Company Overview [Company Business Structure](index=5&type=section&id=Company%20Business%20Structure) The Group's business is segmented into Mainland China, Hong Kong, Macau, and other regions, encompassing infrastructure investment, construction, and asset operation, with specialized services like curtain wall systems provided by a listed subsidiary - The Group's business layout is clear, with core markets in Mainland China, Hong Kong, and Macau, covering the entire chain of construction, infrastructure investment, and operation, and expanding into specialized areas (e.g., curtain wall systems) [9](index=9&type=chunk) [Board of Directors and Committees](index=6&type=section&id=Board%20of%20Directors%20and%20Committees) The Board of Directors, led by Chairman Mr. Yan Jianguo, includes executive, non-executive, and independent non-executive directors, supported by four specialized committees to ensure governance independence - The Board has established four committees: Audit, Remuneration, Nomination, and Sustainable Development, chaired by Mr. Li Shing Che, Mr. Li Minqiao, and Mr. Zhou Hancheng respectively, reflecting a clear division of responsibilities and a focus on sustainable governance [14](index=14&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) China State Construction International Holdings Limited (03311.HK) is a Cayman Islands-registered company listed on the Hong Kong Stock Exchange, with its head office in Hong Kong and audited by Ernst & Young - Key company information includes stock code **03311**, listed on the Hong Kong Stock Exchange, with disclosure of critical financial dates such as interim and annual results announcement and dividend payment schedules [19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Highlights](index=9&type=section&id=Financial%20Highlights) The Group achieved significant growth in 2021, with turnover up 23.8% to HKD 77.31 billion and profit attributable to shareholders up 13.1% to HKD 6.80 billion, supported by strong uncompleted contract value Five-Year Financial Summary (As of December 31) | Indicator | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Turnover (HKD thousands)** | 50,152,524 | 55,626,304 | 61,669,678 | 62,458,009 | 77,309,614 | | **Profit Attributable to Shareholders (HKD thousands)** | 5,490,091 | 4,500,148 | 5,413,208 | 6,015,368 | 6,800,879 | | **Earnings Per Share (HK cents)** | 118.85 | 89.13 | 107.21 | 119.14 | 134.94 | | **Dividend Per Share (HK cents)** | 35.00 | 27.00 | 32.00 | 36.00 | 40.50 | | **Net Assets Per Share (HKD)** | 7.62 | 8.53 | 10.08 | 11.54 | 13.14 | | **Uncompleted Contract Value (HKD billions)** | 188.01 | 236.56 | 227.07 | 252.37 | 281.36 | [Annual Milestones](index=10&type=section&id=Annual%20Milestones) 2021 was a productive year for the Group, marked by major project completions, significant contract wins in Hong Kong and Macau, successful financing activities in Mainland China, and numerous awards for innovation, sustainability, and governance - January-February: Completed and handed over the Central Government-aided North Lantau Hospital Hong Kong Infection Control Centre, and secured the highest-value wholly-owned Macau engineering project in the company's history [28](index=28&type=chunk) - May-June: Multiple subsidiaries successfully registered in Qianhai, Shenzhen, expanding Greater Bay Area business; awarded five accolades by Institutional Investor, including 'Most Honored Company' and 'Best ESG Company' [30](index=30&type=chunk)[34](index=34&type=chunk) - August-September: S&P upgraded the Group's rating outlook to 'Stable'; successfully issued the first engineering receivables ABS; China State Construction Hong Kong awarded the 'Hong Kong Star Brand Enterprise Award' [39](index=39&type=chunk)[42](index=42&type=chunk) - November-December: Hong Kong Organic Resources Recovery Centre Phase 2 project committed to construction phase carbon neutrality; the Group became the first TCFD supporter in China's construction industry; awarded the NCE Tunnelling Awards and '2021 Touching Hong Kong Organization' honor [47](index=47&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Operations and Financial Review [Chairman's Report](index=22&type=section&id=Chairman%27s%20Report) Chairman Mr. Yan Jianguo's report highlights the Group's robust growth in 2021, driven by strong new contract growth across Mainland China, Hong Kong, Macau, and the curtain wall market, while outlining strategies in sustainability, risk, finance, human resources, and technology 2021 Key Performance Indicators | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | **Revenue** | HKD 77.31 billion | - | | **Operating Profit** | HKD 11.24 billion | - | | **Profit Attributable to Shareholders** | HKD 6.80 billion | +13.1% | | **Basic Earnings Per Share** | 134.94 HK cents | - | | **Full-Year Dividend** | 40.5 HK cents | +12.5% | - In 2021, the Group undertook **167 new projects**, with attributable contract value reaching **HKD 140.05 billion**, laying a solid foundation for future revenue growth [55](index=55&type=chunk) 2021 New Contract Value by Market | Market | New Contract Value (HKD) | YoY Growth | | :--- | :--- | :--- | | **Mainland China** | HKD 81.15 billion | +23.7% | | **Hong Kong** | HKD 36.05 billion | +33.0% | | **Macau** | HKD 14.64 billion | +10.2% | | **China State Construction International Holdings** | HKD 8.21 billion | +60.4% | - Looking ahead, the Group will steadfastly implement its 'Technology+' strategy, adhere to a differentiated competitive approach, and seize development opportunities in Hong Kong's Northern Metropolis, major livelihood projects in Macau, and the deep integration of the Greater Bay Area [69](index=69&type=chunk)[70](index=70&type=chunk) [Business Review](index=24&type=section&id=Chairman%27s%20Report-Business%20Review) [Sustainable Development Management](index=25&type=section&id=Chairman%27s%20Report-Sustainable%20Development%20Management) [Risk Management](index=26&type=section&id=Chairman%27s%20Report-Risk%20Management) [Financial Management](index=26&type=section&id=Chairman%27s%20Report-Financial%20Management) [Human Resources](index=26&type=section&id=Chairman%27s%20Report-Human%20Resources) [Technological Innovation](index=26&type=section&id=Chairman%27s%20Report-Technological%20Innovation) [Business Outlook](index=28&type=section&id=Chairman%27s%20Report-Business%20Outlook) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) Management's analysis highlights a 23.8% turnover increase to HKD 77.31 billion, driven by strong orders, with notable growth in Macau, while financial optimization and business transformation significantly improved operating cash flow, resulting in a 69.4% net gearing ratio 2021 Overall Performance | Indicator | Amount | YoY Growth | | :--- | :--- | :--- | | **Turnover** | HKD 77.31 billion | +23.8% | | **Basic Earnings Per Share** | 134.94 HK cents | +13.3% | | **Total Annual Dividend** | 40.5 HK cents | +12.5% | 2021 Segment Performance | Market Segment | Turnover (HKD billions) | YoY Growth | Segment Results (HKD billions) | YoY Growth | | :--- | :--- | :--- | :--- | :--- | | **Hong Kong** | 23.844 | +6.4% | 0.850 | -14.2% | | **Macau** | 8.405 | +86.6% | 0.832 | +63.3% | | **Mainland China** | 40.529 | +25.3% | 8.784 | +35.1% | - Cash recovery from Mainland China construction-related investment projects intensified, with **HKD 25.508 billion** in repurchase payments received during the year, a **38.8% year-on-year increase** [76](index=76&type=chunk) - Operating cash flow significantly improved, with net cash used in operating activities decreasing substantially from **HKD 4.532 billion** in the prior year to **HKD 0.551 billion** during the year [88](index=88&type=chunk) Financial Position as of End 2021 | Indicator | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Shareholders' Equity** | HKD 66.216 billion | HKD 58.280 billion | | **Bank Balances and Cash** | HKD 24.407 billion | HKD 22.455 billion | | **Total Borrowings** | HKD 70.335 billion | HKD 54.375 billion | | **Net Gearing Ratio** | 69.4% | 54.8% | | **Unutilized Bank Facilities** | HKD 82.107 billion | - | [Overall Performance](index=31&type=section&id=MD%26A-Overall%20Performance) [Segment Performance](index=32&type=section&id=MD%26A-Segment%20Performance) [Corporate Finance](index=33&type=section&id=MD%26A-Corporate%20Finance) [Financial Risk Management Policies](index=35&type=section&id=MD%26A-Financial%20Risk%20Management%20Policies) [Business Review](index=36&type=section&id=Business%20Review) As of end-2021, the Group's business expanded with 376 projects under construction, total attributable contract value of HKD 476.66 billion, and uncompleted contract value of HKD 281.36 billion, driven by 167 new projects, primarily in Mainland China 2021 New Projects Awarded Overview | Item | Quantity | Attributable Contract Value | | :--- | :--- | :--- | | **New Projects Awarded** | 167 projects | HKD 140.05 billion | Projects Under Construction as of End 2021 | Market Distribution | Number of Projects | Attributable Contract Value (HKD millions) | Uncompleted Contract Value (HKD millions) | | :--- | :--- | :--- | :--- | | **Mainland China** | 196 | 294,224 | 185,449 | | **Hong Kong** | 154 | 110,981 | 60,728 | | **Macau** | 26 | 52,741 | 24,334 | | **China State Construction International Holdings Group** | — | 18,716 | 10,849 | | **Total** | **376** | **476,662** | **281,360** | - New contracts by market distribution show Mainland China accounting for **57.9%**, Hong Kong **25.7%**, and Macau **10.5%**, indicating Mainland China remains the primary growth engine while Hong Kong and Macau markets remain stable [96](index=96&type=chunk) [Major Completed Projects](index=38&type=section&id=Business%20Review-Major%20Completed%20Projects) [New Projects Awarded](index=39&type=section&id=Business%20Review-New%20Projects%20Awarded) [Projects Under Construction](index=41&type=section&id=Business%20Review-Projects%20Under%20Construction) Corporate Governance and Social Responsibility [Major Honors and Awards](index=50&type=section&id=Major%20Honors%20and%20Awards) In 2021, the Group received numerous awards across comprehensive strength, corporate governance, brand building, public welfare, and safety and environmental protection, reflecting high industry and social recognition - Corporate Governance and Brand Awards: Ranked **first** as 'Most Honored Company' and 'Best ESG Company' in the Industrials Small & Mid-Cap category by Institutional Investor, and included in the FTSE4Good Index Series for **five consecutive years** [130](index=130&type=chunk) - Public Welfare Awards: Received the **9th Hong Kong Outstanding Volunteer Award – Corporate Award**, demonstrating the company's outstanding contributions to corporate social responsibility [131](index=131&type=chunk) - Engineering and Technology Awards: The Guizhou Zhengxi Expressway Extra-Long Tunnel Group Project received the **2021 NCE Tunnelling Awards**, showcasing the Group's technical prowess in complex engineering fields [133](index=133&type=chunk) - Safety and Environmental Awards: Awarded the 'Low-Carbon Care Environmental, Social and Governance (ESG) Label' for **6 consecutive years**, and achieved the highest rating (LEVEL 4) for **4 consecutive years**, demonstrating the company's long-term commitment and practice in sustainable development [134](index=134&type=chunk) [Corporate Citizenship](index=52&type=section&id=Corporate%20Citizenship) Adhering to its mission, the Group actively fulfills corporate citizenship through employee development programs, ISO14001 environmental management, low-carbon construction, extensive social welfare activities, and effective investor relations, earning multiple awards - Employee Development: Launched the 'Double Hundred' Youth Development Program, committing to provide at least **100 graduate employment positions** and **100 internship opportunities** annually, and dispatching Hong Kong employees to participate in Greater Bay Area construction [138](index=138&type=chunk)[141](index=141&type=chunk) - Environmental Protection: Promoted low-carbon construction technologies such as Modular Integrated Construction (MiC) and Design for Manufacture and Assembly (DfMA), and piloted construction phase carbon neutrality with the Organic Resources Recovery Centre Phase 2 project [147](index=147&type=chunk) - Social Welfare: In 2021, volunteer participation exceeded **2,800 person-times**, with over **11,000 service hours**, and the flagship 'Thousands of Homes Renovation' project completed over **480 households** during the year [150](index=150&type=chunk)[152](index=152&type=chunk) - Investor Relations: Met with over **200 investors** during the year, with a significant increase in Stock Connect shareholding, and received multiple awards including 'Most Honored Company' from Institutional Investor and 'Best IR Hong Kong Stock Company' from New Fortune [163](index=163&type=chunk)[164](index=164&type=chunk) [Employee Development and Personal Growth](index=54&type=section&id=Corporate%20Citizenship-Employee%20Development%20and%20Personal%20Growth) [Environmental Policy](index=55&type=section&id=Corporate%20Citizenship-Environmental%20Policy) [Social Welfare](index=58&type=section&id=Corporate%20Citizenship-Social%20Welfare) [Investor Relations](index=61&type=section&id=Corporate%20Citizenship-Investor%20Relations) [Board of Directors and Executive Structure](index=64&type=section&id=Board%20of%20Directors%20and%20Executive%20Structure) This section details the backgrounds and qualifications of the company's Board of Directors and senior management, comprising experienced professionals across various fields, providing strong support for the Group's strategic execution and daily operations - Chairman and Non-Executive Director Mr. Yan Jianguo possesses approximately **32 years** of experience in investment management for construction and real estate enterprises, also serving as Chairman of China Overseas Land & Investment (0688.HK) [171](index=171&type=chunk) - Executive Director and CEO Mr. Zhang Haipeng joined China State Construction Group in 2000, bringing over **22 years** of experience in construction project management [173](index=173&type=chunk) - The independent non-executive director team comprises Mr. Li Minqiao, Dr. Leung Hoi Ming, Mr. Li Shing Che, and Ms. Wong Wai Ching, all senior professionals in their respective fields, providing independent judgment and professional advice to the Board [174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Corporate Governance Report](index=72&type=section&id=Corporate%20Governance%20Report) This report outlines the company's 2021 compliance with the Hong Kong Stock Exchange's Corporate Governance Code, detailing the Board's composition, committee operations, risk management, internal controls, and shareholder communication to ensure high governance standards - The company complied with **all code provisions** of the Corporate Governance Code during the reporting period [188](index=188&type=chunk) - The Board of Directors comprises **nine directors**, including **four independent non-executive directors**, meeting listing rule requirements, with the roles of Chairman and CEO held by different individuals to ensure checks and balances [189](index=189&type=chunk)[197](index=197&type=chunk) - The Board is responsible for the Group's risk management and internal control systems, having conducted an annual review and confirmed their effectiveness and adequacy [212](index=212&type=chunk) - The company adopted a shareholder communication policy, engaging with shareholders through various channels such as general meetings, annual reports, announcements, and the company website, safeguarding shareholder rights [218](index=218&type=chunk) [Directors' Report](index=83&type=section&id=Directors%27%20Report) The Directors' Report reviews the Group's 2021 business, financial performance, and governance, recommending a final dividend of 20.5 HK cents per share, disclosing key risks and management measures, and covering statutory information like share repurchases and major shareholder holdings - The Board recommended a final dividend of **20.5 HK cents per share**, bringing the total annual dividend, including interim dividend, to **40.5 HK cents** [222](index=222&type=chunk) - During the year, the company repurchased a total of **11,540,000 ordinary shares** on the Stock Exchange for a total consideration of approximately **HKD 54.72 million**, all of which have been cancelled [234](index=234&type=chunk) - The Group issued **USD 500 million** in subordinated guaranteed perpetual capital securities and a total of **RMB 2.5 billion** in medium-term notes in Mainland China to optimize debt structure and supplement working capital [236](index=236&type=chunk)[237](index=237&type=chunk) - As of December 31, 2021, controlling shareholder China Overseas Holdings Limited (COHL) held approximately **64.81%** of the company's shares [249](index=249&type=chunk) [Connected Transactions](index=94&type=section&id=Connected%20Transactions) This section details the Group's significant and continuing connected transactions in 2021, including joint ventures, factoring arrangements, and various sub-contracting and financial service agreements with related parties, confirming compliance with listing rules - Formed a joint venture with China Overseas Land & Investment to jointly develop a Zhuhai project, with a total capital commitment of approximately **RMB 11.4 billion**, of which the company holds a **20% equity interest** [259](index=259&type=chunk) - Signed sub-contracting agreements with China State Construction Engineering Corporation, with the total contract value awarded by the Group to China State Construction Engineering Corporation in 2021 being **RMB 9.803 billion**, below the annual cap of **RMB 55 billion** [264](index=264&type=chunk) - Signed general contracting agreements with China Overseas Land & Investment Group, with the total contract value awarded in 2021 being **HKD 7.366 billion**, below the revised annual cap of **HKD 20 billion** [280](index=280&type=chunk) - Entered into financial services agreements with China State Construction Finance, with the maximum daily deposit balance placed with China State Construction Finance in 2021 being **RMB 0.806 billion**, not exceeding the annual cap of **RMB 1.2 billion** [275](index=275&type=chunk) Financial Statements and Notes [Independent Auditor's Report](index=107&type=section&id=Independent%20Auditor%27s%20Report) Auditor Ernst & Young issued an unmodified opinion on the Group's 2021 consolidated financial statements, highlighting key audit matters such as revenue recognition, impairment assessment of receivables and contract assets, and impairment assessment of concession rights - Auditor Ernst & Young issued an **unmodified audit opinion** [287](index=287&type=chunk) - Key audit matters include: - **Revenue recognition for construction contracts**: Involves significant judgments and estimates regarding total project revenue and costs - **Impairment assessment of trade and other receivables and contract assets**: These assets constitute approximately **51%** of total assets, and their recoverability assessment involves significant judgment - **Impairment assessment of concession rights**: The assessment of recoverable amounts involves significant assumptions regarding future traffic volumes, toll levels, and discount rates [289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Consolidated Statement of Profit or Loss](index=113&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2021, the Group's turnover increased by 23.8% to HKD 77.31 billion, gross profit grew by 29.1% to HKD 11.98 billion, and profit attributable to shareholders rose 13.1% to HKD 6.80 billion Consolidated Statement of Profit or Loss Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Turnover** | 77,309,614 | 62,458,009 | | **Gross Profit** | 11,982,743 | 9,284,159 | | **Profit Before Tax** | 9,385,178 | 8,244,476 | | **Profit for the Year** | 7,435,884 | 6,484,174 | | **Profit Attributable to Owners of the Company** | 6,800,879 | 6,015,368 | | **Basic Earnings Per Share (HK cents)** | 134.94 | 119.14 | [Consolidated Statement of Comprehensive Income](index=114&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) In 2021, the Group recorded a profit for the year of HKD 7.44 billion, with other comprehensive income of HKD 2.44 billion primarily from exchange differences, resulting in a total comprehensive income of HKD 9.96 billion Consolidated Statement of Comprehensive Income Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Profit for the Year** | 7,435,884 | 6,484,174 | | **Other Comprehensive Income (net of tax)** | 2,527,356 | 2,636,741 | | *Of which: Exchange differences arising from translation* | *2,436,320* | *2,605,314* | | **Total Comprehensive Income for the Year** | 9,963,240 | 9,120,915 | | **Total Comprehensive Income Attributable to Owners of the Company** | 9,327,246 | 8,597,603 | [Consolidated Statement of Financial Position](index=115&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2021, total assets grew to HKD 219.3 billion, total liabilities were HKD 153.1 billion, and shareholders' equity reached HKD 66.2 billion, with total borrowings at HKD 70.3 billion and a net gearing ratio of 69.4% Consolidated Statement of Financial Position Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Total Assets** | 219,284,425 | 186,811,307 | | *Non-current Assets* | 105,327,522 | 98,804,266 | | *Current Assets* | 113,956,903 | 88,007,041 | | **Total Liabilities** | 153,068,154 | 128,531,760 | | *Current Liabilities* | 92,922,448 | 79,939,492 | | *Non-current Liabilities* | 60,145,706 | 48,592,268 | | **Total Equity** | 66,216,271 | 58,279,547 | | **Equity Attributable to Owners of the Company** | 56,446,165 | 49,093,774 | [Consolidated Statement of Changes in Equity](index=117&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) In 2021, equity attributable to owners of the company increased from HKD 49.09 billion to HKD 56.45 billion, driven by profit and exchange reserve increases, alongside perpetual capital securities issuance, dividend payments, and share repurchases Changes in Equity Attributable to Owners of the Company (HKD thousands) | Item | Amount | | :--- | :--- | | **As at January 1, 2021** | 49,093,774 | | Total Comprehensive Income for the Year | 9,327,246 | | Equity-settled share-based payment | 44,540 | | Dividends paid | (1,964,670) | | Repurchase and cancellation of shares | (54,725) | | **As at December 31, 2021** | 56,446,165 | [Consolidated Statement of Cash Flows](index=119&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2021, net cash outflow from operating activities significantly narrowed to HKD 0.55 billion, net cash outflow from investing activities was HKD 4.94 billion, and net cash inflow from financing activities was HKD 6.96 billion, increasing year-end cash to HKD 24.34 billion Consolidated Statement of Cash Flows Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash used in operating activities** | (551,492) | (4,531,608) | | **Net cash (used in)/from investing activities** | (4,937,629) | 324,540 | | **Net cash from financing activities** | 6,963,633 | 2,881,279 | | **Increase/(decrease) in cash and cash equivalents** | 1,474,512 | (1,325,789) | | **Cash and cash equivalents at beginning of year** | 22,411,689 | 22,600,362 | | **Effect of foreign exchange rate changes** | 453,670 | 1,137,116 | | **Cash and cash equivalents at end of year** | 24,339,871 | 22,411,689 | [Notes to the Consolidated Financial Statements](index=122&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations of accounting policies, estimates, and financial items, highlighting Mainland China as the largest revenue source, significant trade and other receivables, increased borrowings for expansion, and detailed related party transactions - Segment information indicates that Mainland China, Hong Kong, and Macau are the primary markets, contributing **52.4%**, **30.8%**, and **10.9%** respectively to the Group's turnover [73](index=73&type=chunk) - Total trade and other receivables amounted to **HKD 113.67 billion**, with the non-current portion being **HKD 54.43 billion**, primarily originating from Mainland China construction-related investment projects, expected to be gradually recovered from **2023 to 2031** [469](index=469&type=chunk)[470](index=470&type=chunk) - Total borrowings (including bank borrowings, guaranteed notes, and corporate bonds) amounted to **HKD 70.34 billion**, with RMB borrowings accounting for **81%** to hedge exchange rate risks of Mainland China operations [86](index=86&type=chunk)[495](index=495&type=chunk) [Five-Year Financial Summary](index=208&type=section&id=Five-Year%20Financial%20Summary) The five-year financial summary demonstrates the Group's continuous growth from 2017 to 2021, with turnover increasing from HKD 50.15 billion to HKD 77.31 billion, profit attributable to shareholders from HKD 5.49 billion to HKD 6.80 billion, and net assets from HKD 38.46 billion to HKD 66.22 billion Five-Year Financial Summary (2017-2021) | Indicator (HKD thousands) | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Turnover** | 50,152,524 | 55,626,304 | 61,669,678 | 62,458,009 | 77,309,614 | | **Profit Attributable to Owners of the Company** | 5,490,091 | 4,500,148 | 5,413,208 | 6,015,368 | 6,800,879 | | **Total Assets** | 118,518,273 | 136,122,091 | 161,423,903 | 186,811,307 | 219,284,425 | | **Net Assets** | 38,462,911 | 43,078,250 | 50,907,565 | 58,279,547 | 66,216,271 | [Information on Major Investment Properties](index=210&type=section&id=Information%20on%20Major%20Investment%20Properties) This section lists the Group's major commercial investment properties in Macau, Mainland China (Zhuhai, Zhenjiang), and Hong Kong, all 100% owned, providing stable rental income - The Group's major investment properties are all for commercial use, located in prime areas of Hong Kong, Macau, and Mainland China, contributing rental income to the Group [547](index=547&type=chunk)

Financial Performance - The group's unaudited revenue for the three months ended March 31, 2022, was approximately HKD 17,325,929,000, compared to HKD 13,959,135,000 for the same period in 2021, representing a year-on-year increase of about 24.4%[4] - The unaudited operating profit for the same period was approximately HKD 2,904,704,000, up from HKD 2,406,654,000 in 2021, indicating a growth of around 20.7%[4] - The group reported a significant increase in both revenue and operating profit, reflecting strong operational performance in the first quarter of 2022[4][5] Contracts and Projects - The total new contracts signed by the group for the three months ended March 31, 2022, amounted to approximately HKD 45.01 billion[5] - As of March 31, 2022, the group's uncompleted contract amount was approximately HKD 285.68 billion[5] - Major new contracts included the Tseung Kwan O Chinese Medicine Hospital project with a contract value of approximately HKD 8.11 billion[6] - The group also secured a contract for the relocation housing project in Chuzhou, Anhui, valued at approximately HKD 1.51 billion[6] - The contract for the design and construction of the People's Hospital in Foshan, Guangdong, was approximately HKD 1.96 billion[6] Financial Data Disclaimer - The financial data provided is unaudited and should be considered for reference only, as it may differ from the audited financial statements[7] - The company emphasizes the importance of consulting professional advisors for any investment decisions based on this data[8]

[Company Business Structure](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E6%A5%AD%E5%8B%99%E6%9E%B6%E6%A7%8B) This chapter outlines China State Construction International Holdings Limited's business structure, noting that some operations are conducted through its listed subsidiary, China State Construction Engineering (Hong Kong) Limited (stock code: 00830) - The Group operates part of its business through its listed subsidiary, China State Construction Engineering (Hong Kong) Limited (stock code: **00830**)[4](index=4&type=chunk) [Board of Directors and Committees](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E5%B1%80%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This chapter lists the composition of the company's Board of Directors, including the Chairman, Non-executive Directors, Executive Directors, and Independent Non-executive Directors, detailing their roles in audit, remuneration, nomination, and sustainability committees - Board members include Chairman Yan Jianguo, CEO Zhang Haipeng, other Executive Directors, Non-executive Directors, and Independent Non-executive Directors[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - The company has established an Audit Committee, Remuneration Committee, Nomination Committee, and Sustainability Committee, with clearly defined chairpersons and members for each[6](index=6&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [Company Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This chapter provides key corporate information including the company's basic registration details, contact information, principal share registrars, auditor, legal counsel, principal bankers, listing information, and financial calendar - The company is registered in the Cayman Islands, with its head office and principal place of business located on Hennessy Road, Wan Chai, Hong Kong[10](index=10&type=chunk)[11](index=11&type=chunk) - The principal share registrar is in the Cayman Islands, with the Hong Kong branch being Tricor Standard Limited[10](index=10&type=chunk) - The auditor is Ernst & Young, and the legal counsel is Mayer Brown[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's shares are listed on The Stock Exchange of Hong Kong Limited, with stock code **03311**[14](index=14&type=chunk) - The financial calendar indicates the interim results announcement date as **August 17, 2021**, and the interim dividend payment date as **October 5, 2021**[15](index=15&type=chunk) [Chairman's Statement](index=6&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Statement comprehensively reviews the global and Chinese economic environment in the first half of 2021, detailing the Group's progress in business transformation, market performance, financial position, corporate governance, risk management, human resources, technological innovation, and social responsibility, while outlining the "14th Five-Year Plan" development strategy to become a world-class investment, construction, and operation service provider [Business Review](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group achieved significant growth in new contract value, revenue, operating profit, and profit attributable to shareholders in H1 2021, driven by business transformation, technology investment, and market opportunities, with strong performance in mainland China, Hong Kong and Macau, and the curtain wall market Key Financial Indicators for H1 2021 | Indicator | Amount (Hong Kong Dollars) | Year-on-Year Growth | | :--- | :--- | :--- | | New Contract Value | **70.53 billion** | **40.4%** | | Unaudited Revenue | **36.37 billion** | **29.9%** | | Operating Profit | **5.53 billion** | **15.2%** | | Profit Attributable to Shareholders | **3.50 billion** | **20.8%** | | Basic Earnings Per Share | **0.69** | - | | Net Asset Value Per Share | **12.99** | - | - The Board of Directors announced an interim dividend of **HKD 20 cents per share** for 2021, with a payout ratio of approximately **28.8%**[17](index=17&type=chunk) [Mainland China Market](index=7&type=section&id=%E4%B8%AD%E5%9C%8B%E5%85%A7%E5%9C%B0%E5%B8%82%E5%A0%B4) Benefiting from infrastructure investment recovery and stable monetary and fiscal policies, the Group consolidated its investment business transformation, vigorously expanded specialized general contracting businesses like prefabricated construction in the Greater Bay Area, leading to a **68.7% year-on-year increase** in new contract value in H1 - New contract value in mainland China reached **HKD 36.20 billion** in H1, a **68.7% year-on-year increase**[18](index=18&type=chunk) - The Group continued to consolidate the transformation and upgrading of its investment business, maintaining efforts to expand infrastructure investment projects with faster turnover and higher dynamic returns[18](index=18&type=chunk) - Vigorously developed specialized general contracting businesses such as prefabricated construction in the Greater Bay Area[18](index=18&type=chunk) [Hong Kong and Macau Market](index=7&type=section&id=%E6%B8%AF%E6%BE%B3%E5%B8%82%E5%A0%B4) With increased infrastructure investment from the HKSAR Government, the Group leveraged its expertise to secure large-scale projects, resulting in a **27.9% growth** in new contract value in Hong Kong, while Macau's economy rebounded, achieving **HKD 12.60 billion** in new contract value and maintaining its market leadership - New contract value in the Hong Kong market increased by **27.9%** year-on-year to **HKD 17.18 billion**[19](index=19&type=chunk) - New contract value in the Macau market reached **HKD 12.60 billion**, maintaining its market leadership position[19](index=19&type=chunk) - Hong Kong's capital works expenditure is projected to exceed **HKD 100 billion annually** in the coming years, with the total value of construction works increasing to approximately **HKD 300 billion annually**[19](index=19&type=chunk) [Curtain Wall Market](index=8&type=section&id=%E5%B9%95%E7%89%86%E5%B8%82%E5%A0%B4) China State Construction Engineering (Hong Kong) Limited, a subsidiary of the Group, followed the strategic guidance of "contracting overseas, consolidating Hong Kong and Macau, and accelerating expansion in mainland China," maintaining its leading position in the high-end curtain wall market with rich project experience and brand advantages, achieving a **76.6% year-on-year increase** in new contract value in H1 - New contract value in the curtain wall market surged by **76.6%** year-on-year to **HKD 4.55 billion** in H1[20](index=20&type=chunk) - The strategic guidance is "contracting overseas, consolidating Hong Kong and Macau, and accelerating expansion in mainland China"[20](index=20&type=chunk) [Corporate Governance](index=8&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Group is committed to strengthening Board functions, refining internal controls, and enhancing corporate competitiveness and risk management capabilities, having elevated the Sustainability Committee to Board level, intensified directors' ESG training, and actively responded to national carbon peak and carbon neutrality goals - Strengthened Board functions and refined internal controls to enhance corporate competitiveness and risk management capabilities[21](index=21&type=chunk) - In 2020, the Sustainability Committee was elevated to Board level, and all directors participated in Environmental, Social, and Governance (ESG) training during H1[21](index=21&type=chunk) - Actively responded to national carbon peak and carbon neutrality goals, promoting the quality improvement of the Group's carbon reduction efforts[21](index=21&type=chunk) [Risk Management](index=8&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E6%8E%A7) The Group has established a comprehensive risk management framework and internal control system, with a risk management team to identify, assess, and monitor strategic, financial, market, and operational risks, while the Sustainability Committee regularly reviews ESG reports to identify sustainability risks and propose control strategies - A risk management framework has been established, clearly allocating roles and responsibilities, and a risk control team identifies major risks across various operating segments[22](index=22&type=chunk) - The Sustainability Committee regularly reviews ESG reports, identifies sustainability risks and control strategies, and provides recommendations to the Board on risk appetite[23](index=23&type=chunk) [Financial Management](index=9&type=section&id=%E8%B2%A1%E5%8B%99%E7%AE%A1%E7%90%86) The Group maintains a robust financial structure, reducing interest-bearing debt costs through strategic refinancing and effectively hedging exchange rate risks by matching financing and business currencies; as of June 30, 2021, the Group held **HKD 20.32 billion** in cash, with a net gearing ratio controlled at **54.9%**, and unused bank credit facilities significantly increased to **HKD 82.77 billion** - The cost of interest-bearing debt on hand further decreased, effectively achieving natural hedging of exchange rate risks by matching financing currencies with business currencies[24](index=24&type=chunk) - As of June 30, 2021, cash on hand was **HKD 20.32 billion**, accounting for **10.3%** of total assets[24](index=24&type=chunk) - The net gearing ratio was controlled at **54.9%**[24](index=24&type=chunk) - Unused bank credit facilities amounted to **HKD 82.77 billion**, a **46.4% increase** compared to the same period last year[24](index=24&type=chunk) [Human Resources](index=9&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) The Group prioritizes talent attraction and development, adhering to the philosophy of "gathering strivers, motivating achievers," continuously improving human resource management policies, providing competitive compensation, benefits, and health protection, and actively responding to the COVID-19 pandemic to safeguard employee well-being - Adhering to the talent philosophy of "gathering strivers, motivating achievers," continuously improving human resource management policies and systems[25](index=25&type=chunk) - Provided competitive compensation and employee benefits, regularly reviewed the compensation system, implemented performance incentives, and established a talent pipeline[25](index=25&type=chunk) - Offered health benefits to employees, including life, accident, and medical insurance, and subsidized physical examinations[26](index=26&type=chunk) - Cautiously responded to the COVID-19 pandemic, implemented workplace epidemic prevention measures, and actively provided assistance to employees requiring mandatory quarantine[26](index=26&type=chunk) [Technological Innovation](index=10&type=section&id=%E7%A7%91%E6%8A%80%E5%89%B5%E6%96%B0) The Group increased investment in R&D and achievement commercialization, refined internal policies, and led trends in areas like Modular Integrated Construction (MiC); in H1 2021, it was granted **40 national patents** (including **3 invention patents**) and **7 software copyrights**, receiving industry recognition and multiple awards for safety, environmental protection, and technological application on various construction sites - Further improved internal policies and systems for technology R&D, achievement commercialization, and intellectual property protection, increasing investment and incentives for technological development[27](index=27&type=chunk) - Since the beginning of 2021, the Group has been granted **40 national patents** (including **3 invention patents**) and **7 software copyrights**[27](index=27&type=chunk) - Its performance in safety, environmental protection, and technological application on multiple construction sites has been highly recognized by the industry and owners, winning numerous awards, including the Construction Industry Council BIM Award[27](index=27&type=chunk) [Social Responsibility](index=11&type=section&id=%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB) The Group actively promotes green building methods, applying new technologies like MiC, DfMA, and BIM, and explores carbon neutrality during construction and carbon asset development for operational projects; its comprehensive sustainability performance has received international recognition, including its fifth consecutive inclusion in the FTSE4Good Index and awards from CDP and Institutional Investor - Actively promoted the application of new technologies such as Modular Integrated Construction (MiC), Design for Manufacture and Assembly (DfMA), and Building Information Modeling (BIM) to transform construction methods towards intensive, efficient, and energy-saving approaches[28](index=28&type=chunk) - Explored the possibilities of carbon neutrality during the construction phase and carbon asset development for operational projects[28](index=28&type=chunk) - Included in the FTSE4Good Index for the **fifth consecutive year**, received the CDP "Excellent Performance Award for Driving Zero Deforestation Transition Action" for the **first time**, and was ranked **first in ESG for Industrial Small & Mid-Cap** by Institutional Investor for the **first time**[28](index=28&type=chunk) [Business Outlook](index=12&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) Looking ahead to the "14th Five-Year Plan" period, the Group will uphold customer-centricity, quality assurance, and value creation as its operating philosophy, aiming to become a world-class investment, construction, and operation service provider by enhancing its technological, investment, construction, and operational capabilities to deliver high-quality, high-value-added products and services, leveraging its cross-regional layout advantages - During the "14th Five-Year Plan" period, the Group will adhere to the operating philosophy of customer-centricity, quality assurance, and value creation[29](index=29&type=chunk) - Provide high-quality, high-value-added products and services by enhancing technological, investment, construction, and operational capabilities[29](index=29&type=chunk) - The goal is to become a "world-class investment, construction, and operation service provider"[29](index=29&type=chunk) [Acknowledgements](index=12&type=section&id=%E8%87%B4%E8%AC%9D) Chairman Yan Jianguo, on behalf of the Board of Directors, extends sincere gratitude to fellow Board members, shareholders, all sectors of society, and all employees - Chairman Yan Jianguo expressed gratitude to all parties on behalf of the Board of Directors[30](index=30&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) Management Discussion and Analysis details the Group's overall financial performance for H1 2021, including revenue, profit, EPS, and dividends, with a performance analysis by geographical and business segments, also reviewing the Group's financial position, cash flow, and financial risk management strategies, emphasizing a robust financial structure and risk control [Overall Performance](index=13&type=section&id=%E6%95%B4%E9%AB%94%E8%A1%A8%E7%8F%BE) In H1 2021, the Group achieved double-digit growth in profit attributable to company shareholders, turnover, and basic earnings per share, announced an interim dividend, and saw steady growth in equity attributable to shareholders Overall Financial Performance for H1 2021 | Indicator | H1 2021 (Hong Kong Dollars) | H1 2020 (Hong Kong Dollars) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Company Shareholders | **3.50 billion** | **2.898 billion** | **20.8%** | | Turnover | **36.371 billion** | **28.002 billion** | **29.9%** | | Basic Earnings Per Share | **69.42 cents** | **57.39 cents** | **21.0%** | - The Board of Directors announced an interim dividend of **HKD 20 cents per share**, with a payout ratio of approximately **28.8%**[31](index=31&type=chunk) - As of June 30, 2021, equity attributable to company shareholders reached **HKD 52.105 billion**, an increase of **6.1%** compared to December 31, 2020[31](index=31&type=chunk) [Segment Results](index=13&type=section&id=%E5%88%86%E9%83%A8%E6%A5%AD%E7%B8%BE) The Group's segment results varied, with strong growth in Macau and mainland China businesses, stable revenue in Hong Kong but a decline in segment performance due to early project stages, and steady increases in revenue and performance for China State Construction Engineering (Hong Kong) Limited [Construction and Related Businesses — Hong Kong and Macau](index=13&type=section&id=%E5%BB%BA%E7%AF%89%E5%8F%8A%E7%9B%B8%E9%97%9C%E6%A5%AD%E5%8B%99%20%E2%80%94%20%E9%A6%99%E6%B8%AF%E5%8F%8A%E6%BE%B3%E9%96%80) Hong Kong's turnover grew steadily by **1.7%**, but segment performance fell by **37.0%** due to multiple large projects being in preliminary stages, while Macau's business benefited from the launch of major hospital and gaming projects, with turnover and segment performance increasing significantly by **50.3%** and **83.1%**, respectively Hong Kong and Macau Segment Performance | Region | Turnover (Hong Kong Dollars) | Year-on-Year Growth (%) | Segment Performance (Hong Kong Dollars) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | **10.468 billion** | **1.7%** | **0.440 billion** | **-37.0%** | | Macau | **2.925 billion** | **50.3%** | **0.477 billion** | **83.1%** | - Hong Kong segment performance declined primarily because several large-scale projects were still in their preliminary stages, not yet accumulating profit[32](index=32&type=chunk) - Macau segment performance was driven by the commencement of large hospital and licensed gaming projects[32](index=32&type=chunk) [Infrastructure Investment Projects and Construction Related Businesses — Mainland China](index=14&type=section&id=%E5%9F%BA%E5%BB%BA%E6%8A%95%E8%B3%87%E9%A0%85%E7%9B%AE%E5%92%8C%E5%BB%BA%E7%AF%89%E7%9B%B8%E9%97%9C%E6%A5%AD%E5%8B%99%20%E2%80%94%20%E4%B8%AD%E5%9C%8B%E5%85%A7%E5%9C%B0) Mainland China's business benefited from infrastructure investment recovery and successful business transformation, achieving a record-high turnover of **HKD 20.803 billion**, a **48.3% year-on-year increase**, with segment performance also showing a significant **19.0% growth** Mainland China Segment Performance | Indicator | H1 2021 (Hong Kong Dollars) | H1 2020 (Hong Kong Dollars) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Turnover | **20.803 billion** | **14.029 billion** | **48.3%** | | Segment Performance | **4.317 billion** | **3.627 billion** | **19.0%** | [Infrastructure Investment Projects](index=14&type=section&id=%E5%9F%BA%E5%BB%BA%E6%8A%95%E8%B3%87%E9%A0%85%E7%9B%AE) As a core business and major contributor in mainland China, infrastructure investment projects achieved substantial growth in both repurchase payments and turnover, with steady performance improvement, through optimized order structure and accelerated turnover speed - During the review period, the Group received **HKD 11.676 billion** in repurchase payments from infrastructure investment projects, an increase of approximately **42.2%**[34](index=34&type=chunk) Infrastructure Investment Project Performance | Indicator | H1 2021 (Hong Kong Dollars) | H1 2020 (Hong Kong Dollars) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Turnover | **20.299 billion** | **13.813 billion** | **47.0%** | | Performance | **4.113 billion** | **3.578 billion** | **14.9%** | [Operating Infrastructure Projects](index=15&type=section&id=%E9%81%8B%E7%87%9F%E5%9F%BA%E5%BB%BA%E9%A0%85%E7%9B%AE) Operating infrastructure projects, primarily toll road operations, recovered post-pandemic, achieving a significant **86.1% growth** in turnover after deducting contributions from joint ventures - Turnover from operating infrastructure projects, after deducting contributions from joint ventures, was **HKD 0.092 billion**, an **86.1% increase** from **HKD 0.049 billion** in the same period last year[35](index=35&type=chunk) [China State Construction Engineering (Hong Kong) Limited](index=15&type=section&id=%E4%B8%AD%E5%9C%8B%E5%BB%BA%E7%AF%89%E8%88%88%E6%A5%AD%E9%9B%86%E5%9C%98%E6%9C%89%E9%99%90%E5%85%AC%E5%8F%B8) China State Construction Engineering (Hong Kong) Limited focuses on building curtain wall contracting, general contracting, and project operation and management services, consolidating its leading position in the Hong Kong and Macau markets while actively expanding into mainland China, with both revenue and performance steadily increasing during the review period - Focused on developing building curtain wall contracting, general contracting, and project operation and management services[36](index=36&type=chunk) - Further consolidated its leading position in the Hong Kong and Macau markets and continued to expand its market presence in mainland China[36](index=36&type=chunk) - Both revenue and performance showed steady growth during the review period[36](index=36&type=chunk) [Investment Income, Other Income and Other Net Gains](index=15&type=section&id=%E6%8A%95%E8