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].

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]