Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 6,127 million, representing a 16.4% increase from RMB 5,265 million in the same period of 2023[2] - Gross profit decreased by 10.7% to RMB 717 million, down from RMB 803 million in the previous year[2] - Net profit attributable to shareholders increased by 6.0% to RMB 89 million, compared to RMB 84 million in the same period last year[2] - The company reported a basic earnings per share of RMB 0.07, a decrease of 12.5% from RMB 0.08 in the previous year[2] - Operating revenue for the first half of 2024 reached RMB 6,127,097,623.16, a 16.3% increase from RMB 5,264,950,621.52 in the same period of 2023[7] - Net profit for the first half of 2024 was RMB 115,742,587.88, up 5.7% from RMB 110,231,871.08 in the first half of 2023[8] - The total profit for the first half of 2024 was RMB 113,454,707.27, compared to RMB 120,923,401.76 in the first half of 2023, indicating a decrease of 6.1%[8] - The company reported a decrease in operating profit to RMB 113,631,724.19 from RMB 135,400,986.01, reflecting a decline of 16.1% year-over-year[7] - Basic earnings per share for the first half of 2024 were RMB 0.07, down from RMB 0.08 in the same period of 2023[10] - The company’s total comprehensive income attributable to shareholders of the parent company was RMB 111,510,565.42, slightly up from RMB 111,366,274.56 in the first half of 2023[10] Assets and Liabilities - Total current assets as of June 30, 2024, amounted to RMB 19,121 million, an increase from RMB 17,060 million as of December 31, 2023[4] - Total assets increased to RMB 25,786 million as of June 30, 2024, compared to RMB 23,522 million at the end of 2023[6] - Current liabilities rose to RMB 18,935 million, up from RMB 17,006 million at the end of 2023[6] - Total liabilities increased to RMB 22,525 million as of June 30, 2024, compared to RMB 20,396 million at the end of 2023[6] - The company’s cash and cash equivalents increased to RMB 3,044 million from RMB 2,636 million at the end of 2023[4] Research and Development - Research and development expenses decreased to RMB 135,481,163.57 from RMB 185,265,736.38, a reduction of 26.9%[7] - R&D expenses were RMB 135.5 million, a decrease of 26.9% from RMB 185.3 million, attributed to a reduction in the number of R&D projects[55] Market and Strategic Focus - The company plans to continue focusing on industrial engineering contracting and related services as part of its core business strategy[11] - The company anticipates continued growth in revenue and profitability for the remainder of 2024, driven by expansion in both domestic and international markets[21] - The company plans to expand its market presence in Southeast Asia, Central Asia, and Africa, focusing on renewable energy and chemical engineering projects[36] - The company is actively pursuing new energy projects, including pumped storage and compressed air energy storage, to enhance its service offerings[35] - The company has implemented a strategy to expand its market presence through new technology and product development, supported by favorable tax incentives[28] Tax and Compliance - The company has received high-tech enterprise certification, allowing it to benefit from a reduced corporate income tax rate of 15% until December 2024[27] - Tax and additional charges for the six months ended June 30, 2024, were RMB 13.0 million, a decrease of 22.9% from RMB 16.9 million in the same period last year, primarily due to a reduction in property tax and stamp duty[52] - The company has adopted corporate governance practices in line with the Stock Exchange's guidelines, ensuring accountability and transparency to enhance shareholder value[82] Employee and Operational Metrics - The company has 3,739 full-time employees as of June 30, 2024, with employee expenses totaling approximately RMB 317 million during the reporting period[76] - Short-term employee compensation liabilities rose to approximately $113.74 million, with an increase of $37.06 million during the period[18] Risks and Challenges - The company faces significant risks from changes in government policies affecting the construction industry, which could impact business and financial performance[72] Dividends and Shareholder Returns - The board of directors has resolved not to declare any interim dividend for the six months ended June 30, 2024[2] - No interim dividends will be distributed for the reporting period, consistent with the previous year[85]

Financial Performance - In 2023, the company reported a revenue of RMB 11,150,176 thousand, a decrease of 13.2% from RMB 12,844,822 thousand in 2022[19]. - The gross profit for 2023 was RMB 1,578,292 thousand, down from RMB 1,842,046 thousand in the previous year, resulting in a gross margin of 14.2%[19]. - The net profit attributable to equity holders was RMB 154,942 thousand, slightly up from RMB 150,882 thousand in 2022, with a net profit margin of 1.8%[19]. - Total assets increased to RMB 23,522,431 thousand in 2023, compared to RMB 21,447,024 thousand in 2022[19]. - Total liabilities rose to RMB 20,396,627 thousand, up from RMB 19,214,104 thousand in the previous year, resulting in a debt-to-equity ratio of 6.53[19]. - The company achieved a total revenue of RMB 11,150.2 million, a decrease of 13.2% compared to RMB 12,844.8 million in 2022[34]. - The professional industrial engineering segment generated revenue of RMB 6,351.1 million, down 16.3% from RMB 7,591.1 million in the previous year[35]. - Revenue from professional supporting engineering business was RMB 2,236.1 million, an increase of 6.9% compared to RMB 2,091.1 million in 2022[36]. - Revenue from other engineering business decreased by 32.7% to RMB 1,276.5 million from RMB 1,896.6 million in 2022[37]. - Revenue from non-engineering business increased by 1.6% to RMB 1,286.5 million from RMB 1,266.0 million in 2022[38]. Market Expansion and Contracts - New contract signing amount increased by 11.2% year-on-year, while profit grew by 2.56%, and operating revenue decreased by 13.2%[11]. - The company achieved over 50% market share outside the province, with new contracts in overseas markets amounting to CNY 2.738 billion[12]. - The traditional sectors such as municipal, chemical, and electromechanical engineering saw new contract amounts increase by 11.07% year-on-year[12]. - The company secured key projects including a 200MW wind power project in Gujiao and a 66MW wind power project in Bangladesh, enhancing its presence in the renewable energy sector[13]. - The overseas new contract amount reached RMB 2.738 billion, with significant projects in Algeria, Vietnam, and Zimbabwe[32]. - The company secured a total of 374 MW in distributed and centralized renewable energy projects in 2023, including a 66 MW wind project in Bangladesh and an 80 MW solar project in Algeria[31]. Innovation and Technology - The company received 15 authorized patents and participated in the development of 6 key technologies in clean heating and new energy, achieving advancements in international and domestic standards[11]. - The company has developed three major platforms for BIM applications, enhancing its digital design and construction management capabilities[11]. - The company emphasizes the importance of innovation and technology development, planning to increase R&D investment to solve key technical challenges[76]. - The company is investing in new technologies, particularly in BIM (Building Information Modeling), to improve project delivery and quality assurance[98]. Corporate Governance and Management - The company maintains high corporate governance standards, adhering to the principles and code provisions of the Corporate Governance Code as per the Hong Kong Listing Rules since its listing date until December 31, 2023[103]. - The board consists of 11 members, including 3 executive directors, 4 non-executive directors, and 4 independent non-executive directors, ensuring a diverse and balanced leadership structure[107]. - The company has established an independence assessment mechanism for the board to ensure strong independence and effective judgment[122]. - The board has established three committees: Audit Committee, Remuneration and Assessment Committee, and Nomination Committee, each responsible for specific company affairs and providing advice or recommendations to the board[123]. - The company has a robust financial management team, with members having extensive experience in accounting and finance, ensuring sound financial practices[87]. Environmental, Social, and Governance (ESG) - The 2023 ESG report reflects the company's commitment to environmental, social, and governance practices, adhering to the guidelines set by the Hong Kong Stock Exchange[158]. - The company has established a three-tier ESG governance structure, led by the board of directors, to oversee and implement ESG initiatives[166]. - The company aims to enhance its ESG performance by integrating green, low-carbon, and high-quality sustainable development into its strategic goals[165]. - The company is committed to promoting low-carbon technologies and has reserved multiple leading construction techniques to support business structure adjustments[165]. Safety and Risk Management - The company has established a safety production committee to oversee and coordinate safety production work, implementing a management structure led by the chairman[200]. - The company has adopted a "zero tolerance" approach to safety risk management, enhancing its safety risk management system to control various risks effectively[199]. - The company has implemented a comprehensive safety inspection approach covering seven aspects, including organization, system, and safety education training[200]. - The company has established an effective comprehensive risk management system to enhance risk prevention and management levels[133]. Employee and Leadership Development - Employee expenses totaled approximately RMB 613.0 million in 2023, compared to RMB 542.9 million in 2022, reflecting an increase in workforce costs[64]. - Approximately 26.1% of the company's full-time employees, including senior management, are women as of December 31, 2023[136]. - The company is committed to providing long-term development opportunities for female employees in various fields, including operations, management, and compliance[137]. - The leadership team is focused on continuous improvement and professional development, with members holding advanced degrees and certifications in their respective fields[83][85][87].

Revenue and Profit Performance - Revenue for 2023 decreased to RMB 11,150,176 thousand, a decline of RMB 1,694,646 thousand compared to 2022[2] - Gross profit for 2023 was RMB 1,578,292 thousand, down by RMB 263,754 thousand from 2022[2] - Net profit attributable to equity holders of the company increased to RMB 154,942 thousand, up by RMB 4,060 thousand compared to 2022[2] - Gross margin slightly decreased to 14.2% in 2023 from 14.3% in 2022[2] - Net profit margin improved to 1.8% in 2023, up from 1.6% in 2022[2] - The company's total revenue for the year ended December 31, 2023, was RMB 11,150,176 thousand, with RMB 9,863,712 thousand from the Construction Engineering Contracting Division and RMB 1,286,464 thousand from the Non-Engineering Division[15] - The company achieved annual revenue of RMB 11,150.2 million and an annual profit of RMB 205.6 million in 2023[44] - The company's total revenue for 2023 was RMB 11.15 billion, a 13.2% decrease from RMB 12.84 billion in 2022[57] - Revenue from professional industrial engineering decreased by 16.3% to RMB 6.35 billion in 2023, primarily due to reduced construction phase income[59] - Revenue from professional supporting engineering increased by 6.9% to RMB 2.24 billion in 2023, driven by new wastewater treatment projects[60] - Revenue from other engineering decreased by 32.7% to RMB 1.28 billion in 2023, mainly due to the completion of large commercial and office building projects[61] - Non-engineering business revenue increased by 1.6% to RMB 1,286.5 million, driven by interest and operational income from service concession projects[62] - Sales cost decreased by 13.0% to RMB 9,571.9 million due to a decline in operating revenue[63] - Gross profit decreased by 14.3% to RMB 1,578.3 million, with a slight drop in gross margin to 14.2%[64] - Other income and gains increased by RMB 21.7 million to RMB 42.5 million, mainly due to higher government subsidies and interest income[65] - Net profit increased by 2.6% to RMB 205.6 million, attributed to savings in administrative and operating expenses[72] Assets and Liabilities - Total assets increased to RMB 6,462,054 thousand in 2023 from RMB 5,344,622 thousand in 2022[6] - Total liabilities rose to RMB 3,387,378 thousand in 2023 from RMB 3,181,293 thousand in 2022[7] - Equity attributable to equity holders of the company increased to RMB 2,610,142 thousand in 2023 from RMB 1,809,316 thousand in 2022[7] - The company's total assets as of December 31, 2023, were RMB 23,522,431 thousand, with RMB 18,845,158 thousand from the Construction Engineering Contracting Division and RMB 8,695,416 thousand from the Non-Engineering Division[15] - Total liabilities amounted to RMB 20,396,627 thousand, with RMB 16,730,692 thousand from the Construction Engineering Contracting Division and RMB 6,380,644 thousand from the Non-Engineering Division[15] - Total assets as of December 31, 2022, were RMB 21,447,024 thousand, with the construction engineering segment accounting for RMB 17,275,884 thousand and the non-engineering segment accounting for RMB 8,634,003 thousand[17] - Cash and bank balances (excluding pledged deposits) rose to RMB 2,090.2 million, up from RMB 1,380.9 million in 2022[78] - Total borrowings increased to RMB 5,951.8 million, primarily used to supplement daily operating cash flow[79] Business Segments and Projects - The Construction Engineering Contracting Division generated RMB 10,194,290 thousand in total revenue, including RMB 330,578 thousand from inter-segment sales[15] - The Non-Engineering Division reported total revenue of RMB 1,858,119 thousand, with RMB 571,655 thousand from inter-segment sales[15] - The company's pre-tax profit for the year was RMB 225,124 thousand, with RMB 17,998 thousand from the Construction Engineering Contracting Division and RMB 213,545 thousand from the Non-Engineering Division[15] - Capital expenditures for the year totaled RMB 583,416 thousand, with RMB 76,805 thousand from the Construction Engineering Contracting Division and RMB 506,611 thousand from the Non-Engineering Division[16] - Depreciation of property, plant, and equipment amounted to RMB 108,805 thousand, with RMB 46,121 thousand from the Construction Engineering Contracting Division and RMB 62,684 thousand from the Non-Engineering Division[16] - Financial costs for the year were RMB 336,632 thousand, with RMB 208,500 thousand from the Construction Engineering Contracting Division and RMB 128,132 thousand from the Non-Engineering Division[16] - Revenue from professional industrial engineering projects decreased to RMB 6,351,119 thousand in 2023 from RMB 7,591,132 thousand in 2022[20] - Revenue from professional supporting engineering projects increased to RMB 2,236,143 thousand in 2023 from RMB 2,091,063 thousand in 2022[20] - Revenue from non-engineering businesses was RMB 1,286,464 thousand in 2023, slightly up from RMB 1,266,030 thousand in 2022[20] - Revenue from China accounted for RMB 10,620,676 thousand in 2023, down from RMB 12,752,249 thousand in 2022, while overseas revenue increased to RMB 529,500 thousand from RMB 92,573 thousand[22] - The company secured 374MW in new energy projects, including 174MW in distributed and 200MW in centralized competitive allocation projects[44] - Overseas newly signed contracts amounted to RMB 2.738 billion, including key projects in Algeria, Vietnam, and Zimbabwe[45] - The company's new contract value in the "chemical, municipal, power, and electromechanical" markets increased by 11.07% year-on-year[44] - The company won bids for major projects such as the 80MW photovoltaic EPC project in Algeria and the 800MW photovoltaic production plant EPC project in Vietnam[45] - The company is advancing the Taiyuan Wusu Zero-Carbon Airport project in collaboration with Shanxi Aviation Industry Group and Shanxi Geological Group[45] Tax and Financial Incentives - The company benefits from a preferential corporate income tax rate of 15% for certain subsidiaries due to their high-tech enterprise status, valid until December 2024[23] - The company's subsidiary, Gaoping Xinshi Yangtian Photovoltaic Power Generation Co., Ltd., enjoys a "three exemptions and three halvings" corporate income tax preferential policy from January 1, 2017, to December 31, 2022, and a 15% preferential tax rate from December 7, 2021, to December 6, 2024, due to its high-tech enterprise certification[24] - Subsidiaries Shanxi Shan'an Biquan Sponge City Technology Co., Ltd., Shanxi Shan'an Lide Environmental Technology Co., Ltd., and Shanxi Shan'an Maode Distributed Energy Technology Co., Ltd. have been granted high-tech enterprise certifications, allowing them to enjoy a 15% preferential corporate income tax rate from September 16, 2019, to September 15, 2022, and from November 25, 2019, to November 24, 2022, respectively[24] - The company benefits from an additional R&D allowance tax incentive, with R&D expenses deductible at 50% of the actual amount, and intangible asset amortization deductible at 150% if capitalized[25] - From January 1, 2018, to December 31, 2023, the R&D expense deduction ratio increased from 50% to 75%, and the intangible asset amortization deduction ratio increased from 150% to 175%[26] Dividends and Shareholder Information - The proposed final dividend for 2023 is RMB 0.02682 per 10 ordinary shares, totaling approximately RMB 3,680,000[27] - The basic earnings per share for 2023 and 2022 are both RMB 0.15, calculated based on the weighted average number of ordinary shares of 1,040,930,000 and 1,000,000,000, respectively[29] - The company has proposed a final dividend of RMB 0.02682 per 10 shares, totaling RMB 3.68 million, subject to approval at the annual general meeting[103] Contract Assets and Receivables - The non-current portion of service concession project contract assets and receivables under service concession arrangements as of December 31, 2023, is approximately RMB 3,558,606,000, compared to RMB 2,972,086,000 in 2022[30] - The non-current portion of EPC project contract assets as of December 31, 2023, is approximately RMB 600,323,000, compared to RMB 597,411,000 in 2022[31] - The total contract assets for 2023 are RMB 6,551,068,000, compared to RMB 5,854,931,000 in 2022, with a significant portion attributed to service concession project contract assets and EPC projects[32] - The company's trade receivables and notes are primarily from engineering contracting services, sales of goods, and provision of services, with credit terms specified in relevant contracts[34] - Trade receivables increased to RMB 6,823,406 thousand in 2023 from RMB 6,377,191 thousand in 2022, reflecting a growth of 7%[35] - Expected credit losses for trade receivables rose to RMB 380,570 thousand in 2023, up from RMB 302,072 thousand in 2022, an increase of 26%[35] - The net amount of trade receivables and notes receivable was RMB 6,699,792 thousand in 2023, compared to RMB 6,371,366 thousand in 2022, showing a 5% increase[35] - Pledged trade receivables and notes receivable amounted to RMB 1,113,665 thousand in 2023, up from RMB 828,866 thousand in 2022, a 34% increase[35] - Service concession receivables increased to RMB 156,430 thousand in 2023 from RMB 94,743 thousand in 2022, a 65% rise[36] Capital and Share Issuance - The company issued 373,486,000 H shares at HK$2.18 per share, raising approximately HK$409,435 thousand (equivalent to RMB 373,486 thousand) in 2023[42] - Total issued and fully paid shares increased to 1,373,486,000 in 2023 from 1,000,000,000 in 2022, reflecting a 37% growth[43] - The company plans to use HKD 738.5 million from the net proceeds of its H-share listing for various projects, including centralized photovoltaic projects, distributed photovoltaic projects, wind power projects, and clean heating projects[96][97] Market and Industry Trends - China's renewable energy installed capacity reached 1.516 billion kW by the end of 2023, accounting for 51.9% of the total power generation capacity[47] - The market size of China's new energy industry engineering is expected to reach RMB 4,501.8 billion by 2027, with a CAGR of 9.7%[47] - The market size of China's petrochemical industry engineering is projected to reach RMB 2,688.4 billion by 2027[48] - Shanxi Province's new energy and clean energy installed capacity reached 60.9778 million kW by the end of 2023, with a target of 80 million kW by 2025[47] - Centralized heating can save approximately 30% of energy compared to decentralized heating, with significant environmental and economic benefits[51] - China's urban construction waste exceeds 2 billion tons annually, with a current processing volume of 1.75 billion tons, expected to surpass 2 billion tons by 2026[52] - The resource utilization rate of construction waste in China is less than 10%, compared to 90% in some developed countries[52] - By 2025, Shanxi Province aims to achieve a distributed renewable energy power capacity of 10 million kilowatts, doubling the 2022 generation[54] - In 2023, China's overseas construction business revenue reached RMB 856.88 billion, an 8.3% YoY increase, with 82.0% from Belt and Road countries[56] Corporate Governance and Compliance - The company listed on the Hong Kong Stock Exchange on November 22, 2023[8] - The company has fully complied with the Corporate Governance Code since its listing on the Hong Kong Stock Exchange on November 22, 2023[99] - The company has adopted the Standard Code for Securities Transactions and confirmed that all directors have complied with the code from the listing date to December 31, 2023[100] - The company has not purchased, sold, or redeemed any of its listed securities from the listing date to December 31, 2023[101] - The company’s 2023 annual report will be made available to shareholders and published on the Hong Kong Stock Exchange and the company’s website[105] Strategic Goals and Development - The company aims to become the most competitive modern engineering service provider in China, focusing on market expansion, product quality, resource integration, and digital capabilities[80] - The company's vision includes becoming a full lifecycle provider in design consulting, investment construction, building construction, component manufacturing, and operation maintenance[80] - By the end of the 14th Five-Year Plan, the company targets to become a nationally renowned and industry-leading modern engineering service provider, emphasizing green energy and low-carbon project operations[84] - The company's development strategy revolves around "15326," focusing on transformation, innovation, and high-quality development, with a goal to achieve a revenue scale of 10 billion yuan[86][87] - The company plans to enhance its core business, optimize business models, and improve integrated service capabilities to support high-quality growth[86] - The company emphasizes technological innovation, increasing R&D investment to solve key technical challenges and drive development momentum[86] - The company will optimize its business structure to align with national "dual carbon" strategies, building industrialization, and digital transformation trends[86] - The company aims to expand its market presence by deepening domestic and international cooperation, integrating into global industrial systems[86] - The company will deepen reforms, including mixed-ownership and market-oriented mechanisms, to enhance operational efficiency and governance[87] - The company's high-quality development goals include strong scale and profitability, a focus on quality, and enhancing employee satisfaction and well-being[87] - The company aims to enhance project profitability by optimizing project selection, risk control, and operational management to maximize profits[88] - The company is focusing on improving resource integration capabilities by leveraging its full industry chain and expanding social resource collaborations[88] - The company is committed to technological innovation and the application of research outcomes to enhance product quality and market competitiveness[88] - The company is implementing a "1+7+X" regional development strategy to expand its market presence both domestically and internationally[89] - The company is optimizing its organizational structure and management processes to improve efficiency and operational effectiveness[90] - The company is investing in technological innovation to develop proprietary core technologies and enhance technical efficiency[90] Risks and Challenges - The company faces market risks from major clients and suppliers, as well as external factors such as foreign exchange and interest rate fluctuations[93] - The company is subject to environmental compliance risks and must adhere to national and local environmental regulations, including pollution control measures[94][95] - The company is exposed to policy and regulatory risks, particularly in the construction industry, which could impact its business and financial performance[92] Financial Utilization and Allocation - The company plans to utilize HKD 22.2 million by the end of 2024 for the registered capital of project companies and construction costs of existing service concession projects[98] - HKD 36.9 million will be used by the end of 2024 for the construction costs of existing service concession projects[98] - HKD 44.3 million is allocated for current and future service concession projects, including the Changzhi City Zhangzi County urban flood control and ecological environment comprehensive management project, to be utilized by the end of 2025[98] - HKD 73.9 million will be used by the end of 2025 to fund new energy upstream and downstream manufacturing projects, including the purchase of tower production line equipment and related facilities, as well as raw materials[98] - HKD 59.1 million is allocated for working capital and other general corporate purposes, to be utilized by June 2024[98] Administrative and Operating Expenses - Administrative and other operating expenses decreased by RMB 227.9 million to RMB 963.0 million, primarily due to reduced R&D costs[67] - Financial costs decreased by RMB 60.6 million to RMB 336.6 million, driven by lower LPR interest rates[68] Capital Expenditures and Depreciation - Capital expenditures for the year amounted to RMB 253,819 thousand, with the non-engineering segment accounting for RMB 219,898 thousand and the construction engineering segment accounting for RMB 33,921 thousand[18] - Capital expenditure increased significantly to RMB 583.4 million, mainly for property, plant, equipment, and intangible assets[76] Trade Payables and Notes - Trade payables and notes payable aged within 1 year increased to RMB 7,626,761 thousand in 2023 from RMB 6,483,009 thousand in 2022, a 18% rise[41] - The company transferred bank-accepted notes with a book value of RMB 456,539 thousand in 2023, up from RMB 315,854 thousand in 2022, a 45% increase[40] - The company's long-term payables to related parties amounted to RMB 300,000 thousand with an annual interest rate of 9.7%[41]