Core Viewpoint - China Sanjiang Chemical (02198) has entered into an energy management agreement with Haoxing Energy, which is expected to enhance operational efficiency and expand business relations between the two companies [1] Group 1: Agreement Details - The energy management agreement is set to commence on August 1, 2025, and will last until December 31, 2027, covering a period of approximately two and a half years [1] - Haoxing Energy will provide modifications to the driving motors for circulating pumps and auxiliary cooling equipment for Sanjiang Chemical's sixth-phase ethylene oxide/ethylene glycol production facility, which has an annual output of 1 million tons [1] - Sanjiang Chemical has agreed to pay Haoxing Energy for energy-saving costs based on a profit-sharing model, with annual caps of RMB 12.5 million, RMB 25 million, and RMB 25 million [1] Group 2: Company Operations - Sanjiang Chemical primarily engages in the production and supply of ethylene oxide, ethylene glycol, polypropylene, and surfactants, as well as providing processing services [1] - The establishment of the energy management agreement is anticipated to bring further synergies to both parties involved [1]

Core Viewpoint - China Sanjiang Chemical (02198) has entered into an energy management agreement with Haoxing Energy, which will enhance their business relationship and create further synergies for both parties [1] Group 1: Agreement Details - The agreement is set to commence on August 1, 2025, and will last until December 31, 2027, covering a period of approximately two and a half years [1] - Haoxing Energy will retrofit the driving motors for circulating pumps and auxiliary cooling equipment for Sanjiang Chemical's sixth phase of ethylene oxide/ethylene glycol production facility, which has an annual output of 1 million tons [1] - Sanjiang Chemical will pay Haoxing Energy for energy-saving costs based on an agreed profit-sharing basis, with annual caps of RMB 12.5 million, RMB 25 million, and RMB 25 million [1] Group 2: Company Operations - The company primarily engages in the production and supply of ethylene oxide, ethylene glycol, polypropylene, and surfactants, as well as providing processing services [1] - The establishment of the energy management agreement is expected to expand the company's business relationship with Haoxing Energy [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何 部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立的有限公司） （股份代號：2198） 持續關連交易 — 與浩星節能訂立能源管理協議 持續關連交易 董事會欣然宣佈，於二零二五年八月一日（交易時段後），浩星節能與三江化工 （本公司間接全資附屬公司）訂立能源管理協議，據此，浩星節能已同意為三江化 工年產量1,000,000公噸的第六期環氧乙烷╱乙二醇生產設施改裝循環泵及輔助 冷卻設備之驅動馬達，而三江化工已同意按協定的溢利分攤基準向浩星節能支付 節能成本，年度上限分別不高於人民幣12.5百萬元、人民幣25.0百萬元及人民幣 25.0百萬元，自本協議簽署日期起直至二零二七年十二月三十一日，為期約兩年 半。 – 1 – 上市規則之涵義 CHINA SANJIANG FINE CHEMICALS COMPANY LIMITED 中國三江精細化工有限公司 浩星節能由本公司控股股東及韓女士之配偶管先生擁有約55.5%權益，因而為本 公司之關連人士 ...

Industry Overview - Ethylene Oxide (EO) is a crucial organic chemical raw material and intermediate, ranking third among ethylene derivatives after polyethylene and polyvinyl chloride [1][2] - In 2010, China's EO production capacity was approximately 1.26 million tons, which surged to 4.79 million tons by 2019, achieving a compound annual growth rate (CAGR) of 16% [5] - From 2020 to 2023, China's EO production capacity maintained a growth rate of over 14%, projected to reach 9.44 million tons by 2024, with a year-on-year increase of 8.51% [5] Production and Supply Chain - The upstream of the EO industry includes raw materials such as ethylene and oxygen, while the midstream involves EO production, primarily through the direct oxidation of ethylene [3] - The downstream applications of EO include a variety of products such as polycarboxylic acid superplasticizers, non-ionic surfactants, and others, serving multiple sectors including real estate, infrastructure, and agriculture [3] Regional Distribution - EO production in China is concentrated in East China, South China, and Northeast China, with these regions accounting for over 85% of total capacity [7] - East China, in particular, has become the most significant production base, contributing over 55% of the total capacity due to its robust chemical industry infrastructure and market demand [7] Trade Dynamics - China's EO exports have shown a rapid growth trend, with export volume reaching 971 tons in 2024, a year-on-year increase of 45.14% [9] - The country has maintained a net export status, with zero imports in 2023-2024, indicating that domestic production fully meets market demand [9] Consumption Market - The consumption structure of EO is evolving, with polycarboxylic acid superplasticizers being the largest market, although its share is declining from 61% in 2020 to 37% in 2024 due to a slowdown in the real estate sector [11] - Non-ionic surfactants are experiencing strong growth, increasing their share from 24% in 2024, driven by demand from the daily chemical and agricultural sectors [11] Competitive Landscape - The market share of private enterprises in the EO industry has increased from 33.79% in 2019 to 48.24%, while state-owned enterprises have seen a decline [13] - This shift is attributed to the competitive advantages of private firms in raw material procurement and flexible resource allocation [13] Future Trends - The EO production capacity is expected to continue expanding, with an anticipated addition of 1 million tons by 2025, leading to a total capacity exceeding 9 million tons [19] - The industry is also moving towards green processes and high-end transformation, with a focus on low-carbon catalysts and bio-based EO production methods [20]

Core Insights - The 2025 Autumn/Winter Tmall Apparel White Paper highlights a significant shift in consumer preferences towards high-quality design, sustainable technology, and niche aesthetics, with a total apparel consumption of 386.9 billion yuan in the first quarter of 2025, reflecting a 3.4% year-on-year growth [1][13][17] - The report emphasizes the dual driving forces of technology competition and emotional demand within the industry, with high-end consumer groups leading the market by prioritizing quality and innovation [1][20][21] Industry Trends - Key apparel categories such as down jackets, wool coats, and knitted sweaters are experiencing growth through material upgrades and expanded usage scenarios [2][40] - The demand for innerwear and loungewear shows regional differentiation, with northern consumers focusing on warmth and static resistance, while southern consumers prioritize breathability and antibacterial properties [2][40] - Fashion accessories like shoes and bags are transitioning towards more stylish and functional designs, with materials like vegetable-tanned leather gaining popularity [2][40] Consumer Behavior - High-end consumer groups are the core driving force in Tmall apparel, showing a strong preference for products that combine quality and trendiness throughout their entire purchasing journey [29][34] - The purchasing behavior of high-end consumers indicates a significant increase in the number of items purchased, with a notable trend towards cross-category and cross-brand consumption [34][36] Technological Advancements - The apparel industry is increasingly leveraging AI technology across the entire supply chain, enhancing operational efficiency and consumer experience [20][23][24] - Innovations in materials, such as anti-cold and antibacterial fabrics, are becoming central to brand revenue growth, particularly among younger consumers [20][21] Market Opportunities - The report identifies a blue ocean of opportunities in categories like innerwear, loungewear, and bags, with designer and trendy brands showing high growth potential [19][40] - Tmall is actively promoting trend labels and targeted marketing tools to help merchants align with emerging market trends, driving the apparel industry towards digitalization and differentiation [2][40]

Financial Performance - In 2024, the company achieved a revenue growth of approximately 49.2%, driven by a 9.7% increase in average selling price and an 84.6% increase in sales volume of ethylene glycol compared to 2023[7]. - The average selling price of butadiene increased by approximately 51.0% to about RMB 10,267 per ton, with sales volume rising by approximately 105.2% to about 74,732 tons in 2024[8]. - The overall gross profit margin improved from approximately 1.5% in 2023 to about 5.7% in 2024, attributed to the successful ramp-up of the new production facilities[8]. - The net profit attributable to equity holders for the year ended December 31, 2024, was approximately RMB 532.6 million, representing a growth of about 482.2% compared to 2023[7]. - The sales volume of ethylene glycol surged by approximately 84.6% to 868,951 tons, contributing to a revenue increase of about 102.7%[22]. - The revenue from propylene increased by approximately 24.6%, driven by a 23.5% rise in sales volume due to recovering downstream demand[24]. - The revenue from the butadiene business line increased by approximately 210.0% in 2024 compared to 2023, driven by an average selling price increase of about 51.0% and a sales volume rise of approximately 105.2%[25]. Operational Efficiency - The successful ramp-up of the sixth-phase ethylene oxide/ethylene glycol production facility significantly improved overall production efficiency and resource allocation flexibility[9]. - The company continues to invest in operational efficiency and diversification to adapt to changing market conditions[14]. - The overall gross margin improved from 1.5% in 2023 to approximately 5.7% in 2024, primarily due to enhanced production efficiency from the successful ramp-up of facilities in the second quarter of 2023[26]. Debt and Financial Stability - The company maintained a debt-to-asset ratio of approximately 49.5% in 2024, similar to 48.5% in 2023, aligning with internal guidelines[10]. - The group's cash and bank balance was approximately RMB 564.3 million as of December 31, 2024, compared to RMB 364.2 million in 2023[29]. - The interest-bearing borrowings amounted to approximately RMB 10,945 million as of December 31, 2024, up from RMB 10,190 million in 2023, resulting in a debt-to-asset ratio of approximately 49.5%[29]. Employee and Training Initiatives - The group employed a total of 1,430 full-time employees as of December 31, 2024, an increase from 1,307 employees in 2023[36]. - The total number of employees trained increased to 1,430 in 2024 from 1,307 in 2023, reflecting a growth of 9.4%[81]. - The average training hours for male and female employees remained consistent at 96 hours in 2024, indicating stable training engagement[81]. - The employee turnover rate decreased to 6.2% in 2024 from 10.2% in 2023, indicating improved employee retention[77]. Environmental and Social Responsibility - The company is committed to corporate social responsibility and aims to integrate sustainable development into its business operations[55]. - The group has invested RMB 94.2 million in environmental protection efforts in 2024, up from RMB 73.5 million in 2023[67]. - The total wastewater discharge for 2024 is reported at 2,456,299 tons, a significant increase from 723,874 tons in 2023[67]. - Greenhouse gas emissions (Scope 1) increased to 3,828,641 tons in 2024 from 1,950,496 tons in 2023, with an intensity of 195 tons per RMB 1 million revenue[67]. - The group aims to improve energy efficiency and resource utilization, with electricity consumption increasing to 1,400,813,410 kWh in 2024 from 1,071,105,625 kWh in 2023[72]. Corporate Governance - The board of directors believes that good corporate governance strengthens accountability and investor confidence, and has complied with all corporate governance codes as of the report date[92]. - The audit committee, consisting of three independent non-executive directors, has reviewed the interim results for the six months ending June 30, 2024, and the annual results for the year ending December 31, 2024[99]. - The board has adopted a diversity policy, recognizing the benefits of diversity in skills, experience, and background among its members[103]. - The company has established a policy to prohibit any illegal activities related to bribery, extortion, fraud, and money laundering, with no known violations reported as of the report date[89]. Shareholder Information - The board of directors did not recommend the distribution of a final dividend for the year ended December 31, 2024[37]. - The company has adopted a shareholder communication policy to ensure equal and timely access to relevant information for shareholders[117]. - The company will not recommend a final dividend for the year ending December 31, 2024[124]. - The largest customer accounted for 4.1% of total sales in 2024, down from 4.8% in 2023, while the top five customers collectively represented 15.3% of total sales[150]. Agreements and Contracts - The company entered into a desalinated water and material supply agreement with Zhejiang Jiayuan Energy Chemical Co., agreeing to supply desalinated water and materials at a weighted average price comparable to independent buyers[164]. - A steam purchase agreement was established with Jiayuan Energy Chemical Co. for the supply of low, medium, and high-pressure steam for a period ending December 31, 2026[165]. - The company has a low-pressure steam supply agreement with Jiaxing Xinggang Heat Network, effective from January 1, 2022, until December 31, 2024, at market prices[166].

Core Viewpoint - China Sanjiang Chemical (02198) reported a significant increase in revenue and profit for the fiscal year ending December 31, 2024, with total revenue reaching RMB 19.586 billion, a year-on-year growth of 49.2%, and a net profit attributable to shareholders of RMB 533 million, up 482.2% [1] Group 1: Business Performance - The company observed signs of stable and gradual recovery in its major business lines, particularly in ethylene glycol, butadiene, ethylene oxide, and surfactants, with polypropylene also showing positive momentum [1] - Ethylene glycol experienced a notable rebound in 2024, with average prices rising approximately 9.7% compared to 2023, reaching about RMB 3,986 per ton, and sales volume increasing by about 84.6% to 868,951 tons, making it one of the best-performing segments [1] - The rebound in ethylene glycol was driven by a stable domestic consumption and a recovery in the textile and apparel industry, alongside supply adjustments due to low-margin coal-based production [1] Group 2: Butadiene and Ethylene Oxide - Butadiene saw a strong rebound in 2024, with average prices increasing by approximately 51.0% to about RMB 10,267 per ton, and sales volume rising by about 105.2% to approximately 74,732 tons [2] - The growth in butadiene was primarily driven by increased demand from the automotive manufacturing sector and supply shortages due to unexpected power outages in South Korea and Japan [2] - The ethylene oxide segment also showed positive developments, with average prices rising about 5.6% to approximately RMB 5,993 per ton, reversing a downward trend observed in previous years [2][3] Group 3: Surfactants and Polypropylene - The surfactants business line saw a sales increase of approximately 45.6% compared to 2023, as the company focused on vertical integration to mitigate market risks and enhance profit margins [3] - Polypropylene maintained stable pricing in 2024 at around RMB 6,448 per ton, with a slight increase in downstream demand contributing to price stability [3] - The overall gross margin improved from 1.5% in 2023 to approximately 5.7% in 2024, attributed to enhanced production efficiency and cost-effectiveness following successful capacity increases in previous years [3]

Financial Performance - The company's revenue for the fiscal year ending December 31, 2024, reached RMB 19,586,052 thousand, representing a 49.2% increase compared to RMB 13,128,400 thousand in 2023[3]. - Gross profit surged to RMB 1,110,563 thousand, a significant increase of 471.5% from RMB 194,336 thousand in the previous year[3]. - Net profit attributable to shareholders was approximately RMB 532,550 thousand, marking a 482.2% increase from RMB 91,477 thousand in 2023[3]. - Basic earnings per share rose to RMB 45.99, up 486.6% from RMB 7.84 in 2023[3]. - The overall gross margin improved to 5.7%, up from 1.5% in the previous year, reflecting enhanced operational efficiency[3]. - The operating profit before tax for 2024 was RMB 547,147 thousand, compared to RMB 20,207 thousand in 2023, showing a significant improvement[15]. - The group's profit before tax for 2024 was RMB 532,550,000, a significant increase from RMB 91,477,000 in 2023, representing a growth of approximately 482%[54]. - The total tax expense for the year was RMB 13,207,000, compared to a tax credit of RMB 23,927,000 in 2023, indicating a shift from a tax benefit to a tax expense[51]. Revenue Breakdown - Revenue from industrial product sales was RMB 19,488,826 thousand in 2024, up from RMB 13,024,230 thousand in 2023, reflecting a growth of 49.8%[41]. - Revenue from external customers in mainland China amounted to RMB 19,256,801 thousand in 2024, compared to RMB 13,048,224 thousand in 2023, indicating a growth of 47.7%[42]. - Ethylene glycol revenue increased by approximately 102.7% to RMB 3,463,776 thousand, with sales volume rising by 84.6% to 868,951 tons[76]. - The sales revenue of butadiene surged by approximately 210.0%, with an average selling price increase of 51.0%[78]. - The average selling price of butadiene increased by 51.0% to RMB 10,267 per ton[73]. - The average selling price of ethylene glycol rose by approximately 9.7% to RMB 3,986 per ton[76]. - The average selling price of ethylene oxide rose by approximately 5.6% to RMB 5,993 per ton, indicating a recovery in demand[6]. Cost and Expenses - The cost of sold inventory increased to RMB 18,447,808,000 in 2024 from RMB 12,897,701,000 in 2023, reflecting a rise of about 43%[49]. - Financing costs totaled RMB 414,656 thousand in 2024, a substantial increase from RMB 214,904 thousand in 2023, primarily due to higher interest expenses on bank and other borrowings[48]. - Other income decreased to RMB 284,832 thousand in 2024 from RMB 550,104 thousand in 2023, largely due to the absence of gains from the acquisition of a subsidiary in the current year[47]. - The company reported a net foreign exchange loss of RMB 77,221 thousand in 2024, compared to a loss of RMB 26,733 thousand in 2023[47]. Assets and Liabilities - The company's debt-to-asset ratio for 2024 is approximately 49.5%, compared to 48.5% in 2023, aligning with internal guidelines[8]. - Current liabilities total RMB 13,694,427,000, an increase of 10.3% from RMB 12,419,637,000 in the previous year[18]. - Non-current liabilities decreased to RMB 3,517,656,000 from RMB 4,220,793,000, a reduction of 16.7%[18]. - The company's equity increased to RMB 4,893,788,000, up from RMB 4,361,342,000, reflecting a growth of 12.2%[18]. - The total issued share capital remains at RMB 102,662,000, unchanged from the previous year[18]. - The group’s deferred tax expense for the year was RMB 9,931,000, down from RMB 16,710,000 in 2023, showing a decrease of about 40%[51]. - The total number of full-time employees as of December 31, 2024, is 1,430, an increase from 1,307 employees in 2023[86]. Strategic Initiatives - The company has focused on high-value chemicals and downstream integration to enhance resilience against market volatility[10]. - The company has implemented strategic measures to improve cost efficiency and process optimization to ensure profitability amid market fluctuations[11]. - The company continues to invest in operational efficiency and diversification to adapt to changing market conditions[12]. - The successful ramp-up of the new production facilities is expected to significantly improve overall production efficiency and resource allocation flexibility[7]. - The company plans to maintain operational flexibility and production efficiency to adapt to market volatility and enhance profitability[7]. Accounting Standards and Compliance - The group plans to apply new and revised Hong Kong Financial Reporting Standards upon their effective date, including HKFRS 18 and HKFRS 19[30]. - The amendments clarify the classification of liabilities as current or non-current, emphasizing that the classification is not influenced by the entity's ability to exercise repayment rights[29]. - The group is currently analyzing the impact of HKFRS 18 on its financial statement presentation and disclosures[33]. - The amendments to HKFRS 9 and HKAS 7 clarify the derecognition of financial assets or liabilities and introduce accounting policy choices for certain financial liabilities settled before the settlement date[36]. - The group anticipates that the recent accounting standard amendments will not have a significant impact on its financial statements[39]. Shareholder Information - The board does not recommend the distribution of a final dividend for the year ended December 31, 2024[87]. - The annual general meeting will be held on May 30, 2025, in Hong Kong[100]. - Share transfer registration will be suspended from May 26 to May 30, 2025, to determine the eligibility of shareholders[101]. - The financial information provided does not constitute audited accounts for the year ending December 31, 2024, but is extracted from the consolidated financial statements[102]. - The annual report for the year ending December 31, 2024, will be sent to shareholders and published on the stock exchange and company websites[103].

[Management Discussion and Analysis](index=3&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Overall Performance](index=3&type=section&id=Overall%20Performance) The Group achieved profitability in H1 2024, with gross margin improving to 4.2% and total revenue surging over 100% to RMB 9.24 billion, driven by new production facilities and cost efficiencies - The Group successfully turned its performance around, with gross margin improving by **6.6 percentage points** from **-2.4%** in H1 2023 to **4.2%**[4](index=4&type=chunk) - Total revenue increased by over **100%** year-on-year to approximately **RMB 9.24 billion**, primarily driven by significant increases in production capacity for key products like ethylene oxide, ethylene glycol, and polypropylene[4](index=4&type=chunk) - The commissioning of the sixth phase production facility increased output by approximately **80%**, reduced ethylene oxide/ethylene glycol processing costs by about **20%**, and introduced butadiene product sales[4](index=4&type=chunk) - The Board decided not to declare an interim dividend to retain sufficient liquidity for potential economic fluctuations[4](index=4&type=chunk)[34](index=34&type=chunk) [Financial Review](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%8C) Total revenue surged over 100% to RMB 9.24 billion, driven by substantial sales volume increases across key products, with new capacity and product mix optimization significantly improving overall gross margin Revenue by Product Category (RMB '000) | Product Category | H1 2024 Revenue (RMB '000) | H1 2023 Revenue (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Total** | **9,239,833** | **4,591,142** | **>100%** | | Ethylene Oxide | 1,042,308 | 745,844 | 39.7% | | Ethylene Glycol | 1,685,508 | 457,476 | >100% | | Polypropylene | 1,784,769 | 1,463,004 | 22.0% | | Ethylene | 702,378 | — | >100% | | Surfactants | 1,578,465 | 917,249 | 72.1% | | Butadiene | 358,984 | — | >100% | Sales Volume by Product Category (Metric Tons) | Product Category | H1 2024 Sales Volume (Metric Tons) | H1 2023 Sales Volume (Metric Tons) | Change (%) | | :--- | :--- | :--- | :--- | | Ethylene Oxide | 175,767 | 128,923 | 36.3% | | Ethylene Glycol | 427,091 | 124,243 | >100% | | Polypropylene | 280,455 | 229,052 | 22.4% | | Ethylene | 102,827 | — | >100% | | Butadiene | 36,809 | — | >100% | [Product Performance](index=6&type=section&id=Product%20Performance) Major product lines experienced significant growth, with ethylene oxide and ethylene glycol revenues surging due to improved market conditions, polypropylene revenue increasing by 22.0%, and butadiene contributing RMB 359 million with a 34.0% gross margin - Ethylene oxide revenue increased by **39.7%** to **RMB 1.042 billion**, primarily due to a **36.3%** increase in output[6](index=6&type=chunk) - Ethylene glycol revenue increased by **268.4%** to **RMB 1.686 billion**, primarily due to a **243.8%** increase in output[7](index=7&type=chunk) - Polypropylene revenue increased by **22.0%**, primarily due to a **22.4%** increase in output[8](index=8&type=chunk) - New product butadiene contributed approximately **RMB 359 million** in revenue with a gross margin as high as **34.0%**[9](index=9&type=chunk) [Gross Margin Analysis](index=6&type=section&id=%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's overall gross margin improved by 6.6 percentage points to 4.2%, driven by better product pricing, increased output, and cost savings from new production facilities - Overall gross margin improved by **6.6 percentage points** to **4.2%**[10](index=10&type=chunk) - Gross margins for ethylene oxide, ethylene glycol, and polypropylene business lines increased by **20.2%**, **18.0%**, and **0.5%** respectively[10](index=10&type=chunk) [Unaudited Consolidated Results](index=7&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E6%A5%AD%E7%B8%BE) [Condensed Consolidated Statement of Profit or Loss](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For H1 2024, the Group achieved profitability with a profit of RMB 154 million, total revenue more than doubled to RMB 9.24 billion, and basic earnings per share attributable to owners of the parent company increased to 13.30 fen Condensed Consolidated Statement of Profit or Loss (RMB '000) | Indicator (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 9,239,833 | 4,591,142 | | Gross Profit/(Loss) | 386,432 | (109,238) | | Profit/(Loss) Before Tax | 164,429 | (44,457) | | Profit for the Period | 154,364 | 7,367 | | Profit Attributable to Owners of the Parent Company | 154,055 | 26,121 | | Basic Earnings Per Share (RMB Fen) | 13.30 | 2.22 | [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%A0%B1%E8%A1%A8) As of June 30, 2024, total assets were RMB 21.48 billion, total liabilities RMB 16.96 billion, and net assets increased to RMB 4.51 billion, with net current liabilities of approximately RMB 6.21 billion Condensed Consolidated Statement of Financial Position (RMB '000) | Indicator (RMB '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 14,285,252 | 14,718,210 | | Total Current Assets | 7,192,943 | 6,283,562 | | **Total Assets** | **21,478,195** | **21,001,772** | | Total Current Liabilities | 13,400,884 | 12,419,637 | | Total Non-current Liabilities | 3,563,099 | 4,220,793 | | **Total Liabilities** | **16,963,983** | **16,640,430** | | **Net Assets** | **4,514,212** | **4,361,342** | - As of June 30, 2024, the Group's net current liabilities were approximately **RMB 6.208 billion**[14](index=14&type=chunk)[20](index=20&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In H1 2024, net cash flow from operating activities turned positive to RMB 163 million, while investing cash outflow increased to RMB 916 million, and financing cash inflow was RMB 902 million, with period-end cash and cash equivalents at RMB 514 million Condensed Consolidated Statement of Cash Flows (RMB '000) | Indicator (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 162,992 | (337,562) | | Net Cash Flow from Investing Activities | (915,561) | (811,957) | | Net Cash Flow from Financing Activities | 902,464 | 1,451,310 | | Net Increase in Cash and Cash Equivalents | 149,895 | 301,791 | | Cash and Cash Equivalents at End of Period | 514,286 | 522,490 | [Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2024, total equity increased to RMB 4.51 billion from RMB 4.36 billion at 2023 year-end, primarily driven by the RMB 154 million profit recorded during the period - Total equity increased from **RMB 4,361.3 million** at the end of 2023 to **RMB 4,514.2 million** as of June 30, 2024[17](index=17&type=chunk) - The primary driver for the increase in equity was the **RMB 154.4 million** profit recorded during the period[17](index=17&type=chunk) [Notes to the Condensed Consolidated Financial Information](index=13&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [Note 1 & 3: Company Business and Segment Information](index=13&type=section&id=Note%201%20%26%203%3A%20Business%20and%20Segment%20Information) The Group primarily produces and supplies chemical products in China, managed as a single operating segment, with approximately 98% of revenue generated from the PRC market - The Group's principal business involves the production and supply of various fine chemical products and related processing services in China[18](index=18&type=chunk) - Management monitors the Group as a single reportable operating segment[23](index=23&type=chunk) Revenue by Geographical Region (RMB '000) | Region | H1 2024 Revenue (RMB '000) | Proportion (%) | | :--- | :--- | :--- | | Mainland China | 9,054,834 | 98.0% | | Singapore | 183,357 | 2.0% | | Other | 1,642 | <0.1% | | **Total** | **9,239,833** | **100%** | [Note 2.1: Going Concern Assumption](index=13&type=section&id=Note%202.1%3A%20Going%20Concern) As of June 30, 2024, the Group had net current liabilities of approximately RMB 6.21 billion, but directors believe there are sufficient funds to continue operations, thus financial statements are prepared on a going concern basis - As of June 30, 2024, the Group's net current liabilities were approximately **RMB 6.208 billion**[20](index=20&type=chunk) - The directors believe the Group has sufficient funds to continue as a going concern, and the financial statements are prepared on this basis[20](index=20&type=chunk) [Note 15: Interest-bearing Bank and Other Borrowings](index=21&type=section&id=Note%2015%3A%20Interest-bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2024, total interest-bearing borrowings increased to RMB 11.54 billion, with RMB 8.64 billion due within one year, and certain borrowings are secured by the Group's assets Interest-bearing Bank and Other Borrowings (RMB '000) | Borrowing Category (RMB '000) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Borrowings | 8,642,451 | 7,113,868 | | Non-current Borrowings | 2,899,303 | 3,076,147 | | **Total** | **11,541,754** | **10,190,015** | - Some of the Group's bank borrowings are secured by leasehold land (carrying value approximately **RMB 470 million**), property, plant and equipment (carrying value approximately **RMB 5.61 billion**), financial assets (carrying value approximately **RMB 50 million**), and pledged deposits (carrying value approximately **RMB 2.01 billion**)[43](index=43&type=chunk) [Other Information](index=24&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Directors' and Substantial Shareholders' Interests](index=24&type=section&id=Directors%27%20and%20Substantial%20Shareholders%27%20Interests) As of June 30, 2024, Chairperson Ms. Han held approximately 46.86% of the company's shares, and substantial shareholder Sure Capital Holdings Limited held 45.12%, with its ownership detailed - Ms. Han, the Chairperson of the Board, is deemed to be interested in **557,674,000 shares**, representing **46.86%** of the Company's issued share capital[47](index=47&type=chunk) - Substantial shareholder Sure Capital Holdings Limited holds **536,936,000 shares**, representing **45.12%** of the issued share capital[50](index=50&type=chunk) [Share Award Scheme](index=25&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) The Company's share award scheme held 32,125,000 shares as of June 30, 2024, with no awards granted or expenses recognized during the review period despite share purchases - As of June 30, 2024, **32,125,000 shares** were held in the share pool of the Share Award Scheme[52](index=52&type=chunk)[53](index=53&type=chunk) - For the six months ended June 30, 2024, no shares were granted, and no share award scheme expenses were deducted in the statement of profit or loss[52](index=52&type=chunk)[53](index=53&type=chunk) [Liquidity and Financial Resources](index=28&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group's gearing ratio increased to 53.7% from 48.5% at 2023 year-end, while working capital turnover days, including inventory and trade receivables, remained stable Financial Ratios | Financial Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing Ratio | 53.7% | 48.5% | | Inventory Turnover Days | 43.7 days | 42.6 days | | Trade and Bills Receivables Turnover Days | 28.0 days | 28.3 days | | Trade and Bills Payables Turnover Days | 38.9 days | 48.0 days | [Corporate Information](index=30&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Basic Corporate Information](index=30&type=section&id=Corporate%20Information) The Company is a Cayman Islands-incorporated limited company listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2198), with key corporate details provided - Company Name: **China Sanjiang Fine Chemicals Company Limited**[1](index=1&type=chunk) - Listing Venue: **Main Board of The Stock Exchange of Hong Kong Limited**[67](index=67&type=chunk) - Stock Code: **2198**[1](index=1&type=chunk)[67](index=67&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, increased over 100% to RMB 9,239.8 million compared to RMB 4,591.1 million in the same period of 2023[2]. - Gross profit turned from a loss of RMB 109.2 million in 2023 to a profit of RMB 386.4 million in 2024, achieving a gross margin of 4.2%[2][3]. - Net profit attributable to equity holders of the parent company surged over 100% to RMB 154.1 million from RMB 26.1 million year-on-year[2]. - The company reported a pre-tax profit of RMB 164.4 million, a significant turnaround from a loss of RMB 44.5 million in the previous year[12]. - The net profit for the period was RMB 154.4 million, compared to RMB 7.4 million in the same period last year, with earnings per share increasing to RMB 13.30 from RMB 2.22[12]. - Total comprehensive income for the period was RMB 154,055,000, reflecting the company's improved financial performance[17]. Revenue Growth - The glycol business line generated revenue of approximately RMB 1,685.5 million, representing a significant increase of about 268.4% year-over-year, with production rising approximately 243.8%[7]. - The revenue from the ethylene oxide business line was approximately RMB 1,042.3 million, an increase of about 39.7% compared to the same period in 2023, driven by a production increase of approximately 36.3% due to improved profit margins and market conditions[6]. - The polypropylene business line saw revenue increase by approximately 22.0%, attributed to a production increase of about 22.4% during the review period[8]. - The sales volume of ethylene glycol rose over 100% to 427,091 tons from 124,243 tons in the previous year[4]. - The company achieved a significant increase in sales of new products, including butadiene, contributing to revenue growth[3][4]. Production and Operational Efficiency - The production capacity of the new ethylene oxide/ethylene glycol facility increased output by approximately 80%, reducing production costs by about 20%[3]. - The new production facilities are expected to perform better in the second half of 2024, enhancing overall production efficiency[3]. - The overall gross margin improved by approximately 6.6% to about 4.2%, compared to a gross loss margin of about 2.4% in the same period last year, influenced by improved pricing and operational efficiencies from new production facilities[10]. Financial Position - The asset-liability ratio improved slightly to 53.7% from 54.7% in the previous year, indicating better financial stability[2]. - Total assets decreased to RMB 8,077.3 million from RMB 8,582.1 million, while total liabilities increased to RMB 13,400.9 million from RMB 12,419.6 million[14]. - Non-current liabilities decreased to RMB 3,563.1 million from RMB 4,220.8 million, indicating improved financial stability[15]. - The company’s equity attributable to shareholders increased to RMB 4,514.2 million from RMB 4,361.3 million, reflecting a positive trend in shareholder value[15]. Cash Flow and Investments - Net cash flow from operating activities for the six months ended June 30, 2024, was RMB 162,992,000, a significant improvement from a negative RMB 337,562,000 in the same period of 2023[16]. - Net cash flow from investing activities was negative RMB 915,561,000, compared to negative RMB 811,957,000 in the prior year, indicating increased investment outflows[16]. - Net cash flow from financing activities decreased to RMB 902,464,000 from RMB 1,451,310,000 year-over-year, reflecting a reduction in financing activities[16]. - The total cash and cash equivalents at the end of the period stood at RMB 514,286,000, slightly down from RMB 522,490,000 at the end of the previous year[16]. Dividend and Shareholder Returns - The company does not recommend the distribution of an interim dividend to maintain sufficient liquidity amid economic uncertainties[3]. - The company did not recommend the declaration of an interim dividend for the periods ended June 30, 2024, and June 30, 2023[33]. - Basic earnings per share attributable to equity holders of the parent for the six months ended June 30, 2024, was RMB 154,055, compared to RMB 26,121 for the same period in 2023, representing a significant increase[32]. Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules and has complied with all provisions up to the date of this announcement[49]. - The audit committee, consisting of three independent non-executive directors, has reviewed the interim results for the six months ending June 30, 2024[51]. - The remuneration committee evaluates the performance of directors and senior management and makes recommendations regarding their compensation[52]. - The nomination committee is responsible for recommending suitable candidates for the board and reviewing its structure and composition[53]. Employee and Operational Metrics - The company employed 1,350 full-time employees as of June 30, 2024, with various employee benefits including housing subsidies and performance bonuses[46]. - Inventory turnover days remained stable at 43.7 days as of June 30, 2024, compared to 42.6 days at the end of 2023[47].