Investment Rating - Maintains "Buy" rating [4] Core Views - The company released its 2024 interim report, with performance in line with expectations [3] - Revenue for 2024H1 was RMB 13.564 billion, a year-on-year decrease of 11.33%, and net profit was RMB 1.043 billion, a year-on-year decrease of 30.19% [4] - The company is transitioning its pipeline business sales and optimizing its debt structure [2][3] - The company is actively expanding into non-real estate sectors, such as oil and hydrogen pipelines, and the agricultural and rural markets are showing growth trends [4] - The company's gross margin remained stable year-on-year, with the pipeline business gross margin estimated at around 29.5% [4] - The company's debt structure is being optimized, with total debt at the end of 2024H1 at RMB 21.03 billion, a year-on-year decrease of 12.8% [4] Financial Summary - Revenue for 2024H1: RMB 13.564 billion, a year-on-year decrease of 11.33% [4] - Net profit for 2024H1: RMB 1.043 billion, a year-on-year decrease of 30.19% [4] - Gross margin for 2024H1: 27.48%, relatively stable year-on-year [4] - Total debt at the end of 2024H1: RMB 21.03 billion, a year-on-year decrease of 12.8% [4] - Expected net profit for 2024-2026: RMB 2.088 billion, RMB 2.280 billion, and RMB 2.546 billion respectively [4] Market Data - Current stock price: HKD 2.64 [5] - 52-week price range: HKD 2.64 - HKD 4.55 [6] - Current market capitalization: HKD 8.19 billion [6]

Investment Rating - The investment rating for China Liansu (02128) is "Buy" with a target price of 2.79 HKD, maintaining the rating for the next six months [1]. Core Views - The report highlights that the company's performance is temporarily under pressure due to weak downstream demand, but there is optimism regarding its overseas expansion prospects [1]. - Revenue for the first half of 2024 is reported at 13.564 billion, a year-on-year decrease of 11.33%, with EBITDA at 1.283 billion, down 23.64%, and net profit attributable to shareholders at 1.043 billion, down 30.16% [1]. - The company has established over 30 advanced production bases and has a wide distribution network across the country, with an increase in independent exclusive distributors from the beginning of the year to 2,891 [1]. Summary by Sections Financial Performance - The company has adjusted its profit forecast for 2024-2026, expecting net profits of 2.08 billion, 2.28 billion, and 2.51 billion respectively, with corresponding PE ratios of 5.5, 5.1, and 4.6 times [1]. - The revenue breakdown for the first half of 2024 shows plastic pipeline systems, building materials, environmental protection, supply chain services, and new energy generating revenues of 11.219 billion, 1.080 billion, 0.131 billion, 0.769 billion, and 0.157 billion respectively, with year-on-year changes of -8.3%, -19.4%, -25.57%, +32.82%, and -78.76% [1][2]. Market and Competitive Landscape - The report notes that raw material prices are at low levels, impacting gross margins due to industry competition [1]. - The average selling price of plastic pipeline systems decreased by 266 to 9,330 per ton, with total sales volume down by 5.7% [1]. - The company has seen significant growth in overseas markets, particularly in Southeast Asia and Africa, with production bases established in Indonesia, Cambodia, Thailand, and Malaysia, and plans for local production in Tanzania and Vietnam [1]. Cost Structure and Profitability - The company’s expense ratio for the first half of 2024 is reported at 18.81%, with a net profit margin of 7.5%, down from the end of 2023 [1]. - The debt-to-asset ratio is reported at 46.8%, a decrease of 3.0% year-on-year, indicating an ongoing optimization of the debt structure [1].

Financial Performance - Revenue decreased by 11.3% to RMB 13.564 billion compared to the six months ended June 30, 2023[2] - Gross profit decreased by 12.5% to RMB 3.728 billion compared to the same period last year[2] - Net profit for the period decreased by 29.2% to RMB 1.017 billion compared to the previous year[2] - Basic earnings per share were RMB 0.34, a decrease of 30.6% compared to RMB 0.49 in the same period last year[6] - Total comprehensive income for the period amounted to RMB 340.1 million, a significant decrease from RMB 1.615 billion in the previous year[6] - The company reported a pre-tax profit of RMB 1,283,304,000 for the period[14] - The group's pre-tax profit before tax was RMB 8,694,771 thousand for the six months ended June 30, 2024, compared to RMB 9,291,231 thousand for the same period in 2023, representing a decline of approximately 6.4%[21] - The company reported a total operating profit of CNY 4,259,138,000 for the period, with a pre-tax profit of CNY 1,680,506,000[15] - The effective tax rate increased to 20.8% in the first half of 2024, compared to 14.6% in the same period of 2023[60] Dividends - The board has resolved not to declare an interim dividend for the six months ended June 30, 2024[2] - The company declared a final dividend of HKD 0.20 per share for the year 2023, totaling HKD 620,483,000, compared to HKD 0.30 per share for 2022, which amounted to HKD 930,725,000, reflecting a reduction of 33.3%[28] - The company has not proposed an interim dividend for the six months ended June 30, 2024, compared to no interim dividend for the same period in 2023[28] - The final dividend of HKD 0.20 per share will be paid to shareholders for the year ending December 31, 2023, on July 18, 2024[90] Assets and Liabilities - Non-current assets totaled RMB 38.028 billion as of June 30, 2024, down from RMB 39.217 billion at the end of 2023[7] - Current assets increased to RMB 21.565 billion from RMB 20.814 billion at the end of 2023[7] - Cash and cash equivalents stood at RMB 6.702 billion, slightly up from RMB 6.553 billion at the end of 2023[7] - As of June 30, 2024, the total current liabilities decreased to RMB 21,023,447 thousand from RMB 24,512,720 thousand, representing a reduction of approximately 14.5%[8] - The total assets minus current liabilities increased to RMB 38,569,377 thousand compared to RMB 35,518,550 thousand, indicating a growth of about 8.8%[8] - Non-current liabilities rose to RMB 14,679,907 thousand from RMB 11,207,472 thousand, reflecting an increase of approximately 31.5%[8] - The net assets decreased slightly to RMB 23,889,470 thousand from RMB 24,311,078 thousand, showing a decline of about 1.7%[8] - The company's total borrowings amounted to RMB 20,618,487 thousand, a decrease from RMB 19,844,586 thousand, indicating a reduction of approximately 3.7%[8] - The company's equity attributable to owners decreased to RMB 23,333,642 thousand from RMB 23,503,483 thousand, a decline of about 0.7%[8] Revenue Segmentation - The company operates primarily in manufacturing and selling building materials and home products, with a focus on geographic segmentation for resource allocation[12] - The company’s operational segments include Southern China, areas outside Southern China, and overseas markets, with performance evaluated based on adjusted profit before tax[12] - For the six months ending June 30, 2024, total revenue from external customers reached RMB 13,563,523,000[14] - Sales related to building materials amounted to RMB 12,141,577,000, representing a significant portion of total revenue[14] - Revenue from new energy business, including sales and services, amounted to CNY 738,823,000, with specific contributions from installation contracts and environmental projects[15] - The logistics and related services generated revenue of CNY 467,559,000, while financial services and property leasing contributed CNY 25,644,000[15] - The total income from external customers in China and overseas was highlighted as a key revenue source[13] Operational Strategy - The company maintained a stable operating strategy, focusing on core business development and optimizing customer structure[56] - The company is actively upgrading production technology and equipment to enhance operational efficiency and control costs[60] - The group plans to diversify its pipe products and reduce reliance on the real estate sector by developing new products such as hydrogen and oil pipelines[64] - The group is actively optimizing its customer structure and strengthening strategic partnerships with government departments and leading state-owned enterprises[65] - The group is leveraging new technologies such as AI and IoT to enhance manufacturing capabilities and improve operational efficiency[66] - The company aims to improve operational efficiency through technology advancements and process optimizations in its service delivery[16] Market Outlook - The company anticipates continued growth in revenue from construction materials and new energy sectors, projecting a strong performance in the upcoming quarters[16] - Future guidance indicates a positive outlook for revenue growth, driven by ongoing projects and market demand in both construction and renewable energy sectors[16] - The company plans to enhance its overseas market presence, with production bases expected to commence in Vietnam by Q4 2024[68] - The group is responding to national rural revitalization policies by expanding the application of pipe systems in agriculture, contributing to the modernization of traditional agriculture[64] Employee and Operational Costs - The company employed approximately 21,000 staff, with total employee costs amounting to RMB 1.351 billion during the reporting period[79] Other Financial Metrics - The company reported a significant reduction in trade payables from RMB 8,369,185 thousand to RMB 1,856,318 thousand, a decrease of approximately 77.8%[8] - The company reported a net loss from the sale of subsidiaries of RMB (123,471) thousand for the six months ended June 30, 2024, compared to a loss of RMB (1,173) thousand for the same period in 2023, indicating a significant increase in losses[22] - The total income tax expense for the six months ended June 30, 2024, was RMB 266,708,000, compared to RMB 244,907,000 for the same period in 2023, representing an increase of approximately 8.5%[24] - The company has adopted new and revised Hong Kong Financial Reporting Standards during the reporting period, which may impact financial performance and disclosures[10]

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 30,868,289, representing a slight increase of 0.3% compared to RMB 30,767,211 in 2022[8]. - Gross profit decreased by 1.5% to RMB 8,121,014 from RMB 8,241,423 in the previous year[8]. - Finance costs increased significantly by 63.4% to RMB 1,112,761 from RMB 681,084 in 2022[8]. - Profit before tax declined by 16.5% to RMB 2,664,169 compared to RMB 3,190,424 in the prior year[8]. - Profit for the year decreased by 7.9% to RMB 2,320,346 from RMB 2,520,550 in 2022[8]. - Total assets increased by 1.7% to RMB 60,031,270 from RMB 59,004,001 at the end of 2022[8]. - Cash and bank deposits decreased by 11.0% to RMB 6,552,984 from RMB 7,361,770 in the previous year[8]. - Total equity rose by 7.4% to RMB 24,311,078 compared to RMB 22,641,086 in 2022[8]. - Proposed final dividend per share decreased by 33.3% to HK 20 cents from HK 30 cents in the previous year[8]. - Profit attributable to owners of the Company for 2023 was RMB 2,368 million, down from RMB 2,521 million in 2022, representing a decrease of approximately 6.06%[13]. Assets and Liabilities - Non-current assets increased to RMB 39,217 million in 2023 from RMB 35,011 million in 2022, reflecting a growth of approximately 6.29%[12]. - Total liabilities decreased to RMB 35,720 million in 2023 from RMB 36,363 million in 2022, a reduction of approximately 1.77%[12]. - Total assets reached RMB 60,031 million in 2023, compared to RMB 59,004 million in 2022, indicating a growth of about 1.73%[12]. - Equity attributable to owners of the Company rose to RMB 23,503 million in 2023 from RMB 21,842 million in 2022, marking an increase of about 7.58%[12]. Strategic Initiatives - China Lesso aims to enhance its core competency by establishing smart factories that integrate intelligent manufacturing and automated production[21]. - The company plans to capitalize on ongoing demand for infrastructure construction driven by state policy and economic recovery[21]. - China Lesso continues to focus on product innovation and quality improvement in its core piping business to maintain its market leadership[15]. - The company is committed to providing high-quality green, low-carbon, and environmentally friendly products and solutions, actively managing its operational environmental impact to reduce its operational footprint[24]. - The company plans to leverage national policies and the recovering economy to meet the ongoing demand for infrastructure construction, focusing on deepening its pipeline sector and expanding its industrial layout[24]. - The company aims to enhance its core capabilities through the integration of AI, Internet, and IoT technologies, creating smart manufacturing and automated production facilities[24]. - Despite facing challenges and uncertainties, the management team is confident in continuing to innovate and upgrade in line with market trends, while seizing overseas opportunities[24]. - The company is focused on optimizing its product mix and increasing market share in its main industry products[24]. Corporate Governance - The company emphasizes good corporate governance practices and business ethics as essential for sustainable development and investor confidence[72]. - The Board currently comprises 14 directors, including 9 executive directors and 5 independent non-executive directors[79]. - The company has adopted a Model Code governing securities transactions by directors, ensuring compliance throughout the year[74]. - The company has confirmed compliance with all applicable code provisions during the reporting period[73]. - The company has a commitment to continuous improvement in corporate governance practices to meet shareholder expectations[73]. - The independent non-executive directors have confirmed their independence under Rule 3.13 of the Listing Rules[164]. - The Board reviews its independence and effectiveness annually[163]. - The Company follows a formal and transparent procedure for the appointment of new directors[148]. - The Board diversity policy aims to enhance diversity through factors such as gender, age, cultural background, and professional experience[169]. - The Nomination Committee believes the existing Board is adequate in size, diversity, and composition for effective decision-making[177]. Risk Management - The Group has established a risk management and internal control system aligned with COSO standards to manage operational risks[182]. - The Audit Committee continuously monitors and annually reviews the effectiveness of the risk management and internal control system[183]. - The Group has developed a risk management project team responsible for assessing the Group's risk profile and tracking mitigation plans[184]. - The comprehensive risk management program aims to enhance the implementation of risk management across all functional departments[200]. - The internal control team assists in formulating internal control plans based on risk assessment results[199]. - The internal audit department evaluates the effectiveness of risk management through measures such as walk-through tests and analytical reviews[199]. Board Composition and Diversity - The Company has achieved the requirement of at least one female director on the Board according to the Listing Rules[171]. - The Board consists of 14 directors, with 3 female directors, achieving the target of at least one female director[175]. - Over one-third of the Board members are independent non-executive directors, promoting critical review and control of management processes[176]. - Women employees represent 30.1% of the Group's total workforce and 16.0% of middle or above managerial levels[178]. - The Board believes that the current gender ratio in the workforce is appropriate for the Group's development[180].

Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 4.89 HKD per share based on a PE of 5 times for 2024 [3]. Core Insights - In 2023, the company achieved a revenue of 30.868 billion CNY, a year-on-year increase of 0.3%, while the pre-tax profit decreased by 16.49% to 2.664 billion CNY, and the net profit attributable to shareholders fell by 6.1% to 2.368 billion CNY. The decline in profit was primarily due to increased impairment provisions for receivables and rising dollar borrowing rates. Future impacts from these factors are expected to diminish, allowing net profit margins to gradually return to historical levels of 11-12%, which could lead to significant profit elasticity [1][13]. Summary by Sections 1. Revenue and Profit Trends - The company reported a stable revenue of 30.868 billion CNY in 2023, with a slight increase of 0.3% year-on-year. However, pre-tax profit decreased by 16.49% to 2.664 billion CNY, and net profit attributable to shareholders fell by 6.1% to 2.368 billion CNY, influenced by higher impairment provisions and increased dollar borrowing rates [1][13]. 2. Market Position and Growth Opportunities - The domestic plastic pipe market is stabilizing, with the company solidifying its leading position and accelerating market share growth, reaching 16.3% in 2023. The company is actively expanding into non-residential sectors and exploring overseas opportunities, particularly in Southeast Asia, the US, and Africa [1][19][22]. 3. Operational Quality and Financial Health - The company has maintained high operational quality, with a decreasing debt-to-asset ratio and ample cash reserves. The strategic shift back to core pipe business is expected to reduce capital expenditures significantly, enhancing shareholder returns after short-term operational pressures are alleviated [1][13]. 4. Profit Forecast and Investment Recommendations - The company is projected to achieve net profits of 2.8 billion CNY in 2024 and 3.3 billion CNY in 2025. The current market capitalization corresponds to a PE ratio of 3.19 and 2.71 for 2024 and 2025, respectively. The report recommends a target price of 4.89 HKD per share based on a 5x PE for 2024, supporting a "Buy" rating [1][3][22].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 3.97 HKD [2][4][6] Core Insights - The company reported a revenue of 31 billion CNY in 2023, a slight increase of 0.4% year-on-year, while the net profit attributable to shareholders decreased by 5.9% to 2.4 billion CNY [1][6] - Despite a decline in revenue from major products, the company saw an increase in sales volume and gross margin, with total product sales reaching 2.65 million tons, up 10.6% year-on-year [1] - The infrastructure investment, particularly in water conservancy projects, is expected to support demand for related pipeline products in 2024, contributing to stable performance [1][6] Financial Summary - The company’s EPS for 2023-2025 is projected to be 0.76, 0.73, and 0.77 CNY respectively, reflecting a downward adjustment from previous estimates due to ongoing pressures in the real estate sector [2][6] - The average selling price of plastic pipeline systems decreased by 13.2% to 9,289 CNY per ton, while the gross margin for these systems increased by 1 percentage point to 28.5% due to lower raw material prices [1][6] - The company is expected to maintain stable performance in 2024, with infrastructure investment remaining a key growth driver [1][6]

港股公司报告 | 公司点评 中国联塑（02128） 证券研究报告 2024年04月 02日 投资评级 业绩短暂承压，多元化业务布局前景可期 行业 地产建筑业/建筑 6个月评级 买入（维持评级） 业绩短暂承压，看好公司中长期发展潜力 当前价格 3.3港元 公司发布23年年报，全年实现营收308.68亿，同比+0.3%；归母净利润为 目标价格 4.62港元 23.68亿，同比-6.1%。其中，23H2 下半年实现营收155.71亿，同比-1.93%， 归母净利润为8.7亿，同比-28.6%。利润下降主要系公司23 年对客户应收 基本数据 账款计提减值以及借款利率上升致使利息支出增长，财务费用同比 港股总股本(百万股) 3,102.42 +63.38%，考虑到目前地产下行压力，我们将公司 24-25 年归母净利润从 港股总市值(百万港元) 10,237.98 30.95/34.90亿调整为26.0/29.4亿，预估26年归母净利润为33.6亿元，对 应PE为4.0/3.6/3.2 倍，考虑到港股流动性较弱，给予公司24年6 倍PE， 每股净资产(港元) 8.37 对应目标价为4.62港元，维持“买入”评级。 资产负 ...

Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company reported a slight increase in revenue for 2023, achieving 30.87 billion with a year-on-year growth of 0.3%, while net profit attributable to shareholders decreased by 6.1% to 2.37 billion [4]. - The core business of plastic pipes saw a revenue decline of 4% to 24.6 billion, while the building materials and home improvement segment grew by 5% to 2.8 billion, and other businesses increased by 40.3%, accounting for 79.6%, 9.2%, and 11.2% of total revenue respectively [4]. - The company experienced a 10.6% increase in sales volume to 2.6467 million tons, but the average selling price dropped by 13.2% to 9,300 per ton [4]. - The overall gross margin decreased by 0.5 percentage points to 26.3%, with the gross margin for pipe business improving by 1.0 percentage point to 28.5% [4]. Summary by Sections Revenue and Profitability - The company achieved a total revenue of 30.87 billion, with a slight increase of 0.3% year-on-year, while net profit decreased by 6.1% to 2.37 billion [4]. - The gross margin for the year was 26.3%, down 0.5 percentage points, with a notable improvement in the pipe business gross margin to 28.5% [4]. Business Segments - The core business of plastic pipes generated 24.6 billion, a decline of 4%, while building materials and home improvement revenue grew by 5% to 2.8 billion [4]. - Other business segments saw a significant growth of 40.3%, contributing to 11.2% of total revenue [4]. Sales Volume and Pricing - The company sold 2.6467 million tons of products, an increase of 10.6% year-on-year, but the average selling price fell by 13.2% [4]. - The sales volume for PVC and non-PVC pipes grew by 9.3% and 14.5% respectively, while average prices for PVC and non-PVC pipes decreased by 18.3% and 6.9% respectively [4]. Cost Structure - The company’s overall expense ratio increased by 1 percentage point to 18.3%, with financial, management, and sales expenses rising by 1.4, 0.3, and 0.4 percentage points respectively [4]. - The net profit margin for the year was 7.7%, down 0.5 percentage points, impacted by an impairment loss of 860 million [4].

Financial Performance - Revenue increased by 0.3% to RMB 30.868 billion compared to last year[2] - Gross profit decreased by 1.5% to RMB 8.121 billion[2] - Net profit for the year decreased by 7.9% to RMB 2.320 billion[2] - Basic earnings per share were RMB 0.77, a decrease of 6.1%[2] - The company reported a net profit before tax of RMB 2,664,169 thousand, indicating strong financial performance despite various expenses[21] - The net profit attributable to the company's owners for the year ended December 31, 2023, was RMB 7,148,000, compared to RMB 3,923,000 in 2022, reflecting an increase of approximately 82.5%[15] - The total comprehensive income for the year ended December 31, 2023, was RMB 7,505,000, up from RMB 5,650,000 in 2022, indicating a growth of approximately 32.7%[15] - The total income tax expense for 2023 was RMB 343,823,000, a decrease from RMB 669,874,000 in 2022, reflecting a significant reduction of approximately 48.7%[35] - The basic and diluted earnings attributable to equity holders of the company for 2023 were RMB 2,368,062,000, down from RMB 2,521,245,000 in 2022[41] - The group's EBITDA decreased by 3% year-on-year to RMB 5.613 billion, with an EBITDA margin of 18.2% compared to 18.8% in 2022[83] - Net profit fell by 6.1% to RMB 2.368 billion, with a net profit margin of 7.5% down from 8.2% in 2022[83] Dividends - Proposed final dividend of HKD 0.20 per share for the year ended December 31, 2023[2] - The proposed final dividend for the year ended December 31, 2023, is HKD 0.20 per share, totaling HKD 615,885,000, compared to HKD 0.30 per share and HKD 923,828,000 in 2022[39] - The board announced a proposed final dividend of HKD 0.20 per share for the year ended December 31, 2023, with a payout ratio of 23.7% of the profit attributable to shareholders, down from 33.0% in 2022[115] Assets and Liabilities - Non-current assets increased to RMB 39.217 billion from RMB 35.011 billion in the previous year[6] - Current assets decreased to RMB 20.814 billion from RMB 23.993 billion in the previous year[6] - Cash and bank deposits decreased to RMB 6.553 billion from RMB 7.362 billion[6] - Current liabilities total RMB 24,512,720,000, an increase from RMB 21,447,072,000 in the previous year, representing a growth of approximately 9.6%[7] - The company's short-term debt increased significantly to RMB 10,692,553,000 from RMB 7,257,639,000, marking an increase of about 47.5%[7] - Total assets minus current liabilities decreased to RMB 35,518,550,000 from RMB 37,556,929,000, a decline of approximately 5.5%[7] - Non-current liabilities decreased to RMB 11,207,472,000 from RMB 14,915,843,000, reflecting a reduction of about 25.5%[7] - The company's net assets increased to RMB 24,311,078,000 from RMB 22,641,086,000, showing a growth of approximately 7.4%[7] - The total debt of the group at the end of the reporting period was RMB 20.696 billion, with a debt-to-asset ratio of 46.0%[100] - The total equity increased to RMB 24.311 billion, while current assets and current liabilities were RMB 20.814 billion and RMB 24.513 billion, respectively, resulting in a current ratio of 0.85 and a quick ratio of 0.57[100] Revenue Breakdown - Total revenue reached RMB 30,868,289 thousand, with significant contributions from various segments, including RMB 12,496,150 thousand from home building materials sales and RMB 12,788,513 thousand from other sales[20] - Revenue from customer contracts amounted to RMB 30,673,848 thousand in 2023, compared to RMB 30,534,701 thousand in 2022, representing an increase of 0.5%[27] - Revenue from sales related to construction materials was RMB 27,544,672 thousand, accounting for approximately 89.7% of total revenue[23] - Revenue from logistics and related services was RMB 1,240,989 thousand in 2023, significantly up from RMB 693,129 thousand in 2022, marking an increase of 78.8%[27] - Revenue from new energy-related products and services was RMB 1,057,321 thousand[20] - Revenue from the plastic pipe system was RMB 24.585 billion, representing 79.6% of total revenue, a decrease of 4.0% from 2022[81] - Revenue from the South China market accounted for 45.6% of total revenue, down from 50.7% in 2022[80] - Revenue from other business segments increased by 40.3% to RMB 3.444 billion, contributing 11.2% to total revenue[81] - The total revenue from overseas markets was RMB 2,415,486 thousand in 2023, compared to RMB 1,875,448 thousand in 2022, representing a growth of 28.8%[28] - The total revenue from the Chinese market was RMB 28,258,362 thousand in 2023, down from RMB 28,659,253 thousand in 2022, a decrease of 1.4%[28] Costs and Expenses - Finance costs increased to RMB 1.113 billion from RMB 681.084 million[3] - The group's pre-tax profit before tax was impacted by a cost of goods sold related to building materials of RMB 19,156,399 thousand in 2023, down from RMB 20,033,849 thousand in 2022, a decrease of 4.4%[34] - Research and development costs increased to RMB 1,237,708 thousand in 2023 from RMB 1,219,208 thousand in 2022, showing a slight increase of 1.5%[34] - The cost of raw materials decreased to RMB 1,939,287 thousand in 2023 from RMB 2,176,660 thousand in 2022, a decline of 10.9%[54] Investments and Financing - The company has entered into a financing agreement for an amount equivalent to USD 600,000,000 (approximately RMB 4,249,620,000), with the potential to increase to USD 800,000,000 (approximately RMB 5,666,160,000)[8] - The group recognized a fair value gain of RMB 85 million and a net foreign exchange gain of RMB 12 million during the reporting period, while it also reported a loss of RMB 143 million in other comprehensive income[108] - The group will closely monitor the performance of its investments and adjust its investment strategy as necessary to mitigate market volatility[108] Market and Economic Outlook - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[26] - The company aims to enhance its market share and optimize its product mix while focusing on smart manufacturing and automation through AI and IoT technologies[72] - The overall economic environment is expected to improve, supported by effective economic policies and infrastructure investments[74] - The real estate market is expected to gradually stabilize with supportive policies and demand-supply coordination[95] - The company anticipates new business opportunities arising from the recovery of international trade and infrastructure development[92] Strategic Initiatives - The company is committed to sustainable development and aims to align with China's dual carbon strategy, striving for peak carbon emissions by 2030 and carbon neutrality by 2060[75] - The company plans to continue innovating and upgrading green products in the pipeline and environmental protection sectors[72] - The company is diversifying its customer base by shifting towards government and state-owned enterprise-led projects to mitigate business risks associated with the private real estate sector[94] - The company is actively expanding its overseas market presence, particularly in Southeast Asia, with operational production bases in Indonesia, Cambodia, Thailand, and Malaysia[92]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 15,296,931, representing a 2.7% increase from RMB 14,889,613 in the same period of 2022[8]. - Gross profit increased by 8.0% to RMB 4,259,138 compared to RMB 3,942,695 in the previous year[8]. - Profit for the period rose by 10.1% to RMB 1,435,599, up from RMB 1,303,621 in the prior year[8]. - Profit attributable to owners of the Company increased by 15.2% to RMB 1,493,672 from RMB 1,296,710[8]. - Basic and diluted earnings per share increased by 16.7% to RMB 0.49 from RMB 0.42 in the previous year[8]. - EBITDA increased by 9.3% year-on-year to RMB 3.114 billion, with an EBITDA margin of 20.4%, up from 19.1% in 1H 2022[20]. - Profit before tax rose by 7.9% year-on-year to RMB 1.681 billion, with a net profit margin of 9.4%, compared to 8.8% in 1H 2022[20]. - Total comprehensive income for the period attributable to owners of the Company was RMB 1,650,364, compared to RMB 682,968 in the same period last year, showing a significant increase of around 142.5%[125]. - The total comprehensive income for the period was RMB 1,614,515, compared to RMB 692,699 in the previous year, indicating a substantial increase of about 133.0%[125]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 61,827,587, a 4.8% increase from RMB 59,004,001 at the end of 2022[8]. - Total debts increased by 17.1% to RMB 24,129,841 from RMB 20,614,088 at the end of 2022[8]. - Net debt rose by 28.4% to RMB 17,020,034 compared to RMB 13,252,318 at the end of 2022[8]. - Total non-current assets increased to RMB 38,523,333,000 as of June 30, 2023, compared to RMB 35,010,956,000 as of December 31, 2022, representing an increase of approximately 7.2%[127]. - Current assets totaled RMB 23,304,254,000 as of June 30, 2023, a decrease from RMB 23,993,045,000 as of December 31, 2022, reflecting a decline of about 2.9%[127]. - Total current liabilities amounted to RMB 21,067,332,000 as of June 30, 2023, slightly down from RMB 21,447,072,000 as of December 31, 2022, indicating a decrease of approximately 1.8%[127]. - Non-current liabilities rose to RMB 17,308,220,000 as of June 30, 2023, up from RMB 14,915,843,000 as of December 31, 2022, marking an increase of approximately 15.9%[129]. - Total equity reached RMB 23,452,035,000 as of June 30, 2023, compared to RMB 22,641,086,000 as of December 31, 2022, reflecting an increase of about 3.6%[129]. Revenue Breakdown - Revenue from plastic piping systems was RMB 12,233 million, representing 80.0% of total revenue, down from 85.7% in the previous year[18]. - Revenue from building materials and home improvement increased by 10.0% year-on-year to RMB 1,341 million, accounting for 8.8% of total revenue[18]. - Revenue from the building materials and home improvement business was RMB 1.341 billion, accounting for 8.8% of the Group's total revenue[44]. - Revenue from contracts with customers in Mainland China was RMB 13,267,916, while revenue from outside China was RMB 636,553, indicating a strong domestic performance[178]. - Revenue from the sale of goods related to building materials and home improvement business was RMB 13,168,623,000 for the six months ended June 30, 2023, compared to RMB 13,699,241,000 in the same period of 2022, indicating a decrease of about 3.86%[171]. Operational Efficiency and Strategy - The Group continued to enhance operational efficiency and optimize its product portfolio to increase market share[19]. - Strategic partnerships with government departments and leading infrastructure enterprises were strengthened to capitalize on national development projects[21]. - The Group is actively expanding its product applications in various fields, including agriculture, petroleum and natural gas transmission, and urban services, to broaden its customer base[35][36]. - The Group is focusing on strategic partnerships with government and state-owned enterprises to enhance market leadership and reduce business risks[41][45]. - The Group aims to enhance technology development capabilities and explore new cooperation models with various companies[66]. Market Conditions - The property sector remains under pressure, affecting consumer confidence and the building materials industry[11]. - The infrastructure construction sector is expected to maintain high growth in 2023, driven by government policies, which will increase demand for piping products[40][41]. - In the first half of 2023, China's GDP grew by 5.5% year-on-year, reaching approximately RMB 59.30 trillion, with an acceleration of one percentage point from the first quarter[10]. Corporate Governance - The Company is committed to high standards of corporate governance and has complied with all applicable code provisions during the reporting period[87]. - The Company has adopted the Model Code for securities transactions by directors, and all directors confirmed compliance during the reporting period[88]. - The independent non-executive directors confirmed compliance with the non-competition deed established with the controlling shareholder[102]. Dividends and Shareholder Returns - The Company did not declare an interim dividend for the six months ended 30 June 2023, compared to no dividend declared in the same period of 2022[110]. - A final dividend of HK$0.30 per share was paid on 25 May 2023 for the year ended 31 December 2022[110]. - The final dividend declared for 2022 was HK$0.30 per share, totaling HK$930,725,000, an increase from HK$0.26 per share in 2021, which totaled HK$806,629,000[199]. Investments and Acquisitions - The Group's investment properties were valued at RMB9,347 million at the end of the reporting period, with an increase mainly due to the collection of properties worth RMB1,130 million[80]. - The total consideration for the acquisition of Keda's interests was approximately RMB2,100 million during the reporting period[79]. - The Group aims to strengthen its connection with Keda by seeking business cooperation in overseas markets such as Africa[79]. Employee and Talent Management - The Group employed approximately 21,600 employees, with total staff costs amounting to RMB1,158 million during the reporting period[72]. - The Company is committed to attracting and retaining talent through the share award scheme[100].