Financial Performance - The group's revenue increased by 32.5% from RMB 20,374.94 million for the year ended December 31, 2022, to RMB 27,005.89 million for the year ended December 31, 2023[3]. - Gross profit for the year ended December 31, 2023, was RMB 3,511.52 million, compared to RMB 2,103.52 million in 2022, reflecting a significant increase[4]. - The company's net profit for the year ended December 31, 2023, was RMB 437.16 million, down from RMB 693.54 million in 2022, indicating a decrease of approximately 37%[4]. - Basic earnings per share decreased from RMB 0.4408 in 2022 to RMB 0.1661 in 2023, representing a decline of about 62.4%[4]. - Total revenue for the year was RMB 27,005,885,000, an increase of 32.5% compared to RMB 20,374,942,000 in 2022[20]. - Revenue from sales of power batteries reached RMB 22,249,046,000 in 2023, up from RMB 18,323,505,000 in 2022, representing a growth of 21.5%[20]. - Revenue from energy storage systems and other products surged by 131.9% from RMB 2,051.44 million in 2022 to RMB 4,756.84 million in 2023, due to strategic partnerships with leading customers in the energy storage sector[81]. Cash Flow and Liquidity - Net cash inflow from operating activities rose by 37.5% from RMB 2,109.05 million in 2022 to RMB 2,900.17 million in 2023[3]. - The group's net current liabilities at the end of the reporting period were approximately RMB 4,710 million, with a net cash outflow of about RMB 3,132 million, including a net cash inflow from operating activities of approximately RMB 2,900 million[12]. - As of December 31, 2023, the total cash and bank balances of the group were approximately RMB 7,834 million, while the total outstanding bank loans amounted to approximately RMB 29,171 million, with about RMB 8,115 million due within one year[12]. - The company has sufficient liquidity to meet daily working capital management and capital expenditure needs[87]. Assets and Liabilities - Total assets decreased from RMB 37,359.45 million in 2022 to RMB 32,111.02 million in 2023, indicating a reduction of approximately 14%[7]. - The company's non-current assets increased from RMB 53,101.17 million in 2022 to RMB 73,318.01 million in 2023, reflecting a growth of about 38%[7]. - The total equity of the company rose from RMB 41,575.46 million in 2022 to RMB 46,385.79 million in 2023, an increase of approximately 11%[8]. - Total liabilities rose from RMB 48,885.16 million as of December 31, 2022, to RMB 59,043.24 million as of December 31, 2023, an increase of 20.8%[86]. - The debt-to-equity ratio increased to 47.1% as of December 31, 2023, from 17.7% as of December 31, 2022, primarily due to increased project financing[88]. Research and Development - Research and development expenses increased from RMB 664.76 million in 2022 to RMB 991.96 million in 2023, marking a rise of about 49%[4]. - The company has been granted 3,060 patents and has 1,111 pending patent applications as of December 31, 2023, focusing on high-quality patent layout for continuous innovation[58]. - The company developed a 400Wh/kg high-energy hybrid solid-liquid battery, leading the industry in key safety indicators such as thermal safety and calendar life[59]. Market and Sales - Global sales of new energy vehicles reached 14.056 million units in 2023, a year-on-year increase of 33.4%[46]. - In China, new energy vehicle sales reached 9.495 million units in 2023, up 37.9% year-on-year, with a penetration rate of 31.6%, an increase of 5.9 percentage points from the previous year[47]. - The company aims to enhance its international presence by establishing production capacity in Europe and collaborating with global partners to meet market demands[76]. Compliance and Governance - The audit committee has reviewed the audited consolidated financial statements for the year ending December 31, 2023, confirming compliance with applicable accounting principles and full disclosure[111]. - The company has adopted a standard code of conduct for directors' securities transactions, ensuring compliance throughout the reporting period[110]. - The board of directors has resolved not to recommend a final dividend for the year ending December 31, 2023[104].

[Company Information](index=2&type=section&id=Company%20Information) This section provides essential corporate details for CALB Technology Group, including governance, contact information, and key operational identifiers [Basic Company Information](index=2&type=section&id=Basic%20Company%20Information) This section provides basic company information for CALB Technology Group Co., Ltd., including key contact and governance details such as board members, authorized representatives, auditors, registered office, principal place of business, principal bankers, stock code, and company website - Board members include Executive Directors Ms. Liu Jingyu (Chairwoman and President), Mr. Dai Ying, Non-executive Directors Mr. Zhou Sheng, Mr. Zhang Guoqing, Mr. Li Yunxiang, and Independent Non-executive Directors Mr. Wu Guangquan, Mr. Wang Susheng, Mr. Chen Zetong[5](index=5&type=chunk) - The company's auditor is **RSM Hong Kong**[5](index=5&type=chunk) - The company's stock code is **3931**, and its website is http://www.calb-tech.com[6](index=6&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section analyzes the Group's H1 2023 performance, industry trends, strategic initiatives, and financial health [Industry Overview](index=5&type=section&id=Industry%20Overview) This section analyzes H1 2023 power battery and energy storage market growth, driven by NEV sales and supportive policies China New Energy Vehicle Sales and Penetration (10,000 units) | Indicator | 2021 | 2022 | H1 2023 | | :--- | :--- | :--- | :--- | | Sales (10,000 units) | 350.7 | 687.2 | 375 | | Penetration Rate (%) | 13% | 25% | 28.3% | - In H1 2023, China's NEV sales reached **3.75 million units**, a **44% YoY increase**, with a penetration rate of **28.3%**; total NEV sales for 2023 are projected to reach **9 million units**, a **31% YoY increase**[7](index=7&type=chunk) - From January to June 2023, global power battery installations reached **304.3 GWh**, a **50.1% YoY increase**; global power battery installations are projected to reach **749 GWh** in 2023, a **45% YoY increase**[10](index=10&type=chunk) - From January to June 2023, domestic power battery installations reached **152.1 GWh**, a **38.1% YoY increase**, with LFP batteries accounting for **68.3%** and NCM batteries for **31.5%** of total installations[10](index=10&type=chunk) - By 2025, the cumulative installed capacity of the global electricity storage market is expected to reach **500 GWh**, with new energy storage accounting for over **50%**[13](index=13&type=chunk) [Business Operations](index=7&type=section&id=Business%20Operations) This section outlines CALB's strategic focus on innovation, product leadership, and market expansion, highlighting significant H1 2023 operational improvements - As of June 30, 2023, the Group's total assets were approximately **RMB 100.281 billion**, a **10.9% YoY increase**; net assets were approximately **RMB 44.906 billion**, an **8.0% YoY increase**[15](index=15&type=chunk) - Revenue reached approximately **RMB 12.295 billion**, a **34.1% YoY increase**; net profit was approximately **RMB 266 million**, a **60.8% YoY increase**[15](index=15&type=chunk) - The Group's operating performance continued to improve significantly, with power battery installations growing exponentially, entering the global top five[15](index=15&type=chunk) [Technological Breakthroughs](index=8&type=section&id=Technological%20Breakthroughs) The Group significantly enhanced core competitiveness through increased R&D, extensive patent applications, and a comprehensive patent layout across the battery industry chain - During the reporting period, the Group applied for **1,009 patents** and obtained **534 patent grants**[16](index=16&type=chunk) - As of June 30, 2023, the Group had cumulatively applied for **3,724 patents**, of which **2,232** were granted[16](index=16&type=chunk) - Formed a patent layout covering the entire battery industry chain, including battery materials, battery structure, system integration, electrical circuits, BMS, manufacturing processes and equipment, and battery recycling and regeneration[16](index=16&type=chunk) [Product Leadership](index=8&type=section&id=Product%20Leadership) The Group maintains market leadership by innovating high-performance, high-safety power batteries and energy storage solutions across diverse applications - In the power market, the product line was further enriched, completing a multi-scenario layout across all fields, maintaining high standardization and scalability of product specifications, and leading the development direction of standardized prismatic batteries in the industry[17](index=17&type=chunk) - In the energy storage market, a series of high-performance, high-safety, and high-efficiency products were developed, fully covering needs from portable energy storage to residential, commercial & industrial distributed energy storage, and grid-side & generation-side large-scale energy storage power stations[18](index=18&type=chunk) [(1) Ternary Power Products](index=9&type=section&id=(1)%20Ternary%20Power%20Products) The Group's ternary products offer ultra-fast charging, high power, and energy density for premium EVs and hybrids - **400V 2C mid-nickel high-voltage battery**: Achieves 20%-80% charge in **18 minutes**, already mass-delivered for customer 100kWh and other vehicle models[18](index=18&type=chunk) - **800V 3C/4C mid-nickel high-voltage battery**: First to achieve 20%-80% charge in **10 minutes**, and already mass-delivered[18](index=18&type=chunk) - **800V 6C high-nickel battery**: 46-series large cylindrical product, cell energy density up to **300Wh/kg**, maximum fast charging capability over **6C**[18](index=18&type=chunk) - **Ultra-high energy density semi-solid-state battery**: Cell energy density exceeds **400Wh/kg**, cycle life approaches **1,000 cycles**, achieving extreme balance of energy, performance, and safety[18](index=18&type=chunk) [(2) Phosphate Series Power Products](index=10&type=section&id=(2)%20Phosphate%20Series%20Power%20Products) The Group's phosphate products provide diverse, high-performance solutions for passenger vehicles, featuring innovative LFP battery technologies - **High-power LFP battery**: Developed for passenger vehicle hybrid market, covering **80km-300km** range, already mass-delivered to leading customers[19](index=19&type=chunk) - **High-specific energy LFP battery**: Adopts the world's first full-tab stacking technology, leading the industry's third-generation standard for prismatic products[19](index=19&type=chunk) - **One-Stop LFP battery**: Industry's highest mass-produced LFP battery pack energy density (**153Wh/kg**), supporting **600km** cruising range[19](index=19&type=chunk) - **One-Stop high-manganese lithium iron phosphate battery**: **0 nickel, 0 cobalt** usage, battery pack energy density **180Wh/kg**, supporting over **700km** cruising range[19](index=19&type=chunk) [(3) Energy Storage Products](index=10&type=section&id=(3)%20Energy%20Storage%20Products) The Group's energy storage products deliver long-life, high-efficiency, and safe solutions for utility, commercial, and residential sectors - **Utility-scale energy storage applications**: Liquid-cooled/air-cooled container products, simplifying system integration components by over **20%**, increasing integrated power per unit area by over **30%**[20](index=20&type=chunk) - **Commercial & industrial energy storage applications**: Outdoor integrated cabinets and container products offer modular design, active safety systems, and intelligent power distribution systems, maximizing arbitrage profits from peak-valley price differences[20](index=20&type=chunk) - **Residential energy storage applications**: Long-life prismatic batteries and intelligent management systems feature multiple protection mechanisms, passing a series of overseas certifications like UL/IEC/CE[21](index=21&type=chunk) [Performance Achievements](index=11&type=section&id=Performance%20Achievements) The Group achieved rapid growth in power battery and energy storage markets, entering the global top five for passenger vehicle installations - In H1 2023, cumulative passenger vehicle market installations reached **12 GWh**, a **53% YoY increase**; monthly installations exceeded **3 GWh**, entering the global top five for installations[22](index=22&type=chunk) - Maintained a leading position in the **BEV (Battery Electric Vehicle)** market, further improved strategic layout in the **PHEV/REEV (Plug-in Hybrid Electric Vehicle/Range-Extended Electric Vehicle)** sub-segments, securing new model nominations from multiple customers[22](index=22&type=chunk) - Assisted customers like AION, Xpeng, Deepal, NIO, Leapmotor, Smart in launching multiple new vehicle models, and commenced mass production and delivery of NIO's overseas export models[22](index=22&type=chunk) - Commercial vehicle business achieved comprehensive cooperation and mass delivery with customers including Geely, Ruichi, Chery, and FAW Jiefang[23](index=23&type=chunk) - Energy storage system business completed significant deployments in utility-scale, commercial & industrial, and residential energy storage sub-segments, securing annual centralized procurement and supplier nominations from multiple state-owned power enterprises, system integrators, and leading PV and wind power companies[23](index=23&type=chunk) [Future Outlook](index=12&type=section&id=Future%20Outlook) This section details CALB's future strategies for technology, product innovation, and market expansion to secure competitive advantages and new growth [Technology and Product Innovation](index=12&type=section&id=Technology%20and%20Product%20Innovation) The Group will pursue continuous innovation in advanced materials, smart manufacturing, and next-gen battery technologies to maintain product leadership - In chemical energy storage materials, focus will be on breakthroughs in key technologies such as **high-manganese lithium iron phosphate materials**, **5V high-voltage nickel-manganese lithium materials**, and **new silicon-carbon anode materials**[24](index=24&type=chunk) - In intelligent manufacturing technology, through structural innovation of batteries and highly integrated manufacturing process innovation, efficient manufacturing technology upgrades will be achieved, and a new structural top-flow cylindrical battery technology supporting **6C fast charging** will be launched[24](index=24&type=chunk) - In high-performance battery and system technology, committed to building comprehensive leading advantages in high specific energy, long life, high safety, high power, and all-climate technology fields, and completing the promotion of **high specific energy 4C ultra-fast charging prismatic battery products**[24](index=24&type=chunk) - In new battery types, focusing on next-generation battery technologies such as **high-manganese lithium iron phosphate batteries**, **5V high-voltage nickel-manganese lithium batteries**, **high-specific energy anode-free batteries**, **all-solid-state batteries**, and **lithium-sulfium batteries**[24](index=24&type=chunk) - In battery full lifecycle management, continuous investment in intelligent battery management technology development, and active exploration of efficient cascade utilization and recycling technologies[24](index=24&type=chunk) [Market and Customer Expansion](index=13&type=section&id=Market%20and%20Customer%20Expansion) The Group will expand in power battery and energy storage markets through platform products and strategic partnerships - In the power battery market, develop **PHEV/REEV platform products** covering **80km-300km** range, forming comprehensive strategic cooperation with domestic independent brand hybrid architectures and technologies[25](index=25&type=chunk) - In the **400V pure electric market**, iterate One-Stop technology to launch battery products with higher energy density and faster charging speeds; the new generation One-Stop, equipped with high-manganese lithium iron phosphate technology, can achieve a battery pack energy density of **180Wh/kg**, supporting a cruising range of over **700km**[25](index=25&type=chunk) - In the **800V pure electric market**, deploy two product lines: **prismatic batteries** (meeting up to **4C charging** scenarios) and **cylindrical batteries** (creating the best solution for **6C and above ultra-fast charging** scenarios)[25](index=25&type=chunk) - In the energy storage system market, focus on new energy generation-side, grid-side, and user-side sub-segments, establishing long-term strategic cooperation with leading enterprises in wind power, photovoltaic, and grid industries[26](index=26&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides a comprehensive review of the Group's financial performance for the six months ended June 30, 2023, including key financial indicators and changes in revenue, profit, balance sheet, liquidity, capital structure, foreign exchange risk, capital expenditures, and contingent liabilities [Overview](index=14&type=section&id=Overview) The Group achieved significant revenue and gross profit growth, with improved margins, despite a decrease in profit attributable to owners Key Financial Indicators | Financial Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 12,294,712 | 9,167,200 | | Gross Profit | 1,179,065 | 870,479 | | Profit for the Period | 266,487 | 165,695 | | Profit Attributable to Owners of the Company | 146,517 | 166,719 | | Basic Earnings Per Share (RMB) | 0.0827 | 0.1107 | | Gross Margin (%) | 9.6% | 9.5% | | Net Sales Margin (%) | 2.2% | 1.8% | - Gross margin increased by **0.1%** from 9.5% in the same period of 2022 to **9.6%**, mainly due to the gradual release of the Group's production capacity and more significant economies of scale during the reporting period[27](index=27&type=chunk) - Net sales margin increased by **0.4%** from 1.8% in the same period of 2022 to **2.2%**, primarily due to the Group's increased gross profit and effective control of various expenses[28](index=28&type=chunk) [Revenue Structure](index=15&type=section&id=Revenue%20Structure) Power battery sales remain dominant, but energy storage and overseas revenue show strong growth, reflecting successful market diversification - The Group's revenue increased by **34.1%** from **RMB 9.167 billion** in the same period of 2022 to **RMB 12.295 billion**, primarily due to the gradual release of production capacity, richer product lines, market expansion, and continuous growth in customer demand[29](index=29&type=chunk) [1) Revenue by Product](index=15&type=section&id=1)%20Revenue%20by%20Product) Power battery sales revenue grew by 20.0%, while energy storage and other products saw a robust 268.1% increase Revenue by Product | Item | 2023 Revenue (RMB thousand) | Revenue Share (%) | 2022 Revenue (RMB thousand) | Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Power Batteries | 10,377,467 | 84.4% | 8,646,346 | 94.3% | | Energy Storage System Products and Others | 1,917,245 | 15.6% | 520,854 | 5.7% | | **Total** | **12,294,712** | **100.0%** | **9,167,200** | **100.0%** | - Power battery sales revenue increased by **20.0%**, mainly due to the company's capacity release, continuous enrichment of product lines, and growth in market and customer demand[30](index=30&type=chunk) - Revenue from energy storage system products and others increased by **268.1%**, mainly due to the Group's continuous expansion in domestic and international energy storage system markets, leading to sustained sales growth[31](index=31&type=chunk) [2) Revenue by Product Delivery Location](index=16&type=section&id=2)%20Revenue%20by%20Product%20Delivery%20Location) Revenue from mainland China grew by 32.5%, while overseas revenue surged 115.7%, driven by energy storage Revenue by Product Delivery Location | Item | 2023 Revenue (RMB thousand) | Revenue Share (%) | 2022 Revenue (RMB thousand) | Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 11,920,164 | 97.0% | 8,993,569 | 98.1% | | Overseas Regions | 374,548 | 3.0% | 173,631 | 1.9% | | **Total** | **12,294,712** | **100.0%** | **9,167,200** | **100.0%** | - Revenue from mainland China increased by **32.5%**, mainly due to the Group's continuous increase and release of production capacity and rapid growth in battery demand from major customers[32](index=32&type=chunk) - Revenue from overseas regions increased by **115.7%**, primarily driven by strong growth in overseas energy storage business, indicating a significant upward trend in the Group's international operations[33](index=33&type=chunk) [Financial Position](index=16&type=section&id=Financial%20Position) Total assets and liabilities increased, with non-current assets and liabilities rising due to expansion and project financing [1) Assets](index=16&type=section&id=1)%20Assets) Total assets grew 10.9%, driven by non-current asset expansion, while current assets decreased due to H-share proceeds utilization - The Group's total assets increased by **10.9%** to **RMB 100.281 billion**; non-current assets increased by **25.8%** to **RMB 66.827 billion**, mainly due to the Group's continuous investment in production bases, leading to an increase in property, plant and equipment[34](index=34&type=chunk) - Current assets decreased by **10.5%** to **RMB 33.453 billion**, mainly due to the use of H-share proceeds for the company's production base construction, a decrease in bank deposits, and a reduction in inventory as operational efficiency improved[34](index=34&type=chunk) [2) Liabilities](index=17&type=section&id=2)%20Liabilities) Total liabilities increased 13.3%, with non-current liabilities significantly rising due to project financing to meet funding needs for business expansion and major projects - The Group's total liabilities increased by **13.3%** to **RMB 55.375 billion**; current liabilities increased by **1.4%** to **RMB 33.232 billion**, mainly due to business expansion and continuous investment in production bases, leading to an increase in payables for property, plant and equipment[35](index=35&type=chunk) - Non-current liabilities increased by **37.4%** to **RMB 22.143 billion**, primarily due to increased project syndicated loans to meet the Group's funding needs for business expansion and continuous investment in major projects[35](index=35&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) Despite operating cash outflow, the Group maintains sufficient liquidity with substantial cash balances and borrowings for operations and capital needs - Net cash outflow from operating activities for the six months ended June 30, 2023, was **RMB 2.725 billion**, a decrease of **RMB 3.168 billion** compared to a net cash inflow of RMB 443 million in the same period of 2022, mainly due to increased payments for materials and employee expenses from business growth[36](index=36&type=chunk) - The Group's bank and cash balances as of June 30, 2023, were approximately **RMB 9.687 billion**[36](index=36&type=chunk) - The Group's total borrowings as of June 30, 2023, were approximately **RMB 26.844 billion**, mainly comprising bank project loans and bill discounting financing[36](index=36&type=chunk) [Capital Structure](index=17&type=section&id=Capital%20Structure) The debt-to-asset ratio increased to 42.0% due to project borrowings, but the Group maintains financial stability - The Group's debt-to-asset ratio as of June 30, 2023, was **42.0%** (December 31, 2022: 17.7%), with the increase mainly due to increased project construction borrowings[38](index=38&type=chunk) - Approximately **21.0%** of the Group's borrowings are denominated in RMB and bear fixed interest rates, with the remaining portion bearing floating interest rates[37](index=37&type=chunk) [Foreign Exchange Risk](index=18&type=section&id=Foreign%20Exchange%20Risk) The Group's RMB-denominated operations in mainland China experienced no significant foreign exchange impact during the period - The Group's operations are primarily located in mainland China, and most transactions are conducted in RMB[39](index=39&type=chunk) - During the reporting period, the Group did not experience any significant difficulties or impacts on its operations or liquidity due to currency exchange rate fluctuations[39](index=39&type=chunk) [Capital Expenditures](index=18&type=section&id=Capital%20Expenditures) Capital expenditures reached RMB 11.992 billion, primarily for capacity expansion and facility upgrades, funded by various sources - During the reporting period, the Group's capital expenditures for the six months ended June 30, 2023, were **RMB 11.992 billion** (2022: RMB 11.031 billion)[40](index=40&type=chunk) - Capital expenditures were primarily used for capacity expansion, including the construction of new production facilities and the upgrading of existing machinery and equipment[40](index=40&type=chunk) [Capital Commitments](index=18&type=section&id=Capital%20Commitments) Total contracted but unspent capital commitments were RMB 23.651 billion, mainly for property, plant, and equipment - Total contracted but not yet incurred capital expenditures as of June 30, 2023, were **RMB 23.651 billion** (December 31, 2022: RMB 29.205 billion)[41](index=41&type=chunk) - Capital commitments primarily relate to the acquisition of property, plant, and equipment[41](index=41&type=chunk) [Restricted Assets](index=18&type=section&id=Restricted%20Assets) The Group had RMB 3.015 billion in restricted assets, including pledged deposits and bills, used to secure financing - As of June 30, 2023, the Group had restricted assets with a total carrying value of **RMB 3.015 billion** used to obtain bank loans and other bank financing[42](index=42&type=chunk) - These assets include pledged and restricted bank deposits of **RMB 1.242 billion**, bills receivable of **RMB 364 million**, property, plant and equipment of **RMB 962 million**, and right-of-use assets of **RMB 446 million**[42](index=42&type=chunk) [Significant Investments Held](index=18&type=section&id=Significant%20Investments%20Held) As of June 30, 2023, the Group did not hold any significant investments - As of June 30, 2023, the Group held no significant investments[43](index=43&type=chunk) [Future Plans for Material Investments and Capital Assets](index=18&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2023, the Group had no other future plans for material external investments and capital assets - As of June 30, 2023, the Group had no other plans for material external investments and capital assets[44](index=44&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Joint Ventures, and Associates](index=19&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Joint%20Ventures%2C%20and%20Associates) For the six months ended June 30, 2023, the Group did not undertake any material acquisitions or disposals of subsidiaries, joint ventures, or associates - For the six months ended June 30, 2023, the Group had no material acquisitions or disposals of subsidiaries, joint ventures, or associates[45](index=45&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) The Group faces contingent liabilities from endorsed bank bills and multiple IP infringement claims by CATL, with some patents declared invalid - As of June 30, 2023, the maximum risk from potential default on endorsed and discounted bank acceptance bills was **RMB 4.994 billion** (December 31, 2022: RMB 3.535 billion)[46](index=46&type=chunk) - CATL filed four intellectual property infringement claims against the Company regarding Patent 1, Patent 2, Patent 3, and Patent 4, seeking total compensation of **RMB 485 million** and expenses of **RMB 2.7 million**[47](index=47&type=chunk) - The Company has appealed the first-instance judgments of the Fuzhou Intermediate People's Court regarding Patent 1, Patent 3, and Patent 4 to the Supreme People's Court, and has made provisions totaling **RMB 8.64 million**[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - On August 3, 2023, the China National Intellectual Property Administration declared the invention patent rights for Patent 1 and Patent 4 entirely invalid[51](index=51&type=chunk) - The directors believe that the claims related to Patent 2 and Patent 6 lack merit, and a satisfactory resolution of these claims is unlikely to result in an outflow of economic benefits[51](index=51&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the Group's governance, compliance, IPO proceeds, dividends, employee policies, and director/shareholder interests [Compliance with Corporate Governance Code](index=23&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code, with a justified deviation for the combined Chairman and CEO role - The Company has complied with all applicable code provisions of the Corporate Governance Code, except for a deviation from code provision C.2.1 (which stipulates that the roles of chairman and chief executive should be separate)[53](index=53&type=chunk) - Ms. Liu Jingyu serves as both the Chairwoman and President of the Company, and the Board believes that having the same person in these roles ensures leadership consistency within the Group and enables more effective and efficient formulation of overall strategic planning[53](index=53&type=chunk) [Standard Code for Securities Transactions by Directors and Supervisors](index=23&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Supervisors) The Company adopted and complied with the Standard Code for securities transactions by directors, supervisors, and senior management - The Company has adopted the Standard Code as the code of conduct for securities transactions by directors, supervisors, and senior management of the Group[55](index=55&type=chunk) - The directors and supervisors have confirmed their compliance with the Standard Code for the six months ended June 30, 2023[55](index=55&type=chunk) [Audit Committee Review of Interim Results](index=23&type=section&id=Audit%20Committee%20Review%20of%20Interim%20Results) The Audit Committee reviewed the H1 2023 interim financial statements, confirming compliance and adequate disclosure - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023[56](index=56&type=chunk) - Confirmed compliance with all applicable accounting principles, standards, and requirements, and adequate disclosure[56](index=56&type=chunk) [Legal Proceedings and Compliance](index=24&type=section&id=Legal%20Proceedings%20and%20Compliance) Except for the patent infringement claims disclosed in this report, the Group was not involved in any legal proceedings, arbitrations, or litigations during the reporting period that would have a material adverse effect on its ordinary business, financial position, or operating results - Except as disclosed in this report, during the reporting period, the Group was not involved in any legal proceedings, arbitrations, or litigations that would have a material adverse effect on its ordinary business, financial position, or operating results[57](index=57&type=chunk) [Use of Proceeds from Listing](index=24&type=section&id=Use%20of%20Proceeds%20from%20Listing) IPO proceeds of HKD 9.980 billion are primarily for new production facilities, with HKD 2.083 billion utilized by June 30, 2023 - The total net proceeds from the listing were approximately **HKD 9.980 billion**[58](index=58&type=chunk) Use of Proceeds from Listing | Item | Approximate Percentage of Total Net Proceeds (%) | Net Proceeds Available from Listing (HKD million) | Amount Used for the Six Months Ended June 30, 2023 (HKD million) | Net Proceeds Unused as of June 30, 2023 (HKD million) | Expected Timeline for Use of Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction of New Production Facilities (95GWh Power Batteries and Energy Storage Systems) | 80.0 | 7,984.08 | 2,082.91 | 2,183.12 | Before December 31, 2024 | | Advanced Technology R&D | 10.0 | 998.01 | 0.00 | 998.01 | Before December 31, 2023 | | Working Capital and General Corporate Purposes | 10.0 | 998.01 | 0.00 | 965.77 | Before December 31, 2023 | | **Total** | **100.0** | **9,980.10** | **2,082.91** | **4,146.90** | | [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2023, neither the Group nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2023, neither the Group nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[59](index=59&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2023, nor to effect any capitalization issue or other forms of distribution from capital reserves - The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2023, nor to effect any capitalization issue or other forms of distribution[60](index=60&type=chunk) [Events After Reporting Period](index=25&type=section&id=Events%20After%20Reporting%20Period) The Board confirmed that, apart from the patent-related matters disclosed in Note 27(b), there have been no material adverse changes in the Company's financial or trading position or prospects from June 30, 2023, up to the date of this report - After careful consideration, the directors confirmed that there have been no material adverse changes in the Company's financial or trading position or prospects from June 30, 2023, up to the date of this report[61](index=61&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) Employee numbers significantly increased to 21,587, driven by business growth and conversion of external labor to formal employees - The Company's employee remuneration is based on the 3P1M (person, performance, position, market) remuneration philosophy, primarily determined by market conditions, position value, individual performance, and capabilities[62](index=62&type=chunk) - As of June 30, 2023, the Group had **21,587 employees**, a significant increase from the total number of employees as of December 31, 2022[62](index=62&type=chunk) - The overall increase in headcount was mainly due to the conversion of certain labor personnel, previously employed by external labor service companies and providing outsourced labor services, to formal employees of the Group, as well as the continuous development of the business[62](index=62&type=chunk) [Changes in Information of Directors, Supervisors and Senior Management Members](index=25&type=section&id=Changes%20in%20Information%20of%20Directors%2C%20Supervisors%20and%20Senior%20Management%20Members) For the six months ended June 30, 2023, and up to the date of this report, there were no changes in the information of directors, supervisors, and senior management members required to be disclosed under Rule 13.51B(1) of the Listing Rules - For the six months ended June 30, 2023, and up to the date of this report, there were no changes in the information of directors, supervisors, and senior management members required to be disclosed under Rule 13.51B(1) of the Listing Rules[63](index=63&type=chunk) [Material Transactions, Arrangements or Contracts](index=25&type=section&id=Material%20Transactions%2C%20Arrangements%20or%20Contracts) Except as disclosed in this report, at no time during the six months ended June 30, 2023, did the Company or any of its subsidiaries enter into any material transactions, arrangements, or contracts in which any director, supervisor, or entity connected with any director or supervisor had a material interest - Except as disclosed in this report, at no time during the six months ended June 30, 2023, was there any material transaction, arrangement, or contract entered into by the Company or any of its subsidiaries in which any director, supervisor, or any entity connected with any director or supervisor had a material interest, and which remained in force at the end of the period or at any time during the period[64](index=64&type=chunk) [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=26&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) Executive Directors Liu Jingyu and Dai Ying held long positions in domestic shares, representing 0.09% and 0.06% of total share capital respectively Shareholdings of Directors, Supervisors or Chief Executive (as of June 30, 2023) | Name | Position | Nature of Interest | Share Class | Number of Shares Held (1) | Percentage of Respective Share Class (2) | Percentage of Total Share Capital (3) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Jingyu | Executive Director | Beneficial Owner | Domestic Shares | 1,640,913 | 0.11% | 0.09% | | Dai Ying | Executive Director | Beneficial Owner | Domestic Shares | 1,151,168 | 0.08% | 0.06% | [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Underlying Shares of the Company](index=27&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) Key shareholders, including Jintan Holdings, Jinyuan Investment, and AVIC, collectively control significant voting rights in the Company Shareholdings of Substantial Shareholders and Other Persons (as of June 30, 2023) | Shareholder Name | Nature of Interest | Share Class | Number of Shares Held (1) | Percentage of Respective Share Class (2) | Percentage of Total Share Capital (3) | | :--- | :--- | :--- | :--- | :--- | :--- | | Changzhou Jinsha Technology Investment Co., Ltd. | Beneficial Owner | Domestic Shares | 252,130,281(L) | 16.74%(L) | 14.23%(L) | | Jiangsu Jintan Investment Holdings Co., Ltd. | Interest in Controlled Corporation | Domestic Shares | 452,573,757(L) | 30.04%(L) | 25.54%(L) | | Xiamen Jinyuan Investment Group Co., Ltd. | Interest in Controlled Corporation | Domestic Shares | 253,809,580(L) | 16.85%(L) | 14.32%(L) | | Sichuan Chengfei Integration Technology Co., Ltd. | Beneficial Owner | Domestic Shares | 151,145,867(L) | 10.03%(L) | 8.53%(L) | | Aviation Industry Corporation of China, Ltd. | Interest in Controlled Corporation | Domestic Shares | 163,970,995(L) | 10.88%(L) | 9.25%(L) | | Guotai Junan Securities Co., Ltd. | Interest in Controlled Corporation | H Shares | 48,331,900(L) | 18.18%(L) | 2.73%(L) | | Huatai Securities Co., Ltd. | Interest in Controlled Corporation | H Shares | 47,861,800(L) | 18.00%(L) | 2.70%(L) | | J.P. MORGAN SECURITIES PLC | Interest in Controlled Corporation | H Shares | 29,570,100(L) | 11.12%(L) | 1.67%(L) | - Jingsha Investment, Huake Engineering, Huake Investment, Jintan Guofa, Jintan Hualuogeng, and Jintan Holdings constitute a group of largest shareholders, directly or indirectly controlling a total of approximately **25.54%** of the Company's voting rights[70](index=70&type=chunk) - Jinyuan Investment directly and indirectly controls a total of approximately **14.32%** of the Company's voting rights[72](index=72&type=chunk) - AVIC indirectly controls a total of approximately **9.25%** of the Company's voting rights[73](index=73&type=chunk) [Rights of Directors and Supervisors to Acquire Shares or Debentures](index=30&type=section&id=Rights%20of%20Directors%20and%20Supervisors%20to%20Acquire%20Shares%20or%20Debentures) No arrangements granting directors or supervisors rights to acquire shares or debentures of the Company or related entities existed in H1 2023 - Except as disclosed in this report, at no time during the reporting period did the Company or any of its subsidiaries or holding companies or any subsidiary of the Company's holding company enter into any arrangement granting directors or supervisors the right to acquire benefits through the acquisition of shares or debentures of the Company or any other corporate body[77](index=77&type=chunk) [Share Option Schemes](index=31&type=section&id=Share%20Option%20Schemes) The Group's 2019, 2020, and 2021 equity incentive schemes incentivize management through indirect shareholdings, with some transfers occurring Summary of Equity Incentive Schemes | Scheme | 2019 Equity Incentive Scheme | 2020 Equity Incentive Scheme | 2021 Equity Incentive Scheme | | :--- | :--- | :--- | :--- | | Maximum Entitlement per Participant | Not exceeding 1% of the Company's issued shares at the plan adoption date | Not exceeding 1% of the Company's issued shares at the plan adoption date | Not exceeding 1% of the Company's issued shares at the plan adoption date | | Amount Payable upon Acceptance of Award | Same as the price at which Lihang Jinzhi subscribed for the Company's increased registered capital on July 29, 2019 | RMB 1.0293 per share | RMB 41.67 per share | | Incentive Shares Granted (Directors and Senior Management) | 939,512 shares (0.05% of issued share capital) | 6,139,910 shares (0.35% of issued share capital) | 188,400 shares (0.01% of issued share capital) | | Incentive Shares Granted (Other Incentive Objects) | - | 13,106,987 shares (0.74% of issued share capital) | 8,454,000 shares (0.48% of issued share capital) | - Under the 2020 Equity Incentive Scheme, Ms. Liu Jingyu acquired **36,521 shares** on April 10, 2023[82](index=82&type=chunk) - Under the 2021 Equity Incentive Scheme, Ms. Liu Jingyu acquired **91,200 shares** on April 10, 2023, and Mr. Dai Ying acquired **64,800 shares** on April 11, 2023, and **32,400 shares** on June 21, 2023[84](index=84&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement shows H1 2023 revenue and gross profit growth, with fluctuations in net profit due to finance costs and tax credits [Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30, 2023)](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20(For%20the%20six%20months%20ended%20June%2030%2C%202023)) The Group's condensed consolidated statement of profit or loss for the six months ended June 30, 2023, shows YoY growth in revenue and gross profit, but profit for the period and profit attributable to owners of the Company fluctuated due to a significant increase in finance costs and income tax credit Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30, 2023) | Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 12,294,712 | 9,167,200 | | Cost of Sales | (11,115,647) | (8,296,721) | | Gross Profit | 1,179,065 | 870,479 | | Operating Profit | 364,776 | 323,486 | | Finance Costs | (138,290) | (13,737) | | Profit Before Tax | 226,468 | 309,362 | | Profit for the Period | 266,487 | 165,695 | | Attributable to Owners of the Company | 146,517 | 166,719 | | Non-controlling Interests | 119,970 | (1,024) | | Basic Earnings Per Share (RMB) | 0.0827 | 0.1107 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement reports H1 2023 profit for the period of RMB 266 million and total comprehensive income of RMB 257 million [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2023)](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20(For%20the%20six%20months%20ended%20June%2030%2C%202023)) The Group's condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2023, shows a profit for the period of RMB 266 million and a net other comprehensive expense of RMB 9.06 million, resulting in a total comprehensive income for the period of RMB 257 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2023) | Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 266,487 | 165,695 | | Other Comprehensive (Expense)/Income, Net of Tax | (9,056) | 490 | | Total Comprehensive Income for the Period | 257,431 | 166,185 | | Attributable to Owners of the Company | 137,461 | 167,209 | | Non-controlling Interests | 119,970 | (1,024) | [Condensed Consolidated Statement of Financial Position](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement shows H1 2023 total assets at RMB 100.281 billion, with increased non-current assets, liabilities, and equity [Condensed Consolidated Statement of Financial Position (As at June 30, 2023)](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20(As%20at%20June%2030%2C%202023)) The Group's condensed consolidated statement of financial position as of June 30, 2023, shows total assets increased to RMB 100.281 billion, with a significant rise in non-current assets; total liabilities also increased, but net assets and total equity maintained steady growth Condensed Consolidated Statement of Financial Position (As at June 30, 2023) | Indicator | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 66,827,229 | 53,101,171 | | Current Assets | 33,453,486 | 37,359,447 | | **Total Assets** | **100,280,715** | **90,460,618** | | Current Liabilities | 33,231,873 | 32,774,951 | | Non-current Liabilities | 22,142,817 | 16,110,208 | | **Total Liabilities** | **55,374,690** | **48,885,159** | | Net Assets | 44,906,025 | 41,575,459 | | Equity Attributable to Owners of the Company | 34,499,914 | 34,379,318 | | Non-controlling Interests | 10,406,111 | 7,196,141 | | **Total Equity** | **44,906,025** | **41,575,459** | [Condensed Consolidated Statement of Changes in Equity](index=39&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement shows H1 2023 total comprehensive income of RMB 257 million and total equity increasing to RMB 44.906 billion [Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2023)](index=39&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity%20(For%20the%20six%20months%20ended%20June%2030%2C%202023)) The Group's condensed consolidated statement of changes in equity for the six months ended June 30, 2023, shows a total comprehensive income for the period of RMB 257 million, contributions from non-controlling interests of RMB 3.090 billion, and share-based payments of RMB 20.71 million, leading to total equity increasing to RMB 44.906 billion Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2023) | Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Total Comprehensive Income for the Period (Attributable to Owners of the Company) | 137,461 | 167,209 | | Total Comprehensive Income for the Period (Non-controlling Interests) | 119,970 | (1,024) | | Contributions from Non-controlling Interests | 3,090,000 | 3,118,000 | | Share-based Payments | 20,705 | 20,037 | | Payment of Listing Expenses | (37,570) | - | | Total Equity at End of Period | 44,906,025 | 24,857,114 | [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement shows H1 2023 net cash outflows from operating and investing activities, offset by financing inflows, resulting in RMB 8.445 billion cash at period-end [Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2023)](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20(For%20the%20six%20months%20ended%20June%2030%2C%202023)) The Group's condensed consolidated statement of cash flows for the six months ended June 30, 2023, shows a net cash outflow from operating activities of RMB 2.725 billion, a net cash outflow from investing activities of RMB 13.689 billion, and a net cash inflow from financing activities of RMB 13.894 billion, resulting in cash and cash equivalents of RMB 8.445 billion at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2023) | Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flows (Used in)/Generated from Operating Activities | (2,724,886) | 443,220 | | Net Cash Used in Investing Activities | (13,688,636) | (7,195,963) | | Net Cash Generated from Financing Activities | 13,893,847 | 6,969,708 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (2,519,675) | 216,965 | | Cash and Cash Equivalents at End of Period | 8,444,794 | 3,326,470 | [Notes to the Condensed Financial Statements](index=41&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) These notes provide detailed explanations and disclosures for the Group's H1 2023 condensed financial statements [1. General Information](index=41&type=section&id=1.%20General%20Information) This note provides CALB's basic corporate information, including its incorporation, HKEX listing, and primary business activities - CALB Technology Group Co., Ltd. ("the Company") is a joint stock company incorporated in the People's Republic of China ("China"), with its H shares listed on The Stock Exchange of Hong Kong Limited since October 6, 2022[92](index=92&type=chunk) - The Company and its subsidiaries (collectively, "the Group") have been engaged in the design, research and development, production, and sale of power batteries and energy storage system products[92](index=92&type=chunk) [2. Basis of Preparation](index=41&type=section&id=2.%20Basis%20of%20Preparation) These interim financial statements adhere to IAS 34 and HKEX Listing Rules, consistent with 2022 annual accounting policies - These condensed financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board ("IASB") and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[93](index=93&type=chunk) - The accounting policies and methods of computation used in the preparation of these condensed financial statements are consistent with those adopted in the 2022 Annual Report[93](index=93&type=chunk) [3. Adoption of New and Revised International Financial Reporting Standards](index=42&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20International%20Financial%20Reporting%20Standards) The Group adopted IAS 12 amendments for deferred tax and Pillar Two rules, with no material impact on financial position [A. Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction](index=42&type=section&id=A.%20Deferred%20Tax%20Related%20to%20Assets%20and%20Liabilities%20Arising%20from%20a%20Single%20Transaction) IAS 12 amendments for deferred tax on lease transactions had no impact on the financial position due to offsetting conditions - The Group has adopted the amendments to International Accounting Standard 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction" from January 1, 2023[94](index=94&type=chunk) - For lease transactions, the Group is required to recognize related deferred tax assets and liabilities from the beginning of the earliest comparative period presented, but due to these balances meeting the offsetting conditions of IAS 12 paragraph 74, there was no impact on the condensed consolidated statement of financial position[94](index=94&type=chunk) [B. International Tax Reform – Pillar Two Model Rules](index=42&type=section&id=B.%20International%20Tax%20Reform%20%E2%80%93%20Pillar%20Two%20Model%20Rules) IAS 12 amendments for Pillar Two top-up tax had no retrospective impact as no new legislation was enacted - The Group has adopted the amendments to International Accounting Standard 12 "International Tax Reform – Pillar Two Model Rules", which provide a temporary mandatory exception to the accounting for deferred tax on top-up tax, effective immediately[96](index=96&type=chunk) - As no new legislation implementing top-up tax was enacted or substantively enacted in any jurisdiction where the Group operates as of December 31, 2022, retrospective application had no impact on the Group's condensed consolidated interim financial statements[96](index=96&type=chunk) [4. Changes in Accounting Policies and Disclosures](index=43&type=section&id=4.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) New accounting policies and government grant presentation were adopted and retrospectively applied, restating comparative figures - The Group adopted new accounting policies and presentation methods for government grants for the year ended December 31, 2022; this change has been applied retrospectively, and accordingly, the corresponding figures in the comparative financial statements have been restated[97](index=97&type=chunk) Impact of Changes in Accounting Policies and Disclosures (For the six months ended June 30, 2022) | Item | As Previously Reported (RMB thousand) | Impact of Changes in Accounting Policies and Disclosures (RMB thousand) | As Restated (RMB thousand) | | :--- | :--- | :--- | :--- | | Cost of Sales | (8,347,442) | 50,721 | (8,296,721) | | Selling Expenses | (193,494) | 52,599 | (140,895) | | Administrative Expenses | (297,680) | 69,040 | (228,640) | | Research and Development Expenses | (412,837) | 207,562 | (205,275) | | Government Grants and Subsidies | 393,222 | (379,922) | 13,300 | [5. Critical Judgments and Key Estimates](index=43&type=section&id=5.%20Critical%20Judgments%20and%20Key%20Estimates) Product warranty provisions are based on recent claims and historical data, now presented as current and non-current portions - The Group makes product warranty provisions for products sold that are still under warranty, based on the best estimate of expected settlement under sales agreements, considering the Group's recent claim cases, historical warranty data, and the weighted probabilities of all possible outcomes[98](index=98&type=chunk) - Due to continuous business development over the years and recent increases in production capacity, the Group has obtained more detailed and longer-term historical warranty data, and warranty provisions are presented as current and non-current portions at the end of the reporting period[98](index=98&type=chunk) [6. Fair Value Measurement](index=44&type=section&id=6.%20Fair%20Value%20Measurement) This note details fair value measurements of financial assets, totaling RMB 901 million, using Level 1 and Level 2 inputs [(a) Disclosure of Fair Value Hierarchy:](index=44&type=section&id=(a)%20Disclosure%20of%20Fair%20Value%20Hierarchy%3A) Financial asset fair value measurements, totaling RMB 901 million, primarily use Level 1 and Level 2 inputs Disclosure of Fair Value Hierarchy for Financial Assets (as of June 30, 2023) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Other Comprehensive Income - Certificates of Deposit | - | 123,398 | 123,398 | | Financial Assets at Fair Value Through Other Comprehensive Income - Investments in Listed Equity Securities | 223,005 | - | 223,005 | | Financial Assets at Fair Value Through Other Comprehensive Income - Investments in Unlisted Equity Securities | - | 295,917 | 295,917 | | Financial Assets at Fair Value Through Profit or Loss - Investments in Listed Equity Securities | 44,192 | - | 44,192 | | Financial Assets at Fair Value Through Profit or Loss - Investments in Unlisted Debt Instruments | - | 214,730 | 214,730 | | **Total** | **267,197** | **634,045** | **901,242** | Disclosure of Fair Value Hierarchy for Financial Assets (as of December 31, 2022) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Other Comprehensive Income - Certificates of Deposit | - | 101,428 | 101,428 | | Financial Assets at Fair Value Through Other Comprehensive Income - Investments in Listed Equity Securities | 234,590 | - | 234,590 | | Financial Assets at Fair Value Through Other Comprehensive Income - Investments in Unlisted Equity Securities | - | 286,712 | 286,712 | | Financial Assets at Fair Value Through Profit or Loss - Investments in Listed Equity Securities | 75,662 | - | 75,662 | | Financial Assets at Fair Value Through Profit or Loss - Investments in Unlisted Debt Instruments | - | 149,263 | 149,263 | | **Total** | **310,252** | **537,402** | **847,655** | [(b) Disclosure of Valuation Procedures and Valuation Techniques and Inputs Used for Fair Value Measurement by the Group as at June 30, 2023:](index=45&type=section&id=(b)%20Disclosure%20of%20Valuation%20Procedures%20and%20Valuation%20Techniques%20and%20Inputs%20Used%20for%20Fair%20Value%20Measurement%20by%20the%20Group%20as%20at%20June%2030%2C%202023%3A) The CFO oversees fair value measurements, using specific techniques for Level 2 inputs, with no changes in valuation methods - The Group's Chief Financial Officer is responsible for the fair value measurement of financial assets and financial liabilities required for financial reporting, including Level 2 fair value measurements, and reports directly to the Board on these fair value measurements[102](index=102&type=chunk) - For Level 2 fair value measurements, the specific valuation techniques used by the Group to value financial assets include the annual interest rate for certificates of deposit and the net asset value for limited partnership funds and limited partnerships[102](index=102&type=chunk) - For the six months ended June 30, 2023, there were no changes in the valuation techniques used; there were no transfers into or out of Level 3 fair value measurements[102](index=102&type=chunk) [7. Segment Information](index=46&type=section&id=7.%20Segment%20Information) The Group operates as a single reportable segment in China, with major customer revenue disclosed - The Group primarily designs, researches, develops, produces, and sells power batteries and energy storage system products in China, and all assets are primarily located in China; therefore, the chief operating decision-maker regularly reviews only one single business reportable segment[103](index=103&type=chunk) Revenue from Customers Accounting for Over 10% of the Group's Total Revenue (For the six months ended June 30, 2023) | Customer | 2023 Revenue (RMB thousand) | 2022 Revenue (RMB thousand) | | :--- | :--- | :--- | | Customer G | 4,609,230 | 3,013,601 | | Customer J* | 1,828,430 | Not Applicable | | Customer X | 1,385,310 | 2,698,733 | [8. Revenue](index=46&type=section&id=8.%20Revenue) This note disaggregates revenue by product and geography, detailing transaction prices for remaining performance obligations [(a) Disaggregation of Revenue](index=46&type=section&id=(a)%20Disaggregation%20of%20Revenue) Revenue is primarily from power battery sales in mainland China, with significant growth in overseas energy storage products Disaggregation of Revenue by Major Product or Service Line (For the six months ended June 30, 2023) | Item | 2023 Revenue (RMB thousand) | 2022 Revenue (RMB thousand) | | :--- | :--- | :--- | | Sale of Power Batteries | 10,377,467 | 8,646,346 | | Sale of Energy Storage System Products and Others | 1,917,245 | 520,854 | | **Total** | **12,294,712** | **9,167,200** | Disaggregation of Revenue by Major Geographical Market (For the six months ended June 30, 2023) | Region | Sale of Power Batteries (RMB thousand) | Sale of Energy Storage System Products and Others (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Mainland China | 10,264,880 | 1,655,284 | 11,920,164 | | Europe | 35,800 | 58,142 | 93,942 | | Asia | 72,361 | 183,419 | 255,780 | | United States | 3,766 | 20,400 | 24,166 | | Other | 660 | - | 660 | | **Revenue from External Customers** | **10,377,467** | **1,917,245** | **12,294,712** | - The vast majority of revenue (**RMB 12,290,461 thousand**) is recognized at a point in time when goods are transferred[105](index=105&type=chunk) [(b) Transaction Price Allocated to the Remaining Performance Obligations from Contracts with Customers](index=47&type=section&id=(b)%20Transaction%20Price%20Allocated%20to%20the%20Remaining%20Performance%20Obligations%20from%20Contracts%20with%20Customers) Remaining performance obligations totaled RMB 283 million, expected to be recognized as revenue within one year - The transaction price allocated to remaining performance obligations (unfulfilled or partially unfulfilled) as of June 30, 2023, was **RMB 283,009 thousand** (December 31, 2022: RMB 490,532 thousand)[106](index=106&type=chunk) - The expected timing of revenue recognition is within **1 year**[106](index=106&type=chunk) [9. Investment and Other Income](index=48&type=section&id=9.%20Investment%20and%20Other%20Income) This note lists investment and other income, including interest from bank deposits and financial assets, and compensation Investment and Other Income (For the six months ended June 30, 2023) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 69,541 | 43,536 | | Interest Income from Financial Assets at Fair Value Through Other Comprehensive Income | 8,147 | 54,901 | | Supplier Compensation | 5,820 | 1,016 | | Insurance Compensation Income | 979 | 186 | | Other | 846 | 935 | | **Total** | **85,333** | **100,574** | [10. Government Grants and Subsidies](index=48&type=section&id=10.%20Government%20Grants%20and%20Subsidies) Government grants and subsidies significantly increased to RMB 33.22 million, mainly for R&D and industrial development Government Grants and Subsidies (For the six months ended June 30, 2023) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | R&D Subsidies | 14,720 | 7,394 | | Industrial Development Subsidies | 17,052 | 5,249 | | Employee Stability Subsidies | 370 | 4 | | Recruitment Subsidies | 637 | 135 | | Other | 437 | 518 | | **Total** | **33,216** | **13,300** | - For the six months ended June 30, 2023, the Group received or recognized government grants and subsidies receivable from relevant entities of the Jintan District Government totaling approximately **RMB 224 million** (2022: RMB 68.06 million)[110](index=110&type=chunk) [11. Other Net Losses](index=49&type=section&id=11.%20Other%20Net%20Losses) Other net losses include inventory provisions and fair value changes of financial assets, with no put option liability changes post-listing Other Net Losses (For the six months ended June 30, 2023) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Inventory Provisions | (330,587) | (53,137) | | Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss | (32,003) | (8,927) | | Fair Value Changes of Put Option Liabilities | - | (40,007) | | Net Exchange Gains | 41,069 | 9,989 | | **Total** | **(321,128)** | **(92,106)** | - Since the Company's listing on The Stock Exchange of Hong Kong Limited on October 6, 2022, the written put options expired, and therefore, no fair value changes of put option liabilities have been recognized since October 6, 2022[113](index=113&type=chunk) [12. Income Tax (Credit)/Expense](index=50&type=section&id=12.%20Income%20Tax%20(Credit)%2FExpense) The Group reported an income tax credit of RMB 40.02 million, benefiting from a 15% preferential tax rate for high-tech enterprises Income Tax (Credit)/Expense (For the six months ended June 30, 2023) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Current Tax - China | 51,146 | 122,910 | | Current Tax - Germany | 36 | - | | Deferred Tax | (91,201) | 20,757 | | **Total** | **(40,019)** | **143,667** | - The Company and certain subsidiaries operating in mainland China are approved as high-tech enterprises and enjoy a preferential corporate income tax rate of **15%**[115](index=115&type=chunk) [13. Profit for the Period](index=51&type=section&id=13.%20Profit%20for%20the%20Period) This note details expenses contributing to profit, with employee benefit expenses significantly increasing due to staff conversion Components of Profit for the Period (For the six months ended June 30, 2023) | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Inventory Provisions | 330,587 | 53,137 | | Amortization of Intangible Assets | 77,168 | 70,801 | | Cost of Inventories Sold | 11,115,647 | 8,296,721 | | Depreciation of Property, Plant and Equipment | 715,810 | 314,874 | | Depreciation of Right-of-Use Assets | 32,750 | 23,820 | | Salaries, Bonuses and Allowances | 1,107,813 | 421,575 | | Contributions to Retirement Benefit Schemes | 84,622 | 22,023 | - Salaries, bonuses and allowances, and contributions to retirement benefit schemes for the six months ended June 30, 2023, increased significantly due to the conversion of certain labor personnel, previously employed by external labor service companies providing outsourced labor services, to formal employees of the Group, as well as the continuous development of the Group's business[116](index=116&type=chunk) [14. Dividends](index=52&type=section&id=14.%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023 - The directors do not recommend the payment of any interim dividend for the six months ended June 30, 2023[118](index=118&type=chunk) [15. Earnings Per Share](index=52&type=section&id=15.%20Earnings%20Per%20Share) Basic earnings per share were RMB 0.0827, with no diluted earnings per share presented due to lack of dilutive shares [(a) Basic Earnings Per Share](index=52&type=section&id=(a)%20Basic%20Earnings%20Per%20Share) Basic EPS was RMB 0.0827, based on RMB 147 million profit and 1.772 billion weighted average shares - For the six months ended June 30, 2023, basic earnings per share were **RMB 0.0827** (same period in 2022: RMB 0.1107)[120](index=120&type=chunk) - Calculated based on profit attributable to owners of the Company of **RMB 147 million** (same period in 2022: RMB 167 million) and a weighted average of approximately **1.772 billion** (same period in 2022: 1.506 billion) ordinary shares outstanding during each period[120](index=120&type=chunk) [(b) Diluted Earnings Per Share](index=52&type=section&id=(b)%20Diluted%20Earnings%20Per%20Share) Diluted earnings per share are not presented as there were no potential dilutive ordinary shares of the Company during the period - Diluted earnings per share are not presented as there were no potential dilutive ordinary shares of the Company during the period[121](index=121&type=chunk) [16. Property, Plant and Equipment](index=52&type=section&id=16.%20Property%2C%20Plant%20and%20Equipment) The Group acquired RMB 15.723 billion in property, plant and equipment, reflecting continuous capital inves

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group reported a 34.1% revenue increase to RMB 12.295 billion, with profit for the period up 60.8% to RMB 266.49 million, despite a 12.1% decline in profit attributable to owners Key Financial Metrics Changes in H1 2023 | Metric | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Group Revenue | RMB 12,294.71 million | RMB 9,167.20 million | +34.1% | | Profit for the Period | RMB 266.49 million | RMB 165.70 million | +60.8% | | Profit Attributable to Owners of the Company | RMB 146.52 million | RMB 166.72 million | -12.1% | | Basic Earnings Per Share | RMB 0.0827 | RMB 0.1107 | -25.3% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023, detailing core financial data [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue grew 34.1% to RMB 12.295 billion, with gross profit up 35.4% to RMB 1.179 billion, while profit before tax declined due to increased finance costs Statement of Profit or Loss Summary (For the Six Months Ended June 30) | Item (RMB thousands) | 2023 (Unaudited) | 2022 (Restated) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 12,294,712 | 9,167,200 | +34.1% | | Gross Profit | 1,179,065 | 870,479 | +35.4% | | Operating Profit | 364,776 | 323,486 | +12.8% | | Profit Before Tax | 226,468 | 309,362 | -26.8% | | Profit for the Period | 266,487 | 165,695 | +60.8% | | Profit Attributable to Owners of the Company | 146,517 | 166,719 | -12.1% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets grew 10.9% to RMB 100.281 billion, total liabilities increased 13.3% to RMB 55.375 billion, and net assets rose 8.0% to RMB 44.906 billion Statement of Financial Position Summary (RMB thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **100,280,715** | **90,460,618** | **+10.9%** | | Non-current Assets | 66,827,229 | 53,101,171 | +25.8% | | Current Assets | 33,453,486 | 37,359,447 | -10.5% | | **Total Liabilities** | **55,374,690** | **48,885,159** | **+13.3%** | | Non-current Liabilities | 22,142,817 | 16,110,208 | +37.4% | | Current Liabilities | 33,231,873 | 32,774,951 | +1.4% | | **Total Equity** | **44,906,025** | **41,575,459** | **+8.0%** | [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the financial statements, including segment information, revenue composition, and major customer details, highlighting the Group's single business segment - The Group primarily operates in a single business segment in China, which involves the design, research and development, production, and sales of power battery and energy storage system products[9](index=9&type=chunk)[16](index=16&type=chunk) Major Customer Revenue (For the Six Months Ended June 30) | Customer | 2023 Revenue (RMB thousands) | 2022 Revenue (RMB thousands) | | :--- | :--- | :--- | | Customer G | 4,609,230 | 3,013,601 | | Customer J | 1,828,430 | Not Applicable* | | Customer X | 1,385,310 | 2,698,733 | Revenue Breakdown by Product (For the Six Months Ended June 30) | Product Line | 2023 Revenue (RMB thousands) | 2022 Revenue (RMB thousands) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Sales of Power Batteries | 10,377,467 | 8,646,346 | +20.0% | | Sales of Energy Storage System Products and Others | 1,917,245 | 520,854 | +268.1% | | **Total** | **12,294,712** | **9,167,200** | **+34.1%** | - During the reporting period, the Group's employee benefit expenses significantly increased, primarily due to the conversion of some outsourced personnel to permanent employees and staff expansion driven by business development[28](index=28&type=chunk)[29](index=29&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) Management reviewed the industry, business, and financial performance for H1 2023, highlighting growth in new energy and energy storage markets, operational breakthroughs, and ongoing patent litigation [Industry Overview](index=15&type=section&id=Industry%20Overview) In H1 2023, China's new energy vehicle sales grew 44% to 3.75 million units, global power battery installed capacity increased 50.1% to 304.3 GWh, and the global energy storage market expanded rapidly - In H1 2023, China's new energy vehicle sales reached **3.75 million units**, a **44% year-on-year increase**, with a penetration rate of **28.3%**[39](index=39&type=chunk) - From January to June 2023, global power battery installed capacity reached **304.3 GWh**, a **50.1% year-on-year increase**, with China's market installed capacity at **152.1 GWh**, up **38.1% year-on-year**, and LFP batteries accounting for **68.3%**[42](index=42&type=chunk) - The global energy storage market is rapidly developing due to policy support and technological advancements, with cumulative installed capacity projected to reach **500 GWh by 2025**[45](index=45&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) The company's performance improved, with power battery installed capacity entering the global top five, significant patent achievements, new product launches, and deepened customer collaborations in passenger, export, and commercial vehicle markets - As of June 30, 2023, the company had cumulatively applied for **3,724 patents**, with **2,232 authorized**, establishing a full industry chain patent layout[48](index=48&type=chunk) - The company launched several innovative products, including **46-series large cylindrical batteries** with energy density up to **300Wh/kg**, **semi-solid-state batteries** exceeding **400Wh/kg**, and the industry's highest mass-produced LFP battery pack at **153Wh/kg**[51](index=51&type=chunk)[52](index=52&type=chunk) - In H1 2023, passenger vehicle installed capacity reached **12 GWh**, a **53% year-on-year increase**, with monthly installed capacity entering the global top five; the company deepened cooperation with key customers like Aion, Xpeng, Deepal, and Nio, and expanded into export and commercial vehicle businesses[54](index=54&type=chunk) [Future Outlook](index=22&type=section&id=Future%20Outlook) The company plans to maintain technology and product leadership by focusing on advanced materials, 6C fast-charging cylindrical batteries, next-generation battery technologies, and expanding into hybrid, pure electric, and all energy storage market segments - Key technological innovations include accelerating the development of new materials like **high-manganese lithium iron phosphate** and **5V high-voltage nickel-manganese lithium oxide**, launching **6C fast-charging cylindrical batteries**, and tackling next-generation battery technologies such as **all-solid-state** and **lithium-sulfur**[55](index=55&type=chunk) - Key market expansion focuses include: in the power battery market, leveraging **One-Stop technology** to cover hybrid and high-to-low-end pure electric markets; in the energy storage market, providing **full-scenario solutions** to establish it as a new business growth point[56](index=56&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) In H1 2023, the Group's revenue grew 34.1% to RMB 12.295 billion, gross profit increased 35.5% to RMB 1.179 billion, and energy storage revenue surged 268.1%, while the asset-liability ratio rose and operating cash flow turned negative Key Financial Ratios | Financial Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Gross Margin | 9.6% | 9.5% | | Net Sales Margin | 2.2% | 1.8% | Revenue by Product (H1 2023) | Item | Revenue (RMB thousands) | Revenue Share | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Power Batteries | 10,377,467 | 84.4% | +20.0% | | Energy Storage System Products and Others | 1,917,245 | 15.6% | +268.1% | | **Total** | **12,294,712** | **100.0%** | **+34.1%** | - The asset-liability ratio increased from **17.7%** at the end of 2022 to **42.0%** as of June 30, 2023, primarily due to increased borrowings for project construction[68](index=68&type=chunk) - Net cash outflow from operating activities was **RMB 2.725 billion**, compared to an inflow of **RMB 443 million** in the same period last year, mainly due to increased payments for materials and employee expenses driven by business growth[67](index=67&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) The company faces multiple patent infringement lawsuits from CATL, with provisions made for some claims and others deemed baseless, while the CNIPA has invalidated two key patents used in the litigation - The company has made provisions totaling **RMB 8.64 million** for CATL's claims regarding Patents One, Three, and Four[78](index=78&type=chunk) - On August 3, 2023, the China National Intellectual Property Administration declared the invention patent rights for **Patents One and Four**, used by CATL in its lawsuits, entirely invalid[79](index=79&type=chunk) Contingent Liabilities Related to CATL (As of June 30, 2023) | Related Patent | Claimed Damages (RMB thousands) | Claimed Costs (RMB thousands) | | :--- | :--- | :--- | | Patent Two | 365,000 | 1,200 | | Patent Six | 130,000 | 500 | [Other Information](index=32&type=section&id=Other%20Information) This section covers IPO proceeds utilization, employee growth, the Board's decision not to declare an interim dividend, and corporate governance practices, including the combined roles of Chairman and President Use of IPO Proceeds and Utilization (As of June 30, 2023) | Item | Net Proceeds (HKD millions) | Actual Net Utilized (HKD millions) | Net Unutilized (HKD millions) | | :--- | :--- | :--- | :--- | | Construction of Production Facilities | 7,984.08 | 5,800.96 | 2,183.12 | | Research and Development of Advanced Technologies | 998.01 | 0.00 | 998.01 | | Working Capital and General Corporate Purposes | 998.01 | 32.24 | 965.77 | | **Total** | **9,980.10** | **5,833.20** | **4,146.90** | - As of June 30, 2023, the Group had **21,587 employees**, with the significant increase primarily due to the conversion of some outsourced personnel to permanent employees and business expansion[85](index=85&type=chunk) - The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2023[85](index=85&type=chunk) - The company complies with the Corporate Governance Code, with a deviation where the roles of Chairman (Ms. Liu Jingyu) and President (Ms. Liu Jingyu) are not separated; the Board believes this arrangement benefits leadership consistency and decision-making efficiency, with sufficient safeguards to balance power[86](index=86&type=chunk)[87](index=87&type=chunk)

Business Growth and Performance - In 2022, CALB Group achieved significant growth in product sales, marking a multiple increase and expanding its industrial base in Europe, contributing to global green and low-carbon development [21]. - In 2022, the company achieved a total asset of RMB 90.461 billion, a year-on-year increase of 134.2% [41]. - The net profit for 2022 was approximately RMB 0.694 billion, representing a year-on-year growth of 521.8% [41]. - The company realized an operating revenue of about RMB 20.375 billion, which is a year-on-year increase of 198.9% [41]. - The company's revenue increased from RMB 6,817.12 million for the year ended December 31, 2021, to RMB 20,374.94 million for the year ended December 31, 2022, representing a growth of 198.9% [50]. - Gross profit rose from RMB 510.95 million in 2021 to RMB 2,103.52 million in 2022, marking a growth of 311.7% [50]. - Net profit attributable to the company's owners increased from RMB 140.03 million in 2021 to RMB 691.63 million in 2022, a growth of 393.9% [50]. - The company's basic earnings per share increased from RMB 0.1128 in 2021 to RMB 0.4408 in 2022, reflecting a growth of 290.8% [50]. - The gross margin improved from 7.5% in 2021 to 10.3% in 2022, an increase of 2.8 percentage points [50]. - The sales net margin increased from 1.6% in 2021 to 3.4% in 2022, primarily due to increased sales and improved gross margin [51]. Product Innovation and Development - In 2023, CALB Group launched the world's first "Top Flow" cylindrical battery, featuring innovative structural and chemical system designs that significantly enhance battery performance compared to traditional cylindrical batteries [24]. - The company has developed a high-nickel multi-element battery with an energy density of 350 Wh/kg, achieving over 1,500 cycles in lifespan tests [34]. - The 800V 6C high-nickel battery supports charging from 20% to 80% in just 8 minutes, with an energy density of 300 Wh/kg [34]. - The company has developed high-power lithium iron phosphate batteries with an energy density of 152 Wh/kg, supporting a range of over 600 km [2]. - The company has also introduced a manganese iron lithium battery with an energy density of 180 Wh/kg, supporting a range of over 700 km, while reducing lithium usage by 15% [2]. - New product development includes the launch of a high-performance battery technology, expected to enhance energy density by 30% [111]. Market Trends and Industry Insights - In 2022, global sales of new energy vehicles reached 10.83 million units, a year-on-year increase of 61.6% [26]. - China's new energy vehicle sales accounted for over 60% of the global market, with production and sales of 7.058 million and 6.887 million units respectively, representing year-on-year growth of 96.9% and 93.4% [27]. - The global installed capacity of power batteries in 2022 was 511.7 GWh, a year-on-year increase of 71.8%, with China's share at 58% [28]. - The installed capacity of power batteries in China reached 297.3 GWh, growing by 99.6% year-on-year [30]. - The company aims to enhance its product competitiveness in power batteries and energy storage systems while promoting sustainable development [33]. - The global demand for power batteries is expected to continue growing due to the rapid expansion of the new energy vehicle market [28]. Corporate Governance and Management - The company has adopted the Corporate Governance Code as its own governance code since its listing date and has complied with all applicable provisions, except for the separation of roles between the Chairman and the CEO [126]. - The board consists of eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors, ensuring a balanced composition [130]. - The company is committed to maintaining high levels of corporate governance and regularly reviews its governance practices to align with regulatory developments [127]. - The company has established several specialized committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, to delegate responsibilities effectively [130]. - The company has established a risk management and internal control system that complies with corporate governance codes, ensuring effective oversight and evaluation of risks across various operational processes [167]. - The internal control team consists of members with an average of over 5 years of relevant experience, ensuring robust internal auditing and risk management practices [172]. Social Responsibility and Sustainability - The company emphasizes ESG management, integrating it into its development strategy while setting carbon reduction targets and promoting supply chain collaboration for carbon reduction [21]. - The company is committed to creating a healthy ecosystem in the new energy industry and fulfilling its responsibilities for energy security and sustainable development [20]. - The company aims to achieve its "dual carbon goals" while fostering a harmonious and sustainable energy ecosystem for a better future [25]. - The company is committed to sustainability, with plans to implement eco-friendly manufacturing processes by 2025 [112]. - The company actively engages in social responsibility initiatives, including youth development and community building, contributing to local high-quality development [23]. Legal and Compliance Issues - The company faces potential claims from CATL regarding intellectual property infringement, with total damages claimed amounting to RMB 485 million [67]. - The company is actively involved in legal proceedings regarding multiple patent claims, indicating ongoing litigation risks [72]. - The management has taken a cautious approach in estimating provisions based on legal counsel's assessments [75]. - The company has made a provision of RMB 8.64 million for claims related to patents one, three, and four [75]. Leadership and Human Resources - The company has expanded its leadership team with experienced professionals in finance and investment management [86]. - The management team is focused on strategic investments and capital operations to drive growth [85]. - The company has implemented an A+ABC performance management model to maximize employee motivation and potential [155]. - The company has established a tiered incentive system based on the 3P1M (person performance position market) compensation philosophy, which considers market conditions, position value, individual performance, and capabilities [155]. - The company has no record of any director waiving their remuneration during the reporting period [157]. Future Outlook and Strategic Plans - The company plans to accelerate its internationalization strategy and implement a "dual drive" strategy for power storage in 2023, focusing on technology and product innovation, customer development, service upgrades, and sustainable development [24]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years [112]. - A strategic acquisition of a local battery manufacturer is in progress, which is projected to increase production capacity by 40% [112]. - The company has invested $20 million in R&D for innovative battery solutions, aiming to reduce production costs by 15% [111]. - The company has set a future outlook with a revenue target of $600 million for the next fiscal year, indicating a growth rate of 20% [110].

Financial Highlights [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group achieved significant financial growth in 2022, with revenue increasing by 198.9% to approximately RMB 20.375 billion, profit attributable to owners of the Company growing by 393.9% to approximately RMB 692 million, and basic earnings per share increasing by 290.8% 2022 Annual Financial Highlights | Indicator | 2022 (RMB millions) | 2021 (RMB millions) | Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 20,374.94 | 6,817.12 | 198.9% | | Profit attributable to owners of the Company | 691.63 | 140.03 | 393.9% | | Basic Earnings Per Share (RMB Yuan) | 0.4408 | 0.1128 | 290.8% | Consolidated Financial Statements [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended December 31, 2022, the Group's revenue reached RMB 20.375 billion, a 198.9% increase from RMB 6.817 billion in 2021, with gross profit growing to RMB 2.104 billion and profit for the year significantly increasing to RMB 694 million Key Data from 2022 Consolidated Statement of Profit or Loss | Item | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 20,374,942 | 6,817,115 | | Gross Profit | 2,103,520 | 510,950 | | Operating Profit | 711,659 | 113,122 | | Profit for the Year | 693,537 | 111,540 | | Profit attributable to owners of the Company | 691,626 | 140,029 | | Basic Earnings Per Share (RMB Yuan) | 0.4408 | 0.1128 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets increased by 134.2% to RMB 90.461 billion, total liabilities rose to RMB 48.885 billion, and net assets reached RMB 41.575 billion, primarily driven by business expansion, production base construction, and H-share listing proceeds Summary of Consolidated Statement of Financial Position as of December 31, 2022 | Item | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | 53,101,171 | 20,034,407 | | **Current Assets** | 37,359,447 | 18,586,078 | | **Total Assets** | 90,460,618 | 38,620,485 | | **Current Liabilities** | 32,774,951 | 9,890,350 | | **Non-current Liabilities** | 16,110,208 | 3,744,011 | | **Total Liabilities** | 48,885,159 | 13,634,361 | | **Net Assets** | 41,575,459 | 24,986,124 | - Total assets increased by **134.2%**, primarily due to continuous investment in production bases leading to an increase in property, plant, and equipment, and an increase in bank deposits from H-share issuance proceeds[63](index=63&type=chunk) - Total liabilities increased by **258.5%**, mainly due to increased material purchases from business expansion, higher trade and bills payables, and increased syndicated project loans to meet investment needs[64](index=64&type=chunk) Notes to the Consolidated Financial Statements [Accounting Policies and Disclosure Changes](index=8&type=section&id=4.%20Accounting%20Policies%20and%20Disclosure%20Changes) This year, the Group changed its accounting policy for government grants, reclassifying asset-related grants from deferred income to direct deduction from asset carrying amounts, and revenue-related grants to direct deduction from relevant expenses, with retrospective application and restatement of comparative financial statements - Before the change, asset-related government grants were recognized as deferred income; after the change, they are directly deducted from the asset's carrying amount and recognized as a reduction in depreciation expense over the asset's useful life[15](index=15&type=chunk) - Before the change, revenue-related government grants were presented separately; after the change, they are directly deducted when reporting the related expenses[15](index=15&type=chunk) Impact of Accounting Policy Changes on 2021 Statement of Profit or Loss (RMB thousands) | Item | Change Impact | | :--- | :--- | | Cost of Sales | +132,672 | | Selling Expenses | +11,144 | | Administrative Expenses | +77,643 | | Research and Development Expenses | +62,733 | | Government Grants and Subsidies | -284,192 | [Revenue](index=10&type=section&id=5.%20Revenue) In 2022, total revenue was RMB 20.375 billion, with power battery sales contributing RMB 18.324 billion, accounting for 89.9%, and Mainland China being the primary market, contributing 98.1% of revenue Revenue by Product Line (RMB thousands) | Product Line | 2022 | 2021 | | :--- | :--- | :--- | | Sales of Power Batteries | 18,323,505 | 6,065,200 | | Sales of Energy Storage System Products and Others | 2,051,437 | 751,915 | | **Total** | **20,374,942** | **6,817,115** | Revenue by Major Geographic Market (RMB thousands) | Region | 2022 | 2021 | | :--- | :--- | :--- | | Mainland China | 19,988,435 | 6,643,764 | | Europe | 83,175 | 67,161 | | Asia | 213,353 | 44,371 | | United States | 89,979 | 61,653 | | **Total** | **20,374,942** | **6,817,115** | [Segment Information](index=12&type=section&id=9.%20Segment%20Information) The Group primarily operates in a single business segment in China, focusing on the design, R&D, production, and sales of power batteries and energy storage system products, with revenue from customers G and X each exceeding 10% of total revenue in 2022 - The chief operating decision maker reviews only one single business reportable segment[24](index=24&type=chunk) Revenue from Major Customers (RMB thousands) | Customer | 2022 | 2021 | | :--- | :--- | :--- | | Customer G | 8,056,758 | 3,537,094 | | Customer X | 3,457,134 | Not Applicable | | Customer C | Not Applicable | 946,661 | [Dividends](index=14&type=section&id=13.%20Dividends) The Board of Directors resolved not to recommend the payment of a final dividend for the year ended December 31, 2022 - No dividends were paid or proposed during the year 2022[30](index=30&type=chunk)[83](index=83&type=chunk) Management Discussion and Analysis [Industry Overview](index=18&type=section&id=I.%20Industry%20Overview) The global and Chinese new energy vehicle markets continue rapid growth, driving a surge in power battery demand, with global NEV sales up 61.6% and power battery installations up 71.8% in 2022, while the energy storage market shows significant potential amid clean energy transition and energy security needs - Global new energy vehicle sales reached **10.831 million units** in 2022, a **61.6% year-on-year increase**[39](index=39&type=chunk) - In 2022, China's new energy vehicle production and sales reached **7.058 million** and **6.887 million units** respectively, both increasing by over **90%** year-on-year, with an electrification rate of **25.6%**[39](index=39&type=chunk) - Global power battery installations for new energy vehicles reached **511.7 GWh** in 2022, a **71.8% year-on-year increase**, with the Chinese market accounting for **58%**[42](index=42&type=chunk) - The energy storage market has immense development potential, driven by the introduction of wind and solar energy storage policies, cost compensation mechanisms, and growing demand for residential PV and energy storage in Europe and America[45](index=45&type=chunk) [Business Review](index=21&type=section&id=II.%20Business%20Review) In 2022, the Group's performance significantly improved, achieving four consecutive years of multi-fold growth in power battery installations, expanding customer base, launching innovative products, successfully listing on the HKEX, and establishing new industrial bases domestically and internationally - Key products include ternary products (high energy density, ultra-fast charging) and phosphate-based products (ultra-high safety, long lifespan), offering energy storage solutions for power, industrial, commercial, and residential scenarios[48](index=48&type=chunk)[49](index=49&type=chunk) - In the power battery market, the Group consolidated its BEV market position, expanded into PHEV/REEV markets, secured new designated customers like NIO, Dongfeng, and FAW, and commenced mass production deliveries to Smart and Honda[50](index=50&type=chunk) - In the energy storage market, the Group expanded into industrial, commercial, and residential energy storage, securing designated projects from multiple state-owned power enterprises, system integrators, and leading solar and wind power companies[50](index=50&type=chunk) - In 2022, **1,571 patents** were applied for, covering the entire battery industry chain[51](index=51&type=chunk) - Successfully listed on the Main Board of the Stock Exchange, and added new industrial bases in Meishan, Sichuan, Jiangmen, Guangdong, and Europe[50](index=50&type=chunk) [Future Outlook](index=25&type=section&id=III.%20Future%20Outlook) The Group will adhere to a technology and product leadership strategy, continuously innovating across materials, structure, manufacturing, and systems, with a focus on new battery technologies like solid-state lithium batteries, while expanding into hybrid vehicle and energy storage markets and accelerating international expansion - Technological innovation: Committed to maintaining leadership in advanced chemical energy storage materials, intelligent manufacturing, high-performance batteries and systems, new battery types (solid-state lithium batteries, lithium-sulfur batteries), and full lifecycle management[53](index=53&type=chunk) - Market expansion: While consolidating the BEV market, the PHEV/REEV hybrid market will be developed as a rapid growth pole; the energy storage market will become another new business growth driver[55](index=55&type=chunk) - Internationalization strategy: Accelerate the construction of European industrial bases, ensure mass production on schedule, and enhance international market share and brand recognition[56](index=56&type=chunk) [Financial Review](index=26&type=section&id=IV.%20Financial%20Review) In 2022, the Group's revenue grew by 198.9% to RMB 20.375 billion, and gross profit increased by 311.7% to RMB 2.104 billion, with improved margins due to economies of scale and sales growth, while assets and liabilities significantly expanded to support business and capacity, and provisions were made for certain patent litigation claims Key Financial Ratios for 2022 | Financial Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Gross Margin (%) | 10.3% | 7.5% | +2.8 ppt | | Net Sales Margin (%) | 3.4% | 1.6% | +1.8 ppt | - Power battery revenue increased by **202.1%** to **RMB 18.324 billion**, primarily due to capacity release and growing customer demand[60](index=60&type=chunk) - Energy storage systems and other revenue increased by **172.8%** to **RMB 2.051 billion**, mainly due to continuous expansion in the energy storage market[61](index=61&type=chunk) - Capital expenditure was **RMB 29.989 billion**, a **211% year-on-year increase**, primarily for capacity expansion[69](index=69&type=chunk) - The debt-to-equity ratio (net debt/equity) increased from **3.1%** in 2021 to **17.7%** in 2022, mainly due to increased borrowings for project construction[67](index=67&type=chunk) - Regarding the patent litigation with CATL, the Company has made provisions totaling **RMB 8.64 million** for claims related to patents one, three, and four, and believes that claims related to patents two and six are unlikely to require an outflow of economic benefits[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) Other Information [Use of Proceeds from Listing](index=36&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company listed on the Stock Exchange on October 6, 2022, raising net proceeds of approximately HKD 9.98 billion, of which approximately HKD 3.75 billion was used by December 31, 2022, primarily for new production facility construction, with remaining funds to be utilized as disclosed in the prospectus Use and Application of Listing Proceeds (HKD millions) | Purpose | Net Proceeds Raised | Net Proceeds Used | Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | | Construction of New Production Facilities | 7,984.08 | 3,718.05 | 4,266.03 | | Research and Development of Advanced Technologies | 998.01 | 0.00 | 998.01 | | Working Capital and General Corporate Purposes | 998.01 | 32.24 | 965.77 | | **Total** | **9,980.10** | **3,750.29** | **6,229.81** | [Compliance with Corporate Governance Code](index=37&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) From its listing to the end of 2022, the Company complied with all applicable provisions of the Corporate Governance Code, with the only deviation being the same individual serving as both Chairman and President (CEO), an arrangement the Board believes ensures leadership consistency and decision-making efficiency with adequate safeguards - The Company has complied with the Corporate Governance Code, with the only deviation being from Code Provision C.2.1, which states that the roles of Chairman and Chief Executive Officer should be separate[85](index=85&type=chunk) - Ms. Liu Jingyu serves concurrently as the Company's Chairman and President; the Board believes this arrangement facilitates leadership consistency and efficient decision-making, and will review this structure periodically[86](index=86&type=chunk) - The Audit Committee has reviewed the annual audited consolidated financial statements, chaired by Mr. Wang Susheng, an independent non-executive director with appropriate professional qualifications[87](index=87&type=chunk)