Financial Performance - For the six months ended June 30, 2024, the total revenue of Hongcheng Environmental Technology Company Limited was approximately RMB 105.1 million, an increase of about 113.6% compared to RMB 49.2 million for the same period in 2023[1]. - The gross profit for the same period was approximately RMB 51.9 million, up about 66.9% from RMB 31.1 million in the previous year, with the overall gross profit margin decreasing from approximately 63.3% to 49.4%[1]. - The net profit for the six months ended June 30, 2024, was approximately RMB 20.4 million, representing an increase of about 94.3% compared to RMB 10.5 million for the same period in 2023[1]. - The basic earnings per share attributable to the owners of the company for the period was approximately RMB 0.02, compared to RMB 0.01 in the previous year[2]. - The operating profit for the six months ended June 30, 2024, was RMB 29.3 million, an increase from RMB 16.9 million in the same period of 2023[2]. - Revenue for the six months ended June 30, 2024, was RMB 105,104 thousand, a significant increase from RMB 49,159 thousand in the same period of 2023, representing a growth of 114%[14]. - The group reported a net profit of RMB 20,446 thousand for the six months ended June 30, 2024, compared to RMB 10,525 thousand for the same period in 2023, reflecting a year-on-year increase of approximately 94%[12]. Assets and Liabilities - Total assets as of June 30, 2024, were RMB 764.0 million, a decrease from RMB 796.7 million as of December 31, 2023[3]. - Total liabilities as of June 30, 2024, were RMB 273.9 million, down from RMB 325.5 million as of December 31, 2023[4]. - The company reported a decrease in cash and cash equivalents to RMB 29.7 million from RMB 76.1 million as of December 31, 2023[3]. - The total net book value of fixed assets as of June 30, 2024, is RMB 415,635 thousand, down from RMB 384,860 thousand at the beginning of the year[30]. - Trade receivables related to the sale of sulfur concentrate decreased to RMB 21,495 thousand as of June 30, 2024, from RMB 40,234 thousand as of December 31, 2023[33]. - As of June 30, 2024, total liabilities amounted to RMB 33,336,000, a decrease of 56.6% from RMB 76,845,000 as of December 31, 2023[39]. Revenue Segments - Revenue from hazardous waste treatment services for gold mines decreased to RMB 19,150 thousand, down 38.5% from RMB 31,161 thousand in 2023[14]. - Revenue from the sale of sulfur concentrate increased to RMB 34,866 thousand, up 224% from RMB 10,745 thousand in 2023[14]. - Revenue from sulfur concentrate reprocessing products, including sulfuric acid, iron powder, and electricity, was RMB 46,309 thousand, with no revenue reported in the previous year[14]. - The segment profit before tax for hazardous waste processing was RMB 19,820 thousand, while the sulfur concentrate segment reported a profit of RMB 10,805 thousand, contributing to a total profit before tax of RMB 25,864 thousand for the group[12]. Operational Highlights - The company has been engaged in providing hazardous waste treatment services and recovering economically valuable resources in Shandong Province, China[5]. - The group has identified two main operational segments: hazardous waste treatment and sulfur concentrate processing, with a focus on expanding the sulfur concentrate reprocessing product line[11]. - The company is the only entity in Laizhou City, Shandong Province, to have received a hazardous waste operating permit from the Yantai Environmental Protection Bureau[44]. - The company plans to focus on expanding its product line and enhancing resource recycling capabilities, particularly in hazardous waste management and the development of new products such as ammonium sulfate and magnesium sulfate[47]. Expenses and Costs - Administrative expenses for the six months ended June 30, 2024, were approximately RMB 23.1 million, an increase of about 39.2% compared to RMB 16.6 million for the same period in 2023[57]. - The increase in administrative expenses was primarily due to employee benefits rising by approximately RMB 1.6 million due to new production lines, and tax expenses increasing by about RMB 1.0 million due to higher revenue[57]. - Sales expenses rose to approximately RMB 1.6 million, an increase of about 128.6% compared to RMB 0.7 million in the same period last year, driven by increased hospitality expenses[56]. - The cost of inventory for the six months ended June 30, 2024, was RMB 13,382 thousand, an increase from RMB 7,435 thousand in 2023, representing an increase of 80%[22]. Financing and Investments - The company raised approximately RMB 177.3 million from the issuance of 250,000,000 shares, net of underwriting commissions and other related listing expenses[71]. - 86.7% of the raised funds (approximately RMB 188.4 million) is allocated for establishing new production facilities with a processing capacity of 600,000 tons[72]. - 3.9% of the raised funds (approximately RMB 8.5 million) is designated for enhancing R&D capabilities to optimize existing products and expand product varieties[72]. - Capital expenditures for the six months ended June 30, 2024, amounted to approximately RMB 46.2 million, compared to RMB 78.2 million for the year ended December 31, 2023[63]. Corporate Governance and Compliance - The company has adopted the principles of the corporate governance code as per the listing rules and is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[79]. - The board's audit committee has reviewed the accounting principles and policies adopted by the company during the reporting period[79]. - The company has no significant contingent liabilities or major legal proceedings that could adversely affect its business or operations[66].

Revenue Performance - For the year ended 31 December 2023, the Group's total revenue was approximately RMB 108.0 million, representing a decrease of approximately 51.5% compared to RMB 222.8 million for the year ended 31 December 2022[26]. - Revenue from sales of pyrite concentrate and gold mine hazardous waste treatment services decreased by approximately 73.6% and 35.4%, respectively, compared to the previous year[26]. - The Group's revenue from hazardous waste treatment services and sales of pyrite concentrate accounted for approximately 87.5% of total revenue, down from 93.5% in the previous year[25]. - For the year ended December 31, 2023, total revenue decreased significantly, with revenues from gold mine hazardous waste treatment services, sales of pyrite concentrate, and sales of products from reprocessing accounting for approximately 87.5% of total revenue, down from 93.5% in 2022[193]. - The Group's gold mine hazardous waste treatment services generated revenue of RMB 49.37 million, accounting for 45.7% of total revenue in 2023[192]. - Sales of pyrite concentrate amounted to RMB 34.78 million, representing 32.2% of total revenue, a significant decline from RMB 131.86 million in 2022[192]. Profitability and Financial Metrics - The Group's gross profit for the year ended December 31, 2023, was approximately RMB 59.6 million, representing a decline of approximately 58.6% from RMB 144.0 million for the year ended December 31, 2022[39]. - The overall gross profit margin decreased from approximately 64.6% in 2022 to approximately 55.2% in 2023, attributed to lower margins in pyrite concentrate sales and hazardous waste treatment services[40]. - The net profit for the same period was approximately RMB 17.5 million, representing a year-on-year decrease of 78.2%[170]. - The Group's gross profit margin for sales of pyrite concentrate decreased from approximately 61.3% in 2022 to approximately 45.1% in 2023, impacting overall profitability[40]. - The Group's net finance costs were approximately RMB 7.6 million, an increase of 52.0% compared to RMB 5.0 million for the year ended December 31, 2022[29]. Operational Developments - The new product line, which started production in Q4 2023, includes sulfuric acid, iron powder, and electricity, contributing to the diversification of the product portfolio[27]. - The new production line commenced operations in 2023, producing sulfuric acid, iron powder, and electricity, which expanded the Group's product portfolio and aimed to achieve stable profitability[34]. - A new production line for sulfuric acid began operations in 2023, allowing the Group to recycle cyanide tailings and produce economically valuable resources[169]. - The Group commenced production of a new production line in Q4 2023, aimed at diversifying the product portfolio, although initial sales from this line were insufficient to offset declines in pyrite concentrate sales[194]. Research and Development - The Group plans to increase investment in scientific research and accelerate the transformation of R&D achievements to support high-quality development[12]. - The Group plans to enhance its research and development efforts and focus on high-value resource recycling in 2024, aligning with national green development policies[37]. - Three new patents were obtained during the reporting period, enhancing the protection of the Group's R&D achievements[185]. Corporate Governance - The company emphasizes the importance of good corporate governance elements in its management structure and internal control procedures[61]. - The roles of the chairman and the CEO are separated to maintain independence and accountability[64]. - The company has adopted a board diversity policy to maintain a balanced mix of experiences and backgrounds among its Board and senior management team[86]. - The Board consists of three independent non-executive Directors with diverse industry backgrounds and a wide age range from 34 to 58 years old[86]. - The company is committed to high standards of corporate governance to safeguard shareholder interests and enhance corporate value[77]. - The independent non-executive Directors are responsible for supervising the Board and providing independent judgment[73]. Market and Economic Environment - The Group continues to face challenges from a complex international environment and intensifying industry competition[165]. - The market price of products in the sulfuric acid-related market dropped significantly, impacting the sales volume and unit price of pyrite concentrate[194]. Future Strategies - The Group aims to optimize its product structure and enhance resource utilization efficiency as part of its strategy to strengthen its market competitiveness[167]. - The Group aims to become a leader in the circular economy by expanding its business and optimizing product structure[181]. - The Group's strategy focuses on promoting the circular economy and enhancing profitability through a diversified product portfolio, including the new sulfuric acid production line[200]. - The Group aims to optimize the industrial chain of gold solid waste recycling to contribute to sustainable practices and growth opportunities[200].

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 107,988,000, a decrease of 51.5% compared to RMB 222,801,000 in 2022[8] - Gross profit for the same period was RMB 59,634,000, representing a gross margin of approximately 55.2%[8] - Operating profit decreased to RMB 28,769,000 from RMB 108,800,000, reflecting a decline of 73.5% year-over-year[8] - Net profit attributable to the owners of the company was RMB 17,493,000, down 78.2% from RMB 80,216,000 in the previous year[8] - For the fiscal year ending December 31, 2023, the company's revenue and net profit were approximately RMB 108.0 million and RMB 17.5 million, representing declines of 51.5% and 78.2% respectively compared to the fiscal year ending December 31, 2022[127] - The group’s gross profit was approximately RMB 59.6 million, a decrease of about 58.6% compared to approximately RMB 144.0 million for the year ended December 31, 2022[146] - The overall gross margin declined from approximately 64.6% for the year ended December 31, 2022, to approximately 55.2% for the year ended December 31, 2023[147] Revenue Breakdown - The company recognized revenue from hazardous waste treatment services of RMB 49,373,000, down 35.5% from RMB 76,439,000 in 2022[23] - Revenue from the sale of sulfur concentrate decreased to RMB 34,775,000 from RMB 131,855,000, a decline of 73.7%[23] - Revenue from gold mine hazardous waste treatment services, sulfur concentrate sales, and sulfur concentrate reprocessed products accounted for approximately 87.5% of total revenue for the year ended December 31, 2023, down from 93.5% in the previous year[154] - The decline in revenue was primarily due to a 73.6% decrease in sales of sulfur concentrate and a 35.4% decrease in revenue from hazardous waste treatment services[137] Assets and Liabilities - The company reported total assets of RMB 796,655,000, an increase from RMB 757,787,000 in 2022[11] - Total liabilities rose to RMB 325,465,000 from RMB 304,170,000, indicating an increase of 7.5%[11] - Total equity increased to RMB 471,190,000 as of December 31, 2023, compared to RMB 453,617,000 in 2022[33] - The group’s cash and cash equivalents rose to RMB 76,119,000 from RMB 59,160,000 in the previous year, indicating a 28.7% increase[32] - The debt-to-equity ratio as of December 31, 2023, was approximately 46.6%, up from about 30.0% as of December 31, 2022[171] Earnings Per Share - The company reported a basic and diluted earnings per share of RMB 0.017, compared to RMB 0.080 in the previous year[8] - Basic earnings per share for 2023 were RMB 0.017, a decrease of 78.75% from RMB 0.080 in 2022, with weighted average shares outstanding remaining at 1 billion[85] Expenses and Costs - The financing costs net amount for the year ended December 31, 2023, was RMB 7,623 thousand, an increase from RMB 5,037 thousand for the year ended December 31, 2022[54] - Selling expenses decreased by approximately 48.3% to about RMB 1.5 million for the year ended December 31, 2023, compared to approximately RMB 2.9 million in the previous year[158] - Administrative expenses increased by approximately 12.6% to about RMB 36.7 million for the year ended December 31, 2023, compared to approximately RMB 32.6 million in the previous year[160] - Net financing costs increased by approximately 52.0% to about RMB 7.6 million for the year ended December 31, 2023, compared to approximately RMB 5.0 million in the previous year[162] Capital Expenditures and Investments - Non-current asset additions totaled RMB 252,277,000, with significant investments in property, plant, and equipment[43] - Capital expenditures for the year ending December 31, 2023, amounted to approximately RMB 78.2 million, down from RMB 252.3 million for the year ending December 31, 2022[168] - The total cost of fixed assets as of December 31, 2023, was RMB 436,292,000, up from RMB 360,238,000 in 2022, marking an increase of 21.1%[90] Research and Development - The company has successfully applied for three new patents to enhance the protection of its R&D achievements during the reporting period[129] - The company is enhancing its R&D capabilities to optimize existing products and expand product varieties, allocating RMB 8.5 million (3.9% of total funds) for this purpose[200] - The company is collaborating with various institutions and universities for R&D in gold tailings disposal and resource recovery, enhancing its technological support for sustainable development[130] Corporate Strategy and ESG - The company aims to build a resource recycling industrial system and is focusing on hazardous waste recycling to extend its industrial chain and enhance core competitiveness[128] - The company is committed to integrating ESG principles into its corporate strategy and daily operations to achieve high-quality sustainable development[131] - The company has been recognized as a "Social Responsibility Enterprise" by various governmental bodies in Shandong Province during the reporting period[131] Market Conditions and Challenges - The company faced significant competition and challenges in the hazardous waste treatment industry, impacting its main business operations[141] - The market price for sulfuric acid remains low, which has affected the new revenue sources from the new product line[145] Future Plans - The company plans to establish new production facilities with an annual processing capacity of 600,000 tons, utilizing RMB 188.4 million (86.7% of total funds) for this purpose, expected to be fully utilized by 2024[200] - The group plans to enhance resource utilization efficiency and transition from "low efficiency, low value" to "high efficiency, high value" in hazardous waste treatment and recycling[137]

Revenue and Profitability - The Group's revenue from gold mine hazardous waste treatment services and sales of recycled products was approximately RMB 39.3 million, representing a 63.4% increase compared to the previous period[14]. - The company's revenue for the six months ended June 30, 2023, was approximately RMB 49.2 million, representing a decrease of 57.1% compared to the same period in 2022[124]. - Revenue from hazardous waste treatment services and sales of recycled products accounted for about 85.3% of total revenue, down from 93.7% in the previous year[161]. - The gross profit decreased to approximately RMB 31.1 million, with a gross margin of 63.3%, down from RMB 77.2 million and 67.4% in the previous year[125]. - Gross profit for the same period was approximately RMB 31.1 million, representing a decrease of approximately 59.7% from RMB 77.2 million in the prior year[162]. - The gross profit margin for recycled product sales dropped from approximately 68.3% to 50.0%, while the gross profit margin for hazardous waste treatment services slightly increased from 65.4% to 66.4%[28]. - The decrease in total revenue was primarily attributed to a decline in sales from recycled products and hazardous waste treatment services, which fell by 84.2% and 20.7%, respectively[161]. Financial Position - As of June 30, 2023, the Group's cash and cash equivalents were approximately RMB 39.1 million, compared to RMB 59.2 million as of December 31, 2022[20]. - The gearing ratio increased to approximately 35.8% as of June 30, 2023, up from approximately 30.0% as of December 31, 2022[20]. - The total net book value of assets pledged to secure the Group's bank borrowings was approximately RMB 29.5 million as of June 30, 2023, compared to RMB 21.9 million as of December 31, 2022[30]. - The Group's total net asset value was approximately RMB 12.9 million, down from approximately RMB 15.6 million as of December 31, 2022[184]. - The Group's total net asset value of buildings was approximately RMB 35.8 million as of June 30, 2023, down from approximately RMB 40.8 million as of December 31, 2022[184]. Expenses and Taxation - For the six months ended June 30, 2023, the Group's income tax expense was approximately RMB 3.1 million, a decrease of approximately 77.2% compared to RMB 13.6 million for the same period in 2022[30]. - The effective tax rate for the six months ended June 30, 2023 was approximately 22.7%, down from 23.3% for the same period in 2022[30]. - Administrative expenses for the first half of 2023 were approximately RMB 16.6 million, relatively stable compared to RMB 16.9 million in the prior year[164]. - The Group's selling expenses were approximately RMB 0.7 million, a decrease of approximately 46.2% compared to RMB 1.3 million for the same period in 2022[181]. - The increase in employee benefit expenses was approximately RMB 1.3 million due to the preparation for the commencement of the New Production Line[182]. Strategic Initiatives and Market Conditions - The Group aims to expand its waste disposal industry chain and enhance its product layout based on local resource advantages and sustainable development principles[8]. - The Group plans to focus on technology research and development to innovate and upgrade its services in the second half of 2023[8]. - The hazardous waste treatment industry is facing severe competition and challenges, impacting the Group's operational performance during the reporting period[6]. - The company is facing unprecedented challenges due to complex international environments and competition in the hazardous waste industry[124]. - The Group's strategy includes leveraging its industry edges to achieve sustainable high-quality development despite the complex macroeconomic environment[7]. Employee and Governance - The Group had 264 employees as of June 30, 2023, with a total staff cost of approximately RMB 10.5 million for the six months ended June 30, 2023[1]. - The Group's employee remuneration policy is based on local market standards, industry benchmarks, and employee performance[1]. - There were no significant problems with employees due to labor disputes during the Reporting Period[52]. - The company has confirmed compliance with the Corporate Governance Code during the six months ended June 30, 2023[69]. Share Options and Capital Management - The Company has adopted a Share Option Scheme, which allows for the issuance of options not exceeding 10% of the total number of Shares in issue, amounting to 100,000,000 Shares[53]. - No share options have been granted, exercised, canceled, or lapsed under the Share Option Scheme since its adoption[52]. - The maximum number of Shares that may be issued upon the exercise of all outstanding options must not exceed 30% of the share capital of the Company[54]. - The subscription price for Shares under the Share Option Scheme must not be less than the highest of the closing price on the date of the offer, the average closing price for the preceding five business days, or the nominal value of a Share[58]. - The company raised approximately RMB 177.3 million (equivalent to approximately HKD 217.3 million) from the issuance of 250,000,000 shares during its listing[77]. Future Outlook - The expected timeline for full utilization of the unutilized proceeds is by 2024[81]. - The Group intends to commence production of a sulfuric acid production line in the third quarter of 2023 to enrich its product portfolio[178]. - The Group's focus for the second half of 2023 includes promoting solid waste comprehensive utilization projects and enhancing the efficiency of resource utilization[152].

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份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。 HONGCHENG ENVIRONMENTAL TECHNOLOGY COMPANY LIMITED 鴻 承 環 保 科 技 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2265） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 公 告 鴻 承 環 保 科 技 有 限 公 司（「本 公 司」）董 事（「董 事」）會（「董 事 會」）欣 然 公 佈 本公司及其附屬公司（「本集團」）截至二零二三年六月三十日止六個月（「報 告 期 間」）之 未 經 審 核 中 期 業 績，連 同 截 至 二 零 二 二 年 六 月 三 十 日 止 六 個月之比較數字。 業 績 摘 要 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月，本 集 團 總 收 益 約 為 人 民 幣49.2 百 萬 元，較 截 至 二 零 二 二 年 六 月 三 十 日 止 六 ...

Financial Performance - Revenue for the year ended December 31, 2022, was approximately RMB 222.8 million, representing a year-on-year decrease of 13.3%[21] - Net profit for the same period was approximately RMB 80.2 million, reflecting a year-on-year decrease of 6.3%[21] - The Group's gross profit for 2022 was RMB 144.0 million, down from RMB 166.6 million in 2021[14] - Profit before income tax for the year was RMB 103.8 million, compared to RMB 117.1 million in 2021[14] - For the year ended December 31, 2022, the Group's revenue and net profit were approximately RMB 222.8 million and RMB 80.2 million, representing decreases of 13.3% and 6.3% year-on-year, respectively[37] - The Group's gross profit decreased from approximately RMB 166.6 million in 2021 to approximately RMB 144.0 million in 2022, with a gross profit margin of 64.6% compared to 64.8% in the previous year[40] - Revenue from gold mine hazardous waste treatment services decreased by 20.9% to RMB 76.4 million, while revenue from sales of recycled products decreased by 9.7% to RMB 131.9 million[70][74] - The Group's gross profit for the year ended December 31, 2022, was approximately RMB 144.0 million, a decrease of approximately 13.6% compared to RMB 166.6 million for the previous year[75] - The gross profit margin for the year ended December 31, 2022, was 64.6%, comparable to 64.8% for the year ended December 31, 2021[76] - Other income increased significantly from approximately RMB 78,000 in 2021 to approximately RMB 1.8 million in 2022, mainly due to agency income and tax refunds[77] Assets and Liabilities - Total assets as of December 31, 2022, were RMB 757.8 million, an increase from RMB 622.7 million in 2021[16] - Total liabilities as of the same date were RMB 304.2 million, up from RMB 234.5 million in 2021[16] - Total equity increased to RMB 453.6 million in 2022 from RMB 388.2 million in 2021[16] - As of December 31, 2022, the Group had net current assets of approximately RMB 7.9 million, down from approximately RMB 242.7 million as of December 31, 2021[116] - The gearing ratio as of December 31, 2022 was approximately 30.0%, compared to approximately 35.4% as of December 31, 2021[116] - Cash and cash equivalents as of December 31, 2022, were approximately RMB 59.2 million, a decrease from approximately RMB 235.6 million as of December 31, 2021[117] - The total net book value of assets pledged to secure bank borrowings amounted to approximately RMB 201.0 million as of December 31, 2022, up from approximately RMB 142.4 million as of December 31, 2021[101][106] Capital Expenditure and Investments - Capital expenditure for the year ended December 31, 2022 was approximately RMB 252.3 million, a significant increase from approximately RMB 18.5 million for the year ended December 31, 2021[99][104] - The Group had capital commitments of approximately RMB 9.3 million as of December 31, 2022, compared to nil as of December 31, 2021[100][105] - The Group's liquidity risk is managed by closely monitoring its liquidity position to ensure it meets funding requirements for business development[109][113] Business Development and Strategy - The Group expanded a production line involving sulphuric acid production during the reporting period to enhance its product portfolio[22] - The Group focused on the development of "high-silicon flotation tailings recycling technology" to improve industry competitiveness and resource utilization efficiency[23] - The Group is committed to promoting the overall development of the circular economy and supporting green development initiatives[22] - The Group is focusing on the "14th Five-Year" circular economy development plan, aiming to enhance its resource strategy and build comprehensive solid waste utilization projects[27] - The Group plans to accelerate project development and refine project management to enhance operational efficiency and drive business growth[28] - The Group aims to strengthen safety management and cultural construction to support rapid business expansion[28] - The Group is committed to deepening the development of the circular economy, aiming to become a leading enterprise in the field with strong market competitiveness[31] - The Group is actively developing new technologies, including the "high-silicon flotation tailings resource recovery technology," to improve industry competitiveness and resource utilization efficiency[25] - The Group is focused on enhancing its core competitive advantages by expanding the variety of recycled products and improving resource recovery efficiency[45] Research and Development - The Group's research project on gold tailings recycling received the Second Prize of Science and Technology Progress Award from the All-China Environment Federation, marking a significant breakthrough in resource recycling technology[49] - The Group has established a new research and development pilot line for high-silica flotation tailings resource recovery technology, achieving three significant results in the process[56] - The Group's collaboration with Yantai University on low-carbon recycling technologies has yielded progressive results for the recycling technology roadmap of high-silica residues[50] Management and Governance - The Group's management team includes professionals with extensive backgrounds in their respective fields, ensuring strong governance and oversight[139] - The independent non-executive Directors are responsible for providing independent judgment to the Board, enhancing corporate governance[138] - The company aims to leverage its Directors' extensive experience to drive growth and innovation in the environmental technology sector[139] - The Company has adopted the Corporate Governance Code and complied with applicable provisions for the year ended December 31, 2022[166] - The Company has established various Board Committees, including the Audit Committee, Remuneration Committee, and Nomination Committee[167] - The Company has a Board Diversity Policy to enhance performance through a balanced mix of experiences and backgrounds among Board members[187] - All Directors have acted in good faith and in compliance with applicable laws and regulations[168] Director Experience and Training - Mr. Sheng, the executive Director and chief technical officer, has over 30 years of experience in the chemical industry and joined the Group in December 2012[134] - Mr. Zhang, an independent non-executive Director, has over 36 years of experience in education and environmental management, and has been teaching at Shandong University since July 2005[136] - Ms. Liu, an independent non-executive Director, has approximately 25 years of teaching experience and has been a senior partner at Shandong Ray & Young Law Firm since June 2016[141] - Mr. Lau, an independent non-executive Director, has over 18 years of experience in accounting and finance, and has served as company secretary for multiple listed companies[147] - The Board and senior management team have diverse educational backgrounds, including degrees in business administration, mechanical design, and environmental chemistry[188] - The company encourages continuous professional development for directors to refresh their knowledge and skills[198] - Each newly appointed director received necessary induction training to understand the company's operations and their obligations[195]

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份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。 HONGCHENG ENVIRONMENTAL TECHNOLOGY COMPANY LIMITED 鴻 承 環 保 科 技 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2265） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 全 年 業 績 公 告 董 事 會 欣 然 公 佈 本 集 團 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 經 審核綜合業績，連同截至二零二一年十二月三十一日止年度之比較數 字。 業 績 摘 要 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度，本 集 團 總 收 益 約 為 人 民 幣 222.8百萬元，較截至二零二一年十二月三十一日止年度的總收益約人 民幣257.0百萬元下降約13.3%。 截至二零二二年十二月三十一日止年度，本集團毛利約為人民幣144.0 百萬元，較截至二零二一年十二 ...

Financial Performance - For the six months ended June 30, 2022, the company's revenue was approximately RMB 114.6 million, a slight increase of 0.1% compared to RMB 114.5 million for the same period in 2021[8]. - Gross profit for the same period was RMB 77.2 million, up from RMB 70.0 million in 2021, reflecting a gross margin increase from 61.2% to 67.4%[13]. - Profit before tax increased to RMB 58.6 million from RMB 49.4 million, indicating a strong operational performance despite market challenges[8]. - Net profit attributable to the owners of the company was RMB 44.9 million, representing a 22.0% increase from RMB 36.8 million in the previous year[8]. - Operating profit increased to RMB 59,416 thousand, up from RMB 52,279 thousand year-over-year, reflecting a growth of approximately 13.4%[115]. - The company reported a basic and diluted earnings per share of RMB 0.04, down from RMB 0.05 in the previous year[115]. - Total assets as of June 30, 2022, amounted to RMB 676,948 thousand, an increase from RMB 622,664 thousand as of December 31, 2021[120]. - Total liabilities increased to RMB 259,969 thousand from RMB 234,480 thousand at the end of the previous year, indicating a rise of approximately 10.9%[123]. - Cash and cash equivalents decreased significantly to RMB 109,844 thousand from RMB 235,593 thousand at the end of 2021, reflecting a decline of about 53.4%[120]. Revenue Breakdown - Revenue from gold mine hazardous waste treatment services decreased by approximately 21.4% year-on-year, from about RMB 50.0 million to approximately RMB 39.3 million[37]. - Sales of recycled products accounted for 59.4% of total revenue, increasing from 49.9% in the previous year[32]. - Revenue from hazardous waste treatment services decreased to RMB 39,315 thousand in the first half of 2022, down 21.4% from RMB 50,045 thousand in the same period of 2021[184]. - Revenue from the sale of recycled products increased to RMB 68,009 thousand in the first half of 2022, up 19.0% from RMB 57,161 thousand in the same period of 2021[184]. - Major customer A contributed RMB 30,330 thousand to total revenue in the first half of 2022, an increase from RMB 23,784 thousand in the same period of 2021[199]. Operational Developments - The company is focusing on the research and development of gold tailings resource recovery technologies, collaborating with Yantai University on low-carbon recovery techniques[14]. - The project on the recovery of sulfur iron resources from gold tailings received a second-class award from the China Environmental Protection Federation for technological progress[14]. - The new product production line is expected to start operations around Q2 2023, with an annual capacity of approximately 240,000 tons[18]. - The company plans to establish a resource comprehensive research laboratory to foster innovation in resource utilization[27]. Financial Management - The company's financing costs netted approximately RMB 0.9 million for the six months ended June 30, 2022, a decrease of about 69.0% from RMB 2.9 million for the same period in 2021[47]. - Income tax expenses rose to approximately RMB 13.6 million for the six months ended June 30, 2022, up about 7.9% from RMB 12.6 million for the same period in 2021[54]. - The actual tax rate decreased from approximately 25.4% for the six months ended June 30, 2021, to about 23.3% for the same period in 2022, mainly due to a reduction in tax losses[54]. - The company reported a net cash inflow from financing activities of RMB 8,759,000 for the six months ended June 30, 2022, compared to a net outflow of RMB 25,245,000 in the same period of 2021[150]. - The company’s cash flow from financing activities was significantly improved, indicating a positive shift in financial management strategies[150]. Challenges and Risks - The average procurement cost of raw materials has increased due to inflationary pressures from monetary easing and the ongoing impacts of the COVID-19 pandemic[10]. - The hazardous waste disposal industry is facing significant challenges, including increased competition and declining disposal prices[10]. - The group will closely monitor foreign exchange risks and consider hedging for significant foreign currency risks if necessary[66]. - The risk management policy has remained unchanged since the end of last year, focusing on minimizing potential adverse impacts on financial performance[178]. Corporate Governance - The company has maintained compliance with corporate governance standards and has not engaged in any purchase, sale, or redemption of its listed securities during the reporting period[94]. - The group has no significant changes in its capital structure, which consists solely of ordinary shares[68]. - The group does not have a foreign exchange hedging policy, as the board believes that foreign exchange fluctuations do not significantly impact business operations or financial performance[66]. Employee and Shareholder Information - The group employed 186 employees as of June 30, 2022, with total employee costs amounting to approximately RMB 9.7 million for the six months ended June 30, 2022[82]. - The board did not recommend any interim dividend for the six months ended June 30, 2022[81]. - The company has adopted a share option plan effective from October 23, 2021, valid until October 23, 2031, allowing the issuance of up to 100,000,000 shares, which is 10% of the total issued shares as of the mid-term report date[85]. - No share options have been granted since the adoption of the share option plan, and there are no unexercised options as of June 30, 2022[93].

Financial Performance - For the year ended December 31, 2021, the company reported revenue of approximately RMB 257.0 million, representing a year-on-year growth of 25.1%[26] - The net profit for the same period was approximately RMB 85.6 million, reflecting a year-on-year increase of 17.4%[26] - The company's total assets as of December 31, 2021, amounted to RMB 622.7 million, up from RMB 434.5 million in 2020[20] - Total liabilities decreased to RMB 234.5 million in 2021 from RMB 328.4 million in 2020, indicating improved financial stability[20] - The total equity of the company increased significantly to RMB 388.2 million in 2021, compared to RMB 106.1 million in 2020[20] - The gross profit for the year was RMB 166.6 million, which is a 34.4% increase from RMB 123.9 million in 2020[18] - Profit before income tax for 2021 was RMB 117.1 million, representing a growth of 21.4% compared to RMB 96.5 million in 2020[18] - Adjusted net profit for the same period was approximately RMB 99.8 million, reflecting a 29.0% increase compared to the previous year[48] - Gross profit rose from approximately RMB 123.9 million in 2020 to approximately RMB 166.6 million in 2021, with the gross profit margin increasing from 60.3% to 64.8%[49] - The Group's gross profit for the year ended December 31, 2021, was approximately RMB 166.6 million, an increase of approximately 34.5% from RMB 123.9 million in 2020[86] - The overall gross profit margin increased from approximately 60.3% in 2020 to approximately 64.8% in 2021, driven by higher selling prices of recycled products[86] Market Strategy and Growth - The company aims to expand its market presence and enhance its product offerings in the coming years[26] - The increase in revenue was attributed to active business expansion and improved customer relationships, alongside strong market demand for downstream products[48] - The Group aims to enhance its competitiveness through technological innovation and collaboration with industry units and research institutions[27][31] - The Group plans to optimize the development of the industry chain and expand its product mix to capture market opportunities[36][38] - The Group aims to capture more market share by leveraging its strong treatment capacity in the hazardous waste treatment sector[66] - The Group's strategy includes continuous enhancement of research and development capabilities to achieve high utilization rates of gold mine hazardous wastes[69] - The Group is focused on technological innovation to strengthen market competitiveness and expand its product portfolio[72] Challenges and Responses - The impact of COVID-19 and inflationary pressures were noted as challenges faced during the year, yet the company managed to achieve remarkable results[26] - The Group aims to enhance its hazardous waste treatment capacity in response to the consolidation of gold resources, which is expected to increase demand for centralized hazardous waste treatment[66] - The development plan from Shandong Province emphasizes a new industrial landscape focusing on gold, which will optimize product structure and significantly raise safety and environmental protection standards[66] Research and Development - The company continues to focus on technological advancements and new product development to drive future growth[26] - The company successfully acquired land use rights for three parcels of industrial land totaling approximately 533,300 sq.m. in Yinhai Chemical Industrial Park, enhancing production capacity and R&D capabilities[55] - The company's research project on gold tailings recycling was recognized as a scientific achievement and awarded the Second Prize of Science and Technology Progress Award, reflecting its commitment to circular economy development[57] - The company signed a collaboration agreement to establish a Solid Waste Resource Utilisation Engineering Research Centre, promoting technological development in solid waste resource utilization[58] - Five additional patents were obtained during the reporting period, enhancing the company's technological capabilities in hazardous waste treatment and resource utilization[59] - The Group is committed to strengthening its research and development capabilities by planning to build an integrated resources research laboratory to improve product quality and resource utilization[72] Financial Stability and Management - As of 31 December 2021, the Group had net current assets of approximately RMB 242.7 million, a significant increase from RMB 9.8 million in 2020[122] - The gearing ratio as of 31 December 2021 was approximately 35.4%, a decrease from 136.0% in 2020, indicating improved financial stability[122] - Cash and cash equivalents as of 31 December 2021 amounted to approximately RMB 235.6 million, supporting operational and capital needs[123] - The Group had no capital commitments as of 31 December 2021, compared to approximately RMB 3.4 million in 2020[117] - Total net book value of assets pledged to secure bank borrowings was approximately RMB 142.4 million as of 31 December 2021, down from RMB 147.7 million in 2020[117] - The Group does not currently have a hedging policy on foreign exchange risk, as exposure is considered not significant[120] - There were no material contingent liabilities as of 31 December 2021, and the Group is not involved in any significant legal proceedings[117] Corporate Governance - The company is committed to maintaining high standards of corporate governance and transparency in its operations[140] - The Company has adopted the Corporate Governance Code and is committed to high standards of corporate governance to safeguard shareholder interests and enhance corporate value[174] - The Board consists of six Directors, including three executive Directors and three independent non-executive Directors, ensuring compliance with Listing Rules[181] - The roles of the chairman and chief executive officer are separated, with Mr. Liu as Chairman and Mr. Zhan as CEO, maintaining independence and accountability[177] - The Company has established a Board Diversity Policy to enhance performance through a balanced mix of experiences and backgrounds among Board members[190] - Each independent non-executive Director has confirmed their independence, satisfying the requirements of the Listing Rules[188] - The Company has arranged appropriate liability insurance for Directors, which will be reviewed annually[171] - Newly appointed Directors receive necessary induction and training to understand the Company's operations and their responsibilities[199] - The Nomination Committee is responsible for implementing and reviewing the Board Diversity Policy[192] - The Company complies with the Model Code for securities transactions by Directors, ensuring adherence to required standards[198] Management Team - Mr. Liu Zeming has over 10 years of experience in the metal ore waste processing industry and has been the executive director and general manager of HC Mining since April 2011[127] - Mr. Zhan Yirong has more than 10 years of corporate management experience in the gold mine hazardous waste treatment industry and has been the general manager of HC Mining and HC Environmental since January 2017[132] - Mr. Sheng Haiyan has over 29 years of experience in the chemical industry and has been responsible for overall research and development and technical management since his appointment as executive director on April 8, 2021[135] - The company has a strong focus on research and development, with Mr. Sheng leading the technical team since December 2012[135] - The management team has a diverse background, with experience in various sectors including real estate and stone raw materials trading, contributing to a well-rounded strategic approach[128] - The company is pursuing a doctorate in Business Administration for continuous improvement in management practices[132] - The board includes members with diverse backgrounds in law, finance, and environmental management, ensuring comprehensive oversight and governance[141]