Financial Performance - For the year ended December 31, 2024, the revenue of China Boqi Environmental amounted to RMB 2,151 million, representing an increase of 0.6% compared to RMB 2,138 million for the previous year[15]. - The gross profit for the same period was RMB 435 million, a decrease of 0.2% from RMB 436 million last year, with a gross profit margin of 20.2%, stable compared to 20.4% last year[16]. - The net profit for the year was RMB 240 million, an increase of 1.3% from RMB 237 million, maintaining a net profit margin of 11.2%[17]. - The Group's net profit, excluding fair value changes and investment income, was RMB 240 million, reflecting a 3.4% increase from RMB 232 million last year[17]. - The overall financial performance indicates a stable growth trajectory despite slight fluctuations in gross profit and revenue segments[15][16][17]. - The total revenue for the Group for the year ended December 31, 2024, was RMB 2,150,937 thousand, a slight increase from RMB 2,138,199 thousand in 2023[29]. - Gross profit for the year was RMB 434,725 thousand, compared to RMB 436,100 thousand in the previous year, indicating a stable gross margin[29]. - Profit for the year attributable to owners of the parent was RMB 236,436 thousand, slightly down from RMB 240,184 thousand in 2023[29]. - The Group's total comprehensive income for the year was RMB 240,424 thousand, compared to RMB 237,351 thousand in 2023, reflecting a positive trend[31]. - The company's operating revenue for 2024 amounted to RMB 2,151 million, with a gross profit of RMB 435 million and a net profit of RMB 240 million, indicating stable and improving performance[38]. Business Segments - Revenue from the flue gas treatment business segment was RMB 1,735 million, with 7 new EPC projects totaling approximately RMB 378 million in contract value[18]. - Revenue from the water treatment business segment was RMB 204 million, with 14 water treatment projects under stable operation as of December 31, 2024[19]. - The hazardous and solid waste treatment business segment reported revenue of RMB 53 million, with stable operations from the Qinghai Boqi disposal center contributing to sustainable income[23]. - The dual-carbon new energy+ business segment achieved revenue of RMB 159 million, with significant progress in photovoltaic projects and a new contract for waste heat utilization[24]. - The Group successfully implemented 7 concession operation projects, all of which were operational, laying a solid foundation for continued operation and stable development[18]. Strategic Focus and Development - The Group's strategic focus on environmental projects continues to yield consistent operational results and revenue stability[18][19]. - The Company aims to integrate four major business segments: flue gas treatment, water treatment, hazardous and solid waste treatment/disposal, and dual-carbon new energy+, to create a comprehensive ecological service system[52][55]. - The Group is committed to a dual-engine strategy of "environmental governance and dual-carbon new energy+", aiming for stable cash flow from traditional businesses and growth from emerging sectors[57][58]. - The Group's strategic target includes "Carbon Peaking and Carbon Neutrality," aligning with national policies to expand into new energy power generation and storage[52][55]. - The Group's commitment to ecological civilization construction aims to contribute positively to environmental protection in China and globally[155]. Research and Development - The Group's investment in research and development (R&D) led to key technological breakthroughs and the acquisition of multiple new patents in 2024[43]. - The Group is increasing R&D investment and recruiting talent to drive technological innovation and transformation[171]. - The Group's focus on technological innovation is seen as a core driving force for sustainable development amidst market challenges[171]. Management and Governance - The senior management team includes Mr. Zeng Zhijun as chairman and CEO, with a tenure starting in 2004[114]. - The company has a diverse executive team with members holding various key positions since 2004, 2007, and 2019, indicating stability and experience[114]. - The board includes members with significant legal and financial expertise, enhancing governance and strategic oversight[107][104]. - The company is actively involved in strategic cooperation with government entities, which may enhance its market access and growth potential[98]. Market Conditions and Challenges - The global economic slowdown has increased financing difficulties, while the energy transformation has made environmental protection and new energy a new investment hotspot[168]. - The company faces challenges in business expansion and project execution due to increased liquidity pressure on customers and compressed profit margins[168]. - The company anticipates a period of high-quality development driven by the implementation of new environmental policies and standards[162]. Operational Projects - The Group operated 38 O&M projects during the reporting period, all achieving emission standards and providing stable performance growth[18]. - The Group's O&M projects have consistently operated with emissions in compliance with required standards, contributing to stable business performance[191]. - The Group's ongoing projects reflect a commitment to environmental sustainability and compliance with emission standards, enhancing its market position[191]. - The company is expanding its service offerings with multiple projects focused on environmental protection and efficiency improvements in the steel industry[194].

Financial Performance - For the fiscal year ending December 31, 2024, the group's revenue was RMB 2,151 million, an increase of 0.6% compared to RMB 2,138 million in the fiscal year 2023[3]. - The group's gross profit for the fiscal year was RMB 435 million, a slight decrease of 0.2% from RMB 436 million in the previous year, resulting in a gross margin of 20.2%[3]. - The net profit for the fiscal year was RMB 240 million, representing a 1.3% increase from RMB 237 million in fiscal year 2023, with a net profit margin of 11.2%[3]. - The group reported a total comprehensive income of RMB 240 million for the year, compared to RMB 237 million in the previous year, indicating stable performance[7]. - Total revenue for the environmental protection business segment reached RMB 2,150,937 thousand in 2024, slightly up from RMB 2,138,199 thousand in 2023, indicating a growth of approximately 0.08%[25]. - The total profit for the environmental protection business segment was RMB 434,725 thousand in 2024, slightly down from RMB 436,100 thousand in 2023[25]. - The company reported a pre-tax profit of RMB 269,232 thousand for the year, compared to RMB 274,587 thousand in the previous year, reflecting a decrease of approximately 1.3%[25]. - The company’s total revenue from project investment and operation maintenance services for major customer A was RMB 232,457,000 in 2024, slightly down from RMB 237,078,000 in 2023, showing a decrease of about 2.2%[28]. - The company’s EPC business revenue was RMB 670 million, up 4.5% from RMB 641 million in the fiscal year 2023, attributed to market expansion efforts[78]. - The operating and maintenance business revenue decreased by 11.1% to RMB 487 million from RMB 548 million in the fiscal year 2023, mainly due to changes in the operating model of certain projects[78]. Dividends and Shareholder Returns - The board has proposed a final dividend of HKD 0.046 per ordinary share for the fiscal year ending December 31, 2024, up from HKD 0.035 in the previous year[3]. - The proposed final dividend per ordinary share for 2024 is HKD 0.046, an increase from HKD 0.035 in 2023, which translates to a growth of approximately 31.4%[37]. - A voluntary cash offer was made to repurchase up to 150,858,120 shares at HKD 1.20 per share, representing approximately 15% of the issued share capital[112]. - The repurchase was completed on January 14, 2025, with a total payment of HKD 181,029,744, reducing the total issued shares from 1,005,720,799 to 854,862,679[113]. Research and Development - Research and development expenses increased to RMB 63.9 million from RMB 55.9 million, reflecting a focus on innovation and new technology development[6]. - The R&D expenditure for fiscal year 2024 was RMB 64 million, an increase of RMB 8 million from RMB 56 million in fiscal year 2023, with the R&D expenditure ratio rising from 2.6% to 3.0%[89]. - The company is focusing on technology innovation and R&D investment to drive sustainable development amid market challenges[48]. Assets and Liabilities - Total non-current assets rose to RMB 2,450 million in 2024 from RMB 2,207 million in 2023, indicating growth in long-term investments[8]. - Current assets increased to RMB 2,957 million in 2024, compared to RMB 2,812 million in 2023, driven by higher cash and cash equivalents[8]. - The total liabilities increased to RMB 2,123 million in 2024 from RMB 1,950 million in 2023, primarily due to an increase in current liabilities[9]. - The company's equity attributable to owners increased to RMB 3,252 million in 2024 from RMB 3,047 million in 2023, reflecting improved financial health[9]. - The cash and cash equivalents as of December 31, 2024, were RMB 629 million, an increase of RMB 280 million from RMB 349 million as of December 31, 2023, due to enhanced collection efforts[96]. Market and Strategic Focus - The company aims to become a leading "environmental dual-carbon management platform" in response to national policies promoting ecological civilization and carbon reduction[43]. - The company is focused on expanding its services in air pollution control, water treatment, and solid waste management, aligning with national environmental goals[43]. - The company plans to continue expanding its project investment and dual-carbon new energy+ services to enhance revenue growth in the future[24]. - The company aims to enhance core competitiveness and sustainable development through strategic layout optimization and capital value activation[107]. - The company is adapting to new industrial developments and enhancing management efficiency through the revised National Hazardous Waste Directory[47]. Operational Performance - The company operates 38 maintenance projects across the power and steel industries, providing stable revenue and cash flow[55]. - The company has ongoing maintenance contracts for 15 projects with a total capacity of 10,000 MW, including significant projects like the Yangxi Power Plant and Tianjin Ironworks[56]. - The company is actively involved in the procurement and operation of environmental facilities, which is expected to enhance its market position in the energy sector[57]. - The company maintains a stable operational performance across its projects, contributing to continuous revenue generation[68]. Corporate Governance - The audit committee has reviewed the draft consolidated financial statements for the fiscal year 2024, confirming they are prepared in accordance with accounting standards and fairly reflect the financial position and performance of the group[120]. - The company has complied with the corporate governance code throughout the reporting period, with no violations reported by employees regarding the trading of securities[119]. - The company will continue to enhance its corporate governance practices to ensure compliance with the corporate governance code[118]. Environmental Initiatives - The company is committed to deepening customer relationships and providing high-quality products and services to solidify its market position[48]. - The company has secured contracts for the operation and maintenance of various desulfurization and denitrification systems, indicating a strong focus on environmental sustainability[56]. - The company is focusing on a light asset model to optimize resource allocation and improve operational efficiency, aiming to broaden business scope and market space[62]. - The company has initiated a zero discharge wastewater project with Tianjin Ironworks, enhancing its environmental sustainability efforts[64].

中国博奇环保（控股）有限公司 China Boqi Environmental (Holding) Co., Ltd (Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立的有限公司 ) Stock Code 股份代號 : 2377 Interim Report 2024 Contents 目錄 | --- | --- | --- | |-------|-----------------------------------------------------------|----------------------| | | | | | | Corporate Information | 公司資料 | | | Financial and Operation Highlights | 財務及營運摘要 | | | Management Discussion and Analysis | 管理層討論與分析 | | 51 | Major Events in the First Half of 2024 | 2024 年上半年大事記 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 China Boqi Environmental (Holding) Co., Ltd. 中 國 博 奇 環 保（ 控 股 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2377) 截至2024年6月30日止六個月之 中期業績公告 | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Performance - For the year ended December 31, 2023, the revenue of China Boqi Environmental (Holding) Co., Ltd. amounted to RMB 2,138 million, representing an increase of 12.5% compared to RMB 1,900 million for the previous year[14]. - The gross profit for the same period was RMB 436 million, an increase of 11.5% from RMB 391 million last year, with a gross profit margin of 20.4%[15]. - The net profit for the year was RMB 237 million, with a net profit margin of 11.1%, and excluding fair value changes, the net profit was RMB 232 million, up 2.2% from RMB 227 million last year[16]. - Profit before tax for the year was RMB 274.587 million, up from RMB 175.899 million in 2022, indicating a year-over-year increase of approximately 56.1%[29]. - The profit for the year attributable to the owners of the parent was RMB 240.191 million, compared to RMB 152.665 million in 2022, marking a significant increase of about 57.3%[30]. - The total revenue for the company for the year ended December 31, 2023, was RMB 2,138.199 million, an increase from RMB 1,900.248 million in 2022, representing a growth of approximately 12.5%[29]. - The gross profit for the year was RMB 436.1 million, compared to RMB 390.778 million in 2022, reflecting a gross profit margin improvement[29]. Business Segments - Revenue from the flue gas treatment business segment was RMB 1,704 million, with 18 new EPC projects totaling approximately RMB 1,167 million in contract value[17]. - Revenue from the water treatment business segment was RMB 317 million, with 6 newly contracted projects and a total of 14 projects under operation as of December 31, 2023[18]. - For the year ended December 31, 2023, the revenue from the hazardous and solid waste treatment/disposal business segment was RMB 49 million[22][25]. - The revenue from the dual-carbon new energy+ business segment for the same period was RMB 68 million[23][26]. - The company achieved significant breakthroughs in the water treatment business, successfully entering the zero-discharge coking salt extraction and titanium dioxide industries, enhancing market share in industrial wastewater treatment[41]. - The company expanded its service scope in the flue gas treatment business, moving from desulfurization and denitrification to include O&M services for power generation units and coal transportation systems[40]. Strategic Focus and Development - The company aims to optimize its customer base and expand market share in new business segments as part of its strategic transformation[39]. - The company plans to continue promoting the expansion of various business segments and engage in strategic cooperation, investment, and mergers and acquisitions[50]. - The company is focusing on hazardous and solid waste treatment/disposal, aiming to enhance resource utilization and disposal services[52]. - The company is actively expanding its new energy strategy, particularly in the Yangtze River Delta, Northwest, and Pearl River Delta regions[49]. - The company is enhancing its information technology systems and digital management capabilities to improve operational efficiency[49]. - The company emphasizes talent development and team building to support sustainable growth[49]. - The company remains committed to its vision and strategy despite external uncertainties, leveraging flexibility and resilience to overcome challenges[49]. Leadership and Management - Mr. Zeng Zhijun has been appointed as the executive director and CEO since January 30, 2015, and has extensive experience in the management and operations of the group[60]. - Mr. Liu Genyu was redesignated as an executive director effective July 1, 2023, and has significant experience in project development and operational management in the electric power industry[63][67]. - Ms. Qian Xiaoning joined the group in February 2007 and was appointed as an executive director on July 1, 2023, responsible for human resources and new business development[71][74]. - The company has a diverse senior management team with members having extensive experience in various sectors[126]. - The leadership team has a diverse background in various sectors, including electric power and environmental technology, which may contribute to innovative strategies[64][68][74]. - The company has maintained a stable executive structure, with key positions filled by experienced professionals, ensuring continuity in management[60][63][71]. Market and Industry Trends - The environmental protection industry is facing opportunities and challenges due to economic and political influences, with a clear trend towards high-quality development in China[171]. - The state plans to expand energy efficiency requirements and increase the scope of transformation and upgrading for energy saving and carbon reduction in key industrial fields[177]. - The Central Committee of the Communist Party of China supports private enterprises in promoting carbon peaking and carbon neutrality, providing carbon reduction technologies and services, and increasing investment in renewable energy[178]. - The market demand for ultra-low emissions and energy-saving upgrading projects in the coal-fired power industry increased significantly due to large-scale new construction and renovation projects[191]. - The utilization rate of recycled water in water-scarce cities is expected to exceed 25% by 2025, with plans to build 100 green and low-carbon benchmark sewage treatment plants[187]. Project and Operational Highlights - The Group had 32 operational O&M projects during the reporting period, successfully expanding its service scope to include power generation units and coal transportation systems[17]. - The Group won the bid for the EPC Project for Desulfurization of 2X1000MW unit of Guoxin Binhai Port in the first half of 2023, contributing to its expansion in the thermal power flue gas desulfurization market[200]. - The Group secured 8 consecutive bids for thermal power projects, including a significant project for Inner Mongolia Energy Group valued at approximately RMB1,167 million[200]. - The Group's overseas project distribution includes regions such as Europe, South Asia, Latin America, Africa, and Southeast Asia[197]. - The Group's business expansion is supported by strengthening customer service systems and leveraging engineering implementation experience[198].

Financial Performance - For the fiscal year ending December 31, 2023, the company's revenue was RMB 2,138 million, an increase of 12.5% compared to RMB 1,900 million in the previous year[2]. - The gross profit for the same period was RMB 436 million, up 11.5% from RMB 391 million, with a gross margin of 20.4%, slightly down from 20.6% year-on-year[2]. - The net profit for the year was RMB 237 million, resulting in a net profit margin of 11.1%, while adjusted net profit, excluding fair value changes of financial assets, was RMB 232 million, a rise from RMB 227 million in the previous year[2]. - The company's pre-tax profit was RMB 274 million, compared to RMB 176 million in the previous year, reflecting a significant increase[6]. - Total comprehensive income for the year was RMB 237 million, compared to RMB 157 million in the previous year[7]. - The company reported a net profit attributable to ordinary shareholders of RMB 240,184 thousand for 2023, an increase from RMB 151,749 thousand in 2022, reflecting a growth of approximately 58.2%[120]. Assets and Liabilities - The company's total assets as of December 31, 2023, amounted to RMB 3,068 million, an increase from RMB 2,849 million in the previous year[12]. - Current liabilities were RMB 1,117 million, slightly down from RMB 1,134 million in the previous year[9]. - The company reported a net asset value of RMB 3,069 million, up from RMB 2,849 million year-on-year[12]. - Total assets minus current liabilities increased to RMB 3,221,801 thousand in 2023, up from RMB 2,992,784 thousand in 2022, representing a growth of approximately 7.7%[29]. - Current liabilities totaled RMB 1,796,996 thousand in 2023, slightly up from RMB 1,732,520 thousand in 2022, reflecting an increase of about 3.7%[28]. - Trade receivables amounted to RMB 1,181,509 thousand in 2023, up from RMB 872,121 thousand in 2022, indicating a year-over-year increase of about 35.4%[121]. - The company reported a decrease in trade payables to RMB 1,117,380 thousand in 2023 from RMB 1,134,240 thousand in 2022, reflecting a reduction of approximately 1.5%[123]. Dividends - The board has proposed a final dividend of HKD 0.03 per ordinary share for the fiscal year ending December 31, 2023[2]. - The company proposed a final dividend of HKD 0.035 per share for 2023, an increase from HKD 0.030 in 2022, totaling RMB 31,969,000 compared to RMB 27,652,000 in the previous year[77]. Research and Development - Research and development expenses for the year were RMB 56 million, compared to RMB 59 million in the previous year, indicating a stable investment in innovation[25]. Market and Operations - The company operates primarily in China, with nearly all non-current assets and revenue generated from this market[63]. - The company is actively expanding its market presence in both power and non-power sectors, leveraging policy opportunities to drive growth[80]. - The company is involved in multiple BOT projects, with significant investments such as RMB 496 million for the Xinjiang Shenhuo project and RMB 281 million for the Guangxi Laibin project, indicating a strong commitment to infrastructure development[83]. - The company signed 14 new water treatment projects, significantly increasing its market share in industrial wastewater treatment[92]. - The company is actively expanding its water treatment services across various industries, including coking, steel, metallurgy, pharmaceuticals, and papermaking[157]. Environmental Initiatives - The company is focusing on upgrading inefficient air pollution control facilities as part of the national action plan to improve air quality, which is expected to benefit the industry in the long term[79]. - The company aims to develop into a leading "environmental dual-carbon management platform" and is focused on achieving carbon neutrality while meeting customer needs[124]. - The company is actively pursuing green and low-carbon transformation in the steel industry, supporting enterprises in achieving ultra-low emissions[110]. - The company is focusing on the development of green factories in the electronic information manufacturing sector, as encouraged by recent government policies[154]. Governance - The board consists of three executive directors, four non-executive directors, and four independent non-executive directors, ensuring a balanced governance structure[74]. - The financial statements are prepared in accordance with International Financial Reporting Standards and presented in RMB, with all values rounded to the nearest thousand[53]. Growth and Future Outlook - The company is positioned to capitalize on the growing market opportunities in the environmental protection sector as China's economy transitions towards high-quality development[87]. - The company anticipates continued growth in its water treatment segment, driven by its successful entry into new markets[92]. - The group plans to increase the reuse rate of reclaimed water in water-scarce cities to over 25% by 2025, with the construction of 100 green low-carbon benchmark sewage treatment plants[127]. - The dual-carbon new energy projects are part of the group’s strategy to enhance energy efficiency and carbon reduction capabilities by 2025[128].

Financial Performance - For the six months ended June 30, 2023, the Group's revenue amounted to RMB 1,001 million, representing an increase of 38.8% compared to the same period last year[14]. - The Group's gross profit for the same period was RMB 202 million, reflecting a 41.3% increase year-on-year, with a gross profit margin of 20.2%, up by 0.3 percentage points[15]. - The net profit, excluding loss on fair value changes in financial assets and investment income, was RMB 131 million, with a net profit margin of 13.1%, marking a 79.5% increase and a 3.0 percentage point rise compared to the previous year[16]. - The total net profit for the Group was RMB 136 million, resulting in a net profit margin of 13.6%[16]. - Profit for the period surged to RMB 135,908, a significant increase from RMB 3,045 in the prior year, marking a growth of 4,366.5%[22]. - The Group recorded a profit of RMB 136 million for the period, an increase of RMB 133 million from RMB 3 million in the first half of 2022, primarily due to increased revenue and gross profit from various business segments[150][155]. - Profit attributable to the owners of the Parent was RMB 134 million for the six months ended 30 June 2023, representing an increase of RMB 130 million from RMB 4 million in the first half of 2022[151][156]. Revenue Breakdown - The revenue from flue gas treatment business was RMB 780 million, while revenue from water treatment business was RMB 163 million, revenue from hazardous and solid waste treatment/disposal business was RMB 14 million, and revenue from dual-carbon new energy+ business was RMB 44 million[14]. - Revenue for the six months ended June 30, 2023, increased to RMB 1,000,686, up 38.8% from RMB 721,070 in the same period of 2022[22]. - Revenue from the flue gas treatment business segment was RMB 780.3 million, up 26.5% from RMB 616.4 million in the first half of 2022[109]. - The water treatment business segment generated revenue of RMB 162.4 million, representing an increase of 81.1% compared to RMB 90.1 million for the first half of 2022[113]. - The hazardous and solid waste treatment/disposal business recorded revenue of RMB 13.8 million, a significant increase of 180.0% from RMB 4.6 million in the first half of 2022[114]. - Revenue from the dual-carbon new energy+ business segment was RMB 44.2 million, reflecting a substantial increase of 340.0% from RMB 9.9 million for the same period last year[115]. Cost and Expenses - The cost of sales and services for the Group was RMB 798 million, an increase of 38.1% from RMB 578 million for the first half of 2022[117]. - The cost of sales and services for the water treatment business was RMB 132 million, a 123.7% increase from RMB 59 million for the first half of 2022[121]. - The cost of sales and services for the dual-carbon new energy+ business was RMB 29 million, reflecting a 262.5% increase from RMB 8 million in the first half of 2022[123]. - Selling and distribution expenses rose to RMB 11 million, an increase of RMB 4 million from RMB 7 million in the first half of 2022, attributed to higher market expansion costs following the relaxation of COVID-19 measures[140]. - Administrative expenses decreased to RMB 42 million, down RMB 6 million from RMB 48 million in the first half of 2022, with the ratio of administrative expenses to revenue falling from 6.7% to 4.2%[141]. Research and Development - Research and development expenses increased to RMB 23,557, up 38.9% from RMB 16,966 in 2022, indicating a focus on innovation[22]. - For the six months ended 30 June 2023, the Group's R&D expenses amounted to RMB 24 million, an increase of RMB 7 million from RMB 17 million in the first half of 2022, with R&D expenses representing 2.4% of revenue[142][146]. Contracts and Projects - The Group secured 19 new contracts in the fields of thermal power, steel, chemical, and industrial wastewater during the reporting period[17]. - As of June 30, 2023, the Group added 7 new EPC contracts with a total contract value of approximately RMB 259 million[62]. - The Group won the bid for the 2×1000MW Unit Desulfurization EPC Project of Guoxin Binhai Port, supporting further expansion into the thermal power flue gas desulfurization market[62]. - The Group had a total of 25 O&M projects under operation, providing a stable source for business growth[72]. - The Group is actively expanding its water treatment business segment, currently operating 10 water treatment projects as of June 30, 2023[90]. Market and Industry Trends - The environmental protection industry in China is entering a phase of comprehensive policy implementation, which is expected to drive growth opportunities for the company[29]. - The Ministry of Ecology and Environment has revised regulations to promote precise and scientific pollution control, which may benefit the company's operations[34]. - The thermal power industry has entered a recovery period, increasing demand for flue gas treatment, which the company capitalized on to expand its market presence[49]. - The installed capacity of new energy in China ranks first globally, with a steady increase in power generation proportion and a rapid decrease in costs[49]. - The government is enhancing policies and financial instruments to support green development and promote resource conservation and intensive utilization[41]. Financial Stability and Assets - Total assets as of June 30, 2023, were RMB 4,743,277, slightly up from RMB 4,725,304 as of December 31, 2022[25]. - Net current assets improved to RMB 1,007,073, an increase from RMB 906,591 at the end of 2022, reflecting better liquidity[25]. - Total liabilities decreased to RMB 1,745,977 from RMB 1,876,376, indicating improved financial stability[25]. - The Group's asset structure is reported to be in sound condition, reflecting overall satisfactory operational results[103]. Future Outlook - Future outlook includes continued investment in environmental technologies and expansion of operational capacities to meet increasing market demands[79]. - The Group aims to expand its environmental protection services into non-electricity industries such as steel and petrochemicals[191]. - The Group's future cash inflows will depend on project schedules, timely recovery of receivables, and credit terms obtained[195].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 China Boqi Environmental (Holding) Co., Ltd. 中 國 博 奇 環 保（ 控 股 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2377） 截至2022年12月31日止年度年報之補充公告 茲提述本集團於2023年4月26日刊發的截至2022年12月31日止年度的年報（「2022 年年報」）。除另有指明者外，本公告所用詞彙與2022年年報所界定者具有相同涵 義。 首次公開發售前股份獎勵計劃及補充計劃 除2022年年報所披露的資料外，下文載列上市規則第17.12(1)條項下的若干補充 資料： 1. 目的 首次公開發售前股份獎勵計劃（經補充計劃修訂）旨在建立中長期獎勵機制， 吸引及培養人才，維持本集團及管理團隊穩定發展及將管理團隊的利益與股 ...

[Financial and Operational Summary](index=1&type=section&id=Financial%20and%20Operational%20Summary) [Financial and Operational Overview](index=1&type=section&id=Financial%20and%20Operational%20Overview) During the reporting period, the Group achieved significant growth in revenue and gross profit, with a substantial increase in net profit and an improvement in net profit margin | Metric | Amount (RMB Million) | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | 1,001 | 38.8% | | Gross Profit | 202 | 41.3% | | Net Profit (excluding fair value change losses and investment income) | 131 | 79.5% | | Net Profit Margin (excluding fair value change losses and investment income) | 13.1% | 3.0 percentage points | | Net Profit | 136 | N/A | | Net Profit Margin | 13.6% | N/A | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) During the reporting period, the company's revenue and gross profit grew significantly, with profit for the period surging from RMB 3,045 thousand to RMB 135,908 thousand, and basic and diluted earnings per share increasing from RMB 0.00 to RMB 0.13 | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,000,686 | 721,070 | +38.8% | | Gross Profit | 202,105 | 143,222 | +41.1% | | Profit Before Tax | 145,511 | 9,340 | +1458.0% | | Profit for the Period | 135,908 | 3,045 | +4350.0% | | Profit for the Period Attributable to Owners of the Parent | 133,733 | 3,533 | +3686.0% | | Basic Earnings Per Share (RMB) | 0.13 | 0.00 | N/A | | Diluted Earnings Per Share (RMB) | 0.13 | 0.00 | N/A | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets and liabilities, net current assets, and equity attributable to owners of the parent all increased, indicating a robust financial position | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 2,086,601 | 2,086,193 | +0.02% | | Total Current Assets | 2,656,676 | 2,639,111 | +0.66% | | Total Current Liabilities | 1,649,603 | 1,732,520 | -4.96% | | Total Non-current Liabilities | 96,374 | 143,856 | -33.00% | | Equity Attributable to Owners of the Parent | 2,968,823 | 2,834,503 | +4.74% | | Total Equity | 2,997,300 | 2,848,928 | +5.21% | - As of June 30, 2023, **net current assets** were **RMB 1,007,073 thousand**, an increase from RMB 906,591 thousand as of December 31, 2022[8](index=8&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) During the reporting period, equity attributable to owners of the parent increased due to profit for the period and acquisition of subsidiaries' non-controlling interests, with total equity rising from RMB 2,848,928 thousand at the beginning of the year to RMB 2,997,300 thousand | Metric | January 1, 2023 (RMB Thousand) | June 30, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent at Beginning of Period | 2,834,503 | N/A | | Profit for the Period | 133,733 | N/A | | Transfer to Statutory Surplus Reserve | 10,394 | N/A | | Share-based Payments | 587 | N/A | | Acquisition of Subsidiaries (Non-controlling Interests) | N/A | 11,877 | | Equity Attributable to Owners of the Parent at End of Period | N/A | 2,968,823 | - As of June 30, 2023, **non-controlling interests** were **RMB 28,477 thousand**, a significant increase from RMB 14,425 thousand as of January 1, 2023, primarily due to the acquisition of subsidiaries[34](index=34&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, cash outflow from operating activities increased, investment activities shifted from net inflow to net outflow, and cash outflow from financing activities significantly rose, leading to a substantial decrease in cash and cash equivalents at period-end | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (105,966) | (72,723) | Increased Outflow 33,243 | | Net Cash (Used in)/Generated from Investing Activities | (25,100) | 53,041 | Decreased Inflow 78,141 (shifted to outflow) | | Net Cash Used in Financing Activities | (50,399) | (1,104) | Increased Outflow 49,295 | | Net Decrease in Cash and Cash Equivalents | (181,465) | (20,786) | Increased Outflow 160,679 | | Cash and Cash Equivalents at End of Period | 224,215 | 324,727 | Decrease 100,512 | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation and Principal Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with IAS 34 and HKEX Listing Rules, using the historical cost convention, and the application of new and revised IFRSs had no material impact on current and prior period disclosures - The condensed consolidated financial statements are prepared in accordance with **International Accounting Standard 34** and the applicable disclosure requirements of **Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited**[38](index=38&type=chunk) - The condensed consolidated financial statements are prepared on the **historical cost basis**, except for certain properties and financial instruments measured at revalued amounts or fair value where applicable[39](index=39&type=chunk) - The application of new and revised **International Financial Reporting Standards** in the current period had **no material impact** on the disclosures in the Group's interim and prior year financial statements[14](index=14&type=chunk) [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from four business segments: flue gas treatment, water treatment, hazardous and solid waste treatment, and dual-carbon new energy+, with significant overall revenue growth and the fastest growth in dual-carbon new energy+ - The Group primarily generates revenue through four business segments: **flue gas treatment**, **water treatment**, **hazardous and solid waste treatment**, and **dual-carbon new energy+**[72](index=72&type=chunk)[45](index=45&type=chunk) | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Total Revenue | 1,000,686 | 721,070 | 38.8% | | Business Segment | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Flue Gas Treatment Business | 780,256 | 616,407 | 26.6% | | Water Treatment Business | 162,432 | 90,115 | 80.2% | | Hazardous and Solid Waste Treatment Business | 13,766 | 4,625 | 197.6% | | Dual-Carbon New Energy+ Business | 44,232 | 9,923 | 345.8% | - The vast majority of revenue (**RMB 994,583 thousand**) is recognized over time, with a small portion (**RMB 6,103 thousand**) recognized at a point in time[21](index=21&type=chunk)[47](index=47&type=chunk) [Other Income and Gains and Other Expenses and Losses](index=12&type=section&id=Other%20Income%20and%20Gains%20and%20Other%20Expenses%20and%20Losses) During the reporting period, the Group's other income and gains and other expenses and losses shifted from a loss to a gain, primarily due to increased government grants and improved gains from financial asset disposals | Item | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income | 4,058 | 6,394 | | Government Grants | 10,992 | 1,165 | | Foreign Exchange Gains | 4,355 | 5,381 | | Gains/(Losses) on Disposal of Equity Investments at Fair Value Through Profit or Loss | 5,046 | (61,361) | | Gains on Disposal of Property, Plant and Equipment | 3,728 | – | | **Total** | **27,795** | **(57,254)** | - Total **other income and gains** significantly improved year-on-year, primarily due to increased **government grants** and higher investment gains from financial assets measured at fair value through profit or loss[253](index=253&type=chunk) [Finance Costs](index=12&type=section&id=Finance%20Costs) During the reporting period, the Group's finance costs decreased, mainly due to the repayment of bank and other borrowings | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total Finance Costs | 6,584 | 9,190 | - Finance costs primarily include **interest on bank borrowings**, **interest on lease liabilities**, and **discounting of bills receivable**[53](index=53&type=chunk) - The decrease in finance costs was mainly due to the **repayment of borrowings** by the Group during the reporting period[282](index=282&type=chunk) [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) During the reporting period, the Group's income tax expense significantly increased due to higher profit before tax, though some Chinese subsidiaries enjoyed preferential tax rates or exemptions due to high-tech enterprise certification or environmental projects | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total Income Tax Expense | 9,603 | 6,295 | - The increase in income tax expense was primarily due to the **increase in the Group's profit before tax** during the reporting period[258](index=258&type=chunk) - Several Chinese subsidiaries (e.g., Hejin Boqi, Puzhou Boqi, Huainan Boqi, Changji Prefecture Boqi, Jiangsu Boqi, Handan Boqi, Beijing Boqi, Jinggangshan Boqi, Changzhi Boqi, Laibin Boqi, Qinghai Boqi) enjoy a **preferential tax rate of 15%** or **income tax exemption** due to high-tech enterprise certification or environmental projects[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk)[87](index=87&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Chinese entities are subject to a **10% withholding tax** on dividends distributed to overseas investors from profits generated since January 1, 2008[62](index=62&type=chunk) [Profit for the Period](index=14&type=section&id=Profit%20for%20the%20Period) During the reporting period, the Group's profit for the period significantly increased, primarily driven by higher business revenue and gross profit, as well as reduced expenses and increased government grants - For the six months ended June 30, 2023, the Group's **profit for the period** was **RMB 136 million**, an increase of **RMB 133 million** from RMB 3 million in the same period of 2022[259](index=259&type=chunk) - The growth in profit for the period was primarily due to: (i) increased business revenue and gross profit across various segments following the relaxation of COVID-19 control measures and policies; and (ii) a slight decrease in expenses and an increase in government grants compared to the prior year[259](index=259&type=chunk) | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total Staff Costs | 125,838 | 124,418 | | Research and Development Expenses | 23,557 | 16,966 | [Dividends](index=14&type=section&id=Dividends) The company declared a final dividend of HKD 0.03 per share for 2022 but decided not to declare or pay an interim dividend for 2023 - The company declared a **final dividend of HKD 0.03 per share** for the year ended December 31, 2022, which remained unpaid before the end of the reporting period[63](index=63&type=chunk) - The company's directors determined that **no interim dividend** would be declared or paid for 2023[63](index=63&type=chunk) [Earnings Per Share](index=15&type=section&id=Earnings%20Per%20Share) During the reporting period, both basic and diluted earnings per share attributable to owners of the company significantly increased, reflecting a substantial improvement in the company's profitability - **Basic earnings per share** was **RMB 0.13** (2022: RMB 0.00), and **diluted earnings per share** was **RMB 0.13** (2022: RMB 0.00)[6](index=6&type=chunk) | Metric | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Profit for Calculating Earnings Per Share (Profit for the Period Attributable to Owners of the Company) - Basic and Diluted | 133,733 | 3,533 | | Metric | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares for Basic Earnings Per Share | 996,668,799 | 996,690,125 | | Weighted Average Number of Ordinary Shares for Diluted Earnings Per Share | 1,000,114,840 | 1,000,672,632 | [Receivables under Service Concession Arrangements](index=15&type=section&id=Receivables%20under%20Service%20Concession%20Arrangements) At the end of the reporting period, total receivables under service concession arrangements slightly decreased, with the non-current portion accounting for the largest share | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Current Portion | 46,418 | 49,762 | | Non-current Portion | 471,993 | 492,005 | | **Total** | **518,411** | **541,767** | | Expected Collection Period | June 30, 2023 (RMB Thousand) | | :--- | :--- | | Within one year | 46,418 | | Over one year but not exceeding two years | 45,041 | | Over two years but not exceeding five years | 152,820 | | Over five years | 274,132 | [Contract Assets and Contract Liabilities](index=16&type=section&id=Contract%20Assets%20and%20Contract%20Liabilities) During the reporting period, the Group's contract assets significantly increased while contract liabilities substantially decreased, reflecting good project progress and collection performance | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Contract Assets | 579,912 | 437,440 | +32.6% | | Contract Liabilities | (44,288) | (109,009) | -59.4% | - **Contract assets** include **RMB 566,784 thousand** current and **RMB 13,128 thousand** non-current; **contract liabilities** are all current at **RMB 44,288 thousand**[69](index=69&type=chunk) - **Contract assets** arise when the Group has a right to consideration for services completed but has not yet billed under the relevant contract, and the right is conditional on factors other than the passage of time[95](index=95&type=chunk) [Trade Receivables](index=16&type=section&id=Trade%20Receivables) At the end of the reporting period, total trade receivables increased, with a corresponding rise in impairment provisions, as the company assesses recoverability | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Receivables | 962,571 | 918,149 | +4.8% | | Less: Impairment Provision for Bad Debts | (55,553) | (46,028) | +20.7% | | **Net Amount** | **907,018** | **872,121** | **+4.0%** | | Aging | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | 1 to 90 days | 325,245 | 420,120 | | 91 to 180 days | 163,563 | 110,363 | | 181 to 365 days | 150,082 | 74,948 | | 1 to 2 years | 177,985 | 203,426 | | 2 to 3 years | 78,361 | 45,089 | | Over 3 years | 11,782 | 18,175 | - The Group generally grants customer credit terms ranging from **30 to 90 days**, with extended credit terms granted at discretion[114](index=114&type=chunk) [Trade Payables and Bills Payable](index=17&type=section&id=Trade%20Payables%20and%20Bills%20Payable) At the end of the reporting period, total trade payables and bills payable slightly increased, with payables less than 90 days accounting for the largest portion | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Payables | 898,515 | 846,746 | +6.1% | | Bills Payable | 247,028 | 287,494 | -14.0% | | **Total** | **1,145,543** | **1,134,240** | **+1.0%** | | Aging | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Less than 90 days | 514,457 | 409,766 | | 91 to 180 days | 91,009 | 265,540 | | 181 to 365 days | 182,931 | 115,173 | | 1 to 2 years | 198,478 | 172,004 | | 2 to 3 years | 55,156 | 57,154 | | Over 3 years | 103,512 | 114,603 | - Credit terms for the purchase of goods and services are generally **30 to 90 days**[71](index=71&type=chunk) [Share Capital](index=18&type=section&id=Share%20Capital) During the reporting period, the company's share capital remained stable, with no changes in the number of issued ordinary shares or par value per share - The number of **issued ordinary shares** is **1,005,720,799.00**, with a **par value of USD 0.00001 per share**[98](index=98&type=chunk) - Share capital is presented as **RMB 67 thousand**, with **no change** for the six months ended June 30, 2023[98](index=98&type=chunk) [Share Option Scheme](index=18&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2020 to reward contributors; no new options were granted during the period, but some lapsed due to unfulfilled vesting conditions, and share-based payment expenses were recognized - The company adopted a **share option scheme** on December 29, 2020, with a **ten-year validity**, aiming to grant options to eligible participants as rewards or incentives[99](index=99&type=chunk) - For the six months ended June 30, 2023, the company **did not grant any options**[119](index=119&type=chunk) | Metric | January 1 to June 30, 2023 (Unaudited) | January 1 to June 30, 2022 (Unaudited) | | :--- | :--- | :--- | | Beginning of Period | 12,470,000 | 14,220,000 | | Granted during Period | – | – | | Forfeited during Period | (500,000) | (750,000) | | End of Period | 11,970,000 | 13,470,000 | - For the six months ended June 30, 2023, **share-based payment expenses** of **RMB 587 thousand** were recognized (2022: RMB 2,496 thousand)[102](index=102&type=chunk) [Business Combinations](index=22&type=section&id=Business%20Combinations) The Group acquired a 51% equity interest in Jiangsu Boqi Smart Energy Co Ltd during the reporting period for new energy business expansion, recognizing corresponding goodwill and contingent consideration - On May 12, 2023, the Group acquired a **51% equity interest** in Jiangsu Boqi Smart Energy Co Ltd ('Jiangsu Boqi') for a total consideration of **RMB 12,441 thousand**, aiming to accelerate its new energy business expansion[151](index=151&type=chunk) | Item | RMB Thousand (Unaudited) | | :--- | :--- | | Cash | 11,260 | | Contingent Consideration Arrangement | 1,500 | | Put Option | (319) | | **Purchase Consideration at Fair Value** | **12,441** | - The acquisition resulted in **goodwill of RMB 79 thousand** and recognition of **contingent consideration of RMB 1,500 thousand**, contingent on Jiangsu Boqi's profit before tax within 3 years post-acquisition[130](index=130&type=chunk)[133](index=133&type=chunk) - Since the acquisition, Jiangsu Boqi contributed **RMB 1,077 thousand** to the Group's revenue and **RMB 305 thousand** to consolidated profit for the six months ended June 30, 2023[134](index=134&type=chunk) [Related Party Transactions and Balances](index=25&type=section&id=Related%20Party%20Transactions%20and%20Balances) The Group has receivables, payables, and transactions with several related parties, primarily involving O&M services, EPC services, and procurement, with changes in some related party relationships disclosed | Metric | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total Amounts Due from Related Parties | 382,014 | 370,670 | | Total Amounts Due to Related Parties | 41,603 | 7,249 | | Related Party | June 30, 2023 (RMB Thousand) | June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Yangxi Power - O&M Service Revenue | 98,622 | 53,746 | | Yangxi Power - Purchase of Utilities, Labor, etc | 32,632 | 20,465 | | Shouyang Thermal Power - EPC Service Revenue | 36,393 | – | - Shouyang Thermal Power is **no longer a related person** under the Listing Rules due to equity changes, but remains a related party of the Group under **IAS 24**[162](index=162&type=chunk) [Capital Commitments](index=29&type=section&id=Capital%20Commitments) At the end of the reporting period, the Group's contracted but unprovided capital commitments primarily related to property, plant, and machinery | Item | June 30, 2023 (RMB Thousand) | December 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Property, Plant and Machinery | 16,071 | 19,656 | [Events After the Reporting Period](index=29&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events requiring adjustment or disclosure under IFRS occurred after the reporting period - Except as disclosed in this interim results announcement, the Group had **no material events after the reporting period** requiring disclosure[145](index=145&type=chunk)[313](index=313&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=30&type=section&id=Industry%20Overview) China's environmental protection industry has entered a deep policy implementation era, focusing on 'carbon reduction' to promote synergistic pollution and carbon reduction, with policies strengthening cross-departmental supervision and encouraging technological innovation - China's environmental protection industry has transitioned from a policy seeding era to a comprehensive **policy deep-cultivation era**, with increasingly完善 policy regulations covering water, soil, air, and solid waste treatment[147](index=147&type=chunk) - During the **'14th Five-Year Plan' period**, the strategic focus is on **carbon reduction**, promoting synergistic pollution and carbon reduction to achieve comprehensive green transformation of economic and social development[147](index=147&type=chunk) - Multiple policies have been introduced, including guidelines on deepening cross-departmental comprehensive supervision, notices on industrial energy conservation supervision for 2023, calls for major environmental protection technologies and equipment for 2023, and draft opinions on ultra-low emissions in the cement and coking industries, strengthening supervision, encouraging innovation, and expanding markets[148](index=148&type=chunk)[171](index=171&type=chunk)[149](index=149&type=chunk)[172](index=172&type=chunk) [Business Review](index=32&type=section&id=Business%20Review) During the reporting period, the Group actively expanded traditional and new business areas, making progress in flue gas treatment, water treatment, hazardous and solid waste treatment, and dual-carbon new energy+, achieving breakthroughs in the thermal power and photovoltaic sectors, driving both performance and revenue growth - Through active expansion and strategic deployment in both traditional and new business areas, the Group achieved **double growth in performance and revenue**[173](index=173&type=chunk) - The Group continues to advance and refine its **lean management efforts**, allocating internal resources, and continuously improving and formulating multi-level, phased high-incentive schemes across various business segments to motivate teams[174](index=174&type=chunk) - As of June 30, 2023, the Group's projects have a **wide coverage across 31 provinces, municipalities, and autonomous regions in China**, while also actively expanding overseas operations[202](index=202&type=chunk) [Flue Gas Treatment Business](index=34&type=section&id=Flue%20Gas%20Treatment%20Business) Flue gas treatment business provides services through EPC, O&M, and concession models; during the reporting period, EPC business secured new contracts of approximately RMB 259 million, O&M projects operated stably, and concession projects continued, providing a steady growth source for the Group - The Group's **flue gas treatment business** primarily provides services through various models, including **EPC**, **Operation and Maintenance (O&M)**, and **Concession** (including 'Build-Operate-Transfer' or BOT, and 'Build-Own-Operate' or BOO)[177](index=177&type=chunk) - The Group seized the current 'large thermal power' development opportunities in China, continuously expanded its thermal power market, won the bid for the **Guoxin Binhai Port 2x1000MW unit desulfurization EPC project**, and steadily expanded into non-power sectors such as steel and cement industries[177](index=177&type=chunk) [EPC](index=34&type=section&id=EPC) EPC business provides flue gas emission control and dust removal services to industrial clients; during the reporting period, 7 new EPC contracts totaling approximately RMB 259 million were secured, including the Guoxin Binhai Port 2x1000MW unit desulfurization EPC project - The **EPC business** primarily involves providing design, equipment and material procurement, project construction, and equipment installation services for sulfur dioxide, nitrogen oxide emission control, and dust removal projects for industrial clients in power generation, steel, chemical, refining, and building materials sectors[177](index=177&type=chunk) - During the reporting period, the Group secured **7 new EPC contracts**, with a total contract value of approximately **RMB 259 million**[177](index=177&type=chunk) - Key projects include the **Jiangsu Guoxin Binhai Port Power Generation Co Ltd 2×1000MW new desulfurization EPC project**[177](index=177&type=chunk)[208](index=208&type=chunk) [Operation and Maintenance (O&M)](index=36&type=section&id=Operation%20and%20Maintenance%20(O%26M)) O&M services include the operation and maintenance of desulfurization, denitrification, and dust removal facilities; as of June 30, 2023, the Group had 25 operational O&M projects covering thermal power and steel industries, providing continuous revenue and stable cash flow - **O&M services** primarily include providing operational and routine maintenance services for clients' desulfurization, denitrification, and dust removal facilities[209](index=209&type=chunk) - **O&M business revenue** provides the Group with a continuous revenue stream and stable cash flow, with charging models based on total grid-connected electricity, sintered ore tonnage, or pre-agreed prices[209](index=209&type=chunk) - As of June 30, 2023, the Group had **25 operational O&M projects**, covering thermal power, steel, and other industrial sectors, with all projects operating stably and meeting emission standards[179](index=179&type=chunk) [Concession](index=38&type=section&id=Concession) Concession business includes desulfurization, denitrification, and eco-island projects; as of June 30, 2023, the Group was executing 7 concession projects, all operational except for the Shanxi Puzhou Phase I BOT project, laying a foundation for continuous operations - Under the **concession business model**, the Group is responsible for fundraising, investment, construction, and operation of projects in accordance with concession contracts signed with its clients[212](index=212&type=chunk) - As of June 30, 2023, the Group had a total of **7 concession projects** under execution, with all projects successfully operational except for the **Shanxi Puzhou Phase I BOT project**[184](index=184&type=chunk) - The **Shanxi Puzhou Phase I BOT project** is in the owner buyback negotiation phase, and related BOT operations have been suspended[187](index=187&type=chunk) [Water Treatment Business](index=39&type=section&id=Water%20Treatment%20Business) During the reporting period, the Group had 10 operational water treatment projects, all running stably, and is actively expanding and strategically positioning itself in this business area - As of June 30, 2023, the Group had **10 operational water treatment projects**, all running stably with good business development momentum[215](index=215&type=chunk) - The Group is actively **expanding and strategically positioning** itself in the water treatment business sector[215](index=215&type=chunk) [Hazardous and Solid Waste Treatment Business](index=40&type=section&id=Hazardous%20and%20Solid%20Waste%20Treatment%20Business) The Group made progress in hazardous and solid waste treatment, with the Sinopec Xinjiang drilling mud project operating smoothly, Tangshan Yandong cement kiln co-processing project Phase I completed, Qinghai Boqi center operating stably, and new projects under construction - The Group's **Sinopec Xinjiang Work Area drilling mud solid waste treatment O&M project** is operating smoothly[189](index=189&type=chunk) - Phase I of the **Tangshan Yandong cement kiln co-processing hazardous and solid waste treatment project** has been completed and is currently applying for a hazardous waste operating license[189](index=189&type=chunk) - The **Qinghai Boqi Hazardous and Solid Waste Treatment Center** is operating stably, with resource recovery projects for waste packaging and waste photovoltaic panels under construction, expected to commence operation sequentially by year-end and next year[189](index=189&type=chunk) [Dual-Carbon New Energy+ Business](index=40&type=section&id=Dual-Carbon%20New%20Energy%2B%20Business) The Group vigorously advanced its new energy+ business, winning the Zhejiang Post distributed photovoltaic EPC project, acquiring 7 distributed photovoltaic project assets totaling 21MW, and successfully operating the Tianjin Tiechang dry quenching waste heat power generation concession project, bringing stable revenue - In April 2023, the Group won the bid for the **Zhejiang Post distributed photovoltaic EPC general contracting project**, with a provisional installed capacity of **300MW**, not less than **150MW**[218](index=218&type=chunk) - In May 2023, the Group acquired **7 distributed photovoltaic project assets** with a total installed capacity of approximately **21MW**, marking a significant step in its 'new energy+' business segment[218](index=218&type=chunk) - The **Tianjin Tiechang dry quenching waste heat power generation concession project** is operating smoothly, expected to bring stable revenue to the Group in the medium to long term[218](index=218&type=chunk) [Financial Position and Operating Results](index=41&type=section&id=Financial%20Position%20and%20Operating%20Results) During the reporting period, the Group maintained a sound financial position with significant growth in revenue and net profit, improved gross profit margin, but increased cash outflow from operating activities, a shift from net inflow to net outflow in investing activities, and a substantial reduction in capital expenditure - The Group achieved **favorable overall production and operation results**, with significant year-on-year growth in **revenue and net profit**, and a sound asset structure[219](index=219&type=chunk) - In the first half of 2023, following the relaxation of COVID-19 control measures and policies, the domestic economy grew steadily, the company's existing projects proceeded with production and operation in an orderly manner, and new market areas were continuously developed, actively fostering new businesses[219](index=219&type=chunk) [Revenue](index=41&type=section&id=Revenue) During the reporting period, the Group's total revenue increased by 38.8% year-on-year, primarily due to orderly progress of existing orders post-pandemic, increased O&M projects, and higher power generation, with all business segments showing growth, especially dual-carbon new energy+ and hazardous and solid waste treatment - For the six months ended June 30, 2023, the Group's **total revenue** was **RMB 1,001 million**, an increase of **38.8%** from RMB 721 million in the first half of 2022[239](index=239&type=chunk) - Revenue growth was primarily due to: (i) orderly progress of existing orders following the relaxation of COVID-19 control measures and policies; (ii) an increase in the number of operational O&M projects compared to the prior year; and (iii) a year-on-year increase in power generation from some O&M and concession projects[239](index=239&type=chunk) | Business Segment | H1 2023 (RMB Million) | H1 2022 (RMB Million) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Flue Gas Treatment Business - EPC | 301 | 196 | 53.6% | | Flue Gas Treatment Business - O&M | 237 | 158 | 50.0% | | Flue Gas Treatment Business - Concession | 236 | 248 | -4.8% | | Water Treatment Business | 163 | 90 | 81.1% | | Hazardous and Solid Waste Treatment Business | 14 | 5 | 180.0% | | Dual-Carbon New Energy+ Business | 44 | 10 | 340.0% | [Cost of Sales and Services](index=42&type=section&id=Cost%20of%20Sales%20and%20Services) During the reporting period, the Group's cost of sales and services increased by 38.1% year-on-year, mainly due to increased existing orders and business scale post-pandemic, and higher power generation from some O&M and concession projects - For the six months ended June 30, 2023, the Group's **cost of sales and services** was **RMB 798 million**, an increase of **38.1%** from RMB 578 million in the first half of 2022[222](index=222&type=chunk) - Cost growth was primarily due to: (i) orderly progress of existing orders and increased business scale following the relaxation of COVID-19 control measures and policies; and (ii) a year-on-year increase in power generation from some O&M and concession projects[222](index=222&type=chunk) | Business Segment | H1 2023 (RMB Million) | H1 2022 (RMB Million) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Flue Gas Treatment Business - EPC | 287 | 184 | 56.0% | | Flue Gas Treatment Business - O&M | 174 | 130 | 33.8% | | Flue Gas Treatment Business - Concession | 167 | 190 | -12.1% | | Water Treatment Business | 132 | 59 | 123.7% | | Hazardous and Solid Waste Treatment Business | 9 | 7 | 28.6% | | Dual-Carbon New Energy+ Business | 29 | 8 | 262.5% | [Gross Profit and Gross Profit Margin](index=43&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) During the reporting period, the Group's gross profit increased by 41.3% year-on-year, and gross profit margin improved by 0.3 percentage points to 20.2%, primarily due to normal EPC project execution, increased O&M projects and power generation, and reduced costs post-pandemic - For the six months ended June 30, 2023, the Group's **gross profit** was **RMB 202 million**, an increase of **41.3%** from RMB 143 million in the first half of 2022, with a **gross profit margin of 20.2%**, up **0.3 percentage points** from the first half of 2022[224](index=224&type=chunk) - The year-on-year increase in gross profit was primarily due to: (i) normal and orderly execution of various EPC projects following the relaxation of COVID-19 control measures and policies; (ii) an increase in the number of operational O&M projects compared to the prior year; and (iii) increased power generation from some O&M and BOT projects, coupled with reduced costs[224](index=224&type=chunk) | Business Segment | H1 2023 Gross Profit (RMB Thousand) | H1 2023 Gross Profit Margin (%) | H1 2022 Gross Profit (RMB Thousand) | H1 2022 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Flue Gas Treatment Business - EPC | 13,275 | 4.4 | 12,410 | 6.3 | | Flue Gas Treatment Business - O&M | 63,123 | 26.7 | 28,153 | 17.8 | | Flue Gas Treatment Business - Concession | 69,345 | 29.3 | 58,336 | 23.5 | | Water Treatment Business | 30,228 | 18.6 | 30,933 | 34.3 | | Hazardous and Solid Waste Treatment Business | 4,986 | 36.2 | (2,380) | (51.5) | | Dual-Carbon New Energy+ Business | 15,045 | 34.0 | 1,999 | 20.1 | | **Total** | **202,105** | **20.2** | **143,222** | **19.9** | [Other Income and Gains and Other Expenses and Losses (Financial)](index=45&type=section&id=Other%20Income%20and%20Gains%20and%20Other%20Expenses%20and%20Losses%20(Financial)) During the reporting period, the Group's other income and gains and other expenses and losses shifted from a loss to a gain, primarily due to increased government grants and improved gains from financial asset investments - For the six months ended June 30, 2023, the Group's **other income and gains and other expenses and losses** resulted in a gain of **RMB 28 million**, an increase of **RMB 85 million** from a loss of RMB 57 million in the first half of 2022[253](index=253&type=chunk) - The increase in gains was primarily due to increased **government grants** and higher investment gains from financial assets measured at fair value through profit or loss[253](index=253&type=chunk) | Item | For the six months ended June 30, 2023 (RMB Thousand) | For the six months ended June 30, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income | 4,058 | 6,394 | | Government Grants | 10,992 | 1,165 | | Foreign Exchange Gains | 4,355 | 5,381 | | Gains on Disposal of Equity Investments at Fair Value Through Profit or Loss | 5,046 | (61,361) | | Gains on Disposal of Property, Plant and Equipment | 3,728 | – | | Other | (218) | 326 | | **Total** | **27,795** | **(57,254)** | [Selling and Distribution Expenses](index=46&type=section&id=Selling%20and%20Distribution%20Expenses) During the reporting period, the Group's selling and distribution expenses increased, mainly due to higher market expansion costs post-pandemic - For the six months ended June 30, 2023, the Group's **selling and distribution expenses** were **RMB 11 million**, an increase of **RMB 4 million** from RMB 7 million in the first half of 2022[280](index=280&type=chunk) - The increase was primarily due to **higher market expansion costs** following the relaxation of COVID-19 control measures and policies[280](index=280&type=chunk) [Administrative Expenses](index=46&type=section&id=Administrative%20Expenses) During the reporting period, the Group's administrative expenses decreased, mainly due to reduced intangible asset amortization and lower expense amortization from partial option unlocking - For the six months ended June 30, 2023, the Group's **administrative expenses** were **RMB 42 million**, a decrease of **RMB 6 million** from RMB 48 million in the first half of 2022[230](index=230&type=chunk) - The ratio of administrative expenses to revenue decreased from **6.7%** in the prior year to **4.2%**[230](index=230&type=chunk) - The decrease was primarily due to: (i) reduced **intangible asset amortization** influenced by a downward adjustment in the total valuation of Qinghai Boqi's equity transaction; and (ii) reduced expense amortization from partial option unlocking[230](index=230&type=chunk) [Research and Development ("R&D") Expenses](index=46&type=section&id=Research%20and%20Development%20(%22R%26D%22)%20Expenses) During the reporting period, the Group's R&D expenses increased, mainly due to greater investment in new business expansion, but the R&D expense to revenue ratio remained consistent with the prior year - For the six months ended June 30, 2023, the Group's **R&D expenses** were **RMB 24 million**, an increase of **RMB 7 million** from RMB 17 million in the first half of 2022[256](index=256&type=chunk) - The increase was primarily due to **greater R&D investment for new business expansion**, with the R&D expense to revenue ratio remaining flat at **2.4%** compared to the prior year[256](index=256&type=chunk) [Finance Costs (Financial)](index=46&type=section&id=Finance%20Costs%20(Financial)) During the reporting period, the Group's finance costs decreased, mainly due to loan repayments - For the six months ended June 30, 2023, the Group's **finance costs** were **RMB 7 million**, a decrease of **RMB 2 million** from RMB 9 million in the first half of 2022[282](index=282&type=chunk) - The decrease was primarily due to the **repayment of borrowings** by the Group during the reporting period[282](index=282&type=chunk) [Income Tax Expense (Financial)](index=46&type=section&id=Income%20Tax%20Expense%20(Financial)) During the reporting period, the Group's income tax expense significantly increased due to higher profit before tax - For the six months ended June 30, 2023, the Group's **income tax expense** was **RMB 10 million**, an increase of **66.7%** from RMB 6 million in the first half of 2022[258](index=258&type=chunk) - The increase was primarily due to the **increase in the Group's profit before tax** during the reporting period[258](index=258&type=chunk) [Profit for the Period](index=47&type=section&id=Profit%20for%20the%20Period) During the reporting period, the Group's profit for the period significantly increased, primarily driven by higher business revenue and gross profit across various segments, reduced expenses, and increased government grants - For the six months ended June 30, 2023, the Group's **profit for the period** was **RMB 136 million**, an increase of **RMB 133 million** from RMB 3 million in the first half of 2022[259](index=259&type=chunk) - The growth was primarily due to: (i) increased business revenue and gross profit across various segments following the relaxation of COVID-19 control measures and policies; and (ii) a slight decrease in expenses and an increase in government grants compared to the prior year[259](index=259&type=chunk) [Profit Attributable to Owners of the Parent](index=47&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Parent) During the reporting period, profit attributable to owners of the parent significantly increased, reflecting a substantial improvement in the company's overall profitability - For the six months ended June 30, 2023, **profit attributable to owners of the parent** was **RMB 134 million**, an increase of **RMB 130 million** from RMB 4 million in the first half of 2022[285](index=285&type=chunk) [Cash Flows](index=47&type=section&id=Cash%20Flows) During the reporting period, cash outflow from operating activities increased, investing activities shifted from net inflow to net outflow, and financing activities saw a significant increase in outflow, leading to a substantial decrease in bank balances and cash - **Net cash used in operating activities** was **RMB 106 million**, a year-on-year increase in outflow of **RMB 33 million**, primarily due to increased phased operating procurement expenditures for new energy projects[286](index=286&type=chunk) - **Net cash used in investing activities** was **RMB 25 million**, compared to a net cash generated from investing activities of RMB 53 million in the prior year, a year-on-year decrease of **RMB 78 million**, mainly due to reduced gains from disposal of financial assets at fair value through profit or loss[234](index=234&type=chunk) - **Net cash used in financing activities** was **RMB 50 million**, a year-on-year increase in outflow of **RMB 49 million**, mainly due to the repayment of bank and other borrowings and interest[262](index=262&type=chunk) - As of June 30, 2023, the Group's **bank balances and cash** were **RMB 224 million**, a decrease of **RMB 178 million** from RMB 402 million at the beginning of 2023, primarily due to advance payments for some EPC projects as per contractual agreements during the reporting period[261](index=261&type=chunk) [Capital Expenditure](index=48&type=section&id=Capital%20Expenditure) During the reporting period, the Group's total capital expenditure significantly decreased, primarily comprising investments in property, plant, and equipment, and equity investments - In the first half of 2023, the Group's **total capital expenditure** was **RMB 17 million**, a decrease of **RMB 121 million** from RMB 138 million in the prior year[288](index=288&type=chunk) - The Group's capital expenditure primarily includes **investments in the acquisition and construction of projects** and **equity investments**[288](index=288&type=chunk) [Pledged Assets](index=48&type=section&id=Pledged%20Assets) Some of the Group's long-term bank borrowings are secured by property, and equity interests in subsidiaries and service fee receivables are pledged to secure liabilities under finance lease agreements - As of June 30, 2023, the Group's **long-term bank borrowings of RMB 28 million** were secured by **properties owned by the Group**[289](index=289&type=chunk) - The entire equity interests in the company's subsidiaries, Jiangxi Jinggangshan Boqi Environmental Protection Technology Co Ltd and Handan Boqi Environmental Protection Technology Co Ltd, and service fee receivables under service concession agreements, are pledged to CITIC Financial Leasing Co Ltd and Jiangsu Financial Leasing Co Ltd, respectively, to secure liabilities under finance lease agreements[263](index=263&type=chunk)[290](index=290&type=chunk) [Contingent Liabilities](index=48&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had **no significant contingent liabilities**[291](index=291&type=chunk) [Material Investments Held, Material Acquisitions and Disposals](index=48&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group disposed of shares in China Xuyang Group Co Ltd and acquired a 51% equity interest in Wuxi Huadong No 1 Smart Energy Co Ltd to accelerate its new energy business expansion - From April 27, 2022, to February 21, 2023, the company disposed of a total of **19,619,000 shares** in China Xuyang Group Co Ltd for a total consideration of approximately **HKD 75.48 million**, after which the Group no longer held any Xuyang shares[291](index=291&type=chunk) - On May 12, 2023, the company's wholly-owned subsidiary acquired a **51% equity interest** in Wuxi Huadong No 1 Smart Energy Co Ltd for a total consideration of **RMB 11.26 million**, aiming to accelerate its new energy business expansion[292](index=292&type=chunk) - Except as disclosed above, the Group held **no material investments** and had **no material acquisitions or disposals of subsidiaries and associates** during the reporting period[265](index=265&type=chunk) [No Material Changes](index=49&type=section&id=No%20Material%20Changes) Except as disclosed in this interim results announcement, no material changes affecting the Group's performance occurred during the reporting period - Except as disclosed in this interim results announcement, there were **no material changes** affecting the Group's performance requiring disclosure under paragraphs 32 and 40(2) of Appendix 16 of the Listing Rules during the reporting period[266](index=266&type=chunk) [Future Plans for Material Investments and Capital Assets](index=49&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2023, the Group had no other plans for material investments and capital assets but will continue to closely review its business expansion plans - As of June 30, 2023, the Group had **no other plans for material investments and capital assets**[267](index=267&type=chunk) - The Group will continue to **closely and regularly review its business expansion plans** to take necessary measures that align with the Group's best interests[267](index=267&type=chunk) [Group's Future Outlook](index=49&type=section&id=Group%27s%20Future%20Outlook) The Group will focus on 'environmental governance and dual-carbon new energy+' across three development channels—existing, emerging, and exploratory businesses—to form a 'gas, water, solid, dual-carbon new energy+' integrated development pattern, planning to increase R&D investment, refine management, and leverage capital markets for industrial transformation - The Group positions itself with two development channels: **'environmental governance and dual-carbon new energy+'**, focusing on advantageous industries and niche sectors, aiming to form a **'gas, water, solid, dual-carbon new energy+' integrated development pattern** through three development channels—existing, emerging, and exploratory businesses—over five years[267](index=267&type=chunk) - Committed to becoming a highly competitive, domestic first-class **'environmental dual-carbon management platform, operation service technology platform, and capital operation investment and financing platform'**[267](index=267&type=chunk) - Stabilize the **flue gas treatment business** to form a 'base plate'; increase resource investment in **water treatment business** and actively expand market share in **hazardous and solid waste treatment business** to form an 'alternative plate'; accelerate the promotion of **new energy business** to form a 'support plate'[268](index=268&type=chunk) - Adhere to **innovation-driven development**, increase R&D efforts, focus on new business areas, and enhance technological innovation capabilities through technical cooperation and independent R&D[269](index=269&type=chunk) - Continuously advance **lean management**, optimize human resource support, build a comprehensive intelligent management platform to improve management efficiency, and optimize organizational structure and staffing, strengthen internal control mechanisms, and attract high-end talent[295](index=295&type=chunk) - Leverage **capital market forces** to optimize industrial layout and achieve industrial transformation and upgrading through introducing strategic shareholder resources, investment and M&A, and multi-channel fundraising[296](index=296&type=chunk) [Corporate Governance and Other Information](index=51&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Code](index=51&type=section&id=Corporate%20Governance%20Code) The company is committed to maintaining high corporate governance standards, adopting the Listing Rules' Corporate Governance Code; the dual role of Chairman and CEO Mr. Zeng Zhijun deviates from the code, but the board deems it appropriate due to his experience and independent board elements - The company has adopted the **Corporate Governance Code** set out in Appendix 14 of the Listing Rules and has complied with its provisions throughout the reporting period[271](index=271&type=chunk)[298](index=298&type=chunk) - Mr. Zeng Zhijun's dual role as **Chairman and Chief Executive Officer** deviates from **Code Provision C.2.1** of the Corporate Governance Code[297](index=297&type=chunk) - The Board believes that Mr. Zeng's extensive experience and the independent elements of the Board members (including two executive directors, three non-executive directors, and three independent non-executive directors) provide **effective checks and balances** on his power and authority, thus deeming the deviation from the Code appropriate and justifiable[297](index=297&type=chunk) [Model Code for Securities Transactions](index=51&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company adopted the Listing Rules' Model Code for Securities Transactions by Directors and confirmed strict compliance by all directors during the reporting period - The company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** set out in Appendix 10 of the Listing Rules[299](index=299&type=chunk) - Following specific enquiries with all directors of the company, all directors confirmed their **strict compliance** with the required standards set out in the Model Code during the reporting period[299](index=299&type=chunk) - The Board has also adopted the Model Code to regulate all dealings in the company's securities by relevant employees who may possess **unpublished inside information** of the company[273](index=273&type=chunk) [Directors' Responsibilities for Financial Statements](index=51&type=section&id=Directors%27%20Responsibilities%20for%20Financial%20Statements) Directors understand their responsibility to prepare financial statements that present a true and fair view, with management providing necessary information for informed board assessment - Directors understand their responsibility to prepare the financial statements for the first half of 2023 to present a **true and fair view** of the state of affairs of the company and the Group, as well as the Group's performance and cash flows[274](index=274&type=chunk) - The company's management provides the Board with necessary explanations and information, enabling the Board to conduct an **informed assessment** of the company's financial statements presented for approval[301](index=301&type=chunk) - The directors are **unaware of any material uncertainties** related to events or conditions that may cast significant doubt upon the company's ability to continue as a going concern[275](index=275&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=52&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the company nor any member of the Group purchased, sold, or redeemed any of the company's shares - During the reporting period, neither the company nor any member of the Group **purchased, sold, or redeemed any of the company's shares**[302](index=302&type=chunk) [Sufficiency of Public Float](index=52&type=section&id=Sufficiency%20of%20Public%20Float) From the listing date to the end of the reporting period, the company consistently maintained a sufficient public float - Based on information available to the company and to the best of the directors' knowledge, the company has consistently maintained a **sufficient public float** from March 16, 2018 (the date of listing of shares on the Stock Exchange) until June 30, 2023[309](index=309&type=chunk) [Dividend Policy](index=52&type=section&id=Dividend%20Policy) The company's dividend policy stipulates that the Board will consider paying annual dividends within a range of 30% to 50% of the net profit for each year - According to the company's **Dividend Policy** announced on May 18, 2018, the Board will consider paying annual dividends within a range of **30% to 50% of the net profit** for each year[277](index=277&type=chunk)[303](index=303&type=chunk) [Interim Dividend](index=52&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2023 - The Board resolved **not to declare an interim dividend** for the six months ended June 30, 2023 (2022: nil)[303](index=303&type=chunk) [Compliance with Laws and Regulations](index=52&type=section&id=Compliance%20with%20Laws%20and%20Regulations) During the reporting period, the Group strictly complied with business-related laws and regulations and was not involved in any significant legal proceedings - As an environmental service provider, the Group **strictly complies with laws and regulations** related to its business, including those concerning the provision of environmental protection and energy-saving services, and the monitoring of pollutants and flue gas from coal-fired power plants[278](index=278&type=chunk) - During the reporting period, the company **complied with relevant laws and regulations** that have a material impact on the company and was **not involved in any significant legal proceedings**[311](index=311&type=chunk) [Environmental Policies and Performance](index=52&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to environmental protection, social contribution, and sustainable development, with details of its Environmental, Social and Governance Report disclosed in the 2022 Annual Report - The Group is committed to **environmental protection, contributing to society, and achieving sustainable development**[278](index=278&type=chunk) - Details regarding the company's **Environmental, Social and Governance (ESG)** are disclosed in the ESG Report within the company's 2022 Annual Report, published on April 26, 2023, in accordance with Listing Rule 13.91 and Appendix 27[305](index=305&type=chunk) [Events After the Reporting Period (Corporate Governance)](index=53&type=section&id=Events%20After%20the%20Reporting%20Period%20(Corporate%20Governance)) Except as disclosed in this interim results announcement, no material events requiring disclosure occurred after the reporting period - Except as disclosed in this interim results announcement, the Group had **no material events after the reporting period** requiring disclosure[313](index=313&type=chunk) [Audit Committee and Review of Interim Results](index=53&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023, and discussed audit, internal control, risk management systems, and financial reporting matters - The company's **Audit Committee** has reviewed the Group's **unaudited condensed consolidated interim financial statements** for the six months ended June 30, 2023[27](index=27&type=chunk) - The Audit Committee has reviewed the accounting standards and practices adopted by the Group with management and has also discussed **audit, internal control, risk management systems, and financial reporting matters**[313](index=313&type=chunk) - The Audit Committee comprises **two independent non-executive directors and one non-executive director**[313](index=313&type=chunk) [Publication of Interim Results and Interim Report](index=53&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement is published on the company's and HKEX websites, and the 2023 interim report containing all required information will be dispatched to shareholders and posted on these websites in due course - This announcement is published on the company's website (www.chinaboqi.com) and the Stock Exchange's website (www.hkexnews.hk)[306](index=306&type=chunk) - The 2023 interim report, containing all information required by the Listing Rules, will be dispatched to the company's shareholders and posted on the aforementioned websites for review in due course[306](index=306&type=chunk)[314](index=314&type=chunk)

Financial Performance - For the year ended December 31, 2022, the revenue of China Boqi Environmental amounted to RMB 1,900 million, representing a decrease of 9.2% compared to the previous year[12]. - The gross profit for the same period was RMB 391 million, with a gross profit margin of 20.6%, reflecting an increase of 0.8% and 2.1 percentage points year-on-year[13]. - The net profit for the year was RMB 156 million, with a net profit margin of 8.2%. Excluding fair value changes and investment income, the adjusted net profit was RMB 227 million, down 6.2% from last year[14]. - The Group's total revenue for the year ended December 31, 2022, was RMB 1,900,248 thousand, a decrease from RMB 2,092,172 thousand in 2021[26]. - Gross profit for the year was RMB 390,778 thousand, slightly up from RMB 387,559 thousand in the previous year[26]. - Profit for the year was RMB 155,658 thousand, down from RMB 348,402 thousand in 2021[27]. - The Board recommended a final dividend of HK$3.00 cents per ordinary share for the year ended December 31, 2022, compared to HK$7.40 cents in 2021[21]. Business Segments - Revenue from the flue gas treatment business segment was RMB 1,510 million, with 10 new EPC projects added, totaling a contract value of approximately RMB 429 million[15]. - The water treatment business segment generated revenue of RMB 271 million, with three new projects and a total contract value of approximately RMB 295 million[16]. - The revenue from the hazardous and solid waste treatment/disposal business segment was RMB 12 million for the year ended December 31, 2022[19]. - The dual-carbon energy saving business segment generated revenue of RMB 108 million for the year ended December 31, 2022[20]. Operational Developments - As of December 31, 2022, the Group had 23 operational O&M projects, expanding its service scope to include power generating units[15]. - The Group accumulated 7 concession operation projects, all of which have been successfully put into operation, supporting stable development[15]. - The Group secured three new water treatment projects with a total contract value of approximately RMB 295 million during the reporting period[18]. - The company achieved new contracts with an accumulated value of approximately RMB 1,519 million during the reporting period, indicating substantial business diversification breakthroughs[51]. Market Strategy and Challenges - The company faced challenges in 2022 due to the COVID-19 pandemic, resulting in reduced order volume and income[36]. - The percentage of new orders from key customers increased to 70% in 2022, reflecting a strategic focus on customer relationship management[40]. - The company plans to further open up the market for hazardous and solid waste treatment/disposal business through strategic planning[19]. - The company is focusing on expanding its business areas, particularly in pollution abatement, carbon reduction, and clean production, aligning with the high-quality development goals of environmental governance[44]. Leadership and Management - Mr. Zeng Zhijun has been the Chairman and CEO since January 30, 2015, and is responsible for the overall management of the Group[56]. - The company has a senior management team that includes Ms. Qian Xiaoning, who has been with the company since 2007 and is responsible for managing human resources and legal compliance[104]. - The board of directors includes members with extensive backgrounds in finance and law, enhancing corporate governance[94]. - The company has expanded its management team with several vice presidents, including Ms. Wang Hui, who joined in 2019 as the chief financial officer[104]. Environmental Commitment - The company is committed to achieving carbon neutrality and enhancing customer satisfaction, aligning with national environmental protection trends[154][156]. - The company is developing integrated platforms for environmental protection and dual-carbon management, aiming to contribute positively to ecological civilization construction[154][156]. - The focus on scientific and technological innovation in ecological governance is essential for addressing environmental challenges during the "14th Five-Year Plan" period[166]. - The company emphasizes the importance of ecological protection and pollution prevention as part of its strategic deployment for the future[44]. Project and Contract Highlights - The company operates 23 O&M projects, expanding its services from environmental protection facilities to generator unit maintenance, including the first 135 MW supercritical gas-powered generating set in China[186]. - The total installed capacity of O&M projects includes 6×350 MW, 2×600 MW, and 2×1000 MW units, contributing to a stable cash flow[189]. - The largest contract was for the Master Contracting Project of No. 1 Sintering Machine, valued at RMB 115 million, aimed at flue gas purification[184]. - The Group's concession operation business includes desulfurization, denitrification, and green island projects, contributing to its operational foundation[196].