Corporate Governance and Compliance - The company has established a system for managing inside information and disclosure, ensuring compliance with the "Guidelines on Disclosure of Inside Information" issued by the Securities and Futures Commission[6] - The company amended its Memorandum and Articles of Association to permit hybrid and electronic general meetings, aligning with relevant legal and Listing Rules requirements[24] - The company's Audit Committee confirmed that non-audit services, including tax advisory and environmental, social, and governance advisory services, did not affect the independence of the external auditor[8][9] - The company has implemented anti-corruption and anti-bribery policies, providing training to employees and Directors to enhance integrity and awareness of malpractice[37] - The company's Internal Audit and Inspection Department accepts reports of suspected misconduct and violations from employees and stakeholders, with no serious fraud or misconduct incidents reported during the year[37] - The Board is responsible for determining the overall objective, risk appetites, and risk tolerance for corporate risk management, and approves risk management strategies and major risk mitigation solutions[40] - The company has complied with all applicable provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules of the Stock Exchange of Hong Kong Limited[194] - The company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the required standards during the year ended 31 December 2023[196] - The Board is responsible for leadership and control of the company, overseeing the Group's businesses, strategic decisions, and performance, with day-to-day management delegated to the CEO and senior management[196] - The Board composition as of 31 December 2023 includes Executive Directors Zhao Juanxian, Li Zhong, Liu Yujie, and Duan Jerry Linnan, and Independent Non-Executive Directors Chau Kam Wing, Chang Qing, and Peng Yongzhen[196] - The Board complied with the Listing Rules requirement to appoint at least three independent non-executive Directors, with at least one possessing appropriate professional qualifications or accounting expertise[196] - Directors are required to disclose their commitments to the company, including the number and nature of offices held in public companies or organizations[198] - The roles and duties of the Chairman and the Chief Executive Officer are clearly defined and carried out by different individuals to preserve independence and balance of views[198] Risk Management - The company has established a comprehensive risk management process, ensuring timely, accurate, and complete information sharing across departments and business units, laying the foundation for supervision and enhancement of risk management[35] - The senior management focuses on major risks, events, and decisions, supervising the collection of firsthand information, risk assessment, management strategies, and implementation of risk management solutions[35] - The internal audit department conducts annual reviews of risk management implementation across departments and business units, evaluating strategies and proposing adjustments or improvements[35] - Key risks identified in 2023 include government breach of agreement, delayed collection, accounts receivable management, litigation disputes, and liability for breach of agreement[35] - Measures to address government breach risks include establishing a feedback mechanism and actively communicating with local governments to formulate solutions[35] - Delayed collection risks are mitigated by maintaining good communication with the government and making collection efforts[35] - The company's leading risk management and supporting organization is responsible for establishing and amending risk management policies and mechanisms, and formulating annual risk management work plans[42] - The company's risk management organization regularly collects first-hand information regarding risk management, carries out risk assessments, and discusses major risks faced by the company[42] - The company's risk management organization assesses the soundness, reasonability, and effectiveness of the risk management system and reviews the annual comprehensive risk management report[42] - The company's risk management organization accepts reports from employees and cooperating organizations, organizes investigations, and provides handling advice for violations of company and legal regulations[42] - The company's risk management organization assists in carrying out risk management work and formulates internal auditing plans based on risk assessment results[42] - The company has established a comprehensive risk management program led by the Internal Audit and Inspection Department, which includes collecting first-hand information, analyzing and assessing risks, proposing risk management strategies, and supervising the implementation of risk management works[44] Financial Performance and Reporting - The company paid RMB thousands in remuneration to its independent auditor, Ernst & Young, for the year ended 31 December 2023[7][10] - Construction services revenue decreased by RMB 719.5 million (approximately 81%) to RMB 173.6 million, with its share of total revenue dropping from 31% to less than 8%[75] - Total revenue for the year decreased by 23.5% year-on-year to RMB 2,216.4 million[75] - Actual wastewater treatment volume reached 1,265.7 million tonnes, representing a 3.2% increase compared to the previous year[75] - Utilization rate of wastewater treatment plants and reclaimed water plants increased from 82% to 85%[75] - Overall gross profit margin increased by 4.7 percentage points to 48.5% due to a decrease in lower-margin construction services revenue[75] - Gross profit and profit attributable to owners of the parent decreased by 15.2% and 47.1% to RMB 1,076.0 million and RMB 124.8 million, respectively[75] - Capital expenditure for the year was RMB 127.1 million, a 75% decrease year-on-year[75] - Net operating cash inflow was RMB 292.9 million, marking the fifth consecutive year of positive cash flow since 2019[75] - The gearing ratio and current ratio as of December 31, 2023, were 69.6% and 1.15, respectively[75] - The average borrowing interest rate for the year was 5.95%, down 0.01 percentage points from the previous year[75] - The Group had 103 service concession arrangement projects in operation with a treatment capacity of over 4 million tons per day as of 31 December 2023[82] - The Group entered into a total of 112 service concession arrangements, including 106 wastewater treatment plants, 1 water distribution plant, 3 sludge treatment plants, and 2 reclaimed water treatment plants as of 31 December 2023[86] - The Group's operational treatment capacity was 4,024,500 tons per day, with an additional 240,500 tons per day not yet in operation or transferred[88] - Construction revenue for the year ended 31 December 2023 was RMB121.0 million, representing an 84% year-on-year decrease compared to RMB753.0 million in 2022, primarily due to a decrease in the number of projects during the main construction period[93] - Total daily treatment capacity of service concession arrangement plants under construction as of 31 December 2023 was 100,500 tonnes, including 70,500 tonnes for wastewater treatment plants and 30,000 tonnes for water distribution plants[93] - Revenue from Water Environment Comprehensive Remediation projects for the year ended 31 December 2023 was RMB43.4 million, a 62% decrease compared to RMB114.4 million in 2022, mainly due to the completion of most existing EPC projects[95] - Revenue from Rural Water Improvement projects for the year ended 31 December 2023 was RMB49.9 million, a 16% year-on-year decrease compared to RMB59.1 million in 2022, primarily due to a net impact of decreased construction revenue and increased operation revenue from project commencement[95] - Total revenue for the year ended 31 December 2023 was RMB2,216.4 million, a decrease of RMB680.2 million compared to RMB2,896.6 million in 2022, mainly due to a RMB719.6 million decrease in construction revenue[97] - Operation revenue increased by RMB28.5 million in 2023, primarily due to the commencement of new BOT and upgrade projects in Urban Water Treatment[97] - Financial income from service concession arrangements increased by RMB10.9 million in 2023, mainly due to an increase in financial assets[97] - Cost of sales for the year ended 31 December 2023 was RMB1,140.4 million, a 30% decrease compared to RMB1,627.9 million in 2022, driven by a RMB551.5 million decrease in construction costs[98] - Operation costs increased by RMB64.0 million in 2023, mainly due to increased operation numbers of upgrade projects and higher costs of wastewater treatment chemicals[98] - The Group recorded other income and gains of RMB59.8 million for the year ended 31 December 2023, an increase of approximately 11% compared to RMB53.9 million in the previous corresponding period[100] - Administrative expenses for the year ended 31 December 2023 were RMB283.1 million, an increase of approximately 3% compared to RMB274.1 million in the previous corresponding period, mainly due to higher professional fees[100] - Other expenses for the year ended 31 December 2023 were RMB43.4 million, a decrease of approximately 59% compared to RMB105.9 million in the previous corresponding period, primarily due to reduced foreign exchange losses, non-operating expenses, and impairment losses[100] - Receivables for service concession arrangements as of 31 December 2023 were RMB11,592,250 thousand, with a current portion of RMB2,079,291 thousand and a non-current portion of RMB9,512,959 thousand[102] - Contract assets as of 31 December 2023 were RMB1,255.0 million, a decrease of RMB451.9 million compared to RMB1,706.9 million as of 31 December 2022, mainly due to reclassification to financial receivables and increased construction from BOT, PPP, and EPC projects[104] - The Group's wastewater treatment capacity as of 31 December 2023 was 4,265,000 tonnes/day, with an actual treatment volume of 1,261.1 million tonnes for the year[109] - The Group's total water distribution and treatment capacity as of 31 December 2023 was 4,360,000 tonnes/day, with an actual treatment volume of 1,265.7 million tonnes for the year[109] - The Group's sludge treatment capacity as of 31 December 2023 was 550 tonnes/day, contributing to a total capacity of 4,360,550 tonnes/day[109] - The Group had 98 wastewater treatment projects, 2 reclaimed water treatment projects, and 3 sludge treatment projects in operation in Mainland China as of 31 December 2023, with total daily treatment capacities of 4,024,500 tonnes, 65,000 tonnes, and 550 tonnes, respectively[110] - The annualized utilization rate for wastewater and reclaimed water treatment plants was approximately 85% for the year ended 31 December 2023, up from 82% in 2022[110] - The actual average water treatment tariff for the year ended 31 December 2023 was approximately RMB1.59 per tonne, compared to RMB1.56 per tonne in 2022[110] - The actual aggregate processing volume for the year ended 31 December 2023 was 1,265.7 million tonnes, a 3% increase compared to 1,226.6 million tonnes in 2022[110] - Total operation revenue from Urban Water Treatment services for the year ended 31 December 2023 was RMB1,265.3 million, a 2% increase compared to RMB1,243.3 million in 2022[110] - The Group's revenue for the year ended 31 December 2023 was RMB2,216.4 million, a decrease of RMB680.2 million compared to RMB2,896.6 million in 2022, primarily due to a decrease in construction revenue[115] - The Group's gross profit margin for the year ended 31 December 2023 was approximately 49%, an increase of 5 percentage points from 44% in the previous year[117] - The Group's financing costs for the year ended 31 December 2023 were RMB578.7 million, a 2% increase compared to RMB566.2 million in 2022, mainly due to an increase in average interest-bearing bank and other borrowings[118] - The Group's financial receivables as of 31 December 2023 were RMB11,592.3 million, an increase of RMB385.8 million compared to RMB11,206.5 million in 2022, primarily due to reclassification from contract assets after the completion of water treatment project construction and upgrade cycles[120] - Trade receivables increased to RMB2,808.5 million, up by RMB372.1 million, primarily due to a rise in Urban Water Treatment projects receivables by RMB573.4 million and a net decrease in Environment Comprehensive Remediation projects receivables by RMB177.8 million[123] - Prepayments, other receivables, and other assets increased to RMB929.0 million, up by RMB180.9 million, mainly due to receivables from the disposal of an associate increasing by RMB144.9 million and deductible input VAT increasing by RMB29.9 million[123] - Cash and cash equivalents increased to RMB248.4 million, up by RMB51.5 million, primarily due to reduced cash outflows from financing activities[125] - Net cash flows from operating activities in 2023 were RMB292.9 million, compared to RMB368.4 million in 2022[126] - Net cash flows used in financing activities in 2023 were RMB257.1 million, compared to RMB563.0 million in 2022[126] - Interest-bearing debts increased to RMB9,917.0 million, with 64.7% being long-term, and over 71% of bank and other borrowings bearing interest at floating rates[128] - The Group's gearing ratio slightly decreased to 69.6% as of 31 December 2023, compared to 69.7% in the previous year[128] - Capital expenditure for 2023 was RMB127.1 million, significantly lower than the RMB512.7 million in 2022, primarily due to reduced construction and acquisition costs for BOT, TOT, BOO, and PPP projects[128] - Gross profit margin for the year ended 31 December 2023 was approximately 49%, an increase of 5 percentage points compared to 44% in the previous year, primarily due to a decrease in the proportion of construction revenue[141] - Finance costs for the year ended 31 December 2023 amounted to RMB578.7 million, representing a 2% increase from RMB566.2 million in the previous corresponding period, mainly due to an increase in the average balance of interest-bearing bank and other borrowings[142] - The average balance of interest-bearing bank and other borrowings increased by RMB223.6 million, with an average interest rate of 5.95%, slightly lower than the previous corresponding period's rate of 5.96%[142] - The Group did not have any significant contingent liabilities as of 31 December 2023, consistent with the previous year[129] - No significant events took place subsequent to 31 December 2023, as disclosed[130] - The Group's contributions to the defined contribution pension plan are recognized as expenses when incurred, and forfeited contributions cannot be used to reduce existing contribution levels[129][131] - The Group's operations are primarily conducted in China, with transactions mostly denominated and settled in RMB, and as of 31 December 2023, there was no significant foreign currency risk exposure[132] - The Group's share of profits of associates for the year ended December 2023 was RMB4.7 million, a significant increase from RMB2.6 million in the previous year[143] - Share of losses of joint ventures for the year ended 31 December 2023 was RMB0.3 million, a major decrease from RMB3.6 million in the previous year[143] - Income tax expense for the year ended 31 December 2023 was RMB44.7 million for current PRC income tax and RMB59.0 million for deferred expenses, with an effective tax rate of 44%, up 8 percentage points from the previous year[143] - The Group's financial receivables as at 31 December 2023 were RMB11,592.3 million, an increase of RMB385.8 million from the previous year, mainly due to reclassification from contract assets[145] - Contract assets as at 31 December 2023 were RMB1,255.0 million, a decrease of RMB451.9 million from the previous year, mainly due to reclassification to financial receivables and increased construction under BOT, PPP, and EPC contracts[147] - Cash and cash equivalents as at 31 December 2023 were RMB248.4 million, an increase of RMB51.5 million from the previous year, due to decreased cash outflows in financing activities[150] - The Group invested RMB258.4 million in BOT/TOT and PPP projects for the year ended 31 December 2023, compared to RMB311.0 million in the previous year[151] - Trade and bills payables as at 31 December 2023 were RMB2,013.5 million, a decrease of RMB246.7 million from the previous year, in line with construction work progress and settlements[152] - Other payables and accruals as at 31 December 2023 were RMB207.9 million, a decrease of RMB80.2 million from the previous year, mainly due to reduced amounts to an associate and salary payables[152] - The Group had 2,296 employees as at 31 December 2023, with remuneration packages determined by market conditions and individual performance[154] - No significant contingent liabilities as of December 31, 2023 (December 31, 2022: None)[157] - No significant events occurred after December 31, 2023, except as disclosed[158] Environmental and Social Responsibility - The company operates in the environmental sector, focusing on wastewater treatment and water resources, with policies such as the "Implementation Plan for the Construction and Management of Domestic Sewage and Waste Treatment Facilities in Towns" and the "National Water Network Construction Plan Outline" supporting its industry[59] - The company's annual report for the year ended December 31, 2023, highlights its commitment to improving environmental infrastructure and supporting private enterprise development, with policies aimed at enhancing the business environment and reducing transaction costs[59] - The company's male to female ratio in the workforce, including senior management, is approximately 2:1, maintaining a healthy and reasonable gender diversity[37] - The company has been certified as a Class A General Construction Contractor of Municipal and Public Works by the Ministry of Housing and Urban-Rural Development, and holds CAEPI level-1 certifications for industrial wastewater and domestic sewage operation and service capabilities[167] - The company has implemented ISO9001 Quality Management System, ISO14001 Environmental Management System, and ISO45001 Occupational Health and Safety Management System[167] - The company has won the National Important Environmental Protection Practical Technology Demonstration Project Award for several environmental protection projects[167] - The company is the deputy chairman unit of the National Industrial Commercial and Environmental Protection Association and a member of the China Environment Protection

Revenue and Profitability - Revenue for the year ended December 31, 2023, was approximately RMB 2,216.4 million, a decrease of about 23.5% compared to the previous year due to a decline in construction service revenue[2] - Net profit attributable to the parent company was approximately RMB 124.8 million, a decrease of about 47.1% compared to the previous year, attributed to a decline in total revenue[2] - Basic and diluted earnings per share for the year were RMB 5.83, down approximately 47.0% from RMB 11.01 in the previous year[2] - The company recorded a loss of RMB 4,809,000 in the rural sewage treatment segment, highlighting challenges in this area that may require strategic adjustments[86] - The total revenue from the urban water services segment was RMB 2,723,107,000, underscoring its importance to overall company performance[86] Operational Performance - Gross profit was RMB 1,076.0 million, down approximately 15.2% year-on-year, with the gross profit margin increasing from 43.8% to 48.5% due to a higher proportion of operating service revenue[2] - The company continues to focus on improving operational efficiency and exploring new market opportunities despite the revenue decline[2] - The total processing volume for the year was 1,265.7 million tons, an increase of approximately 3.2% from 1,226.6 million tons in the previous year[2] - The group aims to further expand the urban water treatment industry chain to enhance profitability and competitiveness[140] - The group has 106 projects in total, with 98 wastewater treatment projects, 2 recycled water treatment projects, and 3 sludge treatment projects in operation as of December 31, 2023[156] Cash Flow and Liquidity - Net cash inflow from operating activities was RMB 292.9 million, a decrease of 20.5% compared to the previous year[2] - The group reported a net cash inflow from operating activities of RMB 292.9 million, with net cash outflows from financing activities amounting to RMB 257.1 million[200] - Cash and cash equivalents amounted to RMB 248.4 million, an increase of RMB 51.5 million from RMB 196.9 million as of December 31, 2022, primarily due to reduced cash outflows from financing activities[196] - The group’s cash flow from financing activities was negative at RMB (257,108) thousand, an improvement from RMB (563,029) thousand in the previous year[33] Assets and Liabilities - Non-current assets total value decreased from 12,930,405 thousand RMB to 12,615,934 thousand RMB, a decline of approximately 2.43%[9] - Current assets increased from 6,035,345 thousand RMB to 6,611,428 thousand RMB, representing an increase of about 9.52%[12] - Total liabilities increased from 5,458,439 thousand RMB to 5,771,449 thousand RMB, an increase of approximately 5.71%[12] - The company's total equity increased from 5,740,608 thousand RMB to 5,850,032 thousand RMB, reflecting a growth of about 1.92%[13] - As of December 31, 2023, the total interest-bearing debt increased to RMB 9,917.0 million from RMB 9,521.8 million, with 64.7% classified as long-term debt[185] Impairment and Provisions - The impairment loss on financial receivables increased to RMB 3,015 thousand in 2023 from RMB 2,186 thousand in 2022, reflecting a rise of approximately 37.9%[47] - The impairment loss for trade receivables increased to RMB 110,042,000 in 2023 from RMB 79,396,000 in 2022, indicating a rise of about 38.7%[63] - The increase in impairment provisions was primarily due to the rise in the total book value of financial receivables[57] - The impairment loss recognized amounted to RMB 38,045 thousand, with RMB 29,753 thousand attributed to other segments[88] Capital Expenditure - The total capital expenditure for the year was RMB 127.1 million, significantly lower than RMB 512.7 million in 2022, indicating a reduction of approximately 75.2%[38] - The total capital expenditure for the group is RMB 34,761,000, with specific allocations for urban and rural wastewater management[75] - The company is focused on enhancing its capital expenditures to support growth in infrastructure and service concession projects, which are expected to drive future revenue growth[85] Market and Strategic Focus - The group operates in three main segments: Urban Water Services, Water Environment Comprehensive Management, and Rural Wastewater Management, each with distinct operational risks and returns[71] - The company plans to expand its operations in wastewater treatment and related services, leveraging its expertise in BOT and TOT project models[81] - The company has established multiple service concession arrangements for municipal infrastructure projects, indicating a strategic focus on long-term contracts and stable revenue streams[81] - The group aims to further implement feasible measures to reduce losses from joint ventures and associates[172] Taxation and Government Support - The total tax expense for the year was RMB 103,726 thousand, a decrease of 22.8% from RMB 134,379 thousand in 2022[122] - Government subsidies received in 2023 amounted to RMB 20,230 thousand, a decrease of 20% from RMB 25,447 thousand in 2022[104] Employee and Operational Metrics - The group employed 2,296 staff members as of December 31, 2023, with compensation generally aligned with market conditions and individual performance[39] - Employee benefit expenses totaled RMB 261,062 thousand in 2023, down from RMB 274,218 thousand in 2022, reflecting a decrease of about 4.8%[107] - The average water treatment fee for the year ended December 31, 2023, is approximately RMB 1.59 per ton, compared to RMB 1.56 per ton in 2022[159] Financial Reporting and Standards - The group has adopted new and revised International Financial Reporting Standards for the current fiscal year, which did not have a significant impact on the financial statements[22] - The group has implemented changes related to deferred tax assets and liabilities, which did not significantly affect the financial position as of December 31, 2022[26]

Financial Performance - For the six months ended June 30, 2023, total revenue decreased by approximately 34.2% to RMB 1,093.1 million, primarily due to a decrease in revenue from construction services by RMB 513.6 million (approximately 83.7%) to RMB 100.0 million[9]. - Gross profit and profit attributable to owners of the parent decreased by 24.2% and 59.5% to RMB 544.8 million and RMB 81.8 million, respectively, due to the decline in total revenue[9]. - The total operation revenue for Urban Water Treatment services for the six months ended June 30, 2023, was RMB 599.3 million, representing an 11% decrease compared to RMB 670.1 million for the same period last year[36]. - Construction revenue recognized for the six months ended June 30, 2023, was RMB 67.7 million, a significant year-on-year decrease of approximately 89% from RMB 589.4 million[41]. - Total revenue from Water Environment Comprehensive Remediation projects was RMB 27.7 million, marking a significant increase from RMB 6.6 million in the same period last year[45]. - Revenue from Rural Water Improvement projects was RMB 29.3 million, reflecting an 18% decrease compared to RMB 35.8 million for the same period last year[46]. - The Group recorded total revenue of RMB 1,093.1 million for the six months ended June 30, 2023, a decrease of RMB 568.3 million from RMB 1,661.4 million in the previous corresponding period[50]. - The profit for the period was RMB 84,718, representing a decline of 58% from RMB 202,406 in the previous year[153]. - Total comprehensive income for the period was RMB 88,118, down 63% from RMB 239,806 in the same period last year[155]. Profitability and Margins - The overall gross profit margin for the current period was 49.8%, representing an increase of 6.6 percentage points compared to the same period last year[9]. - The Group's gross profit margin for the six months ended June 30, 2023, was approximately 50%, an increase of 7 percentage points from approximately 43% in the previous corresponding period[52]. - The adjusted profit before tax for the period was RMB 131,328,000, after accounting for unallocated expenses and finance costs[183]. - The urban water treatment segment achieved a segment result of RMB 248,829,000, while the rural water improvement segment reported a loss of RMB 3,818,000[183]. Cash Flow and Financial Position - The net operating cash inflow for the current period was RMB 10.0 million, maintaining a positive balance[10]. - Net cash flows from operating activities for the six months ended June 30, 2023, were RMB 10.0 million, a significant decrease from RMB 140.1 million in the same period of 2022[81]. - The Group's cash inflows from the decrease in pledged deposits were RMB 46.1 million during the reporting period[88]. - The company reported a net cash outflow from financing activities of RMB 54,475,000, contrasting with a net inflow of RMB 60,106,000 in the same period last year[163]. - Cash and cash equivalents decreased to RMB 169,946 from RMB 196,938, a decrease of 13.68%[157]. Operational Efficiency and Strategy - The company plans to focus on increasing the profitability of existing projects and improving operational cash flows by raising wastewater treatment standards and expanding operations[15]. - The company will continue to implement energy-saving and consumption reduction measures to enhance operational efficiency and control operating costs[15]. - The Group aims to enhance profitability and competitiveness by further expanding its Urban Water Treatment chain in the future[31][28]. - The Group plans to focus on improving existing projects' profitability through price adjustments and operational efficiency measures[17]. - The Group's strategy includes accelerating the revitalization of inefficient assets to provide better returns for shareholders[17]. Government Policies and Market Environment - The central government has issued several policy documents to promote the development of the wastewater treatment industry, which is expected to improve the business environment and increase overall profitability[14]. - The Group is optimistic about the overall profit growth in the wastewater treatment industry due to improved business environment policies introduced by the government[16]. Assets and Liabilities - As of June 30, 2023, financial receivables increased to RMB 11,431.8 million from RMB 11,206.5 million, an increase of RMB 225.3 million[70]. - Trade receivables rose to RMB 2,708.8 million as of June 30, 2023, up from RMB 2,436.4 million at the end of 2022, an increase of RMB 272.4 million primarily driven by urban water projects[77][89]. - The Group's total interest-bearing debts increased to RMB 9,775.1 million as of June 30, 2023, compared to RMB 9,521.8 million at the end of 2022, with 68.7% classified as long-term[93]. - The Group's gearing ratio decreased to 69.6% as of June 30, 2023, compared to 70.5% in the corresponding period last year[94]. Shareholding and Corporate Governance - Mr. Zhao Juanxian holds 546,728,004 shares, representing approximately 25.56% of the issued share capital of the company[121]. - China Water Affairs Group Limited and Sharp Profit Investments Limited each hold 953,119,996 shares, accounting for 44.54% of the issued share capital[127]. - The company has disclosed substantial shareholders' interests and short positions as required under the SFO[124]. - The Audit Committee reviewed the unaudited interim results for the six months ended June 30, 2023, ensuring the effectiveness of financial reporting and internal controls[135]. - The Company has adopted a board diversity policy to enhance the effectiveness of the Board by ensuring a balance of skills, experience, and diversity of perspectives[142]. Compliance and Reporting - The interim financial information has been prepared in accordance with International Accounting Standard 34 and complies with the applicable disclosure requirements of the Hong Kong Stock Exchange[166]. - The company continues to focus on board diversity to enhance efficiency and effectiveness in decision-making[146]. - The interim results announcement has been published on the Stock Exchange and the company's website, ensuring transparency for shareholders[150].

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。 KANGDA INTERNATIONAL ENVIRONMENTAL COMPANY LIMITED 康 達 國 際 環 保 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：6136） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 告 摘要 ‧ 收 益 約 為 人 民 幣1,093.1百 萬 元，較 去 年 同 期減 少34.2%，乃 主 要 由 於 建設服務收益減少所致。 ‧ 毛利為人民幣544.8百萬元，較去年同期減少24.2%。由於運營服務收 益佔比增加，毛利率上升至49.8%，而去年同期則為43.2%。 ‧ 母 公 司 擁 有 人 應 佔 溢 利 為 人 民 幣81.8百 萬 元，較 去 年 同 期 減 少 59.5%，乃由於總收益較去年同期減少所致。 ‧ 母公司普通權益持有人應佔每股基本及攤薄盈利為人民幣3.82分， ...

Management Team Experience - Mr. Li Zhong has over 20 years of experience in urban public utilities and infrastructure project management, focusing on water affairs since 2002[2]. - Ms. Liu Yujie has participated in the IPO and underwriting of over 30 companies on the Hong Kong Stock Exchange and led three mergers and acquisitions in Hong Kong and Singapore[3]. - Mr. Duan, Jerry Linnan has been involved in hotel operations and intelligent water businesses since joining China Water in 2011, and became the general manager of a hotel in Nanjing in 2015[7]. - Mr. Chau Kam Wing has over 30 years of experience in auditing, taxation, and financial management, and is currently the finance director of Winox Holdings Limited[10]. Company Focus and Strategy - The company is focused on expanding its operations in urban public utilities and infrastructure, particularly in water management[2]. - The company aims to leverage its expertise in environmental engineering and water treatment technologies for future growth[15]. - The company is committed to enhancing its investor relations and capital market strategies to support future expansions[7]. - The management team emphasizes the importance of sustainable practices in their operations and future projects[15]. - The corporate mission focuses on creating a greener environment, specifically in urban sewage treatment and rural water improvement in Mainland China[18]. Financial Performance - Revenue from construction services decreased by RMB115.3 million (approximately 11%) year-on-year to RMB893.2 million, contributing to a total revenue decline of 0.8% to RMB2,896.6 million[33]. - Profit attributable to equity shareholders decreased to RMB235.7 million, representing a decrease of approximately 43% year-on-year[33]. - Overall gross profit margin decreased by approximately 2 percentage points from 46% to 44%, with gross profit declining by approximately 5% year-on-year to RMB1,268.6 million[33]. - The Group's total revenue for the year ended December 31, 2022, was RMB2,896.6 million, a minor decrease of RMB22.4 million compared to RMB2,919.0 million in the previous year[79]. Operational Metrics - Actual wastewater treatment volume for the year reached 1,226.6 million tonnes, representing a slight decrease of approximately 2.8% year-on-year[33]. - The Group operated 101 service concession projects with an operational treatment capacity exceeding 4 million tons per day as of December 31, 2022[52]. - The actual average water treatment tariff for 2022 was approximately RMB1.56 per tonne, up from RMB1.49 per tonne in 2021[68]. - The annualized utilization rate for wastewater and reclaimed water treatment plants was approximately 82% for 2022, down from 86% in 2021[68]. Capital Expenditure and Financing - Capital expenditure for the year was RMB512.7 million, a decrease of approximately 21% year-on-year[36]. - The Group plans to explore diversified financing channels, including equity and debt financing and domestic real estate investment trusts (REITs)[41]. - The Group's total interest-bearing debts increased to RMB9,521.8 million as of December 31, 2022, compared to RMB9,469.7 million as of December 31, 2021[1]. - The Group's banking facilities totaled RMB57,197.6 million as of December 31, 2022, with RMB49,380.5 million remaining unutilized, primarily restricted for environmental protection infrastructure investments[1]. Corporate Governance - The Group has adhered to the corporate governance code as per the Hong Kong Stock Exchange regulations, ensuring compliance and efficiency in governance practices[19]. - The Audit Committee held three meetings during the year ended December 31, 2022, to discuss risk management and internal controls[134]. - The Board of Directors has confirmed compliance with the Model Code for Securities Transactions, ensuring adherence to required standards during the year ended December 31, 2022[156]. - The Company has established clear roles for the Chairman and Chief Executive Officer to maintain independence and balance in decision-making[161]. Environmental and Social Responsibility - The company aims to enhance its environmental, social, and governance (ESG) objectives, focusing on risks such as climate change and supply chain issues[137]. - The company has received awards for its environmental protection projects, highlighting its commitment to sustainable practices[149]. - The Group is committed to building an environmentally friendly and resource-saving enterprise, focusing on the harmonious development of people, nature, and the environment[151]. - The Group organized a "Public Open Day for Environmental Protection Facilities" to raise public awareness about wastewater treatment capabilities and ecological protection[151]. Employee and Board Diversity - The Group had 2,318 employees as of 31 December 2022, with remuneration packages determined based on market conditions and individual performance[127]. - The Board aims to maintain female representation of at least 10% by 2025, achieving 14.3% in 2022[174]. - The Company has adopted a board diversity policy to enhance effectiveness through a balance of skills and experiences[171]. - Continuous professional development is prioritized, with Directors participating in relevant training courses[176].

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。 KANGDA INTERNATIONAL ENVIRONMENTAL COMPANY LIMITED 康 達 國 際 環 保 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：6136） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 年 度 業 績 公 告 摘要 • 收 益 約 為 人 民 幣2,896.6百 萬 元，較 上 年 度 減 少 約0.8%，乃 由 於 建 設 服務收益減少所致。 • 毛 利 為 人 民 幣1,268.6百 萬 元，較 上 年 度 減 少 約5.0%。毛 利 率 約 為 44%，較上年度減少2個百分點，乃由於經營成本普遍增加所致。 • 母 公 司 擁 有 人 應 佔 溢 利 約 為 人 民 幣235.7百 萬 元，較 上 年 度 減 少 約 42.9%。 • 年 內 母 公 司 普 通 權 益 持 有 人 應 佔 每 股 基 本 及 攤 薄 ...

Financial Performance - In the first half of 2022, Kangda International faced challenges due to increased operating costs and a decline in profit margins, with gross profit margin and net profit margin slightly decreasing compared to the previous period [11]. - The Group recorded revenue of RMB 1,661.4 million, an increase of approximately 12.6% compared to RMB 1,475.5 million in the previous period [45]. - Profit for the period was RMB 202,406,000, a decrease of 15.7% compared to RMB 240,004,000 in the prior year [120]. - Earnings per share attributable to ordinary equity holders of the parent was 9.44 cents, down from 11.07 cents in the previous year [120]. - The Group's cost of sales for the same period was RMB 942.9 million, representing an increase of approximately 17.8% from RMB 800.1 million in the previous period [46]. - The gross profit margin for the six months ended June 30, 2022, was approximately 43.2%, a decrease of 2.6 percentage points from approximately 45.8% in the previous period [51]. - Administrative expenses increased by approximately 23% to RMB 137.4 million compared to RMB 111.8 million in the previous period [54]. - Finance costs for the six months ended June 30, 2022, were RMB 280.3 million, a slight decrease from RMB 283.9 million in the previous period [54]. - The effective tax rate for the six months ended June 30, 2022, was approximately 27%, an increase of 4 percentage points from approximately 23% in the previous period [60]. Cash Flow and Liquidity - The Group maintained a positive operating cash flow, which significantly improved during the period, demonstrating effective cash management strategies [11]. - Net cash flows from operating activities for the six months ended June 30, 2022, were RMB 140.1 million, compared to RMB 31.3 million for the same period in 2021 [75]. - Cash and cash equivalents increased to RMB 561.4 million as of June 30, 2022, compared to RMB 289.9 million at the end of the previous period, marking an increase of RMB 271.5 million due to net cash inflows from operating, investing, and financing activities [73]. - The Group's total interest-bearing debts increased to RMB 9,832.4 million as of June 30, 2022, compared to RMB 9,469.7 million as of December 31, 2021 [80]. - The gearing ratio slightly decreased to 70.5% as of June 30, 2022, from 70.7% in the corresponding period last year [83]. Operational Capacity and Projects - The Group's operational treatment capacity exceeded 4 million tons per day as of June 30, 2022, with a total of 112 service concession arrangements projects, including 106 wastewater treatment plants [21][28]. - The Group aims to enhance profitability and operational cash flows by raising treatment standards and expanding existing projects in the wastewater treatment sector [17][24]. - The Group's daily wastewater treatment capacity in operation is approximately 3,989,500 tons, with an additional 275,500 tons not yet transferred [29]. - The Group has engaged in comprehensive water environment remediation projects, including river harnessing and sponge city construction, through previously signed PPP and EPC contracts [22][25]. - The Group's rural water improvement initiatives focus on constructing wastewater treatment facilities and pipelines to enhance rural living environments, initiated since 2016 [23][26]. Financing and Investment Strategies - Kangda International secured a green loan of US$16 million, marking its first green financing in Hong Kong, reflecting its commitment to environmentally sustainable practices [11]. - The Group is exploring diversified financing channels, including equity and debt financing and real estate investment trusts (REITs) in Mainland China [11]. - The Group's financing strategy includes lowering financing costs and improving debt structure by developing more financing channels and enhancing operational efficiency [17][24]. - The Group is committed to participating in the development of Infrastructure REITs as encouraged by the central government, considering market conditions and financial position [17][18]. Regulatory Environment and Industry Outlook - The central government is focused on the healthy development of the wastewater treatment industry, with ongoing policy optimization during the 14th Five-Year Plan period to enhance water ecological environment management [12]. - The National Development and Reform Commission has proposed measures to strengthen water environment protection and promote the resourceful use of wastewater and sludge [12]. - Local government departments have launched plans to set targets for ecological and environmental management, indicating a supportive regulatory environment for the industry [12]. - The overall industry is expected to develop in a more standardized, professional, and healthy direction due to favorable government policies [12]. Corporate Governance and Compliance - The Company has complied with the Corporate Governance Code with no deviations reported for the six months ended 30 June 2022 [85]. - The Group enhanced overall control over budget and risk management, optimizing management strategies and improving operational efficiency [85]. - The Company has established an Audit Committee to oversee the financial reporting process and risk management systems [106]. - The Company has adopted a board diversity policy to enhance the effectiveness of the Board by ensuring a balance of skills, experience, and diversity [109].

Financial Performance - Total revenue for the year decreased by approximately 12% to RMB 2,919.0 million due to a decline in revenue from construction services[14] - Gross profit for the year increased slightly by approximately 1% to RMB 1,335.3 million, with an overall gross profit margin improving to 46% from 40% last year[14] - Profit attributable to equity shareholders decreased to RMB 412.8 million, a decrease of approximately 12% compared to 2020[18] - Basic earnings per share for the year was RMB 19.29 cents[18] - The Group's cost of sales for the year was RMB 1,583.7 million, representing a decrease of approximately 21% from RMB 2,006.8 million in the previous period[59] - Other income and gains amounted to RMB 106.6 million, slightly down from RMB 107.2 million in the previous period, primarily including government grants of RMB 60.5 million[63] - Selling and distribution expenses decreased significantly by approximately 56% to RMB 1.1 million from RMB 2.5 million in the previous period[64] - Administrative expenses increased by approximately 13% to RMB 246.0 million from RMB 217.6 million in the previous period, mainly due to increased staff costs[65] - The Group's financing costs slightly increased to RMB 565.7 million, compared to RMB 561.8 million in the previous year, mainly due to an increase in average interest-bearing bank borrowings[74] Operational Efficiency - The actual wastewater treatment volume increased to 1,262.4 million tonnes, representing an increase of approximately 11% compared to 2020[14] - The Group continues to enhance its operational efficiency despite challenges posed by the pandemic[14] - The annualized utilization rate for wastewater and reclaimed water treatment plants in operation was approximately 86% for the year ended December 31, 2021, compared to 83% in 2020[46] - The Group's wastewater treatment facility projects have been completed and commenced commercial operation, significantly enhancing wastewater treatment capacity[14] - The Group had 101 service concession arrangement projects under operation with an operational treatment capacity exceeding 4 million tons per day as of December 31, 2021[26] - The Group operated 96 wastewater treatment projects, 2 reclaimed water treatment projects, and 3 sludge treatment projects, with a total daily treatment capacity of 3,961,500 tonnes, representing an increase from 3,766,500 tonnes in 2020[46] Strategic Focus - The Group aims to contribute to the long-term development of the wastewater treatment industry as part of building a beautiful China[13] - The Group plans to focus on municipal wastewater treatment and enhance energy-saving measures to increase revenue and profit[19] - The Group aims to explore wastewater resource recycling and reclaimed water utilization to support national goals while creating greater value for shareholders[19] - The Group's strategic direction aligns with national initiatives for energy conservation and emission reduction[13] Financial Position - As of December 31, 2021, the Group's net asset value per share was RMB 2.53, an increase of approximately 4% compared to the same period last year[18] - Total interest-bearing debts increased to RMB 9,469.7 million as of December 31, 2021, compared to RMB 9,272.8 million in 2020, with 66.2% classified as long-term[99] - The Group's trade and bills receivables rose to RMB 1,776.6 million, an increase of RMB 249.6 million, primarily due to an increase in Urban Water Treatment projects receivables of approximately RMB 401.1 million[84] - Cash and cash equivalents decreased to RMB 289.9 million, down RMB 140.4 million from RMB 430.3 million at the end of the previous year, attributed to increased cash outflows in investing activities[89] Governance and Management - The Company is committed to maintaining high standards of corporate governance, as evidenced by the composition of its audit and nomination committees[130] - The Board of Directors is responsible for leadership and control of the Company, overseeing business, strategic decisions, and performance[149] - The Company has established a code of conduct and compliance manual applicable to employees and directors[164] - The Board has formalized corporate governance duties, including the development and review of governance policies and practices[163] - The Company has complied with all applicable provisions of the Corporate Governance Code during the year ended 31 December 2021[144] Human Resources - The group employed 2,426 staff members as of December 31, 2021, with compensation packages reviewed annually based on performance[110] - The Remuneration Committee reviewed Directors' fees considering increasing duties and market conditions[200] - The review of management's remuneration proposals was aligned with the Board's corporate goals and objectives[200] Future Outlook - The Group is confident about its future profitability and will enhance the profitability and effectiveness of its operations[29] - The Group plans to optimize loan structure and expand financing channels to lower the average interest rate in the coming year[71] - The Group will continue to optimize its debt structure and develop financing channels to reduce financing costs[20]

Operational Capacity and Projects - As of June 30, 2021, the company had established 113 service concession projects, including 106 wastewater treatment plants, 2 water supply plants, 3 sludge treatment plants, and 2 recycled water treatment plants[18]. - The company's operational capacity exceeded 4 million tons per day as of June 30, 2021, reflecting significant growth in wastewater treatment capabilities[15]. - The total operational capacity of the company as of June 30, 2021, is 4,547,050 tons, with 3,981,500 tons for wastewater treatment, 65,000 tons for recycled water treatment, and 550 tons for sludge treatment[20]. - The company has 95 operational wastewater treatment projects, 2 recycled water treatment projects, and 3 sludge treatment projects as of June 30, 2021[26]. - The company is actively involved in rural wastewater management projects, enhancing the living environment in rural areas through the construction of wastewater treatment facilities[16]. Financial Performance - The total operational revenue for urban water services is RMB 558.9 million, an increase of approximately 15% from RMB 487.5 million in the same period last year[27]. - The company recorded total revenue of RMB 1,475.5 million for the six-month period, a decrease of approximately 15% from RMB 1,729.8 million in the previous year, mainly due to a reduction in construction revenue[35]. - Revenue for the first half of 2021 was RMB 1,475,467 thousand, a decrease of 14.7% compared to RMB 1,729,806 thousand in the same period of 2020[116]. - Gross profit increased to RMB 675,374 thousand, up 5.6% from RMB 639,342 thousand year-on-year[116]. - Net profit for the period was RMB 240,004 thousand, representing a growth of 3.5% from RMB 232,366 thousand in the previous year[116]. Cost Management and Profitability - The company aims to enhance profitability and operational cash flow through the upgrading and expansion of existing projects in the wastewater treatment sector[11]. - The company is committed to improving operational efficiency and controlling operational costs to maximize shareholder returns[11]. - The company's gross margin for the six months ended June 30, 2021, was approximately 46%, an increase of 9 percentage points from about 37% in the same period last year[37]. - Sales cost for the six-month period is RMB 800.1 million, a decrease of approximately 27% from RMB 1,090.5 million in the same period last year, mainly due to reduced construction costs[36]. Financing and Debt Management - The company is focusing on diversifying its financing channels to improve its debt structure and financial condition[11]. - Total interest-bearing debt rose to RMB 9,453.3 million as of June 30, 2021, up from RMB 9,272.8 million at the end of 2020, with 73.5% classified as long-term debt[61]. - The company's asset-liability ratio slightly decreased to 70.7% as of June 30, 2021, from 71.0% at the end of 2020[61]. Shareholder Information - Zhao Sizhen holds a significant stake of 546,728,004 shares, representing 25.56% of the company's issued share capital[76]. - Major shareholder China Water Affairs Group Limited owns 953,119,996 shares, accounting for 44.54% of the company's issued share capital[80]. - Baring Private Equity Asia V Holding Limited has a stake of 344,129,996 shares, which is 16.08% of the company's issued share capital[80]. Governance and Compliance - The company established an Audit Committee to assist the Board in providing independent opinions on financial reporting procedures, internal controls, and risk management systems[90]. - The interim financial results were prepared in accordance with International Accounting Standard 34 and were reviewed by Ernst & Young[110]. - The company confirmed that all directors complied with the standards set out in the Securities Trading Code during the six months ended June 30, 2021[96]. Future Outlook and Strategic Plans - The company plans to leverage national environmental policies related to carbon peak and carbon neutrality to explore opportunities in the water industry chain[11]. - The company plans to continue expanding its market presence and investing in new technologies and products[118]. - The company is focused on improving its financial performance through strategic investments and operational improvements in its core segments[182].

Financial Performance - The total revenue for 2020 increased by approximately 18% to RMB 3,332.4 million, marking the highest revenue in the company's history[9]. - The net profit attributable to equity shareholders for 2020 was RMB 470.5 million, an increase of approximately 25% from 2019, achieving a record profit level[9]. - Basic earnings per share for 2020 were RMB 22.39, with the net asset value per share increasing by about 8% to RMB 2.44[9]. - The total operational revenue for urban water services was RMB 1,053.4 million, representing an increase of approximately 18% compared to RMB 894.0 million in the previous year[33]. - The total construction revenue for service concession projects was RMB 1,192.9 million, a year-on-year increase of about 15% from RMB 1,040.4 million[34]. - The group's gross profit margin for the year ended December 31, 2020, was approximately 40%, slightly down from about 41% in the previous year[43]. - The group reported other income and gains of RMB 107.2 million, a decrease of approximately 41% from RMB 182.0 million in the previous year[44]. - The group’s administrative expenses decreased to RMB 217.6 million, down about 11% from RMB 243.8 million in the previous year[46]. - The company’s distributable reserves as of December 31, 2020, amounted to RMB 1,715.0 million, a slight decrease from RMB 1,721.6 million in 2019[193]. - The company did not recommend the distribution of a final dividend for the year ended December 31, 2020, consistent with the previous year[178]. Operational Efficiency - The actual sewage treatment volume rose by about 10% to 1,133.6 million tons compared to 2019[9]. - The company aims to enhance operational efficiency and reduce costs to improve profitability and create greater value for shareholders[15]. - The company continues to deepen cost control measures, with sales and distribution expenses and administrative expenses decreasing by approximately 50% and 11% respectively compared to 2019[9]. - The net cash flow from operating activities for 2020 was RMB 243.7 million, compared to RMB 115.0 million in 2019, indicating a significant improvement in operational efficiency[63]. - The company has strengthened budget, risk, performance, and responsibility management to enhance operational efficiency[101]. Debt and Financing - The company secured a syndicated loan of USD 55 million led by ANZ, improving its debt structure and optimizing funding costs[14]. - The group’s financing costs were RMB 561.8 million, a slight increase from RMB 557.5 million in the previous year, with an average borrowing and bond interest rate of 6.11%[49]. - The company's interest-bearing debt slightly increased to RMB 9,272.8 million as of December 31, 2020, from RMB 9,109.4 million in 2019, with 75.6% classified as long-term debt[70]. - The asset-liability ratio decreased to 71.0% as of December 31, 2020, compared to 72.5% in 2019, reflecting improved financial stability[70]. Projects and Capacity - As of December 31, 2020, the company had a total of 112 service concession projects, including 105 wastewater treatment plants, 2 water supply plants, 3 sludge treatment plants, and 2 recycled water treatment plants[24]. - The total daily treatment capacity for operational wastewater treatment plants was 3,766,500 tons, an increase from 3,461,500 tons in 2019[31]. - The daily total treatment capacity for ongoing projects under construction was 515,000 tons, including 335,000 tons for wastewater treatment plants and 180,000 tons for water supply plants[34]. - The actual average water treatment fee was approximately RMB 1.46 per ton, slightly down from RMB 1.47 per ton in the previous year[31]. Corporate Governance - The board consists of seven members, including four executive directors and three independent non-executive directors[82]. - The board of directors has complied with the requirement of having at least three independent non-executive directors, with one possessing appropriate professional qualifications in accounting or related financial management[105]. - The company has established three committees: the nomination committee, the remuneration committee, and the audit committee[125]. - The board is responsible for major decision-making, including approving policies, overall strategy, and significant transactions[123]. - The company has adopted the standard code for securities trading by directors, ensuring compliance throughout the fiscal year ending December 31, 2020[102]. Risk Management - The company has established a comprehensive risk management framework to ensure effective risk control and decision-making[153]. - The company has identified significant risks in its business planning process, including project schedule risks, government contract risks, corporate culture risks, post-audit pricing risks, and performance management risks[159]. - The internal audit department conducts annual checks on the effectiveness of risk management practices across departments and business units[155]. - The company emphasizes the importance of timely, accurate, and complete communication of risk management information across all departments and business units[155]. Environmental and Social Responsibility - The company has implemented internal recycling programs for consumables to minimize environmental impact[187]. - The company has adopted energy-saving practices in its offices and wastewater treatment plants to improve electricity efficiency[188]. - The company has established compliance procedures to ensure adherence to applicable laws and regulations that significantly impact its operations[189]. Shareholder Relations - The company emphasizes the importance of effective communication with shareholders to enhance understanding of its business performance and strategies[164]. - The company has a structured approach to shareholder rights, ensuring that resolutions are presented individually at shareholder meetings[169]. - The company has a dedicated website for timely updates on its operations, financial data, and corporate governance practices[164].