Financial Performance - Revenue increased by 2.7% to RMB 15.30 billion compared to the same period in 2022[2] - Gross profit rose by 8.0% to RMB 4.26 billion, reflecting improved operational efficiency[2] - Net profit for the period increased by 10.1% to RMB 1.44 billion, demonstrating strong financial performance[2] - Basic earnings per share were RMB 0.49, an increase of 16.7% year-on-year[2] - Other income and gains increased significantly to RMB 354.42 million from RMB 228.37 million in the previous year[3] - The company reported a total operating profit of RMB 4,259,138 thousand, reflecting strong performance across various segments[21] - The group’s profit before tax reached CNY 9,291,231 thousand for the six months ended June 30, 2023, down from CNY 10,012,100 thousand in the same period of 2022, representing a decrease of approximately 7.1%[30] - The company achieved a net profit before tax of RMB 1,680,506 thousand, demonstrating effective cost management and operational efficiency[21] - The company reported a pre-tax profit of RMB 1,558,028 thousand[24] - The company’s net profit attributable to shareholders for the six months ended June 30, 2023, was RMB 1,493,672,000, an increase from RMB 1,296,710,000 for the same period in 2022, representing a growth of approximately 15.2%[36] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 38.52 billion, up from RMB 35.01 billion at the end of 2022[6] - Non-current assets increased to RMB 38.52 billion, driven by investments in property and equipment[6] - Cash and cash equivalents stood at RMB 2.72 billion, compared to RMB 2.92 billion at the end of 2022[6] - Inventory levels rose to RMB 6.80 billion, reflecting a 4.7% increase from RMB 6.50 billion[6] - As of June 30, 2023, the company's current liabilities amounted to CNY 21,067,332, a slight decrease from CNY 21,447,072 as of December 31, 2022[7] - The total assets minus current liabilities increased to CNY 40,760,255 from CNY 37,556,929 year-over-year[7] - Non-current liabilities rose to CNY 17,308,220 from CNY 14,915,843, indicating a significant increase in long-term financial obligations[7] - The company's total equity reached CNY 23,452,035, up from CNY 22,641,086, reflecting a growth in shareholder value[7] - The company's borrowings increased to CNY 14,458,010 from CNY 12,778,043, indicating a rise in debt financing[7] - The company's reserve increased to CNY 22,525,567 from CNY 21,707,065, showing a positive trend in retained earnings[7] Revenue Streams - Total revenue for the six months ended June 30, 2023, reached RMB 15,296,931 thousand, with a significant contribution from product sales and services related to the construction and new energy sectors[21] - Revenue from renovation and installation engineering contracts amounted to RMB 644,659 thousand, indicating a robust demand in this area[21] - Financial services revenue was RMB 25,644 thousand, showcasing the company's diversified income streams[21] - Revenue from construction-related product sales reached RMB 13,168,623 thousand, a slight decrease from RMB 13,699,241 thousand in the previous period[26] - Revenue from renovation and installation engineering contracts was RMB 644,659 thousand, compared to RMB 584,620 thousand in the previous period[26] - Environmental engineering and related services generated revenue of RMB 175,624 thousand, up from RMB 143,908 thousand in the previous period[26] - Logistics and related services revenue increased to RMB 467,559 thousand, compared to RMB 338,819 thousand previously[26] Dividends and Shareholder Returns - The company has decided not to declare an interim dividend for the six months ended June 30, 2023[2] - The group declared a final dividend of HKD 0.30 per share for the year 2022, totaling HKD 930,725 thousand, compared to HKD 0.26 per share totaling HKD 806,629 thousand for 2021[35] - The group did not propose an interim dividend for the six months ended June 30, 2023, while there was none declared for the same period in 2022[35] Market and Economic Conditions - In the first half of 2023, China's GDP grew by 5.5% year-on-year, reaching RMB 59,303.4 billion, accelerating by one percentage point compared to the first quarter[63] - Infrastructure investment increased by 7.2% year-on-year, with railway and water management investments growing by 20.5% and 9.6% respectively[63] - The real estate market showed signs of pressure, impacting consumer confidence and the building materials industry[64] - The construction industry in China is expected to maintain a high growth rate in 2023, driven by policies supporting infrastructure investment[77] Strategic Initiatives and Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[27] - The group is actively expanding into overseas markets to support healthy development[65] - The group plans to continue seeking strategic partnerships with government and state-owned enterprises to strengthen market leadership[78] - The group is focusing on digital transformation and smart factory construction to promote sustainable development[78] - The group aims to optimize customer structure by actively seeking new clients with strong capital capabilities, particularly in government-led projects[80] - The group is committed to enhancing product quality and providing comprehensive solutions to support healthy green building initiatives[80] Operational Efficiency - The gross margin improved to 35%, up from 30% in the previous year, indicating better cost management[103] - The company aims to reduce operational costs by 8% through efficiency improvements in the supply chain[104] - The effective tax rate decreased to 14.6%, down from 16.3% in the previous year[69] Corporate Governance - The company has been committed to maintaining high standards of corporate governance and business ethics to ensure sustainable development and protect shareholder interests[95] - The board has reviewed the accounting policies adopted by the group and the unaudited condensed consolidated financial statements for the six months ended June 30, 2023[94] - There were changes in the board composition, with several directors resigning and new independent non-executive directors appointed on May 10, 2023[99]

Financial Performance - Revenue decreased by 4.0% to RMB 30,767,211,000 in 2022 compared to RMB 32,057,584,000 in 2021[8] - Gross profit declined by 2.4% to RMB 8,241,423,000 in 2022 from RMB 8,447,693,000 in 2021[8] - Profit for the year fell by 16.7% to RMB 3,190,424,000 in 2022 from RMB 3,807,282,000 in 2021[8] - Basic earnings per share decreased by 17.2% to RMB 0.82 in 2022 from RMB 0.99 in 2021[8] - Total dividend dropped by 21.1% to HK 30 cents in 2022 from HK 38 cents in 2021[8] - Total revenue for 2022 was RMB30,767 million, a year-on-year decrease of 4.0%[14] - Profit attributable to owners of the Company decreased by 17.3% to RMB2,517 million in 2022[14] - Gross profit for 2022 was RMB8,241,423 thousand, compared to RMB8,447,693 thousand in 2021[10] - Net profit margin decreased to 8.2% in 2022 from 9.4% in 2021[182] - Net profit attributable to the company's owners decreased by 17.3% year-on-year to RMB 2.517 billion, with a net profit margin of 8.2%[185] Assets and Liabilities - Total assets increased to RMB 58,952,604,000 in 2022 from RMB 54,483,189,000 in 2021[8] - Total debts rose by 12.8% to RMB 20,614,088,000 in 2022 from RMB 18,275,903,000 in 2021[8] - Net debt grew by 24.7% to RMB 13,252,318,000 in 2022 from RMB 10,629,654,000 in 2021[8] - Gearing ratio increased to 47.7% in 2022 from 45.6% in 2021[8] - Net debt to equity ratio rose to 58.7% in 2022 from 48.7% in 2021[8] - Total assets increased to RMB58,952,604 thousand in 2022 from RMB54,483,189 thousand in 2021[11] - Non-current assets grew to RMB34,959,559 thousand in 2022, up from RMB30,131,266 thousand in 2021[11] Strategic Expansion and Partnerships - China Lesso held a groundbreaking ceremony in Gansu, marking the official construction of Gansu Lesso[16] - The Group's first extrusion workshop in Indonesia was put into operation in August[16] - China Lesso entered into a strategic cooperation agreement with China Construction Sixth Engineering Division Corp., Ltd.[17] - The Group signed a strategic cooperation agreement with Foshan Construction Development Group Co., Ltd. for comprehensive cooperation in building materials, raw material procurement, new energy, and green construction[17] - China Lesso established a new production base and distribution center in Gansu, marking a strategic expansion in the Northwest region[18] - The first phase of the extrusion workshop in Indonesia was officially put into production, accelerating localization and market expansion in Southeast Asia[18] - China Lesso signed strategic cooperation agreements with China Construction Sixth Engineering Bureau and Foshan Construction Development Group for comprehensive collaboration in building materials, green energy, and green construction[19] - The Group continued to expand its strategic partnerships with government departments and state-owned enterprises in the infrastructure sector[184] Brand and Corporate Development - China Lesso proposed a new brand positioning upgrade with the slogan "Envisioning the Better, Building the Future" to reflect low-carbon, environmentally friendly, and high-quality development[18] - China Lesso ranked 375th in the 2022 Fortune China 500 list and received multiple awards including "2022 Capital Market Influential Enterprise" and "Top 5 Listed Companies with Investment Potential"[18] - China Lesso completed a brand strategy upgrade and aims to expand into building materials, home improvement, environmental protection, and new energy sectors[167] - China Lesso's mission is to improve and enhance living quality, focusing on social responsibility, corporate governance, and sustainable urban development[171] Management and Leadership - Mr. Lai Zhiqiang is responsible for the production and technical management of the Group with 26 years of experience in the plastic pipe industry[29][32] - Mr. Kong Zhaocong oversees the China sales of the Group with 29 years of experience in the plastic pipe industry[30][32] - Mr. Chen Guonan manages the production and engineering of certain companies within the Group with 33 years of experience in the plastic pipe industry[31][32] - Dr. Lin Shaoquan leads the research and development and overseas sales of the Group with 20 years of experience in the plastic pipe industry[33] - Mr. Huang Guirong is responsible for the overall management of the factories and production facilities of the Group with 26 years of experience in the plastic pipe industry[34] - Mr. Luo Jianfeng has approximately 30 years of experience in accounting and is currently an executive director of Xingfa Aluminium Holdings Limited[35] - Dr. Lin Shaoquan, aged 47, is responsible for the company's R&D and overseas sales, with over 20 years of experience in the plastic pipe industry[36] - Mr. Huang Guirong, aged 47, oversees the company's factory and production equipment management, with 26 years of experience in the plastic pipe industry[36] - Mr. Luo Jianfeng, aged 51, has over 30 years of accounting experience and serves as an executive director of Xingfa Aluminum Holdings Limited (stock code: 98)[36] - Mr. Lin Dewei, aged 62, has over 25 years of legal experience and is a non-executive director of HC Group Inc. (stock code: 2280)[38] - Mr. Wong Kwok Ho Jonathan, aged 49, specializes in civil and criminal litigation and is a member of The Chartered Institute of Arbitrators[38] - Ms. Lan Fang, aged 47, has over 25 years of experience in social organization management and the construction and decoration materials industry[38] - Dr. Tao Zhigang, aged 57, is HSBC Professor of Global Economy and Business Strategy at the University of Hong Kong[39] - Mr. Cheng Dickson, aged 53, is an independent director of Magnum Opus Acquisition Limited (Ticker: OPA.U) and general manager at The Hong Kong and China Gas Company Limited (stock code: 3)[40] - Mr. Cheng Dickson has over 25 years of experience in the investment banking industry[41] - Mr. Liu Guanggen, aged 41, is the CFO of the Group, responsible for overall financial and accounting affairs, with a master's degree in engineering from Chongqing University[45][47] - Mr. Kwan Chi Wai Samuel, aged 45, is the company secretary with over 20 years of experience in accounting, auditing, and finance, holding a master's degree in business administration from the University of South Australia[46][47] - Ms. Lu Jiandong, aged 53, is an independent non-executive director with extensive investment banking experience, holding an MBA from The Wharton School of the University of Pennsylvania[43][44] - Dr. Tao Zhigang, aged 57, is an independent non-executive director with a Ph.D. in Economics from Princeton University and serves as a professor at the University of Hong Kong[42] - Mr. Zheng Dishun, aged 53, is an independent non-executive director with over 25 years of investment banking experience, holding a master's degree in applied finance from Macquarie University[42] - The Board currently comprises 15 directors, including 10 executive directors and 5 independent non-executive directors[50] - Mr. Wong Luen Hei ceased to be the chairman of the Nomination Committee, replaced by Ms. Lu Jiandong effective from 30 August 2022[52] - The chairman and chief executive roles are held by Mr. Wong Luen Hei and Mr. Zuo Manlun, respectively, to segregate Board management from daily operations[52] - Independent non-executive directors provide expertise and ensure balanced interests, participating in Board and committee meetings[55] - The Board is responsible for corporate governance duties, including policy development, compliance monitoring, and risk management[58] - Ernst & Young was appointed as the independent auditor for the interim and annual results for 2022[56] - Directors are responsible for preparing consolidated financial statements in accordance with Hong Kong Financial Reporting Standards[56] - The Board ensures all directors are adequately briefed and receive timely, reliable information for decision-making[52] - Directors appointed to fill vacancies hold office until the first AGM and are eligible for re-election[52] - The Board reviewed and monitored the effectiveness of the Company's risk management and internal control systems in 2022[59] - The Board convened eight meetings in 2022 to review operating performance, funding requirements, and market conditions[60] - The Company provided two seminars in 2022 on "Climate risk knowledge and awareness" and "Environmental, social and governance" to Board members[69] - The company secretary received no less than 15 hours of relevant professional training during the reporting period[76] - The Audit Committee convened two meetings in 2022 to review the annual report, annual results announcement, and other financial documents[80] - The Group paid RMB 11.33 million in total to Ernst & Young for audit and non-audit services in 2022, including RMB 7.85 million for annual audit services[83] - Ernst & Young has been the Company's auditor for 13 years since 2010, with certifications provided by Helena Lee Mee Kwan and Lau Kin Yu[87] - The Remuneration Committee is responsible for formulating the Company's remuneration policy and incentive mechanism, and conducting appraisals for directors and senior management[88] - The Audit Committee reviewed the annual report, annual results announcement, and sustainable development report for the year ended 31 December 2022, recommending approval to the Board[81] - The Remuneration Committee convened one meeting in 2022 to assess the performance of directors and senior management, and recommended remuneration packages[93] - Two senior management members received remuneration of less than RMB1 million in 2022[93] - The Nomination Committee comprises six members, including Ms. Lu Jiandong as chairlady, and is responsible for recommending candidates for directors and senior management[93] - The Nomination Committee convened two meetings in 2022, reviewed the Board's structure, and recommended retiring directors for re-election at the AGM[99] - The company ensures the independence of the Board through annual reviews and confirmation from independent non-executive directors under Rule 3.13 of the Listing Rules[100] - The Board comprises 15 directors, including 3 female directors, achieving the target of at least one female director[109] - Women employees constitute 31.2% of the Group's workforce and 12.4% of middle or above managerial level positions[111] - The Board diversity policy aims to achieve diversity through factors such as gender, age, cultural background, and professional experience[104] - The Company has established a risk management project team to assess and communicate the Group's risk profile and material risks[115] - The Board believes the current gender ratio in the workforce is appropriate for the Group's development[111] - The Board has reviewed and confirmed the effectiveness of the Group's risk management and internal control system[115] - The Nomination Committee recommends the re-election of retiring directors based on the Board diversity policy[101] - The Board diversity targets include having at least one director with risk management expertise and industry knowledge, both of which have been achieved[107] - The Board includes one-third independent non-executive directors to promote critical review and control of the management process[109] - The Group's risk management and internal control system is aligned with COSO standards to provide reasonable assurance against material misstatement or loss[114] - The Board is responsible for the effectiveness of the overall risk management, determining the overall objective, risk appetites, and risk tolerance for corporate risk management[119] - The Audit Committee reviews the establishment and planning of the comprehensive risk management system and submits the annual comprehensive risk management report to the Board[119] - The risk management project team is responsible for establishing and amending the Company's risk management policies and mechanisms[121] - The risk management project team formulates and submits the annual risk management work plan to the Board and the Audit Committee for review[121] - The internal control team assists the Group's risk management work and formulates internal control plans based on risk assessment results[125] - The internal audit department assists the Group's risk management work and formulates internal audit plans based on risk assessment results[125] - The risk management program includes collecting first-hand information, analyzing and assessing risks, proposing risk management strategies, and supervising the implementation of risk management works[127] - The Group has established a comprehensive risk management process led by the Risk Management Project Team, assisted by the Internal Audit Department and Internal Control Group[128] - The Group faces material risks including macroeconomic risks, inappropriate market competition strategies, raw material price fluctuations, policy adjustments, cybersecurity, COVID-19, and climate change risks[133][134] - Macroeconomic risks arise from economic volatility and inflation pressure, with measures including reviewing management strategies and mechanisms for macroeconomic risks[134] - Risks of inappropriate market competition strategies stem from competition strategy formulation and client information collection, with measures including reviewing market competition strategy mechanisms[136] - Raw material price fluctuation risks are influenced by refining capacity shortages, manufacturer power and labor cost changes, and resin price changes, with measures including clear risk management strategies and mechanisms[137] - Policy adjustment risks include environmental, urbanization, water projects, and real estate policies, with measures including reviewing management strategies and mechanisms for policy-related risks[138] - The Group’s senior management supervises first-hand risk information collection, risk assessment, risk management strategies, and solution implementation[132] - The Risk Management Project Team conducts annual reviews and examinations of risk management implementation across departments and business units[132] - The Group ensures timely, accurate, and complete communication of risk management information across departments and business units[131] - Risk management measures include collecting and internally releasing information on raw material price fluctuations and policy changes through established channels[137][138] - The company has established a dual-active and duplication system for intra-city and inter-city data centers to enhance cybersecurity[141] - The company has developed internal communication software to manage and mitigate cybersecurity risks[141] - The company has strengthened its environmental management by improving energy resource efficiency and waste discharge control[141] - The company has formulated a whistleblowing policy allowing anonymous reporting of financial misconduct and fraud[142] - The company has proposed amendments to its memorandum and articles of association, approved by shareholders in June 2022[144] - The company has established a system for handling external inquiries, with senior executives authorized as spokespersons[142] - The company has committed to green operations and actively promotes the concept of green development to the public[141] - The company has set up an anti-fraud control unit to investigate reported cases of misconduct and ensure fair treatment[142] - The company has implemented guidelines for epidemic prevention and control to ensure orderly resumption of work and production[141] Market and Industry Trends - China's GDP growth rate in 2022 was 3.0%, reaching approximately RMB 121 trillion[160] - Infrastructure investment in 2022 increased by 9.4% year-on-year, focusing on traditional infrastructure such as transportation, water conservancy, and municipal projects[161] - The real estate industry faced unprecedented challenges due to the Covid-19 pandemic and economic downturn, leading to sluggish sales and debt defaults among developers[163] - The Central Government introduced supportive policies for the real estate industry, including interest rate cuts and RRR reductions[163] - The PRC government is actively promoting green and low-carbon circular development to achieve carbon emission peak and carbon neutrality targets[165] - China Lesso is committed to green, low-carbon, and high-quality development to support China's 2030 carbon emission peak and 2060 carbon neutrality goals[169] - The Group has integrated green concepts into its production and office activities, advocating paperless office and reducing resource consumption[170] Operational Performance - Total revenue for 2022 was RMB30,767 million, a decrease of 4.0% compared to RMB32,058 million in 2021[173] - Southern China contributed 50.7% of total revenue in 2022, down from 53.1% in 2021[174] - Revenue from outside China increased by 79.2% to RMB2,011 million in 2022[173] - Plastic piping systems accounted for 83.2% of total revenue in 2022, a decrease from 85.6% in 2021[175] - Gross profit margin improved to 26.8% in 2022 from 26.4% in 2021[179] - EBITDA increased by 1.2% year-on-year to RMB5,786 million in 2022[182] - The Group recommended a final dividend of HK30 cents per share for 2022, up from HK26 cents per share in 2021[183] - The Group's EBITDA increased by 1.2% year-on-year to RMB 5.786 billion, with an EBITDA margin of 18.8%[185] - The plastic piping systems business recorded revenue of RMB 25.607 billion, accounting for 83.2% of the Group's total revenue[191] - Sales volume of the plastic piping systems decreased by 6.1%, with PVC products sales volume down 4.2% to 1,776,304 tonnes and non-PVC products down 11.4% to 616,069 tonnes[193] - Revenue from PVC products decreased by 7.5% to RMB 15.675 billion, while non-PVC products revenue decreased by 5.5% to RMB 9.932 billion[193] - The average selling price of the plastic piping system decreased by 0.6% to RMB 10,704 per tonne, with a gross profit margin of 27.5%[194] - Revenue from Southern China decreased by 9.0% to RMB 12.839 billion, accounting for 50.1% of total revenue[189] - Revenue from outside China increased by 33.8% to RMB 1.018 billion, accounting for 4.0% of total revenue[189] - Revenue from water supply applications decreased by 3.8% to RMB 9.968 billion, accounting for 38.9% of total revenue[190] - Revenue from power supply and telecommunications applications decreased by 12.4% to RMB 4.206 billion, accounting for 16.4% of total revenue[190] - The Group's annual designed capacity

Financial Performance - Revenue decreased by 4.0% to RMB 30.77 billion compared to the previous year[2] - Gross profit decreased by 2.4% to RMB 8.24 billion[2] - Net profit decreased by 16.7% to RMB 2.51 billion[2] - Basic earnings per share were RMB 0.82, a decrease of 17.2%[4] - Total comprehensive income for the year was RMB 1.71 billion, down from RMB 2.11 billion[4] - Total revenue for 2022 was RMB 30,767,211 thousand, a decrease from RMB 32,057,584 thousand in 2021, representing a decline of approximately 4%[20] - The group's pre-tax profit decreased to RMB 20,033,849 thousand in 2022 from RMB 22,336,356 thousand in 2021, a decline of approximately 10%[27] - The net profit attributable to shareholders fell by 17.3% to RMB 2.517 billion[62] - The company reported a net profit of RMB 3,807,282,000, reflecting its profitability for the year[15] Assets and Liabilities - Non-current assets increased to RMB 34.96 billion from RMB 30.13 billion[5] - Cash and cash equivalents decreased to RMB 7.36 billion from RMB 7.65 billion[5] - Total current liabilities increased to RMB 21,447,072 thousand in 2022 from RMB 20,863,603 thousand in 2021, representing a growth of approximately 2.8%[6] - Non-current liabilities increased significantly to RMB 14,915,737 thousand in 2022 from RMB 11,812,823 thousand in 2021, reflecting a growth of approximately 26.5%[6] - The company's total equity rose to RMB 22,589,795 thousand in 2022, up from RMB 21,806,763 thousand in 2021, which is an increase of approximately 3.6%[6] - The company's total assets were reported at RMB 45,073,784 thousand, indicating a solid asset base[12] - The total amount of revenue from sales of goods and services from domestic customers was RMB 28,659,253 thousand, while revenue from overseas customers was RMB 1,875,448 thousand[20] Dividends - The company proposed a final dividend of HKD 0.30 per share for the year ended December 31, 2022[2] - The company declared a final dividend of HKD 0.30 per share for the year ended December 31, 2022, totaling HKD 923,828,000[32] - The total dividend for 2022 was HKD 0.30 per share, with a payout ratio of 33.0% of the profit attributable to shareholders for the year[116] Revenue Breakdown - Revenue from the new energy-related products and services amounted to RMB 589,378 thousand, showcasing growth in this sector[12] - Revenue from product sales related to new energy business was RMB 566,244 thousand, while installation and renovation project contract revenue was RMB 1,359,196 thousand[19] - Revenue from financial services was RMB 82,984 thousand, showing a decrease from RMB 114,118 thousand in the previous year[20] - The revenue from the plastic pipe system segment was RMB 25.607 billion, accounting for 83.2% of total revenue, down 6.7% from 2021[75] - The revenue from the "Other" segment, which includes environmental engineering and financial services, increased by 32.7% to RMB 2.455 billion[75] Operational Highlights - The company operates in multiple segments, including manufacturing and sales of building materials, new energy products, and logistics services, with a focus on geographic regions in China[9] - The company plans to expand its market presence through strategic acquisitions and new product developments[15] - The company aims to enhance its brand positioning with a new vision for the next decade, focusing on low-carbon, green building, and high-quality development[65] - The company is focusing on automation and smart production to maximize economies of scale and improve operational efficiency[77] Market and Economic Context - In 2022, China's GDP growth was only 3.0%, with a total GDP of approximately RMB 121 trillion, reflecting significant economic challenges[68] - Infrastructure investment in China grew by 9.4% year-on-year in 2022, playing a crucial role in stabilizing economic growth[68] - The management remains cautiously optimistic about the long-term prospects, emphasizing the importance of core competitiveness and resilience[66] Strategic Initiatives - The company plans to strengthen management foundations and improve operational quality and profitability, focusing on four development directions: pipe home furnishings, intelligent manufacturing, green energy, and sustainable growth[66] - The company is actively responding to climate change by identifying opportunities and challenges, implementing effective measures in product design and production processes[72] - The company aims to enhance its operational efficiency by integrating green practices into its daily operations, promoting paperless offices and resource-saving behaviors[72] Employee and Corporate Structure - The company employed approximately 19,690 employees, with total employee costs amounting to RMB 2.409 billion during the reporting period[104] - The group has established over 30 advanced production bases across 18 provinces in China and overseas[59] - The group has a distribution network covering the entire country, with 2,786 independent first-level distributors[59] Future Outlook - The company aims to enhance competitiveness by continuously investing in R&D for new products that meet market demands[86] - The company plans to further expand its distribution network in Southeast Asia to drive business growth[95] - In 2023, the company aims to focus on four development directions: "pipeline home, intelligent manufacturing, green energy, and seizing opportunities" to enhance business growth and profitability[99]

Financial Performance - For the six months ended June 30, 2022, China Lesso reported revenue of RMB 14,889,613, representing a year-on-year increase of 1.1% compared to RMB 14,723,265 in 2021[9]. - Gross profit for the same period decreased by 9.9% to RMB 3,942,695 from RMB 4,373,801 in 2021[9]. - Profit before tax fell by 31.1% to RMB 1,558,028, down from RMB 2,260,090 in the previous year[9]. - Profit for the period attributable to owners decreased by 28.6% to RMB 1,295,174 compared to RMB 1,814,284 in 2021[9]. - Total comprehensive income for the period was RMB 690,578, down from RMB 1,601,003, a decrease of about 56.80%[138]. - Basic and diluted earnings per share attributable to owners of the company were RMB 0.42, down from RMB 0.59 in the previous year, representing a decline of approximately 28.81%[138]. - The company did not declare an interim dividend for the six months ended June 30, 2022, compared to HK12 cents per share in the first half of 2021[127]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 53,164,487, a decrease of 2.4% from RMB 54,483,189 at the end of 2021[9]. - Cash and bank deposits decreased by 27.0% to RMB 5,581,311 from RMB 7,646,249 at the end of 2021[9]. - Total debts amounted to RMB 17,507,802, down 4.2% from RMB 18,275,903 at the end of 2021[9]. - The Group's total equity increased to RMB 21,795 million, with current assets of RMB 21,801 million and current liabilities of RMB 18,260 million, resulting in a current ratio of 1.19[80]. - The Group's cash and bank deposits, including restricted cash, totaled RMB 5,581 million, providing sufficient working capital for operations and future development[80]. Revenue Breakdown - Revenue from plastic piping systems accounted for 85.7% of total revenue, amounting to RMB 12,763 million, up 1.5% from RMB 12,574 million in 2021[25]. - Southern China contributed 50.7% of total revenue, down from 54.1% in the first half of 2021, while other regions accounted for 49.3%[21]. - The building materials and home improvement segment generated RMB 1,219 million, a decrease of 3.1% compared to RMB 1,258 million in 2021[25]. - Revenue from the plastic piping systems business increased slightly to RMB 12,763 million, accounting for 85.7% of the Group's total revenue[38]. - Revenue from contracts with customers for the six months ended June 30, 2022, was RMB 14,889,613,000, compared to RMB 14,723,265,000 for the same period in 2021[174]. Market and Industry Outlook - The company anticipates that total investment in major infrastructure projects in China will exceed RMB 25 trillion in 2022, which is expected to drive demand in the piping industry[12]. - The government has proposed accelerating infrastructure construction, which is expected to create stable demand for the industry[12]. - The government’s policies aimed at stabilizing the real estate sector are expected to gradually restore stability in the building materials and home improvement industry[16]. - The real estate market is expected to gradually stabilize and recover in the second half of the year due to favorable policies[59]. Strategic Initiatives - The company is focusing on smart manufacturing and green business initiatives to enhance competitiveness and drive future growth[15]. - The Group is actively expanding its business into the photovoltaic industry, enhancing synergy among its various business segments[26]. - The Group aims to establish product research and development centers to innovate and upgrade eco-friendly products[59]. - The Group is committed to green development and has been recognized as a National Green Factory, focusing on low energy consumption and high energy efficiency[44]. Operational Efficiency - The Group's management emphasizes the importance of automation and intelligentization in improving operational efficiency and reducing costs[47]. - The Group's average selling price and sales volume for plastic piping systems remained stable, contributing to the overall revenue growth in this segment[38]. - The Group's sales volume of plastic piping systems decreased by 5% year-on-year due to intensified competition and weak market demand[40]. Investment and Financing - In 2022, the Group's capital expenditure was approximately RMB 2,241 million, primarily for improving automated facilities, expanding production bases, and constructing investment properties[79]. - The Group's investment properties amounted to RMB 8,692 million, with increases primarily due to ongoing construction of certain investment properties[83]. - The Group will closely monitor the performance of its investees and adjust investment strategies to minimize the impact of market volatility[85]. Governance and Compliance - The Company complied with all applicable code provisions of corporate governance during the reporting period[88]. - The audit committee reviewed the accounting policies and unaudited condensed consolidated financial statements for the six months ended June 30, 2022[89]. - The Company adopted a share award scheme on August 28, 2018, with a budget of up to HK$750 million to attract and retain talent, with 22,991,000 shares held in trust as of June 30, 2022[110].

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 32,057,584, an increase of 14.2% from RMB 28,073,065 in 2020[4] - Gross profit for 2021 was RMB 8,447,693, slightly up from RMB 8,383,979 in 2020, indicating a gross margin improvement[4] - Profit before tax decreased by 19.9% to RMB 3,807,282 from RMB 4,753,560 in the previous year[4] - Profit for the year was RMB 3,018,589, down 19.7% compared to RMB 3,757,389 in 2020[4] - Basic earnings per share decreased by 18.9% to RMB 0.99 from RMB 1.22 in 2020[4] - The Group's revenue for 2021 was RMB 32,058 million, an increase of 14.2% compared to RMB 28,073 million in 2020[12] - Gross profit for the Group was RMB 8,448 million in 2021, representing a slight increase of 0.8%[12] - Profit attributable to owners of the Company decreased by 18.8% to RMB 3,044 million due to various negative factors during the year[12] - The Group's revenue increased by 14.2% to RMB 32,058 million in 2021, compared to RMB 28,073 million in 2020[186] - Gross profit rose by 0.8% to RMB 8,448 million, with a gross profit margin of 26.4%, down from 29.9% in 2020[186] - EBITDA decreased by 7.7% to RMB 5,720 million, with an EBITDA margin of 17.8% compared to 22.1% in 2020[190] Dividends and Shareholder Returns - Proposed final dividend per share was reduced to 26 HK cents from 38 HK cents, a decrease of 31.6%[4] - The Group proposed a final dividend of HK 26 cents per share for the year ended December 31, 2021[12] - The final dividend recommended for 2021 is HK 26 cents per share, down from HK 38 cents per share in 2020[191] - The Group has a dividend policy of declaring and paying dividends semi-annually at around 30% of profit attributable to owners[145] Assets and Liabilities - Total assets increased to RMB 54,483,189, up from RMB 46,527,562 in 2020, reflecting a growth of 16.5%[4] - Total debts rose to RMB 18,275,903, an increase from RMB 16,236,163 in 2020[4] - The company reported a net debt of RMB 10,629,654, up from RMB 8,788,727 in the previous year[4] - The gearing ratio increased to 45.6% from 44.4% in 2020, indicating a higher level of financial leverage[4] Strategic Initiatives - The Group initiated a brand strategy upgrade in 2021, introducing the new slogan "Envisioning the Better, Building the Future" to enhance product quality and innovation[14] - The Group is focusing on expanding its plastic piping business and has been actively developing new products to enhance competitiveness[15] - The Group has increased investment in technological innovation to enhance its research and development capabilities, particularly in the environmental protection sector[17] - The Group remains cautiously optimistic about long-term prospects and plans to enhance operations through intelligent manufacturing and sustainable practices[21] - China Lesso aims to maintain piping manufacturing as its core business while expanding into building materials, home improvement, and environmental protection sectors[23] Management and Governance - The company has a strong management team with extensive experience in the plastic pipe industry, with members averaging over 25 years of experience[33] - The management team includes professionals with diverse backgrounds, including legal and marketing expertise, contributing to strategic decision-making[39] - The board includes independent directors with significant experience in law and business administration, ensuring robust governance[39] - The Company is committed to high standards of corporate governance practices and business ethics, essential for sustainable development and investor confidence[55] - The Board reviews corporate governance practices periodically to meet shareholder expectations for continual improvement[56] Risk Management - The Board believes that the existing risk management and internal control system is sufficient, effective, and adequate, covering financial, operational, and compliance controls[120] - The Group has developed a risk management system and policies, establishing a project team responsible for assessing the Group's risk profile and tracking mitigation plans[120] - The Group has established a comprehensive risk management program led by the risk management project team, which includes first-hand information collection, risk analysis, and strategy proposal[128] - The material risks identified include macroeconomic risks, inappropriate market competition strategies, fluctuations in raw material prices, and environmental policy adjustments[134] - The Group's measures for macroeconomic risks involve reviewing management strategies and mechanisms to adapt to economic volatility and inflation pressures[135] Market Position and Growth Opportunities - China Lesso Group Holdings Limited is a leading industrial group in manufacturing piping and building materials in mainland China, with over 35 years of rapid development[160] - The Group operates more than 30 advanced production bases across 18 provinces in China and internationally, establishing a nationwide sales network[161] - The company provides over 10,000 types of quality products, applicable in various fields including home improvement, civil architecture, and environmental protection[161] - The market expects a significant acceleration in infrastructure project implementation in 2022 compared to 2021, with "new infrastructure" identified as a key growth driver[167][170] - The government has set targets for carbon emissions peak by 2030 and carbon neutrality by 2060, enhancing prospects for the environmental protection and photovoltaic sectors[168][170] Corporate Social Responsibility - The Group is committed to corporate social responsibility by supporting the construction of epidemic prevention hospitals across the country[142] - China Lesso's mission is to "Improve and Enhance the Living Quality," reflecting its commitment to corporate social responsibility and sustainable urban development[175]