Financial Performance - For the fiscal year ending December 31, 2024, the company reported total revenue of RMB 580,370,000, an increase of 13.2% compared to RMB 512,770,000 for the fiscal year 2023[3]. - The company's gross profit decreased to RMB 54,378,000, down 47.8% from RMB 104,190,000 in the previous year[3]. - Operating loss for the year was RMB 56,286,000, compared to an operating profit of RMB 30,719,000 in 2023[3]. - The net loss attributable to shareholders was RMB 75,199,000, a significant decline from a profit of RMB 10,078,000 in the prior year[3]. - Total revenue for the year ended December 31, 2024, was RMB 580.37 million, an increase from RMB 512.77 million in the previous year, representing a growth of approximately 13.2%[20]. - The gross profit for the year was RMB 54.38 million, compared to RMB 104.19 million in the previous year, indicating a decline of about 47.8%[20]. - The company reported a net loss of RMB 75.20 million for the year, compared to a profit of RMB 10.08 million in the previous year, reflecting a significant downturn in financial performance[20]. - Total expenses for the year ended December 31, 2024, amounted to RMB 622,564 thousand, an increase of 28.1% from RMB 485,941 thousand in 2023[28]. - The cost of goods sold recognized as an expense for the year ended December 31, 2024, was RMB 368,333,000, an increase from RMB 278,015,000 in 2023[58]. Assets and Liabilities - The company's total assets decreased to RMB 1,132,654,000 from RMB 1,352,247,000, reflecting a reduction of approximately 16.2%[4]. - Current liabilities exceeded current assets by approximately RMB 72,483,000, raising concerns about the company's liquidity[10]. - The total equity attributable to shareholders decreased to RMB 377,949,000 from RMB 453,148,000, a decline of approximately 16.6%[4]. - The company’s total liabilities were RMB 754.71 million, compared to RMB 899.10 million in the previous year, indicating a reduction of approximately 16.1%[23]. - The total bank borrowings as of December 31, 2024, amounted to RMB 360,389,000, down from RMB 435,027,000 in 2023[66]. - The debt-to-equity ratio as of December 31, 2024, was approximately 48%, a slight decrease from 49% on December 31, 2023[89]. Operational Challenges - The company has suspended production in its prefabricated concrete component business, contributing to the overall financial challenges faced[10]. - The group has suspended the production of prefabricated concrete components due to ongoing market stagnation and intense competition[45]. - The company plans to improve operational performance and cash flow by enhancing accounts receivable collection and increasing production capacity in its iron ore tailings recovery business[11]. Expenses and Costs - The company’s administrative expenses totaled RMB 78.10 million for the year, reflecting an increase from RMB 49.18 million in the previous year[20]. - Employee benefits expenses increased to RMB 65,731 thousand, reflecting a rise of 6.9% compared to RMB 61,815 thousand in 2023[28]. - The net financing cost for the year was RMB (18,165) thousand, compared to RMB (16,649) thousand in 2023, indicating an increase of 9.1%[30]. - The income tax expense for the year was RMB 748 thousand, a decrease of 81.2% from RMB 3,992 thousand in 2023[31]. - The impairment provision for property, plant, and equipment was RMB 26,767 thousand, a significant increase from RMB 2,260 thousand in 2023[28]. Revenue Segmentation - The segment performance showed that the ready-mixed concrete division generated revenue of RMB 302.90 million, while the precast concrete components and recycled iron ore segments generated RMB 14.09 million and RMB 263.38 million, respectively[20]. - Revenue from ready-mixed concrete sales rose from approximately RMB 259.0 million in FY2023 to approximately RMB 302.9 million in FY2024, an increase of about 17.0%[73]. - Revenue from precast concrete components decreased significantly from approximately RMB 85.4 million in FY2023 to approximately RMB 14.1 million in FY2024, a decline of about 83.5%[74]. - Revenue from iron ore tailings recovery products and eco-bricks increased from approximately RMB 168.4 million in FY2023 to approximately RMB 263.4 million in FY2024, up by about 56.4%[75]. Future Outlook - The revenue growth rate is projected to be 20.8% annually from 2025 to 2029, compared to 2.2% in 2023[57]. - The average gross profit margin is expected to be 31%, down from 48% in 2023[57]. - The group plans to expand its precast concrete component capacity with an allocation of HKD 24.5 million, expected to be completed by December 2025[98]. Corporate Governance - The group has adhered to the corporate governance code as per the Hong Kong Stock Exchange regulations during the fiscal year 2024[99].

Financial Performance - The company's revenue for the six months ended June 30, 2024, was approximately RMB 244.1 million, an increase of about 5.7% compared to RMB 231.0 million for the same period in 2023[10]. - Gross profit increased by approximately 38.9% to about RMB 45.5 million, with a gross margin of 18.6%, up from 14.2% in the previous year[11]. - The net profit for the period was approximately RMB 1.2 million, a decrease of about 89.0% compared to RMB 10.6 million in the same period last year[10]. - Revenue from ready-mixed concrete sales was RMB 130.0 million, a 16.1% increase from RMB 112.0 million in the previous year[14]. - Revenue from precast concrete components decreased by approximately 76.1% to RMB 10.6 million, down from RMB 44.2 million due to increased price pressure from competitors[15]. - Revenue from iron ore tailings recovery and eco-brick sales increased by approximately 38.4% to RMB 103.5 million, compared to RMB 74.8 million in the previous year[16]. - The overall gross profit increased by approximately RMB 12.7 million or about 38.9% to approximately RMB 45.5 million, with the gross profit margin rising from 14.2% to 18.6%[18]. - The profit for the period was approximately RMB 1.2 million, a decrease from RMB 10.6 million in the previous period[24]. - The company reported a net profit attributable to owners of the company of RMB 1,172 thousand, a decrease from RMB 10,649 thousand in the prior year[37]. - Basic and diluted earnings per share were RMB 0.002, down from RMB 0.014 in the same period last year, indicating lower profitability per share[37]. Operational Efficiency - Operating profit decreased to RMB 9,891 thousand from RMB 22,456 thousand, indicating challenges in operational efficiency[37]. - The company plans to focus on enhancing operational efficiency and exploring new market opportunities to drive future growth[37]. - Selling expenses increased by approximately 45.8% to about RMB 10.5 million, mainly due to increased transportation costs from a significant rise in the sales volume of iron ore tailings recovery products[20]. - Administrative expenses rose by approximately 37.9% to about RMB 29.1 million, attributed to increases in non-direct employee costs and professional fees[21]. - Net financing costs increased by approximately 44.3% to about RMB 10.0 million, mainly due to a reduction in capitalized interest included in construction costs[22]. Assets and Liabilities - As of June 30, 2024, the current assets net value was approximately RMB 4.4 million, down from RMB 21.1 million as of December 31, 2023[25]. - The total assets as of June 30, 2024, were RMB 1,270,647 thousand, down from RMB 1,352,247 thousand at the end of 2023, indicating a reduction in asset base[39]. - Total liabilities decreased to RMB 816,327 thousand from RMB 899,099 thousand, reflecting a reduction in financial obligations[39]. - The total borrowings (excluding factoring loans) as of June 30, 2024, were RMB 384,111,000, compared to RMB 423,157,000 as of December 31, 2023, indicating a reduction in debt levels[58]. - The company’s total liabilities decreased to RMB 416,032,000 as of June 30, 2024, from RMB 435,027,000 as of December 31, 2023, indicating improved financial health[96]. Cash Flow and Liquidity - Net cash flow from operating activities was RMB 53,998 thousand, compared to RMB 40,175 thousand in the previous year, showing improved cash generation[41]. - Cash and cash equivalents at the end of the period increased to RMB 26,212 thousand from RMB 13,327 thousand, showing improved liquidity[41]. - The total cash and cash equivalents as of June 30, 2024, were RMB 26,212,000, slightly up from RMB 26,367,000 as of December 31, 2023[89]. Market Outlook - The company expects continued strong revenue from iron ore tailings recovery and eco-brick business, despite market pressures on ready-mixed and precast concrete components[11]. - The company remains optimistic about the business prospects for iron ore tailings utilization due to sufficient supply in Hainan[11]. - The company expects business momentum to continue in the second half of 2024, driven by abundant supply of iron ore tailings in Hainan Province and strong demand from nearby regions[36]. Corporate Governance - The group has established sound corporate governance principles to protect shareholder interests and enhance corporate value[106]. - The company has complied with the corporate governance code principles and has adopted best practices where applicable as of June 30, 2024[107]. - The group continues to review and monitor its corporate governance practices to ensure compliance with the corporate governance code[107]. Shareholder Information - Major shareholders include Zhixin Investment Holdings Limited with a beneficial interest of 274,706,100 shares, representing 36.73% of the issued share capital[111]. - The total number of issued shares as of June 30, 2024, is 748,000,000[111]. - The company did not declare or propose any dividends for the six months ended June 30, 2024, consistent with the previous year[78]. Risk Management - The financial risk management plan focuses on minimizing potential adverse impacts on financial performance due to market unpredictability[49]. - The group has not used any derivative financial instruments to hedge certain risk exposures during the reporting period[49]. - The group’s credit risk is primarily associated with cash and bank balances, trade receivables, and other receivables[50]. - The group has identified significant adverse changes in business, financial, or economic conditions as key indicators for assessing credit risk[55].

Financial Performance - The company's revenue for the six months ended June 30, 2024, was approximately RMB 244.1 million, an increase of about 5.7% compared to RMB 231.0 million for the same period in 2023[4]. - Gross profit increased by approximately 38.9% to about RMB 45.5 million, with a gross margin of 18.6%, up from 14.2% in the previous year[5]. - Net profit for the period was approximately RMB 1.2 million, representing a decrease of about 89.0% compared to RMB 10.6 million in the same period last year[4]. - Revenue from ready-mixed concrete sales increased by approximately 16.1% to RMB 130.0 million, driven by higher average selling prices[8]. - Revenue from the sale of prefabricated concrete components decreased by approximately 76.1% to about RMB 10.6 million due to competitive pricing pressures[4]. - Revenue from iron ore tailings recovery and eco-brick sales increased by approximately 38.4% to about RMB 103.5 million[4]. - Overall gross profit rose to RMB 45.5 million, an increase of approximately 38.9% from RMB 32.8 million for the six months ended June 30, 2023, with gross margin improving from 14.2% to 18.6%[12]. - The company reported a basic and diluted earnings per share of RMB 0.002, down from RMB 0.014 in the previous year[31]. - The company’s profit attributable to owners for the six months ended June 30, 2024, was RMB 1,172,000, a significant decrease of 89.0% from RMB 10,649,000 in the same period of 2023[71]. Expenses and Costs - Selling expenses increased by approximately 45.8% to RMB 10.5 million, driven by higher transportation costs due to increased sales volume of iron ore tailings recovery products[14]. - Administrative expenses rose by approximately 37.9% to RMB 29.1 million, primarily due to increases in non-direct employee costs and professional fees[15]. - The total expenses amounted to RMB 238,131,000, an increase of 5.7% compared to RMB 226,528,000 for the same period in 2023[65]. - The cost of raw materials and consumables decreased to RMB 126,214,000 from RMB 142,924,000, reflecting a reduction of 11.7%[65]. - The depreciation of property, plant, and equipment increased to RMB 15,637,000 from RMB 9,315,000, reflecting a rise of 67.5%[65]. Assets and Liabilities - As of June 30, 2024, the group's current assets net value was approximately RMB 4.4 million, down from RMB 21.1 million as of December 31, 2023[19]. - Total assets as of June 30, 2024, were RMB 1,270,647,000, down from RMB 1,352,247,000 at the end of 2023[32]. - Total liabilities decreased to RMB 816,327,000 from RMB 899,099,000, indicating a reduction of 9.2%[33]. - The company’s total liabilities as of June 30, 2024, amounted to RMB 801,247,000, compared to RMB 894,257,000 as of December 31, 2023[52]. - The company’s total trade receivables aged within one year were RMB 265,526,000 as of June 30, 2024, compared to RMB 277,987,000 as of December 31, 2023[88]. Cash Flow and Financing - The company’s cash flow from operating activities was RMB 53,998,000, an increase from RMB 40,175,000 in the same period last year[35]. - The total cash and cash equivalents as of June 30, 2024, were RMB 26,212,000, slightly up from RMB 26,367,000 as of December 31, 2023[83]. - The company’s borrowings (excluding factoring loans) as of June 30, 2024, totaled RMB 384,111,000, with a breakdown of RMB 256,427,000 due within one year[52]. - The company’s total borrowings as of June 30, 2024, were RMB 416,032,000, down from RMB 435,027,000 as of December 31, 2023, showing a reduction in debt levels[90]. - As of June 30, 2024, the group has undrawn financing facilities amounting to RMB 55,550,000 for bank loans due within one year, compared to RMB 15,050,000 as of December 31, 2023, indicating a significant increase in available credit[20]. Corporate Governance and Shareholder Information - The company has committed to maintaining high standards of corporate governance, which is essential for protecting shareholder interests and enhancing corporate value[100]. - Mr. Ye Zhi Jie holds a 36.73% equity interest in the company, with 274,706,100 shares, as of June 30, 2024, maintaining his position as a major shareholder[103]. - Mr. Huang Wen Gui owns 16.25% of the company with 121,568,700 shares, reinforcing the significant ownership concentration among key stakeholders[104]. - The company did not declare any dividends for the six months ended June 30, 2024, consistent with the previous year[72]. - The total remuneration for key management personnel for the six months ended June 30, 2024, is approximately RMB 2,144,000, a slight decrease from RMB 2,174,000 in the same period of 2023[99]. Market Outlook and Strategic Initiatives - The company expects continued growth in the second half of 2024, driven by strong demand for tailings in Hainan Province[30]. - The company plans to maintain competitiveness by offering price discounts to certain customers in the prefabricated concrete components market[5]. - The company has invested in advanced automated assembly lines, including fully automated production equipment for iron ore tailings recovery, with an annual processing capacity of 3 million tons[5]. - The group plans to continue enhancing its market presence through strategic agreements and product development initiatives[55].

[Supplementary Announcement: Supplementary Information for 2023 Annual Report](index=1&type=section&id=Supplementary%20Announcement) This announcement provides supplementary information to the 2023 annual report, primarily updating the use of proceeds from the share offer [Purpose and Background of the Announcement](index=1&type=section&id=Purpose%20and%20Background) This announcement provides supplementary information for Zixin Group Holdings Limited's 2023 annual report, primarily updating the use of proceeds from the share offer - This is a supplementary announcement to the 2023 annual report of Zixin Group Holdings Limited (Stock Code: 2187)[1](index=1&type=chunk) - The announcement aims to provide supplementary information for the 2023 annual report[1](index=1&type=chunk) [Update on Use of Proceeds](index=1&type=section&id=Use%20of%20Proceeds%20Update) The company updated the unutilized net proceeds from the share offer for expanding precast concrete component capacity and their estimated utilization time, indicating a delay in the plan Unutilized Net Proceeds from Share Offer and Estimated Utilization Time | Metric | As of December 31, 2022 | As of December 31, 2023 | | :--- | :--- | :--- | | Unutilized Net Proceeds (RMB) | approximately 7.3 million | approximately 6.5 million | | Estimated Utilization Time | Before December 2023 | Before December 2025 | [Reason for Delay and Management Decision](index=2&type=section&id=Reason%20for%20Delay) Due to the precast concrete component business's underperformance in FY2023, management decided to postpone the use of proceeds for expanding its capacity - The precast concrete component business performed below expectations in FY2023[2](index=2&type=chunk) - The Group's management decided to postpone the plan for using proceeds to expand the Group's precast concrete component production capacity[2](index=2&type=chunk) [Board Information](index=2&type=section&id=Board%20Information) The announcement was issued by Mr. Ye Zhijie, Chairman and Executive Director, listing board members as of the announcement date - The announcement was issued by Mr. Ye Zhijie, Chairman and Executive Director of the Board[2](index=2&type=chunk) - Board members include Executive Directors Mr. Ye Zhijie, Mr. Huang Wengui, Mr. Lai Quanshui, Mr. Qiu Limiao, Mr. Ye Dan, and Mr. Huang Kaining; and Independent Non-executive Directors Ms. Wang Duanxiu, Mr. Cai Huinong, and Mr. Jiang Qinjian[2](index=2&type=chunk) - The announcement date is Hong Kong, August 20, 2024[2](index=2&type=chunk)

Financial Performance - In the fiscal year 2023, the total revenue from audit services was RMB 2,200,000, a decrease of 4.35% from RMB 2,300,000 in the fiscal year 2022[8]. - The company reported a revenue of RMB 496.2 million for the fiscal year 2023, a decrease from RMB 634.2 million in fiscal year 2022, indicating a decline of approximately 21.8%[68]. - The total number of full-time employees as of December 31, 2023, is 438, down from 508 in 2022[151]. - The overall employee turnover rate during the reporting period is 24.3%, a decrease from 38.2% in the previous fiscal year[153]. Environmental, Social, and Governance (ESG) Initiatives - The board has approved the Environmental, Social, and Governance (ESG) report, confirming that it fairly presents the company's management approach and performance in ESG matters[25]. - The company has established a governance framework to manage environmental, social, and governance risks effectively[52]. - The company continues to engage with stakeholders to understand their concerns and expectations, ensuring compliance with laws and regulations while fulfilling social responsibilities[54]. - The company has implemented various environmental protection measures, including the use of LED lighting to reduce energy consumption[63]. - The company aims to achieve optimal levels in emission control and resource utilization considering new business expansions[67]. - The company has set three environmental goals focusing on recycling, reusing, water conservation, and energy saving to enhance employee environmental awareness[77]. Risk Management and Compliance - The company has implemented a risk management and internal control system to monitor financial, operational, and compliance-related risks[9]. - The company has a policy to ensure timely and fair disclosure of inside information to maintain market fairness[43]. - The company has established a supplier code of conduct to set expectations for ethical and compliant behavior among suppliers[113]. - The company has a strong focus on compliance and regulatory matters, with key personnel having over 30 years of experience in accounting and compliance[123][125][126]. Employee Management and Training - The company provided 529 hours of training during the reporting period, with an average training time of 1.21 hours per employee, a decrease from 2.11 hours in the previous fiscal year[159]. - The company has implemented a competitive compensation system to attract and retain talent, ensuring compliance with national laws regarding employee benefits[174]. - The company aims to achieve a 100% training coverage rate for its anti-corruption training program within four years, with a three-year rolling training plan for employees[182]. - The employee turnover rate was 2.1% for females and 22.2% for males, with the majority of male turnover coming from the production department[173]. Product Quality and Safety - The company has not encountered any significant product recalls, liability claims, or failures to pass regulatory inspections in product quality during the fiscal year 2023[121]. - The company has implemented measures to ensure product safety and fulfill product responsibilities at various operational stages[117]. - The company has established a quality control process throughout its operations, including strict inspections and testing before product delivery[101]. - The company reported no product recalls during the year, indicating strong product management and compliance[134]. Community Engagement and Social Responsibility - The company is committed to maintaining communication with stakeholders and responding to their needs in a timely manner[54]. - The company has committed to maintaining close communication with the community and is concerned about vulnerable groups within it[191]. - The company maintains a zero-tolerance policy towards child labor and forced labor, strictly adhering to relevant national laws[156]. - The company aims to promote gender diversity and has implemented policies to ensure female employees receive their entitled benefits and create a supportive work environment[176].

Revenue and Profitability - Revenue from the sale of iron ore tailings recovery products and eco-bricks increased from approximately RMB 27.9 million in FY2022 to approximately RMB 168.4 million in FY2023, representing a growth of approximately 503.6%[7] - Net profit for the year increased from approximately RMB 1.3 million in FY2022 to approximately RMB 10.1 million in FY2023[9] - Total revenue decreased from RMB 634.15 million in FY2022 to RMB 512.77 million in FY2023, a decline of approximately 19.1%[26] - Basic earnings per share increased from RMB 0.002 in FY2022 to RMB 0.013 in FY2023[26] - The total revenue for the year ended December 31, 2023, was RMB 634,152 thousand, an increase from RMB 576,727 thousand in 2022, representing a growth of approximately 9.9%[47] - The gross profit for the same period was RMB 57,425 thousand, compared to RMB 51,425 thousand in 2022, indicating a gross margin improvement[47] - The company reported a net loss of RMB 2,357 thousand for the year, a decrease from a profit of RMB 1,253 thousand in the previous year[48] - The company's profit attributable to owners for the year ended December 31, 2023, was RMB 10,078,000, compared to RMB 1,253,000 in 2022, representing a significant increase[58] - The basic earnings per share for the year ended December 31, 2023, was RMB 0.013, up from RMB 0.002 in 2022, indicating strong growth in profitability[58] Assets and Liabilities - The total assets decreased from RMB 1,385.099 million in FY2022 to RMB 1,352.247 million in FY2023[28] - The total equity attributable to the owners of the company increased from RMB 443.070 million in FY2022 to RMB 453.148 million in FY2023[28] - Trade receivables decreased from RMB 704.195 million in FY2022 to RMB 610.359 million in FY2023, a reduction of approximately 13.3%[4] - The company's total liabilities as of December 31, 2023, were RMB 899,099 thousand, compared to RMB 942,029 thousand in 2022, indicating a decrease in total liabilities[48] - The total equity and liabilities amounted to RMB 1,352,247,000 as of December 31, 2023, compared to RMB 1,385,099,000 in the previous year[61] - The debt-to-equity ratio as of December 31, 2023, is approximately 49%, a decrease from 52% on December 31, 2022[146] Costs and Expenses - Gross profit decreased from approximately RMB 57.43 million in FY2022 to approximately RMB 104.19 million in FY2023, with a gross margin decline from 8.1% to 6.3%[19][26] - The company’s financing costs for the year were RMB 16,671 thousand, compared to RMB 13,259 thousand in 2022, reflecting an increase in borrowing costs[49] - The company’s employee benefit expenses decreased to RMB 61,815 thousand in 2023 from RMB 72,078 thousand in 2022, a reduction of approximately 14.3%[49] - Administrative expenses increased by approximately RMB 11.9 million or 28.1% to about RMB 54.3 million in fiscal year 2023 from approximately RMB 42.4 million in fiscal year 2022[143] - The net financing costs increased from approximately RMB 13.1 million in the fiscal year 2022 to approximately RMB 16.6 million in the fiscal year 2023, an increase of about 26.7%[170] Investments and Future Outlook - The company has signed an investment contract to invest RMB 350.0 million (approximately HKD 385.0 million) in tailings comprehensive utilization and various building materials production projects in Hainan Province[178] - The company anticipates a revenue growth rate of 2.2% annually from 2024 to 2028, up from 2% in 2022[90] - The average gross profit margin is projected to be 48%, an increase from 40% in 2022[90] - The company plans to expand its precast concrete component production capacity with an investment of HKD 24.5 million, aiming for completion by December 2025[180] - The total investment for the quartz mine deep processing and lightweight environmental building materials project in Longyan City, Fujian Province, is estimated at RMB 1,100 million (approximately HKD 1,242.5 million)[192] Operational Changes - The group has completed the construction of an advanced automatic assembly line with an annual production capacity of 3 million tons of iron tailings, which began operations in May 2023[132] - The company has commenced sales of iron ore tailings recovery products since May 2023, expanding its product offerings[43] - The company did not successfully acquire mining rights in a public auction held on December 28, 2023, leading to the invalidation of the investment contract[192] - The company has not declared or proposed any dividends for the year ended December 31, 2023, consistent with 2022[109] Employee and Governance - As of December 31, 2023, the company had 438 employees, a decrease from 508 employees as of December 31, 2022[179] - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange listing rules during the fiscal year 2023[196] - The company’s financial statements for the fiscal year 2023 have been reviewed by its auditor, confirming compliance with applicable accounting standards[198] - The company will hold its annual general meeting on June 18, 2024, in Hong Kong[184]

Financial Performance - For the six months ended June 30, 2023, the company's revenue was approximately RMB 231.0 million, a decrease of about 24.7% compared to the same period last year[12]. - Gross profit for the same period was approximately RMB 32.8 million, down about 9.2% year-on-year[12]. - The period profit increased significantly to approximately RMB 10.6 million, representing a year-on-year increase of approximately 1,909.2%[21]. - Revenue from the sale of ready-mixed concrete decreased by approximately 48.5% to about RMB 112.0 million, while revenue from the sale of precast concrete components decreased by approximately 46.1% to about RMB 44.2 million[20]. - Revenue from the sale of iron ore tailings recovery and eco-bricks increased by approximately 907.5% to about RMB 74.8 million[20]. - Revenue for the six months ended June 30, 2023, was RMB 231,018 thousand, a decrease of 24.6% compared to RMB 306,675 thousand for the same period in 2022[105]. - Operating profit increased significantly to RMB 22,456 thousand from RMB 7,786 thousand, indicating a strong operational performance[105]. - Net profit attributable to the owners of the company for the period was RMB 10,649 thousand, compared to RMB 530 thousand in the previous year[105]. - The company achieved a net profit of approximately RMB 10.6 million, which is about 20 times that of the same period last year, with a net profit margin of approximately 4.6%[115]. Assets and Liabilities - As of June 30, 2023, trade payables amounted to RMB 385.5 million, compared to RMB 348.4 million as of December 31, 2022[30]. - The company reported a total equity of approximately RMB 364.7 million as of June 30, 2023[27]. - The company’s total liabilities increased to RMB 451,635,000 as of June 30, 2023, from RMB 443,595,000 as of December 31, 2022, marking a growth of 1.3%[36]. - Total assets as of June 30, 2023, amounted to RMB 1,416,780 thousand, an increase from RMB 1,385,099 thousand at the end of 2022[107]. - Total liabilities increased to RMB 963,061 thousand from RMB 942,029 thousand, indicating a rise in financial obligations[110]. - The debt-to-equity ratio as of June 30, 2023, was approximately 50.4%, a slight decrease from 51.5% as of December 31, 2022[137]. Cash Flow and Financing - For the six months ended June 30, 2023, the net cash flow from operating activities was RMB 40,175,000, a significant increase from RMB 1,927,000 in the same period last year, representing a growth of approximately 1,925%[79]. - The cash flow from investing activities showed a net outflow of RMB 37,758,000, compared to a net outflow of RMB 75,580,000 in the previous year, indicating a reduction in investment losses by about 50%[79]. - The company reported a cash inflow from bank borrowings of RMB 72,220,000, up from RMB 50,500,000 in the prior year, reflecting a 43% increase in financing activities[79]. - The total cash and cash equivalents at the end of the period were RMB 13,327,000, down from RMB 30,388,000 at the end of the previous period, marking a decrease of approximately 56%[79]. - The company’s financing costs included interest payments of RMB 11,065,000, which increased from RMB 7,285,000 in the previous year, indicating a rise of about 52%[79]. - The company has unutilized financing facilities amounting to RMB 7,012,000 as of June 30, 2023, compared to RMB 1,422,000 as of December 31, 2022[43]. Shareholder Information - The company has issued 748 million shares as of June 30, 2023, with a total share capital of approximately RMB 6.36 million[26]. - The largest shareholder, Zhi Xin Investment Holdings Limited, holds 274,706,100 shares, representing 36.73% of the total shares[65]. - The second largest shareholder, Yao He Holdings Limited, owns 121,568,700 shares, accounting for 16.25% of the total shares[65]. - The company did not declare an interim dividend for the six months ended June 30, 2023[72]. Operational Segments - The company operates primarily in three segments: ready-mixed concrete, precast concrete components, and iron ore tailings recovery and eco-bricks[23]. - The company is focused on expanding its operations in the concrete materials manufacturing sector in Xiamen, Fujian Province, China[23]. - The company completed the acquisition of 瑞圖明盛環保建材 (Ruitu Mingsheng) in December 2021, which has expanded its operations into the production and sale of eco-friendly bricks in Hainan Province[82]. - The company plans to continue expanding its market presence and product offerings, particularly in the eco-brick segment, which was established through the acquisition of a new subsidiary[176]. Management and Governance - The total remuneration for key management personnel was approximately RMB 2,379,000 for the six months ended June 30, 2023, compared to RMB 1,630,000 for the same period in 2022, reflecting a year-on-year increase of 46%[58]. - The strategic committee was formed on April 6, 2023, with four executive directors, including the newly appointed executive director, Mr. Lai Chuen Shui[68]. - The board of directors has not reported any conflicts of interest with competing businesses as of June 30, 2023[69]. - The company is in compliance with corporate governance codes and standards regarding securities trading by directors[60]. Taxation - For the six months ended June 30, 2023, the income tax expense was RMB 4,853,000 compared to a tax credit of RMB 45,000 in the same period of 2022, indicating a significant increase in tax liability[197]. - The current income tax for China was RMB 6,599,000, up from RMB 1,564,000 in the previous year, reflecting a substantial rise in taxable income[197]. - The group is subject to a corporate income tax rate of 25% in China, with a preferential rate of 15% applicable to Xiamen Zhixin Construction Technology Co., Ltd[200].

[Company Information](index=3&type=section&id=Company%20Information) [Board of Directors and Company Secretary](index=3&type=section&id=Board%20of%20Directors%20and%20Company%20Secretary) The Board of Directors of Zhixin Group Holding Limited comprises six executive directors and three independent non-executive directors, with audit, nomination, remuneration, and strategy committees, and Mr. Yuan Zhiwei and Mr. Zhong Dezhu as joint company secretaries - The Board members include Executive Directors Mr. Ye Zhijie, Mr. Huang Wengui, Mr. Lai Quanshui, Mr. Qiu Limiao, Mr. Ye Dan, and Mr. Huang Kaining; and Independent Non-executive Directors Ms. Wang Duanxiu, Ms. Cai Huinong, and Mr. Jiang Qinjian[2](index=2&type=chunk) - The company has an audit committee, a nomination committee, a remuneration committee, and a strategy committee[29](index=29&type=chunk) - The joint company secretaries are Mr. Yuan Zhiwei and Mr. Zhong Dezhu[29](index=29&type=chunk) [Registration and Principal Place of Business](index=3&type=section&id=Registration%20and%20Principal%20Place%20of%20Business) The company is incorporated in the Cayman Islands, with its headquarters and principal place of business in Xiamen, Fujian Province, China, and its principal place of business in Hong Kong located in Causeway Bay, with stock code 2187 - The Company was incorporated in the Cayman Islands as an exempted company on 14 November 2018[78](index=78&type=chunk) - The Group's headquarters are located in Xiamen, Fujian Province, China[91](index=91&type=chunk) - The Company's stock code is **2187**[11](index=11&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) [Key Financial Data](index=5&type=section&id=Key%20Financial%20Data) For the six months ended 30 June 2023, the company's revenue was approximately RMB 231.0 million, a year-on-year decrease of 24.7%, gross profit decreased by 9.2% to RMB 32.8 million, and profit for the period significantly increased by 1,909.2% to RMB 10.6 million Key Financial Data for the Six Months Ended June 30 | Indicator | 2023 (RMB thousand) | 2022 (RMB thousand) | Change % | | :----- | :------------------ | :------------------ | :------- | | Revenue | 231,018 | 306,675 | (24.7%) | | Gross Profit | 32,777 | 36,080 | (9.2%) | | Profit for the Period | 10,649 | 530 | 1,909.2% | - The decrease in revenue was primarily due to additional price concessions offered by the Group to some customers as a result of market price competition in the ready-mixed concrete and precast concrete components markets[14](index=14&type=chunk) - The decrease was partially offset by increased revenue from the sale of eco-friendly bricks and new revenue streams from the sale of products such as iron ore and aggregates produced from iron ore tailings recycling during the period[14](index=14&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman%27s%20Statement) [Business Overview and Outlook](index=6&type=section&id=Business%20Overview%20and%20Outlook) The Group is a concrete building materials manufacturer and supplier in Xiamen, Fujian Province, China, also engaged in comprehensive utilization of iron ore tailings and production of eco-friendly bricks in Changjiang, Hainan Province, with business segments including ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks, maintaining optimism for strong revenue from the latter despite market pressures on traditional segments - The Group is a manufacturer and supplier of concrete building materials in Xiamen, Fujian Province, China, and is engaged in the comprehensive utilization of iron ore tailings and the production of eco-friendly bricks in Changjiang, Hainan Province, China[23](index=23&type=chunk) - Business segments can be broadly divided into three categories: ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks[23](index=23&type=chunk) - The Group is confident that the iron ore tailings recycling and eco-friendly bricks business will continue to generate strong revenue this year, and is very optimistic about the business prospects of comprehensive utilization of iron ore tailings[15](index=15&type=chunk) [New Business Investments and Performance](index=6&type=section&id=New%20Business%20Investments%20and%20Performance) Since the acquisition of Ruitu Mingsheng in December 2021, the Group has made significant investments in a fully automated iron ore tailings recycling production line with an annual processing capacity of 3 million tons, receiving government subsidies of approximately RMB 10.2 million, with eco-friendly bricks and iron ore tailings recycling businesses achieving profits and gross margins of 49.4% and 54.8% respectively during the period - The Group has made significant investments in advanced automated assembly lines, including fully automated and integrated production equipment for iron ore tailings recycling, with an annual processing capacity of **3 million tons**[24](index=24&type=chunk) - During the period, the Group received government subsidies and incentives of approximately **RMB 10.2 million** for investing in the tailings production line[24](index=24&type=chunk) - The eco-friendly bricks and iron ore tailings recycling businesses achieved profits during the period, with gross margins reaching **49.4%** and **54.8%** respectively[24](index=24&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=7&type=section&id=Business%20Review) During the period, the Group's total revenue was approximately RMB 231.0 million, a year-on-year decrease of 24.7%, with ready-mixed concrete and precast concrete components revenues decreasing by 48.5% and 46.1% respectively due to market price competition, while iron ore tailings recycling and eco-friendly bricks revenue significantly increased by 907.5% to RMB 74.8 million, becoming a new growth driver - The Group's revenue was approximately **RMB 231.0 million**, a decrease of approximately **24.7%** compared to approximately RMB 306.7 million for the six months ended 30 June 2022[32](index=32&type=chunk) Revenue Changes by Business Segment | Business Segment | 2023 Revenue (RMB million) | 2022 Revenue (RMB million) | Change % | | :----------------- | :------------------------ | :------------------------ | :------- | | Ready-mixed Concrete | 112.0 | 217.3 | (48.5%) | | Precast Concrete Components | 44.2 | 82.0 | (46.1%) | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 74.8 | 7.4 | 907.5% | - The increase in revenue from iron ore tailings recycling and eco-friendly bricks was mainly due to increased sales volume of eco-friendly bricks and new revenue streams from the sale of products produced from iron ore tailings recycling during the period[26](index=26&type=chunk) [Cost of Sales, Gross Profit, and Gross Margin](index=7&type=section&id=Cost%20of%20Sales%2C%20Gross%20Profit%2C%20and%20Gross%20Margin) Cost of sales decreased by 26.7% year-on-year to RMB 198.2 million, primarily due to lower sales of ready-mixed concrete and precast concrete components, while overall gross profit decreased by 9.2% to RMB 32.8 million, but the overall gross margin increased from 11.8% to 14.2%, mainly driven by increased sales of high-margin iron ore tailings recycling and eco-friendly bricks - Cost of sales decreased by approximately **RMB 72.4 million** or approximately **26.7%** from approximately RMB 270.6 million for the six months ended 30 June 2022 to approximately **RMB 198.2 million** for the current period[27](index=27&type=chunk) - The Group's overall gross profit decreased by approximately **RMB 3.3 million** or approximately **9.2%** from approximately RMB 36.1 million for the six months ended 30 June 2022 to approximately **RMB 32.8 million** for the current period[27](index=27&type=chunk) - The Group's overall gross margin increased from approximately **11.8%** for the six months ended 30 June 2022 to approximately **14.2%** for the current period, mainly due to increased sales of higher-margin products from iron ore tailings recycling and eco-friendly bricks[27](index=27&type=chunk) [Other Income and Expenses](index=8&type=section&id=Other%20Income%20and%20Expenses) Other income increased by 178.3% to RMB 19.6 million during the period, mainly from government subsidies and incentives, while net other losses decreased by 86.3% to RMB 0.4 million, sales expenses decreased by 48.5% to RMB 7.2 million, administrative expenses decreased by 9.5% to RMB 21.1 million, and net finance costs decreased by 4.8% to RMB 7.0 million - Other income increased by approximately **178.3%** to approximately **RMB 19.6 million**, mainly due to an increase in non-recurring government subsidies and incentives to approximately **RMB 11.2 million**[40](index=40&type=chunk) - Net other losses decreased by approximately **86.3%** to approximately **RMB 0.4 million**, mainly due to a one-off compensation expense arising from the early termination of the lease for the precast concrete components production plant in the same period last year[41](index=41&type=chunk) Key Expense Changes | Expense Category | 2023 (RMB million) | 2022 (RMB million) | Change % | | :------- | :-------------------- | :-------------------- | :------- | | Sales Expenses | 7.2 | 13.9 | (48.5%) | | Administrative Expenses | 21.1 | 23.3 | (9.5%) | | Net Finance Costs | 7.0 | 7.3 | (4.8%) | [Profit for the Period and Liquidity](index=8&type=section&id=Profit%20for%20the%20Period%20and%20Liquidity) Profit for the period was approximately RMB 10.6 million, a significant increase from the prior year, with net current liabilities of approximately RMB 4.1 million compared to net current assets at the end of last year, cash and cash equivalents of approximately RMB 13.3 million, and a gearing ratio of approximately 50.4%, slightly lower than 51.5% at the end of last year - Profit for the period was approximately **RMB 10.6 million** (six months ended 30 June 2022: RMB 530,000)[38](index=38&type=chunk) - As at 30 June 2023, the Group's net current liabilities were approximately **RMB 4.1 million** (31 December 2022: net current assets of approximately RMB 39.8 million)[38](index=38&type=chunk) Liquidity and Borrowings | Indicator | 30 June 2023 (RMB million) | 31 December 2022 (RMB million) | | :--------------- | :--------------------------- | :---------------------------- | | Cash and Cash Equivalents | 13.3 | 17.5 | | Current Borrowings | 305.7 | 257.4 | | Non-current Borrowings | 146.0 | 186.2 | | Gearing Ratio | 50.4% | 51.5% | [Capital Commitments and Significant Investments](index=9&type=section&id=Capital%20Commitments%20and%20Significant%20Investments) As of 30 June 2023, the Group's capital commitments were approximately RMB 133.0 million, with no significant acquisitions or disposals during the period, and the company has signed an investment contract to build a quartz mine deep processing and lightweight eco-friendly building materials production project in Yongding District, Longyan City, Fujian Province, with a total investment of RMB 1,100 million - As at 30 June 2023, the Group's capital commitments were approximately **RMB 133.0 million** (31 December 2022: RMB 148.3 million)[49](index=49&type=chunk) - During the period, the Group did not undertake any significant acquisitions or disposals related to subsidiaries, associates, and joint ventures[56](index=56&type=chunk) - On 16 May 2023, the Company entered into an investment agreement with Longyan Yongding Natural Resources Bureau, conditionally agreeing to invest in the construction of a quartz mine deep processing and lightweight eco-friendly building materials production project in Yongding District, Longyan City, Fujian Province, China, with a total investment of **RMB 1,100 million**[50](index=50&type=chunk) [Employees and Use of Proceeds](index=10&type=section&id=Employees%20and%20Use%20of%20Proceeds) As of 30 June 2023, the Group had 497 employees, a decrease from the prior year, with employee remuneration determined by qualifications, responsibilities, contributions, and experience, and net proceeds from the share offer of approximately HKD 238.7 million were mainly used for expanding precast concrete component production capacity, enhancing IT and environmental systems, purchasing vehicles, and general working capital, most of which have been utilized - As at 30 June 2023, the Group had **497 employees** (30 June 2022: 553 employees)[65](index=65&type=chunk) - Employee remuneration is determined with reference to factors such as qualifications, responsibilities, contributions, and experience[65](index=65&type=chunk) Use of Proceeds from Share Offer | Use | Disclosed Updated Net Proceeds to be Used (HKD million) | Net Proceeds Used as at 30 June 2023 (HKD million) | Net Proceeds Unused as at 30 June 2023 (HKD million) | Expected Timeline for Using Unused Net Proceeds | | :--------------------------------- | :-------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------------------------------- | | Expanding precast concrete component production capacity | 24.5 | 0.2 | 7.1 | Before December 2024 | | Enhancing IT systems | 1.2 | — | — | Not applicable | | Improving environmental protection systems | 1.2 | — | — | Not applicable | | Purchasing mixer trucks and concrete pump trucks | 2.0 | — | — | Not applicable | | General working capital | 105.3 | — | — | Not applicable | | Repaying borrowings | 104.5 | — | — | Not applicable | | **Total** | **238.7** | **0.2** | **7.1** | | [Prospects](index=10&type=section&id=Prospects) The Board is optimistic about the Group's business maintaining an upward trend in the second half of 2023, with the iron ore tailings comprehensive utilization business in Changjiang County, Hainan Province, expected to become a major revenue source due to abundant tailings supply and strong demand in neighboring areas - The Board is optimistic that the Group's business will maintain an upward trend in the second half of 2023 compared to the first half of the year[68](index=68&type=chunk) - The comprehensive utilization of iron ore tailings in Hainan is poised to become one of the Group's main revenue sources, owing to the abundant supply of iron ore tailings available for processing in Changjiang County, Hainan Province, coupled with anticipated strong demand for tailings output resources in neighboring areas[68](index=68&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=11&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) [Statement of Comprehensive Income](index=11&type=section&id=Statement%20of%20Comprehensive%20Income) For the six months ended 30 June 2023, Zhixin Group recorded revenue of RMB 231,018 thousand and gross profit of RMB 32,777 thousand, with profit for the period at RMB 10,649 thousand and basic and diluted earnings per share of RMB 0.014 Condensed Consolidated Interim Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2023 (RMB thousand) | 2022 (RMB thousand) | | :------------------------- | :------------------ | :------------------ | | Revenue | 231,018 | 306,675 | | Cost of sales | (198,241) | (270,595) | | Gross profit | 32,777 | 36,080 | | Other income | 19,562 | 7,028 | | Net other losses | (358) | (2,606) | | Sales expenses | (7,180) | (13,932) | | Administrative expenses | (21,107) | (23,318) | | Impairment loss on financial assets (increase) / reversal | (1,238) | 4,534 | | Operating profit | 22,456 | 7,786 | | Net finance costs | (6,954) | (7,301) | | Profit before income tax | 15,502 | 485 | | Income tax expense / (credit) | (4,853) | 45 | | Profit and total comprehensive income for the period attributable to owners of the Company | 10,649 | 530 | | Basic and diluted earnings per share (RMB) | 0.014 | 0.00071 | [Condensed Consolidated Interim Statement of Financial Position](index=12&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) [Statement of Financial Position](index=12&type=section&id=Statement%20of%20Financial%20Position) As of 30 June 2023, Zhixin Group's total assets were RMB 1,416,780 thousand, total equity was RMB 453,719 thousand, total liabilities were RMB 963,061 thousand, and net current liabilities were approximately RMB 4.1 million Condensed Consolidated Interim Statement of Financial Position (As at June 30) | Indicator | 30 June 2023 (RMB thousand) | 31 December 2022 (RMB thousand) | | :--------------- | :------------------------- | :-------------------------- | | **Assets** | | | | Non-current assets | 619,171 | 600,625 | | Current assets | 797,609 | 784,474 | | **Total Assets** | **1,416,780** | **1,385,099** | | **Equity** | | | | Total equity | 453,719 | 443,070 | | **Liabilities** | | | | Non-current liabilities | 161,400 | 197,363 | | Current liabilities | 801,661 | 744,666 | | **Total Liabilities** | **963,061** | **942,029** | | **Total Equity and Liabilities** | **1,416,780** | **1,385,099** | - As at 30 June 2023, the Group's net current liabilities were approximately **RMB 4.1 million** (31 December 2022: net current assets of approximately RMB 39.8 million)[38](index=38&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=14&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) [Statement of Changes in Equity](index=14&type=section&id=Statement%20of%20Changes%20in%20Equity) For the six months ended 30 June 2023, total equity attributable to owners of the Company increased from RMB 443,070 thousand at the beginning of the period to RMB 453,719 thousand at the end of the period, primarily due to profit for the period of RMB 10,649 thousand Condensed Consolidated Interim Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | Share Capital (RMB thousand) | Reserves (RMB thousand) | Retained Earnings (RMB thousand) | Total (RMB thousand) | | :------------------- | :---------------- | :---------------- | :-------------------- | :---------------- | | As at 1 January 2023 | 6,358 | 364,659 | 72,053 | 443,070 | | Profit for the period | — | — | 10,649 | 10,649 | | As at 30 June 2023 | 6,358 | 364,659 | 82,702 | 453,719 | | As at 1 January 2022 | 6,358 | 364,659 | 70,800 | 441,817 | | Profit for the period | — | — | 530 | 530 | | As at 30 June 2022 | 6,358 | 364,659 | 71,330 | 442,347 | [Condensed Consolidated Interim Statement of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) [Statement of Cash Flows](index=15&type=section&id=Statement%20of%20Cash%20Flows) For the six months ended 30 June 2023, net cash generated from operating activities was RMB 40,175 thousand, net cash used in investing activities was RMB 37,758 thousand, and net cash used in financing activities was RMB 6,579 thousand, with cash and cash equivalents at the end of the period totaling RMB 13,327 thousand Condensed Consolidated Interim Statement of Cash Flows (For the Six Months Ended June 30) | Cash Flow Category | 2023 (RMB thousand) | 2022 (RMB thousand) | | :------------------- | :------------------ | :------------------ | | Net cash generated from operating activities | 40,175 | 1,927 | | Net cash used in investing activities | (37,758) | (75,580) | | Net cash used in financing activities | (6,579) | (3,158) | | Net decrease in cash and cash equivalents | (4,162) | (76,811) | | Cash and cash equivalents at beginning of period | 17,483 | 107,199 | | Cash and cash equivalents at end of period | 13,327 | 30,388 | [Notes to the Condensed Consolidated Interim Financial Statements](index=16&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1 General Information of the Group](index=16&type=section&id=1%20General%20Information%20of%20the%20Group) Zhixin Group primarily engages in the manufacturing and sale of ready-mixed concrete and precast concrete components in Xiamen, Fujian Province, China, and since the acquisition of Ruitu Mingsheng in December 2021, its business has expanded to include eco-friendly brick manufacturing and comprehensive utilization of iron ore tailings in Changjiang City, Hainan Province, China - The Company is an investment holding company and its subsidiaries (collectively, the "Group") are principally engaged in the manufacturing and sale of ready-mixed concrete and precast concrete components in Xiamen, Fujian Province, the People's Republic of China ("China")[91](index=91&type=chunk) - The Group commenced the manufacturing and sale of eco-friendly bricks and comprehensive utilization of iron ore tailings in Changjiang City, Hainan Province, China in 2022, following the completion of the acquisition of Ruitu Mingsheng Environmental Building Materials (Changjiang) Co., Ltd. ("Ruitu Mingsheng") in December 2021[91](index=91&type=chunk) [2 Basis of Preparation](index=16&type=section&id=2%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2022 - These condensed consolidated interim financial statements for the six months ended 30 June 2023 have been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting"[82](index=82&type=chunk) - The condensed consolidated interim financial statements do not include all the information and disclosures normally required in the annual consolidated financial statements, and should therefore be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2022[82](index=82&type=chunk) [3 Significant Accounting Policies](index=17&type=section&id=3%20Significant%20Accounting%20Policies) The principal accounting policies applied in preparing the condensed consolidated interim financial statements are consistent with those applied in the annual consolidated financial statements, with the adoption of new and revised standards including HKFRS 17 and amendments to HKAS 1, 8, and 12 - The principal accounting policies applied in preparing these condensed consolidated interim financial statements are consistent with those applied in the annual consolidated financial statements for the year ended 31 December 2022 and the relevant interim financial period, except for the adoption of new and revised standards as set out below[85](index=85&type=chunk) New and Revised Standards Adopted by the Group | Standard | Effective for annual periods beginning on or after | | :-------------------------------------------------------------- | :----------------------------------- | | HKFRS 17 (Insurance Contracts) | 1 January 2023 | | Amendments to HKAS 1, HKFRS Practice Statement 2 (Disclosure of Accounting Policies) | 1 January 2023 | | Amendments to HKAS 8 (Definition of Accounting Estimates) | 1 January 2023 | | Amendments to HKAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction) | 1 January 2023 | [4 Estimates](index=18&type=section&id=4%20Estimates) The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, and actual results may differ from these estimates - The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses[219](index=219&type=chunk) - Actual results may differ from these estimates[219](index=219&type=chunk) [5 Financial Risk Management](index=19&type=section&id=5%20Financial%20Risk%20Management) The Group is exposed to various financial risks including market risk (foreign exchange and interest rate risk), credit risk, and liquidity risk, with risk management plans aimed at minimizing adverse impacts on financial performance, and no derivative financial instruments were used for hedging during the period, with risk management policies remaining unchanged since the end of the last financial year - The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[227](index=227&type=chunk) - The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance[227](index=227&type=chunk) - There have been no changes in the Group's risk management policies since the end of the last financial year[228](index=228&type=chunk) [5.1 Financial Risk Factors](index=19&type=section&id=5.1%20Financial%20Risk%20Factors) The Group's financial risk factors primarily include credit risk and liquidity risk, with credit risk arising mainly from cash and bank balances, restricted bank balances, and trade receivables, and liquidity risk managed by controlling the maturity dates of financial assets and liabilities - The Group is exposed to credit risk in relation to its cash and bank balances, restricted bank balances, trade receivables, and other receivables[229](index=229&type=chunk) - To manage credit risk arising from cash and bank balances and restricted bank balances, these amounts are mainly deposited with banks with high credit ratings[230](index=230&type=chunk) [5.2 Fair Value Estimation of Financial Assets and Liabilities Measured at Amortized Cost](index=22&type=section&id=5.2%20Fair%20Value%20Estimation%20of%20Financial%20Assets%20and%20Liabilities%20Measured%20at%20Amortized%20Cost) This report does not provide detailed information on the fair value estimation of financial assets and liabilities measured at amortized cost [6 Segment Information](index=23&type=section&id=6%20Segment%20Information) The Group's business is divided into three operating segments: ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks, with the latter segment achieving significant profit during the period, while the ready-mixed concrete and precast concrete components segments recorded losses - The Group's business has identified the following three operating segments: (i) ready-mixed concrete; (ii) precast concrete components; and (iii) iron ore tailings recycling and eco-friendly bricks[103](index=103&type=chunk) Segment Results (For the Six Months Ended 30 June 2023) | Segment | Revenue (RMB thousand) | Gross Profit (RMB thousand) | Segment Results (RMB thousand) | | :------------------- | :---------------- | :---------------- | :-------------------- | | Ready-mixed Concrete | 111,972 | (10,093) | (22,647) | | Precast Concrete Components | 44,209 | 3,355 | (5,065) | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 74,837 | 39,515 | 33,948 | | **Total** | **231,018** | **32,777** | **6,236** | [6.1 Segment Information of the Group](index=23&type=section&id=6.1%20Segment%20Information%20of%20the%20Group) The Group's segment information shows that the iron ore tailings recycling and eco-friendly bricks business achieved significant revenue and segment results growth in the first half of 2023, while traditional ready-mixed concrete and precast concrete components businesses faced challenges with declining revenue and segment results Reconciliation of Segment Results to Profit for the Period (For the Six Months Ended 30 June 2023) | Item | Amount (RMB thousand) | | :------------------------- | :---------------- | | Reportable segment results | 6,236 | | Unallocated costs and expenses | (1,746) | | Other income | 19,562 | | Net other losses | (358) | | Reversal of impairment loss on financial assets | (1,238) | | Net finance costs | (6,954) | | Profit before income tax | 15,502 | | Income tax expense | (4,853) | | Profit and total comprehensive income for the period | 10,649 | Segment Assets and Liabilities (As at 30 June 2023) | Segment | Segment Assets (RMB thousand) | Segment Liabilities (RMB thousand) | | :------------------- | :-------------------- | :-------------------- | | Ready-mixed Concrete | 532,663 | 303,522 | | Precast Concrete Components | 393,957 | 106,689 | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 404,031 | 78,725 | | **Total** | **1,330,651** | **488,936** | [6.2 Contract Liabilities](index=26&type=section&id=6.2%20Contract%20Liabilities) As of 30 June 2023, the Group's total contract liabilities were RMB 9,077 thousand, primarily from the iron ore tailings recycling and eco-friendly bricks business, related to customer advances and recognized before goods delivery Contract Liabilities (RMB thousand) | Business Segment | 30 June 2023 | 31 December 2022 | | :----------------- | :------------ | :------------- | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 7,097 | 131 | | Precast Concrete Components | 1,223 | 560 | | Ready-mixed Concrete | 757 | 1,587 | | **Total** | **9,077** | **2,278** | - Contract liabilities represent the Group's obligation to provide services to customers for consideration received from customers; if a customer pays consideration before the Group delivers goods to them, the Group recognizes a contract liability[106](index=106&type=chunk) - For the six months ended 30 June 2023, revenue recognized from contract liabilities was **RMB 1,748 thousand**, an increase from RMB 1,503 thousand in the same period last year[108](index=108&type=chunk) [7 Expenses by Nature](index=27&type=section&id=7%20Expenses%20by%20Nature) For the six months ended 30 June 2023, the Group's total expenses were RMB 226,528 thousand, a decrease from RMB 307,845 thousand in the prior year, mainly due to reductions in raw materials and consumables used, employee benefit expenses, and transportation expenses Expenses by Nature (For the Six Months Ended June 30) | Expense Category | 2023 (RMB thousand) | 2022 (RMB thousand) | | :------------------- | :------------------ | :------------------ | | Raw materials and consumables used | 142,924 | 203,708 | | Employee benefit expenses | 29,083 | 38,986 | | Outsourcing service fees | 12,879 | 12,214 | | Depreciation of property, plant and equipment | 9,315 | 9,252 | | Depreciation of right-of-use assets | 2,224 | 2,404 | | Transportation expenses | 8,984 | 17,474 | | Utilities | 6,819 | 3,390 | | Impairment provision for inventories | 973 | 1,727 | | **Total** | **226,528** | **307,845** | [8 Income Tax Expense / (Credit)](index=28&type=section&id=8%20Income%20Tax%20Expense%20%2F%20%28Credit%29) For the six months ended 30 June 2023, income tax expense was approximately RMB 4,853 thousand, compared to an income tax credit of RMB 45 thousand in the prior year, primarily due to increased taxable profit from the iron ore tailings recycling and eco-friendly bricks business in China, with Chinese subsidiaries subject to a 25% corporate income tax rate, and some enjoying a preferential rate of 15% Income Tax Expense / (Credit) (For the Six Months Ended June 30) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :----------------- | :------------------ | :------------------ | | Current income tax | 6,599 | 1,564 | | Deferred income tax | (1,746) | (1,609) | | **Income Tax Expense / (Credit)** | **4,853** | **(45)** | - Income tax expense was approximately **RMB 4.9 million**, due to increased taxable profit from the Group's iron ore tailings recycling and eco-friendly bricks business in China[37](index=37&type=chunk) - The Company's subsidiaries incorporated in China are subject to corporate income tax at a rate of **25%**, except for Xiamen Zhixin Construction Engineering Technology Co., Ltd., which is subject to a preferential tax rate of **15%**[125](index=125&type=chunk) [9 Basic and Diluted Earnings Per Share](index=29&type=section&id=9%20Basic%20and%20Diluted%20Earnings%20Per%20Share) For the six months ended 30 June 2023, basic earnings per share significantly increased to RMB 0.014 from RMB 0.00071 in the prior year, and diluted earnings per share were the same as basic earnings per share due to no potential dilutive ordinary shares outstanding during the period Basic Earnings Per Share (For the Six Months Ended June 30) | Indicator | 2023 (Unaudited) | 2022 (Unaudited) | | :------------------------- | :---------------- | :---------------- | | Profit attributable to owners of the Company (RMB thousand) | 10,649 | 530 | | Weighted average number of ordinary shares issued | 748,000,000 | 748,000,000 | | Basic earnings per share (RMB) | 0.014 | 0.00071 | - As there were no potential dilutive ordinary shares outstanding as at 30 June 2023, the diluted earnings per share presented are the same as the basic earnings per share[127](index=127&type=chunk) [10 Dividends](index=29&type=section&id=10%20Dividends) No dividends were paid, declared, or proposed for the six months ended 30 June 2023 - No dividends were paid, declared, or proposed for the six months ended 30 June 2023 (2022: Nil)[123](index=123&type=chunk) [11 Property, Plant and Equipment, Right-of-Use Assets, Investment Properties and Intangible Assets](index=30&type=section&id=11%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%2C%20Investment%20Properties%20and%20Intangible%20Assets) As of 30 June 2023, the Group's total property, plant and equipment, right-of-use assets, investment properties, and intangible assets amounted to RMB 583,566 thousand, with additions to property, plant and equipment of RMB 24,388 thousand during the period Changes in Non-current Assets (RMB thousand) | Asset Category | As at 1 January 2023 | Additions | Depreciation / Amortization | Disposals | As at 30 June 2023 | | :----------- | :------------- | :----- | :--------- | :----- | :-------------- | | Property, Plant and Equipment | 390,405 | 24,388 | (9,428) | (377) | 404,988 | | Right-of-Use Assets | 104,547 | 1,031 | (2,224) | — | 103,354 | | Investment Properties | 36,347 | — | (595) | — | 35,752 | | Intangible Assets | 39,513 | — | (41) | — | 39,472 | - Assets pledged to secure the Group's borrowings are set out in note 20(a)[132](index=132&type=chunk) [12 Inventories](index=30&type=section&id=12%20Inventories) As of 30 June 2023, the Group's total inventories were RMB 87,685 thousand, a significant increase from RMB 22,571 thousand as of 31 December 2022, primarily due to a substantial increase in raw material inventories, with an impairment provision for inventories of RMB 2,010 thousand Inventory Composition (RMB thousand) | Inventory Category | 30 June 2023 | 31 December 2022 | | :--------------- | :------------ | :------------- | | Raw materials | 71,963 | 8,771 | | Work in progress | 3,884 | 623 | | Finished goods | 13,848 | 14,214 | | Less: Impairment provision for inventories | (2,010) | (1,037) | | **Total** | **87,685** | **22,571** | - The impairment provision for inventories was **RMB 1,037 thousand** at the beginning of the period, increased by **RMB 2,010 thousand** during the period, and was **RMB 2,010 thousand** at the end of the period[139](index=139&type=chunk) [13 Trade Receivables](index=31&type=section&id=13%20Trade%20Receivables) As of 30 June 2023, total trade receivables were RMB 640,973 thousand, a decrease from RMB 692,387 thousand as of 31 December 2022, with the largest proportion of trade receivables due within one year, and the Group having transferred some receivables to factoring agents while retaining overdue payment and credit risk Trade Receivables (RMB thousand) | Item | 30 June 2023 | 31 December 2022 | | :--------------- | :------------ | :------------- | | Current trade receivables | 654,242 | 704,195 | | Less: Impairment provision | (13,269) | (11,808) | | **Current Net** | **640,973** | **692,387** | | Non-current retention receivables | 26,192 | 26,947 | | Less: Impairment provision | (1,330) | (1,553) | | **Non-current Net** | **24,862** | **25,394** | | **Total** | **665,835** | **717,781** | Ageing Analysis of Trade Receivables (RMB thousand) | Ageing | 30 June 2023 | 31 December 2022 | | :------- | :------------ | :------------- | | Within 1 year | 385,850 | 465,067 | | 1 to 2 years | 195,291 | 205,149 | | 2 to 3 years | 81,848 | 52,185 | | Over 3 years | 17,445 | 8,741 | | **Total** | **680,434** | **731,142** | - As at 30 June 2023, the carrying amount of trade receivables included receivables subject to factoring arrangements of **RMB 17,261,000**. The Group has transferred the related receivables to factoring agents but retained overdue payment and credit risk[141](index=141&type=chunk) [14 Prepayments, Deposits and Other Receivables](index=32&type=section&id=14%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of 30 June 2023, total prepayments, deposits, and other receivables amounted to RMB 55,624 thousand, an increase from RMB 52,032 thousand as of 31 December 2022, primarily comprising prepayments for raw materials and operating expenses, and recoverable deductible VAT Prepayments, Deposits and Other Receivables (RMB thousand) | Item | 30 June 2023 | 31 December 2022 | | :------------------- | :------------ | :------------- | | Prepayments for raw materials and operating expenses | 29,056 | 25,527 | | Recoverable deductible VAT | 8,771 | 12,925 | | Rental receivables | 6,176 | 5,530 | | Refundable deposits | 5,294 | 4,682 | | Other receivables | 6,327 | 3,368 | | **Total** | **55,624** | **52,032** | [15 Cash and Bank Balances](index=33&type=section&id=15%20Cash%20and%20Bank%20Balances) As of 30 June 2023, the Group's total cash and bank balances were RMB 13,327 thousand, a decrease from RMB 17,483 thousand as of 31 December 2022, with restricted bank balances reduced to zero Cash and Bank Balances (RMB thousand) | Item | 30 June 2023 | 31 December 2022 | | :----------------- | :------------ | :------------- | | Cash on hand and at bank | 13,327 | 17,483 | | Restricted bank balances | — | 1 | | **Total** | **13,327** | **17,484** | - Restricted bank balances are bank deposits held and pledged for the issuance of bills payable[151](index=151&type=chunk) [16 Share Capital](index=33&type=section&id=16%20Share%20Capital) As of 30 June 2023, the Company's authorized share capital was 3,000,000,000 ordinary shares with a par value of HKD 0.01 each, totaling RMB 25,500 thousand, and issued share capital was 748,000,000 ordinary shares, totaling RMB 6,358 thousand, remaining unchanged from the beginning of the period Share Capital (RMB thousand) | Share Capital Category | Number of Ordinary Shares | Share Capital (HKD thousand) | Share Capital (RMB thousand) | | :------- | :------------ | :------------ | :---------------- | | Authorized | 3,000,000,000 | 30,000 | 25,500 | | Issued | 748,000,000 | 7,480 | 6,358 | [17 Reserves](index=33&type=section&id=17%20Reserves) As of 30 June 2023, the Group's total reserves amounted to RMB 364,659 thousand, including share premium, capital reserve, and statutory reserve, remaining unchanged from the beginning of the period Reserves (RMB thousand) | Reserve Category | Share Premium | Capital Reserve | Statutory Reserve | Total | | :------- | :------- | :------- | :------- | :------ | | As at 1 January 2023 to 30 June 2023 | 220,966 | 127,135 | 16,558 | 364,659 | | As at 1 January 2022 to 30 June 2022 | 220,966 | 127,135 | 16,558 | 364,659 | [18 Trade Payables](index=34&type=section&id=18%20Trade%20Payables) As of 30 June 2023, total trade payables were RMB 385,537 thousand, an increase from RMB 348,408 thousand as of 31 December 2022, with most trade payables due within one year Trade Payables (RMB thousand) | Item | 30 June 2023 | 31 December 2022 | | :----------- | :------------ | :------------- | | Trade payables | 385,537 | 348,408 | Ageing Analysis of Trade Payables (RMB thousand) | Ageing | 30 June 2023 | 31 December 2022 | | :------- | :------------ | :------------- | | Within one year | 328,619 | 325,543 | | One to two years | 48,408 | 19,158 | | Over two years | 8,510 | 3,707 | | **Total** | **385,537** | **348,408** | [19 Other Payables and Accrued Expenses](index=35&type=section&id=19%20Other%20Payables%20and%20Accrued%20Expenses) As of 30 June 2023, total other payables and accrued expenses amounted to RMB 93,208 thousand, a decrease from RMB 134,873 thousand as of 31 December 2022, primarily due to a reduction in amounts due to related parties Other Payables and Accrued Expenses (RMB thousand) | Item | 30 June 2023 | 31 December 2022 | | :------------------- | :------------ | :------------- | | Payables for purchase of property, plant and equipment | 37,811 | 52,091 | | Amounts due to related parties | 21,688 | 44,502 | | Employee benefit payables | 4,022 | 4,223 | | Payables for acquisition of subsidiaries | 3,000 | 4,500 | | Other taxes payable | 2,822 | 10,289 | | Others | 7,090 | 5,681 | | **Total** | **93,208** | **134,873** | [20 Borrowings](index=35&type=section&id=20%20Borrowings) As of 30 June 2023, the Group's total borrowings were RMB 451,635 thousand, comprising current borrowings of RMB 305,675 thousand and non-current borrowings of RMB 145,960 thousand, with most bank borrowings secured and guaranteed by subsidiaries, directors and their spouses, and an independent third-party credit guarantee company Total Borrowings (RMB thousand) | Borrowing Category | 30 June 2023 Current | 30 June 2023 Non-current | 30 June 2023 Total | 31 December 2022 Current | 31 December 2022 Non-current | 31 December 2022 Total | | :----------- | :---------------- | :------------------ | :---------------- | :----------------- | :------------------- | :----------------- | | Bank borrowings | 288,414 | 145,960 | 434,374 | 237,801 | 186,208 | 424,009 | | Factoring borrowings | 17,261 | — | 17,261 | 19,586 | — | 19,586 | | **Total Borrowings** | **305,675** | **145,960** | **451,635** | **257,387** | **186,208** | **443,595** | - The Group's secured bank borrowings as at 30 June 2023 were pledged by the Group's assets as set out in note 20(a), and guaranteed by three subsidiaries of the Group, Mr. Huang Wengui, Mr. Ye Zhijie and their spouses, and an independent third-party credit guarantee company[155](index=155&type=chunk) Borrowing Repayment Schedule (RMB thousand) | Repayment Period | 30 June 2023 | | :--------- | :------------ | | Within 1 year | 305,675 | | 1 to 2 years | 18,277 | | 2 to 3 years | 9,987 | | Over 3 years | 117,696 | | **Total** | **451,635** | [21 Lease Liabilities](index=37&type=section&id=21%20Lease%20Liabilities) As of 30 June 2023, the Group's current lease liabilities were RMB 1,227 thousand, primarily for land and building leases used as warehouses and factories Lease Liabilities (RMB thousand) | Lease Category | 30 June 2023 Current | 30 June 2023 Non-current | 30 June 2023 Total | | :----------------- | :---------------- | :------------------ | :---------------- | | Land and buildings used as warehouses and factories | 1,227 | — | 1,227 | - The Group leases land for its operations, and these liabilities are measured at the net present value of the lease payments outstanding over the lease term[177](index=177&type=chunk) [22 Commitments](index=38&type=section&id=22%20Commitments) As of 30 June 2023, the Group's capital commitments were RMB 133,009 thousand, mainly for property, plant and equipment, and irrevocable short-term operating lease commitments were RMB 396 thousand Capital Commitments (RMB thousand) | Commitment Category | 30 June 2023 | 31 December 2022 | | :----------------- | :------------ | :------------- | | Contracted but not provided for: Property, plant and equipment | 133,009 | 148,338 | Irrevocable Short-term Operating Leases (RMB thousand) | Lease Category | 30 June 2023 | 31 December 2022 | | :------- | :------------ | :------------- | | Warehouses | 396 | 2,060 | [23 Related Party Transactions](index=39&type=section&id=23%20Related%20Party%20Transactions) The Group engaged in related party transactions, including the repayment of shareholder advances from Mr. Ye Zhijie of RMB 22,814 thousand, with amounts due to Mr. Ye Zhijie totaling RMB 21,688 thousand as of 30 June 2023, and key management personnel compensation amounting to RMB 2,379 thousand Transactions with Related Parties (For the Six Months Ended June 30) | Transaction Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :------------------- | :------------------ | :------------------ | | Amounts from a shareholder — Mr. Ye Zhijie | — | 16,963 | | Repayment of amounts from a shareholder — Mr. Ye Zhijie | (22,814) | — | Balances with Related Parties (RMB thousand) | Balance Item | 30 June 2023 | 31 December 2022 | | :------------------- | :------------ | :------------- | | Amounts due to a related party — Mr. Ye Zhijie | 21,688 | 44,502 | - Key management personnel compensation for the six months ended 30 June 2023 was approximately **RMB 2,379,000** (2022: RMB 1,630,000)[180](index=180&type=chunk) [Corporate Governance and Other Information](index=39&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=40&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Board is committed to establishing sound corporate governance principles and confirms that for the six months ended 30 June 2023, the Company has applied the principles and complied with the code provisions of the Corporate Governance Code - The Board is committed to establishing sound corporate governance principles and practices and achieving high standards of corporate governance[182](index=182&type=chunk) - The Board has reviewed the Company's corporate governance practices and is satisfied that for the six months ended 30 June 2023, the Company has applied the principles and complied with the code provisions set out in the Corporate Governance Code[183](index=183&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=40&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Model Code, and directors have confirmed compliance with the required standards of the Model Code and the relevant code of conduct after specific enquiry - The Company has adopted a code of conduct regarding securities transactions by directors (the terms of which are no less exacting than the required standards set out in the Model Code) as the code of conduct for directors' dealings in the Company's securities[183](index=183&type=chunk) - Following specific enquiry by the Company to all Directors, the Directors confirmed that they had complied with the required standards set out in the Model Code and the code of conduct for directors' dealings for the six months ended 30 June 2023[183](index=183&type=chunk) [Directors' and Chief Executive's Interests and/or Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=41&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%2For%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of 30 June 2023, several directors held interests in the company's shares, with Mr. Ye Zhijie holding 36.73% through a controlled corporation, Mr. Huang Wengui holding 16.25%, and other directors also holding beneficial interests Directors' Interests in the Company's Shares | Director | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest in the Company's Issued Share Capital | | :--------- | :----------- | :----------------- | :--------------------------------- | | Mr. Ye Zhijie | Controlled corporation interest | 274,706,100 (L) | 36.73% | | Mr. Huang Wengui | Controlled corporation interest | 121,568,700 (L) | 16.25% | | Mr. Lai Quanshui | Beneficial interest | 30,000,000 (L) | 4.01% | | Mr. Huang Kaining | Beneficial interest | 6,000,000 (L) | 0.80% | | Mr. Qiu Limiao | Beneficial interest | 56,000 (L) | 0.01% | | Mr. Ye Dan | Beneficial interest | 50,000 (L) | 0.01% | - Mr. Ye Zhijie is the sole shareholder of Zhixin Investment Holdings Limited, which holds **274,706,100 shares**[196](index=196&type=chunk) - Mr. Huang Wengui is the sole shareholder of Yaohe Holdings Limited, which holds **121,568,700 shares**[185](index=185&type=chunk) [Substantial Shareholders' Interests and/or Short Positions in Shares and Underlying Shares of the Company](index=42&type=section&id=Substantial%20Shareholders%27%20Interests%20and%2For%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of 30 June 2023, Zhixin Investment Holdings Limited and Ms. Hong Wei (spouse of Mr. Ye Zhijie) held 36.73% of the shares, Yaohe Holdings Limited and Ms. Lin Lingling (spouse of Mr. Huang Wengui) held 16.25%, Mr. Lai Yiyang held 7.82%, and Ms. Yang Min held 6.68% Substantial Shareholders' Long Positions in the Company's Shares | Name / Company Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest in the Company's Issued Share Capital | | :----------------- | :------- | :----------------- | :--------------------------------- | | Zhixin Investment Holdings Limited | Beneficial interest | 274,706,100 | 36.73% | | Ms. Hong Wei | Spouse's interest | 274,706,100 | 36.73% | | Yaohe Holdings Limited | Beneficial interest | 121,568,700 | 16.25% | | Ms. Lin Lingling | Spouse's interest | 121,568,700 | 16.25% | | Mr. Lai Yiyang | Beneficial interest | 58,480,000 | 7.82% | | Ms. Yang Min | Beneficial interest | 49,980,000 | 6.68% | - Ms. Hong Wei is the spouse of Mr. Ye Zhijie; under the SFO, Ms. Hong Wei is deemed to be interested in all shares in which Mr. Ye Zhijie is deemed to be interested[192](index=192&type=chunk) - Ms. Lin Lingling is the spouse of Mr. Huang Wengui; under the SFO, Ms. Lin Lingling is deemed to be interested in all shares in which Mr. Huang Wengui is deemed to be interested[201](index=201&type=chunk) [Changes in Directors](index=43&type=section&id=Changes%20in%20Directors) Mr. Lai Quanshui has been appointed as an executive director and, together with Mr. Huang Wengui, Mr. Qiu Limiao, and Mr. Ye Dan, forms the Strategy Committee, with Mr. Lai serving as Chairman, effective 6 April 2023 - Mr. Lai Quanshui has been appointed as an executive director[203](index=203&type=chunk) - The Strategy Committee has been established, comprising four executive directors: Mr. Lai Quanshui, Mr. Huang Wengui, Mr. Qiu Limiao, and Mr. Ye Dan, with Mr. Lai serving as the Chairman of the Strategy Committee, effective 6 April 2023[203](index=203&type=chunk) [Directors' Interests in Competing Business](index=43&type=section&id=Directors%27%20Interests%20in%20Competing%20Business) For the six months ended 30 June 2023, no director had any interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business, nor any conflict of interest with the Group - For the six months ended 30 June 2023, no director had any interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business, nor any conflict of interest with the Group[204](index=204&type=chunk) [Interim Dividend](index=43&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2023 - The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2023[210](index=210&type=chunk) [Review of Interim Financial Statements](index=43&type=section&id=Review%20of%20Interim%20Financial%20Statements) The unaudited condensed consolidated interim financial statements of the Company and its subsidiaries for the six months ended 30 June 2023 and this interim report have been reviewed by the Audit Committee - The unaudited condensed consolidated interim financial statements of the Company and its subsidiaries for the six months ended 30 June 2023 and this interim report have been reviewed by the Audit Committee[209](index=209&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended 30 June 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended 30 June 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[195](index=195&type=chunk) [Glossary](index=43&type=section&id=Glossary) [Glossary](index=43&type=section&id=Glossary) This section provides definitions for key terms used in the interim report to ensure readers have a clear understanding of the report's content - In this interim report, unless the context otherwise requires, the following terms shall have the following meanings[212](index=212&type=chunk)

Financial Performance - The company's revenue for the fiscal year 2022 was approximately RMB 634.2 million, a decrease of about RMB 130.9 million or 17.1% compared to RMB 765.1 million in fiscal year 2021[21]. - Gross profit decreased from approximately RMB 104.3 million in fiscal year 2021 to about RMB 57.4 million in fiscal year 2022, representing a decline of approximately 44.9%[10]. - The gross margin for the fiscal year 2022 was approximately 9.1%, down from about 13.6% in fiscal year 2021[27]. - The profit for the fiscal year 2022 was approximately RMB 1.3 million, a significant drop of about 94.1% from RMB 20.4 million in fiscal year 2021[10]. - Revenue decreased by approximately RMB 130.9 million or about 17.1% to approximately RMB 634.2 million in FY2022[47]. - Revenue from the sale of precast concrete components decreased by approximately 38.2% to approximately RMB 143.0 million in FY2022[48]. - The gross profit from ready-mixed concrete decreased from approximately RMB 85.0 million in FY2021 to approximately RMB 37.7 million in FY2022, with a gross margin decline from approximately 15.9% to about 8.1%[50]. Operational Highlights - The revenue from the sale of ready-mixed concrete decreased from approximately RMB 533.8 million in fiscal year 2021 to about RMB 463.3 million in fiscal year 2022, a decline of approximately 13.2%[15]. - The company expects to process 3 million tons of iron tailings annually, supported by the largest processing line in Hainan Province[12][22]. - The gross profit from iron tailings recovery and eco-bricks was approximately RMB 11.4 million, with a gross margin of about 41.0%[30]. - The company has invested significantly in advanced automated assembly lines for iron tailings recovery, enhancing production capacity[22]. - The company anticipates increased demand for prefabricated concrete components due to government policies promoting their use in new buildings[24]. Expenses and Costs - Sales expenses increased by approximately RMB 1.3 million or about 6.3% to approximately RMB 20.9 million in FY2022, primarily due to increased transportation costs[32]. - Administrative expenses decreased by approximately RMB 1.1 million or about 2.6% to approximately RMB 42.4 million in FY2022, mainly due to a reduction in one-time expenses related to the listing in FY2021[33]. - The net financing cost slightly increased by approximately RMB 0.1 million or about 1.0% to approximately RMB 13.1 million in FY2022[34]. Shareholder Information - As of December 31, 2022, the major shareholder, Zhixin Investment Holdings Limited, holds a beneficial interest of 274,706,100 shares, representing 36.73% of the issued share capital[100]. - The second major shareholder, Yaohua Holdings Limited, has a beneficial interest of 121,568,700 shares, accounting for 16.25% of the issued share capital[100]. - Huatai Securities Co., Ltd. holds a controlled corporation interest of 96,544,000 shares, which is 12.90% of the issued share capital[100]. Corporate Governance - The board has committed to enhancing corporate governance practices, ensuring compliance with regulatory standards and improving overall accountability[92]. - The board has maintained a gender diversity ratio of 13% female to 87% male as of December 31, 2022[115]. - The board has complied with the listing rules by appointing at least three independent non-executive directors, constituting at least one-third of the board[118]. - The audit committee consists of three independent non-executive directors, with one member possessing appropriate professional qualifications in accounting or related financial management[123]. - The remuneration committee has reviewed the compensation policy and structure for the board and senior management based on the group's operating performance and market data[104]. - The company has committed to maintaining good corporate governance standards to protect shareholder interests and enhance corporate value[109]. - The board has reviewed and monitored its corporate governance practices to ensure compliance with the corporate governance code[110]. - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with the standard code and confirming adherence by all directors for the year[136]. Risk Management - The company has implemented policies and procedures to identify, assess, and monitor key risks related to financial, operational, and compliance activities[157]. - The external auditor provided both audit and non-audit services during the fiscal year, with specific remuneration details disclosed in the financial statements[155]. - The company has reviewed and approved the risk management and internal control systems designed and implemented by management[157]. - The board believes that the existing risk management and internal control systems are adequate to manage significant financial, operational, and compliance risks[182]. Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report is prepared in accordance with the guidelines and covers the fiscal year from January 1, 2022, to December 31, 2022[196]. - The board is responsible for identifying and assessing ESG-related risks and determining the relevant strategies and risk management systems[198]. - The ESG working group consists of members deeply involved in the daily operations and management of the group[199]. - The company has complied with the "comply or explain" provisions of the ESG reporting guidelines in the previous fiscal year[197]. Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of B% driven by new product launches and market expansion strategies[78]. - New product development efforts have resulted in the introduction of C innovative products, which are expected to contribute D% to overall revenue in the upcoming year[78]. - The company is planning to expand its market presence in E regions, aiming for a market share increase of F% within the next two years[78]. - A strategic acquisition was completed, enhancing the company's capabilities and expected to generate an additional G million in revenue annually[78]. - The company has implemented new technologies that improved operational efficiency by H%, reducing costs significantly[78]. - Environmental initiatives have led to a reduction in greenhouse gas emissions by I% through optimized logistics and fleet management[76].

[Company Information](index=1&type=section&id=Company%20Information) [Company Overview](index=1&type=section&id=1.1%20Company%20Overview) Zhixin Group Holding Company Limited primarily engages in the manufacturing and sale of ready-mixed concrete and precast concrete components in China. Following the acquisition of Ruitu Mingsheng in December 2021, the Group commenced manufacturing and selling eco-friendly bricks in 2022, with its headquarters in Xiamen, Fujian Province, China - Zhixin Group Holding Company Limited (Stock Code: 2187) was incorporated in the Cayman Islands as an exempted company on November 14, 2018[4](index=4&type=chunk)[111](index=111&type=chunk) - The Group's principal business involves the manufacturing and sale of ready-mixed concrete and precast concrete components, and it began manufacturing and selling eco-friendly bricks in 2022, headquartered in Xiamen, Fujian Province, China[119](index=119&type=chunk) - In December 2021, the Group acquired 100% equity interest in Ruitu Mingsheng, a company engaged in recycling iron ore tailings and producing eco-friendly bricks[5](index=5&type=chunk) [Shareholding Structure and Management](index=5&type=section&id=1.2%20Shareholding%20Structure%20and%20Management) The Company's ultimate controlling shareholder and major shareholders are Mr. Ye Zhijie (Chairman and Executive Director) and Mr. Huang Wengui (Executive Director), respectively - The Company's ultimate controlling shareholder and major shareholders are Mr. Ye Zhijie (Chairman and Executive Director) and Mr. Huang Wengui (Executive Director), respectively[136](index=136&type=chunk) - As of the announcement date, the Board of Directors comprises five executive directors (Mr. Ye Zhijie, Mr. Huang Wengui, Mr. Qiu Limiao, Mr. Ye Dan, and Mr. Huang Kaining) and three independent non-executive directors (Ms. Wang Duanxiu, Mr. Cai Huinong, and Mr. Jiang Qinjian)[233](index=233&type=chunk) [Listing Information](index=5&type=section&id=1.3%20Listing%20Information) The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since March 26, 2021 - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since March 26, 2021[13](index=13&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) [Consolidated Statement of Comprehensive Income](index=2&type=section&id=2.1%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended December 31, 2022, the Group's revenue decreased by **17.1%** year-on-year to **RMB 634.2 million**, and gross profit decreased by **44.9%** to **RMB 57.4 million**. Profit for the year significantly reduced to **RMB 1.3 million**, compared to **RMB 20.4 million** in 2021 Key Data from Consolidated Statement of Comprehensive Income | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Change (%) | | :--------------- | :------------------ | :------------------ | :------- | | Revenue | 634,152 | 765,088 | -17.1% | | Cost of Sales | (576,727) | (660,828) | -12.7% | | Gross Profit | 57,425 | 104,260 | -44.9% | | Other Income | 19,529 | 20,764 | -5.9% | | Selling Expenses | (20,878) | (19,636) | +6.3% | | Administrative Expenses | (42,443) | (43,579) | -2.6% | | Operating Profit | 11,000 | 46,512 | -76.4% | | Net Finance Costs | (13,132) | (13,002) | +1.0% | | (Loss)/Profit Before Income Tax | (2,132) | 33,510 | -106.4% | | Income Tax Credit/(Expense) | 3,385 | (13,112) | -125.8% | | Profit and Total Comprehensive Income for the Year | 1,253 | 20,398 | -93.9% | [Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets increased to **RMB 1,385.1 million**, and total liabilities increased to **RMB 942.0 million**. Property, plant and equipment within non-current assets significantly increased, while borrowings within non-current liabilities also rose substantially Key Data from Consolidated Statement of Financial Position | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Change (%) | | :--------------- | :------------------ | :------------------ | :------- | | **Assets** | | | | | Non-current Assets | 600,625 | 439,116 | +36.8% | | Property, Plant and Equipment | 390,405 | 206,589 | +89.0% | | Right-of-Use Assets | 104,547 | 118,115 | -11.4% | | Investment Properties | 36,347 | 37,536 | -3.1% | | Intangible Assets | 39,513 | 39,458 | +0.1% | | Current Assets | 784,474 | 809,817 | -3.1% | | Inventories | 22,571 | 29,909 | -24.6% | | Trade Receivables | 692,387 | 634,413 | +9.1% | | Cash and Bank Balances | 17,483 | 107,199 | -83.7% | | **Liabilities** | | | | | Non-current Liabilities | 197,363 | 86,659 | +127.8% | | Borrowings | 186,208 | 65,950 | +182.3% | | Current Liabilities | 744,666 | 720,457 | +3.4% | | Trade and Bills Payables | 348,408 | 328,289 | +6.1% | | Borrowings | 257,387 | 259,039 | -0.6% | | **Equity** | | | | | Total Equity | 443,070 | 441,817 | +0.3% | | Total Assets | 1,385,099 | 1,248,933 | +10.9% | | Total Liabilities | 942,029 | 807,116 | +16.7% | [Earnings Per Share and Dividends](index=12&type=section&id=2.3%20Earnings%20Per%20Share%20and%20Dividends) For the year ended December 31, 2022, profit attributable to owners of the Company significantly decreased, leading to a drop in basic earnings per share from **RMB 0.029** in 2021 to **RMB 0.002** in 2022. No dividends were paid, declared, or proposed for the year Earnings Per Share | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------------------- | :------------------ | :------------------ | | Profit Attributable to Owners of the Company | 1,210 | 20,398 | | Weighted Average Number of Ordinary Shares Issued | 748,000,000 | 704,452,055 | | Basic Earnings Per Share (RMB) | 0.002 | 0.029 | | Diluted Earnings Per Share (RMB) | 0.002 | 0.029 | - As there were no potential dilutive ordinary shares outstanding as of December 31, 2022, the diluted earnings per share presented is the same as the basic earnings per share[70](index=70&type=chunk) - For the year ended December 31, 2022, no dividends were paid, declared, or proposed (2021: nil)[71](index=71&type=chunk) [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=28&type=section&id=3.1%20Business%20Review) The Group's business is categorized into ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks. Total revenue for FY2022 decreased by **17.1%**, primarily due to adverse weather, market competition, and reduced sales of ready-mixed concrete and precast concrete components. The iron ore tailings recycling and eco-friendly bricks business contributed **RMB 27.9 million** in revenue in 2022 - The Group's business segments can be broadly categorized into three types: ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks[187](index=187&type=chunk) - The Group's total revenue decreased by approximately **17.1%** from approximately **RMB 765.1 million** in FY2021 to approximately **RMB 634.2 million** in FY2022[190](index=190&type=chunk) [Ready-Mixed Concrete and Precast Concrete Components Business](index=29&type=section&id=3.1.1%20Ready-Mixed%20Concrete%20and%20Precast%20Concrete%20Components%20Business) In FY2022, ready-mixed concrete revenue decreased by **13.2%** to **RMB 463.3 million**, and precast concrete components revenue decreased by **38.2%** to **RMB 143.0 million**. This was primarily due to adverse weather causing suspensions and delays in some construction projects, as well as low-price competition from new market entrants - Revenue from sales of ready-mixed concrete decreased by approximately **13.2%** from approximately **RMB 533.8 million** in FY2021 to approximately **RMB 463.3 million** in FY2022[160](index=160&type=chunk) - Revenue from sales of precast concrete components decreased by approximately **38.2%** from approximately **RMB 231.3 million** in FY2021 to approximately **RMB 143.0 million** in FY2022[191](index=191&type=chunk) - The decrease in revenue was mainly due to the suspension and delay of some construction projects affected by an increase in adverse weather days in FY2022, and competition from new market entrants using low-price strategies[41](index=41&type=chunk) [Iron Ore Tailings Recycling and Eco-Friendly Bricks Business](index=28&type=section&id=3.1.2%20Iron%20Ore%20Tailings%20Recycling%20and%20Eco-Friendly%20Bricks%20Business) The Group's revenue from sales of eco-friendly bricks produced from iron ore tailings recycling was approximately **RMB 27.9 million** in FY2022, primarily stemming from the acquisition of Ruitu Mingsheng in December 2021. The Group made significant investments in advanced automated production lines, achieving an annual processing capacity of **3 million tons** of iron ore tailings and an annual production capacity of **1 million square meters** of eco-friendly bricks - Revenue from sales of eco-friendly bricks produced from iron ore tailings recycling was approximately **RMB 27.9 million** in FY2022, primarily due to sales from Ruitu Mingsheng, which the Group acquired in December 2021[192](index=192&type=chunk) - The Group made significant investments in advanced automated assembly lines, achieving an annual processing capacity of **3 million tons** of iron ore tailings and establishing fully automated molding production lines capable of manufacturing **1 million square meters** of eco-friendly bricks annually[37](index=37&type=chunk) [Financial Review](index=29&type=section&id=3.2%20Financial%20Review) In FY2022, the Group's overall gross profit and gross margin significantly declined, primarily due to reduced revenue from ready-mixed concrete and precast concrete components businesses and a narrower decrease in cost of sales. Other income and administrative expenses slightly decreased, while selling expenses increased due to higher transportation costs. Net finance costs slightly rose, income tax shifted from expense to credit, and profit for the year substantially decreased - The Group's overall gross profit decreased by approximately **44.9%** from approximately **RMB 104.3 million** in FY2021 to approximately **RMB 57.4 million** in FY2022. The overall gross margin decreased from approximately **13.6%** in FY2021 to approximately **9.1%** in FY2022[163](index=163&type=chunk) - Profit for the year decreased from approximately **RMB 20.4 million** in FY2021 to approximately **RMB 1.3 million** in FY2022[168](index=168&type=chunk) [Revenue](index=29&type=section&id=3.2.1%20Revenue) The Group's total revenue decreased by **17.1%** to **RMB 634.2 million** in FY2022. Specifically, ready-mixed concrete revenue decreased by **13.2%**, precast concrete components revenue decreased by **38.2%**, while the iron ore tailings recycling and eco-friendly bricks business contributed **RMB 27.9 million** in new revenue - The Group's revenue decreased by approximately **RMB 130.9 million** or approximately **17.1%** from approximately **RMB 765.1 million** in FY2021 to approximately **RMB 634.2 million** in FY2022[190](index=190&type=chunk) - Revenue from sales of ready-mixed concrete decreased by approximately **13.2%** to **RMB 463.3 million**[160](index=160&type=chunk) - Revenue from sales of precast concrete components decreased by approximately **38.2%** to **RMB 143.0 million**[191](index=191&type=chunk) - Revenue from sales of eco-friendly bricks produced from iron ore tailings recycling was approximately **RMB 27.9 million** in FY2022[192](index=192&type=chunk) [Cost of Sales, Gross Profit, and Gross Margin](index=29&type=section&id=3.2.2%20Cost%20of%20Sales,%20Gross%20Profit,%20and%20Gross%20Margin) Cost of sales decreased by **12.7%** year-on-year to **RMB 576.7 million**, mainly due to lower concrete product sales. Overall gross profit decreased by **44.9%** year-on-year to **RMB 57.4 million**, with the overall gross margin falling to **9.1%**. Both gross profit and gross margin for ready-mixed concrete and precast concrete components declined, while the iron ore tailings recycling and eco-friendly bricks business achieved a gross margin of **41.0%** - Cost of sales decreased by approximately **12.7%** from approximately **RMB 660.8 million** in FY2021 to approximately **RMB 576.7 million** in FY2022, primarily due to a decrease in sales of ready-mixed concrete and precast concrete components[162](index=162&type=chunk) - The Group's overall gross profit decreased by approximately **44.9%** from approximately **RMB 104.3 million** in FY2021 to approximately **RMB 57.4 million** in FY2022. The overall gross margin decreased from approximately **13.6%** in FY2021 to approximately **9.1%** in FY2022[163](index=163&type=chunk) - The gross margin for ready-mixed concrete decreased from approximately **15.9%** in FY2021 to approximately **8.1%** in FY2022. The gross margin for precast concrete components decreased from approximately **8.3%** in FY2021 to approximately **5.8%** in FY2022. The gross margin for iron ore tailings recycling and eco-friendly bricks was approximately **41.0%**[44](index=44&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Other Income and Expenses](index=30&type=section&id=3.2.3%20Other%20Income%20and%20Expenses) Other income decreased by **5.9%** year-on-year to **RMB 19.5 million**, mainly due to reduced rental income. Administrative expenses decreased by **2.6%** year-on-year to **RMB 42.4 million**, primarily attributable to a reduction in one-off listing-related expenses in FY2021. Selling expenses increased by **6.3%** year-on-year to **RMB 20.9 million**, mainly due to higher transportation costs - Other income decreased by approximately **5.9%** from approximately **RMB 20.8 million** in FY2021 to approximately **RMB 19.5 million** in FY2022, primarily due to a decrease in rental income[165](index=165&type=chunk) - Administrative expenses decreased by approximately **2.6%** from approximately **RMB 43.6 million** in FY2021 to approximately **RMB 42.4 million** in FY2022, primarily attributable to a reduction in one-off expenses related to the listing celebration incurred in FY2021[166](index=166&type=chunk) - Selling expenses increased by approximately **6.3%** from approximately **RMB 19.6 million** in FY2021 to approximately **RMB 20.9 million** in FY2022, primarily due to an increase in transportation expenses[196](index=196&type=chunk) [Net Finance Costs](index=31&type=section&id=3.2.4%20Net%20Finance%20Costs) Net finance costs slightly increased by approximately **1.0%** from **RMB 13.0 million** in FY2021 to **RMB 13.1 million** in FY2022 - Net finance costs slightly increased by approximately **RMB 0.1 million** or approximately **1.0%** from approximately **RMB 13.0 million** in FY2021 to approximately **RMB 13.1 million** in FY2022[47](index=47&type=chunk) [Income Tax Expense](index=31&type=section&id=3.2.5%20Income%20Tax%20Expense) An income tax credit of approximately **RMB 3.4 million** was recorded in FY2022, compared to an income tax expense of approximately **RMB 13.1 million** in FY2021. This was primarily due to a decrease in taxable profit from China operations and an increase in deferred income tax credit - An income tax credit of approximately **RMB 3.4 million** was recorded in FY2022, compared to an income tax expense of approximately **RMB 13.1 million** in FY2021. The decrease in income tax expense was mainly due to a reduction in the Group's taxable profit from China operations and an increase in deferred income tax credit arising from previously unrecognized tax losses[217](index=217&type=chunk) [Profit for the Year](index=31&type=section&id=3.2.6%20Profit%20for%20the%20Year) Given the aforementioned factors, profit for the year significantly decreased from **RMB 20.4 million** in FY2021 to **RMB 1.3 million** in FY2022 - Given the aforementioned factors, profit for the year significantly decreased from **RMB 20.4 million** in FY2021 to **RMB 1.3 million** in FY2022[168](index=168&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=3.3%20Liquidity%20and%20Financial%20Resources) The Group primarily funds its operations through cash generated from operating activities and borrowings. At the end of 2022, both net current assets and cash and cash equivalents significantly decreased. The gearing ratio increased to **52%**, and total borrowings rose. Capital commitments decreased, and there were no significant contingent liabilities - In FY2022, the Group primarily funded its operations through cash generated from operating activities and borrowings[199](index=199&type=chunk) - As of December 31, 2022, the Group's net current assets were approximately **RMB 39.8 million** (2021: approximately RMB 89.4 million), and cash and cash equivalents were approximately **RMB 17.5 million** (2021: approximately RMB 107.2 million)[199](index=199&type=chunk) [Gearing Ratio](index=31&type=section&id=3.3.1%20Gearing%20Ratio) As of December 31, 2022, the Group's gearing ratio was approximately **52%**, an increase from **33%** in 2021 - The Group's gearing ratio was approximately **52%** as of December 31, 2022 (December 31, 2021: **33%**)[49](index=49&type=chunk) [Borrowings](index=31&type=section&id=3.3.2%20Borrowings) As of December 31, 2022, the Group's current borrowings were approximately **RMB 257.4 million**, non-current borrowings were approximately **RMB 186.2 million**, and total borrowings increased to **RMB 443.6 million**. The weighted average effective interest rate for bank borrowings was **5.08%** per annum - As of December 31, 2022, the Group's current borrowings were approximately **RMB 257.4 million** (2021: approximately RMB 259.0 million), and non-current borrowings were approximately **RMB 186.2 million** (2021: approximately RMB 66.0 million)[219](index=219&type=chunk) - For the year ended December 31, 2022, the weighted average effective interest rate for bank borrowings was **5.08%** per annum (2021: 5.65%)[154](index=154&type=chunk) Total Borrowings | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------- | :------------------ | :------------------ | | Total Borrowings | 443,595 | 324,989 | [Capital Commitments and Pledged Assets](index=32&type=section&id=3.3.3%20Capital%20Commitments%20and%20Pledged%20Assets) As of December 31, 2022, the Group's capital commitments were approximately **RMB 148.3 million**, a decrease from **RMB 235.0 million** in 2021. Several of the Group's assets have been pledged to secure borrowings, including property, plant and equipment, construction in progress, right-of-use assets, investment properties, and transferred receivables - As of December 31, 2022, the Group's capital commitments were approximately **RMB 148.3 million** (December 31, 2021: RMB 235.0 million)[221](index=221&type=chunk) Total Pledged Assets | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | Property, Plant and Equipment | 80,877 | 78,982 | | Construction in Progress | 208,434 | — | | Right-of-Use Assets | 104,167 | 107,519 | | Investment Properties | 33,807 | 34,852 | | Transferred Receivables | 19,586 | 10,470 | | **Total** | **446,871** | **231,823** | [Contingent Liabilities](index=32&type=section&id=3.3.4%20Contingent%20Liabilities) As of December 31, 2022, the Group had no significant contingent liabilities, whereas as of December 31, 2021, contingent liabilities arising from the acquisition of Ruitu Mingsheng were approximately **RMB 2.9 million** - As of December 31, 2022, the Group had no significant contingent liabilities (December 31, 2021: contingent liabilities of approximately **RMB 2.9 million** arising from the acquisition of Ruitu Mingsheng)[96](index=96&type=chunk) [Outlook](index=28&type=section&id=3.4%20Outlook) The Group is optimistic about the prospects of integrated utilization of iron ore tailings in Hainan Province, expecting it to provide long-term raw material supply and generate synergistic effects with existing concrete businesses, leading to additional revenue. Concurrently, the Group anticipates that government policies encouraging precast concrete components will increase demand, and it plans to enhance production capacity through new production lines to meet future demand - The Group is quite optimistic about the prospects of integrated utilization of iron ore tailings in Hainan Province, expecting it to ensure long-term supply, create synergies with existing ready-mixed concrete and precast concrete components businesses, expand the raw material industry chain, and generate additional revenue[159](index=159&type=chunk) - Government policies encouraging the use of precast concrete components in new building construction are expected to increase the usage of this building material, which will undoubtedly provide a continuous demand for the Group's precast concrete components[188](index=188&type=chunk) - The Group eagerly anticipates that the new production lines currently under construction will enhance its production capacity, enabling it to meet the expected increase in future demand[188](index=188&type=chunk) [Significant Accounting Policies and Notes to Financial Statements](index=5&type=section&id=Significant%20Accounting%20Policies%20and%20Notes%20to%20Financial%20Statements) [Basis of Preparation](index=5&type=section&id=4.1%20Basis%20of%20Preparation) The consolidated financial statements are prepared under the historical cost convention in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance. The Group has adopted certain new or revised standards but has not changed its accounting policies or made retrospective adjustments as a result, nor has it applied any new standards or interpretations not yet effective for the current accounting period - The consolidated financial statements are prepared under the historical cost convention in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance (Chapter 622)[121](index=121&type=chunk) - Certain new or revised standards have been applied, but the Group has not changed its accounting policies or made retrospective adjustments as a result of adopting these standards[7](index=7&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[16](index=16&type=chunk) [Segment Information](index=7&type=section&id=4.2%20Segment%20Information) The Group's reportable segments include ready-mixed concrete, precast concrete components, and recycling iron ore tailings and bricks. In 2022, gross profit for both ready-mixed concrete and precast concrete components significantly decreased, while the recycling iron ore tailings and bricks business contributed **RMB 11.4 million** in gross profit Segment Results for 2022 | Segment | Revenue (RMB thousands) | Cost of Sales (RMB thousands) | Gross Profit (RMB thousands) | Selling Expenses (RMB thousands) | Administrative Expenses (RMB thousands) | Segment Results (RMB thousands) | | :--------------- | :---------------- | :-------------------- | :---------------- | :-------------------- | :-------------------- | :-------------------- | | Ready-Mixed Concrete | 463,282 | (425,609) | 37,673 | (11,442) | (21,991) | 4,240 | | Precast Concrete Components | 142,959 | (134,651) | 8,308 | (8,828) | (12,871) | (13,391) | | Recycling Iron Ore Tailings and Bricks | 27,911 | (16,467) | 11,444 | (608) | (4,042) | 6,794 | | **Total** | **634,152** | **(576,727)** | **57,425** | **(20,878)** | **(38,904)** | **(2,357)** | Segment Results for 2021 | Segment | Revenue (RMB thousands) | Cost of Sales (RMB thousands) | Gross Profit (RMB thousands) | Selling Expenses (RMB thousands) | Administrative Expenses (RMB thousands) | Segment Results (RMB thousands) | | :--------------- | :---------------- | :-------------------- | :---------------- | :-------------------- | :-------------------- | :-------------------- | | Ready-Mixed Concrete | 533,761 | (448,763) | 84,998 | (6,578) | (18,506) | 59,914 | | Precast Concrete Components | 231,327 | (212,065) | 19,262 | (13,058) | (22,530) | (16,326) | | Recycling Iron Ore Tailings and Bricks | — | — | — | — | — | — | | **Total** | **765,088** | **(660,828)** | **104,260** | **(19,636)** | **(41,036)** | **43,588** | [Property, Plant and Equipment](index=13&type=section&id=4.3%20Property,%20Plant%20and%20Equipment) As of December 31, 2022, the Group's property, plant and equipment net book value increased to **RMB 390.4 million**, primarily due to additions and transfers from construction in progress. Total depreciation expense for the year was **RMB 18.8 million**, with **RMB 4.1 million** in borrowing interest capitalized to construction in progress Net Book Value of Property, Plant and Equipment | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | Net Book Value at Year-End | 390,405 | 206,589 | - For the year ended December 31, 2022, general borrowing interest of approximately **RMB 4,123,000** was capitalized to property, plant and equipment, with an average borrowing rate of **5.17%** per annum[85](index=85&type=chunk) Depreciation Expense | Category | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | Cost of Sales | 14,043 | 12,964 | | Selling Expenses | 911 | 536 | | Administrative Expenses | 3,837 | 2,192 | | **Total** | **18,791** | **15,692** | - As of December 31, 2022, buildings and machinery with a total net book value of **RMB 80,877,000**, and construction in progress for an iron ore tailings recycling plant with a book value of **RMB 208,434,000**, were pledged to secure the Group's borrowings[84](index=84&type=chunk) [Right-of-Use Assets](index=16&type=section&id=4.4%20Right-of-Use%20Assets) As of December 31, 2022, the net book value of right-of-use assets was approximately **RMB 104.5 million**, primarily comprising land use rights, leased warehouses and plants, and leased vehicles. Among these, land use rights have been pledged to secure the Group's borrowings. Depreciation and amortization expenses for the year amounted to **RMB 4.6 million** Net Book Value of Right-of-Use Assets | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :----------- | :------------------ | :------------------ | | Net Book Value at Year-End | 104,547 | 118,115 | - Land use rights refer to the Group's interests in leased land in China, with lease terms ranging from **20 to 42 years**, and Ruitu Mingsheng's land use rights having a lease term of **50 years**[125](index=125&type=chunk) - As of December 31, 2022, land use rights with a total net book value of **RMB 104,167,000** were pledged to secure the Group's borrowings[140](index=140&type=chunk) Profit or Loss and Cash Flows Related to Leases | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------------------- | :------------------ | :------------------ | | Depreciation of Right-of-Use Assets | 4,585 | 6,003 | | Interest Expense on Lease Liabilities | 68 | 706 | | Short-term Lease Rental Expense | 3,005 | 4,612 | | Cash Outflow for Short-term Leases from Operating Activities | 2,647 | 4,612 | | Cash Outflow for Leases from Financing Activities | 6,503 | 4,336 | [Investment Properties](index=18&type=section&id=4.5%20Investment%20Properties) As of December 31, 2022, the Group's investment properties had a net book value of **RMB 36.3 million**, stated at historical cost less accumulated depreciation and impairment losses. The total fair value of investment properties was **RMB 45.3 million**, determined by independent valuers using income and market approaches, with a portion pledged to secure Group borrowings Net Book Value of Investment Properties | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :----------- | :------------------ | :------------------ | | Net Book Value at Year-End | 36,347 | 37,536 | - The Group's investment properties are stated at historical cost less subsequent accumulated depreciation and any accumulated impairment losses at the end of each reporting period[142](index=142&type=chunk) - As of December 31, 2022, the total fair value of the Group's investment properties was **RMB 45,300,000** (2021: RMB 45,200,000), determined by independent property valuers based on valuations calculated using the income approach and market approach, respectively[171](index=171&type=chunk) - As of December 31, 2022, investment properties with a net book value of **RMB 33,807,000** were pledged to secure the Group's borrowings[53](index=53&type=chunk) [Intangible Assets](index=19&type=section&id=4.6%20Intangible%20Assets) As of December 31, 2022, the net book value of intangible assets was **RMB 39.5 million**, primarily comprising goodwill and software. Goodwill arose from the acquisition of Ruitu Mingsheng, and an impairment review concluded that no impairment provision was necessary. Amortization expense for intangible assets during the year was **RMB 59 thousand** Net Book Value of Intangible Assets | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :----------- | :------------------ | :------------------ | | Net Book Value at Year-End | 39,513 | 39,458 | | Of which: Goodwill | 39,297 | 39,297 | | Of which: Software | 216 | 161 | - Goodwill arose from the acquisition of Ruitu Mingsheng. The Company performed an impairment review on the carrying amount of goodwill as of December 31, 2022, and concluded that no impairment provision was necessary[129](index=129&type=chunk) - Amortization expense for intangible assets was charged to profit or loss during the year, of which **RMB 59 thousand** was included in cost of sales (2021: RMB 26 thousand)[144](index=144&type=chunk)[172](index=172&type=chunk) [Inventories](index=21&type=section&id=4.7%20Inventories) As of December 31, 2022, the Group's net book value of inventories decreased to **RMB 22.6 million**, primarily consisting of raw materials, work-in-progress, and finished goods. Cost of inventories recognized during the year was **RMB 449.6 million**, and impairment provision for inventories was **RMB 1.0 million** Composition of Inventories | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | Raw Materials | 8,771 | 12,752 | | Work-in-Progress | 623 | 1,373 | | Finished Goods | 14,214 | 18,723 | | Less: Impairment Provision for Inventories | (1,037) | (2,939) | | **Total** | **22,571** | **29,909** | - For the year ended December 31, 2022, cost of inventories recognized as an expense and included in 'cost of sales' was **RMB 449,552,000** (2021: RMB 510,995,000)[146](index=146&type=chunk) Changes in Impairment Provision for Inventories | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | At Beginning of Year | 2,939 | 1,529 | | Increase in Provision Recognized in Profit or Loss During the Year | 1,037 | 2,939 | | Provision Written Off Upon Sale of Inventories | (2,939) | (1,529) | | **At End of Year** | **1,037** | **2,939** | [Trade Receivables](index=22&type=section&id=4.8%20Trade%20Receivables) As of December 31, 2022, total trade receivables (including retention receivables) amounted to **RMB 717.8 million**. The Group generally grants customers a **40-day** credit period and applies the simplified approach to recognize expected credit loss provisions for trade and retention receivables. Some receivables have been transferred under factoring arrangements, but the Group retains overdue and credit risks Total Trade Receivables | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--------------- | :------------------ | :------------------ | | Trade Receivables | 704,195 | 645,318 | | Less: Impairment Provision | (11,808) | (10,905) | | **Net Trade Receivables** | **692,387** | **634,413** | | Non-current: Retention Receivables | 26,947 | 31,906 | | Less: Impairment Provision | (1,553) | (1,177) | | **Net Retention Receivables** | **25,394** | **30,729** | | **Total** | **717,781** | **665,142** | - The Group applies the simplified approach to recognize expected credit loss provisions as required by HKFRS 9, which is a lifetime expected loss provision for trade and retention receivables[60](index=60&type=chunk) - As of December 31, 2022, the carrying amount of trade receivables included receivables of **RMB 19,586,000** (2021: RMB 10,470,000) subject to factoring arrangements. The Group has retained the overdue payment risk and credit risk[148](index=148&type=chunk) Aging Analysis of Trade Receivables | Aging | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------- | :------------------ | :------------------ | | Within One Year | 465,067 | 547,485 | | One to Two Years | 205,149 | 99,324 | | Two to Three Years | 52,185 | 25,566 | | Over Three Years | 8,741 | 4,849 | | **Total** | **731,142** | **677,224** | [Trade and Other Payables](index=24&type=section&id=4.9%20Trade%20and%20Other%20Payables) As of December 31, 2022, total trade and bills payables amounted to **RMB 348.4 million**, and total other payables and accruals amounted to **RMB 134.9 million**. Due to their short-term nature, their carrying amounts approximate their fair values and are primarily denominated in RMB Total Trade and Other Payables | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------------------- | :------------------ | :------------------ | | Trade and Bills Payables | 348,408 | 328,289 | | Other Payables and Accruals | 134,873 | 112,870 | | **Total** | **483,281** | **441,159** | - Due to the short-term nature of trade and bills payables and other payables and accruals, their carrying amounts approximate their fair values at the reporting date[30](index=30&type=chunk) Aging Analysis of Trade and Bills Payables | Aging | 2022 (RMB thousands) | 2021 (RMB thousands) | | :------- | :------------------ | :------------------ | | Within One Year | 325,543 | 312,519 | | One to Two Years | 19,158 | 12,104 | | Over Two Years | 3,707 | 3,666 | | **Total** | **348,408** | **328,289** | Currency Composition of Trade and Other Payables | Currency | 2022 (RMB thousands) | 2021 (RMB thousands) | | :----- | :------------------ | :------------------ | | RMB | 480,693 | 440,817 | | HKD | 2,588 | 342 | | **Total** | **483,281** | **441,159** | [Income Tax](index=11&type=section&id=4.10%20Income%20Tax) The Group applies different tax rates in various jurisdictions: Cayman Islands and British Virgin Islands are tax-exempt, Hong Kong profits tax rate is **16.5%** (no taxable profit for the year), and China corporate income tax rate is **25%**, with Xiamen Zhixin Construction Technology Co., Ltd. enjoying a preferential tax rate of **15%**. The Group has not recognized deferred income tax liabilities for unremitted earnings of its Chinese subsidiaries - The Company is incorporated in the Cayman Islands as an exempted company and is not subject to Cayman Islands taxation. The Group's subsidiaries incorporated in the British Virgin Islands are exempted companies and are not subject to British Virgin Islands taxation[64](index=64&type=chunk) - Hong Kong profits tax has been provided at a rate of **16.5%** on the estimated assessable profit for the year. During the year, the Group had no assessable profit in Hong Kong[64](index=64&type=chunk) - The Company's subsidiaries incorporated in China are subject to corporate income tax at a rate of **25%**, except for Xiamen Zhixin Construction Technology Co., Ltd., which enjoys a preferential tax rate of **15%**[64](index=64&type=chunk) - As of December 31, 2022, no deferred income tax liability was recognized for withholding tax payable on the unremitted earnings of the Group's Chinese subsidiaries. The Group does not intend to distribute their respective unremitted profits in the foreseeable future[67](index=67&type=chunk)[109](index=109&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) [Significant Acquisitions and Disposals](index=33&type=section&id=5.1%20Significant%20Acquisitions%20and%20Disposals) Except for the disclosed acquisition of Ruitu Mingsheng, the Group did not undertake any significant acquisitions or disposals related to subsidiaries, associates, and joint ventures in FY2022 - Save as disclosed above, the Group did not undertake any significant acquisitions or disposals related to subsidiaries, associates, and joint ventures in FY2022[98](index=98&type=chunk) [Significant Investments](index=33&type=section&id=5.2%20Significant%20Investments) As of December 31, 2022, the Group had no significant investments - As of December 31, 2022, the Group had no significant investments[204](index=204&type=chunk) [Use of Proceeds](index=33&type=section&id=5.3%20Use%20of%20Proceeds) The net proceeds from the Company's share offer amounted to approximately **HKD 238.7 million**. As of December 31, 2022, most of the proceeds were used for general working capital and repayment of borrowings, a small portion for expanding precast concrete component production capacity, and the remainder for enhancing IT systems, improving environmental protection systems, and purchasing vehicles - The Company obtained net proceeds from the share offer of approximately **HKD 238.7 million**[100](index=100&type=chunk) Use of Net Proceeds from Share Offer | Purpose | Disclosed Updated Intended Use of Net Proceeds (HKD millions) | Net Proceeds Utilized as at December 31, 2022 (HKD millions) | Net Proceeds Unutilized as at December 31, 2022 (HKD millions) | Expected Timeline for Utilization of Unutilized Net Proceeds | | :------------------------- | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :----------------------------------- | | Expand Production Capacity for Precast Concrete Components | 24.5 | 17.2 | 7.3 | Before December 2023 | | Enhance Information Technology Systems | 1.2 | 1.2 | — | N/A | | Improve Environmental Protection Systems | 1.2 | 1.2 | — | N/A | | Purchase Mixer Trucks and Concrete Pump Trucks | 2.0 | 2.0 | — | N/A | | General Working Capital | 105.3 | 105.3 | — | N/A | | Repay Borrowings | 104.5 | 104.5 | — | N/A | | **Total** | **238.7** | **231.4** | **7.3** | | [Employees and Remuneration Policy](index=33&type=section&id=5.4%20Employees%20and%20Remuneration%20Policy) As of December 31, 2022, the Group had **508** employees, a decrease from 613 in 2021. Employee remuneration is determined based on qualifications, responsibilities, contributions, and experience, with some factory workers outsourced to enhance human resource efficiency and flexibility - As of December 31, 2022, the Group had **508** employees (2021: 613 employees)[225](index=225&type=chunk) - Employee remuneration is determined with reference to factors such as qualifications, responsibilities, contributions, and experience[225](index=225&type=chunk) - The Group outsources some factory workers for its precast concrete components production lines to certain labor service companies to enhance human resource efficiency, flexibility, and management capabilities[225](index=225&type=chunk) [Currency Risk](index=32&type=section&id=5.5%20Currency%20Risk) Most of the Group's subsidiaries operate in China, with RMB as their functional currency. The Group does not expect to face significant currency risk and currently has no foreign currency hedging policy, but management will continue to monitor and consider hedging if necessary - Most of the Group's subsidiaries operate in China, and their functional currency is RMB[220](index=220&type=chunk) - The Group does not expect to face any significant currency risk that could materially impact its operating results. Currently, the Group has no foreign currency hedging policy[220](index=220&type=chunk) - The Group's management will continue to monitor foreign currency risk and will consider hedging significant foreign currency risks when necessary[220](index=220&type=chunk) [Capital Structure](index=32&type=section&id=5.6%20Capital%20Structure) The Group's capital structure has remained unchanged since its listing, comprising equity attributable to owners of the Company, including issued share capital and reserves. The Board regularly reviews the capital structure, considering the cost of capital and associated risks - The Group's capital structure has remained unchanged since the Company's shares were listed on The Stock Exchange of Hong Kong Limited[202](index=202&type=chunk) - The Group's capital structure comprises equity attributable to owners of the Company, including issued share capital and reserves[202](index=202&type=chunk) - The Board regularly reviews the Group's capital structure, considering the cost of capital and risks associated with various types of capital[202](index=202&type=chunk) [Corporate Governance](index=34&type=section&id=5.7%20Corporate%20Governance) To the best knowledge of the Directors, the Company has complied with the code provisions set out in the Corporate Governance Code contained in Appendix 14 to the Listing Rules of the Stock Exchange for the year ended December 31, 2022 - To the best knowledge of the Directors, the Company has complied with the code provisions set out in the Corporate Governance Code contained in Appendix 14 to the Listing Rules of the Stock Exchange for the year ended December 31, 2022[101](index=101&type=chunk) [Events After Reporting Period](index=34&type=section&id=5.8%20Events%20After%20Reporting%20Period) Except as disclosed in this announcement, no significant events materially affecting the Group occurred from the end of the Company's reporting period up to the date of this announcement. The Company will hold its annual general meeting on June 27, 2023 - Save as disclosed in this announcement, no significant events materially affecting the Group occurred from the end of the Company's reporting period up to the date of this announcement[102](index=102&type=chunk) - The Company will hold its annual general meeting in Hong Kong on **Tuesday, June 27, 2023**[208](index=208&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=34&type=section&id=5.9%20Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[80](index=80&type=chunk) [Review and Publication](index=35&type=section&id=5.10%20Review%20and%20Publication) The financial figures for the Group's results for the year ended December 31, 2022, have been reviewed by the auditor, PricewaterhouseCoopers, and are consistent with the consolidated financial statements. The Audit Committee has reviewed the audited financial statements and found them to comply with applicable accounting standards, Listing Rules, and other legal requirements. This results announcement has been published on the Company's website and the Stock Exchange's website - The financial figures for the Group's results for the year ended December 31, 2022, as presented in this results announcement, have been compared by the Group's auditor, PricewaterhouseCoopers, with the amounts contained in the Group's consolidated financial statements for the year ended December 31, 2022, and these amounts are in agreement[210](index=210&type=chunk) - The Audit Committee has reviewed the Group's audited financial statements for the year ended December 31, 2022, and is of the opinion that they comply with applicable accounting standards, the Listing Rules, and other legal requirements, and that adequate disclosures have been made[231](index=231&type=chunk) - This results announcement is published on the Company's website at www.xiamenzhixin.com and on the Stock Exchange's website at www.hkexnews.hk[232](index=232&type=chunk)