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，並明確表示概不就因本公告全部或任何部份內容而 產生或因依賴該等內容而引致的任何損失承擔任何責任。 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2281） 截至2023年6月30日止六個月的中期業績公告 財務摘要 截至2023年6月30日止六個月： • 營業收入約為人民幣640.5百萬元，較去年同期減少約8.3%。 • 淨利潤約為人民幣85.0百萬元，較去年同期減少約36.1%。 • 歸屬於母公司所有者的淨利潤約為人民幣79.2百萬元，較去年同期減少約35.0%。 • 每股基本盈利約為人民幣0.09元，較去年同期減少約35.7%。 • 董事會不建議分派截至2023年6月30日止六個月之中期股息。 ...

Financial Performance - The company reported a significant increase in revenue, achieving a total of RMB 1.5 billion, representing a year-on-year growth of 15%[14] - The Group recorded total revenue of approximately RMB 1,353.4 million in 2022, a year-on-year decrease of approximately 1.2%[28] - Net profit for 2022 amounted to approximately RMB 223.2 million, representing a year-on-year decrease of approximately 14.5%[28] - Basic earnings per share for 2022 was RMB 0.24, reflecting a year-on-year decrease of approximately 14.3%[28] - Operating revenue decreased by 1.2% to RMB 1,353.4 million from RMB 1,370.1 million in the same period of 2021[71] - Revenue from tap water sales increased by 6.6% to RMB 411.1 million, accounting for 30.4% of total revenue in 2022[72] - Revenue from wastewater treatment increased by 11.7% to RMB 524.0 million, representing 38.7% of total revenue in 2022[77] - Gross profit decreased by 13.1% to RMB494.0 million, with gross profit margin declining from 41.5% in 2021 to 36.5% in 2022[88] - Net profit declined by 14.5% to RMB223.2 million, with net profit margin decreasing from 19.1% to 16.5%[110] User and Market Growth - User data showed an increase in active users, reaching 2 million, which is a 20% increase compared to the previous year[14] - The company plans to expand its market presence by entering two new provinces, aiming for a 5% market share in these regions within the next two years[14] - A strategic acquisition of a local competitor is anticipated to enhance operational efficiency and increase market share by 8%[14] - The company aims to enhance its long-term sustainable development by focusing on the integration of water supply and drainage in townships and expanding into the regional liquor-making wastewater treatment market[55] Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[14] - New product launches are expected to contribute an additional RMB 300 million in revenue, with a focus on innovative water treatment technologies[14] - For 2023, the Group aims to expand the industrial wastewater treatment market and promote the integration of water supply and drainage in townships[34] - The company plans to establish a replicable control model for external expansion and enter the shale gas wastewater treatment sector[56] Operational Efficiency and Technology - The company is investing RMB 50 million in research and development for sustainable water solutions over the next three years[14] - The implementation of intelligent water systems is expected to improve management efficiency and reduce leakage rates in the water supply network[50] - The Group's self-developed technologies received utility model patents, enhancing its core competitiveness in wastewater treatment[29] - The MBR integrated wastewater treatment equipment was recognized as a key research project, indicating technological leadership in the industry[29] Financial Position and Assets - Total assets increased to RMB 7,140,568,000 in 2022, up from RMB 7,073,316,000 in 2021, representing a growth of 0.95%[45] - Total liabilities decreased to RMB 4,299,548,000 in 2022, down from RMB 4,412,295,000 in 2021, a reduction of 2.55%[45] - Total equity attributable to shareholders rose to RMB 2,636,130,000 in 2022, compared to RMB 2,476,129,000 in 2021, marking an increase of 6.46%[45] - The return on average equity for 2022 was 8.0%, down from 9.9% in 2021[41] Challenges and Legal Issues - Despite challenges from COVID-19 and extreme weather, the Group achieved high-quality and sustainable development[25] - The company is involved in a legal dispute with Sichuan Changjiang Engineering Crane Co., Ltd. regarding unpaid equipment costs amounting to RMB 42.82 million and a penalty of RMB 17.15 million due to equipment quality issues[181] - The company is also facing a lawsuit from China Communications Construction Group Hongfeng Co., Ltd. for outstanding project payments totaling RMB 11.55 million, along with interest and litigation costs[181] Customer Service and Governance - The management highlighted a commitment to improving customer service, aiming for a 90% satisfaction rate by the end of the next fiscal year[14] - The board of directors emphasized the importance of corporate governance and compliance with regulatory standards to ensure long-term growth[14] Employee and Cost Management - Employee salaries and benefits expenses decreased to approximately RMB152.2 million in 2022 from RMB182.9 million in 2021, due to business integration and outsourcing[167] - Operating costs rose by 7.2% to RMB 859.4 million, primarily due to increased depreciation and variable costs[81]

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，並明確表示概不就因本公告全部或任何部份內容而產生或因依賴該等內容 而引致的任何損失承擔任何責任。 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2281） 截至 2022 年 12 月 31 日止年度的全年業績公告 2022年度財務摘要 － 營業收入約為人民幣1,353.4百萬元，較2021年同期減少約1.2%。 － 淨利潤約為人民幣223.2百萬元，較2021年同期減少約14.5%。 － 歸屬於母公司所有者的淨利潤約為人民幣203.2百萬元，較2021年同期減少約16%。 － 每股基本收益約為人民幣0.24元，較2021年同期減少14.3%。 2022年度利潤分配預案 ...

Financial Performance - The company reported a revenue of RMB 500 million for the first half of 2022, representing a year-on-year increase of 15%[23] - The net profit attributable to shareholders was RMB 150 million, up 20% compared to the same period last year[23] - Revenue for the six months ended June 30, 2022, was RMB 698,079,000, representing an increase from RMB 670,477,000 in the same period of 2021, which is a growth of approximately 4.8%[49] - Net profit for the period was RMB 133,071,000, up from RMB 124,765,000 in the previous year, indicating an increase of about 6.5%[49] - Profit before tax increased to RMB 155,912,000 from RMB 147,959,000, reflecting a growth of approximately 5.3%[49] - Total comprehensive income attributable to shareholders of the Company was RMB 121,918,000, compared to RMB 117,548,000 in the prior year, marking an increase of around 3.2%[49] - The Group's unaudited profit attributable to owners for the reporting period was approximately RMB 121.9 million, with basic earnings per share of approximately RMB 0.14[54] - The net profit increased by 6.7% to RMB133.1 million, with the net profit margin improving from 18.6% to 19.1%[115][119] User and Market Expansion - User data indicates an increase in active users by 10% to 1.2 million in the first half of 2022[23] - The company plans to expand its market presence in Sichuan Province, targeting a 25% increase in service coverage by the end of 2023[23] - The Company continues to focus on tap water production and sales through its subsidiaries, including Hejiang Water and Naxi Water, which were operational prior to their cancellation in 2022[29] - The Company is engaged in market expansion efforts, particularly in the water supply sector, to enhance service delivery and operational efficiency[49] Research and Development - The company has allocated RMB 50 million for research and development in new technologies for wastewater treatment[23] - New product development includes the launch of a smart water management system, expected to enhance operational efficiency by 30%[23] Future Guidance - Future guidance estimates a revenue growth of 10-15% for the full year 2022[23] - The Group aims to expand its water supply and drainage business and intelligent water services to increase operating revenue and reduce production costs[61] Financial Position and Assets - The Company has maintained a strong financial position, with total assets and equity reflecting stability and growth potential in the water services market[49] - Total assets increased to RMB 7,249.8 million as of June 30, 2022, compared to RMB 7,073.3 million as of December 31, 2021, representing a growth of 2.5%[53] - Total liabilities rose to RMB 4,498.7 million, up from RMB 4,412.3 million, indicating an increase of 2.0%[53] - The cash and bank balances of the Group amounted to approximately RMB890.9 million, up from RMB871.7 million at the end of 2021[159] Operational Efficiency - The average utilization rate of tap water plants was 64.6%, with a daily water supply capacity of approximately 774,000 tons[67] - The daily treatment capacity of city wastewater treatment plants was approximately 397,000 tons, with an average load rate of 94.80%[69] - Operating costs increased by 15.0% to RMB 439.9 million from RMB 382.6 million in the same period of 2021, primarily due to increased sales volume and depreciation expenses[87] Revenue Breakdown - Revenue from tap water sales amounted to RMB 182.0 million, representing a 4.4% increase from RMB 174.4 million for the same period in 2021[78] - Revenue generated from wastewater treatment operations was RMB 263.9 million, reflecting a 23.2% increase from RMB 214.2 million in the same period of 2021[84] - Revenue from installation services decreased by 7.2% to RMB 232.3 million from RMB 250.2 million in the same period of 2021[82] Cost and Profit Analysis - Gross profit decreased by 10.3% to RMB 258.2 million from RMB 287.8 million in the same period of 2021, with gross profit margin declining from 42.9% to 37.0%[96] - The gross profit from tap water sales decreased by 98.7% to RMB0.3 million, with a gross profit margin dropping from 14.3% to 0.2% due to the scale effect of the newly constructed water treatment plant not materializing[99][101] - The gross profit from wastewater treatment services increased by 38.4% to RMB117.8 million, with the gross profit margin rising from 39.7% to 44.6% due to increased sewage treatment volume and economies of scale being fully utilized[104][105] Accounts and Receivables - Accounts receivable increased from RMB486.1 million to RMB548.8 million, primarily due to the impact of COVID-19 and financial payments[116][120] - Average turnover days of accounts receivable increased from 117 days to 133 days, indicating a longer collection period[123] Other Financial Metrics - The gearing ratio increased from approximately 25.3% at the end of 2021 to approximately 40.2% at the end of the reporting period, primarily due to increased borrowings[167] - The net debts to equity ratio of the Group was 244.1%, down from 351.0% at the end of 2021[166] Events and Impact - The COVID-19 pandemic had basically no impact on the unaudited condensed consolidated financial statements for the six months ended 30 June 2022[196] - The Group did not incur any significant labor disputes that materially impacted its normal business operations during the reporting period[174] - The Group reported no significant events after the Reporting Period[195]

Financial Performance - The company reported a revenue of RMB 1.2 billion for the fiscal year ending December 31, 2021, representing a year-on-year increase of 15%[35] - The company achieved a total revenue of approximately RMB 1,370.1 million in 2021, representing a year-on-year growth of about 13.7%[46] - Net profit for the year was approximately RMB 261.0 million, remaining stable compared to the previous year[46] - Basic earnings per share were RMB 0.28, consistent with the previous year's performance[46] - Revenue from tap water sales reached RMB 385.8 million, a 10.7% increase from RMB 348.5 million in 2020, accounting for 28.2% of total revenue[77] - Revenue from installation services was RMB 469.0 million, up 16.8% from RMB 401.7 million in 2020, representing 34.2% of total revenue[78] - Revenue from wastewater treatment operations was RMB 469.3 million, an 11.9% increase from RMB 419.4 million in 2020, making up 34.2% of total revenue[79] - Operating revenue for the group reached RMB 1,370.1 million in 2021, a 13.7% increase from RMB 1,205.5 million in 2020, driven by higher sales of water and sewage fees[76] Customer Growth and Engagement - User data indicates that the company served approximately 1.5 million residential customers, with a 10% growth in customer base compared to the previous year[35] - User data showed a growth of 20% year-over-year, indicating strong customer engagement and retention[177] - The company reported a significant increase in revenue, achieving a total of 1.2 billion in the last fiscal year, representing a growth of 15% year-over-year[191] - User data indicates a rise in active users to 500,000, up from 400,000 in the previous year, marking a 25% increase[191] Market Expansion and Strategic Initiatives - The company plans to expand its market presence by entering two new provinces in China, aiming for a 25% increase in market share within the next three years[35] - The company plans to expand its market presence through technological empowerment and capital operations, targeting integrated urban and rural water supply and wastewater treatment services[68] - Market expansion plans include entering two new regions, which are projected to increase market share by 10%[177] - A strategic acquisition of a local water utility company is in progress, which is anticipated to add an additional 300,000 customers to the company's portfolio[35] - A strategic acquisition of a local competitor is in progress, which is projected to increase market share by 15%[191] Operational Efficiency and Technology Development - New product development includes the launch of an advanced wastewater treatment technology, which is expected to enhance operational efficiency by 20%[35] - The company has developed an integrated micro-power wastewater treatment equipment, significantly reducing investment and operational costs for rural wastewater treatment[47] - The company is investing in new technology development, with a budget allocation of 10 million for R&D initiatives[177] - The company is investing 5 million in research and development for innovative water management solutions[191] - The company reported a 30% increase in operational efficiency due to recent process improvements[177] - Operational efficiency improvements are expected to enhance profit margins by 5% through streamlined processes[191] Sustainability and Environmental Initiatives - The management highlighted a focus on sustainability initiatives, aiming to reduce carbon emissions by 30% by 2025[35] - The management team remains committed to sustainable practices, with a goal to reduce carbon emissions by 20% over the next five years[177] - The company has initiated a sustainability program aimed at reducing carbon emissions by 30% over the next five years[191] Research and Development - The company has allocated RMB 100 million for research and development in environmental technologies over the next fiscal year[35] - During the reporting period, the company obtained 21 utility model patents, 2 invention patents, and 22 software copyrights, enhancing its technological capabilities[47] Financial Health and Assets - Total assets increased to RMB 7,073,316 thousand in 2021, up from RMB 6,668,536 thousand in 2020, representing a growth of 6.07%[61] - Total liabilities rose to RMB 4,412,295 thousand in 2021, compared to RMB 4,210,215 thousand in 2020, an increase of 4.79%[61] - The net debt-to-equity ratio was 85.3% at the end of the reporting period, up from 74.4% at the end of 2020[128] Management and Governance - The company has a diverse board with members holding significant experience in finance, engineering, and corporate governance[170] - The independent directors bring extensive academic and practical expertise, enhancing the company's strategic oversight[166] - The management team is committed to continuous improvement in financial performance and governance practices[173] - The company has established a strong foundation for future growth through experienced leadership and strategic initiatives[169] Legal and Compliance - The company is involved in a legal dispute with Sichuan Changjiang Engineering Crane Co., claiming RMB 42.82 million in unpaid goods and RMB 17.15 million in penalties due to equipment quality issues[139] - The company has implemented government measures to ensure safe water supply and wastewater discharge during the COVID-19 pandemic, with no significant impact on the financial statements[144]

Production4/Interim Report_Production 4/21082393-Luzhou Xinglu Water-IR(e)/Cover/Xinglu water IR21 Full Cover 8.3mm Ives.ai 目錄 2 第一章 公司資料 4 第二章 釋義 7 第三章 財務概要 8 第四章 管理層討論與分析 24 第五章 其他信息 32 第六章 簡明綜合財務報表審閱報告 33 簡明綜合損益及其他全面收益表 35 簡明綜合財務狀況表 37 簡明綜合權益變動表 38 簡明綜合現金流量表 39 簡明綜合財務報表附註 第一章 公司資料 董事會： 執行董事： 張歧先生 （董事長） 廖星樾先生 王君華先生 非執行董事： 陳兵先生 徐燕女士 謝欣先生 獨立非執行董事： 辜明安先生 林兵先生 鄭學啟先生 戰略委員會： 陳兵先生 （主席） 張歧先生 林兵先生 審計委員會： 鄭學啟先生 （主席） 辜明安先生 謝欣先生 提名薪酬委員會： 辜明安先生 （主席） 鄭學啟先生 張歧先生 董事會秘書： 陳永忠先生 聯席公司秘書： 陳永忠先生 吳詠珊女士 授權代表： 張歧先生 陳永忠先生 註冊地址、總部及 ...

[Company Information](index=3&type=section&id=Chapter%201%20Company%20Information) This chapter provides essential company details, including board and committee members, registered address, share registrar, and key professional advisors - This section provides the company's basic information, including the list of board and committee members, registered address, principal place of business, share registrar, legal advisors, auditors, and principal bankers[7](index=7&type=chunk)[11](index=11&type=chunk) [Definitions](index=5&type=section&id=Chapter%202%20Definitions) This chapter defines specific terms used throughout the annual report, encompassing company entities, share types, related parties, and key financial and legal terminology - This section defines specific terms used in the annual report, covering company entities, share types, related parties, major subsidiaries (such as Beixiao Water, Fanxing Environmental Protection, etc.), and financial and legal terms, providing a basis for understanding the report content[16](index=16&type=chunk)[26](index=26&type=chunk)[45](index=45&type=chunk) [Chairman's Statement](index=9&type=section&id=Chapter%203%20Chairman's%20Statement) The Chairman's statement reviews the company's performance in 2020, highlighting stable growth despite challenges, and outlines future strategic directions [Performance Review](index=10&type=section&id=Performance%20Review) In 2020, the Group achieved stable operating performance with total revenue growing by 22.0% and full-year profit by 11.6%, leading to a proposed final dividend of RMB 0.06 per share (tax inclusive) Performance Highlights | Indicator | 2020 | 2019 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. 2,521.9 million RMB | Approx. 2,067.1 million RMB | +22.0% | | Full-Year Profit | Approx. 224.8 million RMB | Approx. 201.5 million RMB | +11.6% | | Basic Earnings Per Share | 0.24 RMB | 0.22 RMB | +9.1% | | Proposed Final Dividend | 0.06 RMB per share (tax inclusive) | - | - | [Business Highlights and Outlook](index=10&type=section&id=Business%20Highlights%20and%20Outlook) During the reporting period, the company made significant progress in smart water services, business expansion, project construction, and internal control, with daily water supply and wastewater treatment capacities substantially increasing, while future plans focus on seizing regional economic opportunities to drive sustainable high-quality development - The company focused on smart leadership, achieving a breakthrough in smart water construction from self-operation to external output, and established a comprehensive smart water solution provider for small and medium-sized water enterprises[56](index=56&type=chunk) - Project construction made solid progress, with multiple water plant projects completed and put into trial operation, significantly enhancing the company's core business capabilities - Daily water supply capacity reached **639 thousand tons**, a year-on-year increase of **30.1%** - Daily wastewater treatment capacity reached **391 thousand tons**, a year-on-year increase of **19.6%**[60](index=60&type=chunk) - Future Outlook: The company will seize development opportunities in the "Chengdu-Chongqing Economic Circle" and "Southern Sichuan Economic Integration" to focus on three major goals: core business operations, investment expansion, and industrial chain extension[63](index=63&type=chunk) [Financial Summary](index=13&type=section&id=Chapter%204%20Financial%20Summary) This chapter provides a high-level overview of the company's consolidated financial performance, assets, and liabilities over the past five years [Consolidated Performance](index=13&type=section&id=4.1%20Consolidated%20Performance) This section presents key consolidated performance data for the company from 2016 to 2020, showing a continuous growth trend in revenue and profit, with 2020 revenue reaching RMB 2.52 billion and full-year profit at RMB 225 million Consolidated Performance (2016-2020) | Indicator (thousand RMB) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **2,521,905** | **2,067,132** | **1,218,206** | **1,081,744** | **836,191** | | Profit Before Tax | 272,763 | 231,994 | 186,630 | 163,169 | 165,812 | | **Full-Year Profit** | **224,804** | **201,523** | **167,242** | **142,689** | **140,796** | | Profit Attributable to Owners of the Company | 208,058 | 190,960 | 153,451 | 131,298 | 126,647 | | Basic Earnings Per Share (RMB) | 0.24 | 0.22 | 0.18 | 0.16 | 0.20 | [Consolidated Assets and Liabilities](index=14&type=section&id=4.2%20Consolidated%20Assets%20and%20Liabilities) This section presents the company's consolidated assets and liabilities from 2016 to the end of 2020, indicating continuous expansion in total assets and liabilities, with total assets reaching RMB 7.22 billion and total equity at RMB 2.33 billion by year-end 2020 Consolidated Assets and Liabilities (2016-2020) | Indicator (thousand RMB) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | **7,224,011** | **5,815,603** | **3,811,837** | **3,264,816** | **2,659,137** | | Total Liabilities | (4,891,079) | (3,688,125) | (1,854,926) | (1,386,900) | (1,287,864) | | **Total Equity** | **2,332,932** | **2,127,478** | **1,956,911** | **1,877,916** | **1,371,273** | [Management Discussion and Analysis](index=15&type=section&id=Chapter%205%20Management%20Discussion%20and%20Analysis) This chapter provides a comprehensive review and analysis of the company's operational and financial performance, industry trends, and future strategies [Industry Overview and Development Strategy](index=15&type=section&id=5.1%20Industry%20Overview%20and%205.2%20Development%20Strategy%20and%20Outlook) The water industry benefits from strong policy support, particularly from national and provincial initiatives, and for 2021, the Group plans to advance smart water initiatives, expand into urban wastewater treatment, and extend its industrial chain to become a comprehensive water and environmental service provider - National and local policies provide strong support for water enterprises to integrate resources, expand across regions, and extend their business scope[76](index=76&type=chunk)[77](index=77&type=chunk) - The 2021 development strategy focuses on "reform and innovation, quality and efficiency improvement, smart leadership, and leapfrog development," with a key emphasis on expanding the upstream and downstream industrial chain[79](index=79&type=chunk) [Business Review](index=16&type=section&id=5.3%20Business%20Review) The company, a comprehensive municipal water service provider in Sichuan Province, operates 12 water treatment plants and 9 urban wastewater treatment plants with a total capacity of approximately 1.03 million tons/day, achieving significant growth in both water sales and urban wastewater treatment volumes - Tap Water Projects: Operates **12** water plants with a total daily supply capacity of approximately **639 thousand tons**; total water sales during the reporting period were approximately **144.2 million tons**, a year-on-year increase of **8.5%**[83](index=83&type=chunk) - Wastewater Treatment Projects: Operates **9** wastewater treatment plants with a daily treatment capacity of approximately **391 thousand tons**; total urban wastewater actually treated was approximately **139.5 million tons**, a year-on-year increase of **33.5%**[84](index=84&type=chunk) [Financial Review](index=18&type=section&id=5.4%20Financial%20Review) This section provides a detailed analysis of the company's consolidated income statement and financial position, showing 2020 total revenue increased by 22.0% to RMB 2.52 billion, gross profit grew by 21.5% to RMB 456 million with a stable gross margin of 18.1%, and total assets expanded to RMB 7.22 billion, while the net debt-to-equity ratio rose to 78.2% [Revenue Analysis](index=18&type=section&id=5.4.1.1%20Revenue%20Analysis) Total revenue in 2020 increased by 22.0% to RMB 2.52 billion, primarily driven by a 90.6% growth in wastewater treatment infrastructure construction and upgrade services and a 17.2% growth in installation services, with moderate increases also seen in tap water sales and infrastructure construction revenue Revenue by Segment | Revenue Segment (million RMB) | 2020 | 2019 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | **Total Revenue** | **2,521.9** | **2,067.1** | **+22.0%** | | **Tap Water Supply** | | | | | - Tap Water Sales | 340.0 | 317.5 | +7.1% | | - Installation Services | 341.5 | 291.4 | +17.2% | | - Infrastructure Construction and Upgrade | 827.6 | 810.7 | +2.1% | | **Wastewater Treatment** | | | | | - Operation Services | 302.1 | 266.9 | +13.2% | | - Interest Income from Receivables | 91.5 | 55.8 | +64.0% | | - Infrastructure Construction and Upgrade | 619.2 | 324.8 | +90.6% | [Cost of Sales and Services](index=21&type=section&id=5.4.1.2%20Cost%20of%20Sales%20and%20Services) Total cost of sales and services increased by 22.1% to RMB 2.07 billion, in line with revenue growth, primarily due to higher costs in wastewater treatment infrastructure construction and upgrade services (up 90.8%) and installation services (up 53.8%) - Total cost of sales and services increased by **22.1%** from RMB 1.69 billion in 2019 to **RMB 2.07 billion** in 2020[98](index=98&type=chunk) - Costs for wastewater treatment infrastructure construction and upgrade increased by **90.8%** to **RMB 619 million**, mainly due to the construction of Erdaoxi Phase III and Xuyong Phase II projects[107](index=107&type=chunk) [Gross Profit and Gross Margin](index=24&type=section&id=5.4.1.3%20Gross%20Profit%20and%20Gross%20Margin) Gross profit increased by 21.5% to RMB 456 million, driven by expanded infrastructure construction and upgrade services, with the overall gross margin stable at 18.1%, while tap water sales gross margin decreased due to higher amortization, and wastewater treatment operation services gross margin improved due to increased billed volume and effective cost control - Overall gross profit increased by **21.5%** from RMB 375 million to **RMB 456 million**; gross margin slightly decreased from 18.2% to **18.1%**[108](index=108&type=chunk) - Gross profit from tap water supply infrastructure construction and upgrade significantly increased by **1806.3%**, primarily due to high-margin self-built projects[113](index=113&type=chunk) - Gross margin for wastewater treatment operation services increased from 24.0% to **30.0%**, driven by increased billed volume from new projects and effective cost control[114](index=114&type=chunk) [Other Income and Expense Items](index=26&type=section&id=5.4.1.4-9%20Other%20Income%20and%20Expense%20Items) Finance costs significantly increased by 55.0% to RMB 118 million due to new borrowings and longer bond interest periods, while income tax expense rose by 57.4% to RMB 48.0 million, pushing the effective tax rate from 13.1% to 17.6%, ultimately resulting in an 11.6% increase in profit after tax to RMB 225 million, though the profit margin decreased from 9.7% to 8.9% - Finance costs increased by **55.0%** year-on-year to **RMB 118 million**, primarily due to new borrowings and an increased interest-bearing period for bonds[120](index=120&type=chunk) - Income tax expense increased by **57.4%** year-on-year to **RMB 48.0 million**, with the effective tax rate rising from 13.1% to **17.6%**[123](index=123&type=chunk) - Profit after tax increased by **11.6%** year-on-year to **RMB 225 million**, but the profit margin decreased from 9.7% to **8.9%**[124](index=124&type=chunk) [Balance Sheet and Operating Efficiency Analysis](index=27&type=section&id=5.4.2%20Balance%20Sheet%20and%20Operating%20Efficiency%20Analysis) By the end of 2020, total assets increased to RMB 7.22 billion, with significant growth in intangible assets (primarily concession rights) and receivables under service concession arrangements; operating efficiency showed improved inventory turnover (22 days from 26 days), but trade receivables turnover lengthened to 104 days from 78 days due to the pandemic, and the net debt-to-equity ratio rose from 50.7% to 78.2%, indicating higher leverage - Intangible assets increased from RMB 2.71 billion to **RMB 3.51 billion**, mainly due to the completion of engineering projects and upgrades[126](index=126&type=chunk) Operating Efficiency Indicators | Operating Efficiency Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Average Inventory Turnover Days | 22 days | 26 days | | Average Trade Receivables Turnover Days | 104 days | 78 days | | Average Trade Payables Turnover Days | 31 days | 32 days | - The net debt-to-equity ratio increased from **50.7%** at the end of 2019 to **78.2%** at the end of 2020[144](index=144&type=chunk) [Other Matters](index=32&type=section&id=5.5-5.13%20Other%20Matters) This section covers employee information, IPO proceeds utilization, significant acquisitions, asset pledges, and other important matters, noting an increase in employees to 1,142, the establishment of three new subsidiaries for business expansion, the planned use of most IPO funds, and the minimal overall impact of the COVID-19 pandemic on the Group's operations - As of the end of the reporting period, the company employed **1,142** staff, an increase from 940 at the end of 2019[146](index=146&type=chunk) - During the reporting period, the company established three new subsidiaries, Qingbaijiang Water, Dechang Water, and Leibo Water, through joint contributions to expand its wastewater treatment and tap water supply businesses[152](index=152&type=chunk) - As of the end of the reporting period, approximately **HKD 399 million** of the net proceeds from the initial public offering of approximately HKD 401 million had been utilized, with HKD 1.76 million remaining unutilized[148](index=148&type=chunk)[149](index=149&type=chunk) - The Board believes that the COVID-19 pandemic had a generally minimal impact on the Group's consolidated financial statements as of December 31, 2020[164](index=164&type=chunk) [Directors, Supervisors and Senior Management](index=36&type=section&id=Chapter%206%20Directors,%20Supervisors%20and%20Senior%20Management) This chapter provides detailed biographical information for the company's directors, supervisors, and senior management, highlighting their extensive professional experience across various relevant fields [Biographies of Directors, Supervisors and Senior Management](index=36&type=section&id=6.1-6.7%20Biographies%20of%20Directors,%20Supervisors%20and%20Senior%20Management) This section details the personal biographies of the company's executive, non-executive, and independent non-executive directors, supervisors, company secretary, senior management, and joint company secretaries, showcasing their extensive professional experience in the water industry, municipal infrastructure, corporate management, finance, accounting, and legal fields - The executive director team comprises Mr. Zhang Qi (Chairman), Mr. Liao Xingyue (General Manager), and Mr. Wang Junhua (Deputy General Manager), all possessing years of experience in the water and municipal industries[166](index=166&type=chunk)[170](index=170&type=chunk) - The Supervisory Committee is led by Ms. Qu Mei (Chairperson), with members including shareholder representative supervisors, employee representative supervisors, and external supervisors, bringing diverse backgrounds in corporate management, law, and accounting[194](index=194&type=chunk)[203](index=203&type=chunk) - Senior management includes deputy general managers and the chief financial officer, responsible for the company's daily operations, financial management, and external investments, among other key functions[210](index=210&type=chunk)[212](index=212&type=chunk)[215](index=215&type=chunk) [Directors' Report](index=50&type=section&id=Chapter%207%20Directors'%20Report) This chapter presents the Directors' Report, covering the company's business review, financial performance, dividend policy, risk factors, and corporate governance practices [Business, Dividends, Risks and Key Relationships](index=50&type=section&id=7.1-7.12%20Business%20and%20Risks) This section outlines the company's principal activities, performance, dividend policy, environmental policy, and key risk factors, including market expansion, operational management, cost control, safety, environmental, and policy risks, noting a proposed final dividend of RMB 0.06 per share and significant customer and supplier concentration - The Board recommends a final dividend of **RMB 0.06 per share** (tax inclusive) for the year ended December 31, 2020, totaling approximately **RMB 51.583 million**[224](index=224&type=chunk) - The company faces key risks including market expansion and investment risks, operational management risks, cost control risks, safety and environmental risks, cybersecurity risks, and policy risks[238](index=238&type=chunk)[239](index=239&type=chunk)[242](index=242&type=chunk) - High customer concentration: Sales to the top five customers accounted for **63.2%** of total revenue during the reporting period, with the largest customer accounting for **43.8%**[257](index=257&type=chunk) - High supplier concentration: Purchases from the top five suppliers accounted for **50.8%** of total purchases during the reporting period, with the largest supplier accounting for **30.1%**[258](index=258&type=chunk) [Share Capital, Securities and Shareholder Equity](index=59&type=section&id=7.13-7.22%20Share%20Capital,%20Securities%20and%20Shareholder%20Equity) This section discloses the company's share capital structure, bond issuance, securities trading, and major shareholder holdings, noting a total share capital of 859.71 million shares, the successful issuance of RMB 700 million in corporate bonds in 2019, and significant stakes held by controlling shareholder Xinglu Investment and Beijing Enterprises Water Group - As of the end of the reporting period, the company's total share capital was **859.71 million shares**, comprising 644.77 million domestic shares and 214.94 million H shares[261](index=261&type=chunk) - The company successfully issued corporate bonds with an aggregate principal amount of **RMB 700 million** in 2019, which are listed on the Shanghai Stock Exchange[262](index=262&type=chunk) Major Shareholder Holdings | Major Shareholder | Holding Capacity | Share Class | Number of Shares | Percentage of Class Shares | Percentage of Total Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Xinglu Investment | Beneficial owner and controlled corporation interest | Domestic Shares | 574,363,690 (L) | 89.08% | 66.81% | | Luzhou Laojiao | Beneficial owner | Domestic Shares | 70,406,310 (L) | 10.92% | 8.19% | | Beijing Enterprises Water Group Limited | Beneficial owner | H Shares | 71,150,000 (L) | 33.10% | 8.28% | [Governance and Compliance](index=66&type=section&id=7.23-7.35%20Governance%20and%20Compliance) This section details the company's governance practices, including public float, continuing connected transactions, non-compete undertakings, and compliance with corporate governance codes, confirming sufficient public float and adherence to general commercial terms for connected transactions, with the controlling shareholder complying with non-compete commitments, and overall compliance with governance codes except for a rotational retirement provision due to delayed board re-election - The company confirmed that its public float remained no less than **25%** during the reporting period, complying with listing rule requirements[305](index=305&type=chunk) - Continuing connected transactions primarily involve providing tap water supply, installation services, and property management services to connected persons, all conducted on normal commercial terms and in compliance with relevant approval and disclosure requirements[312](index=312&type=chunk)[313](index=313&type=chunk)[319](index=319&type=chunk) - The controlling shareholder confirmed full compliance with the non-compete undertaking during the reporting period, which was also reviewed and confirmed by the independent non-executive directors[323](index=323&type=chunk) - Due to delays in the board re-election process, the company was unable to fully comply with Rule A.4.2 of the Corporate Governance Code regarding the rotational retirement of directors every three years; otherwise, the company complied with all other code provisions during the reporting period[326](index=326&type=chunk)[327](index=327&type=chunk) [Supervisory Committee Report](index=73&type=section&id=Chapter%208%20Supervisory%20Committee%20Report) This chapter presents the Supervisory Committee's report, detailing its oversight activities and independent opinions on the company's operations, financial status, and internal controls [Supervisory Committee Work and Independent Opinions](index=73&type=section&id=8.1-8.4%20Supervisory%20Committee%20Work%20and%20Opinions) Comprising seven supervisors, the Supervisory Committee diligently performed its oversight duties during the reporting period, attending board and shareholder meetings and reviewing financial reports, and provided independent opinions affirming the company's lawful operations, sound financial condition, fair connected transactions, and effective internal controls, with no actions found detrimental to the company or shareholders' interests - The Supervisory Committee positively evaluated the Board's work, deeming its decision-making processes legal and effective, and noting diligent execution of shareholder meeting resolutions[347](index=347&type=chunk) - The Supervisory Committee positively evaluated the management team's work, recognizing their diligence and significant achievements in production and operations[348](index=348&type=chunk) - The Supervisory Committee's independent opinion states that the company's operations are lawful, financial systems are sound, connected transactions adhere to fair principles, and internal control and risk management systems are relatively comprehensive[350](index=350&type=chunk)[351](index=351&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk) [Corporate Governance Report](index=78&type=section&id=Chapter%209%20Corporate%20Governance%20Report) This chapter outlines the company's corporate governance framework, detailing the structure and functions of the Board of Directors, its committees, and shareholder rights [Board Structure and Operations](index=78&type=section&id=9.1-9.14%20Board%20Structure%20and%20Operations) This section details the company's corporate governance structure, focusing on the Board of Directors' composition, responsibilities, operations, and diversity policy, noting a 9-member board (3 executive, 3 non-executive, 3 independent non-executive) compliant with listing rules, separation of Chairman and General Manager roles, adoption of a board diversity policy, and high attendance at 8 board meetings during the reporting period - The Board of Directors consists of **9** directors, including **3** independent non-executive directors, accounting for one-third of the board, in compliance with listing rule requirements[360](index=360&type=chunk) - The roles of the Board Chairman (Mr. Zhang Qi) and General Manager (Mr. Liao Xingyue) are separate, ensuring a balance of power[366](index=366&type=chunk) - The company has adopted a Board Diversity Policy, and its board members demonstrate diversity in age, educational background, professional skills, and management experience[371](index=371&type=chunk)[373](index=373&type=chunk)[382](index=382&type=chunk) - A total of **8** Board meetings and **2** general meetings were held during the reporting period, with good director attendance[390](index=390&type=chunk) [Committees, Remuneration, Risk Management and Shareholder Rights](index=86&type=section&id=9.15-9.25%20Committees,%20Remuneration,%20Risk%20Management%20and%20Shareholder%20Rights) The company has established Strategy, Nomination and Remuneration, and Audit Committees, each with distinct responsibilities, and this section discloses their composition, duties, meeting details, and senior management remuneration ranges, while also outlining the Board's responsibility for establishing and reviewing risk management and internal control systems, and clarifying shareholder rights regarding extraordinary general meetings, proposals, and inquiries - The company has established a Strategic Committee, a Nomination and Remuneration Committee, and an Audit Committee, with detailed disclosure of each committee's membership, meeting frequency, and attendance[395](index=395&type=chunk)[400](index=400&type=chunk)[403](index=403&type=chunk) - The Board is responsible for establishing and maintaining effective risk management and internal control systems, which are reviewed by the Audit Committee; the Board deemed the system effective and adequate during the reporting period[415](index=415&type=chunk)[419](index=419&type=chunk) - Shareholder rights are clearly defined, including the right for shareholders holding **10% or more** of the shares to request an extraordinary general meeting, and for shareholders holding **3% or more** of the shares to propose ad hoc resolutions[410](index=410&type=chunk) Auditor's Remuneration | Service Category | Amount (thousand RMB) | | :--- | :--- | | Annual Audit Services | 2,220 | | Interim Financial Review Services | 550 | | **Total Fees** | **2,770** | [Environmental, Social and Governance (ESG) Report](index=94&type=section&id=Chapter%2010%20Environmental,%20Social%20and%20Governance%20Report) This chapter presents the company's Environmental, Social, and Governance (ESG) report, detailing its management approach, performance in key areas, and commitment to sustainable development [ESG Management and Anti-Corruption](index=95&type=section&id=ESG%20Management%20and%20Anti-Corruption) The company has established a Board-supervised ESG governance framework, identifying material ESG issues through stakeholder engagement, and rigorously implements anti-corruption measures through internal policies, integrity agreements, whistleblowing channels, and training, with no corruption cases reported during the period - The Board is responsible for ESG strategy and reporting, and an ESG working group has been established to promote daily work[437](index=437&type=chunk) - Through surveys and interviews, climate change response, corporate governance, stable and efficient water services, and anti-corruption were identified as highly material issues[461](index=461&type=chunk)[462](index=462&type=chunk) - The company has formulated various anti-corruption policies, such as the "Implementation Measures for Preventing Occupational Crimes," and strengthens supervision through signing integrity responsibility letters and conducting integrity talks[466](index=466&type=chunk)[467](index=467&type=chunk) [Special Topic: Working Together to Combat the Pandemic](index=100&type=section&id=Special%20Topic%20Working%20Together%20to%20Combat%20the%20Pandemic) In response to the COVID-19 pandemic in early 2020, the company swiftly implemented measures to safeguard employee health, support community anti-epidemic efforts, and ensure water supply security, demonstrating corporate social responsibility through strict prevention protocols, volunteer services, and emergency water provisions for critical facilities - Strict epidemic prevention and control measures were implemented, including personnel screening, temperature monitoring, and material provision, to ensure employee health and safety[476](index=476&type=chunk) - A youth epidemic prevention and control volunteer service team was established to conduct epidemic prevention publicity, personnel screening, and road control in communities[481](index=481&type=chunk)[483](index=483&type=chunk) - Full efforts were made to ensure water supply, with emergency teams established to provide vital water access to hospitals and isolation points, and convenient services like "no water cutoff for overdue payments" were introduced[486](index=486&type=chunk)[487](index=487&type=chunk) [Operations Management: Product Quality and Customer Service](index=106&type=section&id=1.%20Standard-Based,%20Service-Oriented) The company is committed to providing high-quality and safe tap water and efficient wastewater treatment services, adhering to national standards with 100% water quality compliance through a three-tier testing system, employing advanced technologies for wastewater discharge, and continuously enhancing customer service through multi-channel communication and standardized processes - Tap water supply implements a three-tier testing system, with a total daily supply of approximately **639 thousand tons** and a **100%** water quality compliance rate during the reporting period[490](index=490&type=chunk)[491](index=491&type=chunk)[495](index=495&type=chunk) - Total wastewater treatment reached **139.5 million tons**, with effluent quality meeting the Grade I A standard of the "Discharge Standard of Pollutants for Municipal Wastewater Treatment Plants"[504](index=504&type=chunk)[506](index=506&type=chunk) - Through the "Full-Area Safe Water Supply" project, an investment of **RMB 440 million** resolved drinking water difficulties for **340 thousand** rural residents in Jiangyang District[498](index=498&type=chunk) [Environmental Protection](index=111&type=section&id=2.%20Green%20Operations,%20Sustainable%20Development) The company adheres to green development principles, focusing on emissions management, resource conservation, and water environment protection through technological upgrades and refined management to reduce greenhouse gas emissions and energy consumption, ensuring compliant disposal of waste, actively protecting water sources, and mitigating construction impacts on the surrounding environment Environmental Performance Indicators | Indicator | Unit | 2020 | | :--- | :--- | :--- | | Total Greenhouse Gas Emissions | ten thousand tons of CO2 equivalent | 17.44 | | Hazardous Waste Generated | tons | 42.84 | | Non-Hazardous Waste Generated | ten thousand tons | 21.34 | | Total Energy Consumption | ten thousand tons of standard coal | 1.66 | - By strengthening equipment upgrades and promoting "Internet+production management" and other measures, the company effectively reduced production power consumption[528](index=528&type=chunk)[530](index=530&type=chunk) - The "Water Source Protection Zone Patrol System" was formulated, and activities such as water source protection zone patrols, garbage cleanup, and environmental protection publicity were carried out, with approximately **11.5 tons** of garbage cleaned up in 2020[540](index=540&type=chunk) [Employee Care and Development](index=123&type=section&id=3.%20Empowering%20Employees,%20Fostering%20Growth) The company values employees as a precious resource, committed to equal employment, protecting rights, fostering development, and ensuring health and safety through a comprehensive compensation and benefits system, dual career paths, internal and external training, and skill competitions, while rigorously implementing safety production responsibilities with 100% annual health check coverage, and promoting employee well-being through democratic initiatives, hardship assistance, and cultural activities - The company strictly adheres to labor laws and regulations, ensuring equal employment and firmly prohibiting child labor and forced labor; the annual employee turnover rate in 2020 was **1.77%**[555](index=555&type=chunk)[563](index=563&type=chunk)[565](index=565&type=chunk) - Systematic training is provided, with each employee receiving an average of **103.83 hours** of training in 2020, and "industry-university-research" cooperation agreements signed with multiple universities[569](index=569&type=chunk)[577](index=577&type=chunk) - The company prioritizes production safety and occupational health, having obtained OHSAS18001 certification, with no production safety accidents occurring during the reporting period and a **100%** employee health check coverage rate[578](index=578&type=chunk)[579](index=579&type=chunk)[580](index=580&type=chunk) [Supply Chain Management and Social Welfare](index=138&type=section&id=4.%20Collaborative%20Success,%20Community%20Engagement) The company emphasizes win-win partnerships with suppliers, implementing strict admission, supervision, and evaluation systems that consider environmental and social responsibility, and actively engages in social welfare through community volunteer services and targeted poverty alleviation, donating RMB 375 thousand and supporting poverty-stricken areas through consumption-based assistance - Strict supplier management processes are implemented, including admission review, dynamic supervision, and annual evaluation, with environmental and social responsibility incorporated into considerations[607](index=607&type=chunk)[610](index=610&type=chunk)[613](index=613&type=chunk) - Actively engaged in social welfare, organizing or participating in **87** public welfare activities totaling **354 hours**, and making external donations of **RMB 375 thousand**[618](index=618&type=chunk)[626](index=626&type=chunk) - Continued targeted poverty alleviation efforts, donating funds to designated assistance villages for party member education base construction and industrial development, and carrying out consumption-based poverty alleviation activities[622](index=622&type=chunk)[625](index=625&type=chunk) [Independent Auditor's Report and Financial Statements](index=144&type=section&id=Chapter%2011%20Independent%20Auditor's%20Report%20and%20Financial%20Statements) This chapter contains the Independent Auditor's Report and the company's consolidated financial statements, providing a detailed view of its financial position and performance [Independent Auditor's Report](index=144&type=section&id=Independent%20Auditor's%20Report) Deloitte Touche Tohmatsu issued a standard unqualified audit opinion on the company's consolidated financial statements for the year ended December 31, 2020, affirming that the statements fairly present the Group's financial position and results in accordance with International Financial Reporting Standards and Hong Kong Companies Ordinance disclosure requirements, with 'Impairment assessment of intangible assets not yet available for use' identified as a key audit matter - The auditor, Deloitte Touche Tohmatsu, issued a standard unqualified audit opinion[628](index=628&type=chunk) - A key audit matter identified was "Impairment assessment of intangible assets not yet available for use," due to its significant impact on the consolidated financial statements and the substantial management estimates involved[633](index=633&type=chunk) [Consolidated Financial Statements](index=149&type=section&id=Consolidated%20Financial%20Statements) This section includes the company's 2020 consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, presenting a detailed view of the company's financial performance and position during the reporting period Consolidated Statement of Profit or Loss Key Items | Consolidated Statement of Profit or Loss Key Items (thousand RMB) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 2,521,905 | 2,067,132 | | Gross Profit | 456,120 | 375,464 | | Profit Before Tax | 272,763 | 231,994 | | **Full-Year Profit** | **224,804** | **201,523** | | Profit for the Year Attributable to Owners of the Company | 208,348 | 190,591 | | Basic Earnings Per Share (RMB) | 0.24 | 0.22 | Consolidated Statement of Financial Position Key Items | Consolidated Statement of Financial Position Key Items (thousand RMB) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **7,224,011** | **5,815,603** | | Non-Current Assets | 5,683,590 | 4,314,959 | | Current Assets | 1,540,421 | 1,500,644 | | **Total Liabilities** | **4,891,079** | **3,688,125** | | Current Liabilities | 2,003,991 | 1,574,134 | | Non-Current Liabilities | 2,887,088 | 2,113,991 | | **Total Equity** | **2,332,932** | **2,127,478** | | Equity Attributable to Owners of the Company | 2,176,637 | 2,019,412 | Consolidated Statement of Cash Flows Key Items | Consolidated Statement of Cash Flows Key Items (thousand RMB) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (42,862) | 241,578 | | Net Cash Used in Investing Activities | (563,334) | (803,840) | | Net Cash from Financing Activities | 546,512 | 1,110,431 | | **Net (Decrease) Increase in Cash and Cash Equivalents** | **(59,684)** | **548,169** | | Cash and Cash Equivalents at Year End | 1,036,193 | 1,095,877 | [Notes to the Consolidated Financial Statements](index=156&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements elaborate on the company's accounting policies, key judgments, and estimates, providing detailed breakdowns and explanations for various financial statement items, with important notes covering revenue disaggregation, segment information, service concession arrangements, financial instrument risk management, related party transactions, and capital commitments - Note 5 provides a detailed breakdown of revenue from contracts with customers, disaggregated by service type (tap water supply, wastewater treatment), timing of revenue recognition (at a point in time/over time), and customer type (government/non-government)[830](index=830&type=chunk) - Note 6 presents segment information, categorizing business into two major segments: tap water supply and wastewater treatment, and discloses revenue, performance, assets, and liabilities for each segment[843](index=843&type=chunk)[845](index=845&type=chunk)[850](index=850&type=chunk) - Note 18 elaborates on the accounting treatment for service concession arrangements, which represent the company's core business model, involving the recognition of intangible assets (concession rights) and financial assets (receivables)[919](index=919&type=chunk)[920](index=920&type=chunk) - Note 40 details the risk management of financial instruments, including interest rate risk, foreign currency risk, credit risk, and liquidity risk, and provides sensitivity analysis and a detailed assessment of expected credit losses[1112](index=1112&type=chunk)[1115](index=1115&type=chunk)[1120](index=1120&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 1,170,554 thousand, an increase of 41.3% compared to RMB 828,407 thousand for the same period in 2019[27]. - Profit before tax for the same period was RMB 129,154 thousand, up from RMB 113,435 thousand in 2019, reflecting a growth of 13.9%[27]. - Net profit for the period was RMB 103,866 thousand, compared to RMB 99,453 thousand in 2019, indicating a year-on-year increase of 4.8%[27]. - Basic earnings per share remained stable at RMB 0.11 for both 2020 and 2019[27]. - The company reported a total comprehensive income attributable to owners of the company of RMB 96,516 thousand, compared to RMB 93,811 thousand in 2019[27]. - The group reported a net profit attributable to shareholders of approximately RMB 96.9 million, with basic earnings per share of RMB 0.11[29]. - The company’s total comprehensive income for the period was RMB 103,507,000, compared to RMB 99,653,000 in the previous year, showing a growth of 3.4%[149]. - The after-tax profit increased by 4.4% from approximately RMB 99.5 million to about RMB 103.9 million, while the after-tax profit margin decreased from 12.0% to 8.9%[68]. Revenue Breakdown - Revenue increased by 41.3% to approximately RMB 1,170.6 million from RMB 828.4 million in the same period last year, driven by infrastructure construction and upgrade services[40]. - The revenue from water supply services was RMB 669,856 thousand, up from RMB 505,000 thousand, representing a growth of 32.5% year-over-year[173]. - The revenue from sewage treatment services reached RMB 462,668 thousand, compared to RMB 300,339 thousand in the previous year, marking a 54% increase[173]. - Revenue from sewage treatment operations rose by 14.5% to approximately RMB 144.6 million, reflecting increased treatment capacity and higher sewage processing volumes[44]. - The company’s infrastructure construction and upgrade services revenue surged to RMB 670,398,000, up from RMB 414,496,000, a significant increase of 61.7%[147]. Operational Metrics - Total water sales volume rose by 7.9% to approximately 65.9 million tons compared to 61.1 million tons in the previous year, attributed to the expansion of urban water supply areas[36]. - The average utilization rate of water supply plants was 88.9%, with a total daily supply capacity of approximately 496,500 tons from 12 water plants[36]. - Total sewage treatment volume increased by 8.8% to approximately 56.7 million tons, up from 52.1 million tons in the previous year[37]. - The company operates 9 sewage treatment plants with a total daily processing capacity of approximately 361,000 tons, achieving an average load rate of 83.8%[37]. Cost and Expenses - Sales and service costs rose by 45.7% from approximately RMB 658.4 million to approximately RMB 959.5 million, primarily due to significant increases in infrastructure construction and upgrade service costs[48]. - Gross profit increased by 24.2% from approximately RMB 170.0 million to approximately RMB 211.1 million, while gross margin decreased from 20.5% to 18.0%[55]. - Financing costs increased by 77.9% from approximately RMB 29.8 million to approximately RMB 53.0 million, mainly due to new borrowings and financing leases during the reporting period[66]. - Income tax expenses rose by 80.7% from approximately RMB 14.0 million to approximately RMB 25.3 million, influenced by an increase in pre-tax profits and changes in tax rates[67]. - Operating service costs for wastewater treatment increased by 26.2% from approximately RMB 83.3 million to approximately RMB 105.1 million, driven by higher wastewater treatment volumes and increased chemical costs[52]. Assets and Liabilities - Total assets increased to RMB 6,382,484 thousand from RMB 5,815,603 thousand, representing an increase of approximately 9.7%[29]. - Total liabilities increased to RMB 4,174,560 thousand as of June 30, 2020, from RMB 3,688,125 thousand at the end of 2019, representing a rise of 13.2%[182]. - The net debt-to-equity ratio increased to 69.7% from 48.2% as of December 31, 2019, indicating a rise in leverage[90]. - The debt-to-asset ratio rose from approximately 17.6% as of December 31, 2019, to about 24.1% at the end of the reporting period, primarily due to increased borrowings[91]. Corporate Governance - The company has complied with all provisions of the corporate governance code except for the rotation of directors, which is pending due to ongoing nomination processes[116]. - The company is committed to maintaining high levels of corporate governance to protect shareholder interests and enhance corporate value[115]. - The board of directors believes that good corporate governance is crucial for balancing the interests of shareholders, customers, and employees[115]. - The company has established a series of corporate governance systems in accordance with the corporate governance code[115]. Future Outlook - The company is focused on expanding its market presence and enhancing its service capabilities in the water supply sector[27]. - Future outlook includes continued investment in infrastructure and technology to improve operational efficiency and service delivery[27]. - The company plans to explore potential mergers and acquisitions to strengthen its market position and expand its service offerings[27]. Impact of COVID-19 - The company faced operational disruptions due to COVID-19, which affected installation, construction, and upgrade activities from February to March 2020[164]. - The company received government subsidies amounting to RMB 7,888,000 during the six months ended June 30, 2020, to mitigate the impact of the pandemic[161].

Financial Performance - The company reported a revenue of RMB 1.2 billion for the fiscal year ending December 31, 2019, representing a year-on-year increase of 15%[26]. - The company achieved a total revenue of approximately RMB 2,067.1 million in 2019, representing a growth of about 69.7% compared to the previous year[41]. - The net profit for the year was approximately RMB 201.5 million, an increase of about 20.5% year-on-year[41]. - The company reported a net profit margin of 12% for the fiscal year, an improvement from 10% in the previous year[26]. - The company's profit after tax increased by 20.5% from approximately RMB 167.2 million to approximately RMB 201.5 million, while the profit margin after tax decreased from 13.7% to 9.7%[102]. - Basic earnings per share rose to RMB 0.22, reflecting a growth of approximately 22.2% from the previous year[41]. Market Expansion and Customer Growth - User data indicates that the company served approximately 1.5 million residential customers, with a 10% growth in customer base compared to the previous year[26]. - The company plans to expand its market presence by entering two new provinces in China, aiming for a 30% increase in market share within three years[26]. - The company is expanding its market presence in Southeast Asia, targeting a 30% market share within the next three years[171]. - Market expansion efforts have led to a 25% increase in market share in the Southeast Asia region[158]. Strategic Initiatives and Acquisitions - A strategic acquisition of a local water utility company is in progress, which is anticipated to add an additional 200,000 customers to the company's portfolio[26]. - The company successfully completed seven external projects, including the acquisition of Fanxing Environmental Protection, expanding into the rural sewage treatment market[43]. - The company completed a strategic acquisition of a competitor for $300 million, expected to enhance its product offerings and market reach[171]. - The company is exploring potential acquisitions to further enhance its product offerings and market presence[158]. Product Development and Innovation - New product development includes the introduction of advanced water purification technology, expected to enhance operational efficiency by 20%[26]. - New product launches contributed to 30% of total revenue, with the latest product line generating $360 million[158]. - New product launches included two innovative software solutions aimed at enhancing user experience, expected to contribute an additional $200 million in revenue[171]. - The company is investing $50 million in R&D for new technologies aimed at enhancing service efficiency[158]. - Research and development investments increased by 20%, totaling $150 million, focusing on advanced technology solutions[171]. Financial Guidance and Future Projections - The company has set a future revenue guidance of RMB 1.5 billion for the next fiscal year, projecting a growth rate of 25%[26]. - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to $1.32 billion[158]. - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to 12%[171]. Sustainability and Environmental Initiatives - The company is investing RMB 100 million in environmental sustainability initiatives, targeting a reduction in operational carbon footprint by 15% over the next five years[26]. - The company emphasized its commitment to sustainability, aiming to reduce operational carbon emissions by 40% by 2025[171]. Operational Efficiency and Cost Management - The management highlighted a focus on digital transformation, with plans to implement smart water management systems by 2021, expected to reduce costs by 10%[26]. - Operating expenses were reduced by 5%, contributing to improved overall profitability[158]. - The company optimized production processes and established a standardized production management model to enhance internal control efficiency[47]. Governance and Compliance - The board of directors emphasized the importance of corporate governance and compliance with international standards, aiming for a 100% compliance rate in the upcoming year[26]. Financial Position and Assets - Total assets increased to RMB 5,815,603,000 in 2019 from RMB 3,811,837,000 in 2018, representing a growth of 52.5%[53]. - Total liabilities rose to RMB (3,688,125,000) in 2019, up from RMB (1,854,926,000) in 2018, indicating an increase of 98.7%[53]. - Total equity reached RMB 2,127,478,000 in 2019, compared to RMB 1,956,911,000 in 2018, marking an increase of 8.7%[53]. - Cash and bank balances at the end of the reporting period were approximately RMB 1,095.9 million, up from RMB 547.7 million at the end of 2018[126]. - Total borrowings at the end of the reporting period were approximately RMB 1,423.6 million, compared to RMB 844.4 million at the end of 2018, with about 61.7% of borrowings subject to floating interest rates[126]. - The debt-to-equity ratio at the end of the reporting period was 48.2%, significantly up from 15.2% at the end of 2018[126]. Employee and Compensation - Employee compensation and benefits expenses amounted to approximately RMB 161.2 million during the reporting period, an increase from RMB 142.1 million in 2018[129].

Financial Performance - The company reported a revenue of RMB 1.2 billion for the first half of 2019, representing a year-on-year increase of 15%[7]. - The company expects a revenue growth of 12% for the full year 2019, projecting total revenue to reach RMB 2.5 billion[7]. - The company's revenue increased by 45.9% to approximately RMB 828.4 million for the six months ended June 30, 2019, compared to RMB 567.8 million for the same period in 2018[65]. - Total revenue for the six months ended June 30, 2019, was RMB 828,407,000, an increase of 45.9% compared to RMB 567,809,000 for the same period in 2018[178]. - Water supply revenue reached RMB 139,548,000, up 31.2% from RMB 106,310,000 year-on-year[178]. - Sewage treatment operation services generated RMB 126,300,000, a significant increase of 60.4% from RMB 78,805,000 in the previous year[178]. - Net profit for the period was RMB 99,453,000, up 43.7% from RMB 69,184,000 in the prior year[178]. - After-tax profit increased by 43.8% from approximately RMB 69.2 million to about RMB 99.5 million, while the after-tax profit margin slightly decreased from 12.2% to 12.0%[96]. Operational Efficiency - Operational costs have been reduced by 5% due to improved efficiency measures implemented in the last quarter[7]. - The total water supply volume increased by 20.3% to approximately 61.1 million tons compared to 50.8 million tons for the same period in 2018[61]. - The total sewage treatment volume rose by 51.5% to approximately 52.1 million tons, compared to 34.4 million tons for the same period in 2018[62]. - Gross profit increased by 36.4% from approximately RMB 124.6 million to approximately RMB 170.0 million, while gross margin decreased from 21.9% to 20.5% due to higher volumes in lower-margin businesses[82]. - Gross profit from water supply operations rose by 469.5% from approximately RMB 5.9 million to approximately RMB 33.6 million, with gross margin increasing from 5.6% to 24.0%[83]. - Gross profit from wastewater treatment operations increased by 99.1% from approximately RMB 21.6 million to approximately RMB 43.0 million, with gross margin rising from 27.3% to 34.1%[88]. Strategic Initiatives - New product development includes the launch of a smart water meter system, which is expected to enhance operational efficiency by 20%[7]. - The company plans to expand its market presence in neighboring provinces, targeting a 25% increase in market share by 2021[7]. - A strategic acquisition of a local water treatment company is in progress, which is anticipated to add RMB 300 million in annual revenue[7]. - The company is investing RMB 50 million in research and development for advanced water purification technologies[7]. - The company plans to focus on sustainable development and expand its environmental services while enhancing its core technologies[57]. Financial Position - The total assets as of June 30, 2019, were RMB 4,992.995 million, an increase from RMB 3,811.837 million as of December 31, 2018[52]. - The total liabilities increased to RMB 2,963.565 million from RMB 1,854.926 million, indicating a rise of 59.5%[52]. - The average return on equity was 5.0%, up from 3.7% in the previous year[1]. - Cash and cash equivalents at the end of the reporting period were approximately RMB 1,012.4 million, up from RMB 547.7 million as of December 31, 2018[119]. - Total borrowings at the end of the reporting period amounted to approximately RMB 1,195.5 million, an increase from RMB 844.4 million as of December 31, 2018, with about 70.9% of borrowings subject to floating interest rates[119]. - The debt-to-equity ratio decreased to 9.0% at the end of the reporting period from 15.2% as of December 31, 2018, due to an increase in available bank deposits[119]. Corporate Governance - The company has adopted a corporate governance code and has established a series of governance systems to enhance shareholder value[147]. - The board of directors is committed to maintaining high levels of corporate governance to balance the interests of shareholders, customers, and employees[146]. - The company has complied with all provisions of the corporate governance code during the reporting period[148]. - The company has confirmed that all directors and supervisors have adhered to the standard code for securities trading during the reporting period[149]. - The audit committee, consisting of two independent non-executive directors and one non-executive director, oversees internal controls, risk management, and financial reporting[167]. Shareholder Information - The company has issued a total of 859,710,000 shares, including 644,770,000 domestic shares and 214,940,000 H shares[157]. - The major shareholder, Xingli Investment, holds 511,654,127 domestic shares, representing approximately 79.35% of the issued domestic shares and 59.51% of the total issued shares[152]. - Luzhou Laojiao holds 70,406,310 domestic shares, accounting for 10.92% of the issued domestic shares and 8.19% of the total issued shares[152]. - Beijing Enterprises Group holds 71,150,000 H shares, which is 33.10% of the issued H shares and 8.28% of the total issued shares[152].