Group 1 - The Hang Seng Index closed down 0.63% at 24,069.94 points on July 3 [1] - Zhongshen Jianye (02503.HK) closed at HKD 0.82 per share, up 15.49%, with a trading volume of 8.668 million shares and a turnover of HKD 8.1581 million, showing a volatility of 36.62% [1] Group 2 - In the past month, Zhongshen Jianye has seen a cumulative decline of 10.13%, while it has increased by 10.94% year-to-date, underperforming the Hang Seng Index which has risen by 20.75% [2] - As of December 31, 2024, Zhongshen Jianye reported total revenue of RMB 751 million, a year-on-year decrease of 50.97%, and a net profit attributable to shareholders of RMB 1.944 million, down 93.89% year-on-year, with a gross margin of 5.51% and a debt-to-asset ratio of 71.12% [2] Group 3 - Currently, there are no institutional investment ratings for Zhongshen Jianye [3] - The average price-to-earnings (P/E) ratio for the construction industry (TTM) is 8.31 times, with a median of 0.42 times. Zhongshen Jianye has a P/E ratio of 208.94 times, ranking 106th in the industry [3] - Zhongshen Jianye Holdings Limited is a developing private general contracting construction company in China, holding five first-class construction contracting qualifications and several second and third-class qualifications covering various specialties [3]

Revenue Performance - The company's revenue decreased from approximately RMB 1,530.9 million in the year ended December 31, 2023, to approximately RMB 750.6 million in the year ended December 31, 2024, representing a decline of 51.0%[11]. - Revenue from construction projects fell by approximately RMB 568.0 million or 57.6%, from RMB 985.5 million in 2023 to RMB 417.5 million in 2024[15]. - Revenue from municipal public works projects decreased by approximately RMB 74.5 million or 21.7%, from RMB 343.6 million in 2023 to RMB 269.0 million in 2024[16]. - Revenue from foundation engineering projects plummeted by approximately RMB 103.6 million or 97.6%, from RMB 106.1 million in 2023 to RMB 2.6 million in 2024[17]. - Revenue from specialized contracting projects decreased by approximately RMB 34.3 million or 35.8% to about RMB 61.5 million for the year ending December 31, 2024, primarily due to the completion of most existing projects[18]. Financial Performance - Total revenue costs for the year ending December 31, 2024, decreased by approximately RMB 732.6 million or 50.8% compared to the previous year, consistent with the reduction in revenue from construction projects[20]. - Gross profit for construction projects was RMB 41.3 million with a gross margin of 5.5% for the year ending December 31, 2024, down from RMB 89.1 million and 5.8% in the previous year[21]. - Net profit for the year ending December 31, 2024, was approximately RMB 1.9 million, a decrease of about 93.9% from RMB 31.8 million in the previous year[28]. - Cash and cash equivalents were approximately RMB 96.7 million as of December 31, 2024, down from RMB 147.1 million in the previous year[29]. - Total bank borrowings as of December 31, 2024, were approximately RMB 56.3 million, compared to RMB 32.3 million in the previous year[30]. - The debt-to-equity ratio increased to approximately 11.8% as of December 31, 2024, from 7.9% in the previous year[31]. - Capital expenditures for the year ending December 31, 2024, were approximately RMB 8.4 million, down from RMB 42.0 million in the previous year[35]. Corporate Governance - The company has adopted a corporate governance code that aligns with the principles and provisions of the listing rules[63]. - The company emphasizes integrity, accountability, and transparency as core values in its corporate culture[64]. - The board consists of two executive directors and three independent non-executive directors, with four board meetings held since the listing date[70]. - The board of directors has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[84]. - The board believes that transition risks driven by policy changes and market expectations are more manageable, allowing for timely adjustments to new procedures[167]. Risk Management - The company has established a risk management and internal control framework based on the COSO framework, focusing on managing key risks to acceptable levels[97]. - The board conducts an annual review of the effectiveness of the company's risk management and internal control systems, which are deemed sufficient and effective[98]. - The company has engaged an independent internal control consultant to review key business processes and internal control systems for the year ending December 31, 2024[97]. Environmental, Social, and Governance (ESG) Initiatives - The company has established a governance framework to oversee environmental, social, and governance (ESG) risks, with a dedicated ESG working group comprising senior management[122]. - The ESG working group meets regularly, at least once a year, to manage and report on ESG-related issues[123]. - The company has set a quantitative target to manage diesel consumption, maintaining it at 2.6 tons per million revenue for 2022 and 2023, with a plan to reduce it to 2.5 tons by 2025[139]. - The company has complied with all applicable environmental laws and regulations, with no significant claims or penalties related to environmental protection during the reporting period[136]. - The company has implemented measures to reduce Scope 3 emissions by considering environmental compliance history and certifications in the selection of suppliers and subcontractors[150]. Employee Management - The company employed a total of 237 employees as of December 31, 2024, compared to 225 in 2023, indicating a growth in workforce[186]. - The overall employee turnover rate increased to 42.7% in the reporting period, up from 30% in 2023, with 94% of the turnover being frontline staff[186]. - The company has established a standardized employment contract with employees, which includes confidentiality clauses and competitive compensation packages[188]. - The company is committed to providing a safe and fair working environment, adhering to labor standards and prohibiting child labor and forced labor[189]. Safety and Quality Control - The company has established a three-tier occupational safety system to address the inherent high safety risks in the construction industry[194]. - The company has achieved GB/T45001-2020/13045001:2018 standard certification for occupational health and safety management systems[193]. - There were no reportable accidents or related lost time injury frequency during the reporting period[198]. - The company has implemented strict quality control measures throughout the construction project lifecycle, ensuring compliance with contractual and technical specifications[177].

Financial Performance - Revenue decreased from approximately RMB 1,530.9 million for the year ended December 31, 2023, to approximately RMB 750.6 million for the year ended December 31, 2024, representing a decline of about 51.0%[3] - Gross profit fell from approximately RMB 89.1 million in 2023 to approximately RMB 41.3 million in 2024, a decrease of about 53.7%[3] - Net profit attributable to the owners of the company decreased from approximately RMB 31.8 million in 2023 to approximately RMB 1.9 million in 2024, a decline of about 94.0%[3] - Operating profit decreased significantly from approximately RMB 47.8 million in 2023 to approximately RMB 2.3 million in 2024, a decline of about 95.2%[5] - The company reported a basic earnings per share of RMB 0.38 for the year ended December 31, 2024, compared to RMB 8.24 in 2023, a decrease of about 95.4%[5] - The net profit for the year ended December 31, 2024, was approximately RMB 1.9 million, a decrease of about 93.9% from RMB 31.8 million in 2023[55] Assets and Liabilities - Total assets decreased from approximately RMB 1,682.7 million in 2023 to approximately RMB 1,648.1 million in 2024, a reduction of about 2.1%[6] - Total liabilities decreased from approximately RMB 1,310.3 million in 2023 to approximately RMB 1,172.2 million in 2024, a decline of about 10.6%[7] - The net asset value as of December 31, 2024, was approximately RMB 476.0 million, an increase of about 27.8% compared to RMB 372.4 million as of December 31, 2023[3] Revenue Breakdown - Revenue from construction services for the year ended December 31, 2024, was RMB 750,556,000, a decrease of 51% compared to RMB 1,530,919,000 for the year ended December 31, 2023[23] - Revenue from construction projects decreased from approximately RMB 985.5 million in 2023 to about RMB 417.5 million in 2024, a reduction of RMB 568.0 million or 57.6%[41] - Revenue from municipal public works projects decreased by approximately RMB 74.5 million or 21.7%, from RMB 343.6 million in 2023 to RMB 269.0 million in 2024[42] - Revenue from foundation engineering projects dropped significantly by approximately RMB 103.6 million or 97.6%, from RMB 106.1 million in 2023 to about RMB 2.6 million in 2024[43][44] - Revenue from specialized contracting projects decreased by approximately RMB 34.3 million or 35.8%, from RMB 95.7 million in 2023 to RMB 61.5 million in 2024[45] Expenses and Costs - Total expenses for the year ended December 31, 2024, were RMB 749,245,000, down from RMB 1,482,983,000 in 2023, indicating a reduction of approximately 49%[25] - The total cost of revenue for the year ended December 31, 2024, was approximately RMB 709.2 million, a decrease of about RMB 732.6 million or 50.8% compared to RMB 1,441.8 million for the year ended December 31, 2023[47] - Administrative expenses decreased by approximately RMB 1.2 million or 2.9% in 2024, mainly due to reduced listing expenses, partially offset by increases in employee costs and professional fees[52] Financing and Cash Flow - The net financing cost for the year ended December 31, 2024, was RMB (2,996,000), compared to RMB (2,177,000) in 2023, reflecting an increase in financing costs[25] - Cash and cash equivalents as of December 31, 2024, were approximately RMB 96.7 million, down from RMB 147.1 million in 2023[56] - Total bank borrowings increased to RMB 56.4 million in 2024 from RMB 29.3 million in 2023, reflecting a growth of 92.5%[35] - The debt-to-equity ratio as of December 31, 2024, was approximately 11.8%, up from 7.9% in 2023[58] Dividends and Shareholder Returns - The company does not recommend the payment of any final dividend for the year ended December 31, 2024, consistent with the previous year[4] - The company did not declare or pay any dividends for the year ended December 31, 2024, consistent with 2023[30] Trade Receivables - Trade receivables increased to RMB 249.6 million in 2024 from RMB 140.7 million in 2023, representing a growth of 77.3%[32] - The net amount of trade receivables after impairment provisions was RMB 240.4 million in 2024, compared to RMB 137.3 million in 2023[32] - The company provided a credit period of no more than one month to customers, with trade receivables aging analysis showing RMB 177.3 million within one year in 2024, up from RMB 111.1 million in 2023[33] Company Operations and Market Position - The company has been primarily engaged in providing construction services in the People's Republic of China[9] - The company was recognized as one of the "Top 500 Enterprises in Shenzhen" for five consecutive years from 2020 to 2024[38] - The construction market in Guangdong Province recorded a compound annual growth rate (CAGR) of approximately 13.4%, increasing from about RMB 229.57 billion in 2018 to RMB 229.57 billion in 2022, and is expected to continue growing at a CAGR of about 8.3% to reach approximately RMB 342.61 billion by 2027[66] Future Plans and Investments - The company plans to use approximately HKD 30 million from the net proceeds of share subscriptions for potential acquisitions of construction companies with municipal engineering qualifications and good track records[68] - The net proceeds from the share subscriptions, after deducting underwriting commissions and listing expenses, are approximately RMB 773 million, with specific allocations for various projects detailed in the prospectus[69] - As of December 31, 2024, the company has utilized RMB 42.4 million of the net proceeds, with RMB 34.9 million remaining to be used by the end of 2025 and 2026 for equipment purchases and hiring additional staff[69] Compliance and Reporting - The audit committee is responsible for reviewing and supervising the financial reporting process and internal control systems of the group, ensuring compliance with corporate governance measures[76] - The company's auditor has confirmed that the figures in the preliminary announcement are consistent with the audited financial statements for the year ended December 31, 2024[77] - The annual report for the year ended December 31, 2024, will be provided to shareholders in accordance with listing rules and published on the stock exchange and the company's website[78]

Revenue Performance - Revenue for the six months ended June 30, 2024, decreased by approximately RMB 116.8 million or 23.5% to RMB 379.0 million compared to RMB 495.8 million for the same period in 2023[17] - Construction project revenue decreased by approximately RMB 32.5 million or 11.6% to RMB 246.9 million for the six months ended June 30, 2024, from RMB 279.4 million in 2023[19] - Municipal public works project revenue increased by approximately RMB 33.2 million or 35.9% to RMB 126.1 million for the six months ended June 30, 2024, compared to RMB 92.9 million in 2023[20] - Foundation engineering project revenue decreased significantly by approximately RMB 51.3 million or 95.5% to RMB 2.4 million for the six months ended June 30, 2024, from RMB 53.7 million in 2023[21] - Professional contracting project revenue decreased by approximately RMB 66.2 million or 94.9% to RMB 3.6 million for the six months ended June 30, 2024, compared to RMB 69.8 million in 2023[22] - Revenue for the six months ended June 30, 2024, was RMB 379,026 thousand, a decrease of 23.5% compared to RMB 495,780 thousand for the same period in 2023[64] Cost and Profitability - Total cost of revenue for the six months ended June 30, 2024, was RMB 357.4 million, down from RMB 467.2 million in 2023[23] - Revenue costs for the six months ended June 30, 2024, decreased by approximately RMB 109.8 million or 23.5% compared to the same period in 2023, primarily due to a reduction in the number of engineering projects leading to decreased demand for raw materials and lower equipment and machinery usage costs[25] - Gross profit for construction projects for the six months ended June 30, 2024, was RMB 21,673 thousand with a gross margin of 5.7%, compared to RMB 28,547 thousand and a gross margin of 5.8% for the same period in 2023[26] - Operating profit decreased to RMB 3,644 thousand, a decline of 77.9% from RMB 16,465 thousand in the previous year[64] - Profit for the period decreased by approximately 96.9% to RMB 0.3 million for the six months ended June 30, 2024, compared to RMB 10.8 million for the same period in 2023, primarily due to reduced revenue and gross profit along with increased administrative expenses[28] - Adjusted profit for the six months ended June 30, 2024, was RMB 1,898 thousand, down from RMB 13,154 thousand in the same period of 2023[29] Expenses and Administrative Costs - Administrative expenses increased by approximately RMB 3.8 million or 23.3% for the six months ended June 30, 2024, mainly due to increased labor costs and professional fees[28] - The group’s total expenses for the six months ended June 30, 2024, amounted to RMB 377,517,000, compared to RMB 483,588,000 in the same period of 2023[83] Financial Position - Cash and cash equivalents as of June 30, 2024, were approximately RMB 105.1 million, down from RMB 147.1 million as of December 31, 2023[30] - Bank borrowings as of June 30, 2024, amounted to approximately RMB 27.8 million, a decrease from RMB 29.3 million as of December 31, 2023[31] - The debt-to-equity ratio as of June 30, 2024, was approximately 5.9%, down from 7.9% as of December 31, 2023[32] - Total assets as of June 30, 2024, were RMB 1,535,348 thousand, down from RMB 1,682,716 thousand at the end of 2023[65] - Current assets decreased to RMB 1,470,717 thousand from RMB 1,619,313 thousand at the end of 2023[65] - Total liabilities decreased from RMB 1,310,292 thousand as of December 31, 2023, to RMB 1,060,981 thousand as of June 30, 2024, representing a reduction of approximately 19.0%[66] - Total equity increased from RMB 1,682,716 thousand as of December 31, 2023, to RMB 1,535,348 thousand as of June 30, 2024, indicating a decrease of about 8.8%[66] Employee and Management Information - As of June 30, 2024, the total employee cost was approximately RMB 12.7 million, an increase from RMB 9.8 million in the same period last year[36] - The company employed a total of 257 employees, all located in China, and faced no significant hiring or retention issues[36] - The total remuneration for key management personnel for the six months ended June 30, 2024, was RMB 1,261 thousand, an increase from RMB 1,179 thousand for the same period in 2023, showing a growth of about 7.0%[125] Market and Strategic Outlook - The construction market in Guangdong Province recorded a compound annual growth rate (CAGR) of approximately 13.4% from 2018 to 2022, reaching about RMB 229.57 billion in 2022, with expectations of further growth to approximately RMB 342.61 billion by 2027 at a CAGR of about 8.3%[39] - The company is focused on expanding its construction services in response to favorable government policies aimed at increasing infrastructure development[39] - The company aims to enhance its market share in the construction services sector by leveraging its extensive experience and knowledge[39] Shareholder and Compliance Information - As of June 30, 2024, Mr. Sang Xianfeng held 55.20% of the shares through controlled corporations, while Mr. Xian Yulong held 13.80%[47] - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with the relevant regulations[43] - The company has appointed Huifu Financing Limited as its compliance advisor[57] Capital and Financing Activities - The company plans to allocate approximately RMB 77.3 million from its IPO proceeds for various purposes, including RMB 35.3 million for capital needs and cash flow, and RMB 31.9 million for equipment and machinery acquisition[40] - The company raised RMB 117,032 thousand from share placements and public offerings during the financing activities in the six months ended June 30, 2024[69] Dividend and Retained Earnings - No interim dividend was recommended for the six months ended June 30, 2024[41] - The group did not declare or pay any dividends for the six months ended June 30, 2024, consistent with the same period in 2023[96] - The company’s retained earnings increased from RMB 12,406 thousand as of January 1, 2023, to RMB 39,784 thousand as of January 1, 2024, representing an increase of approximately 221.5%[67]

Financial Performance - Revenue decreased from RMB 495.8 million for the six months ended June 30, 2023, to RMB 379.0 million for the six months ended June 30, 2024, representing a decline of approximately 23.5%[2] - Gross profit fell from RMB 28.5 million to RMB 21.7 million during the same period, a decrease of about 23.5%[2] - Adjusted profit decreased significantly from RMB 13.2 million to RMB 1.9 million, reflecting a decline of approximately 85.6%[2] - Operating profit dropped from RMB 16.5 million to RMB 3.6 million, a decline of approximately 78.1%[2] - The company reported a net profit attributable to owners of RMB 0.3 million for the six months ended June 30, 2024, down from RMB 10.8 million in the previous year, a decrease of about 97.2%[2] - The company recorded a profit of approximately RMB 0.3 million for the six months ended June 30, 2024, a decrease of about 96.9% from RMB 10.8 million for the same period in 2023[35] - Adjusted profit for the six months ended June 30, 2024, was RMB 1.9 million, down from RMB 13.2 million in the previous year, reflecting a significant decline[37] Assets and Liabilities - Net asset value increased to RMB 474.4 million as of June 30, 2024, up 27.4% from RMB 372.4 million on December 31, 2023[1] - Total assets decreased from RMB 1,682.7 million as of December 31, 2023, to RMB 1,535.3 million as of June 30, 2024, a reduction of approximately 8.8%[4] - Total liabilities decreased from RMB 1,310.3 million to RMB 1,060.9 million, a decline of about 19.0%[5] - Total liabilities decreased to RMB 1,012,462,000 as of June 30, 2024, from RMB 1,248,876,000 as of December 31, 2023, indicating a reduction of 18.9%[19] - Trade receivables increased to RMB 226,467,000 as of June 30, 2024, compared to RMB 140,719,000 as of December 31, 2023, reflecting a growth of 60.9%[17] Revenue Breakdown - Revenue from construction services for the six months ended June 30, 2024, was RMB 379,026,000, a decrease of 23.5% compared to RMB 495,780,000 for the same period in 2023[10] - Revenue from construction projects was RMB 246.9 million, a decrease of RMB 32.5 million or 11.6% from RMB 279.4 million in the previous period[25] - Revenue from municipal public works increased by RMB 33.2 million or 35.9% to RMB 126.1 million, up from RMB 92.9 million[26] - Revenue from foundation engineering projects plummeted by RMB 51.3 million or 95.5% to RMB 2.4 million, down from RMB 53.7 million[27] - Revenue from specialized contracting projects fell by RMB 66.2 million or 94.9% to RMB 3.6 million, compared to RMB 69.8 million[28] Costs and Expenses - Cost of materials and consumables for the six months ended June 30, 2024, was RMB 146,025,000, down 40.4% from RMB 245,118,000 in 2023[11] - Total cost of revenue decreased by approximately RMB 109.8 million or 23.5% to RMB 357.4 million for the six months ended June 30, 2024[30] - Administrative expenses increased by approximately RMB 3.8 million or 23.3%, primarily due to rising employee costs and professional fees[32] - Financing costs decreased due to reduced factoring interest expenses, partially offset by increased borrowing interest expenses[33] - Income tax expenses decreased in line with the reduction in taxable income from operations in China[34] Dividends and Shareholder Returns - The company does not recommend the payment of any interim dividend for the six months ended June 30, 2024[1] - The company did not declare or pay any dividends for the six months ended June 30, 2024, consistent with the previous year[16] Compliance and Governance - The company has adopted a code of conduct for directors' securities trading, ensuring compliance with the standards set out in the Listing Rules Appendix C3[48] - The audit committee has reviewed the group's financial reporting processes and internal control systems for the six months ending June 30, 2024[52] - The company has appointed a compliance advisor, ensuring adherence to regulatory requirements[50] - The board is satisfied with the company's compliance with the corporate governance code as of June 30, 2024[47] Market Outlook - The construction market in Guangdong Province is expected to continue growing at a compound annual growth rate of approximately 8.3%, reaching about RMB 342.61 billion by 2027[44]

Revenue and Financial Performance - The company's revenue increased from approximately RMB 1,378.1 million in 2022 to approximately RMB 1,530.9 million in 2023, representing an increase of RMB 152.8 million or 11.1%[12]. - Revenue from construction projects rose by RMB 222.2 million or 29.1%, from approximately RMB 763.3 million in 2022 to approximately RMB 985.5 million in 2023[17]. - The number of construction projects generating revenue increased from 33 in 2022 to 61 in 2023[17]. - Revenue from municipal public works projects decreased from 29.3% in 2022 to 22.4% in 2023, amounting to approximately RMB 343.6 million[13]. - Revenue from foundation engineering projects increased by approximately RMB 52.5 million or 98.0% to about RMB 106.1 million for the year ended December 31, 2023, with the number of projects rising from 9 to 17[19]. - Revenue from specialized contracting projects decreased by approximately RMB 61.6 million or 39.2% to about RMB 95.7 million for the year ended December 31, 2023[20]. - Total revenue costs increased by approximately RMB 142.6 million or 11.0% for the year ended December 31, 2023, primarily due to the launch of multiple large projects and recovery from COVID-19 impacts[23]. - Gross profit for the year ended December 31, 2023, was approximately RMB 89.1 million, with a gross margin of 5.8%, compared to RMB 78.9 million and 5.7% in the previous year[24]. - Net profit for the year ended December 31, 2023, was approximately RMB 31.8 million, an increase of about 25.6% from RMB 25.3 million in the previous year[31]. - Cash and cash equivalents were approximately RMB 147.1 million as of December 31, 2023, compared to RMB 112.1 million as of December 31, 2022[32]. - Capital expenditures for the year ended December 31, 2023, were approximately RMB 42.0 million, significantly up from RMB 0.5 million in the previous year[40]. Corporate Governance and Management - The company emphasizes integrity, accountability, and transparency as core values in its corporate culture, aiming to align decisions with the interests of the company and its shareholders[72]. - The board has adopted a code of conduct for securities trading by directors, ensuring compliance with the standards set forth in the listing rules[76]. - The company has reviewed its corporate governance practices and is satisfied with compliance with the principles and provisions of the corporate governance code[70]. - The company’s operational management is overseen by Mr. Zhang Lei, who has over 16 years of experience in the construction industry[64]. - The company is focused on enhancing its human resources and administrative management under the leadership of Mr. Sang Yongwei, who has over 8 years of experience in the field[65]. - The company’s engineering management is led by Mr. Wang Xuguang, who has extensive experience in project management within the construction sector[68]. - The board consists of two executive directors and three independent non-executive directors, with one board meeting held since the listing date[80]. - All independent non-executive directors have confirmed their independence in accordance with listing rules, ensuring compliance with regulations[81]. - The company will hold its first annual general meeting on May 29, 2024, encouraging full participation from all directors[86]. - The board is responsible for strategic planning, ensuring sustainability, and maintaining diversity within the board[87]. - The chairman and CEO roles are held by Mr. Sang and Mr. Sin respectively, with clear division of responsibilities[93]. - The board has established three committees: audit, remuneration, and nomination, each with specific written terms of reference[96]. - The Audit Committee consists of three independent non-executive directors, with Ms. Liu Zhihong as the chairperson, and has held one meeting since the listing date, with full attendance[98]. - The Remuneration Committee, chaired by Mr. Xie Huagang, has also held one meeting since the listing date, with all members present, and has reviewed the remuneration of directors and senior management[99]. - The Nomination Committee, chaired by Mr. Zeng Qingli, has convened one meeting since the listing date, with full attendance, focusing on board composition and diversity[102]. Environmental, Social, and Governance (ESG) Initiatives - The company has maintained compliance with multiple environmental laws and regulations in China, including the Environmental Protection Law and the Water Pollution Prevention Law, with no significant claims or penalties related to environmental protection during the reporting period[148]. - The company has established an environmental management system certified to GB/T24001-2016/13014001:2015 standards, aiming to minimize adverse environmental impacts from its business activities[147]. - The company identified 12 key environmental, social, and governance (ESG) issues, including environmental protection, energy efficiency, and labor standards, which were approved by the board[144]. - The ESG working group, consisting of senior management, is responsible for daily management and oversight of ESG risks and measures, meeting at least once a year[132]. - The company is planning to enhance stakeholder engagement processes through ESG surveys and interviews to gather feedback and improve governance measures[141]. - The company has committed to sustainable income and quality products as part of its ESG strategy[144]. - The company has implemented a risk management and internal control system related to ESG, which is overseen by the board[132]. - The company aims to strengthen its environmental compliance status and reduce any negative impacts from its operations[148]. - Total diesel consumption by the company increased from 3,581 tons in 2022 to 3,945 tons in 2023, with a target to maintain consumption at 2.6 tons per million revenue in 2023 and 2024, and reduce it to 2.5 tons by 2025[152]. - Total electricity consumption by the company rose from 5,101,096 kWh in 2022 to 5,693,897 kWh in 2023, with a goal to maintain consumption at 3,700 kWh per million revenue in 2023 and 2024, and reduce it to 3,600 kWh by 2025[153]. - Scope 1 greenhouse gas emissions increased from 2,326 tons of CO2 in 2022 to 2,583 tons in 2023, while Scope 2 emissions rose from 857 tons to 974 tons in the same period[156]. - Total greenhouse gas emissions reached 15,888 tons of CO2 in 2023, up from 13,779 tons in 2022, with a greenhouse gas emission density of 0.0104 tons of CO2 per 1,000 RMB revenue[156]. - Water consumption by the company increased from 162,286 cubic meters in 2022 to 186,782 cubic meters in 2023, with a target to maintain consumption at 120 cubic meters per million revenue in 2023 and 2024, and reduce it to 115 cubic meters by 2025[159]. - The company is committed to implementing energy-saving measures and monitoring results through an Environmental, Social, and Governance (ESG) working group[160]. - The company prioritizes subcontractors with clean environmental records to ensure effective implementation of energy-saving measures[161]. - The company has implemented measures to reduce Scope 3 emissions, including continuous monitoring of subcontractors' environmental compliance and encouraging employees to save energy during travel[171]. - The company does not generate hazardous waste and maintains a low level of non-hazardous industrial waste during production[173]. - The company has established an internal waste management policy to handle construction waste and wastewater, ensuring compliance with local regulations[174]. - The company has set noise level limits at construction sites, with daytime levels capped at 70 decibels and nighttime levels at 55 decibels, successfully maintaining compliance during the reporting period[178]. - The company has assessed climate change risks, categorizing them into physical risks and transition risks, and has implemented monitoring and mitigation measures[182]. - The company maintains a diversified supplier base to ensure resilience against supply chain disruptions caused by extreme weather events[186]. - The company is committed to maintaining effective environmental qualifications and will invest necessary resources to meet new regulatory requirements[186]. - The company has not identified any significant environmental, social, and governance issues among its suppliers during the reporting period[172]. - The company prioritizes the use of energy-efficient and low-consumption equipment in its operations[170]. - The company has a program in place to distribute supplier conduct guidelines to major suppliers, ensuring they understand the company's ethical and environmental expectations[176]. - The company has 34 key suppliers during the reporting period, down from 36 in 2022, with each supplier accounting for over 1% of total procurement costs[191]. - The company maintains a diversified supplier base to ensure stable competitive advantages in supply chain resilience[192]. - The company has obtained quality management system certifications including GB/T19001-2016/ISO9001:2015, ensuring a commitment to high-quality products and services[196]. - The company implements strict quality control measures throughout the construction project lifecycle, ensuring compliance with customer requirements and applicable standards[199]. - No material quality issues were encountered during the reporting period, and no significant complaints regarding project quality were received from customers[200].

Financial Performance - The total revenue for the year ended December 31, 2023, was approximately RMB 1,530.9 million, an increase of about 11.1% compared to RMB 1,378.1 million for the year ended December 31, 2022[3]. - Gross profit for the year ended December 31, 2023, was approximately RMB 89.1 million, up approximately 13.0% from RMB 78.9 million in the previous year[3]. - Net profit for the year ended December 31, 2023, was approximately RMB 31.8 million, representing a significant increase of about 25.6% from RMB 25.3 million for the year ended December 31, 2022[3]. - Operating profit for the year ended December 31, 2023, was approximately RMB 47.8 million, compared to RMB 38.6 million in the previous year[6]. - Basic and diluted earnings per share for the year ended December 31, 2023, were RMB 8.24, an increase from RMB 6.56 in the previous year[6]. - The company reported a significant increase in financing income to RMB 912,000 from RMB 148,000 in the previous year[6]. - Total expenses for the year ended December 31, 2023, amounted to RMB 1,482,983,000, up from RMB 1,338,199,000 in 2022, reflecting a year-on-year increase of 10.8%[31]. - Income tax expense for the year ended December 31, 2023, was RMB 14,722,000, compared to RMB 12,937,000 in 2022, representing a 13.8% increase[33]. - The company recorded a net profit of approximately RMB 31.8 million for the year ended December 31, 2023, representing an increase of about 25.6% from RMB 25.3 million for the year ended December 31, 2022[67]. Assets and Liabilities - The net asset value as of December 31, 2023, was approximately RMB 372.4 million, an increase of about 13.9% from RMB 327.1 million as of December 31, 2022[3]. - Total assets as of December 31, 2023, amounted to approximately RMB 1,682.7 million, compared to RMB 1,509.2 million as of December 31, 2022[8]. - Total liabilities as of December 31, 2023, were approximately RMB 1,310.3 million, an increase from RMB 1,182.1 million in the previous year[11]. - Trade receivables decreased to RMB 137,270,000 in 2023 from RMB 187,374,000 in 2022, a decline of 26.7%[39]. - Trade payables increased to RMB 1,203,236,000 in 2023 from RMB 1,091,566,000 in 2022, reflecting a rise of 10.2%[42]. - The company had bank borrowings of approximately RMB 29.3 million as of December 31, 2023, compared to none in 2022[69]. - The debt-to-equity ratio as of December 31, 2023, was approximately 7.9%, up from zero on December 31, 2022[70][71]. Revenue Breakdown - Revenue from construction services for the year ended December 31, 2023, was RMB 1,530,919,000, an increase of 11.1% from RMB 1,378,055,000 in 2022[29]. - Revenue from construction projects rose from RMB 763.3 million in 2022 to RMB 985.5 million in 2023, an increase of RMB 222.2 million or 29.1%[52]. - Revenue from municipal public works projects decreased by RMB 60.2 million or 14.9% from RMB 403.8 million in 2022 to RMB 343.6 million in 2023[53]. - Revenue from foundation engineering projects surged by RMB 52.5 million or 98.0% from RMB 53.6 million in 2022 to RMB 106.1 million in 2023[54]. - Revenue from specialized contracting projects fell by RMB 61.6 million or 39.2% from RMB 157.3 million in 2022 to RMB 95.7 million in 2023[56]. Costs and Expenses - Total cost of revenue increased by approximately RMB 142.6 million or 11.0% from RMB 1,299.1 million in 2022 to RMB 1,441.8 million in 2023[58]. - Gross profit for the year 2023 was RMB 89.1 million, with a gross margin of 5.8%, compared to RMB 78.9 million and a gross margin of 5.7% in 2022[60]. - Administrative expenses increased by approximately RMB 2.1 million or 5.5% due to higher listing and professional fees[63]. - Financing costs increased primarily due to higher factoring interest expenses[65]. - The total employee cost for the year ended December 31, 2023, was approximately RMB 20.5 million, a decrease from RMB 22.2 million in 2022[77]. Dividends and Shareholder Information - The company did not recommend the payment of any final dividend for the year ended December 31, 2023[4]. - The annual report for the year ending December 31, 2023, will be sent to shareholders and published on the stock exchange and the company's website in accordance with listing rules[93]. Future Outlook and Plans - The construction market in Guangdong Province is expected to continue growing at a compound annual growth rate of approximately 8.3%, reaching about RMB 342.61 billion by 2027[79]. - The company plans to utilize the net proceeds from its IPO, which is expected to be received after December 31, 2023, for business strategies outlined in the prospectus[80]. Auditor and Governance - The company's auditor, PwC, confirmed that the preliminary announcement figures for the year ending December 31, 2023, are consistent with the audited financial statements[92]. - The board of directors includes executive directors Mr. Sang Xianfeng and Mr. Xian Yuwang, as well as independent non-executive directors Ms. Liu Zhihong, Mr. Zeng Qingli, and Mr. Xie Huagang[94].