Financial Performance - Revenue for the year increased by 9.68% to RMB 12,880,448,000 compared to RMB 11,743,824,000 in the previous year[8] - Net profit grew by 19.22% to RMB 1,959,235,000 from RMB 1,643,405,000 in 2019[8] - EBITDA increased by 13.19% to RMB 2,665,470,000, up from RMB 2,354,852,000[8] - The gross profit margin slightly decreased to 23.37% from 23.93% in the previous year[8] - The interest coverage ratio improved significantly to 135 from 50, reflecting better earnings relative to interest expenses[8] - The comprehensive gross profit margin was 23.37%, a slight decrease of 0.56 percentage points from 23.93% in the previous year[15] - The net profit for the year was approximately RMB 1,960 million, representing a year-on-year increase of 19.21% from RMB 1,644 million in the previous year[15] - The company reported a significant increase in trade payables, which rose by RMB 1,468,943 thousand in 2020 compared to RMB 208,949 thousand in 2019[141] - The retained earnings as of December 31, 2020, were RMB 7,001,348 thousand, up from RMB 6,099,776 thousand in 2019, showing an increase of approximately 14.8%[138] Market Position and Sales - The company maintained a market share of 1st in the domestic loader market, with excavator sales showing steady growth[12] - The sales of wheel loaders accounted for 49% of total sales, with total sales amounting to approximately RMB 6,284 million[18] - The sales revenue from the Northeast, Eastern, and Northwestern regions increased by 42%, 16%, and 17% respectively, reaching approximately RMB 463 million, RMB 2,417 million, and RMB 1,299 million[16] - The sales revenue from international markets surged by 40% to approximately RMB 864 million, driven by growth in the "Belt and Road" markets[16] - The sales proportion of excavators increased by 0.7% to 18.8%, while forklifts accounted for 21.0%, up by 0.8%[15] Cash Flow and Financial Health - The cash flow from operating activities was RMB 1,071,000,000, with total cash and financial assets at RMB 5,965,000,000 at year-end[12] - The company's debt-to-asset ratio at year-end was 42%, indicating a healthy financial structure[12] - As of December 31, 2020, the group had cash and bank balances of approximately RMB 2,781 million, up from RMB 2,502 million in 2019, an increase of about RMB 279 million[21][22] - Total net assets increased by 11% to approximately RMB 10,094 million as of December 31, 2020, compared to RMB 9,077 million in 2019[23] - The total debt-to-asset ratio was approximately 41.56% as of December 31, 2020, compared to 37.90% in 2019[24] Research and Development - The company emphasized R&D investment, particularly in new energy loaders and forklifts, leading to significant progress in these areas[14] - The company plans to continue investing in research and development, with R&D expenses amounting to RMB 578,946 thousand in 2020, compared to RMB 550,074 thousand in 2019[134] - New product development initiatives are underway, with an investment of HKD 200 million allocated for R&D in the next fiscal year[36] Dividends and Shareholder Value - The proposed dividend per share is HKD 0.33, totaling over HKD 1.4 billion, marking a historical high for the company[12] - The company proposed a final dividend of HKD 0.33 per share for the year ended December 31, 2020, compared to a final dividend of HKD 0.25 per share for the previous year, totaling HKD 1,070 million for 2019[40] - The total distributable reserves of the company as of December 31, 2020, amounted to approximately RMB 7,457 million, an increase from RMB 6,522 million in 2019[42] - The board of directors remains committed to enhancing shareholder value through sustainable growth strategies[34] Corporate Governance and Compliance - The board of directors consists of 9 members, including 5 executive directors, 1 non-executive director, and 3 independent non-executive directors[80] - The company has adopted the standard code of conduct for securities trading as per the listing rules, ensuring compliance by all directors for the year ended December 31, 2020[78] - The audit committee reviewed the financial statements and internal control mechanisms for the fiscal year ending December 31, 2020[84] - The board confirmed compliance with all applicable laws and regulations, with no significant violations impacting the business[66] Environmental and Social Responsibility - The company is committed to improving its environmental performance and reducing pollution during its production processes[60] - The company emitted a total of 263,709 tons of CO2, 0.548 tons of methane, and 0.0787 tons of nitrous oxide in 2020[102] - The company discharged 587,627 tons of wastewater, achieving a 100% compliance rate with urban drainage standards[102] - The company achieved an industrial water reuse rate of 85% and reduced water consumption significantly[105] - The company actively participates in social and public welfare activities, contributing to local community development while maintaining business growth[100] Risk Management - The company faces market risks due to a potential decline in demand for its products, including wheel loaders, road rollers, excavators, and forklifts, as the engineering machinery industry enters a relatively stable period[68] - The company relies on a limited number of suppliers for key raw materials and components, which poses operational risks if supply is disrupted[70] - The company has established a risk management and internal control system to identify and manage significant risks to achieve its business objectives[91] Employee and Workforce Management - The company employed approximately 8,220 employees as of December 31, 2020[59] - The average monthly employee turnover rate was 1.69% in 2020, with a total of 8,220 employees[107] - Male employees accounted for 84.86% of the workforce, with the majority aged between 26-40 years[108] - The company offers over 3,000 online training courses to enhance employee skills and knowledge, aligning career development with business growth[111] Financial Reporting and Audit - The independent auditor's report indicates that the audit provides reasonable assurance that the financial statements are free from material misstatement due to fraud or error[132] - The auditor evaluated the appropriateness of accounting policies and the reasonableness of accounting estimates and related disclosures made by the board[133] - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and are based on historical cost conventions, except for certain financial instruments measured at fair value[150]

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) [Financial Highlights](index=3&type=section&id=Financial%20Highlights) For H1 2020, the company reported a slight revenue decrease but improved operating and net profits, with basic EPS increasing and mixed liquidity indicators Key Financial Data Summary for H1 2020 | Metric | For the six months ended June 30, 2020 (RMB thousand) | For the six months ended June 30, 2019 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 6,513,807 | 6,759,674 | -3.64% | | **Operating Profit** | 1,064,603 | 987,780 | +7.78% | | **Profit attributable to owners of the parent** | 943,836 | 886,621 | +6.45% | | **Basic earnings per share** | 0.22 RMB | 0.21 RMB | +4.76% | | **Overall gross profit margin** | 22.89% | 23.24% | -0.35 percentage points | | **Net profit margin** | 14.49% | 13.15% | +1.34 percentage points | | **Current ratio** | 1.80 | 2.19 | -0.39 | | **Inventory turnover days** | 107 days | 90 days | +17 days | [Review Report on Interim Financial Information](index=5&type=section&id=Review%20Report%20on%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Review Report](index=5&type=section&id=Review%20Report%20on%20Interim%20Condensed%20Consolidated%20Financial%20Information) The interim condensed consolidated financial information has been reviewed by independent auditors, with a scope smaller than a full audit, thus no audit opinion is expressed - Independent auditors reviewed the interim condensed consolidated financial information for the six months ended June 30, 2020, with a scope smaller than a full audit, thus no audit opinion is expressed[8](index=8&type=chunk)[9](index=9&type=chunk) [Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Despite a revenue decrease to RMB 6.51 billion in H1 2020, profit before tax and profit for the period increased due to positive other income and lower finance costs Key Profit or Loss Items for H1 2020 | Item | For the six months ended June 30, 2020 (RMB thousand) | For the six months ended June 30, 2019 (RMB thousand) | | :--- | :--- | :--- | | **Revenue** | 6,513,807 | 6,759,674 | | **Gross Profit** | 1,490,784 | 1,571,179 | | **Profit before tax** | 1,125,055 | 1,048,227 | | **Profit for the period** | 943,836 | 888,879 | | **Profit attributable to owners of the parent** | 943,608 | 888,621 | | **Basic and diluted earnings per share** | 0.22 RMB | 0.21 RMB | [Interim Condensed Consolidated Statement of Comprehensive Income](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for H1 2020 increased to RMB 941 million, primarily driven by profit for the period and foreign exchange differences from overseas operations - Total comprehensive income for the period was **RMB 941 million**, with **RMB 940 million** attributable to owners of the parent, primarily influenced by profit for the period and exchange differences from overseas operations[12](index=12&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2020, total assets slightly increased to RMB 16.06 billion, with current assets rising and current liabilities significantly growing, while net assets remained stable Key Financial Position Items Changes | Item | As of June 30, 2020 (RMB thousand) | As of December 31, 2019 (RMB thousand) | | :--- | :--- | :--- | | **Total non-current assets** | 3,604,000 | 3,787,707 | | **Total current assets** | 12,457,814 | 10,829,996 | | **Total current liabilities** | 6,913,622 | 4,741,297 | | **Total non-current liabilities** | 106,692 | 799,441 | | **Net assets** | 9,041,500 | 9,076,965 | [Interim Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity slightly decreased to RMB 9.04 billion as of June 30, 2020, primarily due to total comprehensive income offset by the 2019 final dividend distribution - Total equity decreased by approximately **RMB 35.47 million**, primarily due to a **RMB 941 million** increase from total comprehensive income for the period, offset by a **RMB 976 million** decrease from the 2019 final dividend distribution[17](index=17&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash flow from operating activities significantly decreased to RMB 407 million in H1 2020, mainly due to increased trade receivables, while cash and cash equivalents increased to RMB 2.73 billion at period-end Cash Flow Overview for H1 2020 | Item | For the six months ended June 30, 2020 (RMB thousand) | For the six months ended June 30, 2019 (RMB thousand) | | :--- | :--- | :--- | | **Net cash flows from operating activities** | 406,669 | 850,146 | | **Net cash flows used in investing activities** | (113,611) | (70,466) | | **Net cash flows (used in)/from financing activities** | (61,843) | 79,433 | | **Net increase in cash and cash equivalents** | 231,215 | 859,113 | | **Cash and cash equivalents at end of period** | 2,733,009 | 3,424,131 | [Notes to the Financial Statements](index=16&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Operating Segment Information](index=19&type=section&id=4.%20Operating%20Segment%20Information) The Group's business is primarily driven by construction machinery sales, with wheel loaders as the largest revenue source, followed by excavators and forklifts Segment Performance for H1 2020 | Segment | Revenue (RMB thousand) | Results (RMB thousand) | | :--- | :--- | :--- | | **Construction Machinery Sales** | 6,513,057 | 823,957 | | **Construction Machinery Finance Lease** | 750 | 262 | | **Financial Investments** | – | 242,398 | Product Revenue Composition for H1 2020 | Product | Revenue (RMB thousand) | Percentage | | :--- | :--- | :--- | | **Wheel Loaders** | 3,216,119 | 49.4% | | **Excavators** | 1,282,636 | 19.7% | | **Forklifts** | 1,348,666 | 20.7% | | **Parts** | 617,112 | 9.5% | | **Road Rollers** | 48,524 | 0.7% | [Dividends](index=24&type=section&id=8.%20Dividends%20Payable%20to%20Shareholders) The Board does not recommend an interim dividend for H1 2020, while the 2019 final dividend of HKD 0.25 per share was paid on July 20, 2020 - No interim dividend is recommended for H1 2020[39](index=39&type=chunk) - The 2019 final dividend of **HKD 0.25** per share was paid on July 20, 2020[39](index=39&type=chunk) [Trade Receivables](index=26&type=section&id=12.%20Trade%20Receivables) Net trade receivables increased significantly to RMB 2.97 billion as of June 30, 2020, with the majority aged within 90 days Trade Receivables Aging Analysis | Aging | As of June 30, 2020 (RMB thousand) | As of December 31, 2019 (RMB thousand) | | :--- | :--- | :--- | | **0 to 90 Days** | 2,095,697 | 1,395,345 | | **91 to 180 Days** | 417,991 | 421,823 | | **181 to 360 Days** | 375,237 | 363,494 | | **Over 1 Year** | 83,609 | 64,360 | [Management Discussion and Analysis](index=39&type=section&id=Management%20Discussion%20and%20Analysis) [Performance and Business Review](index=39&type=section&id=Performance%20and%20Business%20Review) Despite a slight revenue decrease in H1 2020 due to COVID-19, net profit grew due to effective cost control and stable financial investment income, with wheel loaders remaining the primary revenue source - Despite a **3.64%** year-on-year revenue decrease, net profit increased by **6.18%** year-on-year through cost control and investment income[72](index=72&type=chunk) - Export sales accounted for **4.8%** of total sales, growing by **21.7%** year-on-year[73](index=73&type=chunk) Major Product Sales Changes (H1 2020 vs H1 2019) | Product | Sales (RMB million) | Year-on-year Change | | :--- | :--- | :--- | | **Wheel Loaders** | 3,216 | -3.6% | | **Excavators** | 1,283 | -8.9% | | **Forklifts** | 1,349 | -0.1% | | **Road Rollers** | 49 | -31.9% | | **Parts** | 617 | +4.6% | [Financial Review](index=41&type=section&id=Financial%20Review) The Group's financial position remained solid with total shareholders' equity of RMB 9.04 billion, increased cash and bank balances, a current ratio of 1.80, and capital expenditure for strategic and product transformation - As of June 30, 2020, Group bank balances and cash were approximately **RMB 2.73 billion**, an increase of **RMB 231 million** from the beginning of the year[80](index=80&type=chunk) - The current ratio was **1.80**, and the total asset-liability ratio was approximately **43.71%**[81](index=81&type=chunk)[82](index=82&type=chunk) - Capital expenditure for property, plant, and equipment amounted to approximately **RMB 98 million** in H1 2020, supporting strategic and product transformation[83](index=83&type=chunk) [Outlook](index=44&type=section&id=Outlook) Management is optimistic about H2 2020, expecting increased infrastructure investment to drive demand for construction machinery, with the Group focusing on core products, quality, domestic market share, and international expansion - Increased national infrastructure investment is expected to boost demand for construction machinery in H2[90](index=90&type=chunk) - Strategic focus: Concentrate on four main products—wheel loaders, excavators, forklifts, and road machinery—to enhance quality, service, and cost-effectiveness[90](index=90&type=chunk) - Market strategy: Deepen domestic market penetration, consolidate the leading position in wheel loaders, increase excavator market share, and expand international presence by improving overseas marketing networks[90](index=90&type=chunk)[91](index=91&type=chunk) [Corporate Governance](index=45&type=section&id=Corporate%20Governance) [Corporate Governance](index=45&type=section&id=Corporate%20Governance) The company maintains high corporate governance standards, adhering to most Listing Rules, but disclosed deviations including lack of directors' liability insurance, non-attendance of independent non-executive directors at AGM, and combined Chairman and CEO roles - The company disclosed several deviations from the Corporate Governance Code: - **Code Provision A.1.8**: No liability insurance purchased for directors - **Code Provision A.6.7**: Three independent non-executive directors did not attend the 2020 AGM - **Code Provision A.2.1**: The roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Li Xinyan[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Disclosure of Interests](index=49&type=section&id=Disclosure%20of%20Interests) [Disclosure of Interests](index=49&type=section&id=Disclosure%20of%20Interests) As of June 30, 2020, Chairman Mr. Li Xinyan and Non-executive Director Ms. Ni Yinying (couple) are the controlling shareholders, jointly holding 56.03% of issued share capital, with Citigroup Inc. holding 5.00% Directors' and Chief Executive's Interests | Director Name | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | **Li Xinyan and Ni Yinying** | Beneficial Owner | 2,398,273,188 | 56.03% | - Major shareholder Citigroup Inc. holds **214,427,208** shares, representing **5.00%** of the issued share capital[108](index=108&type=chunk) [Other Information](index=51&type=section&id=Other%20Information) [Other Information](index=51&type=section&id=Other%20Information) The Board did not recommend an interim dividend for H1 2020, the Group employed approximately 7,828 staff, and the interim results were reviewed by the Audit Committee - The Board did not recommend an interim dividend for the six months ended June 30, 2020[109](index=109&type=chunk) - As of June 30, 2020, the Group employed approximately **7,828** staff[110](index=110&type=chunk) - The interim results for the six months ended June 30, 2020, were reviewed by the company's Audit Committee[111](index=111&type=chunk) [Company Information](index=52&type=section&id=Company%20Information) [Company Information](index=52&type=section&id=Company%20Information) This section provides essential company details, including board and committee members, company secretary, registered office, principal place of business, legal advisors, auditor (Ernst & Young), and share registrar - The company's Chairman and Chief Executive Officer is Mr. Li Xinyan[112](index=112&type=chunk) - The company's auditor is Ernst & Young[113](index=113&type=chunk)

Financial Performance - The operating revenue for 2019 was RMB 11,743.82 million, a slight decrease of 1.05% compared to RMB 11,868.32 million in 2018[6]. - Net profit increased by 43.71% to RMB 1,643.40 million, reflecting strong cost control and a healthy financial condition[9]. - EBITDA for 2019 was RMB 2,354.85 million, an increase of 37.00% from RMB 1,718.86 million in 2018[6]. - The comprehensive gross profit margin increased to 23.93%, up by 0.97 percentage points from 22.96% in 2018[12]. - The total revenue of China Longgong Holdings Limited was approximately RMB 11,744 million, a decrease of 1.05% compared to RMB 11,868 million in 2018[12]. - The net profit for 2019 was approximately RMB 1,644 million, an increase of RMB 500 million from RMB 1,144 million in the previous year, primarily due to improved operational efficiency and cost control[12]. - The company reported a significant management team with extensive experience in various sectors, including supply chain management and financial oversight[26][27][28][29]. - The company reported a profit for the year of RMB 1,643,405,000, reflecting a strong performance compared to previous periods[129]. Cash Flow and Assets - Cash flow from operating activities was RMB 1,570 million, with total cash and financial assets amounting to RMB 5,510 million at the end of the period[9]. - As of December 31, 2019, the group's cash and bank balances were approximately RMB 2,502 million, a decrease of RMB 63 million from RMB 2,565 million in 2018[16]. - The total liabilities decreased significantly from RMB 5,865,164,000 in 2018 to RMB 5,540,738,000 in 2019, a reduction of about 5.5%[128]. - The company's net asset value increased to RMB 9,076,965,000 in 2019, up from RMB 8,207,183,000 in 2018, reflecting a growth of approximately 10.6%[128]. - The company's inventory increased to RMB 3,005,756,000 in 2019, compared to RMB 2,857,771,000 in 2018, marking an increase of about 5.2%[127]. Dividends and Shareholder Returns - The proposed dividend per share is HKD 0.25, with a total dividend payout exceeding HKD 1 billion, marking a historical high for the company[9]. - The company maintained a consistent dividend policy, reflecting its commitment to returning value to shareholders[32]. - The company declared a final dividend of RMB 548,195 for the year, consistent with its commitment to return value to shareholders[130]. Market Position and Sales - The company maintained a market share of first place in the domestic loader market, with sales growth in key products like excavators and forklifts aligning with industry trends[9]. - Sales revenue from wheel loaders was approximately RMB 6,026 million, accounting for 51.3% of total revenue, a decrease of 2.1% from the previous year[13]. - Excavators generated revenue of approximately RMB 2,122 million, representing 18.1% of total revenue, showing a slight increase from RMB 2,111 million in 2018[14]. - Sales in the North China region decreased by 4.2% to approximately RMB 2,997 million, while sales in East China increased by 5.4% to RMB 2,091 million[12]. Research and Development - The company has strengthened its focus on research and development, increasing investment in technology and talent acquisition to enhance core competitiveness[11]. - Research and development expenses were RMB 550,074 thousand, slightly up from RMB 544,503 thousand in 2018[125]. Corporate Governance - The board consists of both executive and independent non-executive directors, ensuring a diverse governance structure[35]. - The company emphasizes its commitment to technological innovation and market expansion, as evidenced by the qualifications of its management team[27][28]. - The board is committed to maintaining high standards of corporate governance and has adopted the principles of the Corporate Governance Code[63]. Environmental Responsibility - The company is committed to improving environmental performance and reducing pollution during its production processes[51]. - The company has established an ISO14001 environmental management system to ensure effective environmental management and reduce operational impact on the environment[93]. - In 2019, the company emitted 225,920 tons of CO2, 0.4641 tons of methane, and 0.0649 tons of nitrous oxide[94]. - The company processed 615,552 tons of wastewater in 2019, achieving a 100% compliance rate with discharge standards[94]. Risk Management - The company faces market risks due to a potential decline in demand for its products, including wheel loaders, road rollers, excavators, and forklifts, as the engineering machinery industry enters a relatively stable period[59]. - Financial risks may adversely affect the company's business, financial condition, and operating results[60]. - The company has established a risk management and internal control system to identify, assess, and manage significant risks to achieve its business objectives[82]. Employee Management - The company employed approximately 7,644 employees as of December 31, 2019[50]. - The average monthly employee turnover rate in 2019 was 2.26%, with a total of 7,644 employees as of December 31, 2019[99]. - The company offers over 3,000 training courses to enhance employee skills and knowledge, aligning career development with business growth[103]. Compliance and Integrity - The company has implemented strict anti-corruption measures, including requiring suppliers and agents to sign a "Integrity Agreement"[114]. - The internal audit and risk management departments reported no claims of bribery or extortion from stakeholders during the year[114]. - The company actively promotes a culture of integrity among its stakeholders, enhancing its corporate image[114].

Financial Performance - The company's revenue for 2018 was RMB 11,868,316,000, representing a 31.96% increase from RMB 8,994,097,000 in 2017[6] - Operating profit decreased by 7.16% to RMB 1,365,923,000 from RMB 1,471,196,000 in the previous year[6] - EBITDA for 2018 was RMB 1,718,857,000, down 6.1% from RMB 1,830,534,000 in 2017[6] - Profit attributable to equity holders of the parent increased by 9.39% to RMB 1,143,867,000 compared to RMB 1,045,635,000 in 2017[6] - Basic earnings per share rose by 12.5% to RMB 0.27 from RMB 0.24 in the previous year[6] - The company's gross profit margin decreased to 22.96% from 26.59% in 2017, a decline of 3.63%[6] - The net profit margin also fell to 9.64% from 11.63%, a decrease of 1.99%[6] - Revenue increased by 32% to RMB 11.87 billion, with excavator and forklift sales growing above industry average, maintaining the leading market position[9] - Net profit rose by 9% to RMB 1.14 billion, while net profit excluding investment gains increased by 56% to RMB 1.32 billion, with earnings per share at RMB 0.27[9] Financial Ratios and Metrics - Current ratio improved to 2.29 from 1.81, an increase of 26.52%[6] - The debt-to-equity ratio decreased to 66.77% from 71.46%, a reduction of 7.3%[6] - The company maintained a healthy debt-to-asset ratio of 42%, indicating a strong financial structure[9] - The total debt-to-asset ratio improved to approximately 41.68% from 44.06% in 2017[19] - Total equity increased by 6% to approximately RMB 8,207 million as of December 31, 2018, compared to RMB 7,730 million in 2017[18] Cash Flow and Investments - Operating cash flow reached RMB 810 million, with total cash and financial assets amounting to RMB 5.17 billion[9] - Cash and bank balances increased by approximately RMB 931 million to RMB 2,565 million as of December 31, 2018, from RMB 1,634 million in 2017[17] - The company reported a net cash inflow from investment activities of RMB 441,904 thousand in 2018, compared to a net cash outflow of RMB 1,410,809 thousand in 2017, indicating a positive turnaround[131] Sales and Revenue Breakdown - Wheel loader sales revenue reached RMB 6,154 million, an increase of 28% compared to RMB 4,826 million in 2017, accounting for 52% of total sales revenue[13] - Excavator revenue surged 59% to approximately RMB 2,111 million, up from RMB 1,330 million in 2017, representing about 18% of total revenue[14] - Forklift revenue increased by 26% to RMB 2,308 million, compared to RMB 1,826 million in 2017[15] - Parts revenue rose by 21% to RMB 899 million, up from RMB 742 million in 2017[16] - Sales in North China increased by 60% to approximately RMB 3.13 billion, accounting for 26% of total revenue[12] - Overseas sales revenue reached RMB 652 million, a decrease of 5% compared to the previous year[12] Dividends and Shareholder Returns - Proposed dividend of HKD 0.20 per share, achieving a record high payout ratio exceeding 60%[9] - The company proposed a final dividend of HKD 0.20 per share for the year ended December 31, 2018, compared to HKD 0.16 per share for the previous year, totaling HKD 685 million for the prior year[34] - The company paid dividends totaling RMB 549,027 thousand in 2018, compared to RMB 235,247 thousand in 2017, indicating an increase of approximately 133.0%[131] Research and Development - Research and development expenses increased to RMB 544,503 thousand in 2018 from RMB 381,967 thousand in 2017, indicating a focus on innovation[124] - The company emphasized enhancing product quality and R&D investment, focusing on core components and new product development[10] Corporate Governance - The company’s board consists of a mix of executive and independent non-executive directors, ensuring a balanced governance structure[39] - The board has established four committees: Executive Committee, Audit Committee, Remuneration Committee, and Nomination Committee, to enhance governance[72] - The board believes that the risk management and internal control systems are adequate and effective as of the end of the reporting period[84] - The company is committed to maintaining high standards of corporate governance and transparency to enhance shareholder value[66] Environmental and Social Responsibility - The company is committed to improving environmental performance and reducing pollution during production processes[52] - The company actively participates in social and public welfare activities, contributing to local community development while pursuing profit growth[93] - The company established an ISO14001 environmental management system to ensure effective environmental management and reduce operational impact on the environment[94] Risk Management - The company faces market risks due to declining demand for its products in the engineering machinery industry, which may adversely affect its financial condition and operating performance[61] - The company relies on a limited number of suppliers for key raw materials and components, which poses operational risks if supply is disrupted[62] - The company aims to continuously review and strengthen its business operations to identify and mitigate significant business risks[84] Employee and Workforce - The company employed approximately 8,424 employees as of December 31, 2018[51] - The average monthly employee turnover rate in 2018 was 1.77%, with a total of 8,424 employees as of December 31, 2018[100] - Male employees accounted for 86.56% of the workforce, with the majority aged between 26 and 40 years[100] Financial Reporting and Standards - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, with values reported in Renminbi rounded to the nearest thousand[141] - The company adopted the new Hong Kong Financial Reporting Standard No. 9, which replaced the previous standard and impacted the classification and measurement of financial instruments[145] - The company has assessed control over subsidiaries based on the ability to influence returns and has consolidated financial statements accordingly[142]