Market Overview - The Hong Kong stock market experienced a decline, with the Hang Seng Index falling by 1.17% to close at 23,698.65 points and the Tech Index dropping by 1.58% to 5,208.23 points [1] Sector Performance - Oil and gas stocks showed renewed activity, while biopharmaceutical B shares increased in value. However, sectors such as new energy vehicles, technology, and domestic real estate stocks faced declines, and rare earth concept stocks experienced a pullback [1] Notable Stock Movements - Jixing New Energy (03395.HK) surged by 337.5%, while Yuanheng Gas (00332.HK) rose by 50%, United Energy Group (00467.HK) increased by 35.7%, and Baiqin Oil Services (02178.HK) gained 47.8% [1] - Beijing Construction (00925.HK) resumed trading with a rise of over 210%, as it plans to privatize and delist [1] - Lehua Entertainment (02306.HK) saw an increase of nearly 30% [1] - Conversely, companies like Li Auto (02015.HK), China Resources Land (01109.HK), and Meituan (03690.HK) fell by 3.7%, while Alibaba (09988.HK) and Kuaishou (01024.HK) dropped by over 2.5% [1]

Group 1 - The core viewpoint of the article highlights the significant market activity in low-priced oil and gas stocks in the Hong Kong market, particularly the dramatic rise in share prices of certain companies [1] - Jixing New Energy (03395.HK) experienced a surge of over 300% in its stock price, indicating strong investor interest and market speculation [1] - Other companies in the sector also saw notable increases, with Baikin Oil Services (02178.HK) rising over 40% and Yanchang Petroleum International (00346.HK) increasing by 13% [1]

Group 1 - Hong Kong low-priced oil and gas stocks opened higher, with Jixing New Energy (03395.HK) rising nearly 15% [1] - Extended Petroleum International (00346.HK) increased by over 11% [1] - Baikin Oil Services (02178.HK) saw a rise of over 13% [1]

6月16日，截至港股收盘，恒生指数上涨0.7%，报24060.99点。百勤油服（02178.HK）收报0.075港元/ 股，上涨66.67%，成交量1.35亿股，成交额1006.91万港元，振幅117.78%。 本文源自：金融界 作者：行情君 资料显示，百勤油田服务有限公司成立于2002年,总部设于深圳,2013年于香港主板上市(股票代 码:02178.HK)。百勤油服是一家以"钻井、增产"为核心的综合性油气田技术服务公司,立志成为服务于全 球的国际化油田技术服务公司。 百勤油服业务遍及海内外:中国、印度尼西亚、澳大利亚、加拿大、尼日利亚、也门、阿尔及利亚、阿 根廷、土库曼斯坦、哈萨克斯坦、伊拉克、埃及、中东等地区。服务的主要客户有:中石化、中石油、 中海油、延长石油、壳牌、BP、康菲、马来西亚石油公司、道达尔、CACT联合作业者集团、丹文能 源、远东能源、亿欧格等。 百勤油服高度重视质量安全与客户满意,不断完善公司的体系,获得了ISO9001:2015质量管理体系认证、 ISO14001:2015环境管理体系认证、ISO45001:2018职业健康管理体系认证、GBT29490-2013知识产权管 理体系认 ...

Financial Performance - The company's revenue for the fiscal year 2024 was approximately HKD 292.4 million, a decrease of 7.1% from HKD 314.8 million in 2023[5] - Operating profit for 2024 was HKD 5.2 million, a significant recovery from a loss of HKD 68.5 million in 2023[5] - The net loss from continuing operations decreased by 80.4% to HKD 14.7 million in 2024, compared to HKD 74.7 million in 2023[5] - The basic loss per share for 2024 was HKD 1.0, a reduction of 76.7% from HKD 4.3 in 2023[5] - Total revenue decreased by approximately HKD 22.4 million (or 7.1%) to approximately HKD 292.4 million in 2024 compared to HKD 314.8 million in 2023[23] Assets and Liabilities - Total assets as of December 31, 2024, were HKD 642.9 million, down 9.7% from HKD 712.0 million in 2023[6] - The company's total liabilities decreased by 11.2% to HKD 462.7 million in 2024, compared to HKD 520.9 million in 2023[6] - The current ratio for 2024 was 1.0, slightly down from 1.05 in 2023, indicating stable liquidity[7] Revenue Breakdown - Revenue from the China market increased by approximately HKD 1.9 million (or 0.7%) to approximately HKD 268.2 million in 2024, driven by increased sales of completion products and drilling services[22] - Revenue from the overseas market decreased by approximately HKD 24.3 million (or 50.1%) to approximately HKD 24.2 million in 2024, primarily due to the completion of several service contracts without renewal[23] - Revenue from the North China region decreased by approximately HKD 17.9 million (or 26.4%) to approximately HKD 49.8 million in 2024, mainly due to reduced production and drilling services[24] - Revenue from the Southwest China region increased by approximately HKD 12.8 million (or 7.4%) to approximately HKD 185.2 million in 2024, driven by increased production services[25] - Revenue from the Middle East decreased by approximately HKD 29.4 million (or 61.5%) to approximately HKD 18.4 million in 2024, mainly due to reduced consulting services[26] Cost Management - Material costs for the year were approximately HKD 41.4 million, a decrease of about HKD 6.7 million (or 13.9%) from HKD 48.1 million in 2023, representing 14.2% of revenue in 2024, down from 15.3% in 2023[36] - Employee benefits expenses were approximately HKD 44.0 million, a decrease of about HKD 4.6 million (or 9.5%) from HKD 48.6 million in 2023, due to the completion of several supervisory service contracts[38] Employee and Workforce - The group had a total of 195 employees as of December 31, 2024, a decrease of approximately 23.8% from 256 employees as of December 31, 2023, primarily due to the completion of several consulting service contracts in the Middle East[60] - The gender distribution of employees is 15% male and 85% female, with 88% of employees in frontline and other roles[132] - The total employee turnover rate for the reporting period was 46.03%, with 87 employees leaving the company[141] Environmental, Social, and Governance (ESG) - The group integrates ESG considerations into daily operations, reflecting its commitment to environmental protection, employee welfare, and community engagement[73] - The group aims to monitor the progress of ESG-related goals through various methods, including meetings and regular inspections of production facilities[74] - The group emphasizes the importance of compliance with increasingly stringent ESG regulations to ensure long-term viability[68] - The group has established an ESG task force composed of senior management to drive the integration and management of ESG concerns in business activities[73] Energy and Resource Management - Total energy consumption for the reporting period was 41,020.21 MWh, with an overall energy consumption density of 0.15 MWh per thousand HKD revenue, a decrease of 14.0% compared to the previous reporting period[111] - Diesel consumption decreased to 40,611.70 MWh in 2024 from 49,781.11 MWh in 2023, representing a reduction of approximately 18.0%[112] - Water consumption in 2024 was 177 cubic meters, a decrease of over 15% compared to 210 cubic meters in 2023, exceeding the set target of a 1% reduction[116] Corporate Governance - The board of directors consists of 3 executive directors, 1 non-executive director, and 3 independent non-executive directors, ensuring compliance with corporate governance codes[173] - The company has maintained a high level of corporate governance, adhering to the corporate governance code as per the Hong Kong Stock Exchange[173] - The company has established a risk management system and identified no significant risks during the risk assessment conducted in 2024[197] Innovation and R&D - The group has 33 utility model patents and 10 invention patents as of December 31, 2024, and is in the process of applying for 33 utility model patents and 8 invention patents[61] - The company is investing resources in the research and development of new energy service technologies[128] - The company has established technical cooperation teams with renowned research institutions to advance research in energy-efficient low-carbon utilization and new carbon storage technologies[127]

Financial Performance - The company's total revenue for the fiscal year ending December 31, 2024, was approximately HKD 292.4 million, a decrease of about 7.1% from HKD 314.8 million in 2023[3]. - The loss attributable to shareholders for the fiscal year was approximately HKD 14.7 million, compared to a loss of HKD 74.7 million in 2023, resulting in a basic loss per share of approximately HKD 0.01[3]. - Total comprehensive income for the year was HKD (11,776,000) in 2024, compared to HKD (72,693,000) in 2023, reflecting a reduction in losses[22]. - The company reported a net loss of approximately HKD 14,662,000 for the year ended December 31, 2024, compared to a loss of HKD 74,737,000 in 2023, indicating a significant improvement[29]. - The company reported a loss before tax of HKD 13,299,000 for the year ended December 31, 2024, significantly improved from a loss of HKD 71,407,000 in 2023[41]. - The company recorded a net loss of approximately HKD 14.7 million for the year, a decrease of about HKD 60.0 million (or approximately 80.3%) compared to a loss of HKD 74.7 million in 2023[61]. Revenue Breakdown - Revenue from the Chinese market increased by approximately 0.7% to HKD 268.2 million, accounting for 91.7% of total revenue, driven by increased sales of completion products and drilling services[4]. - Revenue from overseas markets decreased by approximately 50.1% to HKD 24.2 million, accounting for 8.3% of total revenue, primarily due to the completion of several service contracts without renewal[5]. - Revenue from oilfield project tools and services was approximately HKD 267.5 million, an increase of about 1.7% from HKD 262.9 million in 2023[10]. - Revenue from consulting services decreased by approximately 52.0% to HKD 24.9 million, primarily due to the completion of service contracts in the first quarter of 2024[11]. - Revenue from production services in 2024 is approximately HKD 235.4 million, a decrease of about HKD 7.0 million (or approximately 2.9%) compared to 2023[13]. - Revenue from drilling services in 2024 is approximately HKD 26.5 million, an increase of about HKD 6.1 million (or approximately 29.9%) compared to 2023[14]. - Revenue from completion services in 2024 is approximately HKD 5.6 million, an increase of about HKD 5.5 million (or approximately 5,500.0%) compared to 2023[15]. Market and Operational Insights - The company continues to engage in oil and gas field technical services covering various stages of the oil and gas field lifecycle, including drilling, completion, and production enhancement[3]. - The company expects stable market demand for production services and other oilfield services in 2025 due to stable international oil prices and supportive national policies in China[20]. - Brent crude oil prices remained strong, fluctuating between approximately USD 68-92 per barrel throughout the year[20]. Financial Position and Assets - Non-current assets decreased from HKD 256,384,000 in 2023 to HKD 226,208,000 in 2024, primarily due to a decline in property, plant, and equipment[23]. - The company’s cash and cash equivalents decreased from HKD 26,294,000 in 2023 to HKD 15,607,000 in 2024, indicating a tighter liquidity position[23]. - The company’s net assets decreased from HKD 191,155,000 in 2023 to HKD 180,263,000 in 2024, reflecting ongoing financial challenges[24]. - The company’s property, plant, and equipment decreased to approximately HKD 108.2 million in 2024, a reduction of about HKD 19.1 million (or approximately 15.0%) from HKD 127.3 million in 2023, primarily due to depreciation[63]. - The company’s trade receivables decreased to approximately HKD 206.6 million in 2024 from HKD 222.1 million in 2023, with net trade receivables amounting to HKD 201.6 million[47]. Employee and Operational Changes - The number of employees decreased by approximately 23.8% to 195 as of December 31, 2024, compared to 256 in 2023[18]. - Employee benefits expenses decreased to approximately HKD 44.0 million in 2024, down by about HKD 4.6 million (or approximately 9.5%) from HKD 48.6 million in 2023, due to the completion of several supervisory service contracts[54]. Debt and Financing - The company has secured additional loan financing of RMB 49,500,000 from a bank in China to support its operational funding needs for oil and gas projects[30]. - The unused loan financing amount as of December 31, 2024, was RMB 30,000,000, which has not yet been drawn down[30]. - The company is actively negotiating for new loan financing to meet operational funding requirements for its projects in China[31]. Governance and Compliance - The audit committee has been established in accordance with regulatory requirements, consisting of three independent non-executive directors[81]. - The chairman of the board is Wang Jinlong, with executive directors Zhao Jindong, Lin Jingyu, and Zhou Sisi[82]. - The independent non-executive directors include Liang Nianchang, Xin Junhe, and Zhang Dawei[82].

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Corporate Profile](index=2&type=section&id=Corporate%20Profile) This section provides key information on Petro-king Oilfield Services Limited, including its board, committees, and key advisors - The company's Executive Directors are Mr. Zhao Jindong, Mr. Lin Jingyu, and Ms. Zhou Sisi[11](index=11&type=chunk) - The company's principal place of business in Hong Kong is at Room 1603A, 16/F, Tower 1, Silvercord, 30 Canton Road, Kowloon[11](index=11&type=chunk) - The company's auditor is **BDO Limited**[12](index=12&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Financial Summary](index=5&type=section&id=Business%20Review) Group revenue surged 60.8% YoY to HKD 166 million in H1 2024, driven by strong demand for production enhancement services Financial Highlights | Metric | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | HKD 165.9 million | HKD 103.2 million | +60.8% | | **Loss for the period** | HKD 0.4 million | HKD 18.0 million | -97.8% | | **Loss attributable to owners** | HKD 0.4 million | HKD 17.1 million | -97.7% | | **Basic loss per share** | HKD 0.02 cents | HKD 1.0 cent | -98.0% | | **Interim dividend** | Nil | Nil | - | - The significant revenue growth was primarily driven by strong demand for production enhancement services in China, supported by firm international oil prices and shale gas consumption policies[14](index=14&type=chunk) - The narrowed loss was mainly due to increased revenue and a net reversal of impairment losses on financial assets[14](index=14&type=chunk) [Geographical Market Analysis](index=5&type=section&id=Geographical%20Market%20Analysis) The China market was the main growth driver, contributing 89.2% of total revenue with an 80.4% YoY increase Revenue by Market | Market | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | Revenue Contribution (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | **China Market** | 147.9 | 82.0 | +80.4% | 89.2% | | **Overseas Market** | 18.0 | 21.2 | -15.1% | 10.8% | | **Total** | **165.9** | **103.2** | **+60.8%** | **100%** | [China Market Revenue](index=6&type=section&id=China%20Market%20Revenue) Growth in the China market was primarily driven by a 193% surge in the Southwest region due to increased production enhancement services Revenue by Region in China | China Region | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | **Southwest** | 113.7 | 38.8 | +193.0% | | **North** | 21.9 | 37.8 | -42.1% | | **Northwest** | 9.4 | 4.4 | +113.6% | | **Other Regions** | 2.9 | 1.0 | +190.0% | [Overseas Market Revenue](index=8&type=section&id=Overseas%20Market%20Revenue) The decline in overseas revenue was mainly caused by the expiration of a supervision service contract in the Middle East Revenue by Overseas Region | Overseas Region | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | **Middle East** | 14.2 | 21.1 | -32.7% | | **Others** | 3.8 | 0.1 | +3700.0% | [Business Segment Analysis](index=9&type=section&id=Business%20Segment%20Analysis) Oilfield project tools and services remained the core business, accounting for 89.0% of total revenue with an 81.9% YoY growth Revenue by Business Segment | Business Segment | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | Revenue Contribution (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | **Oilfield project tools and services** | 147.7 | 81.2 | +81.9% | 89.0% | | **Consultancy services** | 18.2 | 22.0 | -17.3% | 11.0% | [Oilfield Project Tools and Services](index=10&type=section&id=Oilfield%20Project%20Tools%20and%20Services) Production enhancement was the dominant business line, with revenue growing 90.3% YoY to HKD 137 million, driven by services in Southwest China Revenue Breakdown for Oilfield Project Tools and Services | Business Type | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | **Production enhancement** | 136.6 | 71.8 | +90.3% | | **Drilling** | 8.1 | 7.4 | +9.5% | | **Completion** | 3.0 | 2.0 | +50.0% | [Customer Analysis](index=11&type=section&id=Customer%20Analysis) The Group exhibits very high customer concentration, with the top three customers contributing 96.1% of total revenue - Revenue from the largest customer (Customer 1) **grew 153.9% YoY to HKD 115 million**, accounting for 69.3% of total revenue[25](index=25&type=chunk) - The top three customers (Customers 1, 2, and 3) collectively contributed **96.1% of total revenue**, indicating high customer concentration risk[25](index=25&type=chunk) [Human Resources and R&D](index=12&type=section&id=Human%20Resources%20and%20R&D) The Group streamlined its organization, reducing its workforce by 23.0%, and holds 38 patents, reflecting a focus on technology - As of June 30, 2024, the Group had **197 employees**, a 23.0% decrease from 256 at the end of 2023[26](index=26&type=chunk) - The Group holds **28 utility model patents and 10 invention patents**, with 5 additional invention patents pending, demonstrating its emphasis on intellectual property[27](index=27&type=chunk) [Outlook](index=13&type=section&id=Outlook) Management remains cautiously optimistic, expecting strong market demand to continue and plans to explore diversified investment opportunities - Market demand for production enhancement and other oilfield services is **expected to remain strong** for the rest of 2024[28](index=28&type=chunk) - The Group plans to explore other profitable investment opportunities, such as **surface geothermal projects**, to diversify its business[28](index=28&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) The Group's financial performance improved with a 60.8% revenue increase and a turnaround to operating profit, while operational efficiency also improved [Key P&L Items](index=13&type=section&id=Key%20P&L%20Items) The Group achieved an operating profit of HKD 7.6 million, a significant turnaround from a loss of HKD 10.7 million in the prior year Key Profit & Loss Figures | Item | H1 2024 (HKD million) | H1 2023 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 165.9 | 103.2 | +60.8% | | **Technical service fees** | 70.5 | 32.6 | +116.3% | | **Net reversal of impairment on financial assets** | 3.7 | 0.2 | +1750% | | **Operating profit/(loss)** | 7.6 | (10.7) | Turnaround | | **Loss for the period** | (0.4) | (18.0) | -97.8% | [Key Balance Sheet Items](index=16&type=section&id=Key%20Balance%20Sheet%20Items) Working capital management improved significantly, with inventory and trade receivables turnover days both decreasing, and the gearing ratio slightly improved - Average inventory turnover days **decreased from 184 to 131 days**[45](index=45&type=chunk) - Average trade receivables turnover days **decreased significantly from 365 to 206 days**[46](index=46&type=chunk) - Contract assets **increased by 31.5%** from the beginning of the year to HKD 158 million[47](index=47&type=chunk) - The gearing ratio **decreased from 45.3% to 42.2%**[51](index=51&type=chunk) [Other Information](index=21&type=section&id=Other%20Information) [Corporate Governance and Compliance](index=21&type=section&id=Corporate%20Governance%20and%20Compliance) The company complied with all applicable Corporate Governance Code provisions and did not declare an interim dividend for H1 2024 - The company has **complied with all applicable Corporate Governance Code provisions** during the reporting period[58](index=58&type=chunk) - The Board resolved **not to declare an interim dividend** for the first half of 2024[61](index=61&type=chunk) - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[60](index=60&type=chunk) [Directors, Chief Executive and Substantial Shareholders' Interests](index=22&type=section&id=Directors%2C%20Chief%20Executive%20and%20Substantial%20Shareholders'%20Interests) Non-executive Director Mr. Wang Jinlong is the largest shareholder with a 28.32% interest through his controlled corporation - Mr. Wang Jinlong (Non-executive Director) holds **488,920,138 shares (28.32%)** in the company through a controlled corporation[63](index=63&type=chunk)[64](index=64&type=chunk) - Substantial shareholder Lee & Leung (B.V.I.) Limited and its affiliates hold a combined interest of **approximately 19.53%** in the company[66](index=66&type=chunk)[70](index=70&type=chunk) [Share Option Scheme](index=27&type=section&id=Share%20Option%20Scheme) The 2013 share option scheme expired in February 2023, and consequently, no new options were granted in H1 2024 - The share option scheme **expired on February 18, 2023**, and no new options were granted in H1 2024[73](index=73&type=chunk) - 500,000 share options held by the former company secretary, Mr. Tong Tat Chiu, **lapsed in June** following his resignation on March 20, 2024[73](index=73&type=chunk)[75](index=75&type=chunk) [Interim Condensed Consolidated Financial Statements](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's loss for the period narrowed significantly to HKD 0.4 million on revenue of HKD 165.9 million, with a turnaround to operating profit Statement of Comprehensive Income Summary (HKD thousand) | Item (HKD thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Revenue** | 165,908 | 103,215 | | **Operating profit/(loss)** | 7,636 | (10,747) | | **Profit/(loss) before tax** | 594 | (18,444) | | **Loss for the period** | (412) | (17,973) | | **Loss attributable to owners of the Company** | (395) | (17,113) | | **Basic loss per share (HKD cents)** | (0.02) | (1.0) | [Interim Condensed Consolidated Statement of Financial Position](index=32&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group had total assets of HKD 694 million and net assets of HKD 193 million, with a current ratio of approximately 1.03 Statement of Financial Position Summary (HKD thousand) | Item (HKD thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | 694,056 | 712,011 | | **Total Liabilities** | 500,948 | 520,856 | | **Net Assets** | 193,108 | 191,155 | | **Net Current Assets** | 14,543 | 22,504 | | **Cash and cash equivalents** | 29,787 | 26,294 | | **Bank and other borrowings (Total)** | 179,248 | 187,061 | [Interim Condensed Consolidated Statement of Changes in Equity](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Equity attributable to owners increased by approximately HKD 2.0 million to HKD 188.8 million, mainly driven by other comprehensive income - Equity attributable to owners of the Company **increased from HKD 186,829 thousand to HKD 188,802 thousand**[82](index=82&type=chunk) - The change in equity was primarily driven by the combined effect of **other comprehensive income (+HKD 1,907 thousand)**, share-based payments (+HKD 461 thousand), and loss for the period (-HKD 395 thousand)[82](index=82&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=36&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Cash and cash equivalents increased by HKD 3.5 million to HKD 29.8 million, primarily due to cash inflows from investing activities Statement of Cash Flows Summary (HKD thousand) | Item (HKD thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | (1,521) | (9,044) | | **Net cash from investing activities** | 13,259 | 8,868 | | **Net cash used in financing activities** | (7,390) | (17,055) | | **Net increase/(decrease) in cash** | 4,348 | (17,231) | | **Cash and cash equivalents at end of period** | 29,787 | 22,228 | [Notes to the Interim Condensed Consolidated Financial Information](index=37&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Basis of Preparation and Going Concern](index=37&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) A material uncertainty exists regarding the Group's ability to continue as a going concern due to its net current liability position and liquidity pressure - As of June 30, 2024, the Group's **current bank and other borrowings of HKD 115 million** significantly exceeded its cash and cash equivalents of approximately HKD 29.8 million, indicating liquidity pressure[90](index=90&type=chunk) - Management states that the Group's ability to continue as a going concern depends on successfully obtaining new bank loans, drawing down shareholder loan facilities, and timely repayments from an associate[93](index=93&type=chunk) - The report explicitly states the existence of a **material uncertainty** that may cast significant doubt on the Group's ability to continue as a going concern[93](index=93&type=chunk) [Revenue and Segment Information](index=41&type=section&id=Revenue%20and%20Segment%20Information) The oilfield project tools and services segment generated HKD 148 million in revenue but incurred a loss of HKD 4.2 million Revenue by Source (HKD thousand) | Revenue Source (HKD thousand) | H1 2024 | | :--- | :--- | | **Oilfield project tools and services** | **147,716** | | Of which: Production enhancement | 136,623 | | **Consultancy services** | **18,192** | | **Total Revenue** | **165,908** | Segment Results (HKD thousand) | Segment Results (HKD thousand) | H1 2024 | | :--- | :--- | | **Oilfield project tools and services** | (4,219) | | **Consultancy services** | 8,717 | | **Total segment results** | **4,498** | [Related Party Transactions](index=58&type=section&id=Related%20Party%20Transactions) The Group has a loan receivable of HKD 6.5 million from an associate, Star Petrotech, due by the end of 2024 - The loan receivable from associate Star Petrotech has a balance of **HKD 6.53 million**, carries an annual interest rate of 7%, and is repayable on or before December 31, 2024[136](index=136&type=chunk)[137](index=137&type=chunk) - Amounts due to an associate company are **HKD 12.33 million** and are trade in nature[136](index=136&type=chunk)[137](index=137&type=chunk) - Total remuneration for key management personnel during the period was **HKD 2.41 million**, a decrease year-over-year[135](index=135&type=chunk) [Events After the Reporting Period](index=61&type=section&id=Events%20After%20the%20Reporting%20Period) A subsidiary is involved in a major lawsuit over technical service fees, resulting in the freezing of approximately RMB 14.9 million in bank deposits - A subsidiary of the Group is involved in a major lawsuit, with the plaintiff claiming **technical service fees of approximately RMB 28.9 million**[139](index=139&type=chunk) - The first-instance judgment ordered a payment of approximately RMB 12.6 million, but the plaintiff has appealed, and the outcome is pending[139](index=139&type=chunk) - As of the report date, **approximately RMB 14.9 million** of the subsidiary's bank deposits have been frozen[139](index=139&type=chunk)

[Performance Summary](index=1&type=section&id=Performance%20Summary) [Overall Performance Overview](index=1&type=section&id=Overall%20Performance%20Overview) In H1 2024, the Group's performance significantly improved, with total revenue surging by 60.8% year-on-year to HKD 166 million, and loss attributable to owners of the Company narrowing by 97.7% to approximately HKD 0.4 million, nearing breakeven Performance Metrics | Metric | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 165.9 million HKD | 103.2 million HKD | +60.8% | | Net Loss | 0.4 million HKD | 18.0 million HKD | -97.8% | | Loss Attributable to Owners of the Company | 0.4 million HKD | 17.1 million HKD | -97.7% | | Basic Loss Per Share | 0.02 HK cents | 1.0 HK cents | -98.0% | | Interim Dividend | None | None | - | - Performance improvement primarily attributed to two factors: (1) increased revenue from production enhancement services in the Chinese market; and (2) increased net reversal of impairment losses on financial assets[2](index=2&type=chunk) [Business Review and Outlook](index=2&type=section&id=Business%20Review%20and%20Outlook) [Geographical Market Analysis](index=2&type=section&id=Geographical%20Market%20Analysis) The Group's growth was entirely driven by the Chinese market, where revenue increased by 80.4% year-on-year, while overseas market revenue declined by 15.1% due to the expiration of a Middle East contract Geographical Market Revenue | Geographical Market | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | % of Total Revenue (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | China Market | 147.9 | 82.0 | +80.4% | 89.2% | | Overseas Market | 18.0 | 21.2 | -15.1% | 10.8% | | **Total** | **165.9** | **103.2** | **+60.8%** | **100%** | [China Market](index=3&type=section&id=China%20Market) Strong growth in the Chinese market was primarily contributed by the Southwest region, where revenue surged by 193.0% year-on-year to HKD 114 million, mainly due to increased production enhancement services China Regional Revenue | China Region | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Southwest | 113.7 | 38.8 | +193.0% | | North | 21.9 | 37.8 | -42.1% | | Northwest | 9.4 | 4.4 | +113.6% | | Other Regions | 2.9 | 1.0 | +190.0% | - Growth in the Southwest region was mainly due to increased production enhancement services; the decline in the Northern region was due to reduced production enhancement and drilling services[5](index=5&type=chunk)[6](index=6&type=chunk) [Overseas Market](index=4&type=section&id=Overseas%20Market) The decline in overseas market revenue was primarily affected by the Middle East region, where a supervision service contract expired in Q1 2024, leading to a 32.7% year-on-year decrease in revenue - Middle East market revenue decreased from **HKD 21.1 million** to **HKD 14.2 million**, a **32.7%** year-on-year reduction, mainly due to the expiration of a supervision service contract[7](index=7&type=chunk) - Other overseas regions' revenue increased from **HKD 0.1 million** to **HKD 3.8 million**, a **3700.0%** year-on-year growth, mainly due to increased supervision and drilling services[8](index=8&type=chunk) [Business Segment Analysis](index=5&type=section&id=Business%20Segment%20Analysis) From a business segment perspective, 'Oilfield Project Tools and Services' is the Group's core and growth engine, with revenue increasing by 81.9% year-on-year, accounting for 89% of total revenue Business Segment Revenue | Business Segment | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | % of Total Revenue (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | Oilfield Project Tools and Services | 147.7 | 81.2 | +81.9% | 89.0% | | Consulting Services | 18.2 | 22.0 | -17.3% | 11.0% | | **Total** | **165.9** | **103.2** | **+60.8%** | **100%** | [Oilfield Project Tools and Services](index=6&type=section&id=Oilfield%20Project%20Tools%20and%20Services) Within the 'Oilfield Project Tools and Services' segment, production enhancement services were the absolute dominant force, contributing HKD 137 million in revenue, a 90.3% year-on-year increase, accounting for 92.5% of the segment's revenue Service Type Revenue | Service Type | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Production Enhancement | 136.6 | 71.8 | +90.3% | | Drilling | 8.1 | 7.4 | +9.5% | | Completion | 3.0 | 2.0 | +50.0% | - Growth in production enhancement services primarily came from the Southwest region of China, partially offset by reductions in Northern China[12](index=12&type=chunk) [Consulting Services](index=5&type=section&id=Consulting%20Services) Consulting services revenue decreased by 17.3% year-on-year to HKD 18.2 million, primarily due to the expiration of a supervision service contract in the Middle East market in Q1 2024 - The decrease in consulting services revenue was mainly due to the expiration of a supervision service contract in the Middle East market, partially offset by increased integrated project management services in the Middle East and supervision services in other overseas markets[10](index=10&type=chunk) [Client Analysis](index=7&type=section&id=Client%20Analysis) The Group's client concentration is very high, with the top three clients contributing 96.1% of revenue, and the largest client (Client 1) showing particularly strong growth - The top five clients accounted for **98.7%** of total revenue[15](index=15&type=chunk) Top Clients Revenue | Client | H1 2024 Revenue (million HKD) | % of Total Revenue (%) | | :--- | :--- | :--- | | Client 1 | 115.0 | 69.3% | | Client 2 | 30.3 | 18.3% | | Client 3 | 14.1 | 8.5% | [Human Resources and R&D](index=8&type=section&id=Human%20Resources%20and%20R%26D) To adapt to industry trends, the Group streamlined its organizational structure, reducing total employees by 23.0%, while continuing to invest in R&D to maintain technological leadership - As of June 30, 2024, the Group had **197** employees, a **23.0%** decrease from the end of 2023[16](index=16&type=chunk) - The Group emphasizes intellectual property protection, holding **28** utility model patents and **10** invention patents, with another **5** invention patents pending[17](index=17&type=chunk) [Future Outlook](index=9&type=section&id=Future%20Outlook) Management maintains a cautiously optimistic outlook for the Group, expecting strong demand for oilfield services in H2 2024, and plans to expand existing businesses while exploring diversified investment opportunities - Market demand for oilfield services is expected to remain strong in H2 2024, primarily benefiting from stable international oil prices and China's shale gas consumption policies[18](index=18&type=chunk) - The Group plans to expand existing businesses and seek diversified development, including exploring profitable investment opportunities such as surface geothermal projects[18](index=18&type=chunk) [Financial Review](index=25&type=section&id=Financial%20Review) [Consolidated Statement of Profit or Loss Analysis](index=25&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20Analysis) In H1 2024, the Group achieved an operating profit of HKD 7.6 million, reversing a prior-period loss, primarily due to significant revenue growth and increased net reversal of impairment losses on financial assets - Material costs as a percentage of revenue increased from **12.6%** to **14.3%**, and technical service fees as a percentage of revenue increased from **31.6%** to **42.5%**, both due to the higher proportion of revenue from high-cost production enhancement services[52](index=52&type=chunk)[55](index=55&type=chunk) - Net reversal of impairment losses on financial assets was approximately **HKD 3.7 million**, compared to only **HKD 0.2 million** in the prior period, mainly due to overall improvement in financial asset quality[56](index=56&type=chunk) - Final net loss significantly narrowed to **HKD 0.4 million**, compared to **HKD 18.0 million** in the prior period[61](index=61&type=chunk) [Statement of Financial Position Analysis](index=27&type=section&id=Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2024, the Group's total assets were approximately HKD 694 million, with trade receivables turnover days significantly shortening, while contract assets increased due to higher unbilled work - Net trade receivables decreased by **17.6%** to **HKD 169 million**, with average turnover days decreasing from **365 days** to **206 days**[66](index=66&type=chunk) - Contract assets increased by **31.5%** to **HKD 158 million**, mainly due to increased unbilled work for production enhancement services[67](index=67&type=chunk) - Trade payables turnover days decreased from **889 days** to **426 days**, due to increased material and technical service fees and faster payments[69](index=69&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The Group's liquidity remains tight, with cash and cash equivalents of approximately HKD 29.8 million against total borrowings of HKD 179 million, though the gearing ratio has improved to 42.2% Liquidity Metrics | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 29.8 million HKD | 26.3 million HKD | | Bank and Other Borrowings | 179.2 million HKD | 187.1 million HKD | | Gearing Ratio | 42.2% | 45.3% | [Financial Statements and Notes](index=10&type=section&id=Financial%20Statements%20and%20Notes) [Interim Condensed Consolidated Statement of Comprehensive Income](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The financial report shows the Group achieved revenue of HKD 166 million in H1 2024, a 60.8% year-on-year increase, with operating activities turning profitable and total loss for the period significantly narrowing Interim Condensed Consolidated Statement of Comprehensive Income | Item (HKD '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 165,908 | 103,215 | | Operating Profit / (Loss) | 7,636 | (10,747) | | Profit / (Loss) Before Income Tax | 594 | (18,444) | | Loss for the Period | (412) | (17,973) | | Loss Attributable to Owners of the Company | (395) | (17,113) | [Interim Condensed Consolidated Statement of Financial Position](index=12&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were HKD 694 million, total liabilities HKD 501 million, and net assets HKD 193 million, with a current ratio of approximately 1.03 indicating tight liquidity Interim Condensed Consolidated Statement of Financial Position | Item (HKD '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | **Total Assets** | **694,056** | **712,011** | | Non-current Assets | 244,989 | 256,384 | | Current Assets | 449,067 | 455,627 | | **Total Liabilities** | **500,948** | **520,856** | | Current Liabilities | 434,524 | 433,123 | | Non-current Liabilities | 66,424 | 87,733 | | **Net Assets** | **193,108** | **191,155** | [Notes to the Financial Statements](index=14&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes disclose key accounting information, including significant uncertainties regarding going concern, detailed segment information, and a significant post-balance sheet litigation matter [Basis of Preparation and Going Concern](index=14&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) Although the financial statements are prepared on a going concern basis, the notes explicitly state significant uncertainties due to liquidity risk, with management's plan relying on securing new loans and collecting receivables - As of June 30, 2024, the Group's total current bank and other borrowings were approximately **HKD 115 million**, while cash and cash equivalents were only approximately **HKD 29.79 million**[26](index=26&type=chunk) - Management's response plan includes: (a) securing a **RMB 19.75 million** loan in July 2024; (b) having an unutilized shareholder loan facility of **RMB 30 million**; and (c) associate Star Petrotech repaying approximately **HKD 6.5 million** in loans[27](index=27&type=chunk) - The notes explicitly state that the above circumstances indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[27](index=27&type=chunk) [Events After the Reporting Period](index=24&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, a Group subsidiary was involved in a technical service fee lawsuit, with a first-instance judgment ordering payment of approximately RMB 12.6 million, and the plaintiff has appealed - A subsidiary was sued by a service provider for approximately **RMB 28.9 million** in technical service fees[50](index=50&type=chunk) - The first-instance judgment ordered the defendant to pay approximately **RMB 12.6 million**, but the plaintiff has appealed[50](index=50&type=chunk) - As of the announcement date, approximately **RMB 14.9 million** (approximately **HKD 16.3 million**) across three bank accounts of the defendant has been frozen by the court[50](index=50&type=chunk) [Corporate Governance and Other Matters](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Matters) [Dividends and Audit](index=31&type=section&id=Dividends%20and%20Audit) The Board resolved not to declare an interim dividend for H1 2024, and the unaudited interim condensed consolidated financial information has been reviewed by the Company's Audit Committee - The Board resolved not to declare an interim dividend for H1 2024 (H1 2023: None)[78](index=78&type=chunk) - The unaudited interim financial information for the period has been reviewed by the Audit Committee, comprising three independent non-executive directors[78](index=78&type=chunk)

[Supplemental Announcement Regarding the 2023 Annual Report](index=1&type=section&id=%E6%9C%89%E9%97%9C%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%B8%89%E5%B9%B4%E5%8D%81%E4%BA%8C%E6%9C%88%E4%B8%89%E5%8D%81%E4%B8%80%E6%97%A5%E6%AD%A2%E5%B9%B4%E5%BA%A6%E4%B9%8B%E5%B9%B4%E5%A0%B1%E7%9A%84%E8%A3%9C%E5%85%85%E5%85%AC%E5%91%8A) This announcement provides supplementary details on the company's share option scheme for the 2023 annual report [Supplemental Information on Share Option Scheme](index=1&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) This section clarifies details regarding share options granted, their expiration, and the total potential shares issuable under the scheme - The company clarified that **500,000** share options granted on January 10, 2023, were to the then-former company secretary and fully expired in June 2024[2](index=2&type=chunk) Changes in Number of Shares Available for Grant Under Share Option Scheme | Time Point | Number of Share Options Available for Grant | | :--- | :--- | | Beginning of 2023 | 75,073,129 | | End of 2023 | 0 | - The share option scheme expired on February 18, 2023, resulting in **zero** share options available for grant at year-end[2](index=2&type=chunk) - For the fiscal year ended December 31, 2023, the number of shares potentially issuable under all company schemes (share options and awards) represented approximately **4.34%** of the weighted average number of shares outstanding for the year[3](index=3&type=chunk)

Financial Performance - The company's revenue for the year ended December 31, 2023, was approximately HKD 314.8 million, a slight increase of 0.3% compared to HKD 313.8 million in 2022[3]. - The operating loss for the year was HKD 68.5 million, representing a significant increase of 181.8% from a loss of HKD 24.3 million in the previous year[3]. - The net loss attributable to the company's owners was HKD 74.7 million, compared to a loss of HKD 27.5 million in 2022, marking a 171.4% increase[3]. - Basic loss per share for the year was HKD 4.3 cents, up 152.9% from HKD 1.7 cents in 2022[3]. - The total loss for the year was approximately HKD 74.7 million, an increase of about HKD 47.2 million (or approximately 171.6%) from HKD 27.5 million in 2022[52]. - The loss attributable to the company's owners for 2023 was approximately HKD 73.5 million, an increase of about HKD 44.9 million (or approximately 157.0%) from HKD 28.6 million in 2022[53]. Revenue Breakdown - Revenue from the Chinese market decreased by approximately 4.4% to about HKD 266.3 million in 2023, down from HKD 278.6 million in 2022[21]. - Revenue from the overseas market increased by approximately 37.8% to about HKD 48.5 million in 2023, up from HKD 35.2 million in 2022[22]. - Revenue from the Middle East increased by approximately 56.2% to about HKD 47.8 million in 2023, compared to HKD 30.6 million in 2022[27]. - Revenue from consulting services increased by approximately 44.2% to about HKD 51.9 million in 2023, up from HKD 36.0 million in 2022[30]. - Revenue from oilfield project tools and services decreased by approximately 5.4% to about HKD 262.9 million in 2023 from HKD 277.8 million in 2022[29]. - Revenue from drilling services decreased by approximately 18.7% to about HKD 20.4 million in 2023, down from HKD 25.1 million in 2022[32]. - Revenue from completion services plummeted by approximately 98.9% to about HKD 0.1 million in 2023, down from HKD 9.3 million in 2022[34]. Assets and Liabilities - Total assets decreased by 13.5% to HKD 712.0 million from HKD 823.4 million in 2022[4]. - Total liabilities decreased by 7.3% to HKD 520.9 million from HKD 561.7 million in 2022[4]. - The group's property, plant, and equipment amounted to approximately HKD 127.3 million, a decrease of about HKD 36.4 million (or approximately 22.2%) from HKD 163.7 million in 2022[54]. - The group's intangible assets decreased from approximately HKD 85.7 million in 2022 to approximately HKD 26.8 million in 2023, primarily due to a goodwill impairment loss of approximately HKD 58.9 million recognized in 2023[55]. - The group's cash and cash equivalents were approximately HKD 26.3 million, a decrease of about HKD 13.7 million from HKD 40.0 million in 2022[62]. Operational Strategy and Market Outlook - The company anticipates stable market demand for its production enhancement services in China due to consistent international oil prices and supportive national policies[15]. - The company plans to continue marketing and promoting its oilfield services and technologies to enhance market penetration in 2024[16]. - The company expects a significant decline in consulting service scale in the Middle East due to the expiration of a supervisory service contract in Q1 2024, which will not be renewed by the client[16]. Employee and Training - The group employed 256 staff as of December 31, 2023, an increase of approximately 3.2% from 248 employees a year earlier[68]. - A total of 142 training sessions were conducted in 2023, totaling over 9,791 hours, with 224 employees participating[68]. - 88% of employees received training, totaling 9,555 hours, with an average of 37.3 hours per employee, reflecting a 13% increase in training coverage compared to the previous reporting period[167]. - 100% of senior management received training, with an average of 37.6 hours per employee, while 75% of middle management and 87% of frontline employees received training[169]. Environmental, Social, and Governance (ESG) Initiatives - The group emphasizes compliance with ESG regulations, recognizing their impact on long-term sustainability and operational risks[77]. - The company has established ESG-related goals to ensure sustainable operations and long-term business growth, focusing on emissions reduction and energy conservation[82]. - The total greenhouse gas emissions for the reporting period amounted to 12,466.90 tons of CO2 equivalent, a decrease from 13,922.14 tons in 2022, representing a reduction of approximately 10.4%[105][108]. - The company achieved a 16.3% reduction in greenhouse gas emissions intensity per thousand Hong Kong dollars of revenue compared to the 2022 baseline, successfully progressing towards its 10% reduction target by 2032[110]. - The company has implemented measures to prioritize the use of electric pumps over diesel pumps in fracturing operations, enhancing energy efficiency and reducing emissions[112]. - The company has obtained ISO 14001 certification for its environmental management system, demonstrating its commitment to environmental protection[99]. Corporate Governance - The board of directors consists of three executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2023[196]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules and has complied with it during the year[196]. - Continuous professional development for directors is ensured, with all directors participating in training and seminars[198].