Core Viewpoint - The company, Yijia Additive Manufacturing, has shown significant growth in revenue and net profit under the leadership of the new generation entrepreneur, Li Jianhao, while facing challenges in cash flow and reliance on financing [1][18][26]. Group 1: Company Performance - From 2022 to 2024, the company's revenue increased from 247 million to 471 million yuan, and net profit rose from 28.93 million to 98.81 million yuan, indicating rapid growth in both key performance metrics [1][20]. - The company plans to raise 1.205 billion yuan through its IPO to fund expansion and R&D projects [2]. - The average selling price of 3D printing equipment increased by 46.58% from 1.8452 million yuan to 2.7047 million yuan, while sales volume grew from 124 units to 163 units during the same period [21][22]. Group 2: Financial Health - Despite a net profit of 98.81 million yuan in 2024, the company experienced a significant cash flow issue, with a net cash outflow of 93.80 million yuan, compared to a net inflow of 19.67 million yuan in 2023 [26][28]. - The company's asset-liability ratio dropped dramatically from 82.63% in 2022 to 16.69% in 2024, reflecting improved debt repayment capacity [31][32]. - The company’s accounts receivable increased significantly, reaching 217 million yuan in 2024, which accounted for 46.07% of total revenue [28][29]. Group 3: Market Position and Industry Context - The global additive manufacturing market is projected to grow from 12.76 billion USD in 2020 to 21.9 billion USD in 2024, with the Chinese market expected to reach 41 billion yuan in 2023 [20][21]. - Yijia Additive Manufacturing's gross profit margin increased from 39.31% in 2022 to 45.12% in 2024, contrasting with the declining trend in the industry average [24][25]. - The company has established subsidiaries in Germany and the USA to expand its overseas market presence, with foreign sales accounting for approximately 15% of its main business revenue [22][24].

Core Viewpoint - *ST Tianchuang (603608.SH) reported a significant decline in revenue and net profit for the year ending December 31, 2024, indicating ongoing financial challenges for the company. Financial Performance - The total operating revenue for *ST Tianchuang was 1.099 billion yuan, a decrease of 175 million yuan or 13.74% compared to the same period last year [1] - The net profit attributable to the parent company was -90.81 million yuan, a reduction of 60.66 million yuan compared to the previous year [1] - The net cash inflow from operating activities was 47.21 million yuan, down by 71.31 million yuan or 60.17% year-on-year [1] Key Financial Ratios - The asset-liability ratio stood at 35.09% as of December 31, 2024 [3] - The gross profit margin was 62.24%, an increase of 0.15 percentage points from the previous year [3] - The return on equity (ROE) was -8.71%, a decrease of 6.38 percentage points compared to the same period last year [3] - The diluted earnings per share were -0.24 yuan, down by 0.17 yuan from the previous year [3] - The total asset turnover ratio was 0.58 times, a decline of 0.01 times year-on-year [3] - The inventory turnover ratio was 1.42 times, a decrease of 0.04 times compared to the previous year [3] Shareholder Information - The number of shareholders was 10,700, with the top ten shareholders holding 203 million shares, accounting for 48.38% of the total share capital [3] - The largest shareholder was Qingdao Hetian Trading Partnership, holding 17.4% of the shares [3] Research and Development - The total R&D investment was 39.67 million yuan, ranking fifth in the last five years, and decreased by 7.62 million yuan or 16.10% compared to the previous year [3] - The R&D investment ratio was 3.61%, down by 0.10 percentage points from the previous year [3]

智通财经APP讯，永盛新材料(03608)发布公告，于2024年1月3日，要约人根据开曼群岛公司法第88条向所有余下要约股东寄发强制收购通知。余下要约股东可向大法院申请反对强制收购的通知期于2024年2月2日(即自强制收购通知日期起计一个月届满当日)下午11时59分(开曼群岛时间)届满。根据要约人于2024年2月5日(开曼群岛时间)对大法院的令状及其他原诉程序记录册所进行的查册显示，概无任何余下要约股东向大法院提出有关申请。由于概无余下要约股东于2024年2月2日下午11时59分(开曼群岛时间)前提出有关申请，要约人已有权且必须按与股份要约相同的条款收购余下要约股份。 强制收购已于2024年2月6日完成，而所有余下要约股份均已过户予要约人。应付余下要约股东的强制收购代价款项总额已由要约人支付予公司，并由公司以信托形式代余下要约股东于独立开设的银行账户内持有，直至(i)余下要约股东按照股份要约的条款已获支付强制收购代价;及(ii)强制收购完成日期起计六年届满(以较早者为准)。强制收购支票将于2024年2月7日后于实际可行情况下尽快且无论如何不迟于2024年2月底寄发予于2023年12月27日名列公司股东名册的余 ...

Financial Performance - The Group recorded a turnover from continuing operations of approximately RMB119.8 million, representing an increase of approximately 13.9% from RMB105.2 million for the corresponding period of 2022[21]. - Gross profit from continuing operations was approximately RMB43.8 million, an increase of approximately 27.7% from RMB34.3 million for the corresponding period of 2022, with an overall gross profit margin improving from approximately 32.6% to 36.6%[21]. - Profit attributable to Shareholders increased to approximately RMB18.4 million, representing a 64.3% increase from RMB11.2 million in the corresponding period of 2022, with basic earnings per share for the period at RMB2.6 cents[21]. - For the six months ended June 30, 2023, the revenue from continuing operations was approximately RMB119.8 million, representing a year-on-year increase of 13.9% compared to RMB105.2 million in the same period of 2022[38]. - Profit for the period from continuing operations was approximately RMB16.3 million, a 38.1% increase from RMB11.8 million in the same period of 2022[38]. - Profit attributable to shareholders of the Company was approximately RMB18.4 million, up 64.3% from RMB11.2 million in the previous year[38]. - Profit before tax from continuing operations was RMB22,689,000, up from RMB15,638,000, reflecting a year-over-year increase of approximately 45%[143]. - Total comprehensive income attributable to shareholders of the Company rose to RMB21,585 thousand, up from RMB15,244 thousand, reflecting an increase of 41.6%[146]. Revenue Sources - Rental income from Yongsheng Plaza was approximately RMB16.6 million, with revenue from management services at approximately RMB1.8 million during the Review Period[26]. - The occupancy rate of Yongsheng Plaza has increased since late 2022, contributing to higher rental income[21]. - Revenue from contracts with customers for the six months ended June 30, 2023, was RMB102,303,000, compared to RMB92,327,000 in the previous year, indicating an increase of about 11%[190]. - Gross rental income from investment properties under operating leases for the six months ended June 30, 2023, was RMB17,504,000, up from RMB12,861,000 in the same period of 2022, reflecting a growth of approximately 36%[190]. Expenses and Liabilities - The Group's current liabilities increased by 21.10% to RMB218.1 million, while net current assets decreased by 3.94% to RMB216.9 million[15]. - Selling and distribution expenses increased by approximately RMB0.5 million to RMB1.1 million, primarily due to higher staff costs in line with increased revenue from the dyeing and processing segment[96]. - Administrative expenses rose from approximately RMB20.0 million to RMB21.0 million, mainly due to increased depreciation and wages[98]. - The Group's total bank borrowings amounted to approximately RMB240.1 million as of June 30, 2023, compared to RMB216.1 million as of December 31, 2022[100]. - Interest-bearing bank and other borrowings increased to RMB125,660 thousand from RMB76,132 thousand, representing a significant rise of 65.0%[151]. Market Conditions - The global economic growth has significantly slowed due to weaker end-demand from major developed economies, impacting the home textile industry in China[24]. - There was a decrease of approximately 20% in maritime container shipments from Asia to the US in May 2023 compared to the same period last year, indicating a declining trend in consumer demand[24]. - The textile and apparel exports from China amounted to approximately US$67.23 billion in Q1 2023, reflecting a year-on-year decrease of approximately 6.7%[43]. - The global manufacturing PMI in April 2023 was approximately 48.6%, indicating a decline for two consecutive months and the lowest level since June 2020[43]. Strategic Initiatives - The Group's strategy focuses on dyeing and processing differentiated polyester filament fabric, environmental water project operation, and properties investment for long-term development[45]. - The Group aims to create greater value for shareholders through its concentrated resource allocation in key business areas[45]. - The Group plans to explore the domestic market and tap into the home-textiles market to raise production capacity, alongside focusing on environmental water services for diversified business development[91]. - The Group aims to diversify its business by focusing on environmental water treatment markets in the second half of 2023[63]. - The Malaysian water supply project has commenced construction as part of the Group's overseas business expansion[56]. Financial Position - The current ratio decreased to 1.81 as of June 30, 2023, from 3.13 as of June 30, 2022[125]. - The debt to equity ratio increased to 0.21 as of June 30, 2023, compared to 0.19 as of June 30, 2022[125]. - Cash and bank balances, including pledged deposits, were approximately RMB149.2 million as of June 30, 2023, compared to approximately RMB146.9 million as of December 31, 2022[124]. - Total non-current assets reached RMB1,089,217 thousand, an increase from RMB1,044,622 thousand, indicating a growth of 4.3%[149]. - The Group's total equity attributable to shareholders of the Company increased to RMB1,123,472 thousand from RMB1,101,887 thousand, reflecting a growth of 1.9%[154]. Corporate Governance - The company maintained high standards of corporate governance, ensuring transparency and accountability in its operations[160]. - The audit committee reviewed the unaudited condensed interim results and confirmed compliance with applicable accounting standards[160]. - The company has maintained consistent accounting policies, with no impact on financial position or performance from the recent amendments to accounting standards[179]. - The company is focused on enhancing its financial reporting in line with the new and revised IFRSs, ensuring compliance and clarity in its financial statements[180].

[Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) [Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) For the six months ended June 30, 2023, the company's continuing operations achieved significant growth in revenue, gross profit, and net profit attributable to shareholders Financial Highlights for the Six Months Ended June 30, 2023 | Metric | 2023 (RMB in millions) | 2022 (RMB in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 119.8 | 105.2 | +13.9% | | Gross profit from continuing operations | 43.8 | 34.3 | +27.7% | | Profit for the period from continuing operations | 16.3 | 11.8 | +38.1% | | Profit for the period | 16.3 | 10.4 | +56.7% | | Profit for the period attributable to owners of the Company | 18.4 | 11.2 | +64.3% | | Basic earnings per share for the period | RMB 2.6 cents | RMB 1.5 cents | +73.3% | - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2023[2](index=2&type=chunk)[118](index=118&type=chunk) [Interim Condensed Consolidated Financial Information](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) During the reporting period, revenue from continuing operations grew by 13.9% to RMB 119.8 million, driving a 38.1% increase in profit from these operations Condensed Consolidated Statement of Profit or Loss (Continuing Operations) | Item | 2023 (RMB in thousands) | 2022 (RMB in thousands) | | :--- | :--- | :--- | | Revenue | 119,807 | 105,188 | | Cost of sales | (75,998) | (70,868) | | **Gross Profit** | **43,809** | **34,320** | | Other income and net gains | 6,267 | 9,813 | | Administrative expenses | (20,997) | (19,964) | | Finance costs | (6,302) | (7,578) | | **Profit before tax** | **22,689** | **15,638** | | Income tax expense | (6,388) | (3,815) | | **Profit for the period** | **16,301** | **11,823** | - A loss from discontinued operations of **RMB 1.429 million** was recorded in the same period of 2022, with no such loss in the current period[25](index=25&type=chunk)[166](index=166&type=chunk) [Consolidated Statement of Financial Position](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2023, the Group's total assets slightly increased to RMB 1.484 billion, maintaining a stable balance sheet structure Summary of Consolidated Statement of Financial Position | Item | June 30, 2023 (RMB in thousands) | December 31, 2022 (RMB in thousands) | | :--- | :--- | :--- | | Total non-current assets | 1,089,217 | 1,044,622 | | Total current assets | 394,567 | 405,838 | | **Total Assets** | **1,483,784** | **1,450,460** | | Total current liabilities | 218,060 | 180,056 | | Total non-current liabilities | 141,487 | 165,862 | | **Total Liabilities** | **359,547** | **345,918** | | **Total Equity** | **1,124,237** | **1,104,542** | [Notes to the Financial Statements](index=7&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section details the basis of preparation, accounting policy changes, segment performance, and breakdowns of key income and expense items - The interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and adopts several new and revised IFRSs for the first time[12](index=12&type=chunk)[152](index=152&type=chunk) Segment Results for H1 2023 (RMB in thousands) | Operating Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | Processing | 100,533 | 18,711 | | Environmental water services project operation | – | (4,601) | | Property investment | 19,274 | 11,623 | | **Total** | **119,807** | **25,733** | - During the reporting period, the Group's total bank borrowings increased to approximately **RMB 240.1 million** from RMB 216.1 million at the end of 2022[77](index=77&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Business Review](index=23&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) The Group maintained normal and healthy development despite challenges from a global economic downturn and weak external demand - The Group is principally engaged in three business segments: (1) dyeing and processing of differentiated polyester fabrics; (2) property investment; and (3) environmental water services project operation[203](index=203&type=chunk) - Despite the global economic downturn and weak external demand, the Group has strived to maintain normal and healthy development[63](index=63&type=chunk) [Dyeing and processing of differentiated polyester fabrics](index=24&type=section&id=%E5%B7%AE%E5%88%AB%E5%8C%96%E6%B6%A4%E7%BA%B6%E9%9D%A2%E6%96%99%E6%9F%93%E8%89%B2%E5%8F%8A%E5%8A%A0%E5%B7%A5) This segment showed recovery during the period, with revenue growing 8.9% year-on-year to approximately RMB 100.5 million, driven by lower raw material costs Key Metrics for Polyester Fabric Business | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Segment Revenue | Approx. RMB 100.5 million | Approx. RMB 92.3 million | | YoY Growth | Approx. 8.9% | - | | Gross Margin | Approx. 29.9% | Approx. 24.8% | - Despite weak demand in the US and European markets, a potential turnaround in export orders is expected in the second half of the year as US market destocking concludes[67](index=67&type=chunk)[89](index=89&type=chunk) [Property Investment](index=26&type=section&id=%E7%89%A9%E4%B8%9A%E6%8A%95%E8%B5%84) The property investment business provided a stable source of income for the Group, with high occupancy rates at its key properties Major Investment Property Income (During the review period) | Property Name | Rental Income (RMB) | Management Service Income (RMB) | | :--- | :--- | :--- | | Yongsheng Building | Approx. 16.6 million | Approx. 1.8 million | | Office units in Zhejiang Private Enterprise Development Building | Approx. 0.9 million | - | [Environmental Water Services Project Operation](index=26&type=section&id=%E7%8E%AF%E4%BF%9D%E6%B0%B4%E5%8A%A1%E9%A1%B9%E7%9B%AE%E8%90%A5%E8%BF%90) The Group is actively advancing its environmental water services projects in line with national green development policies - **Domestic project**: The Group is actively communicating with the government to obtain relevant industrial licenses for the industrial land project in Ma'anshan[70](index=70&type=chunk) - **Overseas business**: The water supply project in Malaysia, developed through a joint venture, has commenced construction[70](index=70&type=chunk) - The joint venture in Deqing, Zhejiang (new construction materials) is operational but currently underperforming, and the Group is striving for a turnaround[92](index=92&type=chunk) [Outlook](index=27&type=section&id=%E5%B1%95%E6%9C%9B) The Group plans to counter market uncertainties by expanding into the domestic home textile market and enhancing production capacity - **Core business strategy**: The Group will stabilize its core business by improving dyeing and finishing technologies while broadening its product lines[72](index=72&type=chunk) - **Market expansion**: The Group will actively explore the domestic market, aiming to penetrate the home textile market in addition to the apparel market[70](index=70&type=chunk) - **Diversified development**: The Group will focus on the environmental water services market to achieve business diversification and maximize shareholder value[72](index=72&type=chunk) [Financial Review](index=29&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) The Group's financial performance was strong, with significant growth in revenue, gross profit, and net profit attributable to shareholders, alongside a healthy liquidity position Key Financial Ratios | Ratio | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Current Ratio | 1.81 | 3.13 | | Debt-to-Equity Ratio | 0.21 | 0.19 | - The growth in revenue and gross profit was mainly due to: (i) increased high-margin rental income from the improved occupancy rate of Yongsheng Building; and (ii) increased revenue and decreased raw material costs in the differentiated polyester fabric segment[73](index=73&type=chunk)[87](index=87&type=chunk) - Other income and net gains **decreased by 36.1%** year-on-year, primarily due to reduced bank interest income and an increased fair value loss on financial derivatives[99](index=99&type=chunk) - As of June 30, 2023, the Group had **279 employees**, with staff costs amounting to approximately RMB 16.1 million[104](index=104&type=chunk) [Corporate Governance](index=34&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company is committed to high standards of corporate governance and has complied with the Corporate Governance Code of the Hong Kong Stock Exchange - The company has complied with the Corporate Governance Code as set out in Appendix 14 of the Listing Rules throughout the review period[134](index=134&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited condensed interim results for the period[135](index=135&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company terminated its RMAA service business in July 2022, with continuing operations revenue increasing by 4.8% and loss attributable to owners significantly narrowing by 77.5% - The company sold its RMAA service subsidiary in July 2022, and this business has been terminated[52](index=52&type=chunk) Key Financial Indicators for FY2022 | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 216.0 | 206.2 | +4.8% | | Gross profit margin from continuing operations | 31.7% | 35.6% | -3.9 percentage points | | Loss attributable to owners from continuing operations | 69.3 | 81.5 | -15.0% | | Basic loss per share | 0.077 | 0.335 | -77.0% | | Fair value loss on investment properties | 20.3 | 104.7 | -80.6% | | Remeasurement loss on transfer of properties held for sale to investment properties | 70.4 | 0 | N/A | | Loss attributable to owners | 55.2 | 245.3 | -77.5% | - The Board does not recommend the payment of any final dividend for FY2022[52](index=52&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In 2022, revenue from continuing operations increased by 4.8% to RMB 216 million, but gross profit decreased by 6.6%, with fair value losses on investment properties and remeasurement losses on properties held for sale negatively impacting profit, while discontinued operations achieved profitability, significantly narrowing the loss for the year Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income for 2022 | Indicator | 2022 (RMB thousand) | 2021 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 216,014 | 206,182 | +4.8% | | Gross profit from continuing operations | 68,411 | 73,246 | -6.6% | | Fair value loss on investment properties | (20,331) | (104,651) | -80.6% | | Remeasurement loss on transfer of properties held for sale to investment properties | (70,359) | – | N/A | | Loss before tax from continuing operations | (62,242) | (79,426) | -21.6% | | Loss for the year from continuing operations | (72,126) | (82,579) | -12.7% | | Profit/(Loss) for the year from discontinued operations | 14,164 | (163,744) | N/A | | Loss for the year | (57,962) | (246,323) | -76.5% | | Loss attributable to owners of the Company | (55,178) | (245,307) | -77.5% | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of year-end 2022, the Group's total non-current assets increased to RMB 1.045 billion, driven by investment properties, while total current assets decreased due to the reclassification of completed properties held for sale to investment properties, resulting in a reduction in net assets and equity attributable to owners Summary of Consolidated Statement of Financial Position for 2022 | Indicator | 2022 (RMB thousand) | 2021 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 1,044,622 | 900,725 | +15.97% | | Investment properties | 809,600 | 674,660 | +20.0% | | Completed properties held for sale | – | 225,630 | -100% | | Total current assets | 405,838 | 653,861 | -37.9% | | Cash and cash equivalents | 143,834 | 86,551 | +66.2% | | Total current liabilities | 180,056 | 203,681 | -11.6% | | Net assets | 1,104,542 | 1,165,083 | -5.2% | | Total equity attributable to owners | 1,101,887 | 1,160,311 | -5.0% | [Loss Per Share](index=4&type=section&id=Loss%20Per%20Share) In 2022, basic loss per share significantly decreased by 77.0% to RMB 7.7 cents, primarily due to a substantial narrowing of the loss for the year, with diluted loss per share being similar to basic loss per share due to the anti-dilutive effect of potential ordinary shares Loss Per Share for 2022 | Indicator | 2022 (RMB cents) | 2021 (RMB cents) | Change | | :--- | :--- | :--- | :--- | | Basic loss per share for the year | (7.7) | (33.5) | -77.0% | | Basic loss per share from continuing operations | (9.6) | (11.1) | -13.5% | - For the year ended December 31, 2022, the diluted loss per share was similar to the basic loss per share, as potential ordinary shares had an anti-dilutive effect[151](index=151&type=chunk) [Notes to the Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [Company and Group Information](index=7&type=section&id=Company%20and%20Group%20Information) Yongsheng New Materials Co., Ltd. was incorporated in the Cayman Islands, with principal activities including differentiated polyester fabric dyeing, property investment, renewable energy, and environmental businesses, ultimately controlled by Mr. Li Cheng through Hengsheng Global Co., Ltd - The Company was incorporated as an exempted company in the Cayman Islands on April 19, 2012[89](index=89&type=chunk) - The Group's principal activities include differentiated polyester fabric dyeing services, property investment, and the investment, development, construction, operation, and management of renewable energy, water treatment, and environmental businesses[90](index=90&type=chunk) - The Company's holding company and ultimate controlling party is Hengsheng Global Co., Ltd., controlled by Mr. Li Cheng[90](index=90&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=7&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The financial statements are prepared in accordance with IFRS and the Hong Kong Companies Ordinance, using the historical cost convention, with certain financial assets and investment properties measured at fair value, and the adoption of several revised IFRS standards this year had no significant impact on the Group's financial position or performance [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The financial statements are prepared in accordance with IFRS and the Hong Kong Companies Ordinance, based on the historical cost convention with certain assets measured at fair value, presented in RMB, and the consolidated financial statements cover the Company and its subsidiaries, with control assessed accordingly - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the disclosure requirements of the Hong Kong Companies Ordinance[91](index=91&type=chunk) - The financial statements are prepared on the historical cost basis, except for financial assets at fair value through profit or loss, bills receivable at fair value through other comprehensive income, derivative financial instruments, and investment properties, which are measured at fair value[91](index=91&type=chunk) - The consolidated financial statements include the Company and its subsidiaries, with control assessed based on voting rights, contractual arrangements, and potential voting rights[92](index=92&type=chunk)[94](index=94&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group adopted several revised IFRS standards for the first time this year, including IFRS 3, IAS 16, IAS 37, and IFRS Improvements 2018-2020, primarily concerning conceptual framework references, proceeds from property, plant and equipment sales, onerous contract costs, and financial liability terms assessment, none of which had a significant impact on the Group's financial position or performance - The Group adopted amendments to IFRS 3, IAS 16, IAS 37, and IFRS Improvements 2018-2020 for the first time[96](index=96&type=chunk)[97](index=97&type=chunk) - Amendments to IFRS 3 replaced the old framework with a reference to the Conceptual Framework and clarified that contingent assets do not qualify for recognition, with no impact on the Group's financial position and performance[99](index=99&type=chunk) - Amendments to IAS 16 prohibit deducting proceeds from selling items produced before an asset is available for its intended use from the cost of property, plant and equipment, with no impact on the Group's financial position or performance[100](index=100&type=chunk) - Amendments to IAS 37 clarified that the cost of fulfilling an onerous contract includes both incremental costs and other costs directly related to the contract, with no impact on the Group's financial position or performance[100](index=100&type=chunk) - IFRS Improvements 2018-2020 clarified the fees to be included in the assessment of terms of a financial liability, with no impact on the Group's financial position or performance[102](index=102&type=chunk) [Issued but Not Yet Effective International Financial Reporting Standards](index=10&type=section&id=Issued%20but%20Not%20Yet%20Effective%20International%20Financial%20Reporting%20Standards) The Group has not yet applied several new and amended IFRS standards issued but not yet effective, including amendments to IFRS 10, IAS 28, IFRS 16, IFRS 17, IAS 1, IAS 8, and IAS 12, which cover asset sales between investors and associates or joint ventures, lease liabilities from sale and leaseback, liability classification, accounting policy disclosures, accounting estimate definitions, and deferred tax, with no significant impact expected on the Group's financial statements - The Group has not yet applied amendments to IFRS 10 and IAS 28, which address the recognition of gains or losses on asset sales or contributions between an investor and its associate or joint venture, with the mandatory effective date yet to be determined[103](index=103&type=chunk)[105](index=105&type=chunk) - Amendments to IFRS 16 address the measurement of lease liabilities arising from a sale and leaseback transaction, effective for annual periods beginning on or after January 1, 2024, with no significant impact expected on the Group's financial statements[103](index=103&type=chunk)[106](index=106&type=chunk) - Amendments to IAS 1 clarify the requirements for classifying liabilities as current or non-current and require additional disclosures, effective for annual periods beginning on or after January 1, 2024, with no significant impact expected on the Group's financial statements[103](index=103&type=chunk)[107](index=107&type=chunk) - Amendments to IAS 1 require disclosure of material accounting policy information rather than significant accounting policies, effective for annual periods beginning on or after January 1, 2023[103](index=103&type=chunk)[109](index=109&type=chunk) - Amendments to IAS 8 clarify the distinction between changes in accounting estimates and changes in accounting policies, effective for annual periods beginning on or after January 1, 2023, with no significant impact expected on the Group's financial statements[103](index=103&type=chunk)[112](index=112&type=chunk) - Amendments to IAS 12 narrow the scope of the initial recognition exemption, making it no longer applicable to transactions that give rise to equal taxable and deductible temporary differences, effective for annual periods beginning on or after January 1, 2023, with no significant impact expected on the Group's financial statements[103](index=103&type=chunk)[118](index=118&type=chunk) [Operating Segment Information](index=12&type=section&id=Operating%20Segment%20Information) The Group is divided into four reportable operating segments: processing, property investment, environmental water project operations, and RMAA services (sold in 2022), with management independently reviewing each segment's results and assessing performance based on adjusted profit/loss before tax from continuing operations - The Group is divided into four reportable operating segments: processing (differentiated polyester fabric dyeing and finishing), property investment, environmental water project operations, and RMAA services (sold in 2022)[110](index=110&type=chunk)[111](index=111&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - The RMAA services operating segment was sold and discontinued during the year ended December 31, 2022[119](index=119&type=chunk) - Segment performance is evaluated based on adjusted profit/loss before tax from continuing operations, excluding interest income, finance costs, investment income, fair value gains/losses on financial instruments, and head office/corporate expenses[120](index=120&type=chunk) Segment Revenue and Results from Continuing Operations for 2022 | Segment | Revenue (RMB thousand) | Results (RMB thousand) | | :--- | :--- | :--- | | Processing | 183,068 | 19,831 | | Environmental Water Project Operations | – | (6,059) | | Property Investment | 32,946 | (69,006) | | **Subtotal from Continuing Operations** | **216,014** | **(55,234)** | | Discontinued Operations (RMAA Services) | 16,500 | 14,105 | | **Total** | **232,514** | **(41,129)** | - Revenue from continuing operations of approximately RMB 37,546,000 (2021: RMB 26,990,000) was derived from sales by the dyeing and finishing segment to a single customer[128](index=128&type=chunk) Revenue by Customer Location for 2022 | Region | Continuing Operations (RMB thousand) | Discontinued Operations (RMB thousand) | | :--- | :--- | :--- | | Hong Kong | – | 16,500 | | Mainland China | 178,468 | – | | Others | 37,546 | – | | **Total** | **216,014** | **16,500** | Non-current Assets by Asset Location for 2022 | Region | Continuing Operations (RMB thousand) | Discontinued Operations (RMB thousand) | | :--- | :--- | :--- | | Hong Kong | – | – | | Mainland China | 1,043,701 | – | | **Total** | **1,043,701** | **–** | [Revenue, Other Income and Gains](index=17&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) In 2022, revenue from continuing operations grew by 4.8% to RMB 216 million, primarily from customer contracts and investment property rental income, while net other income and gains significantly increased due to higher bank and other interest income, government grants, and a shift from fair value loss to gain on financial assets Composition of Revenue from Continuing Operations for 2022 | Source of Revenue | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Revenue from contracts with customers | 185,252 | 200,338 | | Gross rental income from investment properties under operating leases | 30,762 | 5,844 | | **Total** | **216,014** | **206,182** | Net Other Income and Gains from Continuing Operations for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Bank and other interest income | 13,948 | 14,805 | | Investment income | 385 | 4,504 | | Fair value gains/(losses) on financial assets at fair value through profit or loss | 109 | (18,697) | | Fair value changes of derivative financial instruments | 932 | (654) | | Government grants | 1,300 | 657 | | **Total net other income and gains** | **18,250** | **1,557** | [Finance Costs](index=19&type=section&id=Finance%20Costs) In 2022, finance costs from continuing operations increased by 108% to RMB 15.0 million, primarily because no finance costs were capitalized after Yongsheng Building was put to its intended use at the end of September 2021, with all finance costs recognized in profit or loss Finance Costs from Continuing Operations for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on bank loans | 14,891 | 12,885 | +15.6% | | Less: Interest capitalized | – | (5,751) | N/A | | **Total finance costs** | **14,990** | **7,212** | +107.8% | - The increase in finance costs was primarily due to no finance costs being capitalized after Yongsheng Building was put to its intended use at the end of September 2021, with all finance costs recognized in profit or loss[12](index=12&type=chunk) [Loss Before Tax](index=20&type=section&id=Loss%20Before%20Tax) In 2022, loss before tax from continuing operations narrowed to RMB 62.24 million from RMB 79.43 million in 2021, primarily benefiting from a shift from fair value loss to gain on financial assets, along with contributions from investment income and bank interest income Composition of Loss Before Tax from Continuing Operations for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 147,603 | 132,936 | | Depreciation of property, plant and equipment | 8,169 | 5,276 | | Employee benefit expenses (wages and salaries) | 28,912 | 31,800 | | Fair value gains/(losses) on financial assets at fair value through profit or loss | (109) | 18,697 | | Bank and other interest income | (13,948) | (14,805) | | Investment income | (385) | (4,504) | [Income Tax](index=21&type=section&id=Income%20Tax) The Group faces varying income tax rates across jurisdictions, including Hong Kong 16.5%, Malaysia 24%, Myanmar 25%, and Mainland China 25%, with Yongsheng Dyeing and Finishing enjoying a preferential 15% corporate income tax rate as a high-tech enterprise, resulting in a total tax expense of RMB 9.88 million for continuing operations in 2022 - The Group is not subject to income tax in the Cayman Islands and British Virgin Islands[141](index=141&type=chunk) - Hong Kong subsidiaries are subject to profits tax at a rate of 16.5%, with certain qualifying entities under the two-tiered profits tax regime taxed at 8.25% for the first HKD 2 million[148](index=148&type=chunk) - Yongsheng Dyeing and Finishing, as a high-tech enterprise, enjoys a preferential corporate income tax rate of 15% for the period from 2021 to 2023[144](index=144&type=chunk) Composition of Income Tax Expense for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Current tax | 2,678 | 8,435 | | Deferred tax | 7,206 | (5,282) | | **Total tax expense for the year from continuing operations** | **9,884** | **3,153** | | Total tax credit for the year from discontinued operations | (71) | (972) | [Dividends](index=23&type=section&id=Dividends) The Board does not recommend any final dividend for the year ended December 31, 2022, consistent with 2021, when an interim dividend of HKD 0.01 per share was paid - The Board does not recommend the payment of any final dividend for the year ended December 31, 2022[52](index=52&type=chunk)[154](index=154&type=chunk) Dividend Distribution | Dividend Type | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Interim dividend | – | 6,083 | | Proposed final dividend | – | – | [Investment Properties](index=23&type=section&id=Investment%20Properties) The Group's investment properties, comprising two commercial properties in Hangzhou, China, were revalued at RMB 809.6 million at year-end 2022, with properties held for sale transferred to investment properties during the year, recognizing a fair value loss of RMB 20.33 million, and some investment properties are pledged as collateral for long-term loan financing - The Group's investment properties include two commercial properties in Hangzhou, China, with a revalued amount of RMB 809,600,000 as at December 31, 2022[4](index=4&type=chunk)[155](index=155&type=chunk) Movement in Carrying Amount of Investment Properties | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of year | 674,660 | 755,323 | | Transfer from properties held for sale | 155,271 | – | | Fair value changes recognized in profit or loss | (20,331) | (104,651) | | **Carrying amount at end of year** | **809,600** | **674,660** | - As at December 31, 2022, investment properties with a carrying amount of RMB 775,600,000 were pledged as collateral for long-term loan financing[157](index=157&type=chunk) [Leases](index=24&type=section&id=Leases) The Group's right-of-use assets primarily comprise leased land and buildings in Hangzhou and Ma'anshan, China, with a total carrying amount of RMB 33.34 million at year-end 2022, new right-of-use assets were added during the year, and some land use rights are pledged as collateral for short-term bank borrowings Carrying Amount of Right-of-Use Assets for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Leased land | 32,801 | 10,116 | | Buildings | 536 | 508 | | **Total** | **33,337** | **10,624** | - The Group's land use rights relate to land located in Hangzhou and Ma'anshan, China, with remaining lease terms of 31 and 38 years, respectively[158](index=158&type=chunk) - As at December 31, 2022, certain land use rights with a net carrying amount of approximately RMB 3,772,000 were pledged as collateral for short-term bank borrowings[159](index=159&type=chunk) [Goodwill](index=25&type=section&id=Goodwill) As at December 31, 2022, the Group's net carrying amount of goodwill was zero, primarily due to the derecognition of both goodwill cost and accumulated impairment upon the disposal of a subsidiary during the year Movement in Carrying Amount of Goodwill | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Cost at beginning of year | 96,676 | 99,514 | | Disposal of a subsidiary | (98,256) | – | | **Cost at end of year** | **–** | **96,676** | | Accumulated impairment at beginning of year | (96,676) | – | | Disposal of a subsidiary | 98,256 | – | | **Accumulated impairment at end of year** | **–** | **(96,676)** | | **Net carrying amount at end of year** | **–** | **–** | [Inventories](index=25&type=section&id=Inventories) As of year-end 2022, the Group's total inventories amounted to RMB 5.993 million, a decrease from 2021, primarily comprising raw materials, work-in-progress, and finished goods Composition of Inventories | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Raw materials | 3,965 | 3,969 | | Work-in-progress | 1,259 | 1,453 | | Finished goods | 769 | 1,125 | | **Total** | **5,993** | **6,547** | [Completed Properties Held for Sale](index=26&type=section&id=Completed%20Properties%20Held%20for%20Sale) As of year-end 2022, the Group had no completed properties held for sale, as all such properties were transferred to investment properties, recognizing a remeasurement loss of RMB 70.36 million, and at year-end 2021, these properties were pledged as collateral for long-term bank borrowings Movement in Carrying Amount of Completed Properties Held for Sale | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of year | 225,630 | – | | Transfer from properties under development | – | 225,630 | | Remeasurement loss on transfer of certain properties held for sale to investment properties | (70,359) | – | | Transfer to investment properties | (155,271) | – | | **Carrying amount at end of year** | **–** | **225,630** | - During the year, following the signing of an operating lease with an external third party, the use of the Group's properties held for sale changed, resulting in their transfer to completed investment properties and the recognition of a remeasurement loss of RMB 70,359,000[10](index=10&type=chunk)[179](index=179&type=chunk) - As at December 31, 2021, completed properties held for sale with a total carrying amount of approximately RMB 225,630,000 were pledged as collateral for long-term bank borrowings[60](index=60&type=chunk)[178](index=178&type=chunk) [Trade Receivables, Bills Receivable and Lease Receivables](index=26&type=section&id=Trade%20Receivables%2C%20Bills%20Receivable%20and%20Lease%20Receivables) As of year-end 2022, the Group's net trade receivables, bills receivable, and lease receivables amounted to RMB 61.74 million, a slight decrease from 2021, with a typical credit period of 3 months, strict control over outstanding receivables, and no significant concentration of credit risk Composition of Trade Receivables, Bills Receivable and Lease Receivables | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 15,032 | 24,225 | | Bills receivable | 35,157 | 42,907 | | Lease receivables | 11,638 | 412 | | Impairment | (89) | (4,966) | | **Net amount** | **61,738** | **62,578** | - Trade terms with customers are primarily on credit, with a typical credit period of 3 months, and there is no significant concentration of credit risk[180](index=180&type=chunk) Ageing Analysis of Trade Receivables and Lease Receivables (2022) | Ageing | Amount (RMB thousand) | | :--- | :--- | | Within 3 months | 20,003 | | 3 to 6 months | 3,809 | | 6 months to 1 year | 2,769 | | 1 to 2 years | – | | Over 2 years | 89 | | **Total** | **26,670** | [Prepayments, Other Receivables and Other Assets](index=27&type=section&id=Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of year-end 2022, the Group's net prepayments, other receivables, and other assets amounted to RMB 20.63 million, a significant decrease from 2021, primarily comprising interest receivable, deposits, and other receivables, with a substantial reduction in recoverable VAT Composition of Prepayments, Other Receivables and Other Assets | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Prepayments to suppliers | 245 | 672 | | Deposits and other receivables | 8,389 | 11,191 | | Interest receivable | 12,009 | 7,517 | | Recoverable VAT | 18 | 15,998 | | Impairment | (488) | – | | **Net amount** | **20,627** | **35,555** | - The maximum exposure to credit risk at the end of the reporting period is the carrying amount of interest receivable, deposits, and other receivables[185](index=185&type=chunk) [Loans Receivable](index=28&type=section&id=Loans%20Receivable) As of year-end 2022, the Group's net loans receivable amounted to RMB 139.5 million, a decrease from 2021, with an impairment of RMB 2.221 million recognized during the year Net Loans Receivable | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Loans receivable | 141,715 | 158,893 | | Impairment | (2,221) | (484) | | **Net amount** | **139,494** | **158,409** | [Trade Payables](index=28&type=section&id=Trade%20Payables) As of year-end 2022, the Group's total trade payables amounted to RMB 79.81 million, a decrease from 2021, with trade payables being non-interest-bearing and generally settled within 60 days Total Trade Payables | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 79,811 | 99,954 | - Trade payables are non-interest-bearing and are generally settled within a 60-day period[58](index=58&type=chunk) Ageing Analysis of Trade Payables (2022) | Ageing | Amount (RMB thousand) | | :--- | :--- | | Within 6 months | 79,445 | | 6 months to 1 year | 42 | | 1 to 2 years | 324 | | Over 2 years | – | | **Total** | **79,811** | [Other Payables and Accrued Charges](index=29&type=section&id=Other%20Payables%20and%20Accrued%20Charges) As of year-end 2022, the Group's total other payables and accrued charges amounted to RMB 17.54 million, a decrease from 2021, primarily comprising accrued wages, VAT and other taxes payable, and rental deposits received in advance Composition of Other Payables and Accrued Charges | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Contract liabilities | 229 | 1,323 | | Accrued wages | 5,341 | 8,994 | | VAT and other taxes payable | 3,516 | 4,164 | | Rental deposits received in advance | 3,482 | 4,722 | | **Total** | **17,537** | **24,567** | - All interest payable, VAT and other taxes payable, payables for the acquisition of property, plant and equipment, and other payables are non-interest-bearing, with an average term of three months[188](index=188&type=chunk) [Interest-Bearing Bank and Other Borrowings](index=30&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of year-end 2022, the Group's total interest-bearing bank and other borrowings amounted to RMB 216.6 million, comprising RMB 76.13 million in current borrowings and RMB 140.5 million in non-current borrowings, with several bank loans secured by the Group's buildings, land use rights, investment properties, and construction in progress Total Interest-Bearing Bank and Other Borrowings | Type | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Current borrowings | 76,132 | 69,995 | | Non-current borrowings | 140,528 | 167,191 | | **Total** | **216,660** | **237,186** | - Certain bank loans of the Group are secured by buildings, land use rights, investment properties, and construction in progress[189](index=189&type=chunk) [Business Review](index=31&type=section&id=Business%20Review) [Market Review](index=31&type=section&id=Market%20Review) In 2022, the global economy's recovery weakened due to inflation, the Russia-Ukraine conflict, and recurring epidemics, while China's textile industry faced challenges such as localized shutdowns, slowing international demand, and order outflows to Southeast Asia, though market confidence improved in Q4 with adjusted epidemic prevention policies - In 2022, the global economy's recovery momentum weakened due to negative factors such as inflation, the Russia-Ukraine conflict, and recurring domestic epidemics[61](index=61&type=chunk) - China's textile industry composite prosperity index remained below the boom-bust line, but business confidence improved in the fourth quarter with the adjustment of national epidemic prevention policies[61](index=61&type=chunk) - Affected by factors such as slowing overseas demand and supply chain shifts to Southeast Asia, order volumes in China's textile and apparel industry decreased and were lost[61](index=61&type=chunk)[85](index=85&type=chunk) [Business Performance](index=31&type=section&id=Business%20Performance) In 2022, the Group restructured its business, divesting RMAA services to focus on core operations, with continuing operations revenue growing but gross profit margin declining due to increased production costs, while overall business loss significantly narrowed, primarily benefiting from reduced fair value losses on financial instruments and gains from the RMAA business disposal [Continuing Operations](index=32&type=section&id=Continuing%20Operations) In 2022, turnover from continuing operations increased by 4.8% to RMB 216 million, primarily contributed by differentiated polyester fabric dyeing and finishing (84.7%) and property investment (15.3%), while gross profit decreased by 6.6%, and gross profit margin fell from 35.5% to 31.7%, mainly due to increased production costs for dyeing and finishing Turnover and Gross Profit Margin from Continuing Operations for 2022 | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Turnover | 216.0 | 206.2 | +4.8% | | Gross profit | 68.4 | 73.2 | -6.6% | | Gross profit margin | 31.7% | 35.5% | -3.8 percentage points | - Differentiated polyester fabric dyeing and finishing and property investment operations accounted for 84.7% and 15.3% of turnover from continuing operations, respectively[194](index=194&type=chunk) - The decrease in gross profit margin was primarily due to increased production costs for differentiated polyester fabric dyeing and finishing[1](index=1&type=chunk)[194](index=194&type=chunk) [Discontinued Operations](index=32&type=section&id=Discontinued%20Operations) The Group sold its RMAA services segment in July 2022 for RMB 29.5 million, recording a pre-tax gain of approximately RMB 15.6 million, with the business's turnover decreasing by 74.3% year-on-year to RMB 16.5 million, but gross profit shifting from a loss to a profit - The Group sold its RMAA services segment in July 2022 for RMB 29.5 million, recording a pre-tax gain of approximately RMB 15.6 million[194](index=194&type=chunk) Performance of Discontinued Operations | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Turnover | 16.5 | 64.3 | -74.3% | | Gross profit | 1.4 | (6.6) | N/A | | Gross profit margin | 8.4% | Negative | N/A | [Overall Business Performance](index=33&type=section&id=Overall%20Business%20Performance) In 2022, the Group's overall turnover decreased by 14.0% to RMB 232.5 million, but gross profit increased by 4.7% to RMB 69.8 million, with gross profit margin rising to 30.0%, and loss attributable to owners significantly reduced by 77.5% to RMB 55.2 million, primarily due to reduced fair value losses on financial instruments, no goodwill impairment, and gains from the RMAA business disposal Overall Business Performance for 2022 | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Turnover | 232.5 | 270.5 | -14.0% | | Gross profit | 69.8 | 66.7 | +4.7% | | Gross profit margin | 30.0% | 24.6% | +5.4 percentage points | | Loss attributable to owners | 55.2 | 245.3 | -77.5% | | Loss per share | 0.077 | 0.335 | -77.0% | - The reduction in net loss was primarily due to decreased fair value losses on financial instruments, no impairment losses on goodwill and intangible assets, gains from the disposal of the RMAA services segment, reduced fair value losses on investment properties, and remeasurement loss on reclassification of properties held for sale[196](index=196&type=chunk) [Segment Business Performance](index=33&type=section&id=Segment%20Business%20Performance) In 2022, the Group's business segments faced diverse challenges and opportunities, with polyester fabric dyeing and finishing sales declining due to market impact but strategically shifting to domestic apparel orders, property investment benefiting from increased occupancy at Yongsheng Building for stable rental income, and environmental water projects actively progressing, with joint venture projects operational and plans for overseas market expansion [Differentiated Polyester Fabric Dyeing and Finishing](index=33&type=section&id=Differentiated%20Polyester%20Fabric%20Dyeing%20and%20Finishing) In 2022, the polyester fabric dyeing and finishing business saw sales decline by 8.6% year-on-year to RMB 183.1 million, with gross profit margin falling from 34.0% to 22.2%, impacted by lower global consumer sentiment, supply chain shifts, and rising raw material prices, prompting the Group to strategically pivot towards developing domestic apparel orders to mitigate the impact - Yongsheng Dyeing and Finishing is the Group's subsidiary primarily engaged in polyester fabric dyeing and finishing, holding the honor of a provincial-level technology research and development center[63](index=63&type=chunk) - The business experienced a sales decline due to reduced global consumer sentiment, supply chain shifts to Southeast Asia, and rising raw material prices[85](index=85&type=chunk) Performance of Polyester Fabric Dyeing and Finishing Business | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Segment revenue | 183.1 | 200.3 | -8.6% | | Gross profit margin | 22.2% | 34.0% | -11.8 percentage points | - The Group strategically shifted resources to develop domestic apparel orders to offset the impact of declining order demand[85](index=85&type=chunk) [Property Investment](index=34&type=section&id=Property%20Investment) The Group's property investments include Yongsheng Building and eight commercial office units in Hangzhou Xiaoshan Economic and Technological Development Zone, with Yongsheng Building's increased occupancy generating RMB 28.8 million in rental income and RMB 2.2 million in management service income, while the office units contributed RMB 1.9 million in rental income, providing stable revenue to the Group - The Group owns Yongsheng Building (total gross floor area of approximately 41,643.61 square meters) and eight commercial office units in Hangzhou Xiaoshan Economic and Technological Development Zone (total gross floor area of approximately 2,648.78 square meters)[199](index=199&type=chunk) - The retail units in Yongsheng Building are substantially leased out, with occupancy rates further increasing, generating RMB 28.8 million in rental income and RMB 2.2 million in management service income[199](index=199&type=chunk) - All eight commercial office units have been leased out, generating approximately RMB 1.9 million in rental income[199](index=199&type=chunk) [Environmental Water Project Operations](index=35&type=section&id=Environmental%20Water%20Project%20Operations) The Group actively responds to national green development policies by expanding into the production of new building structural reinforcement materials through its joint venture, Zhejiang Deqing Jiemai New Materials Co., Ltd., which is now operational; the Group has also obtained property rights certificates for industrial land in Ma'anshan City, is actively communicating with the government for environmental project licenses, and is advancing a water supply project in Malaysia with Southeast Asian joint venture partners, expecting stable future returns - The Chinese government continues to promote green transformation and low-carbon industrial development, ushering in a new round of growth for the environmental protection industry[201](index=201&type=chunk) - The Group expanded into the production and sales of new building structural reinforcement materials through its joint venture, Zhejiang Deqing Jiemai New Materials Co., Ltd., with the project having completed quality inspection reports and officially commenced operations[201](index=201&type=chunk) - The Group has obtained property rights certificates for two industrial land parcels and related factory buildings in Ma'anshan City, and is actively communicating with the government regarding environmental project licenses, with business operations commencing soon[202](index=202&type=chunk) - The Group is advancing a water supply project in Malaysia through a joint venture in Southeast Asia, aiming to create a benchmark project and facilitate the expansion of other water projects in the Southeast Asian region[202](index=202&type=chunk) [Outlook](index=36&type=section&id=Outlook) Looking ahead to 2023, China's relaxed epidemic control policies and strong economic measures are expected to boost economic recovery, with the Group planning to more actively explore domestic apparel and home textile markets while monitoring improvements in overseas export orders, and favorable real estate policies and the Asian Games effect will benefit Hangzhou's property market, as the Group continues to advance environmental water projects in China and Southeast Asia, optimize asset structure, broaden product lines, and achieve diversified business development - China's relaxed epidemic control policies and strong economic measures at the beginning of 2023 are expected to consolidate and expand the economic recovery momentum[204](index=204&type=chunk) - The Group will more actively explore the domestic apparel and home textile markets, while closely monitoring changes in overseas markets and adjusting strategies promptly[204](index=204&type=chunk) - The Hangzhou government's gradual relaxation of real estate restrictions, coupled with the Asian Games effect, will be beneficial for Hangzhou's economic recovery and real estate market stability[205](index=205&type=chunk) - The retail units in Yongsheng Building are expected to continue providing stable revenue contributions and capital appreciation potential to the Group[207](index=207&type=chunk) - The Group will continue to advance the development of environmental protection and water projects in China and Southeast Asia, seizing the immense business opportunities in the green and circular economies[207](index=207&type=chunk) - The Group will continue to refine its dyeing and finishing processing technology, broaden its product lines, and focus on blue ocean markets such as environmental water services to achieve diversified business development[207](index=207&type=chunk) [Financial Review](index=38&type=section&id=Financial%20Review) [Revenue and Gross Profit](index=38&type=section&id=Revenue%20and%20Gross%20Profit) In 2022, revenue from continuing operations increased by 4.8% to RMB 216 million, primarily driven by a significant 463.8% growth in property investment segment revenue; however, gross profit from continuing operations decreased by 6.6% to RMB 68.4 million, mainly due to increased production costs in the dyeing and finishing segment, leading to a 40.3% decline in its gross profit Revenue and Gross Profit from Continuing Operations for 2022 | Item | 2022 Revenue (RMB thousand) | 2021 Revenue (RMB thousand) | Revenue Change | 2022 Gross Profit (RMB thousand) | 2021 Gross Profit (RMB thousand) | Gross Profit Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Dyeing and Finishing | 183,068 | 200,338 | (8.6)% | 40,645 | 68,094 | (40.3)% | | Property Investment | 32,946 | 5,844 | 463.8% | 27,766 | 5,152 | 438.9% | | **Total** | **216,014** | **206,182** | **4.8%** | **68,411** | **73,246** | **(6.6%)** | - The increase in revenue from continuing operations was primarily due to increased revenue from the property investment segment, mainly driven by higher occupancy rates at Yongsheng Building[209](index=209&type=chunk) - The decrease in gross profit was primarily due to increased production costs in the dyeing and finishing segment, which in turn compressed the segment's gross profit[1](index=1&type=chunk) [Selling and Distribution Expenses](index=39&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's selling and distribution expenses decreased by approximately RMB 1.1 million, a 43.2% year-on-year decline, primarily due to reduced salaries and bonuses for dyeing and finishing sales personnel following a sales downturn during the year, and lower marketing and promotion expenses after the completion of Yongsheng Building's leasing efforts Selling and Distribution Expenses | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 1.415 | 2.493 | -43.2% | - The decrease in selling and distribution expenses was primarily due to reduced salaries and bonuses for sales personnel following a sales downturn, and lower marketing and promotion expenses after the completion of Yongsheng Building's leasing efforts[2](index=2&type=chunk) [Administrative Expenses](index=39&type=section&id=Administrative%20Expenses) Administrative expenses in 2022 were approximately RMB 39.8 million, remaining stable compared to 2021 Administrative Expenses | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 39.8 | 39.8 | Stable | [Fair Value Loss on Investment Properties](index=39&type=section&id=Fair%20Value%20Loss%20on%20Investment%20Properties) In 2022, the Group recognized a fair value loss on investment properties of approximately RMB 20.3 million, primarily due to the adverse impact of epidemic controls and economic slowdown on China's real estate market, coupled with increased office supply in Hangzhou leading to downward pressure on rents; this non-cash loss had no material impact on cash flow Fair Value Loss on Investment Properties | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Fair value loss | 20.3 | 104.7 | -80.6% | - The loss was primarily due to negative factors such as epidemic controls and economic slowdown affecting China's real estate market, as well as increased competition in Hangzhou's office leasing market leading to continuous downward pressure on rents[6](index=6&type=chunk) - The fair value loss on investment properties is a non-cash item and will not have a material impact on the Group's cash flow[6](index=6&type=chunk) - The valuation adopted the income approach, with market rental rates decreasing from RMB 73-190 per square meter per month in 2021 to RMB 69-188 per square meter per month in 2022[7](index=7&type=chunk) [Remeasurement Loss on Transfer of Certain Properties Held for Sale](index=41&type=section&id=Remeasurement%20Loss%20on%20Transfer%20of%20Certain%20Properties%20Held%20for%20Sale) In 2022, the use of the Group's properties held for sale changed, leading to their reclassification as completed investment properties and the recognition of a remeasurement loss of approximately RMB 70.4 million Remeasurement Loss | Indicator | 2022 (RMB million) | 2021 (RMB million) | | :--- | :--- | :--- | | Remeasurement loss | 70.4 | – | - The loss resulted from a change in the use of properties held for sale, which were reclassified as completed investment properties upon the commencement of an operating lease with an external third party[10](index=10&type=chunk) [Impairment Loss on Financial and Contract Assets](index=41&type=section&id=Impairment%20Loss%20on%20Financial%20and%20Contract%20Assets) In 2022, impairment loss on financial and contract assets increased by approximately 4,300% to RMB 2.0 million, primarily due to increased expected credit losses on the principal and interest of loans receivable Impairment Loss on Financial and Contract Assets | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Impairment loss | 2.0 | 0.046 | +4,300% | - The increase in impairment loss was primarily due to increased expected credit losses on the principal and interest of loans receivable[11](index=11&type=chunk) [Finance Costs](index=41&type=section&id=Finance%20Costs%20%28Financial%20Review%29) In 2022, finance costs increased by approximately 108% to RMB 15.0 million, primarily because no finance costs were capitalized after Yongsheng Building was put to its intended use at the end of September 2021, with all finance costs recognized in profit or loss Finance Costs | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Finance costs | 15.0 | 7.2 | +108% | - The increase in finance costs was primarily due to no finance costs being capitalized after Yongsheng Building was put to its intended use at the end of September 2021, with all finance costs recognized in profit or loss[12](index=12&type=chunk) [Loss Attributable to Owners](index=41&type=section&id=Loss%20Attributable%20to%20Owners) In 2022, the Group recorded a loss attributable to owners of approximately RMB 55.2 million, a reduction of about 78% from the previous year, primarily due to the combined impact of the aforementioned factors Loss Attributable to Owners | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Loss attributable to owners | 55.2 | 245.3 | -77.5% | [Cash Flows](index=41&type=section&id=Cash%20Flows) In 2022, net cash from operating activities significantly increased to RMB 55.3 million, primarily due to higher rental income from Yongsheng Building; investing activities shifted from a net outflow to a net inflow of RMB 44.3 million, mainly due to reduced capital expenditure, disposal of a subsidiary, and settlement of loans receivable; and financing activities changed from a net inflow to a net outflow of RMB 48.1 million, primarily due to fewer new bank loans and increased repayments Summary of Cash Flows for 2022 | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 55,256 | 31,361 | | Net cash flows from/(used in) investing activities | 44,262 | (79,364) | | Net cash flows (used in)/from financing activities | (48,147) | 47,369 | | Cash and cash equivalents at end of year | 143,834 | 86,551 | - The significant increase in net cash from operating activities was primarily due to increased rental income generated from Yongsheng Building[16](index=16&type=chunk) - Investing activities shifted from a net outflow to a net inflow, primarily due to reduced capital expenditure, disposal of a subsidiary, and settlement of loans receivable[18](index=18&type=chunk) - Financing activities shifted from a net inflow to a net outflow, primarily due to fewer new bank loans and increased bank loan repayments[18](index=18&type=chunk) [Liquidity and Financial Resources](index=42&type=section&id=Liquidity%20and%20Financial%20Resources) As of year-end 2022, the Group's cash and bank balances increased to RMB 146.9 million, total bank borrowings decreased to RMB 216.1 million, the current ratio declined to 2.25, and the debt-to-equity ratio remained stable at 0.20 Liquidity and Financial Resources for 2022 | Indicator | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances | 146.9 | 86.6 | +69.6% | | Total bank borrowings | 216.1 | 236.6 | -8.6% | | Current ratio | 2.25 | 3.21 | -0.96 | | Debt-to-equity ratio | 0.20 | 0.20 | Stable | [Exchange Rate Fluctuation Risk and Related Hedging](index=43&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) The Group primarily operates in Mainland China, with most transactions settled in RMB, which is also the reporting currency, resulting in extremely low exposure to foreign exchange risk; the Group currently has no foreign exchange hedging policy but regularly reviews its foreign exchange risk management - The Group primarily conducts its business in Mainland China, with most transactions settled in RMB, which is also the reporting currency[21](index=21&type=chunk) - The Group's exposure to foreign exchange risk is extremely low, and it currently has no foreign exchange hedging policy, but manages foreign exchange risk through regular reviews[21](index=21&type=chunk) - The Group's cash and bank deposits are primarily denominated in RMB, and if dividends are declared, the Company will pay them in HKD[21](index=21&type=chunk) [Employee Benefits and Remuneration Policy](index=43&type=section&id=Employee%20Benefits%20and%20Remuneration%20Policy) As of year-end 2022, the Group had 308 employees, a slight increase from 2021, with remuneration determined by experience, qualifications, Group performance, and market conditions, offering competitive compensation packages, discretionary bonuses, and share options; the Group participates in local government social security schemes and emphasizes team building Number of Employees and Costs | Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Number of employees | 308 | 304 | +4 | | Staff costs from continuing operations | 33.7 million | 37.1 million | -9.2% | - Employee remuneration is determined based on experience, qualifications, Group performance, and prevailing market conditions, offering competitive compensation packages, discretionary bonuses, and share options[22](index=22&type=chunk) - The Group participates in social security schemes operated by relevant local government authorities, covering pensions, medical insurance, unemployment insurance, work injury insurance, and maternity insurance[22](index=22&type=chunk) [Significant Investments Held as at December 31, 2022](index=44&type=section&id=Significant%20Investments%20Held%20as%20at%20December%2031%2C%202022) As of year-end 2022, the Group held two significant investments totaling RMB 43.522 million, with a fair value of RMB 25.545 million at year-end, comprising money market trusts and private equity funds Details of Significant Investments for 2022 | Asset Manager | Custodian | Investment Amount (RMB thousand) | Agreement Date | Fair Value at Year-End (RMB thousand) | Investment Type | | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Tiange Investment Management Co., Ltd. | Hengtai Securities Co., Ltd. | 20,000 | February 1, 2021 | 20,547 | Money market trust | | Minsheng Wealth Asset Management Co., Ltd. | China Merchants Securities Co., Ltd. | 23,522 | June 24, 2020 | 4,998 | Private equity fund | | **Total** | | **43,522** | | **25,545** | | - Save as disclosed, the Group held no other significant investments as at December 31, 2022[33](index=33&type=chunk) [Details of Loans Receivable as at December 31, 2022](index=45&type=section&id=Details%20of%20Loans%20Receivable%20as%20at%20December%2031%2C%202022) As of year-end 2022, the Group's total loans receivable amounted to RMB 141.7 million, involving multiple borrowers, with annual interest rates ranging from 5.0% to 18.0% and loan terms mostly between 9 and 18 months; some loans are secured by personal guarantees or asset pledges, and the Group conducts due diligence and implements monitoring measures before granting loans Details of Loans Receivable for 2022 | Borrower | Principal (RMB) | Annual Interest Rate | Loan Term (Months) | Guarantee/Collateral | | :--- | :--- | :--- | :--- | :--- | | Borrower A | 27,000,000 | 6.0% | 12 | Unsecured and unguaranteed | | Borrower B | 27,000,000 | 6.0% | 12 | Unsecured and unguaranteed | | Borrower C | 6,000,000 | 6.0% | 12 | Unsecured and unguaranteed | | Borrower D | 40,197,000 | 5.0% | 15 | Personal guarantee from the sole shareholder of Borrower D | | Borrower E | 13,399,000 | 5.0% | 9 | Personal guarantee from the sole shareholder of Borrower E | | Borrower F | 25,534,000 | 12.0% | 18 | Pledged by the right to receive income from wastewater treatment services | | Borrower G | 2,585,000 | 18% | 18 | Pledged by equity in Borrower G, personal guarantee from Borrower G's shareholder; mortgage on Borrower G's machinery and equipment | | **Total** | **141,715,000** | | | | - Borrower D and Borrower E repaid all outstanding balances and accrued interest on March 30, 2023[29](index=29&type=chunk) - Borrower G has repaid RMB 7.36 million, with the outstanding principal overdue, and the Group charges 18% overdue interest[30](index=30&type=chunk) - The Group conducts due diligence before granting loans and adopts loan monitoring measures to protect its interests[31](index=31&type=chunk) [Contingent Liabilities](index=46&type=section&id=Contingent%20Liabilities) As at December 31, 2022, the Group had no significant contingent liabilities, consistent with 2021 - The Group had no significant contingent liabilities as at December 31, 2022[38](index=38&type=chunk) [Events After the Reporting Period](index=46&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred after the end of the reporting period for the Group - No significant events occurred after the end of the reporting year[39](index=39&type=chunk) [Other Information](index=46&type=section&id=Other%20Information) [Closure of Register of Members](index=46&type=section&id=Closure%20of%20Register%20of%20Members) The Company will suspend the registration of members from June 9 to June 14, 2023, to determine the eligibility of shareholders to attend the Annual General Meeting on June 14, 2023 - The Company will suspend the registration of members from June 9 to June 14, 2023[40](index=40&type=chunk) - The closure of the register of members is to determine the eligibility of shareholders to attend the Annual General Meeting to be held on June 14, 2023[40](index=40&type=chunk) [Purchase, Sale and Redemption of the Company's Listed Securities](index=46&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) In 2022, the Company repurchased a total of 24,535,000 ordinary shares on the Stock Exchange for a total consideration (before expenses) of HKD 14,787,000, with all repurchased shares cancelled; save for this, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities - In 2022, the Company repurchased a total of 24,535,000 ordinary shares on the Stock Exchange for a total consideration (before expenses) of HKD 14,787,000[43](index=43&type=chunk) - All repurchased shares were cancelled[43](index=43&type=chunk) Details of Share Repurchases for 2022 | Date | Number of Shares Repurchased | Repurchase Price (Highest/Lowest) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | | May 26, 2022 | 21,585,000 | 0.61/0.59 | 13,017,000 | | May 27, 2022 | 2,950,000 | 0.6/– | 1,770,000 | | **Total** | **24,535,000** | | **14,787,000** | [Corporate Governance Code](index=47&type=section&id=Corporate%20Governance%20Code) The Company is committed to maintaining high standards of corporate governance, guided by the Corporate Governance Code set out in Appendix 14 of the Listing Rules, with the Board comprising four executive directors and three independent non-executive directors, and the Board believes the Company has complied with the Code throughout the year - The Company is committed to achieving and maintaining high standards of corporate governance, based on the Corporate Governance Code set out in Appendix 14 of the Listing Rules[45](index=45&type=chunk) - The Board comprises four executive directors and three independent non-executive directors[45](index=45&type=chunk) - The Board is of the view that the Company has complied with the Corporate Governance Code throughout the year[45](index=45&type=chunk) [Model Code for Securities Transactions by Directors](index=47&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those in the Model Code set out in Appendix 10 of the Listing Rules, and all directors have confirmed compliance with the Model Code throughout the review year - The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those in the Model Code set out in Appendix 10 of the Listing Rules[46](index=46&type=chunk) - Each Director has confirmed compliance with the Model Code throughout the review year[46](index=46&type=chunk) [Audit Committee](index=48&type=section&id=Audit%20Committee) The Company established an Audit Committee on November 7, 2013, comprising three independent non-executive directors, whose primary responsibilities include reviewing financial information, overseeing financial reporting and internal control procedures, and nominating and monitoring external auditors; the Committee has reviewed the 2022 audited financial statements and deemed them compliant with applicable accounting standards and legal requirements - The Audit Committee was established on November 7, 2013, comprising three independent non-executive directors, with Ms. Wong Wai Ling as Chairperson[48](index=48&type=chunk) - The Audit Committee's primary responsibilities include reviewing the Company's financial information, reviewing and overseeing financial reporting processes and internal control procedures, and nominating and monitoring external auditors[48](index=48&type=chunk) - The Audit Committee has reviewed the 2022 audited financial statements and is of the opinion that they comply with applicable accounting standards, the Listing Rules, and other applicable legal requirements[48](index=48&type=chunk) [Publication of Results Announcement](index=48&type=section&id=Publication%20of%20Results%20Announcement) This results announcement has been published on the Company's website and the Stock Exchange's website, and the annual report for the current year (containing all information required by the Listing Rules) will be dispatched to shareholders and published on the Company's and Stock Exchange's websites in due course - This results announcement has been published on the Company's website (www.chinaysgroup.com) and the Stock Exchange's website (www.hkexnews.hk)[49](index=49&type=chunk) - The annual report for the current year will be dispatched to shareholders and published on the Company's and Stock Exchange's websites in due course[49](index=49&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 121.7 million, a decrease of 6.10% compared to RMB 129.6 million in 2021[17]. - Gross profit increased by 13.70% to RMB 35.7 million from RMB 31.4 million in the previous year[17]. - Profit before tax decreased by 10.19% to RMB 14.1 million from RMB 15.7 million in 2021[17]. - Profit for the period attributable to shareholders was RMB 11.2 million, down 8.94% from RMB 12.3 million in 2021[17]. - Basic earnings per share for the period was RMB 1.5 cents, a decrease of 11.76% from RMB 1.7 cents[18]. - The Group recorded a turnover of approximately RMB121.7 million, representing a decrease of approximately 6.10% compared to RMB129.6 million in the same period of 2021, mainly due to the contraction of the RMAA business[30]. - Profit attributable to Shareholders was approximately RMB11.2 million, a decrease of approximately 8.94% from RMB12.3 million in the same period of 2021, with earnings per share at RMB1.5 cents[30]. - Total comprehensive income for the period was RMB 14,759,000, an increase of 80.5% from RMB 8,190,000 in 2021[131]. Asset and Liability Management - As of June 30, 2022, non-current assets were RMB 914.40 million, an increase of 1.52% from RMB 900.73 million at the end of 2021[20]. - Current assets decreased by 2.62% to RMB 636.73 million from RMB 653.86 million[20]. - Net current assets decreased by 3.69% to RMB 433.56 million from RMB 450.18 million[20]. - Net assets as of June 30, 2022, were RMB 1,167.25 million, a slight increase of 0.19% from RMB 1,165.08 million[20]. - Total assets as of June 30, 2022, amounted to RMB 1,551,127,000, a slight decrease from RMB 1,554,586,000 as of December 31, 2021[178]. - Total liabilities as of June 30, 2022, were RMB 383,877,000, compared to RMB 389,503,000 as of December 31, 2021, indicating a reduction in liabilities[178]. Business Segments and Operations - Revenue from dyeing and processing of differentiated polyester filament fabric accounted for approximately 75.9% of the Group's turnover, while RMAA services and properties investment contributed 13.5% and 10.6%, respectively[31]. - The RMAA segment recorded revenue of approximately RMB 16.5 million, a decline of 63.27% compared to the same period last year, and continued to operate at a loss[40]. - The Group streamlined its business structure by disposing of its RMAA services segment to focus on dyeing and processing of differentiated polyester filament fabric and environmental water project operations[26]. - Segment revenue from processing was RMB 92,327,000, while RMAA service revenue was RMB 16,500,000 for the six months ended June 30, 2022[172]. Market Conditions and Trends - The Consumer Confidence Index has fallen since the second quarter of 2022, leading to weakened demand for non-essential consumables[38]. - The scale of China's textile and apparel orders relocation was approximately US$6 billion in the first half of 2022, primarily to countries like Bangladesh, Vietnam, and India[38]. - The apparel consumption market in China is expected to grow, driven by increasing per capita disposable income and a recovery in offline consumption in the second half of 2022[52]. Cost Management and Efficiency - Selling and distribution expenses decreased by approximately RMB0.7 million to RMB0.64 million, aligning with the drop in sales scale and cost-saving measures[65]. - Administrative expenses increased by RMB1.67 million to approximately RMB22.54 million, mainly due to higher depreciation and operating expenses of the owner-occupied part of Yongsheng Plaza[69]. - The Group aims to complete technological improvements before the peak consumption season to enhance production efficiency and reduce defect rates[52]. Corporate Governance and Compliance - The audit committee reviewed the unaudited interim results and confirmed compliance with applicable accounting standards and adequate disclosures[123]. - The board comprises four executive directors and three independent non-executive directors, maintaining high standards of corporate governance[119]. - The company is committed to transparency, accountability, and independence in its corporate governance practices[119]. Employee and Social Responsibility - As of June 30, 2022, the Group employed a total of 298 employees, a decrease from 319 employees as of June 30, 2021[84]. - Employee costs, including directors' remuneration, amounted to approximately RMB 16.5 million in the first half of 2022, down from approximately RMB 18.6 million in the first half of 2021, representing a decrease of about 5.6%[84]. - The Group emphasizes team building and recognizes that its success depends on the contributions of all employees[84]. Financial Instruments and Risk Management - The Group has not hedged foreign exchange risks and will closely monitor currency fluctuations[82]. - The Group measures expected credit loss (ECL) for loan receivables in accordance with IFRS 9, generally measuring ECL equal to 12-month ECL unless there is a significant increase in credit risk[103]. - The Group conducted due diligence on borrowers prior to granting loans, including reviewing financial statements and repayment records[102].

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 270.5 million, a decrease of 25.3% compared to RMB 361.9 million in 2020[9]. - Gross profit for 2021 was RMB 66.7 million, down 40.7% from RMB 112.4 million in 2020[9]. - The company reported a loss for the year of RMB 246.3 million, compared to a profit of RMB 71.1 million in 2020, representing a decline of 446.4%[9]. - Basic loss per share for 2021 was RMB (33.5) cents, a decrease of 438.4% from RMB 9.9 cents in 2020[9]. - The Group recorded a turnover of approximately RMB 270.5 million, representing a decrease of approximately 25.3% compared to RMB 361.9 million in 2020[41]. - The gross profit was approximately RMB 66.7 million, a decrease of approximately 40.7% from RMB 112.4 million in 2020, with a gross profit margin declining to approximately 24.6% from 31.0%[41]. - The loss attributable to shareholders was approximately RMB 245.3 million, compared to a profit of approximately RMB 72.7 million in 2020, resulting in a loss per share of RMB 33.5 cents[41]. - The RMAA service segment recorded a revenue of approximately RMB 64.3 million, a decline of approximately 65.3% compared to RMB 185.1 million in 2020 due to the impact of the COVID-19 pandemic[52][54]. - The RMAA service segment experienced a significant loss of RMB 6.6 million in 2021, compared to a profit of RMB 48.1 million in 2020, marking a decline of 113.7%[79]. Asset and Liability Changes - Non-current assets decreased by 11.5% to RMB 900.7 million in 2021 from RMB 1,017.4 million in 2020[9]. - Current assets fell by 14.5% to RMB 653.9 million in 2021, down from RMB 764.6 million in 2020[9]. - Net assets decreased by 18.5% to RMB 1,165.1 million in 2021 from RMB 1,430.2 million in 2020[9]. - Current liabilities remained relatively stable, with a slight decrease of 0.6% to RMB (203.7) million in 2021[9]. - Non-current liabilities increased by 26.6% to RMB (185.8) million in 2021 from RMB (146.8) million in 2020[9]. - The current ratio decreased to 3.21 in 2021 from 3.73 in 2020, while the debt to equity ratio increased to 0.33 from 0.12[140]. Investment and Development - The Group actively explored opportunities in renewable resources and environmental protection, acquiring two parcels of land in Ma'anshan City, Anhui Province for solid waste disposal projects[29]. - The Group's investment properties are expected to diversify income sources in the long run, supporting sustainable development[25]. - The Group is actively exploring overseas environmental protection projects to capitalize on green industry development opportunities[69]. - The Group plans to expand its dyeing production capacity through acquisitions and mergers, focusing on high-value orders to enhance gross profit margins[63]. - The Group's investment in environmental protection is expected to benefit from the anticipated growth of the industry, projected to exceed RMB 19 trillion by 2027[59]. Operational Strategies - The Group plans to focus on internal optimization and active research and development to enhance overall competitiveness and expand its industrial presence[22]. - The Group aims to diversify its revenue sources by expanding into various fields of domestic environmental protection-related industries[29]. - The Group will continue to seize opportunities in different industries to diversify business types and invest in sustainable development[30]. - The Group's strategy aligns with China's 14th Five-Year Plan, focusing on high-quality development in the textile industry[22]. Management and Governance - The Group's management team includes experienced professionals with backgrounds in textile, dyeing, and property development, enhancing operational efficiency[170][176]. - The board includes independent directors with significant experience in finance and management, enhancing corporate governance and strategic oversight[184]. - The management team emphasizes the importance of independent judgment in assessing company performance and resource allocation[186]. - The Group's leadership structure includes a diverse range of expertise, from textile operations to property development, supporting market expansion strategies[170][176]. Market Conditions and Challenges - The resurgence of COVID-19 in Hong Kong has led to the suspension of redevelopment projects, impacting the overall RMAA market[64]. - The management predicts that the approval of engineering projects will continue to be delayed until the COVID-19 situation improves[106]. - The environmental protection industry in China is projected to exceed RMB 19 trillion by 2027, driven by government policies and market demand[61]. Research and Innovation - The Group acquired six new patents during the Year under Review, including three invention patents, contributing to ongoing innovation in dyeing and processing technology[48][50]. - The company is actively involved in the research and development of new materials, particularly in the area of polymer-based nanocomposite fibers[189]. - The company aims to expand its market presence through innovative product development and strategic partnerships in the materials sector[190].