Company Operations - The company is registered in the Cayman Islands and operates under the stock code 2299[1] - The board of directors includes executive directors and independent non-executive directors[1] - The company secretary is Mr. Luo Kai Cheng[1] Financial Performance - The announcement regarding the annual performance for the year ended December 31, 2022, was made on March 23, 2023[1] - No specific financial performance metrics or user data were disclosed in the announcement[1] - The company emphasizes the accuracy and completeness of the information provided in the announcement[1] - The company does not accept any liability for losses arising from reliance on the announcement[1] - The announcement is a supplementary publication to the annual performance report[1] Corporate Actions - The company did not repurchase, sell, or redeem any of its listed securities during the year ended December 31, 2022[1] - There is no mention of new product development, market expansion, or mergers and acquisitions in the announcement[1]

Financial Performance - For the year ended December 31, 2022, revenue reached RMB 15.565 billion, an increase of 9.3% compared to RMB 14.242 billion for the year ended December 31, 2021[2]. - Profit for the year ended December 31, 2022, was RMB 655.8 million, a decrease of 62.7% from RMB 1.760 billion for the year ended December 31, 2021[2]. - Earnings per share for the year ended December 31, 2022, was RMB 0.31, down from RMB 0.83 in the previous year[2]. - Gross profit for the year ended December 31, 2022, was RMB 1.424 billion, compared to RMB 2.748 billion in the previous year, indicating a significant decline[4]. - The total comprehensive income attributable to the owners of the company for the year ended December 31, 2022, was RMB 723.5 million, down from RMB 1.731 billion in the previous year[5]. - The company's net profit attributable to shareholders for 2022 was RMB 655,818,000, a decrease of 62.7% compared to RMB 1,759,731,000 in 2021[32]. - The group's annual profit for 2022 was RMB 655.8 million, a decrease of 62.7% from RMB 1.76 billion in 2021, with a net profit margin of 4.2%[89]. Revenue Breakdown - Revenue from polyester products increased significantly to RMB 5,636,081 thousand in 2022, up 13.3% from RMB 4,973,212 thousand in 2021[17]. - The total revenue from the Chinese market was RMB 11,787,250 thousand in 2022, up from RMB 11,332,759 thousand in 2021[17]. - The company’s total revenue from Vietnam and other regions was RMB 995,747 thousand in 2022, compared to RMB 542,397 thousand in 2021[17]. - Revenue from differentiated products reached RMB 9,106,941,000, accounting for 58.5% of total revenue[60]. - Overseas sales revenue increased by 29.9% to RMB 3,777,738,000, accounting for 24.3% of total revenue[68]. Cost and Expenses - Employee costs, including director remuneration, increased to RMB 529,315 thousand in 2022 from RMB 457,095 thousand in 2021[23]. - Total financial costs for 2022 amounted to RMB 216,310,000, down 19.6% from RMB 268,933,000 in 2021[25]. - Research and development costs for 2022 were RMB 435,055,000, slightly decreased from RMB 446,384,000 in 2021[26]. - The sales cost for the year was RMB 14,141,043,000, a 23.0% increase from RMB 11,493,748,000, primarily due to rising raw material prices[70]. - The average sales cost of polyester products increased from RMB 5,874 per ton in 2021 to RMB 7,009 per ton in the review year, a rise of RMB 1,135 or 19.3%[72]. Assets and Liabilities - Current liabilities net amount as of December 31, 2022, was approximately RMB 2.614 billion, compared to RMB 1.669 billion in the previous year[9]. - Non-current assets increased to RMB 12.732 billion as of December 31, 2022, from RMB 11.469 billion in the previous year[6]. - Total liabilities as of December 31, 2022, amounted to RMB 16,647,381,000, with a debt-to-equity ratio of 169.4% and total assets of RMB 26,474,258,000, resulting in an asset-to-liability ratio of 1.6 times[92]. Inventory and Trade Receivables - The company reported a significant increase in inventory, which reached RMB 4.011 billion, compared to RMB 2.809 billion in the previous year[6]. - Trade receivables from third parties increased to RMB 963,060,000 in 2022 from RMB 497,706,000 in 2021, representing a growth of 93.4%[34]. - The company's total inventory as of December 31, 2022, was RMB 4,011,391,000, an increase of 42.8% from RMB 2,808,935,000 in 2021[33]. Market and Economic Outlook - The company anticipates gradual economic improvement in 2023, supported by government policies aimed at stimulating local consumption[50]. - The global economic recovery is expected to be influenced by the effectiveness of economic stimulus policies implemented in response to the pandemic[50]. - The overall raw material prices for textile products increased by approximately 5.0% year-on-year from January to December 2022, reflecting rising input costs[53]. Strategic Initiatives and Investments - The group plans to invest approximately $73.9 million in Vietnam for a new polyester bottle chip production facility, expected to have an annual capacity of 300,000 tons starting in June 2023[57]. - The group is investing approximately USD 185,000,000 to establish a production line for polyester industrial yarn, with an expected total capacity of about 250,000 tons per year[98]. - The group plans to invest approximately USD 320,000,000 from 2020 to 2023 to establish polyester film production lines, with an additional production capacity of 400,000 tons per year upon completion[99]. Corporate Governance and Compliance - The audit committee has reviewed the accounting principles and policies adopted by the group for the year ended December 31, 2022[101]. - The company has adhered to all corporate governance codes as stipulated by the Hong Kong Stock Exchange for the year ended December 31, 2022[102]. - The consolidated financial statements for the year ended December 31, 2022, have been reviewed by the external auditor, Zhongshen Zhonghuan[105].

Financial Performance - The company's revenue for the six months ended June 30, 2022, was RMB 8,102,579,000, representing a 25.4% increase compared to RMB 6,462,928,000 in the same period of 2021[11]. - Gross profit decreased by 17.4% to RMB 1,067,514,000 from RMB 1,292,300,000 year-on-year[11]. - Operating profit fell by 21.6% to RMB 895,457,000 compared to RMB 1,141,846,000 in the previous year[11]. - Net profit for the period was RMB 686,352,000, down 17.9% from RMB 835,740,000 in the same period last year[11]. - Earnings per share decreased to RMB 0.32 from RMB 0.40, reflecting a decline in profitability[12]. - The return on equity decreased to 6.9% from 10.2%, indicating reduced efficiency in generating profits from equity[12]. - The net profit for the first half of 2022 was RMB 686,352,000, down 17.9% from RMB 835,740,000 in the same period of 2021, largely due to the impact of the new wave of the pandemic on overall sales[64]. - The profit attributable to the company's owners for the six months ended June 30, 2022, was RMB 686,352,000, compared to RMB 835,740,000 for the same period in 2021, representing a decrease of approximately 17.8%[113]. Revenue Breakdown - Revenue from the main product, polyester filament, was RMB 4,174,488,000, accounting for 51.5% of total revenue[31]. - Revenue from differentiated products amounted to RMB 4,717,228,000, representing 58.2% of total revenue, with R&D expenses of RMB 220,351,000, or 2.7% of total revenue[30]. - The revenue breakdown by product line includes RMB 4,174,488,000 from polyester filament products, RMB 2,963,940,000 from polyester products, RMB 925,699,000 from polyester industrial yarn products, and RMB 38,452,000 from ES fiber products[96]. - The geographical revenue distribution shows that revenue from Mainland China was RMB 5,972,023,000, up from RMB 4,843,695,000 in the previous year, representing a growth of 23.3%[96]. Cost and Expenses - The cost of sales increased to RMB 7,035,065,000, up 36.1% from RMB 5,170,628,000 in the first half of 2021, primarily due to increased sales volume and rising raw material prices[40]. - Selling and distribution expenses rose by 8.8% to RMB 121,825,000 in the first half of 2022, attributed to increased transportation costs following higher sales volumes[60]. - Administrative expenses increased by 16.6% to RMB 310,254,000, primarily due to higher research and development costs[61]. - The average cost per ton of polyester products increased by 25.0% to RMB 6,817, up from RMB 5,454 in the first half of 2021[42]. - The average cost per ton of polyester filament increased by 15.2% to RMB 7,758, up from RMB 6,737 in the first half of 2021[41]. Assets and Liabilities - Non-current assets increased by 5.7% to RMB 12,101,249, while non-current liabilities decreased by 24.5% to RMB 607,032[12]. - Current assets rose significantly by 58.7% to RMB 14,523,484, and current liabilities increased by 39.2% to RMB 16,136,937[12]. - Total equity grew by 20.5% to RMB 9,880,764, with a net current liability reduction of 34.0% to RMB 1,613,453[12]. - The company's total liabilities increased to RMB 16,743,969,000, with a debt-to-equity ratio of 169.5%[68]. - The company's bank loans increased significantly to RMB 1,872,487,000 from RMB 794,074,000, indicating a rise of approximately 135.7%[80]. Production Capacity and Investments - The design capacity for polyester filament in China as of June 30, 2022, was 2,726,400 tons per year, with a significant portion dedicated to differentiated chemical fiber production[7]. - The company established a new polyester filament production line in China with an investment of approximately USD 185 million, aiming for an annual capacity of 250,000 tons[6]. - In Vietnam, the company set up a subsidiary with a design capacity of 554,300 tons per year for polyester filament production[6]. - The company invested approximately USD 230 million from 2019 to 2021 to enhance its polyester film production capacity by an additional 255,000 tons per year[6]. - The group plans to invest approximately USD 32 million in the H area project, which will add 22.8 million tons/year of polyester film capacity and 5.76 million tons/year of APET sheet capacity[27]. Market and Strategic Initiatives - The company aims to leverage its existing manufacturing scale and expertise to capitalize on the growing demand for polyester films in China[6]. - The textile industry is expected to recover gradually as the pandemic is controlled, supported by government policies to stabilize growth[24]. - The company emphasizes technological innovation and aims to enhance competitiveness through automation and smart production[25]. - The group has signed a strategic cooperation agreement with China Mobile for 5G technology, enhancing production efficiency and reducing labor costs through the implementation of a 5G smart factory[29]. - The company focuses on high-end differentiated products with special physical properties and functions, targeting both domestic and international markets[32]. Employee and Governance - The company has a total of 8,727 employees as of June 30, 2022, with compensation based on performance and market conditions[73]. - The company has complied with the corporate governance code during the reporting period[162]. - The audit committee, consisting of three independent non-executive directors, has reviewed the financial reporting procedures[163]. Other Financial Information - Other income increased by 88.3% to RMB 338,039,000 in the first half of 2022, compared to RMB 179,545,000 in the same period of 2021, driven by higher bank interest income and government subsidies[58]. - The net loss from other gains and losses was RMB 78,017,000 in the first half of 2022, compared to a net gain of RMB 48,162,000 in the same period of 2021, reflecting increased realized losses on financial assets[59]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2022, consistent with the previous year[111].

Production Capacity and Expansion - The design capacity for domestic polyester filament is 2,726,400 tons per year, with 1,005,000 tons for fully drawn yarn and pre-oriented yarn, and 711,400 tons for stretch yarn [4]. - The design capacity for polyester products is 510,000 tons per year, with 474,500 tons specifically for BOPET film, making it one of the largest polyester film manufacturers in China [4]. - The establishment of a new production line for polyester industrial yarn with an investment of approximately $185 million, aiming for a total capacity of 250,000 tons per year [6]. - The company has invested about $230 million from 2019 to 2021 to establish new polyester film production lines, adding a capacity of 255,000 tons per year [6]. - The design capacity for polyester filament in Vietnam is 405,000 tons per year, with 136,300 tons for fully drawn yarn and pre-oriented yarn, and 68,700 tons for stretch yarn [6]. - The total design capacity for polyester bottle chips in Vietnam is 250,000 tons per year, marking a significant step in entering emerging markets [6]. - Baihong's F District polyester industrial filament project with an annual capacity of 250,000 tons officially commenced production in July 2020 [9]. - Baihong's G District functional eco-friendly polyester film project estimated annual capacity of 255,000 tons, with two production lines producing a total of 70,000 tons officially launched in December 2020 [9]. - Total design capacity of 500,000 tons per year from 13 production lines in D and G Districts, with plans to expand H District by an additional 330,000 tons [9]. Financial Performance - Revenue for the year 2021 reached RMB 14,241,565 thousand, a 68.9% increase from RMB 8,431,054 thousand in 2020 [12]. - Gross profit for 2021 was RMB 2,747,817 thousand, representing a 99.1% increase from RMB 1,380,345 thousand in 2020 [12]. - Operating profit increased by 112.8% to RMB 2,360,409 thousand in 2021, up from RMB 1,109,242 thousand in 2020 [12]. - Net profit for the year was RMB 1,759,731 thousand, a 125.2% increase compared to RMB 781,482 thousand in 2020 [12]. - Non-current assets rose by 6.1% to RMB 11,468,505 thousand in 2021 from RMB 10,808,813 thousand in 2020 [12]. - Current assets increased by 53.3% to RMB 12,070,094 thousand in 2021, up from RMB 7,873,735 thousand in 2020 [12]. - Total equity grew by 23.4% to RMB 9,103,339 thousand in 2021, compared to RMB 7,374,843 thousand in 2020 [12]. - The gross margin improved to 19.3% in 2021 from 16.4% in 2020 [12]. - The operating margin increased to 16.6% in 2021, up from 13.2% in 2020 [12]. Market Position and Strategy - The company has achieved a market position as one of the major polyester film manufacturers in China, leveraging existing scale and expertise to benefit from market growth [6]. - The company aims to expand its overseas market by establishing a subsidiary in Vietnam for polyester bottle chip business [6]. - The company is focusing on the development of differentiated chemical fibers and functional environmentally friendly polyester film products, enhancing its competitive edge in the market [19]. - The sales volume of polyester film products is steadily increasing, supported by the company's existing manufacturing scale and expertise [20]. - The company aims to leverage its technological advancements and market insights to drive future growth and innovation in its product offerings [20]. Research and Development - The company has been recognized as a "National Recognized Enterprise Technology Center," highlighting its commitment to innovation and technology [7]. - Baihong's ES fiber project developed 1.2D ultra-fine short fibers, designed to perfectly replace cotton demand [9]. - The company has successfully implemented a simulation system for polyester industrial yarn production, optimizing the entire production process [18]. - The group has achieved a revenue of RMB 8,966,557,000 from differentiated products, accounting for 63.0% of total revenue, with R&D expenses of RMB 446,384,000, representing 3.1% of total revenue [35]. - The company emphasizes technological innovation and has implemented a comprehensive automation process, showcasing resilience during the pandemic [30]. Corporate Governance - The company is committed to high standards of corporate governance, adhering to all applicable codes as of December 31, 2021 [76]. - The company has established a strong independent element within the board by balancing executive and non-executive directors [88]. - The company provides insurance coverage for potential legal actions against its directors and officers [86]. - The company’s governance structure includes a remuneration committee, nomination committee, audit committee, and corporate governance committee, all comprising independent non-executive directors [92][94][96][98]. - The board held 12 meetings in the year ending December 31, 2021, with full attendance from executive directors [81]. Sustainability and Social Responsibility - The management highlighted the importance of sustainable practices in production to align with global environmental standards [114]. - The company made charitable donations of approximately RMB 192,000 for the year ended December 31, 2021, a decrease from RMB 3,200,000 in 2020 [128]. - The company has maintained compliance with relevant laws and regulations, with no significant violations reported during the review period [119]. - The company has not experienced any substantial disputes with suppliers, customers, or other stakeholders during the review period [120]. Future Outlook - The company plans to invest approximately 320 million USD to establish polyester film production lines from 2020 to 2022, aiming to expand its polyester film business [20]. - The company remains confident in its long-term business development due to a solid foundation in the textile industry and ongoing market expansion efforts [56]. - Future guidance suggests a continued upward trajectory in revenue, with expectations of maintaining a growth rate of around 20% in the upcoming fiscal year [114]. - The group anticipates continued global economic growth in 2022, supported by fiscal and monetary policies, with limited recession risks [74].

Production Capacity and Investment - As of June 30, 2021, the group's domestic polyester filament design capacity is 2,726,400 tons per year, with differentiated chemical fiber production being the largest in Fujian Province at 1,716,400 tons per year[5]. - The group has invested approximately $185 million to establish a production line for polyester industrial yarn, with a total capacity of 250,000 tons per year, which commenced commercial production on July 17, 2020[6]. - The group is investing about $230 million to establish polyester film production lines, expected to reach a total capacity of approximately 255,000 tons per year, with 222,000 tons specifically for polyester film[6]. - The design capacity for polyester filament in Vietnam is 405,000 tons per year, with the first phase of the "700,000 tons differentiated chemical fiber project" officially in production[5]. - The combined design capacity for polyester filament in Vietnam includes 136,300 tons for fully drawn yarn and 68,700 tons for textured yarn[5]. - The group reported a significant increase in the consumption of polyester industrial yarn in East China, prompting further investment in production capacity[6]. - The company plans to enhance its production capacity in both China and Vietnam, with significant expansions in various product lines[14][15]. Financial Performance - Revenue for the first half of 2021 reached RMB 6,462,928 thousand, representing a 78.8% increase compared to RMB 3,614,662 thousand in 2020[9]. - Gross profit increased by 154.8% to RMB 1,292,300 thousand from RMB 507,198 thousand year-over-year[9]. - Operating profit surged by 233.1% to RMB 1,141,846 thousand, up from RMB 342,752 thousand in the previous year[9]. - Net profit for the period rose by 270.8% to RMB 835,740 thousand, compared to RMB 225,366 thousand in 2020[9]. - Total equity rose by 19.1% to RMB 8,197,478 thousand, up from RMB 6,883,665 thousand in 2020[9]. - The gross margin improved to 20.0% from 14.0% in the previous year[9]. - The operating margin increased to 17.7% from 9.5% year-over-year[9]. - Total revenue for the period reached RMB 6,462,928,000, an increase of 78.8% compared to RMB 3,614,662,000 in the same period last year[26]. - Revenue from polyester products amounted to RMB 2,238,967,000, representing a significant increase of 175.9% from RMB 811,383,000 in the previous year[28]. - Revenue from differentiated products was RMB 3,850,541,000, accounting for 59.6% of total revenue, with R&D expenses at RMB 183,366,000, or 2.8% of total revenue[24]. Market Position and Strategy - The group aims to expand its market presence in the rapidly growing polyester film market in China, leveraging its existing manufacturing scale and expertise[6]. - The group’s polyester products are positioned in the high-end market, with special physical properties such as UV resistance and moisture-wicking capabilities, widely used in consumer goods[5]. - The company aims to provide high-end quality products and gradually lead the market in the polyester industrial yarn sector[23]. - The company aims to enhance its market presence in Vietnam's textile and polyester bottle chip markets, leveraging the region's advantages and market potential[24]. Cost and Pricing - The sales cost for the group increased by 66.4% to RMB 5,170,628,000, up from RMB 3,107,464,000 in the previous year, primarily due to increased sales volume and raw material price hikes[38]. - The average selling price of polyester products rose by 2.0% to RMB 7,310 per ton, compared to RMB 7,170 per ton in the previous year[28]. - The average selling price of polyester filament decreased by 1.2% to RMB 8,131 per ton, down from RMB 8,230 per ton in the previous year[27]. - The average sales cost per ton of polyester filament decreased by 8.3% from RMB 7,348 to RMB 6,737, attributed to fluctuations in crude oil prices[39]. - Polyester product average sales cost per ton increased by 2.1% from RMB 5,342 to RMB 5,454, influenced by raw material price changes[40]. Operational Efficiency and Challenges - The company has demonstrated strong risk resistance during the pandemic, maintaining high production efficiency through smart manufacturing and automation[22]. - The macroeconomic environment is showing signs of recovery, with government policies aimed at stimulating consumption and supporting the textile industry[20][21]. - The company continues to focus on marketing channel expansion and customer service, ensuring timely feedback integration for product improvement[24]. Shareholder and Corporate Governance - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2021, consistent with the previous year[104]. - The company has complied with the corporate governance code as per the listing rules during the six months ending June 30, 2021[158]. - The audit committee consists of three independent non-executive directors, responsible for reviewing financial reporting and risk management[159]. Employee and Management - The company’s employee count was 7,717 as of June 30, 2021, with compensation based on performance and market conditions[66]. - Total employee costs, including directors' remuneration, increased to RMB 201,409,000 in 2021 from RMB 170,064,000 in 2020, reflecting a growth of approximately 18.4%[98]. - Research and development costs rose to RMB 183,366,000 in the first half of 2021, up from RMB 128,281,000 in the same period of 2020, indicating a year-on-year increase of about 43.1%[99].

Production Capacity and Investment - The design capacity for domestic polyester filament is 2,726,400 tons per year, with 1,005,000 tons for fully drawn yarn and pre-oriented yarn, and 711,400 tons for stretch yarn[5]. - The design capacity for polyester film is 255,000 tons per year, with 252,500 tons specifically for BOPET film, making it one of the largest polyester film manufacturers in China[6]. - The company has invested approximately $185 million to establish a production line for polyester industrial yarn, with an estimated total capacity of 250,000 tons per year, which commenced commercial production on July 17, 2020[6]. - The company is investing about $230 million to establish a production line for polyester film, expected to reach a total capacity of approximately 255,000 tons, with 222,000 tons specifically for polyester film production[6]. - The establishment of Baohong Vietnam aims to expand overseas polyester bottle chip business, with a design capacity of 405,000 tons per year for polyester filament[6]. - The combined design capacity for stretch yarn, fully drawn yarn, and pre-oriented yarn in Vietnam is 205,000 tons per year, marking a significant step in expanding into emerging markets[6]. - The company launched a new polyester bottle chip project in Vietnam with an annual production capacity of 250,000 tons in May 2020[11]. - The polyester industrial yarn project in Fujian with an annual capacity of 250,000 tons commenced production in July 2020[11]. - The company plans to invest approximately USD 230 million to establish new polyester film production lines with an estimated annual capacity of 255,000 tons from 2019 to 2021[10]. - The company plans to invest approximately $320 million to establish polyester film production lines from 2020 to 2022, aiming to expand its polyester film business and increase sales volume and revenue[18]. Financial Performance - Revenue for the year 2020 was RMB 8,431,054, a decrease of 10.3% compared to RMB 9,396,866 in 2019[13]. - Gross profit for 2020 was RMB 1,380,345, down 14.6% from RMB 1,616,946 in 2019[13]. - Operating profit decreased by 13.4% to RMB 1,109,242 in 2020 from RMB 1,280,405 in 2019[13]. - Annual profit for 2020 was RMB 781,482, an 8.4% decline from RMB 853,222 in 2019[13]. - Non-current assets increased by 11.4% to RMB 10,808,813 in 2020 from RMB 9,701,232 in 2019[13]. - Current assets rose by 15.9% to RMB 7,873,735 in 2020 compared to RMB 6,791,170 in 2019[13]. - Total equity increased by 10.7% to RMB 7,374,843 in 2020 from RMB 6,660,460 in 2019[13]. - The company's revenue for 2020 was RMB 8,431,054,000, a decrease of 10.3% compared to RMB 9,396,866,000 in 2019[36]. - Sales revenue from polyester filament was RMB 5,970,840,000, accounting for 70.8% of total revenue[36]. - The newly launched ES fiber and polyester industrial yarn generated revenues of RMB 2,357,000 and RMB 199,459,000, representing 0.0% and 2.4% of total revenue, respectively[36]. - The group's annual profit for 2020 was RMB 781,482,000, a decrease of RMB 71,740,000 or 8.4% compared to 2019, with a net profit margin of 9.3%, up from 9.1% in 2019[69]. - The company's net profit attributable to shareholders for the year ended December 31, 2020, was RMB 781,482,000, a decrease from RMB 853,222,000 in 2019[140]. Market Trends and Demand - The company aims to leverage its existing scale and expertise in polyester film manufacturing to capitalize on the growing demand in the market[6]. - The company’s polyester filament products are positioned in the mid-to-high-end market, with applications in various consumer goods including apparel and home textiles[5]. - The textile industry in China is experiencing a recovery with improved domestic demand, as evidenced by a higher operating rate compared to the same period last year, leading to sustained production growth[16]. - The textile industry is expected to benefit from the expansion of domestic demand and consumption upgrades, driven by urbanization and policy changes[16]. - The polyester film market in China is growing steadily, with the company benefiting from its existing scale and expertise in manufacturing polyester films[18]. - The company anticipates stable growth in overall business driven by continuous product innovation and favorable market conditions for polyester products[79]. Technological Innovation and Sustainability - The company has been recognized as a "National Recognized Enterprise Technology Center," enhancing its reputation in the industry[8]. - The company has a strong focus on developing new environmentally friendly polyester film products applicable in multiple fields[6]. - The company emphasizes technological innovation and has achieved full-process intelligent automated production, enhancing product quality and production capacity, especially during the pandemic[16]. - The company is focused on controlling upstream resources and increasing the proportion of recycled products, including biodegradable and bio-based materials[17]. - The company has established a research and development team of over 600 senior technicians, focusing on market-oriented new product development[31]. - The company has obtained 123 national patents and has applied for an additional 133 patents, with 105 patented products currently in production and sales[35]. - The company signed a strategic cooperation agreement with China Mobile for 5G technology, enhancing production efficiency and reducing labor costs[33]. - The company is committed to sustainable development and has focused on enhancing product quality and environmental safety in response to increasing regulatory demands[29]. Corporate Governance and Compliance - The company has complied with all applicable provisions of the corporate governance code as of December 31, 2020[86]. - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, responsible for corporate strategy and development[88]. - The company has adopted a board diversity policy to ensure a balanced mix of skills, experience, and perspectives among board members[99]. - The company has procedures in place for shareholders to request special meetings and propose agenda items[120]. - The company has established written policies and procedures for internal controls applicable to all operating units, ensuring efficiency in risk management and internal controls[118]. - The company has a dedicated independent internal audit department that assists the board in reviewing the internal control system[118]. - The company has implemented recommendations from the internal control review to address identified weaknesses[84]. - The audit committee reviewed the accounting policies and consolidated financial statements for the year ended December 31, 2020[195]. Shareholder Information and Stock Performance - The board does not recommend any final dividend for the year ended December 31, 2020[150]. - The company repurchased a total of 2,174,000 shares during the year, with the highest price per share at HKD 4.00 and the total amount paid approximately RMB 6,910,000[147]. - The total issued shares of the company as of December 31, 2020, were 2,119,924,000[160]. - The company has not made any changes to its memorandum and articles of association during the year ended December 31, 2020[124]. - The company will announce updates to shareholders and potential investors in a timely manner according to listing rules[199].

Production Capacity and Investments - As of June 30, 2020, the domestic design capacity for polyester filament of the group is 2,726,400 tons per year, with 1,005,000 tons for fully drawn yarn and POY, and 711,400 tons for stretch yarn[6]. - The design capacity for polyester products is 255,000 tons per year, including 182,500 tons for BOPET film, targeting the high-end functional polyester film market in China[6]. - The group has established a subsidiary in Vietnam with a design capacity of 348,300 tons for polyester filament, including 92,800 tons for fully drawn yarn and POY, and 250,000 tons for PET bottle chips[7]. - An investment of approximately $185 million is being made to establish a production line for industrial polyester yarn, with an estimated capacity of 250,000 tons per year, which commenced commercial production on July 17, 2020[7]. - The group is investing about $230 million to establish a production line for polyester film, expected to reach a total capacity of approximately 255,000 tons per year by 2021[7]. Financial Performance - Revenue for the first half of 2020 was RMB 3,614,662, a decrease of 22.1% compared to RMB 4,639,037 in 2019[12]. - Gross profit dropped to RMB 507,198, reflecting a decline of 34.7% from RMB 776,742 in the previous year[12]. - Operating profit decreased by 43.0% to RMB 342,752, down from RMB 600,995 in 2019[12]. - Net profit for the period was RMB 225,366, a decline of 44.1% compared to RMB 403,324 in 2019[12]. - The gross margin decreased to 14.0% from 16.7% in the previous year[12]. Assets and Liabilities - Non-current assets increased by 14.1% to RMB 10,244,050 from RMB 8,978,200 in 2019[12]. - Current assets rose significantly by 60.8% to RMB 8,398,864, up from RMB 5,223,096 in the previous year[12]. - The group’s total liabilities amounted to RMB 11,759,249,000, with a debt-to-equity ratio of 170.8% as of June 30, 2020[58]. - Cash and cash equivalents increased to RMB 392,803,000 as of June 30, 2020, up RMB 191,405,000 or 95.0% from RMB 201,398,000 on December 31, 2019[57]. Market and Sales Performance - Sales revenue from polyester filament was RMB 2,803,279,000, accounting for 77.6% of total revenue, while polyester product sales were RMB 811,383,000, accounting for 22.4%[28]. - Revenue from polyester filament products decreased by RMB 903,474,000, or 24.4%, compared to RMB 3,706,753,000 in the first half of 2019[29]. - The average selling price of polyester filament was RMB 8,230 per ton, down RMB 2,230, or 21.3%, from RMB 10,460 per ton in the first half of 2019[29]. - Polyester product sales revenue for the review period was RMB 811,383,000, a decrease of RMB 120,901,000 or 13.0% compared to RMB 932,284,000 in the same period of 2019[30]. - Overseas sales revenue rose by 18.9% to RMB 639,228,000, increasing its share of total revenue from 11.6% in the first half of 2019 to 17.7% in the review period[34]. Research and Development - R&D expenses amounted to RMB 128,281,000, representing 3.5% of total revenue, focusing on improving product quality and production efficiency[26]. - The company aims to strengthen its industry position through high-value-added products and technological innovation[26]. Impact of COVID-19 - The textile industry is facing significant external challenges due to the global pandemic, impacting both domestic and international demand[22]. - The COVID-19 pandemic has introduced uncertainty into the operating environment, leading to a decline in product sales and a decrease in profits for the six months ended June 30, 2020[124]. - The company is actively monitoring the impact of the pandemic and has implemented emergency measures, including cost control and maintaining good communication with banks to mitigate liquidity risks[124]. - Management remains optimistic about the long-term prospects of the company despite the challenges posed by the pandemic[124]. Shareholder Information - As of June 30, 2020, the total issued and paid-up share capital as of June 30, 2020, was 2,122,098,000 shares, with a nominal value of HKD 0.01 per share[113]. - Mr. Shi Tianyou holds 643,720,000 shares, representing 30.33% of the company's issued share capital[128]. - Mr. Wu Jinbiao owns 136,820,000 shares, accounting for 6.45% of the company's issued share capital[128]. - Hong Kong Rong'an Investment Co., Ltd. holds 787,980,808 shares, which is 37.13% of the company's issued share capital[133]. - The company has a total of 300,000,000 shares pledged to the Export-Import Bank of China, representing 14.14%[135].