and new products, with industrial gas remaining core, and anticipates future growth from market trends and customer expansion - The Group's revenue achieved a **22.5%** year-on-year increase, benefiting from the gradual release of production capacity at major customer HBIS Group's coastal production bases and improved market sales and prices for new product krypton-xenon mixture[160](index=160&type=chunk) 2022 Key Product Sales Performance | Product Category | Sales Revenue (RMB) | Sales Volume | | :--- | :--- | :--- | | Pipeline Industrial Gases | Approx. RMB 928 million | Approx. 3,622 million standard cubic meters | | Liquid Industrial Gases | Approx. RMB 228 million | Approx. 190,553 tonnes | | Liquefied Natural Gas and Gas Transportation Services | Approx. RMB 305 million | Not applicable | - Future development opportunities include the continuous growth of China's industrial gas market, an increasing proportion of outsourced gas supply models, and expansion plans by major customers (e.g., HBIS Co., Ltd.'s 4 blast furnace construction)[164](index=164&type=chunk)[166](index=166&type=chunk)[198](index=198&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) In 2022, total revenue grew 22.5% to RMB 1.482 billion, gross profit increased 37.8% to RMB 342 million, administrative expenses decreased 14.0%, and net finance costs decreased 7.2%, resulting in a net profit of RMB 113 million Revenue Growth by Business Segment | Business Segment | 2022 Revenue (RMB million) | Year-on-Year Growth | | :--- | :--- | :--- | | Supply of Pipeline Industrial Gases | 927.74 | +15.7% | | Supply of Liquid Industrial Gases | 228.03 | +10.5% | | Supply of Liquefied Natural Gas and Gas Transportation Services | 305.21 | +67.8% | - Gross profit increased by **37.8%**, primarily due to higher revenue, improved equipment efficiency, and reduced unit power consumption[146](index=146&type=chunk) - Administrative expenses decreased by **14.0%** to **RMB 82.18 million**, mainly due to reduced professional fees[204](index=204&type=chunk) - Net finance costs decreased by **7.2%** to **RMB 26.02 million**, primarily due to lower interest expenses from reduced bank borrowings[176](index=176&type=chunk) [Liquidity, Financial Resources and Risk Management](index=28&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Risk%20Management) At year-end 2022, the Group's financial position was robust, with cash up to RMB 361 million, borrowings down to RMB 586 million, and improved gearing and current ratios Key Financial Resources Indicators (As at December 31) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Cash and Bank Balances | RMB 361 million | RMB 298 million | | Bank and Other Borrowings | RMB 586 million | RMB 615 million | | Gearing Ratio | 42% | 48% | | Current Ratio | 1.15 | 1.03 | - The Group's credit risk is primarily concentrated with HBIS Group, which accounts for **97%** of trade receivables. Given a good historical repayment record, management considers the inherent credit risk not significant but has prudently made impairment provisions[210](index=210&type=chunk) - The Group regularly monitors liquidity risk and has approximately **RMB 511 million** in unused bank loan facilities to provide additional liquidity[178](index=178&type=chunk)[182](index=182&type=chunk) [Employees and Remuneration Policy](index=31&type=section&id=Employees%20and%20Remuneration%20Policy) As of year-end 2022, the Group employed 341 staff, with total employee costs of RMB 58.38 million, and maintains competitive remuneration and training programs Employee Data | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Number of Employees | 341 | 369 | | Total Employee Costs | Approx. RMB 58.38 million | Approx. RMB 54.04 million | - The Group provides employees with training in operations, technical knowledge, work safety, and environmental protection[189](index=189&type=chunk) - The Company adopted a share option scheme in 2020, but no share options had been granted as of the reporting date[216](index=216&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) [Discloseable and Connected Transactions](index=32&type=section&id=Discloseable%20and%20Connected%20Transactions) In June 2022, Tanggang Gas entered a RMB 82.9 million gas supply agreement with a connected party, which was approved by independent shareholders in January 2023 - Tanggang Gas signed an agreement with Tangshan Zhonghouban to invest **RMB 82.9 million** in building a Vacuum Pressure Swing Adsorption oxygen production unit to meet Tangshan Zhonghouban's anticipated **30%** increase in oxygen demand[219](index=219&type=chunk)[193](index=193&type=chunk) - The transaction was approved by an extraordinary general meeting of shareholders on January 6, 2023[220](index=220&type=chunk) [Updated Expected Timetable for Use of Proceeds](index=33&type=section&id=Updated%20Expected%20Timetable%20for%20Use%20of%20Proceeds) The Company extended the use of unutilized IPO proceeds of RMB 50.553 million to June 30, 2024, due to customer project delays, with 83.0% of proceeds already utilized - The Board decided to extend the expected timetable for the use of unutilized IPO proceeds to **June 30, 2024**[222](index=222&type=chunk) IPO Proceeds Usage and Application (RMB '000) | Planned Use | Planned Amount | Amount Utilized | Amount Unutilized | | :--- | :--- | :--- | :--- | | Procurement and Relocation of Air Separation Units (Phase I) | 246,950 | 246,950 | 0 | | Purchase and Installation of New Air Separation Units (Phase II) | 50,553 | 0 | 50,553 | | **Total** | **297,503** | **246,950** | **50,553** | - The primary reason for extending the timetable for use of proceeds is delays in customer project construction, requiring the Company, as the exclusive supplier, to align with their development schedule[224](index=224&type=chunk) [Corporate Governance](index=34&type=section&id=Corporate%20Governance) The Company complied with most Corporate Governance Code provisions, achieving separation of Chairman and CEO roles, and the Audit Committee reviewed the audited financial statements - The Company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules[246](index=246&type=chunk) - Addressing the Corporate Governance Code's requirement for separation of Chairman and CEO roles, the Company, after removing the former Chairman, appointed Mr. Yao Li as Chairman of the Board and Mr. Li Libing as Chief Executive Officer, complying with the provisions[225](index=225&type=chunk)[247](index=247&type=chunk) - The Audit Committee, together with the external auditor, reviewed the audited consolidated financial statements for the reporting period[251](index=251&type=chunk) [Extracts from Independent Auditor's Report](index=35&type=section&id=Extracts%20from%20Independent%20Auditor%27s%20Report) The independent auditor issued a "Qualified Opinion" on the 2022 consolidated financial statements due to insufficient audit evidence for unauthorized loans of RMB 118 million and HKD 80 million bill investments - The auditor issued a qualified opinion, stating that, except for the possible effects of the matters described in the basis for qualified opinion, the financial statements present fairly the Group's financial position[230](index=230&type=chunk) - The core reason for the qualified opinion is the limited audit scope regarding two significant transactions: - **Loan Transactions**: Loans totaling **RMB 118 million** provided to three companies in 2020 - **Bill Investment**: An **HKD 80 million** bill investment made to one company in 2021[254](index=254&type=chunk)[255](index=255&type=chunk) - Auditor concerns include: transactions not being part of the Group's ordinary course of business, lack of Board approval, absence of due diligence, use of funds earmarked for dividends, and no recovery to date. Due to unsatisfactory explanations, the auditor could not determine the commercial substance or the appropriateness of their accounting treatment, including the current year's write-off[234](index=234&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)

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，概不就因本公告全部或任何部分內容所產生或因依賴該 等內容而引致的任何損失承擔任何責任。 CHINA GAS INDUSTRY INVESTMENT HOLDINGS CO. LTD. （「本公司」） （於開曼群島註冊成立的成員有限公司） （股份代號：1940） 截至2022年12月31日止年度 年度業績公告及 更新所得款項用途的預期時間表 財務摘要 • 報告期的收益約人民幣1,482百萬元，較截至2021年12月31日止年度約人民 幣1,209百萬元增加約22.5%。 • 報告期的毛利約人民幣342百萬元，較截至2021年12月31日止年度約人民幣 248百萬元增加約37.8%。 • 報告期的純利約人民幣113百萬元，較截至2021年12月31日止年度的淨虧損 約人民幣27百萬元，轉虧為盈。 • 報告期內，本公司權益股東應佔每股基本及攤薄盈利分別約人民幣0.09元及 人民幣0.09元，而截至2021年12月31日止年度本公司權益股東應佔每股基本 及攤薄虧損分別約人民幣0.02元及人民幣0.0 ...

Financial Performance - For the first half of 2022, the revenue of China Gas was RMB 636.43 million, representing a year-on-year increase of 7.8%[14]. - The Group's revenue for the reporting period was approximately RMB636.43 million, representing an increase of approximately 7.80% compared to RMB590.36 million for the same period in 2021[42]. - Gross profit for the reporting period was approximately RMB143.45 million, an increase of approximately 28% from RMB111.68 million for the same period in 2021, mainly due to higher revenue and improved efficiency[44]. - Profit attributable to owners for the reporting period was approximately RMB41.63 million, compared to a loss of approximately RMB39.58 million for the same period in 2021[44]. - The company reported a total comprehensive income of RMB 36,667,290 for the six months ended June 30, 2022, compared to a loss of RMB 39,303,407 in the same period of 2021, indicating a turnaround in performance[170]. - The company recorded a profit attributable to owners of the Company of RMB 41,630,615 for the period, compared to a loss of RMB 39,582,107 in the prior year[163]. - Total comprehensive income for the period was RMB 36,667,290, compared to a loss of RMB 39,303,407 in the same period of 2021[163]. Economic Context - China's GDP for the first half of 2022 was RMB 56,264.2 billion, with a year-on-year growth of 2.5%[14]. - The impact of the COVID-19 pandemic affected China's economic growth, which fell short of initial expectations[14]. - China's GDP growth target for 2022 is 5.5%, with a recorded increase of only 2.5% in the first half of 2022, but recovery is expected in the latter half[37]. Industry Performance - The national crude steel output from January to June 2022 was 527 million tons, a year-on-year decrease of 36.45 million tons or 6.5%[14]. - The steel industry in China showed a generally stable performance in the first half of 2022, despite a negative trend after a favorable start[14]. - The Group's performance was influenced by the overall stability of the steel industry in China during the reporting period[14]. - The pipeline industrial gas business remained stable compared to the same period last year, benefiting from the gradual release of production capacity from HBIS Group[14]. - The sales volume and price of the new product krypton xenon increased during the reporting period[14]. Revenue Breakdown - For the six months ended June 30, 2022, the total sales of the Company's pipeline industrial gas reached 1,629.71 million Nm3, generating revenue of RMB 410.80 million[29]. - The sales of liquefied industrial gas totaled 75,054 tons, with revenue of RMB 103.19 million during the same period[29]. - Revenue from LNG and gas transmission service was RMB 113.70 million, while other revenue amounted to RMB 8.7 million[29]. - Revenue from the supply of liquefied industrial gas increased by approximately 8.45% to RMB103.19 million, compared to RMB95.15 million for the same period in 2021[45]. - Revenue from the supply of LNG and gas transmission services increased significantly by approximately 67.80% to RMB113.70 million, compared to RMB67.76 million for the same period in 2021[45]. Expenses and Liabilities - Selling and marketing expenses increased by approximately 5.14% to RMB0.95 million, attributed to the launch of a new product[51]. - Administrative expenses increased by approximately 11.30% to RMB39.86 million, primarily due to increased remuneration-related expenses[51]. - Expected credit losses for trade receivables amounted to RMB3.46 million, mainly due to an increase in trade receivables with aging periods of more than 6 months[52]. - Finance costs for the Reporting Period decreased by approximately 3.86% to approximately RMB13.03 million, mainly due to a decrease in interest expenses as the Group's bank borrowings decreased[54]. - Income tax expense for the Reporting Period increased by approximately 4.09% to RMB20.00 million, due to the increase in operating profit of certain subsidiaries[55]. Current Assets and Liabilities - The Group recorded total current assets of approximately RMB905.07 million as at 30 June 2022, representing an increase of approximately 11.69% compared to approximately RMB810.32 million as at 31 December 2021[60]. - Total current liabilities increased to approximately RMB1,031.85 million as at 30 June 2022, representing an increase of RMB244.02 million compared to approximately RMB787.83 million as at 31 December 2021[60]. - The current ratio of the Group was approximately 0.88 as at 30 June 2022, down from approximately 1.03 as at 31 December 2021[60]. - The Group's net debt was approximately RMB296.58 million as at 30 June 2022, down from RMB317.89 million as at 31 December 2021[55]. Shareholder Structure - As of June 30, 2022, Huitang Zhihe (Hong Kong) Co., Limited holds 431,904,000 shares, representing approximately 35.99% of the company's issued share capital[99]. - China Gas Investors Ltd. owns 468,096,000 shares, accounting for approximately 39.01% of the company's issued share capital[99]. - Huang He Investment Limited also holds 468,096,000 shares, which is about 39.01% of the company's issued share capital[101]. - The interests in shares are primarily held by controlled corporations, indicating significant ownership concentration among a few shareholders[99][101]. - The concentration of ownership may impact the company's market strategies and expansion plans moving forward[99][101]. Corporate Governance - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period, except for the separation of roles between the chairman and chief executive[91]. - The company has appointed Mr. Yao Li as the chairman of the Board and Mr. Li Libing as the chief executive officer as of March 31, 2022[92]. - The audit committee has reviewed the unaudited interim condensed consolidated financial information for the reporting period[96]. Share Option Scheme - The Share Option Scheme was adopted on June 17, 2020, and is effective for 10 years starting from December 29, 2020[109]. - The purpose of the Share Option Scheme is to motivate Eligible Persons to optimize their future contributions and reward past contributions[109]. - The scheme aims to attract and retain individuals significant to the Group's performance, growth, or success[109]. - The maximum number of shares to be issued upon exercise of all outstanding share options shall not exceed 30% of the shares in issue at any time[114]. - No options were granted by the Company under the Share Option Scheme since the Date of Adoption, and there were no outstanding share options as of June 30, 2022[118]. Legal and Compliance Issues - The Company received a writ of summons on May 4, 2022, related to a legal claim against it and other parties[123]. - An independent investigation committee was established on March 24, 2021, to address matters raised by the previous auditor[189]. - The Independent Investigation was completed in March 2022, focusing on the financial impact of certain transactions conducted by the Group[196]. - The investigation included reviewing internal control policies and procedures related to the transactions[194]. - The company did not perform background checks or due diligence on the Borrowers and Company D before entering into the Loan Transactions and the Note Investment[150].

Financial Performance - In 2021, the company's revenue was RMB 1,209,271,000, a slight increase from RMB 1,186,824,000 in 2020, representing a growth of approximately 1.4%[12] - The company reported a loss attributable to owners of RMB 26,817,000 in 2021, compared to a loss of RMB 27,697,000 in 2020, indicating a reduction in losses[12] - The company reported a loss attributable to shareholders of approximately RMB 36.46 million in 2021, an increase of 45% compared to a loss of RMB 25.16 million in 2020[20] - The gross profit for 2021 was RMB 248.14 million, down 8% from RMB 269.01 million in 2020, resulting in a gross margin of 20.5%, a decrease of 2.1 percentage points[20] - Revenue for the reporting period was approximately RMB 1,209.27 million, an increase of about 2% compared to RMB 1,186.82 million in 2020[23] - Revenue from gas generation was approximately RMB 802.18 million, a decrease of about 9% from RMB 877.51 million in 2020[23] - Revenue from liquefied natural gas (LNG) supply and gas transportation services was approximately RMB 181.88 million, an increase of about 124% compared to RMB 81.22 million in 2020[23] - Other income for the reporting period was approximately RMB 10.82 million, an increase of about 504% from RMB 1.79 million in 2020, mainly due to more government subsidies received[23] Assets and Liabilities - Total assets decreased to RMB 2,406,049,000 in 2021 from RMB 2,524,718,000 in 2020, a decline of about 4.7%[12] - The total liabilities decreased to RMB 1,124,019,000 in 2021 from RMB 1,206,225,000 in 2020, a reduction of approximately 6.8%[12] - The company’s total equity stood at RMB 1,282,030,000 in 2021, down from RMB 1,318,493,000 in 2020, reflecting a decrease of about 2.7%[12] - The group's total cash and bank deposits as of December 31, 2021, were approximately RMB 297.55 million, a decrease from RMB 511.83 million in 2020[26] - The group's total bank and other borrowings as of December 31, 2021, were approximately RMB 615.44 million, compared to RMB 607.80 million in 2020[26] - The debt-to-equity ratio as of December 31, 2021, was 48%, an increase from 46% in 2020[26] - The current ratio as of December 31, 2021, was approximately 1.03, compared to 1.01 in 2020, indicating a stable liquidity position[26] Operational Developments - The company successfully developed and launched two new air separation units with a capacity of 40,000 Nm3/h each, enhancing production capacity significantly[10] - The company reported a successful R&D in rare gas products, filling market gaps in aerospace and high-end electronics sectors[10] - The company has initiated 6 new technology projects and filed 5 patents and 2 software reports in 2021, reflecting a strong commitment to innovation[10] - The company aims to enhance its market competitiveness by focusing on high-value products and expanding its strategic layout across China[10] - The company plans to deepen cooperation with Hebei Iron and Steel Group in the steelmaking industry, leveraging its production service experience[10] - The company plans to enhance its oxygen production capacity through the construction of air separation units at the Tangshan plant, funded by the proceeds from its IPO[19] - The company aims to develop high-value specialty gases, including electronic gases and medical gases, to diversify its product offerings and improve profitability[19] Market and Strategic Outlook - The production target for 2022 includes 15.86 million tons of iron, 17.48 million tons of steel, and 16.91 million tons of steel products[1] - The company expects to gradually increase its production capacity utilization rates in the coming years, driven by new construction and relocation of facilities[1] - The steel industry in China benefited from a strong economic environment in 2021, with the steel price index increasing by 34.53% year-on-year[1] - The company has a priority right to acquire industrial gas assets from Hebei Iron and Steel Group if they are offered for sale, which is a key growth strategy[19] Employee and Management Information - The group employed a total of 369 employees as of December 31, 2021, a slight decrease from 370 employees in 2020[32] - The total employee cost for the group was approximately RMB 54.04 million for the year, compared to RMB 40.04 million for the year ended December 31, 2020[32] - The management team includes experienced professionals with backgrounds in finance and engineering, contributing to operational and strategic decision-making[67] - The company plans to continue attracting and retaining skilled personnel through competitive compensation and professional development programs[32] Corporate Governance - The board consists of nine directors, including three executive directors, three non-executive directors, and three independent non-executive directors[43] - The company has established a strong governance structure with independent non-executive directors overseeing board activities and providing independent opinions[62] - The board is responsible for guiding and supervising the company's affairs, ensuring effective internal controls and risk management[84] - The company has adopted the corporate governance code and has complied with all applicable provisions during the reporting period[73] - The company has implemented appropriate insurance coverage for directors and senior officers against potential legal actions arising from company activities[86] Risk Management - The company faces operational risks, regulatory risks, and financial risks, including interest rate risk and credit risk[113] - The board is responsible for assessing and determining the nature and extent of risks the company is willing to take to achieve strategic goals, with a minimum annual review of the risk management and internal control systems[111] - The company has established internal control procedures in compliance with applicable Chinese laws and regulations, covering governance, operations, management, legal matters, finance, and auditing[113] - The board has reviewed the effectiveness of the risk management and internal control systems during the reporting period and deemed them sufficient and effective[118] Future Growth Strategies - The management has outlined future growth strategies that include market expansion and potential mergers and acquisitions to enhance competitive positioning[61] - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[58] - The company is exploring potential acquisitions to enhance its product offerings and market reach[143] Environmental and Social Responsibility - The company has implemented environmental protection measures and encourages employees to conserve energy and reduce waste[198] - The group made charitable donations of approximately RMB 5,000 during the reporting period[156] - The company has been engaged in comprehensive and all-season ecological tourism resource development, greening and environmental protection, skiing, and sports training since its establishment[61]

Financial Performance - The company reported a revenue of RMB 1,186,824,000 for the fiscal year 2020, a decrease of 9.1% compared to RMB 1,305,152,000 in 2019[10]. - The company incurred a loss attributable to owners of RMB 27,697,000 in 2020, compared to a profit of RMB 133,838,000 in 2019, marking a significant decline[10]. - The total revenue for the reporting period was approximately RMB 1,186.82 million, a decrease of about 9.07% compared to RMB 1,305.15 million in 2019[22]. - The gross profit for 2020 was approximately RMB 269.01 million, down about 4.7% from RMB 282.23 million in 2019, with a gross margin of approximately 22.67%[22]. - The revenue from the supply of industrial gases was approximately RMB 877.51 million, a decrease of about 5.81% from RMB 931.64 million in 2019[23]. - The revenue from the supply of liquefied industrial gases was approximately RMB 214.98 million, down about 15.76% from RMB 255.20 million in 2019[23]. - The company reported a loss attributable to equity shareholders of approximately RMB 25.16 million, a decrease of about 119% compared to a profit of RMB 132.89 million in 2019[22]. - Other income for the reporting period was approximately RMB 1.79 million, a decrease of about 20.27% from RMB 2.25 million in 2019[24]. Assets and Liabilities - Total assets increased to RMB 2,524,718,000 in 2020, up from RMB 2,052,539,000 in 2019, reflecting a growth of 23%[10]. - The total liabilities of the company stood at RMB 1,206,225,000 in 2020, an increase from RMB 748,505,000 in 2019[10]. - Current assets increased by approximately 51.31% to RMB 930.47 million, while current liabilities rose to RMB 920.53 million, resulting in a current ratio of approximately 1.01[32]. - As of December 31, 2020, the total cash and bank balances amounted to approximately RMB 511.83 million, with a debt-to-equity ratio of 46% compared to 29% in 2019[31]. Strategic Initiatives - The company has established a strategic partnership with Hebei Iron and Steel Group, aiming to explore more business development and equity cooperation opportunities[8]. - The company plans to leverage its listing in Hong Kong to enhance its future development and expand its market presence[8]. - The company is actively seeking acquisition opportunities for high-quality industrial gas assets from the Hebei Steel Group, which is a key strategic development for future growth[19]. - The company aims to develop high-value specialty gases, including electronic gases and medical gases, to diversify its product offerings and enhance profitability[19]. - The company plans to increase oxygen production capacity by 67,000 standard cubic meters per hour, representing a 30.7% increase from the capacity as of June 30, 2020[18]. Operational Performance - In 2020, the company produced 1.47 billion cubic meters of oxygen, 1.77 billion cubic meters of nitrogen, and 5.67 million cubic meters of hydrogen, achieving a sales revenue of RMB 877 million[16]. - Sales and distribution expenses decreased by approximately 17% to RMB 1.36 million due to reduced travel costs amid the COVID-19 pandemic[26]. - Administrative expenses increased by approximately 34.26% to RMB 53.96 million, primarily due to relocation costs and increased capital expenditures related to new properties and equipment[27]. - The company recognized an impairment provision of RMB 118 million for receivables due to long-term overdue loans that are unlikely to be recovered[28]. - Financing costs increased by approximately 17.3% to RMB 22.73 million, attributed to an increase in bank borrowings[29]. Corporate Governance - The company has established a robust governance structure with various committees, including the Nomination Committee and the Audit Committee, to ensure effective oversight[69]. - The board of directors is committed to maintaining high standards of corporate governance to protect shareholders' interests[93]. - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with high standards of corporate governance[93]. - The audit committee has reviewed the company's governance policies and compliance with legal and regulatory requirements since the listing date[127]. - The company has implemented a whistleblowing policy to encourage reporting of fraud or misconduct within the group[136]. Management and Personnel - The company has a strong management team with diverse backgrounds in engineering, finance, and operations, enhancing its strategic capabilities[69]. - The group employed 370 employees as of December 31, 2020, down from 400 employees in 2019, with total employee costs approximately RMB 40.04 million, a decrease from RMB 46.74 million in the previous year[45]. - The company plans to continue attracting and retaining high-skilled personnel to strengthen its corporate culture and support employee development[44]. - The management team includes members with advanced degrees in relevant fields, such as Mr. Yao's PhD in Metallurgical Engineering and Ms. Gao's MBA[66]. Risks and Challenges - The company faces significant risks related to its relationship with the Hebei Steel Group, which is crucial for its operations; any changes in this relationship could adversely affect its financial performance[164]. - The company faces operational risks related to relationships with subsidiaries, production control, and customer service, as well as regulatory and financial risks[129]. - The company’s financial performance may be impacted by the construction of its only in-progress production facility, which is expected to incur substantial depreciation expenses[164]. Shareholder Relations - The company emphasizes effective communication with shareholders to enhance understanding of its business performance and strategies[153]. - The company does not recommend the distribution of a final dividend for the reporting period, considering the long-term interests of shareholders[157]. - The company’s dividend payments are contingent upon the availability of profits from its subsidiaries, as per Chinese accounting standards[157]. Market Position - The company operates as an industrial gas supplier in Hebei Province, China, focusing on pipeline industrial gases and liquefied gases, with products including oxygen, nitrogen, argon, hydrogen, and carbon dioxide[162]. - The company’s industrial gas products are essential raw materials in steel production, indicating a strong link to the steel industry’s market conditions[162]. - The largest customer contributed approximately 88% to the total revenue during the reporting period, while the top five customers accounted for about 91% of total revenue[171]. - The largest supplier accounted for approximately 78% of total procurement costs, with the top five suppliers collectively representing about 82%[172].