Key Points Industry/Company Involved - **Company**: Ultimate Energy Corporation (UEC) - **Industry**: Clean Energy, LNG, Industrial Gas, and Equipment Manufacturing Core Views and Arguments - **UEC's Business Performance**: - **Clean Energy**: Strong performance with continuous revenue and profit margin improvement. - **LNG**: Continued growth in orders and expected to contribute significantly to revenue. - **Industrial Gas**: Steady development with new projects and expansion plans. - **Equipment Manufacturing**: Steady growth with new orders and projects. - **Market Outlook**: - **Overall**: Positive outlook with industry trends indicating upward momentum. - **Clean Energy**: Expected to see continued growth due to increasing demand for sustainable energy solutions. - **LNG**: Expected to see sustained growth due to increasing demand for natural gas as a transition fuel. - **Industrial Gas**: Expected to see steady growth due to increasing demand for industrial gases in various industries. Other Important Points - **Order Book**: - **Clean Energy**: Expected to reach 150 billion RMB by the end of the year. - **LNG**: Expected to reach 100 billion RMB in new orders. - **Revenue Growth**: - **Overall**: Expected to achieve double-digit revenue growth. - **Clean Energy**: Expected to contribute around 40 billion RMB in revenue. - **LNG**: Expected to contribute around 40 billion RMB in revenue. - **Profitability**: - **Overall**: Expected to achieve high single-digit profit growth. - **Clean Energy**: Expected to see improvement in profit margins due to increased efficiency and new projects. - **LNG**: Expected to see improvement in profit margins due to increased demand and efficient operations. - **Investment Plans**: - **Clean Energy**: Expansion plans for new projects and capacity increases. - **LNG**: Expansion plans for new projects and capacity increases. - **Market Risks**: - **Macroeconomic Factors**: Potential impact from global economic conditions and geopolitical events. - **Competition**: Intense competition in the clean energy and LNG markets. References - [doc id='1'] - [doc id='2'] - [doc id='3'] - [doc id='4'] - [doc id='5'] - [doc id='6'] - [doc id='7'] - [doc id='8'] - [doc id='9']

Investment Rating - The investment rating for the company has been downgraded to "Accumulate" from "Buy" [2][4]. Core Views - The company's revenue for Q3 2024 increased by 10.4% year-on-year, driven primarily by a 28.1% increase in the clean energy segment, which reached 4.72 billion RMB [1]. - New order intake for Q3 2024 decreased by 38.5% year-on-year to 4.36 billion RMB, with the clean energy segment seeing a 39.1% decline [2]. - Despite the decline in new orders, the total order backlog increased by 25.2% year-on-year to 27.73 billion RMB, indicating strong future business support [2]. Summary by Sections Revenue Performance - Q3 2024 revenue reached 6.49 billion RMB, up 10.4% year-on-year, with the clean energy segment contributing significantly [1]. - For the first three quarters of 2024, total revenue grew by 8.0% year-on-year to 17.97 billion RMB, while clean energy revenue rose by 26.2% to 12.60 billion RMB [1]. Order Intake and Backlog - New orders for Q3 2024 fell to 4.36 billion RMB, a 38.5% decrease year-on-year, with clean energy orders down 39.1% [2]. - The total new order intake for the first three quarters of 2024 increased by 5.1% year-on-year to 20.76 billion RMB, supported by a 22.1% rise in clean energy orders [2]. Profit Forecast Adjustments - The net profit forecasts for FY24-26 have been reduced by 2.9%, 4.5%, and 10.8% respectively, with projected net profits of 1.12 billion RMB, 1.34 billion RMB, and 1.52 billion RMB [2]. - The target price has been adjusted from 7.90 HKD to 7.55 HKD, reflecting a potential upside of 10.8% based on the FY25 target P/E ratio of 10.5x [2].

Investment Rating - The report maintains a **Buy** rating for CIMC Enric (3899 HK) with a target price of **HKD 8.45**, representing a potential upside of **24.1%** [6] Core Views - CIMC Enric's Q3 2024 revenue increased by **10% YoY to RMB 6.49 billion**, driven by strong growth in the clean energy segment, which saw a **28% YoY increase to RMB 4.72 billion** [1] - The company's total revenue for the first nine months of 2024 grew by **8% YoY**, with the clean energy segment contributing a **26% YoY increase** [1] - The clean energy segment's growth was primarily fueled by the delivery of **3 vessels (1 LNG bunkering vessel + 2 LEG carriers)** in Q3, bringing the total deliveries to **7 vessels** by the end of October 2024 [1] - Despite a **14% YoY decline in hydrogen product revenue** in Q3, the clean energy segment's backlog increased by **43% YoY**, although the growth rate slowed compared to the **70-71% YoY increase** in Q1-Q2 2024 [1] Segment Performance Clean Energy - Q3 2024 clean energy revenue reached **RMB 4.72 billion**, up **28% YoY**, with offshore clean energy revenue surging **74.6% YoY** [1] - Hydrogen product revenue declined by **14% YoY** in Q3, with the backlog for hydrogen products dropping **24% YoY to RMB 320 million** [1] - The clean energy backlog stood at **RMB 15.51 billion** in Q3, up **43% YoY** [1] Chemical & Liquid Food - Chemical equipment revenue in Q3 2024 fell **25% YoY**, with new orders growing **31% QoQ** but still down **26% YoY** [2] - Liquid food equipment revenue declined **13% YoY** in Q3, with the backlog down **14% YoY** [2] - Management cited cautious capital expenditure from overseas clients and uncertain global consumption growth as key challenges for these segments [2] Order Backlog - Total backlog at the end of Q3 2024 was **RMB 27.7 billion**, up **25% YoY** but down **6% QoQ** [1] - Clean energy equipment backlog reached **RMB 15.51 billion**, while chemical and liquid food equipment backlogs stood at **RMB 1.44 billion** and **RMB 5.21 billion**, respectively [4] Management Guidance - Management maintained its 2024 full-year revenue growth guidance of **>10% YoY** and core profit growth in the **single-digit range** [2] - The hydrogen product revenue target for 2024 remains unchanged at **RMB 900 million** [2] - A delayed South American liquid food project is expected to be delivered in **2025** [2]

Corporate Governance - The board of directors includes non-executive directors Gao Xiang (Chairman), executive director Yang Xiaohu (President), non-executive directors Yu Yuqun, Zeng Han, and Wang Yu, as well as independent non-executive directors Xu Qipeng, Wang Caiyong, Yang Lei, and Huang Li[166] Headquarters Location - The company's headquarters in China is located at the CIMC R&D Center, No. 2 Gangwan Avenue, Shekou Industrial Zone, Shenzhen, Guangdong[168] Financial Reporting and Compliance - The company confirms that there are no significant changes in the information disclosed in the 2023 annual report regarding the matters listed in Appendix D2, Paragraph 32 of the Listing Rules[165]

Investment Rating - The report does not specify an explicit investment rating for the company [5]. Core Views - The clean energy segment shows strong performance with a revenue increase of 25.1% year-on-year, reaching 7.88 billion RMB, and a gross margin improvement to 12.6% [2][3]. - The chemical segment is expected to improve in the second half of the year, with new orders showing a significant increase of 245.4% quarter-on-quarter [3]. - The liquid food segment is projected to maintain double-digit growth throughout the year, with a revenue increase of 14.7% year-on-year [3][4]. Summary by Relevant Sections Clean Energy Performance - The clean energy business continued its strong momentum, achieving a revenue of 7.88 billion RMB in the first half of 2024, a 25.1% increase year-on-year, with a gross margin of 12.6% [2][3]. - The waterborne clean energy segment saw a revenue growth of 48.96%, reaching 1.77 billion RMB [3]. - As of June 2024, the clean energy backlog reached 22.93 billion RMB, a significant increase of 70.7% year-on-year, with new orders totaling 12.92 billion RMB, up 63.3% [3]. Hydrogen Energy Business - The hydrogen energy segment reported a revenue of 450 million RMB, reflecting a year-on-year growth of 65.2% [3]. - New orders in this segment amounted to 450 million RMB, a 29.3% increase, with a backlog of 330 million RMB, slightly down by 11% [3]. Chemical Environment Segment - The chemical environment segment generated a revenue of 1.3 billion RMB, down 47.1% year-on-year, with a gross margin of 15.7% [3]. - New orders in Q2 2024 for the chemical segment were 1.21 billion RMB, showing a quarter-on-quarter increase of 245.4% and a year-on-year increase of 28.6% [3]. Liquid Food Segment - The liquid food segment achieved a revenue of 2.31 billion RMB, a 14.7% increase year-on-year, with a gross margin of 19.1% [3]. - As of June 2024, new orders in this segment totaled 1.79 billion RMB, with a backlog of 4.9 billion RMB [3].

Investment Rating - The report maintains a "Buy" rating for CIMC Enric (3899 HK) [1] Core Views - CIMC Enric's clean energy business significantly boosted revenue growth, with new orders growing rapidly and stable operations [1] - The company achieved revenue of RMB 11 48 billion in H1 2024, up 6 7% YoY, while net profit attributable to shareholders was RMB 490 million, down 14 5% YoY [1] - Clean energy revenue increased by 25 1% YoY, with overseas business growing faster than domestic, particularly in waterborne clean energy and hydrogen energy [1] - The company's cumulative new orders reached RMB 16 4 billion in H1 2024, up 29 5% YoY, with clean energy new orders showing significant growth [1] Business Segments Clean Energy - Revenue from clean energy reached RMB 7 876 billion in H1 2024, up 25 1% YoY, with domestic revenue at RMB 5 71 billion, up 17 8% YoY, and overseas revenue at RMB 2 17 billion, up 49 6% YoY [1] - New orders for clean energy totaled RMB 12 92 billion in H1 2024, up 63 3% YoY, with outstanding orders at RMB 22 93 billion, up 70 7% YoY [1] - LNG vehicle cylinder revenue surged 711% YoY to RMB 720 million, with new orders for LNG vehicle cylinders reaching RMB 790 million, up 168 8% YoY [1] - Waterborne clean energy revenue grew 48 9% YoY to RMB 1 77 billion, with overseas revenue up 153 6% YoY [1] - Hydrogen energy revenue increased by 65 2% YoY to RMB 450 million, with new orders up 29 3% YoY [2] Chemical Environment - Chemical environment revenue declined 47 1% YoY to RMB 1 3 billion in H1 2024, with Q2 revenue improving 30 8% QoQ [2] - New orders for chemical environment totaled RMB 1 69 billion in H1 2024, down 26 8% YoY, but Q2 new orders surged 245 4% QoQ [2] Liquid Food - Liquid food revenue grew 14 7% YoY to RMB 2 31 billion in H1 2024, with domestic revenue up 113 9% YoY [3] - Beer revenue increased by 9 5% YoY to RMB 1 71 billion, while non-beer revenue grew 32 7% YoY [3] Financial Data and Valuation - The company's revenue is expected to grow from RMB 27 068 billion in 2024E to RMB 35 425 billion in 2026E, with net profit attributable to shareholders projected to increase from RMB 1 364 billion in 2024E to RMB 1 815 billion in 2026E [5] - The PE ratio is expected to decline from 8 72x in 2024E to 6 56x in 2026E, indicating potential undervaluation [5] Industry Trends - The global LNG bunkering market is expected to grow from 1 million tons in 2023 to 3 000-4 000 million tons by 2030, with significant opportunities in LNG-powered vessels and bunkering stations [2] - The domestic market for LNG-powered inland vessels is projected to reach RMB 30 5 billion, driven by policy support for equipment upgrades [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 7.90, down from HKD 9.20 [2][3][8]. Core Insights - The company's net profit for the first half of 2024 decreased by 14.5% year-on-year to RMB 490 million, primarily due to a 47.1% decline in revenue from the chemical and environmental protection segment and a 25.1% increase in financial expenses [2][6]. - Despite the overall decline, the clean energy segment saw a revenue increase of 25.1% year-on-year to RMB 7.88 billion, benefiting from rising natural gas consumption and imports in China [2][6]. - New orders in the clean energy segment surged by 63.3% year-on-year to RMB 12.92 billion, with significant growth in both offshore and onshore clean energy orders [2][6]. Summary by Sections Financial Performance - In 1H24, total revenue was RMB 11.48 billion, reflecting a 6.7% increase year-on-year [6]. - The gross profit margin for the clean energy segment improved by 0.4 percentage points to 12.6%, while the chemical and environmental protection segment's margin fell by 7.0 percentage points to 15.7% [2][6]. - The company reported a total of RMB 16.4 billion in new orders for 1H24, a 29.5% increase year-on-year, with the clean energy segment contributing significantly to this growth [2][6]. Order Backlog - As of June 30, 2024, the company's order backlog reached RMB 29.35 billion, a 42.5% increase year-on-year, with the clean energy segment accounting for 78.1% of this backlog [2][6]. Strategic Direction - The company reiterated its goal to transform from a traditional equipment manufacturer to a comprehensive service provider for low-carbon smart energy solutions, expanding its business into upstream and downstream segments of the energy value chain [2][6].

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The chemical sector shows signs of recovery, while clean energy growth exceeds expectations. The company's core profit for the first half of 2024 decreased by 3.5% year-on-year to 600 million RMB. The clean energy segment continued its strong growth from Q1, with overseas revenue increasing by 72% year-on-year, driven by offshore products. Hydrogen energy product revenue rose by 74% to 170 million RMB. However, the chemical and liquid food segments underperformed, with the chemical sector's gross profit declining by 63% due to low industry demand [1][2] - The second half of 2024 is expected to see a slight rebound in the chemical sector, with continued strong growth in clean energy. Despite weak performance in the first half, the likelihood of a bottoming out is high, especially in the chemical sector, which saw a 32% quarter-on-quarter revenue increase in Q2. New orders for standard containers have also rebounded significantly [1][2] - The company expects the liquid food segment to achieve over 10% revenue growth and over 20% gross profit growth year-on-year in 2024. The total gross profit for the chemical and liquid food segments in the second half of the year is estimated to be 810 million RMB, with a year-on-year decline narrowing to 4% [1][2] Financial Summary - The company’s revenue is projected to grow from 19,602 million RMB in 2022 to 37,267 million RMB in 2026, with a compound annual growth rate (CAGR) of 11% from 2024 to 2026. Net profit is expected to increase from 1,055 million RMB in 2022 to 1,604 million RMB in 2026, with a recovery to double-digit growth in 2025 [5][11] - The estimated earnings per share (EPS) for 2024 is 0.64 RMB, with a projected P/E ratio of 9.1 times. The report adjusts the target price to 8.45 HKD, reflecting a 31.8% potential upside from the current price of 6.41 HKD [2][5]

Investment Rating - The report maintains a "Buy" rating for the company [4][5]. Core Views - The company has shown revenue growth in the first half of 2024, with a 6.7% year-on-year increase in revenue to 11.48 billion RMB, although net profit decreased by 14.5% to 490 million RMB [2]. - The clean energy segment has performed exceptionally well, with a 25.1% increase in revenue to 7.88 billion RMB, driven by the recovery in natural gas consumption and supportive government policies [2]. - The hydrogen energy business has seen significant growth, with a 65.2% increase in revenue to 450 million RMB, supported by national policies promoting the hydrogen industry [3]. Financial Performance Summary - Revenue and Profit Forecasts: - Revenue is projected to grow from 19.60 billion RMB in 2022 to 34.64 billion RMB in 2026, with a compound annual growth rate (CAGR) of approximately 13.5% [11]. - Net profit is expected to increase from 1.06 billion RMB in 2022 to 1.90 billion RMB in 2026, with a CAGR of about 24.9% [11]. - Earnings Per Share (EPS) is forecasted to rise from 0.52 RMB in 2022 to 0.94 RMB in 2026 [11]. - The company's Price-to-Earnings (P/E) ratio is projected to decrease from 11.4 in 2022 to 6.3 in 2026, indicating a potentially undervalued stock [11]. Order Backlog and Future Growth - The company has a strong order backlog, with total orders increasing by 42.5% year-on-year to 29.35 billion RMB as of June 30, 2024 [2]. - New orders signed in the first half of 2024 reached 16.4 billion RMB, a 29.5% increase compared to the previous year [2].

[Financial Highlights](index=1&type=section&id=Financial%20Summary) The company's first-half 2024 financial performance shows revenue growth of 6.7% but a decline in net profit by 11.6% and basic EPS by 14.8% 2024 H1 Key Financial Data (Unaudited) | Metric | H1 2024 (Unaudited) (RMB '000) | H1 2023 (Unaudited) (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 11,479,938 | 10,756,489 | 6.7% | | Net Profit | 503,829 | 570,032 | (11.6%) | | Profit attributable to equity holders | 486,141 | 568,673 | (14.5%) | | Core Profit | 604,208 | 625,944 | (3.5%) | | Basic Earnings Per Share | RMB 0.241 | RMB 0.283 | (14.8%) | | Gross Margin | 14.3% | 16.5% | (2.2) percentage points | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated income statement, comprehensive income statement, balance sheet, and statement of changes in equity for the reporting period [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) During the reporting period, the company achieved revenue of approximately RMB 11.48 billion, a 6.7% year-on-year increase, but gross profit decreased to RMB 1.64 billion and profit for the period fell by 11.6% due to higher cost of sales Consolidated Income Statement Key Data (For the six months ended June 30) | Item | 2024 (RMB '000) | 2023 (RMB '000) | | :--- | :--- | :--- | | Revenue | 11,479,938 | 10,756,489 | | Gross Profit | 1,635,940 | 1,771,166 | | Operating Profit | 702,106 | 751,497 | | Profit Before Tax | 650,685 | 730,318 | | Profit for the Period | 503,829 | 570,032 | | Basic Earnings Per Share | RMB 0.241 | RMB 0.283 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period decreased to RMB 434 million, a 30.7% year-on-year reduction, primarily due to an exchange difference loss of approximately RMB 69.57 million from translating overseas operations - Total comprehensive income for the period was **RMB 434 million**, a significant decrease from **RMB 626 million** in the prior year, mainly due to the exchange difference from overseas operations turning from a gain to a loss[3](index=3&type=chunk) [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2024, total assets increased to RMB 29.68 billion, total liabilities rose to RMB 17.23 billion, and net assets slightly increased to RMB 12.45 billion, driven by growth in current assets and liabilities Balance Sheet Summary | Item | As at June 30, 2024 (RMB '000) | As at December 31, 2023 (RMB '000) | | :--- | :--- | :--- | | Total Assets | 29,679,098 | 27,587,424 | | Total Liabilities | 17,230,106 | 15,213,780 | | Net Assets | 12,448,992 | 12,373,644 | [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, equity attributable to equity holders decreased to RMB 10.93 billion from RMB 11.23 billion at the beginning of the year, influenced by profit for the period, payment of 2023 final dividends, and exchange differences - During the reporting period, the company paid **RMB 563.5 million** in final dividends for 2023 to its shareholders[8](index=8&type=chunk) [Notes to the Financial Statements](index=8&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the basis of financial statement preparation, accounting policies, revenue segmentation, key income statement items, earnings per share, and receivables and payables [Basis of Preparation and Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) This interim financial report is prepared in accordance with HKAS 34, reviewed by KPMG, and incorporates newly adopted HKFRS standards which had no material impact on the Group - The financial report is prepared in accordance with Hong Kong Accounting Standards and incorporates newly revised standards, which have not had a material impact on the Group[9](index=9&type=chunk)[10](index=10&type=chunk) [Revenue and Segment Reporting](index=9&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's revenue primarily derives from goods sales and engineering contracts across three segments: Clean Energy, Chemicals & Environment, and Liquid Food, with Clean Energy being the largest and fastest-growing contributor while Chemicals & Environment revenue significantly declined Revenue Performance by Segment (For the six months ended June 30) | Segment | 2024 Revenue (RMB '000) | 2023 Revenue (RMB '000) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Clean Energy | 7,876,340 | 6,293,551 | +25.1% | | Chemicals & Environment | 1,296,698 | 2,450,832 | -47.1% | | Liquid Food | 2,306,900 | 2,012,106 | +14.7% | | **Total** | **11,479,938** | **10,756,489** | **+6.7%** | [Key Income Statement Items](index=13&type=section&id=Key%20Income%20Statement%20Items) During the period, finance costs increased from RMB 38.43 million to RMB 48.07 million, R&D costs rose to RMB 331 million, and share-based payment expenses significantly increased to RMB 78.43 million, impacting profitability - Finance costs increased by **25.1%** year-on-year to **RMB 48.07 million**[21](index=21&type=chunk) - Research and development costs totaled **RMB 331 million**, an increase from **RMB 319 million** in the prior year[22](index=22&type=chunk) - Share-based payment expenses were **RMB 78.43 million**, a significant increase of **120%** from **RMB 35.62 million** in the prior year[22](index=22&type=chunk) [Earnings Per Share](index=15&type=section&id=Earnings%20Per%20Share) During the reporting period, basic earnings per share decreased by 14.8% to RMB 0.241 from RMB 0.283 in the prior year, while diluted earnings per share fell by 11.9% to RMB 0.222 Earnings Per Share Calculation | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Basic Earnings Per Share | RMB 0.241 | RMB 0.283 | | Diluted Earnings Per Share | RMB 0.222 | RMB 0.252 | [Receivables and Payables](index=16&type=section&id=Receivables%20and%20Payables) As of period-end, total trade and bills receivables were RMB 3.71 billion, stable from year-start, while total trade and bills payables increased by 16.1% to RMB 5.16 billion, with most due within three months - Total trade and bills receivables amounted to **RMB 3.71 billion**, with **83%** being current[30](index=30&type=chunk)[32](index=32&type=chunk) - Total trade and bills payables amounted to **RMB 5.16 billion**, with **75%** due within three months[32](index=32&type=chunk) [Dividends](index=18&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2024, having already paid the 2023 final dividend totaling RMB 563.5 million during the period - The Board decided not to declare an interim dividend for 2024[33](index=33&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the Group's financial performance, operational highlights, and strategic outlook across its key business segments [Financial Review](index=19&type=section&id=Financial%20Review) In H1 2024, the Group's total revenue grew by 6.7%, driven by Clean Energy and Liquid Food segments, despite a decline in Chemicals & Environment, while new and on-hand orders reached record highs, though overall gross margin decreased to 14.3% and core profit slightly declined by 3.5% [Revenue Analysis](index=19&type=section&id=Revenue%20Analysis) Total revenue increased by 6.7% to RMB 11.48 billion, primarily driven by a 25.1% surge in the Clean Energy segment due to domestic natural gas consumption recovery, while Chemicals & Environment revenue significantly declined by 47.1% - The Clean Energy segment's revenue contribution increased from **58.5%** to **68.6%**, becoming the Group's most significant revenue source[37](index=37&type=chunk) - The Chemicals & Environment segment's revenue contribution decreased from **22.8%** to **11.3%**, mainly due to the sluggish chemical industry and slowing tank container demand[38](index=38&type=chunk) [New and On-hand Orders](index=20&type=section&id=New%20and%20On-hand%20Orders) The Group achieved strong growth and record highs in both new and on-hand orders, primarily driven by the Clean Energy segment's 70.7% surge in on-hand orders, despite year-on-year declines in Chemicals & Environment and Liquid Food new orders Order Status (RMB million) | Order Type | H1 2024 | H1 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Total New Orders** | **16,399** | **12,666** | **+29.5%** | | - Clean Energy | 12,919 | 7,912 | +63.3% | | - Chemicals & Environment | 1,688 | 2,309 | -26.9% | | - Liquid Food | 1,792 | 2,445 | -26.7% | | **Total On-hand Orders (Period-end)** | **29,351** | **20,602** | **+42.5%** | | - Clean Energy | 22,933 | 13,438 | +70.7% | | - Chemicals & Environment | 1,522 | 2,095 | -27.4% | | - Liquid Food | 4,896 | 5,069 | -3.4% | [Gross Margin and Profitability](index=22&type=section&id=Gross%20Margin%20and%20Profitability) Overall gross margin decreased from 16.5% to 14.3%, primarily due to lower margins in the Chemicals & Environment segment from reduced capacity utilization and slight declines in Liquid Food due to rising overseas project costs, while Clean Energy's margin slightly increased - The Group's overall gross margin decreased by **2.2 percentage points** to **14.3%**[41](index=41&type=chunk) - The effective tax rate increased from **21.9%** to **22.6%**, due to a decreased profit contribution from high-tech enterprises enjoying preferential tax rates[44](index=44&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) The company maintains a sound financial position with RMB 7.25 billion in cash and equivalents at period-end, while the gearing ratio increased from 21.2% to 24.7%, and operating activities generated a net cash inflow of RMB 617 million Key Financial Ratios | Metric | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents (RMB '000) | 7,246,810 | 6,998,191 | | Interest-bearing Liabilities (RMB '000) | 3,078,491 | 2,626,935 | | Gearing Ratio | 24.7% | 21.2% | - Operating activities recorded a net cash inflow of **RMB 617 million**, primarily due to an increase in contract liabilities[47](index=47&type=chunk) [Assets and Liabilities](index=25&type=section&id=Assets%20and%20Liabilities) As of period-end, total assets increased to RMB 29.68 billion and total liabilities to RMB 17.23 billion, resulting in a slight net asset increase to RMB 12.45 billion, with net assets per share rising from RMB 6.101 to RMB 6.138 - Total assets increased by **7.6%** from the beginning of the year, while total liabilities increased by **13.3%**[50](index=50&type=chunk) [Other Disclosures](index=25&type=section&id=Other%20Disclosures) The Group's contingent liabilities, primarily performance guarantees, significantly increased to RMB 6.67 billion at period-end, capital expenditure rose to RMB 392 million, and total employees grew to approximately 11,000 - Capital expenditure was **RMB 392 million**, a **21.5%** year-on-year increase, primarily for capacity enhancement and general maintenance[54](index=54&type=chunk) - Total employees numbered approximately **11,000**, with total staff costs of **RMB 1.36 billion**, a **14.3%** year-on-year increase[55](index=55&type=chunk) [Business Review and Outlook](index=27&type=section&id=Business%20Review%20and%20Outlook) This section provides a detailed review of the performance, strategic outlook, and research and development initiatives for each of the Group's core business segments [Clean Energy Segment](index=27&type=section&id=Clean%20Energy%20Segment) The Clean Energy segment, a core business, showed strong performance in H1 2024 with significant revenue and order growth, driven by high demand in natural gas heavy trucks, green shipping trends, and accelerated hydrogen energy development, with an optimistic outlook for transitioning into a comprehensive service provider amidst global LNG demand growth and energy transition [Business Review](index=27&type=section&id=Clean%20Energy%20Business%20Review) Driven by the economic advantages of natural gas, LNG vehicle cylinder sales revenue surged by 711% due to increased natural gas heavy truck sales, while overseas land-based clean energy new orders grew by 48.8%, and hydrogen energy projects advanced with policy support - Domestic natural gas heavy truck sales increased by **104%** year-on-year, driving the Group's LNG vehicle cylinder sales revenue to approximately **RMB 720 million**, a **711%** surge year-on-year[59](index=59&type=chunk) - The marine clean energy business secured **16 new vessel orders** during the period and is actively developing green methanol fuel solutions[60](index=60&type=chunk) - Hydrogen energy projects are accelerating with policy support, as the Group secured or delivered projects in hydrogen production, storage, transportation, and refueling stations[61](index=61&type=chunk)[62](index=62&type=chunk) [Outlook and Strategy](index=30&type=section&id=Clean%20Energy%20Outlook%20and%20Strategy) Global LNG demand, particularly in China, is expected to drive opportunities for the Group's LNG equipment and engineering, while green shipping and inland waterway 'oil-to-gas' conversions offer vast potential for marine business, and hydrogen energy's inclusion in national energy systems accelerates industrialization, leading the Group to extend its strategy from 'equipment + engineering' to a 'comprehensive service provider' - Goldman Sachs forecasts global LNG investment to grow by over **50%** by 2029, and Shell predicts global LNG demand to increase by over **50%** by 2040, with China as a key driver[63](index=63&type=chunk)[64](index=64&type=chunk) - The Group's strategic positioning will gradually extend from 'equipment + engineering' to a 'comprehensive service provider', transforming into a technology-driven, low-carbon, smart new energy solution provider[67](index=67&type=chunk) [Research and Development](index=33&type=section&id=Clean%20Energy%20Research%20and%20Development) Significant R&D achievements include developing new products and upgrading technologies, participating in national and industry standards, completing international underwater CO2 storage tank container development, delivering the world's first large vertical marine fuel tank, and making major strides in hydrogen energy, with commercial liquid hydrogen storage tanks entering type testing and Type IV hydrogen cylinder production lines entering commissioning - Breakthroughs in hydrogen energy R&D include commercial liquid hydrogen storage tanks and tank trucks entering type testing, with Type IV hydrogen cylinders expected to achieve mass production in the second half of the year[74](index=74&type=chunk) - The development of international underwater CO2 storage tank containers has been completed, with mass sales achieved[71](index=71&type=chunk) [Chemicals & Environment Segment](index=35&type=section&id=Chemicals%20%26%20Environment%20Segment) Affected by the weak global chemical industry recovery, the tank container market demand slowed, leading to a significant revenue decline for this segment in H1, yet the company maintained its global market leadership, with long-term growth supported by multimodal transport policies and stricter chemical safety requirements, while future focus includes emerging industries and aftermarket services [Business Review](index=35&type=section&id=Chemicals%20%26%20Environment%20Business%20Review) Due to global economic impacts, the chemical industry is experiencing a weak recovery, leading to a slowdown in tank container market demand compared to previous high growth, yet the segment maintained its global market share leadership, with steady development in medical equipment components and ongoing progress in aftermarket services - According to ITCO statistics, the global tank container fleet's compound annual growth rate was **8%** (2013-2023), maintaining a long-term upward trend[76](index=76&type=chunk) [Outlook and Strategy](index=37&type=section&id=Chemicals%20%26%20Environment%20Outlook%20and%20Strategy) National policies promoting multimodal transport and shifting bulk cargo from road to rail and water offer long-term benefits for the tank container industry, while the segment will focus on new energy and high-tech industries, enhance product intelligence, and accelerate global expansion of aftermarket services - National policies emphasize reducing logistics costs, optimizing transport structures, and supporting the development of multimodal transport with 'single bill' and 'single container' systems, benefiting the tank container industry[77](index=77&type=chunk) - Strategic focus is on new application scenarios, including high-tech industries such as battery electrolytes and semiconductor chips, and actively entering the biopharmaceutical industry[78](index=78&type=chunk) [Research and Development](index=39&type=section&id=Chemicals%20%26%20Environment%20Research%20and%20Development) R&D focuses on providing comprehensive logistics solutions, successfully developing and mass-producing the world's largest 52-foot tank container as a rail tank car alternative, operating over ten thousand devices on its smart IoT platform with remote upgrade capabilities, and advancing in eco-friendly coating and welding automation technologies - Successfully developed and mass-produced the world's largest **52-foot tank container**, which can be used to replace rail tank cars[80](index=80&type=chunk) [Liquid Food Segment](index=40&type=section&id=Liquid%20Food%20Segment) The Liquid Food segment achieved steady revenue growth in H1, with its business entity 'CIMC ENRIC Alcohol Technology' successfully listed on the New Third Board, despite a year-on-year decline in new orders due to rising overseas costs and weak consumption, while future strategy focuses on consolidating leadership in beer and spirits, seizing domestic market transformation opportunities, and expanding into diversified fields like biomanufacturing [Business Review](index=40&type=section&id=Liquid%20Food%20Business%20Review) The segment's business entity, CIMC ENRIC Alcohol Technology Co Ltd, was officially listed on the New Third Board on August 8, 2024, while the company mitigates challenges from rising overseas costs and changing consumer behavior by focusing on domestic market opportunities - The segment's business entity, CIMC ENRIC Alcohol Technology Co Ltd (CIMC ENRIC Alcohol Technology), was officially listed on the New Third Board on **August 8, 2024**, with stock code: **872914**[81](index=81&type=chunk)[83](index=83&type=chunk) [Outlook and Strategy](index=41&type=section&id=Liquid%20Food%20Outlook%20and%20Strategy) Global population growth, expanding middle class, and focus on sustainable production are key industry drivers, prompting the company to consolidate its leadership in beer and spirits, expand into other advantageous sectors, and capitalize on market growth from clients' carbon neutrality transitions - Future focus will be on carbon neutrality transformation and upgrade opportunities for global and domestic breweries, solid fermentation, distilleries, and biopharmaceutical plants, aiming to increase the revenue contribution from China operations[84](index=84&type=chunk) [Research and Development](index=42&type=section&id=Liquid%20Food%20Research%20and%20Development) R&D activities continue, including exploring industrial-grade complex distillation systems, developing energy-efficient mechanical vapor recompression solutions for the whiskey industry, deeply participating in China's Baijiu industry technological upgrades, and engaging in multiple collaborative public research projects with universities - R&D directions include industrial-grade distillation systems, energy-saving solutions for the whiskey industry, and technological equipment upgrades for China's Baijiu industry chain[87](index=87&type=chunk) [Corporate Governance and Other Information](index=42&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the company's adherence to corporate governance principles and details securities transactions during the reporting period [Corporate Governance](index=42&type=section&id=Corporate%20Governance) The company consistently complied with all code provisions of the HKEX Corporate Governance Code during the reporting period, and the Audit Committee reviewed the interim financial report - The company confirmed compliance with all corporate governance code provisions during the reporting period[88](index=88&type=chunk) [Securities Transactions](index=43&type=section&id=Securities%20Transactions) During the reporting period, the trustee of the 2020 Share Award Scheme purchased 300,000 company shares on the Stock Exchange, with no other trading or redemption of listed securities by the company or its subsidiaries - Under the 2020 Share Award Scheme, the trustee purchased **300,000 company shares** during the period[89](index=89&type=chunk)