Core Viewpoint - The company, 首创环境 (03989), reported a revenue of 1.876 billion RMB for the six months ending June 30, 2025, reflecting a year-on-year growth of 5.0% [1] - The profit attributable to the owners of the parent company was 188 million RMB, an increase of 10.3% compared to the previous year [1] - Basic earnings per share were 1.32 cents [1] Financial Performance - Revenue for the period was 1.876 billion RMB, showing a 5.0% increase year-on-year [1] - Profit attributable to the parent company's owners reached 188 million RMB, marking a 10.3% year-on-year growth [1] - Basic earnings per share stood at 1.32 cents [1] Profitability Metrics - The company's gross profit margin was approximately 37.64%, up from about 36.41% in the same period of 2024 [1] - The increase in gross profit margin is attributed to the gradual commencement of projects and stable revenue growth, alongside cost reduction measures implemented by the company [1]

Core Viewpoint - The company reported a revenue of 1.876 billion RMB for the six months ending June 30, 2025, reflecting a year-on-year growth of 5.0% [1] - The profit attributable to the parent company was 188 million RMB, representing a year-on-year increase of 10.3% [1] - Basic earnings per share were 1.32 cents [1] Financial Performance - Revenue for the period was 1.876 billion RMB, up 5.0% compared to the same period in 2024 [1] - Profit attributable to shareholders increased to 188 million RMB, a growth of 10.3% year-on-year [1] - Basic earnings per share stood at 1.32 cents [1] Profitability Metrics - The gross profit margin for the group was approximately 37.64%, an increase from about 36.41% in the same period of 2024 [1] - The improvement in gross margin is attributed to the gradual commencement of projects and stable revenue growth, alongside cost reduction measures implemented by the company [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何 部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 CAPITAL ENVIRONMENT HOLDINGS LIMITED 首創環境控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：03989） 截至2025年6月30日止六個月的未經審核中期業績公告 首創環境控股有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其附 屬公司（「本集團」）於截至2025年6月30日止六個月的未經審核中期合併業績連同 2024年相應期間之比較數字如下： 中期簡明合併損益表 截至2025年6月30日止六個月 | | | 2025年 | 2024年 | | --- | --- | --- | --- | | | 附註 | 人民幣千元 | 人民幣千元 | | | | 未經審核 | 未經審核 | | 收益 | 5 | 1,875,929 | 1,786,721 | | 銷售成本 | | (1,169,922) | (1,136,244) | | 毛利 | | 70 ...

CAPITAL ENVIRONMENT HOLDINGS LIMITED 首創環境控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：03989） 董事會會議通告 首創環境控股有限公司（「本公司」）董事會（「董事會」）欣然宣佈，本公司謹訂於 二零二五年八月二十日（星期三）舉行董事會會議，藉以（其中包括）考慮及批准 本公司及其附屬公司截至二零二五年六月三十日止六個月之未經審計的中期業績 及其發佈，以及考慮派發中期股息（如有）。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公告全部或任何 部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 黎青松 北京，二零二五年八月四日 於本公告日期，董事會成員包括一名執行董事黎青松先生；一名非執行董事郝春 梅女士以及四名獨立非執行董事浦炳榮先生、鄭啟泰先生、陳綺華博士及曹富國 博士。 承董事會命 首創環境控股有限公司 主席 ...

公司名稱: 首創環境控股有限公司 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 呈交日期: 2025年8月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 03989 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 33,683,800,000 | HKD | | 0.1 | HKD | | 3,368,380,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 33,683,800,000 | HKD | | 0.1 | HKD | | 3,368,380,000 | | 2. ...

Financial Performance - In 2024, the company achieved total operating revenue of RMB 3.667 billion, a decrease of 10.06% year-on-year[13]. - The net profit attributable to shareholders was RMB 234 million, reflecting a year-on-year decrease of 17.96%[13]. - The group's revenue from waste treatment and energy conversion business for the year was approximately RMB 3,666,591,000, a decrease of about 10.06% compared to RMB 4,076,596,000 in the same period of 2023[36]. - The gross profit margin for the year was approximately 35.70%, an increase from approximately 34.02% in 2023, attributed to increased waste processing volume and improved power generation efficiency[37]. - The net profit attributable to the owners of the company was approximately RMB 234,123,000, down about 17.96% from RMB 285,380,000 in 2023, mainly due to a reduction in overall business activities[37]. Assets and Liabilities - Total assets reached RMB 20.881 billion, an increase of 2.92% year-on-year, while net assets grew by 4.41% to RMB 6.991 billion[13]. - As of December 31, 2024, the total assets of the group were approximately RMB 20,880,537,000, with net assets attributable to the owners of the company at approximately RMB 6,661,471,000[38]. - The debt-to-asset ratio was 66.52%, a decrease of 0.47% from 66.99% on December 31, 2023[38]. - The outstanding borrowings amounted to approximately RMB 10,647,211,000, an increase of about RMB 175,167,000 from RMB 10,472,044,000 on December 31, 2023[41]. Project and Investment Overview - The company has a total of 65 projects in China with a total investment of approximately RMB 19.758 billion, with RMB 17.2 billion already invested[13]. - The group has a total of 65 projects in operation, including 27 waste-to-energy projects and 5 landfill projects, with a total investment of approximately RMB 19.758 billion[23][24]. - Strategic investments and acquisitions will focus on high-quality projects with technological synergy and regional advantages to accelerate resource integration[14]. Market and Industry Trends - In 2024, the environmental protection market reached RMB 783.5 billion, with service projects accounting for 84% and asset projects for 16%[20]. - The urban and rural sanitation sector achieved a transaction value of RMB 168.1 billion, with new energy equipment penetration exceeding 30% and smart management platform coverage over 50%[20]. - The waste treatment industry in China is in a strategic adjustment period, with traditional landfill operations entering a decline phase and the market for site restoration rapidly developing[178]. - The waste incineration industry has matured with a complete business model, while the environmental sanitation industry is transitioning towards maturity after a rapid development phase[178]. Operational Efficiency and Management - The company aims to enhance operational management capabilities and improve the standardized system and intelligent platform for better digital service efficiency[14]. - The group improved operational efficiency, achieving a 6.8% year-on-year increase in electricity generation from incineration projects and a 10.4% increase in capacity utilization rate[26]. - The company aims to optimize its operating cash flow continuously, becoming a core pillar of the parent group's stable growth[12]. Corporate Governance - The company has maintained compliance with all applicable code provisions of the corporate governance code as of December 31, 2024[67]. - The board believes that high standards of corporate governance are key to the company's success and is committed to maintaining these standards[66]. - The board consists of two executive directors, one non-executive director, and four independent non-executive directors, ensuring a diverse governance structure[72]. Risk Management and Compliance - The board confirmed its responsibility for ongoing supervision of the risk management and internal control systems, ensuring they are effective and adequate[105]. - The company has established a risk governance framework to enhance internal controls and improve execution effectiveness[98]. - The company has implemented a unique internal control system to meet regulatory requirements and improve governance standards[99]. Sustainability and Innovation - The company emphasizes technology innovation to drive development and enhance its technological innovation capabilities for high-quality growth[22]. - The company is committed to continuous innovation and has established partnerships with leading international environmental management firms to enhance service quality[117]. - The company will publish its sustainability report by the end of April 2025, detailing its environmental and social responsibilities[177]. Employee and Board Diversity - The gender ratio of employees in the group is approximately 77.7% male and 22.3% female as of December 31, 2024[83]. - The board currently consists of seven members, with two female directors, achieving a gender diversity rate of 28.6%[82]. - The company recognizes the importance of protecting employee rights and providing equal opportunities regardless of gender, age, or background[83].

Financial Performance - For the year ended December 31, 2024, the total revenue was RMB 3,666,591,000, a decrease of 10.1% compared to RMB 4,076,596,000 in 2023[2] - Gross profit for the same period was RMB 1,309,096,000, down 5.6% from RMB 1,386,769,000 in 2023[2] - The net profit for the year was RMB 270,570,000, representing an increase of 4.6% from RMB 258,389,000 in 2023[3] - Basic and diluted earnings per share decreased to RMB 1.64 from RMB 2.00 in the previous year, a decline of 18%[3] - Total comprehensive income for the year was RMB 266,758,000, compared to RMB 243,258,000 in 2023, reflecting an increase of 9.7%[5] - The group's profit before tax for 2024 was RMB 234,123,000, down from RMB 285,380,000 in 2023, indicating a decrease of about 17.9%[37] - The company reported a net profit margin of approximately 0.6% for 2024, down from 0.8% in 2023, reflecting a decline in profitability[37] - The net profit attributable to shareholders reached RMB 234 million, with waste incineration and related collection businesses contributing RMB 457 million to the profit[68] Revenue Breakdown - Customer contract revenue for 2024 was RMB 3,147,996,000, down 11.5% from RMB 3,559,460,000 in 2023[17] - Revenue from construction services under service concession arrangements decreased to RMB 339,823,000 in 2024 from RMB 535,159,000 in 2023, a decline of 36.5%[17] - Revenue from operation services under service concession arrangements increased to RMB 2,054,663,000 in 2024, up 6.7% from RMB 1,925,332,000 in 2023[17] - The group's revenue from waste treatment and energy conversion for the year was approximately RMB 3,666,591,000, a decrease of about 10.06% compared to RMB 4,076,596,000 in the same period of 2023[86] Assets and Liabilities - Non-current assets totaled RMB 13,669,128,000, a decrease from RMB 13,956,791,000 in 2023[7] - Current assets increased to RMB 7,211,409,000 from RMB 6,330,375,000, marking a growth of 13.9%[7] - Current liabilities rose significantly to RMB 5,247,010,000 from RMB 3,528,069,000, an increase of 48.7%[9] - The total equity attributable to equity holders of the parent company was RMB 6,661,471,000, up from RMB 6,429,390,000 in 2023[9] - The total amount of bank and other borrowings was RMB 10,647,211,000 in 2024, a slight increase from RMB 10,472,044,000 in 2023[56] - The debt-to-asset ratio decreased to 66.52% from 66.99% in 2023, while the current ratio fell from approximately 1.79 to 1.37[87] Operational Efficiency - The company continues to engage in waste management and waste-to-energy conversion business, indicating ongoing commitment to market expansion and innovation[11] - The group is focusing on optimizing asset structure and enhancing operational quality of core projects, leading to significant improvements in operational efficiency[70] - The group achieved operating revenue of RMB 3.667 billion, with over 90% contributed by core businesses such as waste incineration power generation and urban sanitation[68] - The group completed 17 engineering projects and successfully transitioned 4 pilot projects to commercial operations, achieving a 6.8% year-on-year increase in electricity generation from waste incineration projects[71] Research and Development - Research and development costs increased to RMB 53,218,000 in 2024 from RMB 42,740,000 in 2023, reflecting a rise of approximately 24.5%[28] - The group submitted 48 patent applications in the field of technological innovation, receiving 35 authorized patents, including 12 invention patents[73] Market and Business Expansion - The group is actively expanding its business scale and exploring optimization potential in operational management, guided by key performance indicators such as return on equity (ROE)[68] - The group entered the Guangxi Zhuang Autonomous Region market for high-standard farmland construction projects, expanding its market presence[73] - The environmental protection market transaction value reached RMB 783.5 billion, with service projects accounting for 84% and asset projects for 16%[64] Financial Management - The total financial expenses for 2024 were RMB 425,156,000, slightly decreased from RMB 440,919,000 in 2023, showing a reduction of about 3.6%[30] - The company did not declare any dividends for the year ending December 31, 2024, compared to a declared dividend of RMB 130,694,000 in 2023[34] - The group has capital commitments of approximately RMB 169,460,000 related to construction projects under service concession arrangements as of December 31, 2024[95] Compliance and Governance - The company adheres to high standards of corporate governance and has complied with all applicable codes during the year ending December 31, 2024[108] - The audit committee reviewed the accounting principles and practices adopted by the group for the year ending December 31, 2024, and found them compliant with relevant standards[110] - The preliminary financial results for the year ending December 31, 2024, have been agreed upon by the auditor, Ernst & Young, and are consistent with the group's consolidated financial statements[111]

[Company Information](index=2&type=section&id=Company%20Information) [Company Basic Information](index=2&type=section&id=Company%20Basic%20Information) Shougang Environment Holdings Limited (stock code 03989) is a Cayman Islands-registered company focused on waste treatment and waste-to-energy - Company registered in Cayman Islands on May 27, 2004, and listed on HKEX main board on July 13, 2006[51](index=51&type=chunk) - Main business is waste treatment and waste-to-energy[51](index=51&type=chunk) - Company stock code is **03989**[2](index=2&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Macroeconomic and Industry Overview](index=3&type=section&id=Macroeconomic%20and%20Industry%20Overview) China's H1 2024 GDP grew 5%, with unstable recovery; waste incineration declined, while sanitation and site remediation expanded - China's GDP grew by **5%** year-on-year in H1 2024, with **5.3%** in Q1 and **4.7%** in Q2[3](index=3&type=chunk) - New waste incineration capacity decreased to **0.58 thousand tons/day**, down **75%** year-on-year; new investment decreased to **RMB 4.2 billion**, down **71%** year-on-year, both hitting a three-year low[3](index=3&type=chunk) - Sanitation market contract value for projects over RMB 10 million reached **RMB 93.9 billion**, up **14%** year-on-year; site remediation business turnover reached **RMB 46.6 billion**, up **15%** year-on-year[3](index=3&type=chunk) [Group Strategy and Operating Results](index=4&type=section&id=Group%20Strategy%20and%20Operating%20Results) The Group focused on core environmental protection, strengthening waste-to-energy and developing asset-light businesses, achieving 13.48% net profit growth and 1.5% asset growth despite a 6.38% revenue decline - The Group focuses on its core environmental protection business, continuously strengthening its leading position in waste-to-energy, and actively promoting the development of asset-light businesses such as urban and rural sanitation, site remediation, and energy saving/carbon reduction[4](index=4&type=chunk) - The Group has established a diversified "investment + operation + service" value-driven model, achieving a balance between asset-heavy and asset-light operations[5](index=5&type=chunk) 2024 H1 Key Operating Results | Indicator | 2024 H1 (RMB billion) | YoY Change | 2023 H1 (RMB billion) | | :--- | :--- | :--- | :--- | | Operating Revenue | 17.87 | -6.38% | 19.08 | | Net Profit Attributable to Owners | 1.71 | +13.48% | 1.50 | | Total Assets (Period-end) | 205.91 | +1.5% (vs. 2023 end) | 202.87 (2023 end) | - Waste-to-energy, urban and rural sanitation, site remediation, and organic solid waste treatment contributed **RMB 16.98 billion** in operating revenue, accounting for **95.04%** of total revenue[5](index=5&type=chunk) - The Group has **67** domestic reserve projects with a total investment of approximately **RMB 19.783 billion**, of which **RMB 17.127 billion** has been invested[5](index=5&type=chunk) - In H1, **5.0416 million tons** of domestic waste were processed, **23.1 thousand tons** of hazardous waste were processed, and **1.287 billion kWh** of on-grid electricity were supplied[6](index=6&type=chunk) [Significant Achievements in Comprehensive Quality Improvement](index=6&type=section&id=Significant%20Achievements%20in%20Comprehensive%20Quality%20Improvement) The Group transitioned 3 projects to commercial operation, adjusted prices for 2, improved capacity utilization to 87%, and saved RMB 14 million through procurement - Qianjiang incineration, Fuzhou kitchen waste, and Gao'an collection and transportation **3** projects successfully transitioned to commercial operation; Puer incineration and Gao'an collection and transportation **2** projects achieved price adjustments[8](index=8&type=chunk) - Project capacity utilization increased from **77%** to **87%**, and the average on-grid electricity per ton of waste for waste-to-energy projects increased by **5.7%** compared to last year[8](index=8&type=chunk) - Centralized procurement saved **RMB 14 million**; loan interest rates for multiple projects were reduced, with a maximum decrease of **80 basis points**[8](index=8&type=chunk) [Fruitful Achievements in Innovation and Growth](index=6&type=section&id=Fruitful%20Achievements%20in%20Innovation%20and%20Growth) The Group advanced technological innovation with new patents and projects, expanding waste incineration derivative businesses and urban/rural sanitation contracts - Flue gas desulfurization process modification project is progressing rapidly, having entered the trial debugging stage[9](index=9&type=chunk) - Completed acceptance for **4** existing research projects, applied for **2** new project initiations, received **4** invention patent applications and **10** utility model applications, and was granted **4** invention patents and **14** utility model patents[9](index=9&type=chunk) - Expanded **10** waste incineration derivative business projects, signed **47** contracts with a contract value of approximately **RMB 24 million**; secured **6** urban and rural sanitation projects with an annual contract value of **RMB 69 million**[9](index=9&type=chunk) - "Key Technologies and Applications for Resource Refinement, Reconstruction, and Graded Directional Conversion of Kitchen Waste" won the **Second Prize for Scientific and Technological Progress in Shanghai**[9](index=9&type=chunk) [Significant Effects of System Upgrades](index=7&type=section&id=Significant%20Effects%20of%20System%20Upgrades) The Group improved operational efficiency through system upgrades, refined sanitation management, and explored new areas like waste plastic recycling and new energy heating - Through the excellent operation system construction, key indicators such as power generation, in-plant power consumption rate, and unit efficiency were successfully improved[11](index=11&type=chunk) - Actively improved the sanitation business management system, focusing on safety management, operational planning management, human resource management, and organizational capability building[11](index=11&type=chunk) - Conducted in-depth research and demonstration on three directions: chemical recycling of waste plastics, new energy heating, and the application of heat pumps in large-scale heating projects[11](index=11&type=chunk) [Enhanced Safety System](index=7&type=section&id=Enhanced%20Safety%20System) The Group fully enhanced its safety management system, achieving 100% responsibility letter signing, and rectified all 265 identified hidden dangers through 10 inspections - All-staff safety objective responsibility letters signing rate reached **100%**[12](index=12&type=chunk) - Formulated "2024 Safety Production Work Priorities" and "2024 Safety Production Work Plan," and compiled "High and Medium Risk Control List"[12](index=12&type=chunk) - Conducted **10** safety inspections, identified and rectified **265** hidden dangers, with a **100%** rectification rate[12](index=12&type=chunk) [Diversified Financing Methods](index=7&type=section&id=Diversified%20Financing%20Methods) The Group maintains strong relationships with mainstream financial institutions, leveraging favorable policies to reduce financing costs, with total bank credit reaching RMB 10.143 billion in H1 2024 - The Group maintains good cooperative relationships with several mainstream financial institutions, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China[13](index=13&type=chunk) - As of H1 2024, the Group's total outstanding bank credit amounted to **RMB 10.143 billion**, including **RMB 0.5 billion** for the headquarters and **RMB 9.643 billion** for project companies[13](index=13&type=chunk) [Business Outlook](index=7&type=section&id=Business%20Outlook) In H2, the Group will prioritize project implementation, focus resources on quality projects, reduce losses and accounts receivable, and enhance overall management driven by improved return on equity - H2 work objectives include promoting project implementation, reducing losses, and reducing accounts receivable[14](index=14&type=chunk) - Driven by an increase in return on equity, comprehensively promote the Group's management improvement, focusing on "five major goals" and adopting "four major measures"[14](index=14&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) The Group's H1 revenue decreased 6.38% to RMB 1.787 billion, but net profit attributable to owners rose 13.48% to RMB 171 million due to reduced asset impairment, with stable assets and improved current ratio despite lower cash 2024 H1 Financial Performance Overview | Indicator | 2024 H1 (RMB thousand) | 2023 H1 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,786,721 | 1,908,540 | -6.38% | | Gross Profit Margin | 36.41% | 34.16% | +2.25pp | | Selling and Administrative Expenses | 198,473 | 202,671 | -2.07% | | Net Profit Attributable to Owners | 170,656 | 150,386 | +13.48% | - Revenue decrease primarily due to reduced construction revenue from projects under construction transitioning to commercial operation, and a sharp decline in revenue from the suspended dismantling project[15](index=15&type=chunk) - Gross profit margin increase primarily due to increased waste processing volume and continuous improvement in power generation efficiency for some project companies, leading to reduced fixed cost allocation[15](index=15&type=chunk) - Net profit attributable to owners increased primarily due to reduced

Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, revenue decreased by **6.38%** to **RMB 1.787 billion**, while gross profit margin improved to **36.41%**, and profit attributable to owners of the parent increased by **13.48%** to **RMB 171 million** Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :-------------------------------------- | :------------------- | :------------------- | :--------- | | Revenue | 1,786,721 | 1,908,540 | -6.38 | | Cost of sales | (1,136,244) | (1,256,574) | -9.60 | | Gross profit | 650,477 | 651,966 | -0.23 | | Gross profit margin | 36.41% | 34.16% | +2.25pp | | Profit before tax | 236,125 | 131,854 | +79.09 | | Profit for the period | 194,820 | 135,498 | +43.78 | | Profit attributable to owners of the parent | 170,656 | 150,386 | +13.48 | | Profit attributable to non-controlling interests | 24,164 | (14,888) | N/A | | Basic earnings per share | RMB 1.19 cents | RMB 1.05 cents | +13.33 | - Revenue decrease was primarily due to reduced construction revenue from projects transitioning to commercial operation and a sharp decline in revenue from discontinued dismantling projects[41](index=41&type=chunk) - Gross profit margin increased mainly due to higher waste processing volume and improved power generation efficiency in some project companies, leading to increased operating income and reduced fixed cost allocation[41](index=41&type=chunk) - Net profit attributable to owners of the company increased primarily due to a reduction in impairment provisions for long-term assets during the period[41](index=41&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2024, total comprehensive income was **RMB 192 million**, a **56.08%** increase from **RMB 123 million** in the prior year, driven by profit growth and foreign exchange differences Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :--------- | | Profit for the period | 194,820 | 135,498 | +43.78 | | Other comprehensive income | (2,451) | (12,070) | -79.60 | | Total comprehensive income for the period | 192,369 | 123,428 | +56.08 | | Attributable to owners of the parent | 169,307 | 143,251 | +18.19 | | Attributable to non-controlling interests | 23,062 | (19,823) | N/A | - Net exchange differences from translating overseas operations were negative **RMB 2,251 thousands**, a narrower loss compared to negative **RMB 10,069 thousands** in the prior period[4](index=4&type=chunk) - Fair value changes of equity investments designated at fair value through other comprehensive income were negative **RMB 200 thousands**, compared to negative **RMB 2,001 thousands** in the prior period[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets reached **RMB 20.591 billion**, with net current assets significantly increasing by **24.84%** to **RMB 3.498 billion**, and the current ratio improving to **2.02**, indicating enhanced liquidity Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | Change (%) | | :-------------------------------- | :---------------------------- | :--------------------------- | :--------- | | Total non-current assets | 13,666,986 | 13,956,791 | -2.08 | | Total current assets | 6,923,887 | 6,330,375 | +9.38 | | Total current liabilities | 3,425,403 | 3,528,069 | -2.91 | | Net current assets | 3,498,484 | 2,802,306 | +24.84 | | Total assets less current liabilities | 17,165,470 | 16,759,097 | +2.42 | | Total non-current liabilities | 10,240,514 | 10,063,232 | +1.76 | | Net assets | 6,924,956 | 6,695,865 | +3.42 | | Total equity | 6,924,956 | 6,695,865 | +3.42 | | Debt-to-asset ratio | 66.37% | 66.99% | -0.62pp | | Current ratio | 2.02 | 1.79 | +0.23 | - The current ratio increased mainly due to most projects entering commercial operation, leading to a continuous increase in trade receivables, while the payment of project final construction costs resulted in a decrease in trade payables[42](index=42&type=chunk) - Franchise financial assets totaled **RMB 9.516 billion**, with **RMB 7.844 billion** classified as non-current and **RMB 1.673 billion** as current[5](index=5&type=chunk)[23](index=23&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [1. Company and Group Information](index=6&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E5%8F%8A%E9%9B%86%E5%9C%98%E8%B3%87%E6%96%99) The company, incorporated in the Cayman Islands and listed on the HKEX, primarily engages in waste treatment and waste-to-energy businesses, with Beijing Capital Group Co., Ltd. as its ultimate controlling entity - The Company was incorporated in the Cayman Islands on May 27, 2004, and listed on the Main Board of the Hong Kong Stock Exchange on July 13, 2006[7](index=7&type=chunk) - Its principal activities are waste treatment and waste-to-energy businesses[7](index=7&type=chunk) - The ultimate controlling company is Beijing Capital Group Co., Ltd., a state-owned enterprise in China[7](index=7&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023 - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 ('HKAS 34') Interim Financial Reporting[8](index=8&type=chunk) - It does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2023[8](index=8&type=chunk) [3. Changes in Accounting Policies and Disclosures](index=6&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E8%AE%8A%E5%8B%95) Newly adopted HKFRS amendments, including those on lease liabilities in sale and leaseback, classification of liabilities, and supplier financing arrangements, have no material impact on the Group's financial position or performance - Newly adopted amendments include HKFRS 16 (Amendment) on lease liabilities in sale and leaseback, HKAS 1 (Amendment) on classification of liabilities as current or non-current, and HKAS 7 and HKFRS 7 (Amendments) on supplier financing arrangements[9](index=9&type=chunk)[10](index=10&type=chunk) - As the Group has no sale and leaseback transactions with variable lease payments not dependent on any index or rate, and no supplier financing arrangements, the related amendments have no impact on its financial position or performance[10](index=10&type=chunk) - The Group has reassessed the terms and conditions of its liabilities and concluded that the classification of liabilities as current or non-current remains unchanged after the initial application of the amendments[10](index=10&type=chunk) [4. Operating Segment Information](index=7&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates a single reportable segment: waste treatment and waste-to-energy businesses in China - The Group has only one reportable segment, which is waste treatment and waste-to-energy businesses in China[11](index=11&type=chunk) [5. Revenue, Other Income and Gains](index=8&type=section&id=5.%20%E6%94%B6%E7%9B%8A%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2024, total revenue was **RMB 1.787 billion**, a **6.38%** decrease year-on-year, while other income and gains significantly increased by **62.79%** to **RMB 60.671 million** due to higher government grants and interest income Revenue Composition | Revenue Type | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :------------------------------------------ | :------------------- | :------------------- | :--------- | | Revenue from contracts with customers | 1,523,209 | 1,639,245 | -7.08 | | Effective interest income from franchise financial assets | 263,512 | 269,295 | -2.00 | | **Total Revenue** | **1,786,721** | **1,908,540** | **-6.38** | Other Income and Gains Composition | Other Income and Gains Type | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :------------------------ | :------------------- | :------------------- | :--------- | | Bank interest income | 1,734 | 6,019 | -71.19 | | Other interest income | 24,602 | 3,011 | +717.01 | | Government grants | 33,955 | 17,042 | +99.24 | | Exchange gains | – | 8,172 | N/A | | **Total Other Income and Gains** | **60,671** | **37,274** | **+62.79** | - Within revenue from contracts with customers, construction service revenue under service concession arrangements decreased by **59.29%** year-on-year, while operation service revenue increased by **12.43%**[12](index=12&type=chunk) [6. Profit Before Tax](index=9&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2024, profit before tax significantly increased by **79.09%** to **RMB 236 million**, primarily due to a substantial reduction in net impairment losses on financial and contract assets Key Deductions/(Additions) to Profit Before Tax | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :---------------------------------------- | :------------------- | :------------------- | :--------- | | Cost of services provided under service concession arrangements | 750,677 | 867,048 | -13.42 | | Cost of other services provided | 347,589 | 259,941 | +33.72 | | Cost of inventories sold | 37,978 | 129,585 | -70.61 | | Depreciation (property, plant and equipment) | 30,900 | 27,952 | +10.55 | | Amortisation of other intangible assets | 105,885 | 104,186 | +1.63 | | Research and development costs | 22,188 | 20,879 | +6.27 | | Employee benefit expenses | 110,464 | 101,860 | +8.45 | | Net impairment losses on financial and contract assets | 40,576 | 129,405 | -68.65 | - Net impairment losses on financial and contract assets significantly decreased, with impairment of other intangible assets falling from **RMB 87,800 thousands** in 2023 to zero in 2024[15](index=15&type=chunk) [7. Finance Costs](index=9&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2024, total finance costs decreased by **4.59%** to **RMB 213 million**, mainly due to reduced interest expenses from corporate bonds and partial interest capitalization Finance Costs Analysis | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :------------------------- | :------------------- | :------------------- | :--------- | | Interest on bank and other borrowings | 213,012 | 206,371 | +3.22 | | Interest on corporate bonds | – | 15,119 | -100.00 | | Interest on lease liabilities | 240 | 743 | -67.70 | | Less: Interest capitalised | (1,203) | (4,576) | -73.70 | | **Total** | **212,903** | **223,134** | **-4.59** | - The decrease in finance costs was mainly due to the repayment of **RMB 1 billion** bonds in May 2023, leading to reduced interest expenses in the current period[44](index=44&type=chunk) [8. Income Tax](index=10&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85) For the six months ended June 30, 2024, income tax expense was **RMB 41.305 million**, compared to an income tax credit in the prior year, primarily due to a shift from deferred tax credit to expense Income Tax Composition | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :------------------ | :------------------- | :------------------- | :--------- | | Current income tax | 19,887 | 9,184 | +116.54 | | Deferred income tax | 21,418 | (12,828) | N/A | | **Total** | **41,305** | **(3,644)** | N/A | - Tax on taxable profits in other regions is calculated at the applicable tax rates in the jurisdictions where the Group operates[16](index=16&type=chunk) [9. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=10&type=section&id=9.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2024, basic earnings per share increased by **13.33%** to **RMB 1.19 cents**, consistent with the growth in profit attributable to ordinary equity holders of the parent Basic Earnings Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :------------------------------------------------------------------- | :------------------- | :------------------- | | Profit attributable to ordinary equity holders of the parent (RMB thousands) | 170,656 | 150,386 | | Weighted average number of shares issued during the period (shares) | 14,294,733,167 | 14,294,733,167 | | **Basic earnings per share** | **RMB 1.19 cents** | **RMB 1.05 cents** | - As of June 30, 2024, and 2023, the Group had no outstanding potentially dilutive ordinary shares[18](index=18&type=chunk) [10. Dividends](index=11&type=section&id=10.%20%E8%82%A1%E6%81%AF) For the six months ended June 30, 2024, no interim dividends were declared, whereas a special dividend of **RMB 132 million** for the year ended December 31, 2022, was declared in the prior period Final Dividends Declared | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :---------------------------------- | :------------------- | :------------------- | | Final dividend declared - HK 1 cent | – | 131,590 | - No dividends were proposed by the Company for the six months ended June 30, 2024[19](index=19&type=chunk) [11. Property, Plant and Equipment](index=11&type=section&id=11.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) For the six months ended June 30, 2024, the Group increased asset purchases, incurred a net loss on asset disposals, and recognized an impairment of **RMB 18.65 million** on machinery, equipment, and vehicles at Zibo Shoutuo Environmental Technology Co., Ltd Property, Plant and Equipment Related Data | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :---------------------------------- | :------------------- | :------------------- | | Cost of assets purchased | 10,874 | 8,157 | | Net book value of assets disposed of | 970 | 12 | | Net loss on disposal | 970 | (26) (gain) | | Impairment | 18,650 | – | - The impairment of **RMB 18.65 million** relates to machinery, equipment, and vehicles of Zibo Shoutuo Environmental Technology Co., Ltd., which is engaged in hazardous waste treatment[20](index=20&type=chunk) - The recoverable amount is determined based on value-in-use calculations, derived from cash flow forecasts over the asset's useful life, using a pre-tax discount rate of **10.1%**[20](index=20&type=chunk) [12. Other Intangible Assets](index=11&type=section&id=12.%20%E5%85%B6%E4%BB%96%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) For the six months ended June 30, 2024, other intangible assets from service concession arrangements increased by **RMB 120 million**, primarily due to the completion of the BOT project by Pu'er Shou Chuang Environmental Energy Co., Ltd - Other intangible assets arising from service concession arrangements increased by **RMB 119,955 thousands**[21](index=21&type=chunk) - Primarily due to the completion of the Build-Operate-Transfer ('BOT') project operated by Pu'er Shou Chuang Environmental Energy Co., Ltd., which is engaged in waste-to-energy incineration[21](index=21&type=chunk) - Intangible assets arising from service concession arrangements are amortized on a straight-line basis from the date they are available for use until the end of the concession period[21](index=21&type=chunk) [13. Franchise Financial Assets](index=11&type=section&id=13.%20%E7%89%B9%E8%A8%B1%E7%B6%93%E7%87%9F%E6%AC%8A%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2024, franchise financial assets totaled **RMB 9.516 billion**, with an impairment of **RMB 832,000** recognized during the period for construction and operation services provided to government agencies under service concession arrangements Franchise Financial Assets | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :------------------------ | :---------------------------- | :--------------------------- | | Franchise financial assets | 9,629,232 | 9,541,196 | | Impairment | (113,116) | (112,284) | | **Total** | **9,516,116** | **9,428,912** | | Current assets | 1,672,563 | 1,631,688 | | Non-current assets | 7,843,553 | 7,797,224 | - The Group provides construction and operation services to certain PRC government authorities under service concession arrangements, where consideration may be the right to a financial asset or an intangible asset[24](index=24&type=chunk) - Impairment of **RMB 832,000** was recognized during the period, with default probabilities ranging from **0.08%** to **1.98%** and estimated loss given default rates of **45%** or **75%**[24](index=24&type=chunk) [14. Prepayments, Other Receivables and Other Assets](index=12&type=section&id=14.%20%E9%A0%90%E4%BB%98%E6%AC%BE%E3%80%81%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) As of June 30, 2024, prepayments, other receivables, and other assets totaled **RMB 1.146 billion**, with a notable increase in receivables from disposals related to the termination of three service concession arrangements Composition of Prepayments, Other Receivables and Other Assets | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :------------------------ | :---------------------------- | :--------------------------- | | Advances to suppliers | 49,012 | 47,073 | | VAT recoverable | 551,383 | 583,475 | | Interest receivable | 5,024 | 5,024 | | Tender deposits | 225,443 | 223,757 | | Receivables from disposals | 188,217 | 142,580 | | Others | 127,339 | 120,453 | | **Total** | **1,146,418** | **1,122,362** | | Current assets | 1,047,921 | 1,015,087 | | Non-current assets | 98,497 | 107,275 | - The increase in receivables from disposals is related to the termination of three service concession arrangements involving Beijing Yanqing District Urban and Rural Environmental Management Center, Huludao Municipal Government, and Wengan County Government[26](index=26&type=chunk) [15. Trade Receivables](index=13&type=section&id=15.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE) As of June 30, 2024, trade receivables totaled **RMB 2.531 billion**, a **21.73%** increase from year-end 2023, with a significant rise in receivables over 180 days, indicating increased collection pressure Trade Receivables and Aging Analysis | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :--------------- | :---------------------------- | :--------------------------- | | Trade receivables | 2,653,284 | 2,169,090 | | Impairment | (122,303) | (89,977) | | **Total** | **2,530,981** | **2,079,113** | | 0 to 90 days | 696,567 | 605,163 | | 91 to 180 days | 410,952 | 484,900 | | Over 180 days | 1,423,462 | 989,050 | - Trade receivables aged over 180 days increased by **43.92%** from **RMB 989 million** at year-end 2023 to **RMB 1.423 billion** as of June 30, 2024[27](index=27&type=chunk) - Trade receivables balance includes **RMB 44.317 million** due from fellow subsidiary Sichuan Qingshi Construction Co., Ltd[27](index=27&type=chunk) [16. Trade Payables](index=14&type=section&id=16.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE) As of June 30, 2024, trade payables totaled **RMB 1.537 billion**, a **6.91%** decrease from year-end 2023, with a reduction in payables aged 0-90 days and stable payables over 180 days Trade Payables Aging Analysis | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :------------ | :---------------------------- | :--------------------------- | | 0 to 90 days | 775,675 | 853,442 | | 91 to 180 days | 52,307 | 57,749 | | Over 180 days | 708,743 | 739,619 | | **Total** | **1,536,725** | **1,650,810** | - Trade payables balance includes **RMB 3.496 million** due to fellow subsidiary Beijing Capital Atmospheric Environmental Technology Co., Ltd[28](index=28&type=chunk) [17. Interest-Bearing Bank and Other Borrowings](index=14&type=section&id=17.%20%E8%A8%88%E6%81%AF%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) As of June 30, 2024, total interest-bearing bank and other borrowings amounted to **RMB 10.592 billion**, with secured borrowings accounting for **62.04%** and a high proportion of non-current liabilities Composition of Interest-Bearing Bank and Other Borrowings | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :---------------------------------- | :---------------------------- | :--------------------------- | | Secured borrowings | 6,571,965 | 6,524,840 | | Unsecured borrowings | 4,020,100 | 3,947,204 | | **Total** | **10,592,065** | **10,472,044** | | Repayable within one year | 1,329,913 | 1,364,343 | | Repayable after one year but within two years | 2,072,113 | 2,040,066 | | Repayable after two years but within five years | 3,491,163 | 3,356,741 | | Repayable after five years | 3,698,876 | 3,710,894 | | Non-current liabilities | 9,262,152 | 9,107,701 | - Secured bank and other borrowings are primarily guaranteed by the Company, pledged under service concession arrangements (including waste-to-energy incineration and food waste treatment projects), and secured by leased land[30](index=30&type=chunk) - Unsecured borrowings include other loans of **RMB 3.27 billion** from Beijing Capital Eco-Environmental Protection Group Co., Ltd., an indirect controlling company of the Company[30](index=30&type=chunk) Management Discussion and Analysis [Macroeconomic and Industry Overview](index=16&type=section&id=%E5%AE%8F%E8%A7%82%E7%BB%8F%E6%B5%8E%E4%B8%8E%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) In H1 2024, China's GDP grew by **5%**, with the environmental protection industry showing positive development despite market segmentation and a decline in new waste incineration and long-term sanitation projects - In H1 2024, China's GDP grew by **5%** year-on-year, with **5.3%** growth in Q1 and a slowdown to **4.7%** in Q2[31](index=31&type=chunk) - New waste incineration capacity decreased to **5,800 tonnes/day**, a **75%** year-on-year decline; new investment fell to **RMB 4.2 billion**, a **71%** year-on-year decrease, both hitting a three-year low[31](index=31&type=chunk) - Contract value for sanitation projects over **RMB 10 million** reached **RMB 93.9 billion**, a **14%** year-on-year increase; long-cycle projects accounted for **28%**, short-cycle projects for **69%**; site remediation business turnover reached **RMB 46.6 billion**, a **15%** year-on-year increase[31](index=31&type=chunk) [Group Strategy and Business Development](index=17&type=section&id=%E9%9B%86%E5%9B%A2%E6%88%98%E7%95%A5%E4%B8%8E%E4%B8%9A%E5%8A%A1%E5%8F%91%E5%B1%95) The Group aligns with national policies and its controlling shareholder's strategies, focusing on waste-to-energy, urban and rural sanitation, site remediation, and carbon management to build a diversified 'investment + operation + service' value model - Fully implementing the '14th Five-Year Plan' strategy and the 'Eco+2025' strategy iteration deployment of the controlling shareholder, Beijing Capital Eco-Environmental Protection Group Co., Ltd[32](index=32&type=chunk) - Focusing on the core environmental protection business, continuously strengthening the core position of waste-to-energy incineration, and actively promoting the development of light-asset businesses such as urban and rural sanitation, site remediation, and energy-saving carbon reduction[32](index=32&type=chunk) - Established three light-asset business platforms: Site Remediation Department, Sanitation Industry Department, and Carbon Asset Management Department, building a diversified 'investment + operation + service' value-driven model[32](index=32&type=chunk) [Operating Performance Overview](index=17&type=section&id=%E7%BB%8F%E8%90%A5%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) In H1 2024, the Group achieved operating revenue of **RMB 1.787 billion**, with waste-to-energy, urban and rural sanitation, site remediation, and organic solid waste treatment contributing **95.04%**, and net profit attributable to the parent company reaching **RMB 171 million** H1 2024 Operating Performance | Metric | Amount (RMB) | Y-o-Y Change (%) | | :-------------------------- | :------------------ | :--------------- | | Operating revenue | 1.787 billion RMB | -6.38 | | Profit for the period | 195 million RMB | +43.78 | | Net profit attributable to owners of the parent | 171 million RMB | +13.48 | - Waste-to-energy incineration, urban and rural sanitation, site remediation, and organic solid waste treatment contributed **RMB 1.698 billion** in operating revenue, accounting for **95.04%** of total revenue[32](index=32&type=chunk) - Seven city companies in Zhumadian, Nanchang, Nanyang, Huizhou, Xinxiang, Pingdingshan, and Duyun collectively achieved revenue of **RMB 678 million**, with Nanyang and Duyun city companies experiencing growth exceeding **35%**[32](index=32&type=chunk) [Project Reserves and Operations](index=18&type=section&id=%E9%A1%B9%E7%9B%AE%E5%82%A8%E5%A4%87%E4%B8%8E%E8%BF%90%E8%90%A5) The Group has **67** projects reserved in China with a total investment of approximately **RMB 19.783 billion**, operating **57** projects that processed **5.0416 million tonnes** of domestic waste and generated **1.287 billion kWh** of grid power in H1 - A total of **67** projects are reserved domestically, including **29** waste-to-energy projects, **5** landfill projects, and **6** organic waste treatment projects, with a total investment of approximately **RMB 19.783 billion**[33](index=33&type=chunk) - The total designed capacity is approximately **14.9808 million tonnes** of waste processed annually and approximately **1.2 million pieces** of electrical and electronic equipment dismantled annually[33](index=33&type=chunk) - In H1, **5.0416 million tonnes** of domestic waste were processed, **23,100 tonnes** of hazardous waste were treated, **23,400 units** were dismantled, and a total of **1.287 billion kWh** of grid power was supplied[33](index=33&type=chunk) [Significant Achievements in Comprehensive Quality Improvement](index=18&type=section&id=%E5%85%A8%E9%9D%A2%E6%8F%90%E8%B4%A8%E6%88%90%E6%9E%9C%E6%98%BE%E8%91%97) The Group achieved significant results in quality improvement, including successful commercialization of **3** projects, price adjustments for **2** projects, increased plant utilization from **77%** to **87%**, and cost reductions through centralized procurement and loan interest rate adjustments - Three projects, Qianjiang Incineration, Fuzhou Food Waste, and Gao'an Collection & Transportation, successfully transitioned to commercial operation; Pu'er Incineration and Gao'an Collection & Transportation projects achieved price adjustments[34](index=34&type=chunk) - Project capacity utilization increased from **77%** to **87%**, and the average on-grid power generation per tonne of waste received at waste-to-energy incineration projects increased by **5.7%** compared to last year[34](index=34&type=chunk) - By expanding centralized procurement categories and coverage, **RMB 14 million** in procurement costs was saved; loan interest rates for projects such as Yutian Incineration and Xinxiang Incineration were reduced, with a maximum decrease of **80** basis points[35](index=35&type=chunk) [Fruitful Results in Innovation and Growth](index=19&type=section&id=%E5%89%B5%E6%96%B0%E5%A2%9E%E9%87%8F%E7%A2%A9%E6%9E%9C%E7%B4%AF%E7%B4%AF) The Group made steady progress in technology innovation projects, expanded its market with **47** waste incineration derivative contracts worth **RMB 24 million** and **6** urban and rural sanitation projects with annual contracts of **RMB 69 million**, and received a Shanghai Science and Technology Progress Second Prize - Six 'leaderboard' technology innovation projects are steadily progressing, with the flue gas desulfurization process modification project entering the trial and commissioning phase[36](index=36&type=chunk) - Waste incineration derivative businesses expanded to **10** projects, signing **47** contracts with a contract value of approximately **RMB 24 million**; urban and rural sanitation landed **6** projects with annual contract values of **RMB 69 million**[36](index=36&type=chunk) - The project 'Key Technologies and Applications for Fine Separation, Reconstruction, and Stepwise Targeted Conversion of Food Waste Resources,' jointly submitted with Donghua University, won the Shanghai Science and Technology Progress Second Prize[36](index=36&type=chunk) [Notable Effects of System Upgrades](index=19&type=section&id=%E7%B3%BB%E7%B5%B1%E5%8D%87%E7%B6%AD%E6%95%88%E6%9E%9C%E6%98%8E%E9%A1%AF) The Group actively advanced its operational excellence and sanitation management systems, improving power generation, reducing plant power consumption, and enhancing unit efficiency, while exploring new ventures in waste plastic chemical recycling and new energy heating - Actively promoting the construction of an excellent operation system, improving power generation, reducing plant power consumption rates, and enhancing unit efficiency through production technology exchange meetings and the implementation of three major procedures in water treatment[37](index=37&type=chunk) - Improving the sanitation business management system, with a focus on advancing safety management, operational planning management, human resource management, and organizational capacity building[37](index=37&type=chunk) - Conducting in-depth research and argumentation on three directions: chemical recycling of waste plastics, new energy heating, and the application of heat pumps in large-scale heating projects[37](index=37&type=chunk) [Enhanced Safety System](index=20&type=section&id=%E5%AE%89%E5%85%A8%E9%AB%94%E7%B3%BB%E5%AE%8C%E5%96%84) The Group achieved **100%** signing of all-staff safety responsibility statements, conducted **10** safety inspections, rectified **265** hazards with a **100%** rectification rate, and revised safety management regulations - All-staff safety target responsibility statements have been signed at all levels with departments, subordinate units, and employees, achieving a **100%** signing rate[38](index=38&type=chunk) - A total of **10** safety inspections were conducted, identifying and rectifying **265** hazards, with **100%** coverage for high and medium-risk safety inspections and **100%** rectification rate for safety hazards[38](index=38&type=chunk) - Revised and issued the 'Management Measures for Reporting and Investigating Production Safety Accidents' and the 'Management Measures for Related Parties'[38](index=38&type=chunk) [Diversified Financing Methods](index=20&type=section&id=%E8%9E%8D%E8%B3%87%E6%96%B9%E5%BC%8F%E5%A4%9A%E5%85%83) The Group maintains strong relationships with major financial institutions and actively reduces financing costs, with total bank credit lines of **RMB 10.143 billion** in H1 2024, including **RMB 500 million** at headquarters and **RMB 9.643 billion** at project companies - Maintaining good cooperative relationships with several mainstream financial institutions, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China[39](index=39&type=chunk) - Continuously engaging in in-depth exchanges and effective communication with partner banks, persistently working to reduce financing costs for existing medium and long-term borrowings[39](index=39&type=chunk) - In H1 2024, the Group's total outstanding bank credit lines amounted to **RMB 10.143 billion**, with **RMB 500 million** at headquarters and **RMB 9.643 billion** at project companies[39](index=39&type=chunk) [Business Outlook](index=20&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The Group will continue to pursue annual operating targets, focus on project implementation, reduce losses, and decrease accounts receivable, aiming for enhanced return on equity and high-quality development through comprehensive management improvements - Continuing to anchor annual operating targets, prioritizing project implementation, and concentrating resources to secure high-quality projects[40](index=40&type=chunk) - Implementing thoroughly and meticulously, continuously advancing loss reduction and accounts receivable compression[40](index=40&type=chunk) - Driven by enhanced return on equity, comprehensively promoting Group management improvements, focusing on 'five major objectives,' adopting 'four major initiatives,' and addressing ten key management improvement areas[40](index=40&type=chunk) Financial Review [Financial Performance](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE) During the review period, the Group's revenue decreased by **6.38%** to **RMB 1.787 billion**, primarily due to projects transitioning to commercial operation and the cessation of dismantling projects, while gross profit margin increased to **36.41%**, and net profit attributable to owners of the company rose by **13.48%** to **RMB 171 million** Financial Performance Overview | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (%) | | :-------------------------------------- | :------------------- | :------------------- | :--------- | | Revenue | 1,786,721 | 1,908,540 | -6.38 | | Gross profit margin | 36.41% | 34.16% | +2.25pp | | Sales and administrative expenses | 198,473 | 202,671 | -2.07 | | Net profit attributable to owners of the company | 170,656 | 150,386 | +13.48 | - Revenue decrease was primarily due to reduced construction revenue from projects transitioning to commercial operation; simultaneously, revenue from discontinued dismantling projects sharply declined[41](index=41&type=chunk) - Gross profit margin increased mainly due to higher waste processing volume and continuously improved power generation efficiency in some project companies, leading to increased operating income and reduced fixed cost allocation[41](index=41&type=chunk) [Financial Position](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2024, the Group's total assets were **RMB 20.591 billion**, with net assets attributable to owners of the company at **RMB 6.599 billion**; the debt-to-asset ratio slightly decreased to **66.37%**, and the current ratio improved to **2.02**, indicating enhanced liquidity Financial Position Overview | Metric | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :-------------------------------------- | :---------------------------- | :--------------------------- | | Total assets | 20,590,873 | 20,287,166 | | Net assets attributable to owners of the company | 6,598,697 | 6,429,390 | | Debt-to-asset ratio | 66.37% | 66.99% | | Current ratio | 2.02 | 1.79 | - The current ratio increased mainly due to most projects entering commercial operation, leading to a continuous increase in trade receivables, while the gradual payment of project final construction costs resulted in a decrease in trade payables[42](index=42&type=chunk) [Financial Resources](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group primarily funds its operations through internal cash flows, debt financing, and bank loans; as of June 30, 2024, cash and bank balances, along with pledged bank deposits, totaled **RMB 546 million**, a decrease of **RMB 157 million** from year-end 2023, mainly due to slower government payments and project final payments - The Group primarily funds its operations through internally generated cash flows, debt financing, and bank loans[43](index=43&type=chunk) Cash and Bank Balances | Metric | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :-------------------------------------- | :---------------------------- | :--------------------------- | | Cash and bank balances and pledged bank deposits | 545,752 | 702,288 | - The decrease in cash was mainly due to slower collection of government receivables, influenced by fiscal approval processes and economic downturns, as well as the gradual payment of project final construction costs during the period[43](index=43&type=chunk) [Borrowings](index=22&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2024, the Group's total outstanding borrowings were **RMB 10.592 billion**, an increase of **RMB 120 million** from year-end 2023, with **32%** secured and **68%** floating-rate; finance costs decreased by **4.59%** to **RMB 213 million** due to corporate bond repayment Borrowings Overview | Metric | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :--------------------- | :---------------------------- | :--------------------------- | | Total outstanding borrowings | 10,592,065 | 10,472,044 | | Secured borrowings | 6,571,965 | 6,524,840 | | Unsecured borrowings | 4,020,100 | 3,947,204 | - Fixed-rate and floating-rate borrowings accounted for approximately **32%** and **68%** of total borrowings, respectively[44](index=44&type=chunk) - Finance costs decreased by **4.59%** to approximately **RMB 212,903 thousands** from **RMB 223,134 thousands** in the prior period of 2023, mainly due to reduced interest expenses from the repayment of **RMB 1 billion** bonds in May 2023[44](index=44&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's sales, purchases, and operating expenses are primarily denominated in USD, HKD, and RMB; the Board anticipates no significant impact from future exchange rate fluctuations and will monitor and prepare for hedging activities - The Group's sales, purchases, and operating expenses are mostly denominated in USD, HKD, and RMB[45](index=45&type=chunk) - The Board expects future exchange rate fluctuations will not have a significant impact on the Group's operations[45](index=45&type=chunk) - Management will continue to flexibly monitor foreign exchange risks and be prepared to promptly undertake appropriate hedging activities when necessary[45](index=45&type=chunk) [Pledge of Assets](index=22&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2024, certain bank financings are secured by revenues from service concession arrangements, **RMB 3.045 million** in bank balances, and **RMB 35.544 million** in leased land and buildings; an additional **RMB 35.964 million** in bank deposits is pledged for service concession arrangements - Guarantees for certain bank financings include certain revenues under service concession arrangements, bank balances of **RMB 3.045 million**, and leased land and buildings of **RMB 35.544 million**[46](index=46&type=chunk) - Bank deposits of **RMB 35.964 million** (primarily bank balances) are pledged as guarantees for service concession arrangements as required by local governments[46](index=46&type=chunk) [Capital Commitments](index=22&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%AE%89%E6%8E%92) As of June 30, 2024, the Group had capital commitments of approximately **RMB 103 million** for construction works under service concession arrangements, which are contracted but not yet provided for in the financial statements - As of June 30, 2024, the Group had capital commitments of approximately **RMB 102,542 thousands** for construction works under service concession arrangements[47](index=47&type=chunk) - These capital commitments are contracted but not yet provided for in the unaudited consolidated financial statements[47](index=47&type=chunk) [Contingent Liabilities](index=23&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2024, the Group provided performance guarantees of approximately **RMB 218 million** to Chinese government agencies for domestic project construction and operation, and is involved in a **RMB 73.477 million** construction contract dispute with Fujian Huifeng Construction Engineering Co., Ltd - The Group provided performance guarantees of approximately **RMB 217,993 thousands** to Chinese government agencies for the construction progress and continuous operation of domestic projects[48](index=48&type=chunk) - A dispute of **RMB 73.477 million** exists with Fujian Huifeng Construction Engineering Co., Ltd. regarding a construction contract, with litigation ongoing[48](index=48&type=chunk) Other Information [Employee Information](index=23&type=section&id=%E5%83%B1%E5%93%A1%E8%B3%87%E6%96%99) As of June 30, 2024, the Group employed approximately **3,647** staff, predominantly in China, with a total employee cost of **RMB 249 million**, and compensation policies linked to performance and ongoing training - As of June 30, 2024, the Group employed approximately **3,647** staff, with a male-to-female ratio of **3.44:1**, primarily based in China[49](index=49&type=chunk) - Total employee costs were **RMB 249 million**, including basic pension insurance, basic medical insurance, unemployment insurance, work injury insurance, maternity insurance, and housing provident fund[49](index=49&type=chunk) - Compensation policies are linked to individual employee performance, benchmarked against prevailing salary trends in the aforementioned regions, and supplemented by continuous training and development programs[49](index=49&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - As of June 30, 2024, the Company held no treasury shares[50](index=50&type=chunk) - For the six months ended June 30, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[50](index=50&type=chunk) [Interim Dividends](index=23&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024 (six months ended June 30, 2023: nil)[51](index=51&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=23&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) Shenzhen Qianhai entered into a capital increase agreement with Shou Chuang Environmental Group and Shou Chuang Sanitation, where Shou Chuang Environmental Group subscribed for approximately **49%** of Shou Chuang Sanitation's increased registered capital, with Shou Chuang Sanitation remaining a subsidiary and no gain or loss expected for the Group - Shenzhen Qianhai entered into a capital increase agreement with Beijing Capital Eco-Environmental Protection Group Co., Ltd. and Beijing Capital Sanitation Co., Ltd[51](index=51&type=chunk) - Shou Chuang Environmental Group will subscribe for **RMB 33.64 million** of the increased registered capital in Shou Chuang Sanitation, representing approximately **49%** of its enlarged registered capital[51](index=51&type=chunk) - Upon completion of the capital increase, Shenzhen Qianhai's equity interest in Shou Chuang Sanitation will be diluted to **51%**, with Shou Chuang Sanitation remaining a subsidiary of the Company, and the Group is not expected to record any gain or loss from the capital increase[51](index=51&type=chunk)[52](index=52&type=chunk) [Significant Investments Held by the Group](index=24&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E6%89%80%E6%8C%81%E6%9C%89%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) For the six months ended June 30, 2024, the Group held no significant investments - For the six months ended June 30, 2024, the Group held no significant investments[52](index=52&type=chunk) [Future Plans for Material Investments or Capital Assets](index=24&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Other than as disclosed in this announcement, the Group had no future plans for material investments or capital asset acquisitions for the six months ended June 30, 2024 - Other than as disclosed in this announcement, for the six months ended June 30, 2024, the Group had no future plans for material investments or acquisitions of capital assets[52](index=52&type=chunk) [Events After the Reporting Period](index=24&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Other than as disclosed in this announcement, no significant events affecting the Company occurred from June 30, 2024, to the date of this announcement - Other than as disclosed in this announcement, no significant events affecting the Company occurred from June 30, 2024, to the date of this announcement[53](index=53&type=chunk) [Corporate Governance Practices](index=24&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules for the six months ended June 30, 2024 - The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[54](index=54&type=chunk) - For the six months ended June 30, 2024, the Company has complied with all applicable code provisions of the Corporate Governance Code[54](index=54&type=chunk) [Standard Code for Securities Transactions by Directors](index=24&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted and its directors have confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, for the review period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as the code for its directors' dealings in the Company's securities, and it also applies to the Company's senior management[55](index=55&type=chunk) - All Directors have confirmed their compliance with the required standards set out in the Standard Code for the six months ended June 30, 2024[55](index=55&type=chunk) [Audit Committee Review of Interim Results](index=25&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Audit Committee reviewed the unaudited interim results and report for the six months ended June 30, 2024, confirming compliance with relevant accounting standards, laws, and regulations, with no material discrepancies found by external auditors - The Audit Committee has reviewed the accounting principles and practices adopted by the Group for the six months ended June 30, 2024, and discussed audit, internal control, and financial reporting matters with management[56](index=56&type=chunk) - The Audit Committee is of the opinion that the Group's unaudited interim results for the six months ended June 30, 2024, comply with relevant accounting standards, laws, and regulations[56](index=56&type=chunk) - The external auditor conducted an independent review in accordance with Hong Kong Standard on Review Engagements 2410 and found no matters that caused them to believe the interim financial information was not prepared, in all material respects, in accordance with HKAS 34[56](index=56&type=chunk) [Publication of Interim Results and Interim Report](index=25&type=section&id=%E5%85%AC%E4%BD%88%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement will be published on the Company's and HKEX websites, and the interim report for the six months ended June 30, 2024, will be dispatched to shareholders and published on the websites in due course - This interim results announcement will be published on the Company's website (www.cehl.com.hk) and the HKEX website (www.hkexnews.hk)[57](index=57&type=chunk) - The Company's interim report for the six months ended June 30, 2024, will be dispatched to shareholders and published on the aforementioned websites in due course[57](index=57&type=chunk)

Financial Performance - The group's revenue from waste treatment and energy conversion business was approximately RMB 4,076,596,000, a decrease of about 11.17% compared to RMB 4,588,955,000 in 2022[13]. - The net profit attributable to the company's owners from continuing operations was approximately RMB 285,380,000, an increase of about 122.03% compared to RMB 128,533,000 in 2022[14]. - Financing costs decreased by approximately 19.05% to about RMB 440,919,000 compared to RMB 544,670,000 in the same period last year[17]. - The total auditor fees for the year amounted to RMB 5,255,000, with RMB 3,804,000 for audit services and RMB 1,451,000 for non-audit services[90]. - The company has no distributable reserves as of December 31, 2023, consistent with the previous year[171]. Waste Treatment Operations - The group achieved a total waste treatment volume of 9.9727 million tons and hazardous waste treatment volume of 49,800 tons in 2023[2]. - The group successfully acquired the operating rights for the Shihezi municipal solid waste incineration project, with total annual investment and contract amounts exceeding RMB 3 billion[5]. - The group signed 9 projects in the site restoration sector in 2023, with a total contract amount exceeding RMB 1.1 billion[5]. - The company focuses on waste treatment technology and services, particularly in the development, design, and operation of waste-to-energy projects[147]. - The company emphasizes professional and systematic solid waste treatment services to contribute to the future of China's waste management industry[117]. Corporate Governance - The board has appointed four independent non-executive directors, ensuring that at least one possesses appropriate accounting or financial management expertise, maintaining a balance of power within the board[35]. - The company has established mechanisms to ensure independent viewpoints are available to the board, including procedures for the election of directors and assessment of their independence[33]. - The company has a clear strategy for corporate governance, with the board responsible for setting strategic directions and monitoring senior management performance[32]. - The company has a structured approach to internal controls and daily operations, clearly defining the responsibilities and powers of the board and management[32]. - The company’s board is committed to maintaining high corporate governance standards and promoting a corporate culture aligned with long-term goals and values[137]. Board Composition and Diversity - The board's gender diversity is at 28.6%, with two female directors among the seven board members, and aims to maintain this level of female representation[41]. - The company is committed to maintaining a diverse board, considering factors such as gender, age, culture, and professional experience[72]. - The nomination committee considers factors such as integrity, loyalty, industry experience, and professional skills when evaluating new or re-elected directors[44]. - The nomination committee held three meetings to review the composition of the board and ensure compliance with the board diversity policy[80]. - The company has arranged appropriate insurance for its directors and senior management related to potential legal actions arising from their duties[38]. Risk Management and Internal Controls - The company aims to ensure that its risk management and internal control systems are effective in identifying and managing significant risks, including environmental, social, and governance risks[90]. - The company has established a clear risk governance framework to enhance internal control and execution effectiveness[91]. - The internal audit department leads risk assessments and prepares a risk database, reporting results to the audit committee[92]. - The board has reviewed the effectiveness of the risk management and internal control systems and deemed them sufficient for the year ending December 31, 2023[112]. - The company has implemented a whistleblowing policy to encourage reporting of misconduct anonymously[96]. Shareholder Relations - The company values the annual general meeting as an important opportunity for direct communication between the board and shareholders[123]. - The board has reviewed the implementation and effectiveness of the shareholder communication policy, finding it promotes open and ongoing communication with shareholders[143]. - The company did not declare a final dividend for the year ended December 31, 2023, compared to a special dividend of HKD 0.01 per share for the year ended December 31, 2022[149]. - The board aims to maintain sufficient reserves for future development while providing continuous returns to shareholders[149]. - The major shareholder, Beijing Capital Group, holds approximately 66.92% of the company's equity as of December 31, 2023[168]. Strategic Partnerships and Acquisitions - The group completed the acquisition of Xinjiang Tianfu Waste Incineration Power Co., Ltd. for RMB 120,000,000, which is expected to benefit future business expansion[20]. - The company agreed to acquire a 37.91% stake in Duyun City Shichuang Environmental Protection for a total consideration of RMB 52 million[198]. - The company has established robust partnerships with internationally renowned environmental management firms to create synergies in environmental processing solutions[118]. - The company has undergone changes in its board of directors, with Mr. Cao Guoxian resigning as executive director and chairman effective December 20, 2023[156]. - The company has appointed Dr. Cao Fuguo as an independent non-executive director effective May 23, 2023[178].