Financial Data and Key Metrics - Revenue in 2021 reached HKD 4.843 billion, a 33% YoY increase [2] - Gross margin improved to 18%, up by 1 percentage point YoY [2] - Net profit was HKD 410 million, a 14% YoY increase [2] - Dividend payout ratio was 30%, with a total dividend of HKD 122 million [2] Business Line Data and Key Metrics - Pipeline gas sales volume grew by 11% YoY to 1.962 billion cubic meters, with core pipeline gas sales contributing HKD 4.012 billion, a 37% YoY increase [2] - Gas transmission services contributed HKD 60.17 million in revenue, with a total transmission volume of 711 million cubic meters [2] - Engineering and gas pipeline installation services revenue increased by 19% to HKD 743 million [2] Market Data and Key Metrics - The company operates in seven provinces and two municipalities, serving 2.1825 million residential customers and 11,178 industrial and commercial customers [3] - High-pressure and sub-high-pressure pipelines increased to 636 km, while the Central Asia pipeline network expanded to 3,574 km [3] - Strong market expansion in key regions, with new projects adding 145 million cubic meters of annual gas sales [3] Company Strategy and Industry Competition - The company is transitioning towards an industrial customer-focused model, with industrial customers now accounting for 77.36% of sales, up 5.27 percentage points YoY [5] - The company aims to maintain double-digit growth in gas sales and connection businesses, with value-added services expected to become a new profit growth point [8] - The company is leveraging its unique upstream resource advantages in the Tianjin region, supported by strategic partnerships with Sinopec and other major gas suppliers [6][7] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's resilience in maintaining stable gross margins despite high gas prices, driven by cost control and pricing power [6][7] - The company expects gas prices to remain high in 2022 but is confident in maintaining double-digit growth in gas sales and stable gross margins [8][9] - The company is focusing on digital transformation and safety investments, with HKD 41 million spent on safety in 2021 [3] Other Important Information - The company completed its 14th Five-Year Plan, targeting stable annual growth of over 10% [4] - The company received the "Most Socially Responsible Listed Company" and "Best Infrastructure and Public Utilities Company" awards at the 6th Golden Hong Kong Stock Awards [4] Q&A Session Summary Question: What is the current gas penetration rate in China, and what is the theoretical ceiling under the carbon neutrality goal? [12] - The company explained that penetration rates vary by region, with significant room for growth in its 40 project areas, especially in the Tianjin Binhai New Area [13] Question: How does the company determine pricing, and what is the potential for price increases? [13] - Pricing is based on upstream gas supply contracts, procurement costs, and customer demand. The company aims to optimize cost matching and maintain competitive pricing [14][15] Question: Can the company maintain its high ROE, and are there plans to increase dividends? [15] - The company attributed its high ROE to strong upstream resource acquisition and cost control. It plans to maintain a stable dividend payout ratio of 30% of net profit [16][17] Question: What is the current scale of value-added services, and what are the future growth prospects? [18] - The company has 2.19 million residential users and is expanding value-added services for industrial and commercial customers, targeting HKD 38 million in revenue from these services in 2022 [19][20] Question: How will the company manage the impact of high global gas prices in 2022? [21] - The company expects gas prices to remain high but will leverage its upstream resource advantages and cost control measures to mitigate the impact [22][23] Question: How will the company manage financial costs amid rising interest rates? [28] - The company has optimized its debt structure, reducing overall financial costs, and is closely monitoring interest rate trends to minimize risks [29][30] Question: What is the expected price difference for industrial and commercial users in 2022, and how will high gas prices affect it? [31] - The company expects a 30-35% increase in gas prices but aims to maintain a lower price increase compared to the industry average, supported by its customer structure and cost absorption capabilities [32][33]

Financial Performance - Revenue for the six months ended June 30, 2021, was HK$2,316,905,000, representing a 26% increase from HK$1,833,801,000 in the same period of 2020[3] - Gross profit for the same period was HK$453,067,000, also a 26% increase compared to HK$359,463,000 in 2020[3] - Profit for the period increased by 57% to HK$238,114,000 from HK$151,184,000 in the previous year[3] - Basic earnings per share attributable to owners of the Company rose by 40% to 17.09 cents from 12.25 cents[6] - Total comprehensive income for the period was HK$266,449,000, significantly up from HK$122,716,000 in 2020[7] - Profit for the period for the six months ended June 30, 2021, was HK$231,116,000, compared to HK$143,890,000 for the same period in 2020, representing a 60.5% increase[15] - Total segment revenue from external customers for the six months ended June 30, 2021, was HK$2,316,905, an increase from HK$1,833,801 in the same period of 2020[39] - Profit before income tax for the six months ended June 30, 2021, was HK$301,454, compared to HK$216,349 for the same period in 2020, reflecting a growth of approximately 39.4%[42] Assets and Liabilities - Total assets as of June 30, 2021, were HK$7,741,004,000, a 9% increase from HK$7,094,864,000 at the end of 2020[4] - Total liabilities rose by 11% to HK$5,631,590,000 from HK$5,095,089,000 at the end of 2020[4] - Total equity increased by 5% to HK$2,109,414,000 from HK$1,999,775,000 at the end of 2020[4] - Borrowings significantly increased to HK$2,080,494 from HK$1,055,498, marking a rise of about 97%[9] - The company reported a total liability of HK$5,631,590, up from HK$5,095,089, indicating an increase of approximately 10.5%[10] - Total borrowings as of June 30, 2021, were HK$2,364,006,000, up from HK$1,308,508,000 as of December 31, 2020[80] - The Group's total borrowings as of June 30, 2021, amounted to HK$3,177,976, an increase of 34.4% from HK$2,364,006 as of December 31, 2020[99] Cash Flow and Financing Activities - Cash generated from operations for the six months ended June 30, 2021, was HK$299,728,000, up from HK$153,866,000 in 2020, indicating a 94.8% increase[17] - Net cash inflow from operating activities for the six months ended June 30, 2021, was HK$252,938,000, compared to HK$99,582,000 in 2020, reflecting a 153.5% increase[17] - Net cash outflow from investing activities for the six months ended June 30, 2021, was HK$365,978,000, compared to HK$421,689,000 in 2020, showing a decrease of 13.2%[18] - Net cash inflow from financing activities for the six months ended June 30, 2021, was HK$590,832,000, compared to HK$124,062,000 in 2020, indicating a 376.5% increase[18] - Cash and cash equivalents at the end of the period were HK$888,617,000, up from HK$491,281,000 at the end of June 30, 2020, representing an 80.8% increase[18] Shareholder Information - The Group's principal shareholders include TEDA Hong Kong Property Company Limited and Great Wall Energy Investment (Hong Kong) Limited, holding approximately 35.43% and 29.99% of total ordinary shares respectively[19] - The largest shareholder, TEDA HK, holds a 35.43% stake, while the ultimate parent, TEDA, increased its shareholding to 39.50% as of June 30, 2021, up from 35.43%[111] - China Petrochemical Corporation owns 405,472,337 ordinary shares, accounting for 29.99% of the total issued ordinary shares as of June 30, 2021[186] Operational Highlights - The Group's income from sales of piped natural gas amounted to HK$1,872,813,000, representing an increase of HK$403,413,000 or 27% compared to HK$1,469,400,000 recorded for the corresponding period last year[146] - Income from construction and gas pipeline installation service amounted to approximately HK$402,174,000, representing an increase of HK$75,188,000 or 23% compared to HK$326,986,000 recorded for the corresponding period last year[147] - The volume of gases transported by the Group for its clients amounted to 359,653,737 cubic meters, with gas passing through service income of approximately HK$29,361,000, representing an increase of HK$1,141,000 or 4% compared to HK$28,220,000 for the corresponding period last year[151] Employee and Administrative Expenses - Employee benefit expenses rose to HK$120,519,000 in 2021 from HK$117,897,000 in 2020, a slight increase of 2.2%[51] - Administrative expenses were HK$131,859,000, reflecting a slight increase of 2% from HK$129,885,000 in the prior year[161] - The Group had a total of 1,661 employees as of June 30, 2021, down from 1,718 employees as of December 31, 2020[173] Future Outlook and Strategic Plans - The Group expects to draw down the remaining US$150,000,000 (approximately HK$1,159,950,000) from a syndicated loan facility within the year[163] - The Group plans to dispose of the property under construction to focus on the development of the gas business[153] - The natural gas industry is expected to maintain an annual consumption growth rate of over 7% during the "14th Five Year Plan" period[157][158] Compliance and Governance - The Audit Committee comprises three independent non-executive Directors and has reviewed the unaudited consolidated results for the period[196] - All Directors confirmed compliance with the required standard of dealings during the reporting period[198] - The Company has adopted a Code of Conduct for securities transactions by Directors, requiring approval from the chairman for trading[197]

濱 海 投 資 有 限 公 司 BINHAI INVESTMENT COMPANY LIMITED (Incorporated in the Bermuda with limited liability) (於百慕達註冊成立之有限公司) Stock Code 股份代號：2886 ANNUAL REPORT 年 | --- | --- | --- | |--------------|-------|------------------------------------------------------------------------------------| | | | | | | | | | | | | | 目錄 | | Content | | | | | | | | | | | | | | 公司資料 | | Corporate Information | | 公司簡介 | | Corporate Profile | | | | Financial Highlights | | 財務摘要 | | | | | | Chairman's Statement | | 主席報告 | | Management ...

Financial Performance - Revenue for the six months ended June 30, 2020, was HKD 1,833,801, representing a 3% increase from HKD 1,777,979 in the same period of 2019[1] - Gross profit increased by 47% to HKD 359,463 compared to HKD 245,013 in the prior year[1] - Profit for the period surged by 124% to HKD 151,184, up from HKD 67,628 in the previous year[1] - Basic earnings per share attributable to the company’s owners rose to HKD 0.1225, a 117% increase from HKD 0.0565[1] - Operating profit for the period was HKD 262,461, compared to HKD 140,817 in the same period last year[3] - The company reported a total comprehensive income of HKD 122,716 for the period, up from HKD 70,897 in 2019[4] - The group reported a profit for the period of HKD 143,890,000, compared to HKD 151,184,000 in the same period last year, representing a decrease of approximately 4.8%[7] - The company reported a profit attributable to owners of HKD 143,890,000 for the six months ended June 30, 2020, compared to HKD 66,404,000 for the same period in 2019, representing a significant increase of 116.5%[36] - The net profit attributable to the company's owners was HKD 143,890,000, representing a 117% increase from HKD 66,404,000 in the previous year[87] Assets and Liabilities - Total assets as of June 30, 2020, were HKD 6,148,333, a 1% increase from HKD 6,103,222 as of December 31, 2019[2] - Total equity increased by 4% to HKD 1,421,127 from HKD 1,360,026[2] - Total liabilities decreased slightly to HKD 4,727,206 from HKD 4,743,196[2] - The total receivables and other receivables amounted to HKD 313,990,000 as of June 30, 2020, a decrease from HKD 331,027,000 as of December 31, 2019[39] - The total borrowings as of June 30, 2020, amount to HKD 2,767,397,000, an increase from HKD 2,540,226,000 as of December 31, 2019[46] - The company’s current ratio as of June 30, 2020, was 0.31, indicating a liquidity concern[89] - The group had a current liability exceeding current assets by approximately HKD 3,034 million as of June 30, 2020, indicating a reliance on financial resources for ongoing operations[91] Cash Flow - The net cash inflow from operating activities was HKD 99,582,000, an increase of 45% from HKD 68,691,000 in the previous year[8] - The net cash outflow from investing activities was HKD 421,689,000, compared to HKD 365,566,000 in the prior year, indicating an increase in investment expenditures[8] - The financing activities generated a net cash inflow of HKD 124,062,000, a significant improvement from a net cash outflow of HKD 116,320,000 in the previous year[8] Expenses - The company’s administrative expenses for the period were HKD 129,885,000, while financing income was HKD 799,000 and financing costs were HKD 50,024,000[22] - Administrative expenses increased by 18% to HKD 129,885,000, compared to HKD 109,747,000 in the same period last year[86] - The company’s income tax expense for the six months ended June 30, 2020, was HKD 65,165,000, compared to HKD 29,787,000 for the same period in 2019[31] Investments and Capital Expenditures - The total capital commitments for property, plant, and equipment as of June 30, 2020, were HKD 250,107,000, an increase from HKD 198,967,000 as of December 31, 2019, reflecting a rise of 25.7%[59] - The company has secured bank loans totaling HKD 269,757,000 as of June 30, 2020, compared to HKD 28,004,000 as of December 31, 2019[46] Shareholder Information - Major shareholder Tai Da Holdings controls 706,818,659 shares, representing 60.19% of the company's equity[102] - The beneficial owner, Mr. Shen, holds 61,952,600 shares, which accounts for 5.28% of the total equity[103] - The company has granted 90,500,000 share options under the 2010 Share Option Scheme, with 2,800,000 options remaining unexercised as of June 30, 2020, representing approximately 0.24% of total ordinary shares[104] Corporate Governance - The audit committee, consisting of three independent non-executive directors, has reviewed the group's unaudited consolidated results for the period[106] - The company has adopted a code of conduct for securities transactions by directors, ensuring compliance with the required trading standards[107] - The company has adhered to the corporate governance code as per the Main Board Listing Rules throughout the period[108] Market and Strategic Outlook - The company expects to see an increase in natural gas demand in China, projected to exceed 130 billion cubic meters annually from 2019 to 2025[83] - The company is in the process of selling a development property in Tianjin, focusing on its gas business strategy[81] Risk Management - The company has not experienced significant adverse effects on its financial condition and operating results due to the COVID-19 pandemic[76] - The company’s risk management policies have remained unchanged since the end of the previous year[5.1]

Financial Performance - Revenue for the year ended December 31, 2019, was HKD 3,557,529, representing an 8% increase from HKD 3,308,032 in 2018[5] - Gross profit decreased by 14% to HKD 524,619 from HKD 612,062 in the previous year[5] - Net profit for the year increased by 12% to HKD 119,624 compared to HKD 106,809 in 2018[5] - Profit attributable to owners of the company decreased by 22% to HKD 81,111 from HKD 104,049 in 2018[5] - Basic and diluted earnings per share were both HKD 6.9, down 22% from HKD 8.9 in the previous year[5] - The group recorded revenue of approximately HKD 3.558 billion for the year ended December 31, 2019, an increase of about 8% compared to HKD 3.308 billion in 2018[7] - The group's profit for the year was approximately HKD 120 million, up about 12% from HKD 107 million in 2018[7] Assets and Liabilities - Current assets decreased by 22% to HKD 1,417,948 from HKD 1,825,205 in 2018[5] - Total assets increased by 1% to HKD 6,103,222 from HKD 6,018,141 in the previous year[5] - Current liabilities surged by 115% to HKD 4,638,251 from HKD 2,156,160 in 2018[5] - Total liabilities increased by 2% to HKD 4,743,196 from HKD 4,653,277 in the previous year[5] - Total borrowings as of December 31, 2019, amounted to HKD 2,540,226,000, a decrease from HKD 2,716,808,000 in 2018, with cash and bank deposits of HKD 706,881,000[22] Operational Highlights - The apparent consumption of natural gas in China reached 306.7 billion cubic meters in 2019, representing a year-on-year growth of 9.4%[8] - The group achieved a 34% year-on-year increase in the number of gas engineering installations, totaling 200,000 households[10] - Pipeline gas sales volume increased by 25% year-on-year to 1.915 billion cubic meters, with a 15.3% increase in pipeline gas sales volume to 1 billion cubic meters[10] - The group’s pipeline gas sales revenue was HKD 2.893 billion, an increase of approximately 12% from HKD 2.583 billion in 2018[14] - The group’s gas transmission service revenue increased by approximately 21% to HKD 81.4 million, with a total gas transmission volume of 914.9 million cubic meters[16] Governance and Management - The company’s board of directors consists of nine members, ensuring a balanced composition of executive and non-executive directors for effective governance[33] - The board of directors held four meetings in 2019, with a 100% attendance rate from the executive directors[34] - The company has a nomination committee composed of three independent non-executive directors and one executive director[44] - The company has implemented a remuneration policy for directors and senior management, ensuring transparency in the remuneration process[48] - The Audit Committee monitored risk management and internal control systems, ensuring the integrity of financial reporting[52] Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes the importance of ESG internal controls and risk management for sustainable development, with the board fully responsible for the ESG strategy and reporting[77] - The company has established an ESG working group to manage and implement sustainability-related matters, including regular collection and analysis of ESG data[80] - The company aims to enhance understanding and management of ESG-related issues through the identification of significant topics and plans to expand stakeholder engagement in future assessments[87] - The company has implemented measures to protect customer privacy and comply with relevant laws regarding data security[114] - The company has a commitment to environmental, social, and governance (ESG) principles, ensuring responsible business practices and community engagement[108] Employee and Community Engagement - The company has established a comprehensive employee benefits policy, including five types of insurance and housing fund contributions[100] - The company conducted four sessions of training on anti-fraud case studies, enhancing compliance awareness among employees[103] - The company emphasizes employee health and safety as a top priority, implementing strict safety management systems and regular inspections to reduce accident rates[106] - The company received a total of 234 customer complaints related to products and services, with a customer satisfaction rate approaching 100% following follow-up visits[113] - The group conducted community safety lectures and distributed over 1,000 safety pamphlets in 2019, enhancing community engagement[116] COVID-19 Impact - The company is closely monitoring the developments of the COVID-19 pandemic and assessing its impact on financial condition and operational performance[196] - The COVID-19 pandemic may lead to a temporary economic slowdown, potentially reducing overall natural gas consumption and construction activities in the real estate market, which could indirectly affect the company's financial performance[195] - The company confirmed that related transactions were conducted in the ordinary course of business and on fair and reasonable terms[195] Shareholder Information - The company reported a proposed final dividend of HKD 0.035 per share for the year ended December 31, 2019, down from HKD 0.045 per share for the previous year[151] - The total shareholding of major shareholders included 706,818,659 shares held by Teda, representing 60.19% of the issued ordinary shares[182] - The company has provided indemnity provisions for directors against liabilities incurred in their capacity[178] - The company has not experienced any significant violations of applicable laws and regulations during the year ended December 31, 2019[148]

Financial Performance - Revenue for the six months ended June 30, 2019, was HKD 1,777,979, representing a 10% increase compared to HKD 1,618,438 for the same period in 2018[1] - Gross profit decreased by 7% to HKD 245,013 from HKD 264,176 year-on-year[2] - Profit for the period was HKD 67,628, down 8% from HKD 73,164 in the previous year[2] - Basic earnings per share attributable to owners of the company decreased to 5.65 cents from 6.1 cents[2] - The company reported a total comprehensive income of HKD 70,897 for the period, compared to HKD 30,911 in the previous year[3] - The total comprehensive income for the period was HKD 69,820,000, compared to HKD 73,164,000 in the same period of 2018, representing a decrease of approximately 4.7%[6] - The company reported a profit of HKD 66,404,000 for the six months ended June 30, 2019, down from HKD 71,661,000 in the previous year, indicating a decline of about 7.5%[6] - The company’s total interest expenses decreased significantly to HKD 53,342,000 in the first half of 2019 from HKD 86,451,000 in 2018, a reduction of approximately 38.3%[26] Assets and Liabilities - Total assets as of June 30, 2019, were HKD 5,868,904, a decrease of 2% from HKD 6,018,141 at the end of 2018[1] - Total equity decreased by 1% to HKD 1,356,915 from HKD 1,364,864[1] - Total liabilities decreased by 3% to HKD 4,511,989 from HKD 4,653,277[1] - The cash and cash equivalents at the end of the period were HKD 571,776,000, compared to HKD 1,255,220,000 at the end of June 30, 2018, reflecting a decrease of approximately 54.4%[7] - The company’s total borrowings as of June 30, 2019, were HKD 2,716,239,000, with non-current borrowings at HKD 2,386,489,000[42] - As of June 30, 2019, total accounts payable and other payables amounted to HKD 1,184,810,000, compared to HKD 1,277,643,000 as of December 31, 2018[40] Cash Flow - The net cash generated from operating activities was HKD 68,691,000, down from HKD 129,597,000 in the same period of 2018, indicating a decrease of about 47%[7] - The net cash used in investing activities was HKD 365,566,000, compared to HKD 275,965,000 in 2018, reflecting an increase of approximately 32.5%[7] - The net cash used in financing activities was HKD 116,320,000, a significant reduction from HKD 1,847,947,000 in the previous year, showing a decrease of about 93.7%[7] Revenue Breakdown - As of June 30, 2019, the total revenue from pipeline gas sales was HKD 1,493,924,000, gas engineering and installation services was HKD 227,445,000, unverified pipeline transportation revenue was HKD 45,296,000, and bottled gas sales was HKD 11,314,000, totaling HKD 1,777,979,000[21] - The gross profit from pipeline gas sales was HKD 59,559,000, from gas engineering and installation services was HKD 140,668,000, from unverified pipeline transportation revenue was HKD 41,525,000, and from bottled gas sales was HKD 3,261,000, totaling HKD 245,013,000[21] - The group reported a revenue of HKD 1,493,924,000 from pipeline gas sales, an increase of HKD 121,508,000 or 9% compared to HKD 1,372,416,000 in the same period last year[60] - Revenue from gas engineering construction and installation services was approximately HKD 227,445,000, an increase of HKD 27,182,000 or 14% from HKD 200,263,000 in the previous year[59] - The group transported 538,077,550 cubic meters of gas, generating pipeline transportation revenue of approximately HKD 45,296,000, an increase of HKD 9,564,000 or 27% from HKD 35,732,000 in the same period last year[61] Expenses and Costs - Administrative expenses increased by HKD 25,464,000 or 30% to HKD 109,747,000, primarily due to rising labor costs[64] - The group incurred a gas procurement cost of HKD (14,263,000), up from HKD (9,253,000) in the previous year[55] Shareholder Information - Major shareholder "Teda Investment" holds 706,818,659 shares, accounting for 60.19% of the company's equity[73] - The total issued and fully paid ordinary shares as of June 30, 2019, was 1,174,349,000 shares, amounting to HKD 117,435,000[37] - The company granted stock options to several directors, with a total of 90,500,000 options issued under the 2010 stock option plan[75] - As of June 30, 2019, 3,500,000 stock options remained unexercised, representing approximately 0.30% of the total issued ordinary shares[75] Compliance and Governance - The audit committee consists of three independent non-executive directors, including a qualified accountant as the chairman[77] - The company has adopted a code of conduct for directors' securities transactions, ensuring compliance with the standards set forth in the Main Board Listing Rules[78] - All directors confirmed adherence to the required trading standards during the reporting period[78]

Financial Performance - Revenue for the year ended December 31, 2018, was HKD 3,308,032, representing a 20% increase from HKD 2,745,687 in 2017[4] - Gross profit for 2018 was HKD 612,062, up 7% from HKD 572,329 in the previous year[4] - Net profit for the year decreased by 52% to HKD 106,809 from HKD 223,886 in 2017[4] - The group recorded revenue of approximately HKD 3.308 billion for the year ended December 31, 2018, representing a 20% increase from HKD 2.746 billion in 2017[8] - The group's profit for the year was approximately HKD 107 million, a decrease of about 52% compared to HKD 224 million in 2017[8] - Basic earnings per share for 2018 were HKD 8.9, down 53% from HKD 18.9 in 2017[4] - The basic earnings per share for the year were HKD 0.089, down from HKD 0.189 in 2017[20] Assets and Liabilities - Total assets as of December 31, 2018, were HKD 6,018,141, a decrease of 24% from HKD 7,875,998 in 2017[5] - Current assets dropped by 56% to HKD 1,825,205 from HKD 4,150,963 in the previous year[5] - Total equity decreased by 7% to HKD 1,364,864 from HKD 1,461,840 in 2017[5] - As of December 31, 2018, the total borrowings of the group amounted to HKD 2,716,808,000, a decrease from HKD 4,825,079,000 as of December 31, 2017[21] - The group had cash and bank deposits of HKD 995,118,000, down from HKD 3,271,772,000 in the previous year, with cash and cash equivalents at HKD 987,576,000[21] - The current ratio of the group was approximately 0.85, indicating that current liabilities exceeded current assets by about HKD 331 million as of December 31, 2018[23] - The group’s capital debt ratio was approximately 199%, calculated based on total borrowings of HKD 2,716,808,000 against total equity of HKD 1,364,864,000[21] Operational Performance - The apparent consumption of natural gas in China reached 280.3 billion cubic meters in 2018, an increase of 18.1% year-on-year, marking the largest annual growth in the history of natural gas utilization in the country[9] - The group completed gas engineering construction and installation for 149,000 households, a 33% increase year-on-year, with pipeline gas sales volume reaching 1.529 billion cubic meters, up 57% from the previous year[10] - The group achieved a pipeline gas sales revenue of HKD 2.583 billion, an increase of approximately 29% from HKD 2.005 billion in 2017[14] - The group’s gross profit for the year was HKD 612 million, with a gross profit margin of 19%, down from 21% in 2017 due to increased procurement costs during the heating season[18] Administrative and Operational Costs - Administrative expenses increased by HKD 16 million or 8% to HKD 211 million, primarily due to increased R&D expenses[19] - Employee salaries and wages for the year amounted to HKD 133 million, an increase from HKD 117 million in the previous year, with HKD 23 million allocated to R&D expenses[27] Governance and Compliance - The board of directors held six meetings during the year, with attendance rates ranging from 67% to 100% among members[33] - The board of directors consists of ten members as of December 31, 2018, down from eleven members due to the resignations of two directors[44] - The company adopted a diversity policy on August 29, 2013, aimed at maintaining a competitive advantage through board diversity[44] - The company confirmed that it has sufficient resources to continue operating for the foreseeable future, preparing financial statements on a going concern basis[54] - The company has not established a corporate governance committee, with governance functions performed by the audit committee[52] Risk Management - The board is responsible for maintaining and reviewing the effectiveness of the risk management and internal control systems[55] - The risk management committee held one meeting, discussing the overall risk management framework and the company's major risk overview[51] - The company has implemented measures to ensure compliance with insider information handling and disclosure regulations[60] Environmental, Social, and Governance (ESG) Initiatives - The group has established an ESG working group to manage and implement sustainability-related matters, reporting directly to the board[73] - High importance ESG issues identified include clean energy usage, energy efficiency, and employee rights protection[79] - The group emphasizes the importance of safety and stability in gas supply and high-quality products and services[79] - The company aims to become a national clean energy operator, promoting the use of clean energy for industrial and urban residential users[83] - The company has established a framework for monitoring related party transactions, ensuring strict control over annual transaction limits[56] Community Engagement and Employee Development - The company participated in community activities, spending RMB 1,800 on visiting and providing care to elderly homes, enhancing community relations[110] - The group emphasizes employee development and training, providing tailored courses to enhance skills and maintain employee rights[91] - The group conducted a skills competition involving 33 subsidiaries, with 69 candidates participating, significantly improving frontline employee skills[96] Related Party Transactions - The company recorded a total related party transaction amount of RMB 192,441,000 for gas supply during the year ended December 31, 2018[184] - The actual transaction amount for gas engineering construction and installation services provided to Tai Da was RMB 17,243,000 for the year ended December 31, 2018[187] - The maximum limit for gas supply framework agreement transactions was set at RMB 777,987,000 for the year ended December 31, 2018[182] Shareholder Information - The company proposed a final dividend of HKD 0.045 per share for the year ended December 31, 2018, down from HKD 0.055 per share for the previous year[142] - As of December 31, 2018, the company had issued 1,174,348,950 ordinary shares with a par value of HKD 0.10 each[148] - The major shareholder, Tai Da, holds approximately 706,818,659 shares, representing 60.19% of the issued ordinary shares[177]