Summary of Key Points Core Viewpoint - On July 7, 34 Hong Kong-listed companies conducted share buybacks, totaling 30.99 million shares and an aggregate amount of HKD 921 million [1][2]. Group 1: Buyback Details - Tencent Holdings repurchased 1.002 million shares for HKD 501 million, with a highest price of HKD 502.000 and a lowest price of HKD 494.400, bringing its total buyback amount for the year to HKD 38.542 billion [1][2]. - AIA Group repurchased 5.5 million shares for HKD 377 million, with a highest price of HKD 69.150 and a lowest price of HKD 68.050, totaling HKD 16.352 billion in buybacks for the year [1][2]. - Founder Holdings repurchased 10.386 million shares for HKD 1.174 million, with a highest price of HKD 1.150 and a lowest price of HKD 1.110, accumulating HKD 3.541 million in buybacks for the year [1][2]. Group 2: Buyback Rankings - The highest buyback amount on July 7 was from Tencent Holdings at HKD 501 million, followed by AIA Group at HKD 377 million [1][2]. - In terms of share quantity, Founder Holdings had the most significant buyback with 10.386 million shares, followed by AIA Group with 5.5 million shares and China Electric Power Technology with 2.26 million shares [1][2].

Group 1 - The article reports on share buybacks conducted by various companies on May 12, 2025, with AIA Group (01299) having the largest buyback amount of 1.25 billion, purchasing 2 million shares [1][2] - Other notable buybacks include China COSCO Shipping Holdings (01919) with 4.21 million shares bought back for 53.77 million, and Times Electric (03898) with 1.43 million shares for 47.22 million [2][3] - The total number of shares repurchased by AIA Group in the year reached 5.93 billion, accounting for 5.276% of its total share capital [2] Group 2 - China Hongqiao Group (01378) repurchased 1.13 million shares for 15.96 million, representing only 0.380% of its total share capital [2] - Swire Properties (00019) bought back 181,000 shares for 12.67 million, with a total annual repurchase of 5.56 million shares, which is 6.652% of its total [2] - The buyback activity reflects a trend among companies to utilize excess cash for share repurchases, potentially signaling confidence in their financial health [1][2]

Group 1 - The article reports on share buybacks conducted by various companies on April 30, 2025, highlighting the total amounts and quantities repurchased [1][2][3] - AIA Group (01299) had the largest buyback amount, repurchasing 3.7736 million shares for a total of 217 million [1][2] - China Merchants Industry Holdings (01919) and China Hongqiao Group (01378) also had significant buybacks, with 12.9715 million shares for 151 million and 4.6665 million shares for approximately 64.83 million respectively [2][3] Group 2 - The cumulative buyback amounts for the year show that AIA Group has repurchased a total of 584 million shares, representing 5.198% of its total share capital [2] - China Merchants Industry Holdings has repurchased 241 million shares, accounting for 7.530% of its total share capital [2] - Other notable companies include Times Electric (03898) with 8.016% of its total shares repurchased and Swire Properties (01972) with 1.530% [2][3] Group 3 - The buyback activities reflect a trend among companies to return capital to shareholders, with varying percentages of total share capital being repurchased across different firms [1][2] - Companies like FOSUN Pharma (02196) and Jitu Express (01519) have lower buyback percentages, at 1.800% and 0.645% respectively, indicating a more conservative approach [2][3] - The data suggests a strategic move by companies to enhance shareholder value amidst market conditions [1][2]

Production Capacity and Expansion - The design capacity for domestic polyester products is 910,000 tons per year, with BOPET film capacity at 702,500 tons per year, making it one of the largest polyester film manufacturers in China[7]. - The company has established a production facility in Vietnam with a design capacity of 554,300 tons per year for polyester filament, including 184,000 tons for fully drawn yarn and 170,300 tons for stretch yarn[9]. - An investment of approximately $73.9 million was made in Vietnam to develop new production facilities for polyester bottle chips, with a design capacity of 300,000 tons per year, which commenced commercial production in July 2023[9]. - The company plans to invest approximately $320 million from 2020 to April 2023 to establish new polyester film production lines, which will add a capacity of 400,000 tons per year, fully operational by November 2023[10]. - The company is set to invest approximately RMB 2.4 billion from 2025 to 2027 to expand its nylon business, with an estimated total capacity of 120,000 tons per year expected to gradually commence production from 2026[10]. - The design capacity for domestic polyester filament is 2,726,400 tons per year, with a combined design capacity of 1,716,400 tons for stretch yarn, fully drawn yarn, and pre-oriented yarn, making it the largest differentiated chemical fiber production base in Fujian Province[6]. - The company has invested approximately $185 million to establish production lines for polyester industrial yarn, with a total capacity of 250,000 tons per year, which began commercial production on July 17, 2020[9]. - Baihong's polyester film production expansion plan completed with a designed capacity of 255,000 tons per year[13]. - Baihong Vietnam established with an investment of approximately $220 million, targeting an annual capacity of 250,000 tons for polyester bottle chips[13]. - New polyester production line investment of about $230 million planned from 2019 to 2021, estimated annual capacity of 255,000 tons[15]. - Baihong's F District in Fujian officially launched a project with an annual capacity of 250,000 tons for polyester industrial yarn in July 2020[15]. - Baihong's G District achieved a total designed capacity of 500,000 tons per year with the launch of 6 production lines for polyester film[15]. - Baihong's G District estimated to reach an annual capacity of 255,000 tons for functional eco-friendly polyester film, with two production lines already in operation[15]. Financial Performance - Revenue for the year ended December 31, 2024, was RMB 20,631,678 thousand, representing a 16.2% increase from RMB 17,755,491 thousand in 2023[19]. - Gross profit increased by 49.7% to RMB 1,572,346 thousand from RMB 1,050,059 thousand[19]. - Operating profit rose by 82.7% to RMB 971,087 thousand compared to RMB 531,517 thousand in the previous year[19]. - Net profit for the year was RMB 747,901 thousand, a significant increase of 111.6% from RMB 353,398 thousand[19]. - Total assets increased to RMB 28,214,782 thousand, with current assets rising by 19.6% to RMB 15,904,789 thousand[19]. - Total equity increased by 7.4% to RMB 10,989,593 thousand from RMB 10,231,260 thousand[19]. - The company achieved a gross margin of 7.6%, up from 5.9% in the previous year[19]. - The return on equity improved to 6.8% from 3.5% in 2023[19]. - The company’s revenue for 2024 was RMB 20,631,678,000, an increase of 16.2% compared to RMB 17,755,491,000 in 2023[64]. - Sales revenue from polyester products reached RMB 9,956,035,000, representing a 38.6% increase from RMB 7,182,898,000 in 2023[67]. - The sales volume of polyester products increased by 40.1%, from 1,059,755 tons in 2023 to 1,485,129 tons in the current year[67]. - Revenue from differentiated products was RMB 11,021,919,000, accounting for 53.4% of total revenue[63]. - Research and development expenses amounted to RMB 567,495,000, representing 2.8% of total revenue[63]. - The average selling price of polyester products decreased by 1.1% to RMB 6,704 per ton, compared to RMB 6,778 per ton in 2023[67]. - The average selling price of polyester filament increased by 1.6% to RMB 8,740 per ton, compared to RMB 8,603 per ton in 2023[65]. - Sales revenue from polyester industrial yarn was RMB 1,657,624,000, with an average selling price of RMB 7,558 per ton[68]. - The annual profit for 2024 was RMB 747,901,000, representing a 111.6% increase from RMB 353,398,000 in 2023, with a net profit margin rising to 3.6% from 2.0%[110]. Market Trends and Strategic Focus - The company aims to capture growth opportunities in the synthetic fiber market, which is a global trend, by expanding its nylon business[10]. - The company has introduced advanced German BOPET film production lines and R&D equipment to target the high-end functional polyester film market domestically[7]. - The company has a strong market position in the polyester film sector, leveraging its existing scale and expertise to benefit from market growth[10]. - The consumption of polyester film in China has been steadily increasing, with the company leveraging its existing scale and expertise to capture market growth[34]. - The Chinese outdoor sports market is expected to approach RMB 600 billion, presenting significant growth opportunities for synthetic fibers[34]. - The textile industry in China is experiencing a recovery, with domestic sales gradually rebounding due to government policies promoting local consumption[52]. - The company aims to enhance its market position as one of China's major manufacturers by expanding its nylon business[34]. - The company aims to leverage its competitive advantages in the Vietnamese textile and polyester bottle chip market[61]. - The group anticipates stable business growth driven by technological innovation and favorable polyester product pricing trends[124]. Corporate Governance and Management - The board consists of three executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2024[132]. - The company has complied with all provisions of the Corporate Governance Code as of December 31, 2024[130]. - Independent non-executive directors play a crucial role in providing independent opinions on the company's strategy and performance[133]. - The company has established written guidelines for employees regarding securities trading to prevent insider trading violations[131]. - The board meets regularly to review the company's financial and operational performance, with attendance records disclosed in the corporate governance report[142]. - The company has a mechanism to ensure independent views are provided to the board, with a majority of non-executive and independent non-executive directors[135]. - The company has received annual confirmations of independence from all current independent non-executive directors[133]. - The chairman and CEO roles are separated to ensure a balance of power and authority within the board[144]. - The company has a policy to manage conflicts of interest among directors[140]. - All directors have the right to seek independent professional advice at the company's expense if needed[141]. - The board has adopted a diversity policy to ensure a balanced mix of executive and non-executive directors, including independent non-executive directors, to enhance governance and operational effectiveness[151]. - As of December 31, 2024, the board includes one female director, achieving gender diversity[153]. - The company has a full-time employee gender distribution of 70% male and 30% female, promoting equal opportunities in recruitment and retention[156]. - The remuneration committee reviewed the compensation policy for 2024 and held one meeting to approve the remuneration plans for directors and senior management[163]. - The nomination committee, consisting mainly of independent non-executive directors, is responsible for reviewing the board diversity policy and measurable targets[164]. - The company has established appropriate insurance coverage for potential legal actions against its directors and executives[149]. - The board's diversity policy includes measurable targets based on various criteria such as gender, age, race, and professional experience[152]. - The company encourages directors to participate in professional development courses to enhance their knowledge and skills[148]. - The board is committed to maintaining a strong element of independence, ensuring that independent non-executive directors have sufficient expertise and numbers to provide impactful opinions[153]. - The company has confirmed compliance with the corporate governance code regarding the rotation of directors every three years[158]. Internal Controls and Audit - The audit committee held four meetings during the year ending December 31, 2024, with all members attending all sessions[170]. - The company paid RMB 1,613,000 for audit services in 2024, an increase from RMB 1,593,000 in 2023[177]. - The company has established written policies and procedures for internal control efficiency, which are regularly reviewed and improved[178]. - The company’s independent internal audit department assists the board in evaluating the effectiveness of its internal control systems[178]. - The audit committee is responsible for reviewing the financial reporting process and risk management systems[168]. - The company’s external auditor is responsible for ensuring that the financial statements fairly reflect the group's financial position[175]. - The company has a policy for identifying, assessing, and managing significant risks to achieve operational objectives[178]. Employee Development and Training - The company emphasizes employee development and training, believing that employees are a key factor in its success[35]. - The company has partnered with Donghua University to establish a talent practice base, enhancing its R&D capabilities[54]. - The company’s secretary completed no less than 15 hours of relevant professional training during the year[180]. - The company has mechanisms for employees and business associates to report misconduct confidentially[186]. Communication with Shareholders - The company emphasizes the importance of clear, timely, and effective communication with shareholders and investors to build confidence and attract new investments[183]. - The board of directors will attend the annual general meeting scheduled for May 23, 2025, to address shareholder questions[183]. - The company has established multiple channels for ongoing communication with shareholders, including direct inquiries to the investor relations department[186]. - The company has a shareholder communication policy to ensure all shareholders can access accurate and comprehensible information[185]. - The company maintains high transparency by publishing annual reports, interim reports, and other communications on its website[183]. - The board regularly meets with institutional investors, financial analysts, and media to enhance understanding of the company's strategies and developments[184].

Financial Performance - For the fiscal year ending December 31, 2024, revenue reached RMB 20.631678 billion, an increase of 16.2% compared to RMB 17.755491 billion for the fiscal year ending December 31, 2023[4] - Profit for the fiscal year ending December 31, 2024, was RMB 747.901 million, representing a significant increase of 111.6% from RMB 353.398 million in the previous year[4] - Earnings per share for the fiscal year ending December 31, 2024, was RMB 0.35, up from RMB 0.17 in the previous year[4] - The company reported total comprehensive income attributable to owners of the company for the fiscal year ending December 31, 2024, of RMB 769.708 million, compared to RMB 405.588 million in the previous year[7] - The annual profit for 2024 was RMB 747,901,000, a substantial increase of 111.6% from RMB 353,398,000 in 2023, with a net profit margin rising to 3.6%[114] Revenue Breakdown - Revenue from polyester products reached RMB 9,956,035,000, a significant increase of 38.8% compared to RMB 7,182,898,000 in the previous year[24] - Revenue from the Chinese market accounted for RMB 14,900,336,000, representing 72.2% of total revenue, up from RMB 13,512,221,000 in 2023[24] - Overseas sales revenue increased by 35.1% from RMB 4,243,270,000 in 2023 to RMB 5,731,342,000 in the current year, accounting for 27.8% of total sales[87] - Domestic sales in Fujian province accounted for 46.3% of total sales, amounting to RMB 9,557,898,000, while Guangdong province contributed 13.1% with RMB 2,706,070,000[88] Cost and Expenses - The sales cost for 2024 was RMB 19,059,332,000, up 14.1% from RMB 16,705,432,000 in 2023, primarily due to increased sales volume[90] - Selling and distribution expenses rose by 19.2% to RMB 279,109,000 in 2024, primarily due to increased transportation costs from expanded sales outside Fujian province[108] - Administrative expenses increased by 18.3% to RMB 763,936,000 in 2024, mainly due to higher R&D expenditures[109] Assets and Liabilities - The net cash and cash equivalents as of December 31, 2024, amounted to RMB 227.528 million, an increase from RMB 158.138 million in the previous year[9] - The total assets less current liabilities as of December 31, 2024, were RMB 11.48724 billion, compared to RMB 10.718657 billion in the previous year[10] - The total liabilities as of December 31, 2024, were RMB 17,225,189,000, with a debt-to-equity ratio of 156.7%[117] Investments and Future Plans - The company plans to invest approximately RMB 2,395,730,000 in a new production line from 2025 to 2027, with an expected annual capacity of 120,000 tons starting in 2026[56] - The company plans to invest approximately $73.9 million in Vietnam for new polyester bottle chip production facilities, expected to have an annual capacity of 300,000 tons, gradually starting commercial production in July 2023[68] - An investment of approximately $320 million is planned for establishing polyester film production lines, with an additional annual production capacity of 400,000 tons expected to be operational by November 2023[68] - The company anticipates investing approximately 2.396 billion RMB from 2025 to 2027 to expand nylon production capacity, estimated at 120,000 tons annually, with gradual commercial production starting in 2026[128] Research and Development - Research and development costs for the year were RMB 567,707,000, an increase of 24.5% from RMB 455,857,000 in 2023[33] - The company has received 135 national patents and has applied for 184 additional patents, with 161 patented products currently in production and sales[76] - The company emphasizes talent acquisition and training, collaborating with Donghua University to establish a talent practice base[63] Market and Industry Insights - The textile industry in China is projected to achieve total operating revenue and profit of approximately RMB 2.4 trillion and RMB 87 billion, respectively, for the year ending December 31, 2024[60] - The overall raw material prices for textile products have decreased by approximately 0.6% year-on-year from January to December 2024[60] - The company’s management believes that the impact of the pandemic on the Chinese economy is temporary and does not alter the long-term growth fundamentals[58] Shareholder Information - The company has not declared a final dividend for the year ending December 31, 2024, consistent with 2023[39] - The board does not recommend any final dividend for the year ending December 31, 2024[130] - The company repurchased a total of 2,948,000 shares during the year ended December 31, 2024, with a total expenditure of HKD 12,312,680[138] Production and Capacity - The company has successfully launched a polyester industrial yarn project with an annual capacity of 250,000 tons in July 2022, positioning itself among the top ten polyester industrial yarn manufacturers in China[69] - The G area project has an annual production capacity of 255,000 tons of functional environmentally friendly polyester film, with two production lines having a capacity of 70,000 tons launched in December 2020[66] - The company has invested in a 700,000-ton differentiated chemical fiber project in Vietnam, which has contributed to the growth of overseas sales[87]

[Company Overview](index=3&type=section&id=Company%20Overview) [Company Profile](index=3&type=section&id=Company%20Profile) Baihong Industrial Holdings Limited is a leading developer and producer of polyester filament yarn and polyester film in China, targeting mid-to-high-end markets and expanding globally with new product lines to consolidate market position and diversify development - The company is one of China's largest developers and producers of polyester filament yarn, with products applied in mid-to-high-end markets such as apparel, footwear, and home textiles[7](index=7&type=chunk) Product Categories and Design Capacity (tons/year) | Product Category | Design Capacity (tons/year) | | :--------------- | :-------------------------- | | Domestic Polyester Filament Yarn Total Capacity | 2,726,400 | | - Fully Drawn Yarn & Pre-Oriented Yarn | 1,005,000 | | - Drawn Textured Yarn | 711,400 | | Domestic Polymer Products Total Capacity | 910,000 | | - BOPET Film | 702,500 | | Vietnam Polyester Filament Yarn Total Capacity | 554,300 | | - Fully Drawn Yarn & Pre-Oriented Yarn | 184,000 | | - Drawn Textured Yarn | 170,300 | | Vietnam PET Chip New Facility | 300,000 (commenced production in July 2023) | | Polyester Industrial Yarn Production Line | 250,000 (commercial production in July 2020) | | New Polyester Film Production Line | Polymerization capacity 400,000, film 228,000 (fully commenced production in November 2023) | [Company Information](index=5&type=section&id=Company%20Information) This section lists the company's basic information, including board members, company secretary, auditor, registered office, headquarters, principal places of business, Hong Kong share registrar, principal bankers, legal advisors, and stock code, providing key contact and management details for investors - Board members include Executive Directors **Mr. Shi Tianyou** (Co-Chairman), **Mr. Wu Jinbiao** (CEO), Non-Executive Director **Mr. Zhang Shengbo** (Co-Chairman), and three Independent Non-Executive Directors[9](index=9&type=chunk) - The company's auditor is **Fuyui Mazars CPA Limited**, and the Hong Kong share registrar is **Hong Kong Central Securities Registrars Limited**[9](index=9&type=chunk) - The company's headquarters and principal places of business are located in Hong Kong, Jinjiang City, Fujian Province, China, and Tay Ninh Province, Vietnam, with stock code **2299**[9](index=9&type=chunk) [Corporate Structure](index=6&type=section&id=Corporate%20Structure) This section is intended to detail the company's corporate structure, though specific content is not provided in the current outline [Production Process of Polyester Filament Yarn and Polyester Film](index=7&type=section&id=Production%20Process%20of%20Polyester%20Filament%20Yarn%20and%20Polyester%20Film) This section is intended to describe the production processes for polyester filament yarn and polyester film, though specific content is not provided in the current outline [Production Facilities](index=8&type=section&id=Production%20Facilities) The company operates major production facilities in Jinan Industrial Zone, China, and Phu Dong Industrial Zone, Vietnam, boasting diversified product design capacities to meet domestic and international market demands - The company has Plant E in Jinan Industrial Zone, China[18](index=18&type=chunk) - The company has a Vietnam plant in Phu Dong Industrial Zone, Phu Dong Commune, Go Dau District, Tay Ninh Province, Ho Chi Minh City, Vietnam[20](index=20&type=chunk) Product Categories and Design Capacity (tons/year) | Product Category | Design Capacity (tons/year) | | :--------------- | :-------------------------- | | Fully Drawn Yarn & Pre-Oriented Yarn | 1,189,000 | | Drawn Textured Yarn | 881,700 | | BOPET | 702,500 | | BOPET Chips | 550,000 | | ES Fiber | 14,500 | | Polyester Industrial Yarn | 250,000 | [Financial Highlights](index=6&type=section&id=Financial%20Highlights) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) For the six months ended June 30, 2024, the company's revenue increased by **41.5%** to **RMB 10,619,933 thousand**, gross profit surged by **85.0%** to **RMB 731,906 thousand**, and profit for the period grew by **62.4%** to **RMB 327,465 thousand**, primarily driven by increased sales volume and improved gross margin Key Operating Results for the Six Months Ended June 30 | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | Change (%) | | :--- | :------------------ | :------------------ | :------- | | Revenue | 10,619,933 | 7,504,397 | 41.5% | | Gross Profit | 731,906 | 395,609 | 85.0% | | Operating Profit | 428,392 | 310,935 | 37.8% | | Profit for the Period | 327,465 | 201,683 | 62.4% | Key Financial Position as of June 30 | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | Change (%) | | :--- | :------------------ | :------------------ | :------- | | Non-current Assets | 12,589,555 | 13,019,375 | (3.3%) | | Non-current Liabilities | 493,649 | 1,048,484 | (52.9%) | | Current Assets | 16,066,985 | 13,440,368 | 19.5% | | Current Liabilities | 17,609,372 | 15,293,563 | 15.1% | | Net Current Liabilities | 1,542,387 | 1,853,195 | (16.8%) | | Total Equity | 10,553,519 | 10,117,696 | 4.3% | Key Ratios Analysis | Indicator | 2024 | 2023 | | :--- | :----- | :----- | | Gross Profit Margin | 6.9% | 5.3% | | Operating Profit Margin | 4.0% | 4.1% | | Net Profit Margin | 3.1% | 2.7% | | Return on Equity | 3.1% | 2.0% | | Current Ratio | 91.2% | 87.9% | | Gearing Ratio | 171.5% | 161.5% | [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) [Macroeconomic and Industry Review](index=11&type=section&id=Macroeconomic%20and%20Industry%20Review) In the first half of 2024, the global economy gradually recovered post-pandemic, with China's economy expanding steadily, and the textile and apparel industry is expected to achieve stable progress, supported by national policies and a positive macroeconomic foundation - In the first half of 2024, the global economy showed signs of recovery post-pandemic, China's long-term positive economic foundation remained unchanged, and consumption-boosting policies were implemented[21](index=21&type=chunk) - China's textile industry faces global economic risks and domestic structural issues, but national macroeconomic policies will focus more on stable growth and introduce supportive measures to alleviate business pressures[22](index=22&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) The company upholds its "healthy green products" mission, enhancing competitiveness through technological innovation, intelligent manufacturing, and talent strategy, actively expanding into new products and overseas markets, and collaborating with China Mobile to build a 5G smart factory for full industry chain layout and high-quality development - The company aims for "technological innovation to enhance corporate competitiveness," pursuing a path of integrating "production, academia, research, and application" to develop new products and increase product added value[23](index=23&type=chunk) - The company has pioneered fully intelligent and automated production, leveraging automation equipment to improve product quality and resilience, demonstrating strong resilience, especially during the pandemic[23](index=23&type=chunk) - The company emphasizes talent acquisition and development, collaborating with Donghua University to establish a talent practice base, boasting a seasoned R&D team and a large quality control team[23](index=23&type=chunk) - The ES fiber project commenced production in **June 2020**, targeting high-end customers with customized products, showing broad future demand and application prospects[24](index=24&type=chunk) - The G-zone project for **255,000 tons/year** of functional environmentally friendly polyester film officially commenced production in **December 2020**, utilizing internationally advanced processes and German equipment, targeting high-end domestic and international markets[25](index=25&type=chunk) - The Vietnam PET chip new production facility gradually commenced commercial production in **July 2023**, and the polyester industrial yarn business commenced production in **July 2022**, positioning the company among China's top ten polyester industrial yarn producers[25](index=25&type=chunk)[26](index=26&type=chunk) - The company signed a 5G new technology strategic cooperation agreement with China Mobile, deploying a 5G intelligent factory to enhance production efficiency and promote digitalization, intelligence, and flexibility[27](index=27&type=chunk) - The company actively expands overseas markets, with the first phase of the Vietnam "700,000 tons differentiated chemical fiber project" fully completed, aiming to build a demonstration platform for China-Vietnam production capacity cooperation[27](index=27&type=chunk) - The company highly values marketing channel expansion and customer service, deeply cultivating international markets, enhancing market responsiveness, and continuously improving product performance and technological upgrades[27](index=27&type=chunk) - Key subsidiaries Baihong Fujian and Baihong Gaoxin have both been awarded High-Tech Enterprise qualifications, with differentiated product revenue accounting for **49.6%** of total revenue and R&D expenses at **2.5%**[28](index=28&type=chunk) [Financial Review](index=15&type=section&id=Financial%20Review) The company demonstrated strong financial performance this period, with total revenue increasing by **41.5%** and profit for the period growing by **62.4%**, primarily due to significant sales volume growth in polyester filament yarn and polyester products, while gross margin improved, but the average selling price of polyester products slightly decreased, and all expenses increased, while income tax expenses significantly decreased [Revenue Analysis](index=15&type=section&id=Revenue%20Analysis) Total Revenue and Major Product Revenue Comparison | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | Change (%) | | :--- | :------------------------ | :------------------------ | :------- | | Total Revenue | 10,619,933 | 7,504,397 | 41.5% | | Polyester Filament Yarn Revenue | 4,502,961 | 3,853,583 | 16.9% | | Polyester Products Revenue | 5,227,993 | 2,777,561 | 88.2% | - The average selling price per ton of polyester filament yarn increased by **3.9% to RMB 8,808**[30](index=30&type=chunk) - The average selling price per ton of polyester products decreased by **1.6% to RMB 6,757**, but sales volume significantly increased by **91.3% to 773,671 tons**[31](index=31&type=chunk) Revenue and Sales Volume Details (by Product) | Product Category | 2024 Revenue (RMB thousand) | 2024 Revenue Share (%) | 2023 Revenue (RMB thousand) | 2023 Revenue Share (%) | 2024 Sales Volume (tons) | 2024 Sales Volume Share (%) | 2023 Sales Volume (tons) | 2023 Sales Volume Share (%) | | :------- | :---------------------- | :----------------- | :---------------------- | :----------------- | :---------------- | :------------------- | :---------------- | :------------------- | | Polyester Filament Yarn Subtotal | 4,502,961 | 42.4% | 3,853,583 | 51.4% | 511,213 | 36.5% | 454,465 | 46.8% | | Polyester Products Subtotal | 5,227,993 | 49.2% | 2,777,561 | 37.0% | 773,671 | 55.2% | 404,518 | 41.6% | | ES Fiber | 60,361 | 0.6% | 42,830 | 0.6% | 6,656 | 0.5% | 4,657 | 0.5% | | Polyester Industrial Yarn | 828,618 | 7.8% | 830,423 | 11.0% | 108,996 | 7.8% | 107,893 | 11.1% | | Total | 10,619,933 | 100.0% | 7,504,397 | 100.0% | 1,400,536 | 100.0% | 971,533 | 100.0% | - Overseas sales revenue increased by **81.0% to RMB 3,245,309 thousand**, with its share of total revenue rising from **23.9% to 30.5%**, primarily driven by the Vietnam project[35](index=35&type=chunk) Revenue by Geographical Region | Region | 2024 (RMB thousand) | 2024 Share (%) | 2023 (RMB thousand) | 2023 Share (%) | | :--- | :------------------ | :------------- | :------------------ | :------------- | | Domestic Sales | 7,374,624 | 69.5% | 5,711,162 | 76.1% | | - Fujian Province | 4,658,977 | 43.9% | 3,659,449 | 48.8% | | - Guangdong Province | 1,369,345 | 12.9% | 1,005,415 | 13.4% | | - Other Provinces | 1,346,302 | 12.7% | 1,046,298 | 13.9% | | Overseas Sales | 3,245,309 | 30.5% | 1,793,235 | 23.9% | | - Vietnam | 542,367 | 5.1% | 326,714 | 4.4% | | - Other | 2,702,942 | 25.4% | 1,466,521 | 19.5% | | Total | 10,619,933 | 100.0% | 7,504,397 | 100.0% | [Cost of Sales Analysis](index=20&type=section&id=Cost%20of%20Sales%20Analysis) - Cost of sales increased by **39.1% to RMB 9,888,027 thousand**, primarily due to increased sales volume[40](index=40&type=chunk) - The average cost of sales per ton for polyester filament yarn decreased by **2.2% to RMB 7,868**, with raw materials PTA and MEG accounting for **72.8%** of total cost of sales[41](index=41&type=chunk) - The average cost of sales per ton for polyester products decreased by **1.0% to RMB 6,463**, while raw material prices slightly increased by **1.8%**[42](index=42&type=chunk) Cost of Sales Details | Product Category | 2024 (RMB thousand) | 2024 Share (%) | 2023 (RMB thousand) | 2023 Share (%) | | :------- | :------------------ | :------------- | :------------------ | :------------- | | Polyester Filament Yarn Subtotal | 4,022,508 | 40.6% | 3,656,914 | 51.5% | | ES Fiber Subtotal | 59,304 | 0.6% | 44,018 | 0.6% | | Industrial Yarn Subtotal | 806,336 | 8.2% | 768,040 | 10.8% | | Polyester Products Subtotal | 4,999,879 | 50.6% | 2,639,816 | 37.1% | | Total | 9,888,027 | 100.0% | 7,108,788 | 100.0% | [Gross Profit Analysis](index=23&type=section&id=Gross%20Profit%20Analysis) - Gross profit increased by **85.0% to RMB 731,906 thousand**, with gross profit margin rising from **5.3% to 6.9%**[47](index=47&type=chunk) - Polyester filament yarn gross profit margin significantly increased from **5.1% to 10.7%**, with average gross profit per ton rising to **RMB 940**[48](index=48&type=chunk) - Polyester products gross profit margin decreased from **5.0% to 4.4%**, with average gross profit per ton falling to **RMB 294**, despite steady growth in sales volume and revenue[49](index=49&type=chunk) Product Gross Profit Analysis | Product Category | 2024 (RMB thousand) | 2024 Share (%) | 2023 (RMB thousand) | 2023 Share (%) | | :------- | :------------------ | :------------- | :------------------ | :------------- | | Polyester Filament Yarn Subtotal | 480,450 | 65.6% | 196,669 | 49.7% | | ES Fiber Subtotal | 1,058 | 0.2% | (1,188) | (0.3%) | | Polyester Industrial Yarn Subtotal | 22,282 | 3.1% | 62,383 | 15.8% | | Polyester Products Subtotal | 228,116 | 31.1% | 137,745 | 34.8% | | Total | 731,906 | 100.0% | 395,609 | 100.0% | Average Selling Price, Cost, and Gross Profit per Ton by Product | Product Category | Indicator | 2024 (RMB) | 2023 (RMB) | | :------- | :--- | :-------------- | :-------------- | | Polyester Filament Yarn | Average Selling Price per Ton | 8,808 | 8,479 | | | Average Cost of Sales per Ton | 7,868 | 8,046 | | | Average Gross Profit per Ton | 940 | 433 | | | Average Gross Profit Margin | 10.7% | 5.1% | | ES Fiber | Average Selling Price per Ton | 9,069 | 9,197 | | | Average Cost of Sales per Ton | 8,910 | 9,452 | | | Average Gross Profit per Ton | 159 | (255) | | | Average Gross Profit Margin | 1.8% | (2.8%) | | Industrial Yarn | Average Selling Price per Ton | 7,602 | 7,697 | | | Average Cost of Sales per Ton | 7,398 | 7,119 | | | Average Gross Profit per Ton | 204 | 578 | | | Average Gross Profit Margin | 2.7% | 7.5% | | Polyester Products | Average Selling Price per Ton | 6,757 | 6,866 | | | Average Cost of Sales per Ton | 6,463 | 6,525 | | | Average Gross Profit per Ton | 294 | 341 | | | Average Gross Profit Margin | 4.4% | 5.0% | [Other Income](index=28&type=section&id=Other%20Income) - Other income decreased by **23.0% to RMB 227,265 thousand**, primarily due to reduced bank interest income, gains from raw material sales, and government grants[56](index=56&type=chunk) [Other Gains and Losses, Net](index=28&type=section&id=Other%20Gains%20and%20Losses,%20Net) - Net other losses amounted to **RMB 33,469 thousand**, an increase in loss compared to the same period last year, primarily due to the combined effect of reduced net realized gains on financial instruments at fair value through profit or loss and increased net exchange losses[57](index=57&type=chunk) [Selling and Distribution Expenses](index=28&type=section&id=Selling%20and%20Distribution%20Expenses) - Selling and distribution expenses increased by **55.6% to RMB 150,282 thousand**, mainly due to higher transportation costs from increased sales outside Fujian Province and overseas[58](index=58&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) - Administrative expenses increased by **36.2% to RMB 347,028 thousand**, primarily due to increased research and development expenses[59](index=59&type=chunk) [Finance Costs](index=29&type=section&id=Finance%20Costs) - Finance costs increased by **44.7% to RMB 85,386 thousand**, mainly due to higher interest related to increased bills payable[60](index=60&type=chunk) [Income Tax](index=29&type=section&id=Income%20Tax) - Income tax decreased by **69.1% to RMB 15,541 thousand**[61](index=61&type=chunk) [Profit for the Period](index=29&type=section&id=Profit%20for%20the%20Period) - Profit for the period increased by **62.4% to RMB 327,465 thousand**, primarily driven by a significant increase in total revenue due to higher overall sales volume of polyester filament yarn and polyester products[61](index=61&type=chunk) Profit for the Period and Net Profit Margin | Indicator | 2024 (RMB thousand) | 2024 Net Profit Margin (%) | 2023 (RMB thousand) | 2023 Net Profit Margin (%) | | :--- | :------------------ | :--------------- | :------------------ | :--------------- | | Profit for the Period | 327,465 | 3.1% | 201,683 | 2.7% | [Financial Position and Capital Management](index=30&type=section&id=Financial%20Position%20and%20Capital%20Management) As of June 30, 2024, the company's cash and cash equivalents significantly increased, with ample cash flow from operating activities, net current liabilities improved, while the gearing ratio increased, and the company plans continued investment in capacity expansion and Vietnam business development, funded by internal resources and bank loans - Cash and cash equivalents increased by **242.0% to RMB 540,811 thousand**[63](index=63&type=chunk) - Net cash inflow from operating activities was **RMB 1,397,781 thousand**[63](index=63&type=chunk) - Inventory turnover days decreased by **21.7 days to 84.8 days**, trade receivables turnover days decreased by **14.0 days to 21.0 days**, and trade payables turnover days increased by **74.5 days to 369.8 days**[63](index=63&type=chunk) - Capital commitments amounted to **RMB 503,149 thousand**, primarily for domestic capacity expansion and Vietnam production operations[63](index=63&type=chunk) - Total liabilities were **RMB 18,103,021 thousand**, total equity was **RMB 10,553,519 thousand**, and the gearing ratio was **171.5%**[64](index=64&type=chunk) - Total bank loans were **RMB 382,842 thousand**, of which **RMB 99,625 thousand** are repayable within one year[64](index=64&type=chunk) - The company had no significant investments, acquisitions, or disposals, with future plans primarily related to domestic capacity expansion and Vietnam production operations, funded by internal resources and bank loans[65](index=65&type=chunk) - As of **June 30, 2024**, there were no other asset pledges or contingent liabilities[66](index=66&type=chunk) - Foreign exchange risk was minimal, with management closely monitoring and entering into forward foreign exchange contracts as needed, resulting in no significant gains or losses[67](index=67&type=chunk) - As of **June 30, 2024**, the Group had **9,549 employees**, with remuneration policies based on performance, experience, and market conditions, and discretionary bonuses provided[68](index=68&type=chunk) [Business Outlook](index=32&type=section&id=Business%20Outlook) The company is optimistic about global economic recovery and China's stable development in 2024, expecting polyester product prices to remain favorable due to the economic cycle and rising crude oil prices, with new product launches and cost control, the company anticipates stable business growth, and the expansion of Vietnam projects, polyester industrial yarn, and polyester film projects will further strengthen the company's scale and sales, maintaining confidence in medium-to-long-term development despite potential short-term pandemic impacts - Global economic rebound is expected to continue in **2024**, with China's stable economic development stimulating consumption[69](index=69&type=chunk) - As the largest polyester filament yarn producer in South China, the company benefits from the economic cycle and rising crude oil prices, leading to a continuously favorable trend in polyester product prices[69](index=69&type=chunk) - The Vietnam polyester filament yarn project commenced production in **September 2019**, the polyester industrial yarn production line gradually entered commercial production, and the new PET chip production facility commenced commercial production in **July 2023**[69](index=69&type=chunk) - The polyester film production line commenced commercial production in **November 2023**, adding **400,000 tons/year** of polymerization capacity and **228,000 tons/year** of polyester film, which will be a significant driver of performance growth[69](index=69&type=chunk) - Upon completion of the polyester industrial yarn and polyester film project expansions, the company's scale and sales will further increase, instilling confidence in medium-to-long-term development[70](index=70&type=chunk) [Financial Statements](index=33&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statement of Profit or Loss](index=33&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the company reported revenue of **RMB 10,619,933 thousand**, gross profit of **RMB 731,906 thousand**, profit for the period of **RMB 327,465 thousand**, and basic and diluted earnings per share of **RMB 0.15** Unaudited Condensed Consolidated Statement of Profit or Loss Summary | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Revenue | 10,619,933 | 7,504,397 | | Cost of Sales | (9,888,027) | (7,108,788) | | Gross Profit | 731,906 | 395,609 | | Operating Profit | 428,392 | 310,935 | | Profit Before Tax | 343,006 | 251,940 | | Income Tax Expense | (15,541) | (50,257) | | Profit for the Period Attributable to Owners of the Company | 327,465 | 201,683 | | Earnings Per Share (RMB) | 0.15 | 0.10 | [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=34&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2024, profit for the period attributable to owners of the company was **RMB 327,465 thousand**, with total other comprehensive loss for the period of **RMB 4,151 thousand**, resulting in total comprehensive income for the period of **RMB 323,314 thousand** Unaudited Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Profit for the Period Attributable to Owners of the Company | 327,465 | 201,683 | | Total Other Comprehensive (Loss) Income for the Period | (4,151) | 89,898 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 323,314 | 291,581 | [Unaudited Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the company's non-current assets were **RMB 12,589,555 thousand**, current assets were **RMB 16,066,985 thousand**, net current liabilities were **RMB (1,542,387) thousand**, and total equity was **RMB 10,553,519 thousand** Unaudited Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Non-current Assets | 12,589,555 | 12,975,068 | | Current Assets | 16,066,985 | 13,293,380 | | Current Liabilities | 17,609,372 | 15,549,791 | | Net Current Liabilities | (1,542,387) | (2,256,411) | | Total Assets Less Current Liabilities | 11,047,168 | 10,718,657 | | Non-current Liabilities | 493,649 | 487,397 | | Net Assets | 10,553,519 | 10,231,260 | | Total Equity | 10,553,519 | 10,231,260 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, profit for the period attributable to owners of the company was **RMB 327,465 thousand**, total other comprehensive loss was **RMB 4,151 thousand**, resulting in total comprehensive income of **RMB 323,314 thousand**, total transactions with owners amounted to **RMB (1,055) thousand**, and total equity at period-end was **RMB 10,553,519 thousand** - As of **January 1, 2024**, total equity was **RMB 10,231,260 thousand**[79](index=79&type=chunk) - Profit for the period was **RMB 327,465 thousand**, and total other comprehensive loss was **RMB 4,151 thousand**[79](index=79&type=chunk) - Total transactions with owners amounted to **RMB (1,055) thousand**, primarily including the purchase and cancellation of own shares[79](index=79&type=chunk) - As of **June 30, 2024**, total equity was **RMB 10,553,519 thousand**[79](index=79&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=38&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, the company reported net cash inflow from operating activities of **RMB 1,397,781 thousand**, net cash outflow from investing activities of **RMB 604,521 thousand**, net cash outflow from financing activities of **RMB 405,676 thousand**, and cash and cash equivalents at period-end of **RMB 540,811 thousand** Unaudited Condensed Consolidated Statement of Cash Flows Summary | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Net Cash Generated From (Used In) Operating Activities | 1,397,781 | (1,244,946) | | Net Cash Generated From (Used In) Investing Activities | (604,521) | 264,578 | | Net Cash Generated From (Used In) Financing Activities | (405,676) | 927,804 | | Net Increase (Decrease) in Cash and Cash Equivalents | 387,584 | (52,564) | | Cash and Cash Equivalents at End of Reporting Period | 540,811 | 218,106 | [Notes to the Financial Statements](index=39&type=section&id=Notes%20to%20the%20Financial%20Statements) [1. General Information](index=39&type=section&id=1.%20General%20Information) Baihong Industrial Holdings Limited was incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, with the company and its subsidiaries primarily engaging in the manufacturing and sale of polyester filament yarn, polyester products, polyester industrial yarn, and ES fiber products - The Company was incorporated in the Cayman Islands on **November 25, 2010**, and listed on the Main Board of the Hong Kong Stock Exchange on **May 18, 2011**[81](index=81&type=chunk) - The Group is principally engaged in the manufacturing and sale of polyester filament yarn products, polyester products, polyester industrial yarn products, and ES fiber products[81](index=81&type=chunk) [2. Basis of Preparation](index=39&type=section&id=2.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, using the historical cost basis and presented in RMB, and despite net current liabilities, the Board believes the company has sufficient working capital for continued operation based on future cash flow estimates and credit commitments - The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[82](index=82&type=chunk) - The interim financial statements are prepared on a historical cost basis and presented in RMB, with all amounts rounded to the nearest thousand[82](index=82&type=chunk) - As of **June 30, 2024**, the Group recorded net current liabilities of approximately **RMB 1,542,387 thousand**, but the directors believe the Group will have sufficient working capital for the next twelve months, thus preparing the statements on a going concern basis[84](index=84&type=chunk) - New/revised Hong Kong Financial Reporting Standards adopted for the first time in this period, including HKAS 1 (Amendments) and HKAS 7 & HKFRS 7 (Amendments), did not have a significant impact on the consolidated financial statements[85](index=85&type=chunk) [3. Revenue and Segment Information](index=41&type=section&id=3.%20Revenue%20and%20Segment%20Information) The company operates a single reportable operating segment, primarily manufacturing and selling polyester filament yarn, polyester products, polyester industrial yarn, and ES fiber products, with revenue disaggregated by major product lines and customer geographical locations, and all revenue recognized at a point in time - The Group has only one reportable operating segment, with principal activities being the manufacturing and sale of polyester filament yarn products, polyester products, polyester industrial yarn products, and ES fiber products[86](index=86&type=chunk) Revenue Disaggregated by Major Product Lines | Product Line | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Polyester Filament Yarn Products | 4,502,961 | 3,853,583 | | Polyester Products | 5,227,993 | 2,777,561 | | Polyester Industrial Yarn Products | 828,618 | 830,423 | | ES Fiber Products | 60,361 | 42,830 | | Total | 10,619,933 | 7,504,397 | Revenue Disaggregated by Customer Geographical Location | Geographical Location | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | China | 7,374,624 | 5,711,162 | | Vietnam | 542,367 | 326,714 | | Other | 2,702,942 | 1,466,521 | | Total | 10,619,933 | 7,504,397 | - All revenue from contracts with customers is recognized at a point in time, and no single customer transaction exceeded **10%** of total revenue[87](index=87&type=chunk) Geographical Location of Specific Non-current Assets | Geographical Location | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | China | 10,010,379 | 10,286,868 | | Vietnam | 2,538,365 | 2,647,029 | | Hong Kong | 40,811 | 41,171 | | Total | 12,589,555 | 12,975,068 | [4. Other Income](index=42&type=section&id=4.%20Other%20Income) For the six months ended June 30, 2024, other income was **RMB 227,265 thousand**, a **23.0%** decrease from the prior year, mainly due to reduced bank interest income, government grants, and gains from raw material sales Other Income Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Bank Interest Income | 95,084 | 110,692 | | Government Grants | 115,205 | 161,925 | | Sales of Raw Materials | 16,952 | 17,913 | | Other | 24 | 4,434 | | Total | 227,265 | 294,964 | [5. Other Gains and (Losses), Net](index=43&type=section&id=5.%20Other%20Gains%20and%20(Losses),%20Net) For the six months ended June 30, 2024, net other losses amounted to **RMB 33,469 thousand**, primarily due to the combined effect of increased net exchange losses and reduced net realized gains on financial instruments at fair value through profit or loss Other Gains and (Losses), Net Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Donations | (228) | (184) | | Net Exchange Losses | (51,958) | (12,423) | | Net Gains (Losses) on Disposal of Property, Plant and Equipment | 242 | (83) | | Net Unrealized Gains on Financial Instruments at Fair Value Through Profit or Loss | 12,511 | 4,760 | | Net Realized Gains (Losses) on Financial Instruments at Fair Value Through Profit or Loss | 3,432 | (12,384) | | Other | 2,532 | (7,936) | | Total | (33,469) | (28,250) | [6. Profit Before Tax](index=43&type=section&id=6.%20Profit%20Before%20Tax) For the six months ended June 30, 2024, profit before tax was derived after deducting finance costs of **RMB 85,386 thousand** (primarily due to increased other interest expenses), staff costs of **RMB 252,674 thousand**, and other items including depreciation and R&D costs Finance Costs Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Interest on Bank Loans | 14,439 | 54,951 | | Interest on Lease Liabilities | 87 | 108 | | Other Interest Expenses | 71,119 | 6,058 | | Total Finance Costs | 85,645 | 61,117 | | Less: Capitalized in Construction in Progress | (259) | (2,122) | | Total | 85,386 | 58,995 | - Borrowing costs were capitalized at an annual interest rate of **2.44%** (H1 2023: 2.32% to 4.95%)[96](index=96&type=chunk) Staff Costs (Including Directors' Emoluments) Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Salaries, Wages, Allowances, and Other Benefits | 242,496 | 204,852 | | Contributions to Defined Contribution Retirement Plans | 10,178 | 7,967 | | Total | 252,674 | 212,819 | Other Items Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Amortization of Intangible Assets | 683 | 861 | | Auditor's Remuneration | 182 | 178 | | Cost of Inventories | 9,888,027 | 7,108,788 | | Depreciation — Property, Plant and Equipment | 405,373 | 371,699 | | Depreciation — Right-of-Use Assets | 14,951 | 12,238 | | Net Provision for (Reversal of) Impairment Losses on Trade Receivables | (868) | 2,210 | | Research and Development Costs | 260,632 | 178,232 | - Cost of inventories includes staff costs of approximately **RMB 607,341 thousand** and depreciation of approximately **RMB 72,400 thousand**[97](index=97&type=chunk) [7. Income Tax Expense](index=45&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2024, income tax expense was **RMB 15,541 thousand**, a significant decrease from the prior year, with Chinese subsidiaries enjoying a **15%** high-tech enterprise income tax preferential rate, while the Vietnamese subsidiary did not provide for tax losses due to tax losses Income Tax Expense Details | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Current Tax - China Corporate Income Tax | 8,377 | 41,021 | | Withholding Tax - Dividend Withholding Tax | 500 | 41 | | Deferred Tax - Origination and Reversal of Temporary Differences | 6,664 | 9,195 | | Total | 15,541 | 50,257 | - Chinese subsidiaries Baihong Fujian and Baihong Gaoxin were granted High-Tech Enterprise qualifications, enjoying a **15%** preferential corporate income tax rate[99](index=99&type=chunk) - Enterprises engaged in R&D activities are entitled to deduct **200%** of eligible R&D expenses as tax-deductible expenses[99](index=99&type=chunk) - The Vietnamese subsidiary, Baihong Vietnam, is exempt from income tax for two years from the first year of generating taxable profits, followed by a **50%** reduction for the next four years; no provision was made for tax losses in this period due to tax losses[100](index=100&type=chunk) [8. Dividends](index=46&type=section&id=8.%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended **June 30, 2024, and 2023**[101](index=101&type=chunk) [9. Earnings Per Share](index=47&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2024, basic and diluted earnings per share attributable to owners of the company increased to **RMB 0.15**, up from **RMB 0.10** in the prior year Earnings Per Share Calculation Data | Indicator | H1 2024 | H1 2023 | | :--- | :----------- | :----------- | | Profit Attributable to Owners of the Company for Basic EPS Calculation (RMB thousand) | 327,465 | 201,683 | | Weighted Average Number of Ordinary Shares | 2,118,447,000 | 2,118,965,459 | | Basic and Diluted Earnings Per Share (RMB) | 0.15 | 0.10 | - There were no potential dilutive ordinary shares for the six months ended **June 30, 2024, and 2023**, so diluted earnings per share were the same as basic earnings per share[103](index=103&type=chunk) [10. Property, Plant and Equipment](index=48&type=section&id=10.%20Property,%20Plant%20and%20Equipment) As of June 30, 2024, the net book value of the company's property, plant, and equipment decreased, and the balance of construction in progress also declined, reflecting the transfer of some construction in progress to other property, plant, and equipment Changes in Other Property, Plant and Equipment | Item | H1 2024 (RMB thousand) | FY 2023 (RMB thousand) | | :--- | :------------------------ | :---------------------- | | At Beginning of Reporting Period | 11,156,676 | 9,881,152 | | Additions | – | 211 | | Transferred from Construction in Progress | 132,923 | 2,016,651 | | Disposals | (119) | (433) | | Depreciation Expense | (405,373) | (753,545) | | At End of Reporting Period | 10,860,725 | 11,156,676 | Changes in Construction in Progress | Item | H1 2024 (RMB thousand) | FY 2023 (RMB thousand) | | :--- | :------------------------ | :---------------------- | | At Beginning of Reporting Period | 539,105 | 1,486,270 | | Additions | 59,400 | 1,049,539 | | Transferred to Other Property, Plant and Equipment | (132,923) | (2,016,651) | | At End of Reporting Period | 465,352 | 539,105 | Net Book Value of Right-of-Use Assets | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Leasehold Land Interests Held for Own Use | 1,081,180 | 1,097,429 | | Buildings Leased for Own Use | 959 | 1,282 | | Total | 1,082,139 | 1,098,711 | [11. Inventories](index=49&type=section&id=11.%20Inventories) As of June 30, 2024, the company's total inventories amounted to **RMB 4,686,779 thousand**, an increase from the end of 2023, primarily reflecting growth in raw materials and finished goods inventory Inventories Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Raw Materials | 624,060 | 536,728 | | Work in Progress | 225,183 | 239,640 | | Finished Goods | 3,837,536 | 3,698,402 | | Total | 4,686,779 | 4,474,770 | [12. Trade and Other Receivables](index=50&type=section&id=12.%20Trade%20and%20Other%20Receivables) As of June 30, 2024, total trade and other receivables significantly increased to **RMB 4,759,641 thousand** from the end of 2023, mainly driven by increased discounted bills receivable and prepayments for raw materials, with most trade receivables and bills receivable due within 1 month Trade and Other Receivables Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Trade Receivables (Net of Impairment Provision) | 1,167,778 | 899,517 | | Bills Receivable | 91,546 | 274,553 | | Deposits, Prepayments, and Other Receivables | 3,676,505 | 2,241,853 | | Less: Non-current Portion | (176,188) | (174,742) | | Total | 4,759,641 | 3,241,181 | - Discounted bank acceptance bills of approximately **RMB 5,784,878 thousand** and endorsed bank acceptance bills of approximately **RMB 85,041 thousand** were derecognized as financial assets[110](index=110&type=chunk) Ageing Analysis of Trade Receivables and Bills Receivable | Ageing | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Within 1 Month | 1,245,107 | 1,152,588 | | 1 to 2 Months | 10,014 | 14,299 | | 2 to 3 Months | 1,185 | 5,384 | | Over 3 Months | 3,018 | 1,799 | | Total | 1,259,324 | 1,174,070 | [13. Financial Assets at Fair Value Through Profit or Loss](index=51&type=section&id=13.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2024, total financial assets at fair value through profit or loss amounted to **RMB 55,296 thousand**, primarily comprising unlisted investment funds and financial instrument contracts, with fair values determined by reference to financial institution quotations Financial Assets at Fair Value Through Profit or Loss Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Unlisted Investment Funds | 30,000 | – | | Financial Instrument Contracts at Fair Value Through Profit or Loss | 25,296 | 32,386 | | Total | 55,296 | 32,386 | - All financial assets at fair value through profit or loss are measured using Level 1 (quoted prices in active markets) or Level 2 (significant other observable inputs) fair value hierarchy[116](index=116&type=chunk)[117](index=117&type=chunk) [14. Restricted Bank Deposits](index=53&type=section&id=14.%20Restricted%20Bank%20Deposits) As of June 30, 2024, total restricted bank deposits amounted to **RMB 6,024,458 thousand**, primarily pledged for bank loans and bills payable - Restricted bank deposits of approximately **RMB 221,502 thousand** are pledged to banks for certain bank loans[118](index=118&type=chunk) - Restricted bank deposits of approximately **RMB 5,802,956 thousand** are pledged to banks for bills payable[118](index=118&type=chunk) [15. Cash and Cash Equivalents](index=53&type=section&id=15.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2024, the company's bank balances and cash amounted to **RMB 540,811 thousand**, a significant increase from the end of 2023 Cash and Cash Equivalents Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Bank Balances and Cash | 540,811 | 158,138 | [16. Trade and Other Payables](index=53&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2024, total trade and other payables increased to **RMB 16,975,268 thousand** from the end of 2023, mainly driven by a significant increase in bills payable, with most payables due within 3 months Trade and Other Payables Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Trade Payables | 2,151,905 | 2,327,575 | | Bills Payable | 14,242,528 | 11,707,191 | | Other Payables and Accrued Expenses | 222,952 | 316,593 | | Salaries and Welfare Payable | 53,546 | 48,109 | | Interest Payable | 7,840 | 6,887 | | Equipment Payables | 61,168 | 27,301 | | Construction Payables | 64,247 | 108,970 | | Accrued Land Costs | 4,453 | 4,453 | | Other Taxes Payable | 166,629 | 182,657 | | Total | 16,975,268 | 14,729,736 | - All trade and other payables are expected to be settled within one year or repayable on demand[120](index=120&type=chunk) Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Within 3 Months | 9,223,963 | 5,458,446 | | Over 3 Months but Within 6 Months | 3,672,962 | 4,796,134 | | Over 6 Months but Within 1 Year | 3,417,932 | 3,711,238 | | Over 1 Year | 79,576 | 68,948 | | Total | 16,394,433 | 14,034,766 | [17. Bank Loans](index=54&type=section&id=17.%20Bank%20Loans) As of June 30, 2024, total bank loans amounted to **RMB 382,842 thousand**, with **RMB 99,625 thousand** repayable within one year, and bank loans are secured by restricted bank deposits, buildings held for own use, and guarantees from subsidiaries Bank Loan Repayment Schedule | Term | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Within 1 Year or On Demand | 99,625 | 417,078 | | After 1 Year but Within 2 Years | 191,625 | 2,467 | | After 2 Years but Within 5 Years | 91,592 | 281,071 | | Total | 382,842 | 700,616 | - Secured bank loans are pledged by approximately **RMB 221,502 thousand** of restricted bank deposits, approximately **RMB 40,558 thousand** of buildings held for own use, and corporate guarantees provided by Baihong Fujian and Baihong Gaoxin[125](index=125&type=chunk) Bank Loan Effective Interest Rate Range | Interest Rate Type | 2024 (%) | 2023 (%) | | :--- | :--------- | :--------- | | Fixed Rate Bank Loans | 2.00–2.80 | 2.00–2.55 | | Variable Rate Bank Loans | 6.73 | 5.58 | [18. Lease Liabilities](index=56&type=section&id=18.%20Lease%20Liabilities) As of June 30, 2024, the present value of the company's lease liabilities was **RMB 2,629 thousand**, with **RMB 447 thousand** repayable within one year, and the weighted average incremental borrowing rate was **5.56%** per annum Lease Liabilities Maturity Profile | Term | June 30, 2024 Present Value of Minimum Lease Payments (RMB thousand) | June 30, 2024 Total Minimum Lease Payments (RMB thousand) | | :--- | :----------------------------------------- | :--------------------------------------- | | Within 1 Year | 447 | 653 | | After 1 Year but Within 2 Years | 81 | 165 | | After 2 Years but Within 5 Years | 85 | 392 | | After 5 Years | 2,016 | 3,989 | | Present Value of Lease Liabilities | 2,629 | 2,629 | | Less: Future Finance Charges | | (2,570) | - As of **June 30, 2024**, the Group's weighted average incremental borrowing rate for lease liabilities was **5.56% per annum** (December 31, 2023: 4.77%)[129](index=129&type=chunk) [19. Share Capital](index=56&type=section&id=19.%20Share%20Capital) As of June 30, 2024, the company's issued share capital was **2,118,380,000 shares** with a nominal value of **HKD 21,183,800**, and during the period, the company repurchased and cancelled some shares, leading to a reduction in issued share capital Authorized and Issued Share Capital | Item | Par Value (HKD) | Number of Shares | Nominal Value of Ordinary Shares (HKD) | RMB | | :--- | :---------- | :------- | :-------------------- | :----- | | Authorized Share Capital | 0.01 | 10,000,000,000 | 100,000,000 | | | Issued and Fully Paid as of January 1, 2023 | 0.01 | 2,118,986,000 | 21,189,860 | 17,819,454 | | Shares Repurchased and Cancelled | 0.01 | (278,000) | (2,780) | (2,337) | | Issued and Fully Paid as of June 30, 2024 | 0.01 | 2,118,380,000 | 21,183,800 | 17,814,358 | Purchase and Cancellation of Own Shares | Year/Month of Repurchase | Number of Shares | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Price Paid (RMB thousand) | | :---------- | :------- | :-------------------- | :-------------------- | :------------------------ | | Repurchased Aug-Dec 2023 and Cancelled H1 2024 | 158,000 | 4.19 | 3.96 | 591 | | Repurchased Jan-Apr 2024 and Cancelled H1 2024 | 120,000 | 4.40 | 4.06 | 464 | | Repurchased May-Jun 2024 and Cancelled Jul 2024 | 574,000 | 4.35 | 4.11 | 2,217 | | Total | 852,000 | | | 3,272 | - For the six months ended **June 30, 2024**, the company repurchased **694,000 shares**, of which **120,000 shares** were cancelled, and the remaining **574,000 shares** were cancelled in **July 2024**[136](index=136&type=chunk) [20. Capital Commitments](index=59&type=section&id=20.%20Capital%20Commitments) As of June 30, 2024, the company's total unfulfilled capital commitments amounted to **RMB 503,149 thousand**, with the majority being contracted projects Capital Commitments Details | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :------------------------- | :-------------------------- | | Authorized but Not Contracted | 13,348 | – | | Contracted | 489,801 | 234,793 | | Total | 503,149 | 234,793 | [21. Significant Related Party Transactions](index=60&type=section&id=21.%20Significant%20Related%20Party%20Transactions) For the six months ended June 30, 2024, total key management personnel remuneration amounted to **RMB 2,597 thousand**, with no other significant related party transactions Key Management Personnel Remuneration | Item | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) | | :--- | :------------------------ | :------------------------ | | Salaries, Wages, Allowances, and Benefits in Kind | 2,567 | 2,583 | | Contributions to Retirement Plans | 30 | 28 | | Total | 2,597 | 2,611 | - Save for key management personnel remuneration, the Group had no other significant related party transactions for the six months ended **June 30, 2024, and 2023**[140](index=140&type=chunk) [Corporate Governance](index=65&type=section&id=Corporate%20Governance) [Share Schemes](index=65&type=section&id=Share%20Schemes) For the six months ended June 30, 2024, the company had no share option schemes or share award schemes - For the six months ended **June 30, 2024**, the Company had no share option schemes or share award schemes[152](index=152&type=chunk) [Compliance with Corporate Governance Code](index=65&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2024 - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended **June 30, 2024**[152](index=152&type=chunk) [Compliance with Model Code](index=65&type=section&id=Compliance%20with%20Model%20Code) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirms that all directors complied with it during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirms that all directors complied with the said code for the six months ended **June 30, 2024**[153](index=153&type=chunk) [Audit Committee](index=65&type=section&id=Audit%20Committee) The company has established an Audit Committee comprising three independent non-executive directors, responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems, and has reviewed the unaudited interim financial information for this period - The Audit Committee comprises three independent non-executive directors: **Mr. Yu Weiming** (Chairman), **Mr. Lin Jianming**, and **Mr. Shi Chunbi**[154](index=154&type=chunk) - The primary responsibilities of the Audit Committee are to review and oversee the Group's financial reporting process, risk management, and internal control systems[154](index=154&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial information for the six months ended **June 30, 2024**[154](index=154&type=chunk) [Other Information](index=61&type=section&id=Other%20Information) [Interim Dividend](index=61&type=section&id=Interim%20Dividend) The Board of Directors has decided not to declare an interim dividend for the six months ended June 30, 2024 - The Board of Directors has decided not to declare an interim dividend for the six months ended **June 30, 2024** (2023 interim dividend: nil)[142](index=142&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=61&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures) As of June 30, 2024, Mr. Shi Tianyou and Mr. Wu Jinbiao held long positions of **30.39%** and **6.46%** respectively in the company's ordinary shares through controlled corporations, with no other directors or chief executives holding disclosable interests or short positions in shares Directors' Long Positions in the Company's Ordinary Shares | Director's Name | Nature of Interest | Number of Ordinary Shares Held | Percentage of the Company's Issued Share Capital | | :------- | :------- | :------------------- | :------------------------- | | Mr. Shi Tianyou | Interest in Controlled Corporation | 643,720,000 | 30.39% | | Mr. Wu Jinbiao | Interest in Controlled Corporation | 136,820,000 | 6.46% | - Mr. Shi Tianyou owns **100%** interest in Di Quan Limited, which directly owns **643,720,000** shares of the Company[143](index=143&type=chunk) - Mr. Wu Jinbiao owns **100%** interest in Yun Ying Investment Limited, which directly owns **136,820,000** shares of the Company[143](index=143&type=chunk) - As of **June 30, 2024**, no other directors or chief executives held interests or short positions in shares, underlying shares, or debentures required to be disclosed under the Securities and Futures Ordinance[144](index=144&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=62&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, Hong Kong Rong An Investment Co., Ltd. and its affiliates held **36.86%** of the company's shares, Di Quan Limited and Yun Ying Investment Limited held **30.39%** and **6.46%** respectively, and The Export-Import Bank of China held a **14.16%** share mortgage interest Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares | Name of Substantial Shareholder/Person | Capacity | Number of Ordinary Shares Held | Percentage of the Company's Issued Share Capital | | :---------------- | :--- | :------------------- | :------------------------- | | Hong Kong Rong An Investment Co., Ltd. | Beneficial Owner | 780,870,808 | 36.86% | | Chongqing CECEP Industrial Co., Ltd. | Interest in Controlled Corporation | 780,870,808 | 36.86% | | CECEP Energy Conservation Technology Co., Ltd. | Interest in Controlled Corporation | 780,870,808 | 36.86% | | China Energy Conservation and Environmental Protection Group | Interest in Controlled Corporation | 780,870,808 | 36.86% | | Di Quan Limited | Beneficial Owner | 643,720,000 | 30.39% | | Yun Ying Investment Limited | Beneficial Owner | 136,820,000 | 6.46% | | Mr. Huang Shaorong | Beneficial Owner | 19,425,000 | 0.92% | | Yong Mao Global Trading Limited | Beneficial Owner | 188,532,000 | 8.90% | | Mr. Lin Haibin | Beneficial Owner | 27,723,000 | 1.31% | | Haibin International Investment Limited | Beneficial Owner | 170,140,000 | 8.03% | | The Export-Import Bank of China | Person with Share Mortgage Interest | 300,000,000 | 14.16% | - Chongqing CECEP, CECEP Technology, and China Energy Conservation are all deemed to have interests in Hong Kong Rong An's shares through controlled corporate relationships[147](index=147&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=64&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2024, the company repurchased a total of **694,000 shares** on the Stock Exchange, of which **120,000 shares** were cancelled, and the remaining **574,000 shares** were cancelled in July 2024, and the company currently holds no treasury shares Details of Share Repurchases | Date | Number of Shares Repurchased | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Price Paid (HKD) | | :--- | :----------- | :---------------- | :---------------- | :-------------- | | January 3, 2024 | 32,000 | 4.14 | 4.06 | 131,560 | | January 17, 2024 | 16,000 | 4.1 | 4.06 | 65,360 | | March 28, 2024 | 10,000 | 4.3 | 4.3 | 43,000 | | April 9, 2024 | 10,000 | 4.4 | 4.4 | 44,000 | | April 12, 2024 | 10,000 | 4.27 | 4.27 | 42,700 | | April 22, 2024 | 10,000 | 4.4 | 4.4 | 44,000 | | April 24, 2024 | 18,000 | 4.38 | 4.22 | 77,880 | | April 26, 2024 | 14,000 | 4.4 | 4.4 | 61,600 | | May 30, 2024 | 6,000 | 4.35 | 4.35 | 26,100 | | June 12, 2024 | 10,000 | 4.25 | 4.25 | 42,500 | | June 21, 2024 | 100,000 | 4.28 | 4.17 | 423,100 | | June 24, 2024 | 86,000 | 4.2 | 4.18 | 361,000 | | June 25, 2024 | 172,000 | 4.3 | 4.11 | 727,140 | | June 27, 2024 | 126,000 | 4.2 | 4.15 | 526,300 | | June 28, 2024 | 74,000 | 4.35 | 4.25 | 316,100 | | Total | 694,000 | | | 2,932,340 | - For the six months ended **June 30, 2024**, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any other listed securities of the Company[150](index=150&type=chunk) - As of **June 30, 2024**, the Company did not hold any treasury shares[150](index=150&type=chunk) [Changes in Directors' Information](index=64&type=section&id=Changes%20in%20Directors'%20Information) No other information regarding directors is required to be disclosed under Listing Rule **13.51B(1)** during this reporting period - No other information regarding directors is required to be disclosed under Listing Rule **13.51B(1)**[151](index=151&type=chunk)

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佈之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部份內容 而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 BILLION INDUSTRIAL HOLDINGS LIMITED 百宏實業控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：2299） 截至二零二四年六月三十日止六個月之中期業績公佈 | --- | --- | |-------|-------------------------------------------------------------------| | | | | 摘要 | | | • | 二零二四年上半年收入達人民幣 106.20 億元，較去年同期上升 41.5% 。 | | • | 二零二四年上半年溢利達人民幣 3.27 億元，較去年同期上升 62.4% 。 | | • | 每股盈利達人民幣 0.15 元。 | — 1 — 百宏實業控股有限公司（「本公司」）董事會（「董事會」）欣然宣佈，本公司及其附屬公司（「本 集團」）截至二零二四年六月三十日止六個月之未經審核中期業 ...

Production Capacity and Expansion - The design capacity for domestic polyester products is 910,000 tons per year, with BOPET film capacity at 702,500 tons, making it one of the largest polyester film manufacturers in China [4]. - The company invested approximately $185 million to establish a production line for polyester industrial yarn, with a total capacity of about 250,000 tons per year, which commenced commercial production on July 17, 2020 [6]. - The company plans to invest around $320 million from 2020 to 2023 to expand its polyester film production lines, with an additional capacity of 400,000 tons per year, fully operational by November 2023 [6]. - The company’s domestic polyester filament design capacity is 2,726,400 tons per year, with differentiated chemical fiber production being the largest in Fujian Province [4]. - The polyester film production expansion plan was completed in 2016, achieving a design capacity of 255,000 tons per year [9]. - The company established a new facility in Vietnam with an annual capacity of 250,000 tons for polyester bottle sheet production, with an investment of approximately $220 million [9]. - The company’s new manufacturing facility for polyester industrial yarn is expected to significantly enhance its market position in the rapidly growing East China market [6]. - The company has introduced advanced German BOPET film production lines and R&D equipment to target the high-end functional polyester film market [4]. - The company’s polyester film production line is designed to meet stringent environmental requirements, ensuring high-quality output for various applications [6]. - The company launched a new polyester fiber project, developing 1.2D ultra-fine short fibers, which can effectively replace cotton demand [12]. - The company plans to expand its production capacity with a new functional polyester film project estimated at 330,000 tons annually [12]. Financial Performance - Revenue for the year 2023 reached RMB 17,755,491 thousand, representing a 14.1% increase from RMB 15,564,988 thousand in 2022 [17]. - Gross profit decreased to RMB 1,050,059 thousand, a decline of 26.3% compared to RMB 1,423,945 thousand in the previous year [17]. - Operating profit fell by 44.7% to RMB 531,517 thousand from RMB 961,111 thousand in 2022 [17]. - Net profit for the year was RMB 353,398 thousand, down 46.1% from RMB 655,818 thousand in 2022 [17]. - Current assets increased by 67.8% to RMB 487,397 thousand from RMB 290,409 thousand in the previous year [18]. - Total equity rose to RMB 10,231,260 thousand, a 4.1% increase from RMB 9,826,877 thousand in 2022 [18]. - The company achieved a gross margin of 5.9%, down from 9.1% in the previous year [18]. - Operating margin decreased to 3.0% from 6.2% in 2022 [18]. - The company has achieved full-process intelligent automated production, enhancing product quality and production capacity, demonstrating strong risk resistance during the pandemic [21]. - The company’s brand value has significantly increased, being recognized as one of the top brands in Fujian, which supports its high-quality development [23]. - The company is focusing on the development of differentiated chemical fibers and functional environmentally friendly polyester film products, aligning with its vision of becoming a quality supplier of global consumer goods [23]. Market and Industry Trends - The textile industry in China reported total operating income of approximately RMB 2.29 trillion and profits of RMB 84 billion for the year ending December 31, 2023 [20]. - The domestic demand and consumption upgrades are the main driving forces for the textile industry, supported by policies such as the three-child policy and urbanization [21]. - The global economic outlook is expected to gradually improve in 2024, supported by fiscal and monetary policy measures [30]. - The textile industry in China is expected to develop under a stable growth framework, aided by various government support policies [31]. - The profit of large industrial enterprises in China from January to December 2023 exceeded RMB 7.6 trillion, showing a year-on-year decline of about 2.3% [30]. - The price of raw materials for textile products decreased by approximately 3.0% year-on-year from January to December 2023 [32]. Research and Development - The company has implemented a talent strategy focused on attracting and retaining skilled personnel, collaborating with Donghua University to establish a talent practice base [34]. - The company has established a new production facility in Vietnam with an expected annual capacity of 300,000 tons, which began commercial production in July 2023 [36]. - The company has obtained 134 national patents and has applied for an additional 168 patents, with 140 patented products currently in production and sales [38]. - The revenue from differentiated products was RMB 10,142,455,000, accounting for 57.1% of total revenue, with R&D expenses at RMB 455,857,000, representing 2.6% of total revenue [38]. - The demand and application prospects for ES fiber are expected to broaden, leading to higher profits and strengthening the company's industry position [34]. Corporate Governance - The board consists of two executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2023 [89]. - All directors have confirmed compliance with the established code of conduct for securities trading during the fiscal year ending December 31, 2023 [88]. - The board held meetings to discuss overall strategy and operational performance, with attendance records showing full participation from all directors in board and shareholder meetings [98]. - Independent non-executive directors play a crucial role in providing unbiased opinions on the group's strategy and performance, ensuring shareholder interests are safeguarded [90]. - The company has established a mechanism to ensure independent viewpoints are provided to the board, with a majority of non-executive and independent non-executive directors [92]. - The company has received annual confirmations of independence from all current independent non-executive directors, meeting regulatory requirements [90]. - The board is responsible for establishing internal controls and risk management systems, regularly discussing their effectiveness with management [89]. - The company has adopted a board diversity policy to ensure a balanced mix of skills, experience, and perspectives among board members [105]. - The board aims to appoint at least one female director by December 31, 2024, to enhance gender diversity [106]. - The remuneration committee reviewed the company's compensation policy for 2023 and approved the remuneration plans for directors and senior management [113]. Shareholder Communication and Transparency - The company is committed to maintaining high transparency and effective communication with investors and shareholders, ensuring timely access to accurate and comprehensive information [133]. - The board of directors will attend the annual general meeting scheduled for May 27, 2024, to address shareholder questions [133]. - The company has established multiple channels for ongoing communication with shareholders, including direct inquiries to the investor relations department [135]. - The company has a shareholder communication policy to ensure all shareholders can access accurate and understandable public information [135]. - The company has appointed a share transfer agent to assist shareholders with registration and related matters [137]. - The company has mechanisms for employees and business associates to report any misconduct or malpractice confidentially [138]. Employee and Management Practices - The company emphasizes employee development and work-life balance, ensuring fair treatment and training opportunities for all staff [24]. - The company employs 9,202 staff as of December 31, 2023, with compensation based on performance, professional experience, and market conditions [82]. - The company recognizes the importance of gender diversity at the board level and continues to seek female candidates [106]. - The company’s remuneration policy is based on individual performance and salary trends in Hong Kong and China [180]. - The company may distribute discretionary bonuses to employees based on the group's profitability [180]. Related Party Transactions - Total sales from related party transactions for the year ended December 31, 2023, reached RMB 196,426,000, within the approved annual cap of RMB 621,000,000 [195]. - Independent non-executive directors confirmed that related party transactions were conducted in the normal course of business and on fair terms [198]. - The company's auditor confirmed that the related party transactions were approved by the board and complied with the company's pricing policy [198]. Miscellaneous - The company made charitable donations totaling approximately RMB 219,000 for the year ended December 31, 2023, compared to RMB 164,000 in 2022 [158]. - The company has maintained compliance with relevant laws and regulations, with no significant violations reported during the review year [151]. - The company has not experienced any substantial disputes with suppliers, customers, or other stakeholders during the review year [152]. - The nature of the company's main business has not undergone significant changes as of December 31, 2023 [150].

Financial Performance - For the year ended December 31, 2023, revenue reached RMB 17.755 billion, an increase of 14.1% compared to RMB 15.565 billion for the year ended December 31, 2022[2]. - Profit for the year ended December 31, 2023, was RMB 353.4 million, a decrease of 46.1% from RMB 655.8 million for the year ended December 31, 2022[2]. - Earnings per share for the year ended December 31, 2023, was RMB 0.17, down from RMB 0.31 in the previous year[2]. - Gross profit for the year ended December 31, 2023, was RMB 1.050 billion, compared to RMB 1.424 billion in 2022, reflecting a decline in gross margin[4]. - Operating profit for the year ended December 31, 2023, was RMB 531.5 million, down from RMB 961.1 million in the previous year[4]. - Other comprehensive income for the year ended December 31, 2023, totaled RMB 52.2 million, down from RMB 67.7 million in 2022[5]. - The group reported a decrease in financial costs to RMB 120.2 million in 2023 from RMB 216.3 million in 2022, indicating improved financial management[4]. - The company's profit attributable to owners for the year 2023 was RMB 353,398,000, a decrease of 46.1% compared to RMB 655,818,000 in 2022[28]. - The group's annual profit for 2023 was RMB 353,398,000, a decrease of 46.1% from RMB 655,818,000 in 2022, with a net profit margin dropping from 4.2% to 2.0%[86]. Revenue Breakdown - Total revenue for the year ended December 31, 2023, was RMB 17,755,491,000, an increase of 14.1% from RMB 15,564,988,000 in 2022[13]. - Revenue from polyester products reached RMB 7,182,898,000, up 27.4% from RMB 5,636,081,000 in the previous year[13]. - Revenue from polyester filament products was RMB 8,712,597,000, an increase of 8.6% compared to RMB 8,022,664,000 in 2022[13]. - The company generated RMB 10,142,455,000 in revenue from differentiated products, accounting for 57.1% of total revenue[50]. - Overseas sales revenue increased by 12.3% to RMB 4,243,270,000, accounting for 23.9% of total revenue[58]. - Domestic sales in Fujian province accounted for 48.6% of total revenue, amounting to RMB 8,615,788,000[59]. Cost and Inventory Management - The total cost of inventories for the year was RMB 16,705,432,000, an increase from RMB 14,141,043,000 in the previous year[22]. - Sales cost for the year was RMB 16,705,432,000, an 18.1% increase from RMB 14,141,043,000 in the previous year[60]. - The total inventory as of December 31, 2023, was RMB 4,474,770,000, an increase of 11.5% from RMB 4,011,391,000 in 2022[29]. - The average selling cost of polyester products decreased by 7.7% to RMB 6,472 per ton, primarily due to lower raw material prices[62]. - Inventory turnover days increased to 92.7 days in 2023 from 88.0 days in 2022, attributed to insufficient orders due to market conditions[88]. Assets and Liabilities - The net current liabilities as of December 31, 2023, were approximately RMB 2.256 billion, an improvement from RMB 2.614 billion in 2022[9]. - Total assets less current liabilities amounted to RMB 10.719 billion as of December 31, 2023, compared to RMB 10.117 billion in the previous year[6]. - The group's total liabilities as of December 31, 2023, were RMB 16,037,188,000, with a debt-to-equity ratio of 156.7%[89]. - Cash and cash equivalents decreased to RMB 158,138,000 in 2023 from RMB 231,620,000 in 2022[37]. Production and Capacity Expansion - The company plans to invest approximately USD 320,000,000 to establish a polyester film production line, expected to add an annual production capacity of 400,000 tons[49]. - The new production facility for polyester bottle chips in Vietnam has an expected annual capacity of 300,000 tons and began commercial production in July 2023[49]. - The company is positioned to increase its polyester film and sheet production capacity by 100% with the new project, strengthening its market position as one of China's major polyester film manufacturers[48]. - An investment of approximately $185 million has been made to establish a production line for polyester industrial yarn, with an annual capacity of about 250,000 tons, which has begun commercial production[95]. Market and Economic Outlook - The group anticipates gradual improvement in the global economy by 2024, supported by fiscal and monetary policy measures[45]. - The Chinese government's supportive policies for the textile industry are expected to help alleviate operational pressures and promote industry transformation and competitiveness[46]. - The group’s management noted a 2.3% year-on-year decline in profits for large industrial enterprises in China, totaling over RMB 76 trillion from January to December 2023[45]. Corporate Governance and Shareholder Returns - The company does not recommend any final dividend for the year ending December 31, 2023[96]. - The company has repurchased a total of 486,000 shares during the fiscal year ending December 31, 2023, with 328,000 shares canceled within the same period[101]. - The company adheres to high standards of corporate governance to safeguard shareholder interests and enhance corporate value[98]. - The financial statements for the year ended December 31, 2023, have been reviewed by the auditors, confirming consistency with the preliminary consolidated financial statements[105].

Financial Performance - For the six months ended June 30, 2023, the company's revenue was RMB 7,504,397,000, a decrease of 7.4% compared to RMB 8,102,579,000 in the same period of 2022[9]. - Gross profit for the same period was RMB 395,609,000, down from RMB 1,067,514,000, reflecting a significant decline in gross margin[9]. - Operating profit decreased to RMB 310,935,000, compared to RMB 895,457,000 in the previous year, indicating a 65.3% drop[9]. - The net profit for the period was RMB 201,683,000, a decrease of 70.6% from RMB 686,352,000 in the prior year[9]. - The gross profit margin dropped to 5.3% from 13.2%, indicating a significant decline in profitability[10]. - The company reported a net profit margin of 2.7%, down from 8.5% in the previous period[10]. - The revenue from the sale of polyester products amounted to RMB 2,777,561,000, accounting for 37.0% of total revenue[30]. - The revenue from differentiated products was RMB 4,349,830,000, representing 58.0% of total revenue, with R&D expenses of RMB 178,232,000, or 2.4% of total revenue[28]. - The revenue from polyester filament products for the review period was RMB 3,853,583,000, a decrease of RMB 320,905,000 or 7.7% compared to RMB 4,174,488,000 in the first half of 2022[31]. - The revenue from polyester products was RMB 2,777,561,000, down RMB 186,379,000 or 6.3% from RMB 2,963,940,000 in the first half of 2022[32]. Investments and Expansion - The company has established Baihong Vietnam to expand its polyester bottle chip business, with a design capacity of 250,000 tons per year for polyester bottle chips[5]. - Investment of approximately USD 73.9 million in Vietnam is expected to yield an annual production capacity of about 300,000 tons, with commercial production anticipated in the second half of 2023[5]. - The company is investing approximately USD 185 million to establish production lines for polyester industrial yarn, with a total capacity of 250,000 tons per year[5]. - A total investment of around USD 320 million is planned for polyester film production lines, with new production capacity expected to reach 400,000 tons per year[5]. - The group’s polyester film production capacity will double with the launch of a new project, enhancing its market position as one of China's major polyester film manufacturers[25]. - The group has successfully launched a polyester bottle chip project with an annual capacity of 250,000 tons in Vietnam, contributing to its goal of becoming a demonstration platform for capacity cooperation between China and Vietnam[27]. - The company plans to invest approximately USD 185,000,000 to establish a production line for polyester industrial yarn, with an expected annual capacity of 250,000 tons[74]. - A further investment of approximately USD 73,900,000 is planned for developing new production facilities for polyester bottle flakes, with an anticipated annual capacity of 300,000 tons starting in the second half of 2023[74]. - The company has invested around USD 320,000,000 in expanding its polyester film production lines, which will add an annual production capacity of 400,000 tons[75]. Cost and Pricing - The average selling price of polyester filament decreased by RMB 476 per ton, or 5.3%, from RMB 8,955 to RMB 8,479 per ton[31]. - The average selling price of polyester products fell by RMB 1,152 per ton, or 14.4%, from RMB 8,018 to RMB 6,866 per ton[32]. - The average gross profit per ton for polyester filament dropped from RMB 1,197 in the first half of 2022 to RMB 433 in the review period, with a gross margin decrease of 8.3 percentage points[49]. - The average gross profit per ton for polyester products fell from RMB 1,201 in the first half of 2022 to RMB 341 in the review period, with a gross margin decrease of 10.0 percentage points[50]. - The main raw materials PTA and MEG accounted for 71.0% of the total sales cost of polyester filament, with PTA costs increasing to RMB 2,049,568, representing 28.8% of total costs in the review period[44]. - The total sales cost for polyester products was RMB 7,108,788 in the review period, slightly up from RMB 7,035,065 in the first half of 2022[45]. Assets and Liabilities - Non-current assets increased by 7.6% to RMB 13,019,375,000 compared to RMB 12,101,249,000 in the previous period[10]. - Current liabilities decreased by 5.2% to RMB 15,293,563,000 from RMB 16,136,937,000[10]. - The total assets of the group were RMB 26,459,743,000, resulting in an asset-to-liability ratio of 1.6 times[68]. - As of June 30, 2023, the total liabilities of the group amounted to RMB 16,342,047,000, with a debt-to-equity ratio of 161.5%[68]. - The cash and cash equivalents as of June 30, 2023, were RMB 218,106,000, a decrease of 5.8% from RMB 231,620,000 at the end of 2022[67]. - The company's inventory increased to RMB 4,350,357 thousand from RMB 4,011,391 thousand, reflecting a rise of approximately 8.45%[78]. - The total trade and other receivables as of June 30, 2023, were RMB 3,197,375,000, compared to RMB 2,886,168,000 as of December 31, 2022, indicating an increase of about 10.8%[113]. - The company reported a decrease in bank acceptance notes from RMB 5,652,298,000 as of December 31, 2022, to RMB 624,152,000 as of June 30, 2023, a decline of approximately 88.9%[114]. Operational Efficiency - The group has established a 5G smart factory in collaboration with China Mobile, improving production efficiency and reducing labor costs[27]. - The company emphasizes technological innovation and has implemented full-process intelligent automation in production[22]. - The company aims to strengthen its marketing channels and customer service, focusing on market responsiveness and product performance improvements based on customer feedback[27]. - The production capacity for full drawn yarn and pre-oriented yarn is 1,189,000 tons per year as of June 30, 2023[18]. - The production capacity for polyester filament was enhanced by the operations of subsidiaries in Vietnam[31]. Management and Governance - The company has complied with the corporate governance code as per the listing rules during the six months ended June 30, 2023[156]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited interim financial information for the six months ended June 30, 2023[157]. - The company has no related party transactions during the reporting period, aside from those disclosed[140]. - The company has no contingent liabilities as of June 30, 2023, maintaining a stable financial position[71]. Market Outlook - The macroeconomic environment is showing signs of recovery, which may positively impact the company's performance moving forward[20]. - The management remains optimistic about the long-term growth of the business despite short-term impacts from the ongoing pandemic[75].