Financial Performance - Revenue decreased by 17.1% to RMB 10.794 billion compared to RMB 13.021 billion in the previous year[2] - Gross margin fell by 17.3 percentage points to 2.4% from the previous year's margin[2] - Net loss amounted to RMB 740.2 million, with a loss attributable to equity holders of RMB 747.2 million[2] - Basic loss per share was RMB 0.81, down from a profit of RMB 1.08 per share in the previous year[3] - The company reported a total comprehensive loss of RMB 667.8 million compared to a profit of RMB 1.051 billion in the previous year[4] - For the six months ended June 30, 2023, total revenue was RMB 10,794,419 thousand, a decrease from RMB 13,020,846 thousand for the same period in 2022, representing a decline of approximately 17%[14] - The company reported a net loss from foreign exchange of RMB 80,316 thousand for the six months ended June 30, 2023, compared to a loss of RMB 111,672 thousand in 2022, showing an improvement[19] - The company reported a basic loss attributable to owners of RMB 747,197,000 for the six months ended June 30, 2023, compared to a profit of RMB 991,972,000 for the same period in 2022, resulting in a basic loss per share of RMB (0.81) versus a profit of RMB 1.08[26] Assets and Liabilities - Total assets decreased to RMB 24.483 billion from RMB 26.151 billion year-on-year[5] - Non-current liabilities increased to RMB 4.813 billion from RMB 3.883 billion in the previous year[7] - Cash and cash equivalents decreased to RMB 2.086 billion from RMB 2.468 billion[5] - The company's asset-liability ratio as of June 30, 2023, was 61%, remaining consistent with the end of the previous year[41] - Accounts payable increased to RMB 666.975 million from RMB 562.329 million year-over-year, while accounts payable and notes payable totaled RMB 3.139 billion, down from RMB 4.597 billion[35] - As of June 30, 2023, the company’s financial assets measured at fair value were RMB 356,973,000, compared to RMB 380,615,000 as of December 31, 2022[31] - The group’s total borrowings increased by RMB 693.8 million to RMB 9.2371 billion as of June 30, 2023, from RMB 8.5434 billion as of December 31, 2022[59] Inventory and Trade Receivables - Inventory decreased to RMB 6.407 billion from RMB 7.590 billion year-on-year[5] - The company's inventory as of June 30, 2023, was RMB 6,823,569,000, a decrease from RMB 8,194,991,000 as of December 31, 2022, with a provision for inventory write-down of RMB (416,974,000)[30] - Trade receivables amounted to RMB 1,060,925,000 as of June 30, 2023, slightly down from RMB 1,090,423,000 as of December 31, 2022, with a provision for impairment of RMB (17,791,000)[32] - The company reported a decrease in trade receivables, with net accounts receivable at RMB 1.324 billion, down from RMB 1.363 billion year-over-year[34] Revenue Breakdown - The group reported that revenue from external customers in Asia accounted for 91.3% of total revenue, while revenue from the Americas accounted for 8.0%[12] - Yarn sales revenue reached approximately RMB 8.0916 billion, a decrease of about 12.4%, with yarn sales accounting for 75.0% of total revenue, up from 71.0% in the same period last year[43] - The sales revenue for fabric reached approximately RMB 245 million, with a gross margin of 4.4%, reflecting a decrease from the previous year[45] - The sales volume of woven fabrics decreased from approximately 64.2 million meters to about 44.3 million meters, resulting in a sales revenue drop of about 22.8% to approximately RMB 1.024 billion[46] - The sales volume of knitted fabrics declined from approximately 8,900 tons to about 7,700 tons, leading to a sales revenue decrease of 19.4% to approximately RMB 401 million[47] - The sales revenue from denim clothing fell to approximately RMB 19.2 million, a significant drop of 95.3% due to the sale of most equity in the Vietnam denim factory[48] - Trade business revenue decreased from approximately RMB 1.097 billion to about RMB 979 million, with a gross margin decline from 6.4% to 5.7%[49] - Non-woven fabric sales revenue increased to approximately RMB 34.1 million, up 31.9% compared to the previous year[51] Operational Challenges - The ongoing geopolitical tensions and rising raw material prices have negatively impacted the textile industry's development and market demand[41] - The company is facing challenges in the market due to low demand for non-essential goods, affecting the textile industry's recovery and profitability[41] - The textile industry in China saw a revenue decline of 4.9% year-on-year, with net profit down 23.8% for the first half of 2023[42] Corporate Governance - The board consists of three executive directors and three independent non-executive directors, adhering to the corporate governance code as per the Stock Exchange's Listing Rules[66] - The audit committee, composed of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, with no disagreements on accounting treatments[69] - The remuneration committee is responsible for formulating the remuneration policies for the board and senior management, ensuring alignment with corporate governance standards[70] - The nomination committee evaluates the board's structure and composition, assessing the independence of non-executive directors and making recommendations for appointments[71] - The environmental, social, and governance committee oversees compliance with relevant laws and regulations related to ESG matters[72] Future Outlook - The group plans to sell approximately 400,000 tons of yarn, 44 million meters of woven fabric, and 5,000 tons of knitted fabric in the second half of 2023[58] - The group aims to optimize its regional product mix and strengthen local supply capabilities to mitigate risks from international trade fluctuations[57] - The group will focus on enhancing or divesting low-efficiency assets to concentrate on core business segments and strengthen industry partnerships for better economies of scale[57] - The company plans to continue optimizing its product mix and developing new products aligned with market trends, focusing on sustainable materials[55]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 23,805,354, a decrease of 10.2% from RMB 26,521,193 in 2021[4] - Gross profit for 2022 was RMB 2,755,622, down 52.9% from RMB 5,851,971 in the previous year[4] - Profit for the year dropped to RMB 201,186, a decline of 92.7% compared to RMB 2,741,616 in 2021[4] - Basic earnings per share decreased to RMB 0.17, down 94.2% from RMB 2.93 in 2021[4] - The Group's revenue for the year ended December 31, 2022, decreased by 10.2% to approximately RMB23.8 billion compared to the previous year[20] - Net profit for the Group was approximately RMB201.2 million, representing a decrease of 92.7% year-over-year[20] - Profit attributable to shareholders of the Company was approximately RMB156.8 million, a decline of 94.2% compared to the previous year[20] - Basic earnings per share decreased significantly to RMB0.17 from RMB2.93 in the previous year[20] Assets and Liabilities - Total assets as of December 31, 2022, increased by 7.0% to RMB 26,151,299 from RMB 24,442,884 in 2021[5] - Total liabilities rose by 16.0% to RMB 16,049,823, compared to RMB 13,841,932 in the previous year[5] - Current ratio decreased to 1.1 in 2022 from 1.3 in 2021, indicating a decline in short-term financial health[6] - Net debt to equity ratio increased to 0.63 in 2022 from 0.45 in 2021, reflecting higher leverage[6] Market and Industry Conditions - The textile industry faced unprecedented challenges in 2022, including high inventory levels and weakened global consumption demand[14] - The overall situation in the Chinese textile industry remains uncertain, but the relaxation of COVID-19 policies is expected to support business operations[16] - The Group aims to leverage its yarn advantages and adopt a regional and platform-based development strategy moving forward[17] Sales and Revenue Breakdown - Revenue from yarn sales, the primary source of the Group's revenue, amounted to approximately RMB17,587.5 million, representing a decrease of 13.8% year-on-year due to weak demand[23] - The sales volume of yarns decreased by approximately 19.7% to about 657,000 tonnes in 2022[24] - Revenue from grey fabrics increased by 23.7% to approximately RMB728.0 million despite a slight decrease in sales volume of 6.5%[26] - Sales revenue of woven garment fabrics increased by 3.0% to approximately RMB2,647.9 million, with a gross profit margin climbing to 24.6%[27] - The sales volume of knitted garment fabrics decreased to approximately 15,000 tonnes, with sales revenue declining by 16.8% to approximately RMB866.4 million[28] Production Capacity and Facilities - As of December 31, 2022, the group operated approximately 4.17 million spindles and over 2,100 weaving and knitting machines[8] - The Group's production facilities are expected to reach approximately 4.4 million spindles by the end of 2022, with ongoing projects including a yarn factory in Turkey and a production base in America[37] Cost and Expenses - The cost of sales rose by 1.8% to RMB21,049.7 million in 2022, with raw materials accounting for approximately 76.2% of total sales costs[54] - Selling and distribution costs decreased by 7.3% to approximately RMB886.4 million, primarily due to reduced freight costs from a significant decrease in yarn sales volume[57] - General and administrative expenses amounted to approximately RMB1,316.1 million, a decrease of 9.3% compared to 2021, representing 5.5% of the Group's revenue[57] Risk Management and Governance - The Group's risk management and internal control framework aligns with the COSO framework, focusing on control environment, risk assessment, control activities, information and communication, and monitoring[1] - The risk management team was established in 2016 and includes key executives from various departments, ensuring comprehensive oversight of risk management practices[170] - The Group emphasizes transparency in governance rules to foster risk awareness and internal control responsibility among employees[1] Corporate Governance - The Group emphasizes high levels of corporate governance, focusing on transparency, accountability, and independence[99] - The Company complied with the applicable code provisions of the Corporate Governance Code during the year ended December 31, 2022[100] - The Board consists of six Directors, including three executive Directors and three independent non-executive Directors, ensuring a balanced governance structure[102] Employee and Workforce Management - The Group's workforce decreased to 30,206 employees as of December 31, 2022, from 33,639 in 2021, indicating a reduction in headcount[72] - The Group's labor-intensive industry requires a relatively high manpower level; effective performance-based incentives and expanded training programs are being implemented to enhance workforce efficiency[96] Environmental and Social Responsibility - The Group has not faced any fines or penalties related to environmental pollution in the past, but future risks may increase due to potential new regulations[98] - The Group has implemented measures such as selective supplier agreements to ensure compliance with environmental protection standards[98] - The Group's investment in clean energy is anticipated to effectively reduce energy costs in the long term[94] Future Outlook and Strategy - The Group plans to rationalize or exit inefficient businesses and enhance middle and back office management efficiency in 2023[17] - The Group targets to sell 750,000 tons of yarns, 110 million meters of woven garment fabrics, and 24,000 tons of knitted garment fabrics in 2023[36] - The Group aims to enhance collaboration in the fabric and non-woven fabric sectors to improve overall product responsiveness and increase sales revenue[39]

Financial Performance - Revenue decreased by 10.2% to RMB 23.805 billion[2] - Gross profit margin fell by 10.5 percentage points to 11.6%[2] - Net profit margin declined by 9.5 percentage points to 0.8%[2] - Shareholders' profit attributable to the company dropped by 94.2% to RMB 156.8 million[3] - Basic earnings per share were RMB 0.17, down from RMB 2.93[3] - Total comprehensive income for the year was RMB 285.672 million, compared to RMB 2.739 billion in the previous year[5] - The company reported a significant decrease in operating profit, down to RMB 601.9 million from RMB 3.423 billion[3] - The overall gross margin for the company decreased from 22.1% in 2021 to 11.6% in 2022, with net profit attributable to shareholders dropping by 94.2% to approximately RMB 156.8 million[45] - Net profit for the year was approximately RMB 201.2 million, a decline of 92.7% year-on-year[41] - Basic earnings per share decreased from RMB 2.93 to RMB 0.17[41] Assets and Liabilities - Total assets increased to RMB 26.151 billion from RMB 24.443 billion[6] - Total liabilities rose to RMB 16.050 billion from RMB 13.842 billion[7] - The total assets of the group as of December 31, 2022, were RMB 24,442,884 thousand[17] - As of December 31, 2022, the total bank borrowings of the group amounted to approximately RMB 8.5434 billion, with RMB 3.4952 billion (40.9%) denominated in RMB, RMB 2.4448 billion (28.6%) in USD, RMB 2.5976 billion (30.4%) in HKD, and RMB 5.8 million (0.1%) in AUD[61] - The outstanding current bank borrowings as of December 31, 2022, were approximately RMB 5.1552 billion, an increase from RMB 3.8317 billion in 2021, primarily due to the restructuring of the debt profile[62] Inventory and Sales - Inventory increased to RMB 7.590 billion from RMB 7.152 billion[6] - The company's inventory turnover days increased to 126 days in 2022 from 95 days in 2021, reflecting a rise in finished goods inventory due to decreased market demand[58] - The company's inventory cost recognized as an expense was RMB 16,420,861,000 in 2022, slightly up from RMB 16,272,629,000 in 2021[30] - The provision for inventory write-downs in 2022 was approximately RMB 495,159,000, a significant increase from RMB 16,177,000 in 2021, indicating potential challenges in inventory management[30] - Yarn sales accounted for about 73.9% of total revenue, with yarn sales revenue declining by 13.8% to approximately RMB 17.5875 billion, driven by a decrease in sales volume[44] - The total yarn sales volume for the year was approximately 657,000 tons, a decrease of about 19.7% compared to the previous year[44] - Fabric sales revenue increased by 23.7% to approximately RMB 728 million despite a slight decline in sales volume of 6.5%[44] Expenses and Costs - The company incurred a total cost of sales, selling and distribution expenses, and general and administrative expenses of RMB 23,252,170 thousand, compared to RMB 23,077,252 thousand in the prior year[19] - Depreciation and amortization expenses for the year amounted to RMB 1,029,050 thousand[13] - Financial expenses net of income were RMB 466,861 thousand, significantly higher than RMB 122,663 thousand in the previous year[20] - The company’s employee benefit expenses decreased to RMB 2,594,979 thousand from RMB 2,888,955 thousand year-over-year[19] - Sales and distribution expenses decreased by 7.3% to approximately RMB 886.4 million, mainly due to reduced freight costs from lower yarn sales volume[55] Strategic Initiatives - The company plans to significantly adjust its organizational management and production structure in response to market changes[40] - The company aims to enhance operational efficiency while streamlining low-efficiency businesses and capacities[40] - The company plans to invest in new yarn and fabric production capacity and equipment upgrades in China, Vietnam, and the Americas[57] - The company is actively pursuing strategic partnerships in the non-woven fabric sector to enhance product responsiveness and increase sales revenue[46] Market and Industry Context - The textile industry in China saw a total revenue of approximately RMB 2.6158 trillion in 2022, a year-on-year decrease of 1.1%[42] - The overall profit for the textile industry was approximately RMB 100.1 billion, down 17.8% year-on-year[42] - The company's revenue for 2022 decreased by 10.2% to approximately RMB 23.8 billion, primarily due to weakened demand in the textile industry[43] Corporate Governance and Compliance - The company’s financial statements are prepared in accordance with the applicable Hong Kong Financial Reporting Standards and are presented in Renminbi[8] - The board consists of three executive directors and three independent non-executive directors, adhering to high standards of corporate governance[69] - The group must comply with several financial covenants related to its borrowings[62] - The company has not engaged in any purchase, sale, or redemption of its listed securities during the year ended December 31, 2022[69] Future Outlook - The company plans to sell 750,000 tons of yarn, 110 million meters of woven fabric, and 24,000 tons of knitted fabric in 2023[46] - The company aims to increase yarn production capacity to approximately 4.4 million spindles by the end of 2022[46] - The global geopolitical situation has necessitated a shift in textile production capacity, which the company has been preparing for over the years[40]

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 13,020,846, an increase from RMB 12,526,280 in the same period of 2021, representing a growth of approximately 3.9%[27] - Gross profit for the period was RMB 2,567,797, compared to RMB 2,852,541 in the prior year, indicating a decrease of about 10%[27] - Profit for the period was RMB 1,024,444, down from RMB 1,321,864 in the previous year, reflecting a decline of approximately 22.5%[28] - Basic earnings per share for profit attributable to owners of the Company was RMB 1.08, compared to RMB 1.41 in the same period last year, a decrease of about 23.4%[28] - Total comprehensive income for the period was RMB 1,051,185, down from RMB 1,323,729 in the same period of 2021, a decrease of approximately 20.5%[30] - Profit attributable to owners of the Company for the six months ended June 30, 2022, was RMB 991,972,000, a decrease of 22.98% from RMB 1,287,620,000 in the same period of 2021[176] - Basic earnings per share for the six months ended June 30, 2022, was RMB 1.08, down from RMB 1.41 in the same period of 2021, reflecting a decline of 23.4%[176] - The Group's revenue increased by approximately 3.9% year-on-year to approximately RMB 13 billion, marking a record high for the Group[198] - Profit attributable to shareholders decreased by 23.0% to approximately RMB 992.0 million during the Review Period[200] Assets and Liabilities - Total assets increased to RMB 26,342,926, up from RMB 24,442,884, representing a growth of 7.8%[20] - Total liabilities increased to RMB 15,140,234 as of December 31, 2022, from RMB 13,841,932 as of June 30, 2022, representing an increase of approximately 9.4%[24] - Total equity attributable to owners of the Company was RMB 11,202,692, a rise of 5.7% from RMB 10,600,952[22] - Current assets totaled RMB 13,937,325, compared to RMB 13,048,619, reflecting an increase of 6.8%[20] - Non-current assets, including property, plant, and equipment, reached RMB 9,642,869, up from RMB 9,229,119, indicating a growth of 4.5%[20] - Total segment assets as of June 30, 2022, amounted to RMB 25,925,079,000, with unallocated assets of RMB 5,230,000[67] - Total liabilities of the Group as of June 30, 2022, were RMB 15,140,234,000, reflecting a significant financial position[67] Cash Flow and Investments - Cash generated from operations for the first half of 2022 was RMB 978,067,000, with net cash flows from operating activities amounting to RMB 770,307,000[38] - The company incurred net cash outflows from investing activities of RMB 1,434,812,000, primarily due to purchases of property, plant, and equipment totaling RMB 1,047,400,000[38] - Financing activities generated net cash inflows of RMB 247,677,000, with proceeds from borrowings amounting to RMB 4,174,836,000[41] - The total cash payment for leases during the six months ended June 30, 2022, was RMB 35,286,000, compared to RMB 33,115,000 for the same period in 2021[79] - The addition to non-current assets for the first half of 2022 was RMB 634,763,000, indicating ongoing investment in growth[67] Market and Operational Strategy - The company is focusing on expanding its market presence and enhancing product development strategies[19] - Future outlook includes continued investment in new technologies and potential acquisitions to drive growth[19] - The company plans to continue expanding its market presence and investing in new technologies to enhance production efficiency[43] - The Group's revenue from external customers in Asia and Americas accounted for 88.6% and 10.6% of total revenue, respectively, for the six months ended 30 June 2022[58] - The demand in the textile industry in China slowed down in the first half of the year due to the COVID-19 pandemic and related policies[198] - The production and operating costs for plants increased, impacting the Group's profitability compared to the previous year[200] - The Group faced challenges from the Russia-Ukraine crisis and high inflation rates, leading to a decline in textile industry demand, especially in Q2[198] Financial Risks and Management - The Group's activities expose it to various financial risks, including foreign exchange risk, price risk, cash flow and fair value interest rate risk, credit risk, and liquidity risk[50] - The Group's liquidity risk management has shown no significant changes compared to the previous year[50] - The Group's risk management policies have remained unchanged since the end of the last year[50] - The Group's financial statements do not include all financial risk management information and disclosures required in the annual financial statements[50] Shareholder Information - A final dividend of RMB 447,492,000 was paid in June 2022, compared to RMB 150,461,000 in 2021, indicating a significant increase[183] - An interim dividend of HKD 0.38 per share was proposed, amounting to RMB 298,328,000, down from RMB 381,518,000 in 2021[183] - The total issued and fully paid ordinary shares were 918,000 thousands, with a share premium of RMB 462,059, resulting in a total of RMB 559,017 as of June 30, 2022[143] - The average exercise price of outstanding options as of June 30, 2022, was HKD 8.27, with 3,500 thousands of options remaining[153] Taxation - Current tax on profits for the period was RMB 192,615,000, a decrease from RMB 300,055,000 in 2021[165] - Six subsidiaries in Mainland China were entitled to a preferential tax rate of 15% during the period, compared to eleven subsidiaries in the same period of 2021[165] - The Company's subsidiaries in Vietnam are entitled to a preferential income tax rate of 15% for 12 years, with initial investments exempt from income taxes for three years[171] - The income tax rate for the Company's subsidiary in Nicaragua is 30%, but it was exempt from profits tax during the period[171] Inventory and Receivables - The company reported a significant increase in inventories, which rose to RMB 7,321,290 from RMB 7,151,667, an increase of 2.4%[20] - The trade receivables as of June 30, 2022, were RMB 2,036,166,000, compared to RMB 1,293,965,000 as of December 31, 2021, indicating a significant increase of approximately 57.3%[105] - The provision for impairment for trade receivables was RMB 2,747,370,000 as of June 30, 2022, compared to RMB 2,030,987,000 as of December 31, 2021, reflecting an increase of approximately 35.3%[105] - The total prepayments, deposits, and other receivables netted RMB 1,067,888,000 as of June 30, 2022, compared to RMB 890,817,000 as of December 31, 2021, marking an increase of around 19.9%[112]

Financial Performance - For the year ended December 31, 2021, the Group's revenue reached RMB 26.52 billion, representing a year-on-year increase of 35.5%[4] - The gross profit for the year was RMB 5.85 billion, a significant increase of 116.2% compared to the previous year[4] - Profit attributable to shareholders rose to RMB 2.69 billion, marking a 419.3% increase from the prior year[4] - The annual sales volume of yarns reached over 810,000 tonnes, achieving stable growth compared to last year[16] - Revenue from the sale of garment fabrics increased by 51.7% to RMB 3.61 billion[16] - The gross profit margin for the yarn business rose by 9.9 percentage points to 23.3% compared to the previous year[16] - The Group's revenue for 2021 increased by 35.5% to approximately RMB 26.5 billion, achieving record high figures[22] - Profit attributable to shareholders soared to approximately RMB 2.69 billion, a fourfold increase compared to the previous year[22] - Yarn sales accounted for approximately 76.9% of total revenue, amounting to approximately RMB 20.4 billion, representing a substantial increase of 34.2%[25] - The overall gross profit margin of the Group improved significantly by 8.3 percentage points from 13.8% last year to 22.1% for the year[33] Operational Highlights - The Group has over 5,000 customers globally, with a sales network spanning multiple regions including China, Vietnam, and North America[9] - The sales volume of woven garment fabrics increased from approximately 88 million meters to 137 million meters, with a gross profit margin climbing to 23.1%[29] - The knitted garment fabrics sales volume was approximately 18,000 tonnes, a modest increase of 1,800 tonnes over the previous year, with a gross profit margin of around 16%[30] - The Group plans to invest approximately RMB 2.0 billion in fixed assets in 2022, targeting sales of 880,000 tonnes of yarns, 180 million meters of woven garment fabrics, and 28,000 tonnes of knitted garment fabrics[37] - The Group's internal use of grey fabrics increased, while external sales decreased from approximately 66 million meters to nearly 53.8 million meters, with a gross profit margin of 29.7%[27] Financial Position - Total assets as of December 31, 2021, were RMB 24.44 billion, reflecting a 21.3% increase from the previous year[5] - The Group's net current assets increased by 124.8% to RMB 2.96 billion[5] - The return on equity for the year was 30%, a significant increase from 7% in the previous year[6] - As of December 31, 2021, total bank borrowings increased by RMB 151.9 million to RMB 7,215.0 million, with current borrowings decreasing by RMB 5.8 million to RMB 3,831.7 million[67][70] - The current ratio as of December 31, 2021, was 1.29, and the debt to equity ratio was 0.72, indicating the Group's financial leverage and liquidity position[69] Risk Management - The Group plans to enhance its operational capabilities and adopt risk management measures in response to high raw material prices and exchange rate fluctuations[20] - The Group has hedged about half of its foreign currency exposure through currency option contracts and currency swaps to mitigate foreign exchange risks[72] - The Group's exposure to foreign exchange risk is mainly from borrowings and raw material procurement denominated in US$ or HK$[73] - The Group is subject to operational risks due to the concentration of its business in the textile industry, which is affected by global COVID-19 impacts and uncertainties in export policies towards China[80] - The risk management and internal controls framework aims to enhance long-term shareholder value by identifying and assessing risk exposures[166] Corporate Governance - The Board comprises four executive Directors and three independent non-executive Directors, ensuring a balance of power and independence[110] - The Company has complied with the Corporate Governance Code provisions during the year ended December 31, 2021[110] - The Board meets regularly to discuss overall strategy and financial performance, holding four Board meetings and one general meeting during the year[115] - The company has established various committees, including the Remuneration Committee, Audit Committee, Nomination Committee, and ESG Committee, to ensure effective governance[130] - The Board adopted a Board Diversity Policy on August 5, 2013, aiming for diversity in Board appointments, including gender diversity[159] Human Resources - The Group had a total workforce of 33,639 employees, down from 38,545 employees at the end of 2020, due to the sale of a spinning mill and a majority interest in a jeanswear production plant[75] - The Group is committed to optimizing its human resources structure and providing competitive remuneration packages based on market conditions and employee performance[75] - The Group plans to continue enhancing its training and development programs to foster a skilled and motivated workforce[75] - The Group has implemented performance-based unit counts and expanded staff training to enhance workforce efficiency and capability[106] Environmental and Social Responsibility - The Group has not faced any fines or penalties related to environmental pollution in the past, but future regulatory changes may require substantial expenditures to upgrade environmental protection facilities[109] - The increase in the number of factories has heightened the risk associated with environmental governance, as governments tighten controls over environmental protection[109] - The ESG Committee's major roles include formulating and reviewing policies on environmental protection, corporate governance, and corporate social responsibility[146] - The company aims to ensure compliance with environmental protection, corporate governance, and corporate social responsibility policies[151]

Financial Performance - Revenue for the year ended December 31, 2020, was RMB 19,576,938, a decrease of 11.0% from RMB 22,002,943 in 2019[4] - Gross profit for 2020 was RMB 2,707,118, down 9.6% from RMB 2,993,437 in 2019[4] - Profit for the year decreased by 42.5% to RMB 530,354 from RMB 922,749 in 2019[4] - Basic earnings per share for 2020 was RMB 0.57, a decline of 41.2% compared to RMB 0.97 in 2019[4] - The Group's total revenue for 2020 was RMB 19.6 billion, representing a decrease of approximately 11% compared to the previous year[20] - Profit attributable to shareholders for 2020 was RMB 517 million, a decrease of 41.5% from the previous year, with basic earnings per share dropping to RMB 0.57 from RMB 0.97[26] - Yarn sales revenue accounted for approximately 77.7% of total revenue, amounting to approximately RMB 15.2 billion, which is a decrease of 9.0% compared to last year[29] - The Group's midstream and downstream business achieved sales revenue of RMB 4.37 billion, representing a decrease of 17.3% compared to 2019[29] - The Group's revenue for 2020 decreased by 11% to RMB 19.6 billion, better than the previously estimated decline of 20%[32] - Yarn sales decreased by about 9.0% in 2020 compared to 2019, primarily due to a decrease in selling prices in the first half of the year[44] Assets and Liabilities - Total assets as of December 31, 2020, were RMB 20,157,279, a decrease of 4.8% from RMB 21,174,661 in 2019[5] - Total liabilities decreased by 10.6% to RMB 11,684,541 from RMB 13,075,286 in 2019[5] - Current ratio for 2020 was 1.2, down from 1.3 in 2019[6] - Net debt to equity ratio improved to 0.52 in 2020 from 0.86 in 2019[6] - As of December 31, 2020, the Group's total bank borrowings decreased by RMB1,221.5 million to RMB7,063.1 million[69] - Current bank borrowings increased by RMB477.9 million to RMB3,837.5 million, while non-current bank borrowings decreased by RMB1,699.4 million to RMB3,225.6 million[69] - The debt to equity ratio improved to 0.90 in 2020 from 1.11 in 2019[71] - The net debt to equity ratio decreased to 0.52 in 2020 from 0.86 in 2019[71] Operational Challenges - In 2020, the COVID-19 pandemic had a systemic impact on the global economy, significantly affecting the textile industry in China, which was already struggling from the Sino-US trade conflict[18] - The pandemic disrupted normal operations of production facilities, leading to challenges such as unsynchronized resumption of upstream and downstream industrial chains, insufficient customer orders, and raw material shortages[18] - After effective pandemic control in China, the worsening situation overseas caused a standstill in the textile export market, resulting in numerous suspended orders[18] - The Group's operational risks are heightened by the ongoing impact of COVID-19 on the textile retail industry in Europe and the United States[85] Production and Capacity - Major production facilities include approximately 4.1 million spindles and 1,900 weaving and knitting machines as of December 31, 2020[8] - The Group plans to increase production capacity of knitted garment fabrics to 100 tons per day in 2021, with expansion plans currently being implemented[22] - The Group aims to sell 840,000 tonnes of yarn, 60 million meters of grey fabrics, 140 million meters of woven garment fabrics, 30,000 tonnes of knitted garment fabrics, and 11 million pieces of jeanswear in 2021[42] - The production facilities include approximately 4.10 million spindles, with 2.51 million in the PRC and 1.59 million in overseas regions[41] Cash Flow and Financial Management - The Group has strengthened capital management, resulting in improved cash flow and debt ratio, achieving the best levels seen in recent years[20] - Net cash generated from operating activities was RMB3,300.8 million, a significant increase from RMB2,418.4 million in 2019[65] - Cash and cash equivalents at the end of 2020 were RMB2,944.2 million, up from RMB1,852.3 million in 2019[66] - The Group's inventories decreased by RMB1,304.4 million to RMB3,795.7 million, while trade and bills receivables increased by RMB200.9 million to RMB1,735.6 million[66] Market and Customer Base - The company has over 5,000 customers globally, with a sales network spanning across multiple regions including North America and Europe[8] - The Group's major market, the Chinese textile market, accounted for 70.4% of total sales in 2020[54] - The ten largest customers accounted for only 12.8% of total sales, indicating a diversified customer base[53] Risk Management - The Group manages foreign exchange risk primarily from borrowings and raw material procurement denominated in US$ or HK$, with measures in place to mitigate depreciation risk of RMB[75] - The fluctuation of cotton prices poses a significant risk, as it may not align with end-product prices, impacting the gross profit margin[87] - Foreign exchange fluctuations, particularly USD/RMB, may lead to material losses and affect procurement and financing costs[87] - The Group's financing needs are high, and failure to secure alternative financing could hinder business operations[88] Corporate Governance - The Group's board comprises eight directors, including five executive directors and three independent non-executive directors, ensuring a high level of corporate governance[130] - The Group has complied with the Corporate Governance Code provisions during the year ended December 31, 2020, emphasizing transparency and accountability[130] - The Board is responsible for overall strategy, investment plans, and significant financial matters, delegating day-to-day responsibilities to senior management[136] - The Company has established a remuneration committee, an audit committee, and a nomination committee, each with specific written terms of reference[147] Environmental and Social Responsibility - The Group is focusing on sustainable textile production by researching environmental protection technologies and planning to apply them in production[22] - The Group has established a factory internal check system to ensure compliance with environmental protection standards, particularly for raw materials like dyestuffs and chemicals[126] - The Group has not faced any fines or penalties related to environmental pollution in the past, but future regulatory changes could impose stricter controls and increase operational risks[121] Employee Management - The Group had a total workforce of 38,545 employees as of December 31, 2020, down from 41,108 in 2019, with a focus on optimizing human resources and competitive remuneration[78] - The Group emphasizes training and development of employees to foster a skilled and motivated workforce, crucial for its operational success[78] - The Group plans to enhance staff training and management capabilities to improve workforce efficiency and retention, addressing cultural differences in its expanding overseas operations[120]

[Financial Highlights](index=4&type=section&id=Financial%20Highlights) The company's 2019 financial performance saw revenue growth but a decline in profit attributable to shareholders, alongside an increase in total assets and equity | Indicator | 2019 (thousands of RMB) | 2018 (thousands of RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Performance** | | | | | Revenue | 22,002,943 | 19,155,709 | 14.9% | | Gross Profit | 2,993,437 | 3,145,825 | -4.8% | | Profit for the Year | 922,749 | 1,167,943 | -21.0% | | Profit Attributable to Shareholders | 883,726 | 1,163,092 | -24.0% | | Basic Earnings Per Share (RMB) | 0.97 | 1.27 | -23.6% | | **Financial Position (Year-end)** | | | | | Total Assets | 21,174,661 | 18,770,015 | 12.8% | | Total Liabilities | 13,075,286 | 11,933,193 | 9.6% | | Equity Attributable to Shareholders | 7,473,456 | 6,738,637 | 10.9% | | **Financial Ratios** | | | | | Net Debt to Equity Ratio | 0.86 | 0.88 | - | | Return on Equity | 12% | 18% | - | [Corporate Profile and Structure](index=5&type=section&id=Corporate%20Profile%20and%20Structure) The group is a leading cotton textile manufacturer specializing in high-value-added core-spun products with global operations [Corporate Profile](index=5&type=section&id=Corporate%20Profile) Tianhong Textile Group is one of China's largest cotton textile manufacturers, focusing on high-value-added core-spun products with global sales and production facilities - The group is a leading cotton textile manufacturer specializing in high-value-added core-spun yarns, with operations across China, Vietnam, North America, Europe, and other regions[6](index=6&type=chunk)[7](index=7&type=chunk) - As of December 31, 2019, the group's main production facilities included approximately **4 million spindles** and **1,819 shuttle and knitting looms**[6](index=6&type=chunk)[7](index=7&type=chunk) [Chairman's Statement](index=9&type=section&id=Chairman's%20Statement) The Chairman's statement reviews the 2019 performance, highlighting revenue growth despite trade friction, and outlines strategic priorities for 2020 [Results](index=9&type=section&id=Results) Despite US-China trade friction, the group achieved nearly 15% revenue growth in 2019, but profit attributable to shareholders declined due to a significant drop in yarn business gross margin 2019 Performance Highlights | Indicator | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22 billion RMB | - | Nearly 15% growth | | Yarn Sales Volume | Nearly 750,000 tons | - | Exceeded original target of 720,000 tons | | Yarn Gross Margin | 13.5% | 17.9% | Down 4.4 percentage points | | Profit Attributable to Shareholders | 884 million RMB | - | Down 24% | | Basic Earnings Per Share | 0.97 RMB | - | Down 24% | - Woven dyed fabric business benefited from the integration of Qingye Group, with sales revenue reaching **1.86 billion RMB**, a twofold increase year-on-year[16](index=16&type=chunk) [Outlook](index=10&type=section&id=Outlook) Facing trade friction and global pandemic uncertainties, the group will pursue internationalization and vertical integration strategies, focusing on overseas production and reduced capital expenditure - To counter trade friction, the group will adhere to internationalization and vertical integration strategies, establishing yarn and fabric production bases outside China to mitigate impacts and enhance profit stability[19](index=19&type=chunk)[23](index=23&type=chunk) - The group completed the reorganization of its knit fabric management team and denim apparel business in 2019, with a future focus on developing Vietnam production bases to enhance profitability[20](index=20&type=chunk) - Capital expenditure for 2020 is expected to significantly decrease, with the group focusing on utilizing existing capacity to improve profitability and reduce debt ratios, strengthening financial stability[21](index=21&type=chunk)[23](index=23&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the group's 2019 performance, industry trends, business segment analysis, future prospects, and financial position [Overview](index=11&type=section&id=Overview) In 2019, the group's revenue increased by 15% to 22 billion RMB, but profit attributable to shareholders decreased by 24% to 884 million RMB 2019 Performance Overview | Indicator | 2019 | YoY Change | | :--- | :--- | :--- | | Revenue | 22 billion RMB | +15% | | Profit Attributable to Shareholders | 884 million RMB | -24% | | Basic Earnings Per Share | 0.97 RMB | -23.6% | [Industry Review](index=11&type=section&id=Industry%20Review) The Chinese textile and apparel industry faced pressure in 2019, while Vietnam's textile sector demonstrated strong growth in exports - The Chinese textile and apparel industry faced challenges, with major enterprises experiencing year-on-year declines in both operating revenue and total profit[26](index=26&type=chunk)[30](index=30&type=chunk) - Vietnam's textile industry performed strongly, with year-on-year growth in both yarn and apparel exports[27](index=27&type=chunk)[30](index=30&type=chunk) [Business Review](index=11&type=section&id=Business%20Review) The group achieved record revenue in 2019, driven by yarn and dyed fabric sales, despite a significant decline in yarn gross margin Performance by Business Segment | Business Segment | 2019 Performance | Key Data/Changes | | :--- | :--- | :--- | | **Yarn** | Sales volume nearly 750,000 tons, exceeding expectations; but gross margin significantly declined | Revenue 16.7 billion RMB (+7.5%); gross margin from 17.9% to 13.5% | | **Grey Fabric** | External sales decreased, but gross margin benefited from vertical integration | Sales volume nearly 80 million meters; gross margin from 14.8% to 17.2% | | **Woven Dyed Fabric** | Benefited from the integration of Qingye Group's business, with significant growth in both sales volume and gross margin | Sales volume 100 million meters (more than doubled); gross margin to 16.6% | | **Knit Dyed Fabric** | Full-year sales target not met, but Q4 gross margin recovered | Sales volume approximately 17,000 tons | | **Denim Apparel** | Business reforms impacted sales volume, but operations concentrated in Vietnam base to enhance profitability | Sales volume increased year-on-year | - The group's overall gross margin decreased from **16.4% in 2018 to 13.6%**, primarily due to the drag from the yarn business[36](index=36&type=chunk)[40](index=40&type=chunk) [Prospects](index=13&type=section&id=Prospects) For 2020, the group will focus on maximizing existing capacity, significantly reducing capital expenditure, and improving profitability through optimized product mix and overseas advantages 2020 Sales Targets (Excluding Trading) | Product | Target Sales Volume | | :--- | :--- | | Yarn | 830,000 tons | | Grey Fabric | 60 million meters | | Woven Dyed Fabric | 140 million meters | | Knit Dyed Fabric | 25,000 tons | | Jeans | 14 million pairs | - Capital expenditure for 2020 is expected to significantly decrease to **below 800 million RMB**, which will help reduce the debt ratio and enhance financial security[38](index=38&type=chunk)[40](index=40&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) In 2019, total sales increased by 14.9% to 22 billion RMB, driven by yarn and fabric, with woven fabric being the fastest-growing segment, while overall gross margin declined 2019 Sales Revenue and Changes by Product | Product Category | 2019 Revenue (thousands of RMB) | 2018 Revenue (thousands of RMB) | Revenue Change | | :--- | :--- | :--- | :--- | | Stretch Core-Spun Yarn | 8,062,776 | 7,993,929 | 0.9% | | Other Yarn | 8,651,516 | 7,560,240 | 14.4% | | Stretch Grey Fabric | 560,477 | 649,110 | -13.7% | | Other Grey Fabric | 150,019 | 208,093 | -27.9% | | Woven Fabric | 2,694,451 | 1,122,412 | 140.1% | | Knit Fabric | 900,225 | 799,864 | 12.5% | | Jeans | 983,479 | 822,061 | 19.6% | | **Total** | **22,002,943** | **19,155,709** | **14.9%** | 2019 Cash Flow Summary (thousands of RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,418,356 | 766,684 | | Net Cash Used in Investing Activities | (1,939,288) | (1,821,900) | | Net Cash from Financing Activities | 297,070 | 643,219 | | Cash and Cash Equivalents at Year-end | 1,830,859 | 1,054,721 | Key Financial Ratios at Year-end 2019 | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Current Ratio | 1.29 | 1.39 | | Debt to Equity Ratio | 1.11 | 1.06 | | Net Debt to Equity Ratio | 0.86 | 0.88 | - The company announced a final dividend of **15 HK cents per share** for 2019, maintaining a dividend policy of approximately **30% of net profit** when combined with the interim dividend of 18 HK cents[72](index=72&type=chunk)[75](index=75&type=chunk) [Material Risks of the Group](index=21&type=section&id=Material%20Risks%20of%20the%20Group) The group identified increased risks in business concentration, customer credit, product liability, environmental compliance, and taxation due to market changes and business expansion - Business concentration risk increased, primarily due to the potential impact of the global pandemic on the textile retail industry, affecting the entire supply chain, given the group's high concentration in the textile industry[80](index=80&type=chunk) - Customer credit management risk increased due to higher total receivables from increased business volume, unfavorable industry operating environment, and potential impact of the pandemic on customer cash flow[94](index=94&type=chunk) - Environmental compliance risk increased, mainly due to the addition of dyeing plant projects and stricter environmental regulations from various governments[109](index=109&type=chunk) - Financing risk increased, primarily due to significant capital expenditure in 2019 and increased difficulty and cost of obtaining loans amidst international trade disputes[91](index=91&type=chunk) [Corporate Governance Report](index=31&type=section&id=Corporate%20Governance%20Report) The Corporate Governance Report details the company's commitment to high governance standards, board structure, and internal control systems [Board and Committees](index=31&type=section&id=Board%20and%20Committees) The company maintains high corporate governance standards with a board comprising executive and independent non-executive directors, and separate roles for Chairman and CEO, supported by independent committees - The Board of Directors consists of **8 directors**, including **3 independent non-executive directors**, exceeding one-third, in compliance with governance requirements[114](index=114&type=chunk)[115](index=115&type=chunk) - The company has established a Remuneration Committee, Audit Committee, and Nomination Committee, with their composition and terms of reference complying with the Corporate Governance Code[130](index=130&type=chunk)[135](index=135&type=chunk)[142](index=142&type=chunk) - The roles of Chairman (Mr. Hong Tianzhu) and Chief Executive Officer (Mr. Zhu Yongxiang) are held by different individuals, complying with Code Provision A.2.1[128](index=128&type=chunk)[131](index=131&type=chunk) [Risk Management and Internal Control](index=45&type=section&id=Risk%20Management%20and%20Internal%20Control) The group has established a COSO-compliant risk management and internal control system, with the Board overseeing its effectiveness and adequacy - The group's risk management and internal control framework complies with the COSO Committee's Internal Control Framework, covering five key components[179](index=179&type=chunk) - The Board reviewed the risk management and internal control systems for the year ended December 31, 2019, deeming them effective and adequate, with no significant control deficiencies identified[191](index=191&type=chunk)[193](index=193&type=chunk) [Report of the Directors](index=60&type=section&id=Report%20of%20the%20Directors) The Directors' Report outlines the group's principal activities, business review, share option scheme, connected transactions, and major customers and suppliers [Principal Activities and Business Review](index=60&type=section&id=Principal%20Activities%20and%20Business%20Review) The group's core business involves manufacturing and selling yarn, grey fabric, fabric, and apparel across various regions, with a commitment to clean production and sustainability - The group's principal activities are the manufacturing and sale of yarn, grey fabric, fabric, and apparel[230](index=230&type=chunk) - The group primarily operates in China, Vietnam, Cambodia, Turkey, Nicaragua, and North America[232](index=232&type=chunk)[235](index=235&type=chunk) [Share Options](index=62&type=section&id=Share%20Options) The company adopted a ten-year share option scheme in 2014 to incentivize contributors, with executive directors holding unexercised options as of year-end 2019 Unexercised Share Options Held by Directors (as of December 31, 2019) | Director Name | Number of Unexercised Share Options | | :--- | :--- | | Mr. Tang Daoping | 2,000,000 | | Mr. Xu Zihui | 4,500,000 | [Connected Transactions](index=72&type=section&id=Connected%20Transactions) During the reporting period, the group engaged in significant connected transactions, including service agreements with a related party and a major acquisition - The group entered into various water, electricity, steam supply, and sewage treatment service agreements with Tianhong Industrial Park (Vietnam) Co., Ltd., a related party controlled by the Chairman and CEO, with annual caps set[297](index=297&type=chunk)[313](index=313&type=chunk) - In December 2019, the group acquired land use rights in Vietnam from related party Tianhong Industrial Park for a total consideration of approximately **106 million RMB**[315](index=315&type=chunk)[317](index=317&type=chunk) - The group completed the acquisition of Winnitex Group in April 2019 for a total consideration of **1.35 billion HKD**, which constituted a discloseable transaction[318](index=318&type=chunk)[320](index=320&type=chunk) [Major Customers and Suppliers](index=71&type=section&id=Major%20Customers%20and%20Suppliers) The group maintains a relatively diversified customer and supplier base, with no single customer or supplier dominating sales or procurement 2019 Customer and Supplier Concentration | Category | Percentage of Total | | :--- | :--- | | Largest Supplier | 13.0% | | Top Five Suppliers Combined | 24.1% | | Largest Customer | 3.5% | | Top Five Customers Combined | 9.2% | [Environmental, Social and Governance Report](index=81&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the group's commitment to environmental protection, social responsibility, and sustainable development practices [Green Operation](index=108&type=section&id=Green%20Operation) The group is committed to green operations and clean production, enhancing resource efficiency and reducing emissions through technological upgrades and improved management 2017-2019 Resource Consumption and Emission Data | Indicator | Unit | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | **Resource Consumption** | | | | | | Total Energy Consumption | MWh | 2,057,828 | 1,693,089 | 1,591,916 | | Energy Intensity | MWh/million RMB sales | 93.5 | 88.4 | 97.6 | | Total Water Consumption | tons | 10,280,314 | 12,473,850 | 8,651,940 | | Water Intensity | tons/million RMB sales | 467.2 | 651.2 | 530.6 | | **Emissions** | | | | | | Total GHG Emissions | tons of CO2e | 1,502,785 | 1,272,418 | 1,219,903 | | GHG Emission Intensity | tons of CO2e/million RMB sales | 68.3 | 66.4 | 74.8 | | Hazardous Waste Emissions | tons | 12,348 | 6,630 | 4,850 | | Non-Hazardous Waste Emissions | tons | 14,808 | 13,035 | 7,722 | - The group's subsidiary, Zhongzhan Textile, received the "Bank of China (Hong Kong) Corporate Environmental Leadership Award" and the "Guangdong-Hong Kong Clean Production Excellent Partner (Manufacturing)" logo, demonstrating its contributions to environmental protection and clean production[434](index=434&type=chunk) [Joint Development of Harmony](index=121&type=section&id=Joint%20Development%20of%20Harmony) The group actively fulfills its social responsibilities, contributing to society through charitable donations, school-enterprise cooperation, and support for vulnerable groups - In early 2020, to combat the COVID-19 pandemic, the group donated **5 million RMB** through a charity federation for epidemic prevention and control[481](index=481&type=chunk) - In 2019, Tianhong Times donated **4 million RMB** to the Nantong University Education Development Foundation[482](index=482&type=chunk)[484](index=484&type=chunk) - The group actively engages in school-enterprise cooperation and provides scholarships and internship opportunities to several universities in Vietnam, supporting local education initiatives[482](index=482&type=chunk)[488](index=488&type=chunk)[491](index=491&type=chunk) [Independent Auditor's Report](index=122&type=section&id=Independent%20Auditor's%20Report) The Independent Auditor's Report provides the auditor's opinion on the financial statements and highlights key audit matters [Auditor's Opinion and Key Audit Matters](index=122&type=section&id=Auditor's%20Opinion%20and%20Key%20Audit%20Matters) PricewaterhouseCoopers issued an unmodified opinion on the group's 2019 consolidated financial statements, with key audit matters being revenue recognition and business combinations - The auditor believes that the consolidated financial statements fairly and accurately reflect the group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[493](index=493&type=chunk) - Key audit matters include: - **Revenue Recognition:** Given the significant sales volume and dispersed customer base, the auditor focused on the occurrence, accuracy, and timely recording of revenue - **Business Combinations:** The acquisition of Winnitex Group resulted in significant negative goodwill, involving substantial judgments and assumptions in valuing intangible and tangible assets and allocating consideration[499](index=499&type=chunk)[501](index=501&type=chunk) [Consolidated Financial Statements](index=130&type=section&id=Consolidated%20Financial%20Statements) This section presents the group's comprehensive financial statements, including the income statement, balance sheet, and cash flow statement [Consolidated Income Statement](index=132&type=section&id=Consolidated%20Income%20Statement) In 2019, the group's revenue grew by 14.9% to 22.003 billion RMB, but operating profit and profit for the year declined due to increased cost of sales and expenses 2019 Consolidated Income Statement Summary (thousands of RMB) | Item | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22,002,943 | 19,155,709 | 14.9% | | Gross Profit | 2,993,437 | 3,145,825 | -4.8% | | Operating Profit | 1,634,461 | 1,895,474 | -13.8% | | Profit Before Income Tax | 1,114,800 | 1,423,900 | -21.7% | | Profit for the Year | 922,749 | 1,167,943 | -21.0% | | Profit Attributable to Owners of the Company | 883,726 | 1,163,092 | -24.0% | [Consolidated Balance Sheet](index=130&type=section&id=Consolidated%20Balance%20Sheet) As of year-end 2019, total assets increased by 12.8% to 21.175 billion RMB, driven by non-current assets, while total liabilities grew by 9.6% to 13.075 billion RMB, maintaining a stable financial structure 2019 Consolidated Balance Sheet Summary (thousands of RMB) | Item | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 11,374,054 | 9,336,032 | 21.8% | | Current Assets | 9,800,607 | 9,433,983 | 3.9% | | **Total Assets** | **21,174,661** | **18,770,015** | **12.8%** | | **Equity and Liabilities** | | | | | Total Equity | 8,099,375 | 6,836,822 | 18.5% | | Non-current Liabilities | 5,492,066 | 5,159,770 | 6.4% | | Current Liabilities | 7,583,220 | 6,773,423 | 12.0% | | **Total Liabilities** | **13,075,286** | **11,933,193** | **9.6%** | | **Total Equity and Liabilities** | **21,174,661** | **18,770,015** | **12.8%** | [Consolidated Cash Flow Statement](index=136&type=section&id=Consolidated%20Cash%20Flow%20Statement) In 2019, net cash from operating activities significantly increased to 2.418 billion RMB, while investing activities consumed cash for expansion and acquisitions, resulting in higher year-end cash and equivalents 2019 Consolidated Cash Flow Statement Summary (thousands of RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,418,356 | 766,684 | | Net Cash Used in Investing Activities | (1,939,288) | (1,821,900) | | Net Cash from Financing Activities | 297,070 | 643,219 | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **776,138** | **(411,997)** | | Cash and Cash Equivalents at Beginning of Year | 1,054,721 | 1,466,718 | | Cash and Cash Equivalents at End of Year | 1,830,859 | 1,054,721 |