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]

2018 ANNUAL REPORT 年度報告 CORPORATE PROFILE China Lesso Group Holdings Limited is a leading large-scale industrial group that manufactures building materials and interior decoration products in mainland China. It is listed on the main board of The Stock Exchange of Hong Kong Limited (stock name: China Lesso, stock code: 2128). China Lesso is one of the constituent stocks of the Hang Seng Composite Index – MidCap and is covered by Hong Kong Stock Exchange's Stock Connect. The Group provides over 10,000 types o ...