Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 657,625 thousand, an increase of 18.7% compared to RMB 554,251 thousand for the same period in 2023[1]. - Operating profit for the same period was RMB 136,705 thousand, up from RMB 122,206 thousand, reflecting a growth of 11.9%[2]. - Net profit attributable to equity shareholders was RMB 49,706 thousand, compared to RMB 41,061 thousand in the previous year, representing an increase of 21.1%[2]. - The operating profit margin decreased slightly to 20.8% from 22.0% year-on-year, while the net profit margin also declined to 6.2% from 6.9%[1]. - The company reported a total comprehensive income of RMB 38,669 thousand for the period, compared to RMB 35,872 thousand in the same period last year, indicating a growth of 7.9%[3]. - The company reported revenue of RMB 1,281,788,000 for the twelve months ending June 30, 2024, an increase from RMB 1,115,089,000 for the same period in 2023, representing a growth of approximately 14.9%[15]. - The reported segment profit (adjusted EBITDA) for the six months ending June 30, 2024, was RMB 300,088,000, compared to RMB 261,444,000 for the same period in 2023, reflecting an increase of about 14.7%[16]. - The company reported a basic earnings per share of RMB 49,706,000 for the six months ended June 30, 2024, compared to RMB 41,061,000 for the same period in 2023, reflecting an increase of approximately 21.5%[23]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 5,134,612 thousand, an increase from RMB 4,934,102 thousand at the end of 2023[1]. - The company’s total liabilities increased to RMB 1,819,837 thousand from RMB 1,760,055 thousand, indicating a rise of 3.4%[4]. - As of June 30, 2024, the total non-current liabilities amounted to RMB 2,057,645,000, an increase from RMB 1,931,472,000 as of December 31, 2023, representing a growth of 6.5%[5]. - The net assets of the company reached RMB 1,257,130,000, compared to RMB 1,242,575,000 at the end of 2023, indicating a slight increase of 1.2%[5]. - The company’s current liabilities exceeded its current assets by RMB 905,111,000 as of June 30, 2024, slightly improved from RMB 937,305,000 at the end of 2023[6]. - The company reported a total equity attributable to shareholders of RMB 1,080,270,000, down from RMB 1,132,990,000 at the end of 2023, indicating a decrease of 4.6%[5]. - The company’s total liabilities increased by 6% from December 31, 2023, to June 30, 2024, reflecting ongoing operational growth[33]. Cash Flow and Financing - Cash and cash equivalents were RMB 223,972 thousand, down from RMB 276,752 thousand at the end of 2023, reflecting a decrease of 19.0%[4]. - The company incurred financing costs of RMB 70,737,000 for the six months ending June 30, 2024, compared to RMB 65,590,000 for the same period in 2023, indicating an increase of about 7.3%[17]. - The company’s financing cost as a percentage of total borrowings was capitalized at an annual rate between 5.46% and 6.25% as of June 30, 2023[17]. - The company has confirmed its ability to continue as a going concern for the next twelve months based on projected cash flows and financing resources[6]. - The company has total capital commitments of approximately RMB 399.0 million as of June 30, 2024, compared to RMB 186.6 million as of December 31, 2023[77]. Revenue Segments - Revenue from the wastewater treatment and public utility segment was RMB 237,436,000 for the six months ended June 30, 2024, up from RMB 206,912,000 in the same period of 2023, reflecting a growth of 14.7%[10]. - Revenue from the sales of goods and related services increased significantly to RMB 190,229,000, compared to RMB 128,501,000 in the previous year, marking a rise of 48.1%[10]. - The total revenue for the six months ended June 30, 2024, was RMB 588,144,000, compared to RMB 489,694,000 in the same period of 2023, representing an overall increase of 20.1%[10]. - Revenue from leasing and facility services increased by approximately RMB 11.2 million or 5.1% to about RMB 230.0 million for the six months ended June 30, 2023[54]. - Revenue from wastewater treatment increased by approximately RMB 21.1 million or 19.3% to about RMB 130.7 million for the six months ended June 30, 2023[56]. - Revenue from sales of goods and related services increased by approximately RMB 58.5 million or 51.5% to about RMB 172.2 million for the six months ended June 30, 2023[59]. Operational Efficiency - The company continues to focus on expanding its market presence and enhancing operational efficiency through strategic initiatives[2]. - The company operates three reportable segments: leasing and facility management, wastewater treatment and public utilities, and sales of goods and related services[9]. - The company’s wastewater treatment and utility services are affected by seasonal factors, with lower demand typically observed during long holidays such as the Lunar New Year and National Day[15]. - The average daily wastewater treatment capacity utilization rates for the group's facilities were 74.0% in Guangdong, 31.6% in Tianjin, 25.0% in Huizhou, 2.4% in Binhai, and 11.0% in Central China, with an overall average of 38.1%[44]. Employee and Operational Costs - Employee costs, including director remuneration, rose to RMB 78,053,000 for the six months ending June 30, 2024, from RMB 67,634,000 in the same period of 2023, representing an increase of approximately 15.4%[18]. - The total cost of goods sold for the six months ended June 30, 2024, was RMB 221,802,000, up from RMB 168,042,000 in 2023, representing a year-over-year increase of about 32%[19]. - Depreciation and amortization increased by approximately RMB 19.9 million or 15.6% to about RMB 147.3 million for the six months ended June 30, 2023[61]. - Other expenses rose by approximately RMB 13.7 million or 22.3% to about RMB 75.2 million for the six months ended June 30, 2023, mainly due to higher professional consulting service fees and increased taxes and additional fees from revenue growth[65]. Strategic Initiatives and Future Outlook - The group aims to focus on environmental protection-related businesses and actively explore hazardous solid waste management to achieve green, low-carbon, and circular development[48]. - The group has applied to the relevant government departments to increase the maximum wastewater treatment capacity in the Huizhou area from 10,000 tons per day to 15,000 tons per day, which is currently under review[50]. - The group has acquired land use rights for several plots in Taixing City, Jiangsu Province, to further develop factories in the East China area, which will add approximately 340,000 square meters of rental factory space upon completion[49]. - The company has increased its full-time employees to 985 as of June 30, 2024, up from 867 a year earlier, reflecting a growth of approximately 13.6%[86].

Revenue and Financial Performance - The company's total revenue for the year was approximately RMB 1,178.4 million, a 7.5% increase compared to 2022, driven by growth across all three business segments[4] - Revenue for the year reached RMB 1,178.4 million, an increase of RMB 82.6 million or 7.5% compared to the previous year[43][45] - Net profit attributable to equity shareholders was RMB 91.2 million, a decrease of RMB 20.1 million or 18.0% due to depreciation, amortization, and interest expenses from new operations in Sichuan and Jiangsu[43][45] - The company declared a final dividend of HK$0.10 per share (approximately RMB 0.91 per share) for the year ended December 31, 2023[43] Wastewater Treatment Capacity and Utilization - The company's daily maximum wastewater treatment capacity reached 23,500 tons, with an average daily treatment volume of 9,747 tons and an annual utilization rate of 41.5%[2] - Guangdong Huizhou Park's daily maximum wastewater treatment capacity reached 10,000 tons, with an average daily treatment volume of 7,363 tons and an annual utilization rate of 73.6%[2] - Tianjin Binhai Park's daily maximum wastewater treatment capacity reached 6,000 tons, with an average daily treatment volume of 2,040 tons and an annual utilization rate of 34.0%[2] - Central China Park's daily maximum wastewater treatment capacity reached 2,500 tons, with an average daily treatment volume of 282 tons and an annual utilization rate of 11.3%, a 6.8% increase from 2022[10] - Qingshen Park's daily maximum wastewater treatment capacity reached 5,000 tons, with an average daily treatment volume of 62 tons[10] - The company has applied to increase the daily maximum wastewater treatment capacity of Guangdong Huizhou Park from 10,000 tons to 15,000 tons, pending government approval[20] - Total wastewater treatment capacity across all parks is 23,500 tons per day[26] - Average daily wastewater treatment volume across all parks is 9,747 tons with a utilization rate of 41.5%[26] - Guangdong Huizhou Park has the highest wastewater treatment capacity utilization rate at 73.6%[26] - Total freshwater used across all parks in 2023 was 3,521,000 tons[26] Leasable Area and Occupancy Rates - Total leasable area of Guangdong Huizhou Park is approximately 501,000 square meters with a leasing rate of 95.8%[22] - Total leasable area of Tianjin Binhai Park is approximately 309,000 square meters with a leasing rate of 90.9%[22] - Total leasable area of Central China Park is approximately 143,000 square meters with a leasing rate of 39.2%[22] - Total leasable area of Qingshen Park is approximately 105,000 square meters with a leasing rate of 46.7%[22] - Total leasable area of East China Park is approximately 120,000 square meters with a leasing rate of 86.7%[22] - Total leasable area across five surface treatment circular economy industrial parks was 1,178,000 square meters, with an overall occupancy rate of 82.3%[57] - The Guangdong Huizhou park had the highest occupancy rate at 95.8%, while the Tianjin Binhai park had the lowest at 39.2%[57] Corporate Governance and Board Structure - The company's board of directors is responsible for strategic direction, operational oversight, financial performance monitoring, and ensuring effective internal control and risk management systems[111] - The company's audit committee reviews and supervises the financial reporting process, risk management, and internal control systems, providing independent opinions on their effectiveness[103] - The company's board of directors has established mechanisms to obtain independent perspectives and opinions, including access to external professional advisors and additional information from management[113] - The company's board committees (audit, remuneration, and nomination committees) operate under defined terms of reference and are provided with sufficient resources to fulfill their duties[114] - The company's independent non-executive directors have confirmed their independence in accordance with Listing Rule 3.13, with no business or other relationships that could affect their ability to perform duties independently[94] - The company's directors are required to retire by rotation at least once every three years, with one-third of the directors retiring at each annual general meeting[96] - The company's senior management is authorized to make decisions and coordinate daily operations, with significant transactions requiring prior board approval[98][99] - The Audit Committee consists of three members, all of whom are independent non-executive directors, with Mr. Liu Da serving as the chairman and possessing appropriate professional qualifications in accounting or financial management[115] - The company temporarily failed to meet the requirements of Listing Rule 3.21 after Mr. Li Yinquan resigned as an independent non-executive director and chairman of the Audit Committee on December 22, 2022. Mr. Liu Da was appointed as the new independent non-executive director and chairman of the Audit Committee on March 1, 2023, restoring compliance[116] - The Audit Committee held two meetings during the year and addressed matters such as the reappointment of the company's auditor, the review of internal audit functions, and the scope of non-audit services[117] - The Audit Committee also held two meetings with the external auditor during the year[118] - The Remuneration Committee, chaired by Mr. Kan Chung Nin, consists of three members, including two independent non-executive directors and one executive director, and is responsible for reviewing and recommending the remuneration policies and structures for directors and senior management[119] - The Remuneration Committee held three meetings during the year to review the company's remuneration policies, the performance and remuneration of executive directors and senior management, and the service contracts of executive directors[122] - The company's controlling shareholder, Jinchang Investment Limited, holds 44.47% of the issued shares as of December 31, 2023, and did not pledge any shares during the year[130] - No director or senior management member received any joining bonus, post-joining bonus, or severance compensation during the year[133] - No director waived or agreed to waive any remuneration during the year[134] - No director or their close associates had any interests in businesses competing with the company during the year[136] - The company has 901 employees as of December 31, 2023, with 616 males (68.4%) and 285 females (31.6%)[144] - The company plans to appoint at least one female director by December 31, 2024, to achieve gender diversity on the board and comply with Listing Rule 13.92[146] - The nomination committee held three meetings during the year to review the board's structure, size, and composition, and to recommend the appointment of independent non-executive directors and executive directors[142] - The company has adopted a board diversity policy, emphasizing the benefits of diversity and considering it a key factor in maintaining competitive advantage[145] - The board will consider setting measurable targets to implement the board diversity policy and review these targets periodically to ensure their appropriateness[146] - The nomination committee is responsible for evaluating the independence of independent non-executive directors and ensuring candidates meet the necessary qualifications and experience[160] - The company's board diversity policy includes considerations such as gender, age, cultural and educational background, industry experience, technical and professional skills, and tenure[169] - The nomination committee will review the board nomination policy to ensure its effectiveness[170] - The board will submit regular reports assessing the group's performance, situation, and prospects to ensure compliance with listing rules[174] - The company held a total of 8 board meetings during the year, with all directors attending all meetings[175] - The company's audit committee reviewed corporate governance policies and practices, including compliance with legal and regulatory requirements[195] - The company's board diversity policy aims to ensure a balanced and diverse board composition, considering factors such as gender, age, cultural background, and professional qualifications[187] - The company's nomination policy outlines the criteria and procedures for selecting and appointing new directors, ensuring the board has the necessary skills and experience[190] - The company's corporate secretary, Mr. Chung Ming-fai, has over 19 years of experience in corporate secretarial, mergers and acquisitions, financial reporting, and auditing[180] - All directors participated in continuous professional development related to their duties, including attending seminars and reviewing industry development materials[179] - The company's board and committee meetings were attended by all eligible directors, with no alternates attending on their behalf[199] Share Repurchase and Shareholder Value - The company repurchased and canceled 3,838,000 shares on May 9, 2023[63] - The company repurchased a total of 3,386,000 shares on the stock exchange at a total cost of approximately HKD 3,460,000, aiming to increase net asset value per share and earnings per share, thereby enhancing shareholder value[89] - The company's share repurchase is considered the best method to enhance shareholder value and aligns with the best interests of shareholders[89] - The company repurchased a total of 3,386,000 shares in 2023, with a total cost of HKD 3,459,440[185] Intellectual Property and Innovation - The company has obtained 139 registered patents, with 31 patents currently under application[11] Marketing and Customer Engagement - The company participated in 17 exhibitions during the year to promote its services and build customer relationships[12] Legal and Regulatory Compliance - The company paid RMB 395,000 in damages for a trademark infringement lawsuit, with frozen bank deposits of RMB 3,140,000 released in January 2024[83] Employee Incentives and Development - The company has adopted a share option plan to incentivize eligible participants to maximize performance efficiency and align their interests with the group's long-term development[88] Subsidiary Transactions - A subsidiary entered into a purchase agreement for refurbished mobile phones worth RMB 20,058,000 and a sales agreement for RMB 20,178,000 on March 5, 2024[70] Construction and Expansion - The company completed the first phase of the East China Park in October 2023, adding 120,000 square meters of rentable factory space[19] - The East China Park completed its first phase of construction and entered the trial production stage in October 2023[36]

Revenue and Profitability - Revenue for the year ended December 31, 2023, was RMB 1,178,414,000, representing an increase of 7.5% compared to RMB 1,095,791,000 for the year ended December 31, 2022[1]. - Net profit attributable to equity shareholders decreased to RMB 91,167,000 from RMB 111,235,000, reflecting a decline of 18.1%[1]. - Basic and diluted earnings per share for the year were both RMB 0.08, down from RMB 0.10 in the previous year[1]. - The annual profit for the year ended December 31, 2023, was RMB 82,092,000, a decrease of 24.5% from RMB 108,705,000 in the previous year[18]. - Total comprehensive income attributable to equity shareholders for the year ended December 31, 2023, was RMB 91,167,000, compared to RMB 111,235,000 in 2022, a decrease of 18.1%[18]. - The company's profit attributable to equity shareholders decreased from approximately RMB 111.2 million to approximately RMB 91.2 million, a reduction of about RMB 20.0 million, primarily due to the aforementioned factors[191]. Assets and Liabilities - Total assets increased to RMB 4,934,102,000 from RMB 4,372,118,000, marking a growth of 12.8%[1]. - Current liabilities exceeded current assets by RMB 937,305,000, compared to RMB 854,989,000 in the previous year, indicating increased financial pressure[10]. - The company's total liabilities increased to RMB 1,016,216,000 as of December 31, 2023, compared to RMB 1,202,194,000 in 2022, reflecting a decrease of about 15.5%[60]. - The company's total assets as of December 31, 2023, are RMB 2,750,680,000, compared to RMB 2,233,241,000 in 2022, indicating an increase of 23.2%[106]. - As of December 31, 2023, the company's asset-liability ratio was approximately 221.4%, up from 163.6% as of December 31, 2022[194]. Operating Performance - Operating profit for the year was RMB 254,265,000, slightly up from RMB 253,671,000, indicating a stable performance[1]. - Operating margin decreased to 21.6% from 23.1%, while net profit margin fell to 7.0% from 9.9%[1]. - The reported segment profit (adjusted EBITDA) for the year ended December 31, 2023, was RMB 544,807,000, compared to RMB 501,128,000 in 2022, indicating an increase of about 8.7%[59]. - Operating costs increased by approximately RMB 79.0 million or 9.2% to about RMB 941.0 million for the year ended December 31, 2023, compared to RMB 862.0 million in the previous year[156]. - Financing costs increased by approximately RMB 35.5 million or 35.0% to approximately RMB 137.0 million, attributed to an increase in average bank loans and other borrowings[163]. Expenses and Costs - Employee costs for the year ended December 31, 2023, were RMB 139,622,000, up from RMB 133,404,000 in 2022, representing an increase of 4.9%[18]. - The total finance costs for the year ended December 31, 2023, amounted to RMB 136,957,000, compared to RMB 101,460,000 in 2022, indicating an increase of approximately 35%[64]. - Depreciation and amortization for properties, plants, and equipment was RMB 264,263,000, an increase from RMB 219,213,000 in 2022[91]. - Research and development expenses increased to RMB 13,918,000 from RMB 10,907,000 in 2022[91]. - The cost of goods sold for the year ended December 31, 2023, was RMB 362,791,000, an increase of 6% from RMB 342,189,000 in 2022[18]. Dividends - The company declared a final dividend of HKD 0.10 per share for the year, compared to HKD 0.05 per share in 2022, indicating a 100% increase in dividend payout[15]. - The company proposed a final dividend of HKD 0.10 per share for the year 2023, up from HKD 0.05 per share in 2022, representing a 100% increase[72]. Cash Flow and Financing - The company confirmed its ability to continue as a going concern based on future cash flow forecasts and financing plans[10]. - The total amount of bank loans and other borrowings as of December 31, 2023, is RMB 2,746,889,000, up from RMB 2,227,428,000 in 2022, representing a rise of 23.3%[106]. - The company is monitoring compliance with covenants related to its bank loans, with no violations reported as of December 31, 2023[133]. Market and Operations - The company has diversified its customer base, with no single customer accounting for more than 10% of total revenue as of December 31, 2023[53]. - The company aims to expand its business related to wastewater treatment and environmental protection, focusing on the electroplating industry[145]. - The company participated in 17 exhibitions this year to enhance marketing and customer relationships[119].

Financial Performance - The company's revenue for the six months ended June 30, 2023, was approximately RMB 554.3 million, an increase of about RMB 19.3 million compared to RMB 535.0 million for the same period in 2022, representing a growth of approximately 3.6%[5] - The profit attributable to equity shareholders for the same period was approximately RMB 41.1 million, a decrease of about RMB 11.5 million from RMB 52.6 million in the previous year, reflecting a decline of approximately 21.8%[5] - Revenue for the six months ended June 30, 2023, was RMB 554,251 thousand, an increase of 3.4% compared to RMB 534,953 thousand in 2022[89] - Operating profit for the same period was RMB 122,206 thousand, slightly down from RMB 123,147 thousand in 2022, reflecting a decrease of 0.8%[89] - Net profit for the period was RMB 38,443 thousand, a decrease of 19.1% from RMB 47,673 thousand in 2022[90] - Basic and diluted earnings per share for the period were RMB 0.04, down from RMB 0.05 in the previous year[89] - The company reported a total comprehensive income of RMB 35,872 thousand for the period, down from RMB 47,029 thousand in 2022, a decrease of 23.8%[90] - For the six months ended June 30, 2023, the company reported a net profit of RMB 41,061 thousand, a decrease of 33.5% compared to RMB 61,032 thousand for the same period in 2022[97] - The total comprehensive income for the same period was RMB 38,490 thousand, down from RMB 59,302 thousand in the previous year, reflecting a decline of 35.1%[97] Revenue Segmentation - Revenue from leasing and facility usage increased from approximately RMB 203.8 million to about RMB 218.8 million, a rise of 7.4% due to an increase in average daily rented area[24] - Wastewater treatment fees rose from approximately RMB 105.8 million to about RMB 109.6 million, an increase of 3.6% attributed to higher average treatment prices[26] - Revenue from the "Facility Usage and Management Services" segment was RMB 154,281,000 for the six months ending June 30, 2023, up from RMB 145,529,000 in 2022[111] - The "Wastewater Treatment and Utilities" segment generated revenue of RMB 206,912,000 for the six months ending June 30, 2023, compared to RMB 202,173,000 in 2022[111] - The "Sales of Goods and Related Services" segment reported revenue of RMB 128,501,000 for the six months ending June 30, 2023, slightly down from RMB 129,008,000 in 2022[111] Operational Metrics - The total leasable area across four surface treatment industrial parks was approximately 1,108,000 square meters, with an overall occupancy rate of 77.9% as of June 30, 2023[7] - The Guangdong Huizhou Park had a leasing rate of 94.2%, while the Qing Shen Park had a significantly lower rate of 22.9%[8] - The average daily wastewater treatment capacity across the three main parks was 18,500 tons, with an average utilization rate of 48.3%[10] - The Qing Shen Park officially commenced operations on May 18, 2023, with a daily wastewater treatment capacity of approximately 5,000 tons[11] Costs and Expenses - Operating costs increased by approximately RMB 19.0 million or 4.5% to about RMB 441.8 million, mainly due to higher depreciation and amortization expenses[30] - Depreciation and amortization expenses increased from approximately RMB 106.6 million to about RMB 127.4 million, a rise of 19.5% due to the commencement of operations at the Qingshen Park[31] - Employee costs increased by 10.8% to approximately RMB 67.6 million, attributed to an increase in the number of employees due to business development needs[33] - Utility costs rose by approximately RMB 2.1 million or 13.8% to about RMB 17.3 million, primarily due to increased wastewater treatment volume and higher electricity costs in the Guangdong Huizhou area[34] - Other expenses decreased by approximately RMB 1.7 million or 2.7% to about RMB 61.5 million, mainly due to lower waste treatment costs and increased other taxes and additional fees[36] Financing and Debt - Financing costs increased by approximately RMB 16.2 million compared to the previous year, impacting overall profitability[5] - Total bank loans and other borrowings amounted to approximately RMB 2,596.0 million as of June 30, 2023, up from RMB 2,233.2 million as of December 31, 2022[41] - The adjusted net debt-to-equity ratio increased to 1.89 as of June 30, 2023, compared to 1.46 as of December 31, 2022[46] - The group’s financing costs increased to RMB 65,590,000 in 2023 from RMB 49,381,000 in 2022[116] - Financing costs rose to RMB 65,590,000 from RMB 49,381,000, with bank loan interest increasing to RMB 73,546,000 from RMB 60,558,000[121] Corporate Governance - The company has complied with the corporate governance code, except for a brief period of non-compliance due to the resignation of an independent non-executive director on December 22, 2022[81] - Liu Da was appointed as an independent non-executive director and audit committee chairman on March 1, 2023, restoring compliance with the relevant listing rules[81] - All directors confirmed compliance with the standards of the code during the review period[83] - The company has maintained a commitment to good corporate governance practices to protect shareholder interests[80] Shareholder Information - The board has proposed not to declare an interim dividend for the six months ended June 30, 2023, consistent with the previous year[69] - The company declared dividends amounting to RMB 49,289 thousand for the year, reflecting a commitment to return value to shareholders[97] - The company repurchased a total of 1,960,000 shares at a total cost of approximately HKD 2.0 million (approximately RMB 1.7 million)[62] - The company repurchased its own shares for a total of RMB 1,712 thousand during the six months ended June 30, 2023, compared to RMB 2,464 thousand in the same period of 2022[101] Research and Development - The company has obtained 120 patents and has 32 patents pending as of June 30, 2023, indicating a strong focus on research and development[12] - The company aims to enhance the effectiveness of wastewater treatment and the reuse rate of treated wastewater as part of its long-term goals and social responsibility[12] - The company is actively exploring hazardous solid waste management and recycling businesses to achieve green, low-carbon, and circular development[15] - The company continues to focus on environmental protection-related businesses, leveraging broader capital markets for expansion[15]

Financial Performance - The company's revenue for the six months ended June 30, 2023, was RMB 554,251 thousand, an increase from RMB 534,953 thousand in the same period of 2022, representing a growth of approximately 3.8%[14] - The total rental income from investment properties increased to RMB 64,557 thousand, up from RMB 58,243 thousand, reflecting a growth of about 10.5%[6] - The operating profit for the period was RMB 122,206 thousand, slightly down from RMB 123,147 thousand in the previous year, indicating a decrease of approximately 0.8%[14] - The profit before tax decreased to RMB 56,616 thousand, compared to RMB 73,766 thousand in the same period last year, representing a decline of around 23.3%[14] - The net profit for the period was RMB 38,443 thousand, down from RMB 47,673 thousand, which is a decrease of approximately 19.2%[16] - Basic and diluted earnings per share were RMB 0.04, compared to RMB 0.05 in the same period of 2022, reflecting a decrease of 20%[14] - The company reported other income of RMB 10,764 thousand, slightly up from RMB 10,411 thousand, indicating an increase of about 3.4%[14] - The cost of sales increased to RMB 127,362 thousand from RMB 106,550 thousand, representing an increase of approximately 19.5%[14] - The total comprehensive income for the period was RMB 35,872 thousand, down from RMB 47,029 thousand, reflecting a decrease of approximately 23.8%[16] Assets and Liabilities - As of June 30, 2023, the total non-current assets amounted to RMB 4,059,514,000, an increase of 4.9% from RMB 3,871,144,000 as of December 31, 2022[17] - Current assets totaled RMB 665,571,000, up 32.8% from RMB 500,974,000 at the end of 2022[17] - The company's current liabilities exceeded current assets by RMB 1,022,525,000, compared to RMB 854,989,000 as of December 31, 2022, indicating a deterioration in liquidity[21] - Non-current liabilities increased to RMB 1,851,671,000 from RMB 1,650,702,000, reflecting a rise of 12.2%[23] - The net assets attributable to equity holders decreased to RMB 1,083,263,000 from RMB 1,141,404,000, a decline of 5.1%[23] - Total liabilities decreased to RMB 3,539,767,000 as of June 30, 2023, from RMB 3,006,665,000 as of December 31, 2022[34] - The group’s net current liabilities amounted to approximately RMB 1,022.5 million as of June 30, 2023, compared to RMB 855.0 million as of December 31, 2022, indicating a decrease in liquidity[169] Cash Flow and Financing - The company confirmed its ability to continue as a going concern for the next twelve months, despite the current liabilities exceeding current assets[21] - Interest income surged to RMB 1,110,000, compared to RMB 391,000 in the previous year, marking a significant increase[29] - The company incurred costs of RMB 67,634,000 for salaries, wages, and other benefits, up from RMB 61,051,000 in 2022[46] - The financing costs increased by approximately RMB 16.2 million compared to the same period last year[85] - Bank loans and other borrowings reached RMB 2,595,961,000 as of June 30, 2023, up from RMB 2,233,241,000 as of December 31, 2022, representing a growth of about 16.3%[99] Operational Highlights - The company is focused on expanding its wastewater treatment and utility services, which are subject to seasonal demand fluctuations[27] - The average daily wastewater treatment capacity is 18,500 tons, with a utilization rate of 48.3%[89] - The first phase of the East China Park is expected to commence operations in Q4 2023, adding 121,000 square meters of leasable area[95] - The group plans to expand its rental space by developing nine factory buildings in the Tianjin Binhai Park, with a total construction area of approximately 68,400 square meters, expected to be completed by December 2023[131] - The group aims to enhance its wastewater treatment capacity in the surface treatment recycling economy industrial park[130] Employee and Corporate Governance - The company had 867 full-time employees, an increase from 833 employees as of June 30, 2022, with employee costs amounting to approximately RMB 67.6 million, representing an increase of about 10.8% compared to RMB 61.1 million for the six months ended June 30, 2022[185] - The company emphasizes employee training, providing onboarding and regular in-service training to ensure performance aligns with strategic goals and operational standards[187] - The company is committed to good corporate governance practices to enhance management and protect shareholder interests[189] Market and Strategic Initiatives - The group has obtained 120 patents, with 32 patents currently under application as part of its R&D efforts[91] - The company has not engaged in any significant investments, acquisitions, or sales during the review period[199] - The group participated in seven exhibitions and eight seminars during the review period to establish customer relationships[92]

Financial Performance - The company's revenue for the year was RMB 1,095.8 million, an increase of RMB 168.0 million or 18.1% compared to the previous year[7]. - The profit attributable to equity shareholders was RMB 111.2 million, up RMB 55.3 million or 98.9% year-on-year[7]. - Revenue from leasing and facility usage increased by approximately RMB 76.7 million or 22.8% to about RMB 412.6 million compared to the previous year[40]. - The group's operating profit before tax increased from approximately RMB 788 million for the year ended December 31, 2021, to approximately RMB 152.2 million for the current year, an increase of about RMB 73.4 million[51]. - The total operating costs rose from approximately RMB 766.9 million for the year ended December 31, 2021, to approximately RMB 862.0 million, representing an increase of about RMB 95.1 million or 12.4%[62]. - The group’s profit attributable to equity shareholders increased from approximately RMB 55.9 million in 2021 to approximately RMB 111.2 million, an increase of about RMB 55.3 million[74]. - Other income increased from approximately RMB 10.8 million in 2021 to approximately RMB 24.4 million, a growth of about 125.9% primarily due to increased government subsidies and interest income[67]. - The company reported total liabilities of RMB 2,234,003,000 for non-current liabilities, an increase from RMB 1,664,714,000 in the previous year[180]. Operational Capacity - The total leasable area across four surface treatment circular economy industrial parks was approximately 1,084,000 square meters, with an overall occupancy rate of 76.5%[12]. - The wastewater treatment capacity at the Tianjin Binhai Park reached a maximum of 6,000 tons per day, with an average annual utilization rate of 34.2%, an increase of 6.1% from the previous year[14]. - The planned maximum wastewater treatment capacity for the Qingshen Park is 20,000 tons per day, which will add 5,000 tons per day to the company's overall capacity[20]. - Water treatment capacity reached 10,000 tons per day, with an average daily wastewater treatment volume of 7,307 tons, resulting in a utilization rate of 73.1%[33]. - The average daily wastewater treatment capacity reached 18,500 tons, with an annual average daily treatment volume of approximately 9,471 tons, resulting in an annual utilization rate of about 51.2%[88]. - The wastewater treatment capacity in the Huazhong area reached a maximum of 2,500 tons per day, with an annual average daily treatment volume of 112 tons and a utilization rate of 4.5%, up 3.8% from the previous year[89]. - The East China Park's planned maximum wastewater treatment capacity is 5,500 tons per day, which will enhance the group's wastewater treatment capabilities[54]. Investments and Future Plans - The first phase of the Qingshen Park is expected to officially commence operations in Q2 2023, which will increase the company's leasable area[19]. - The company plans to continue its strategic layout to promote high-quality economic development and ecological protection[27]. - The company aims to develop and operate more surface treatment recycling economy industries to capture more electroplating enterprises[36]. - The company plans to increase the available rental building area and improve wastewater treatment capacity in future investments[37]. - The construction of the East China Park's first phase, which includes 10 factories, began in April 2022 and is expected to be completed and operational by the third quarter of 2023[53]. - The construction of nine factory buildings in the Tianjin Binhai area, with a total building area of approximately 68,400 square meters, is expected to be completed by December 2023, which will increase the company's leasable area[93]. Costs and Expenses - Wastewater treatment costs rose by approximately RMB 49.2 million or 26.8% to about RMB 232.8 million due to increased leased area and higher unit prices[41]. - Steam costs increased by approximately RMB 18.7 million or 18.2% to about RMB 121.3 million, driven by higher usage and natural gas price increases[41]. - Research and development expenses increased from approximately RMB 9.6 million in 2021 to approximately RMB 10.9 million in the current year, reflecting a growth of about 13.7%[63]. - The group’s other expenses increased from approximately RMB 126.2 million in 2021 to approximately RMB 134.2 million, an increase of about RMB 8.0 million or 6.3%[67]. - The revenue from utility system maintenance increased by approximately RMB 8.5 million or 12.1% to about RMB 79.2 million due to increased electricity consumption and water usage[58]. Cash Flow and Financing - Operating cash flow for 2022 was RMB 503,374,000, an increase of 29.2% from RMB 389,757,000 in 2021[106]. - Net cash used in investing activities increased to RMB (828,067,000) from RMB (660,698,000), reflecting a 25.4% increase[106]. - Cash inflow from bank loans and other borrowings rose to RMB 1,307,389,000, up 72% from RMB 760,298,000 in the previous year[106]. - Cash outflow for bank loans and other borrowings repayment increased to RMB (734,222,000), a rise of 112.5% compared to RMB (345,264,000) in 2021[106]. - Net cash from financing activities improved to RMB 450,900,000, up 31.7% from RMB 342,665,000 in the previous year[106]. - The company's current liabilities exceeded current assets by RMB 854,989,000 as of December 31, 2022, compared to RMB 758,748,000 in 2021[109]. - The total interest-bearing loans amounted to RMB 2,233.2 million as of December 31, 2022, with a debt-to-equity ratio of approximately 163.6%, up from 134.0% in the previous year[135]. Shareholder Information - Major shareholders include Jin Chang Investment Co., Ltd. with a 44.32% stake and Jin Shang Investment Co., Ltd. with a 21.51% stake as of December 31, 2022[165]. - The company has a total of 112,000,000 share options available for issuance under the share option plan, representing 10.1% of the issued share capital[171]. - The company has pledged assets with a book value of approximately RMB 2,233.2 million as collateral for bank loans and other borrowings[182]. Employee and Training - As of December 31, 2022, the group employed 885 full-time employees, an increase from 799 in 2021, with labor costs amounting to approximately RMB 133.4 million, a 30.5% increase from RMB 102.3 million in the previous year[190]. - The company emphasizes employee training, providing onboarding and regular in-service training to align employee performance with strategic goals and operational standards[191]. Risk Management - The company is closely monitoring economic conditions that may impact tenant consumption of freshwater, steam, and utilities, which could pose challenges to its operations and financial status[91]. - The group has limited foreign currency risk as most transactions are conducted in the functional currency, but fluctuations in the HKD to RMB exchange rate may impact financial conditions[194].

[Financial Highlights and Dividends](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81%E4%B8%8E%E8%82%A1%E6%81%AF) The company achieved significant financial growth in FY2022, with revenue and profit attributable to equity holders increasing substantially, alongside a proposed final dividend [Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) The company achieved comprehensive growth in FY2022, with revenue increasing by **18.1%** to **RMB 1.1 billion** and profit attributable to equity holders surging by **98.9%** to **RMB 111 million** FY2022 Financial Highlights (vs. FY2021) | Item | For the year ended December 31, 2022 (RMB thousands) | For the year ended December 31, 2021 (RMB thousands) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 1,095,791 | 927,750 | +18.1% | | Profit from operations | 253,671 | 170,164 | +49.1% | | Profit attributable to equity holders of the Company | 111,235 | 55,915 | +98.9% | | Basic earnings per share (RMB) | 0.10 | 0.05 | +100.0% | | Total assets | 4,372,118 | 3,535,446 | +23.7% | | Net assets | 1,365,453 | 1,241,635 | +10.0% | | Operating profit margin | 23.1% | 18.3% | +4.8pp | | Net profit margin | 9.9% | 5.1% | +4.8pp | [Dividend Policy](index=1&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board resolved to declare a final dividend of **HK 5 cents per share** for FY2022, subject to shareholder approval, with no dividend declared in 2021 - The Board resolved to declare a final dividend of **HK 5 cents per share** (approximately **RMB 4.5 cents**), with no final dividend distributed in 2021[28](index=28&type=chunk) - The proposed final dividend is approximately **HKD 55.65 million** (equivalent to approximately **RMB 49.712 million**), payable around June 30, 2023, subject to shareholder approval[115](index=115&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) The company reported significant revenue and profit growth in 2022, with total assets expanding, though net current liabilities also increased [Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) In 2022, revenue increased by **18.1%** to **RMB 1.1 billion**, with profit from operations surging **49.1%** to **RMB 254 million**, and profit attributable to equity holders growing **98.9%** to **RMB 111 million** Key Items from Consolidated Statement of Profit or Loss (RMB thousands) | Item | For the year ended December 31, 2022 | For the year ended December 31, 2021 | | :--- | :--- | :--- | | Revenue | 1,095,791 | 927,750 | | Profit from operations | 253,671 | 170,164 | | Profit before tax | 152,211 | 78,799 | | Profit for the year | 108,705 | 47,764 | | Profit attributable to equity holders | 111,235 | 55,915 | | Basic and diluted earnings per share (RMB) | 0.10 | 0.05 | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of year-end 2022, total assets grew **23.7%** to **RMB 4.37 billion**, driven by non-current assets, while total equity increased to **RMB 1.37 billion**, and net current liabilities expanded to **RMB 855 million** Consolidated Statement of Financial Position Summary (RMB thousands) | Item | As at December 31, 2022 | As at December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 3,871,144 | 3,185,152 | | Current assets | 500,974 | 350,294 | | **Total assets** | **4,372,118** | **3,535,446** | | **Liabilities and Equity** | | | | Current liabilities | 1,355,963 | 1,109,042 | | Non-current liabilities | 1,650,702 | 1,184,769 | | **Total liabilities** | **3,006,665** | **2,293,811** | | **Total equity** | **1,365,453** | **1,241,635** | | Net current liabilities | (854,989) | (758,748) | [Notes to the Financial Statements](index=6&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) The financial statements are prepared under HKFRS, with detailed notes on accounting policies, segment performance, profit before tax items, taxation, earnings per share, asset composition, and liability structure [Significant Accounting Policies](index=6&type=section&id=%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The financial statements are prepared in accordance with applicable Hong Kong Financial Reporting Standards, and despite net current liabilities of **RMB 855 million** at year-end 2022, the Board confirms the Group's ability to continue as a going concern - The financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards[34](index=34&type=chunk) - Despite the Group's current liabilities exceeding current assets by **RMB 855 million** as of December 31, 2022, the Board has confirmed the Group has sufficient resources to continue as a going concern[35](index=35&type=chunk) [Revenue and Segment Reporting](index=7&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A) The Group operates in three reportable segments: Leasing and Facility Usage, Wastewater Treatment and Utilities, and Sales of Goods and Ancillary Services, with total revenue growing **18.1%** to **RMB 1.1 billion** in 2022, and all segments showing increased revenue and adjusted EBITDA - The Group's principal activities are categorized into three reportable segments: Leasing and Facility Usage, Wastewater Treatment and Utilities, and Sales of Goods and Ancillary Services[22](index=22&type=chunk)[41](index=41&type=chunk)[58](index=58&type=chunk) Revenue by Business Segment (RMB thousands) | Business Segment | 2022 | 2021 | | :--- | :--- | :--- | | Leasing and Facility Usage | 412,554 | 335,863 | | Wastewater Treatment and Utilities | 433,322 | 356,900 | | Sales of Goods and Ancillary Services | 249,915 | 234,987 | | **Total** | **1,095,791** | **927,750** | Reportable Segment Profit (Adjusted EBITDA) by Business Segment (RMB thousands) | Business Segment | 2022 | 2021 | | :--- | :--- | :--- | | Leasing and Facility Usage | 397,824 | 269,577 | | Wastewater Treatment and Utilities | 88,552 | 114,235 | | Sales of Goods and Ancillary Services | 14,752 | 15,276 | | **Total** | **501,128** | **399,088** | [Profit Before Tax Items](index=11&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9%E9%A1%B9%E7%9B%AE) Profit before tax in 2022 was **RMB 152 million**, with significant increases in finance costs to **RMB 101 million**, staff costs by **30.5%** to **RMB 133 million**, and depreciation and amortization to **RMB 219 million** Finance Costs (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 125,199 | 103,381 | | Less: Interest expenses capitalized | (23,787) | (12,074) | | **Total** | **101,460** | **91,365** | Staff Costs (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Salaries, wages and other benefits | 122,863 | 93,821 | | Retirement scheme contributions | 10,541 | 8,430 | | **Total** | **133,404** | **102,251** | Other Major Cost Items (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Depreciation and amortization | 219,213 | 203,637 | | Cost of inventories | 342,189 | 309,383 | | Utility costs | 32,930 | 25,423 | [Income Tax](index=14&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) Income tax expense for 2022 increased by **40.2%** to **RMB 43.506 million**, with three Chinese subsidiaries benefiting from a **15% preferential tax rate** as high-tech enterprises, reducing tax by **RMB 13.596 million** - The statutory income tax rate for the Group's Chinese subsidiaries is **25%**[174](index=174&type=chunk) - Huizhou Jinmaoyuan, Tianjin Bingang, and Jingzhou Jinyuan, as high-tech enterprises, enjoyed a **15% preferential tax rate**, reducing income tax by a total of **RMB 13.596 million** in 2022[176](index=176&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - Certain Group subsidiaries are eligible for additional pre-tax deductions for R&D expenses, which reduced income tax by **RMB 5.357 million** in 2022[177](index=177&type=chunk)[196](index=196&type=chunk) [Earnings Per Share and Dividends](index=15&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E4%B8%8E%E8%82%A1%E6%81%AF) Basic earnings per share doubled to **RMB 0.10** in 2022 due to a significant increase in profit attributable to equity holders, and the Board proposed a final dividend of **HK 5 cents per share** Basic Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | Profit attributable to equity holders (RMB thousands) | 111,235 | 55,915 | | Weighted average number of ordinary shares (thousands) | 1,116,457 | 1,119,995 | | **Basic earnings per share (RMB)** | **0.10** | **0.05** | - The Board proposed a final dividend of **HKD 0.05 per ordinary share**, compared to zero in 2021[198](index=198&type=chunk) [Asset Analysis](index=16&type=section&id=%E8%B5%84%E4%BA%A7%E5%88%86%E6%9E%90) As of year-end 2022, the Group's property, plant, and equipment had a carrying value of **RMB 1.57 billion**, and investment properties had a carrying value of **RMB 1.31 billion** (fair value **RMB 2.39 billion**), with substantial assets pledged as collateral for bank loans - As of December 31, 2022, the Group acquired **RMB 269 million** in property, plant, and equipment, and **RMB 472 million** in investment properties[181](index=181&type=chunk)[182](index=182&type=chunk) - As of year-end 2022, property, plant and equipment, investment properties, and land use rights with a total carrying value of **RMB 2.15 billion** were pledged as collateral for the Group's bank loans and other borrowings[141](index=141&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Liability Analysis](index=18&type=section&id=%E8%B4%9F%E5%80%BA%E5%88%86%E6%9E%90) As of year-end 2022, the Group's total bank loans and other borrowings increased from **RMB 1.66 billion** to **RMB 2.23 billion**, with **RMB 686 million** due within one year, and most borrowings are secured, guaranteed, and at floating rates, while trade payables also increased Maturity Profile of Bank Loans and Other Borrowings (RMB thousands) | Maturity | 2022 | 2021 | | :--- | :--- | :--- | | Within 1 year or on demand | 685,585 | 574,883 | | After 1 year but within 2 years | 461,885 | 274,034 | | After 2 years but within 5 years | 731,115 | 617,638 | | After 5 years | 354,656 | 197,476 | | **Total** | **2,233,241** | **1,664,031** | - As of year-end 2022, **RMB 2.13 billion** of the **RMB 2.23 billion** in bank loans and other borrowings were secured and guaranteed bank loans[238](index=238&type=chunk) - The majority of bank loans and other borrowings are guaranteed by the Company's directors, their relatives, or non-controlling shareholders, and secured by certain Group assets[75](index=75&type=chunk)[239](index=239&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) The Group's 2022 performance saw revenue growth across all segments, driven by increased rental and utility usage, while operating costs also rose, leading to improved operating profit margins but higher leverage, with significant capital commitments for ongoing expansion [Business Review and Outlook](index=21&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE%E4%B8%8E%E5%B1%95%E6%9C%9B) In 2022, the Group operated four surface treatment circular economy industrial parks in China, achieving an **18.1%** increase in total revenue, with overall occupancy at **76.5%** and wastewater treatment utilization at **51.2%**, and plans for future expansion driven by favorable national policies Occupancy Rates by Industrial Park (As at December 31, 2022) | Industrial Park | Total Leasable Area (sqm) | Total Leased Area (sqm) | Occupancy Rate | | :--- | :--- | :--- | :--- | | Guangdong Huizhou | 501,000 | 474,000 | 94.6% | | Tianjin Bingang | 329,000 | 302,000 | 91.8% | | Central China | 143,000 | 47,000 | 32.9% | | Qingshen | 111,000 | 6,000 | 5.4% | | **Total** | **1,084,000** | **829,000** | **76.5%** | Wastewater Treatment Capacity and Utilization Rate (2022) | Metric | Guangdong Huizhou | Tianjin Bingang | Central China | Total | | :--- | :--- | :--- | :--- | :--- | | Daily Wastewater Treatment Capacity (tons) | 10,000 | 6,000 | 2,500 | 18,500 | | Annual Average Daily Treatment Volume (tons) | 7,307 | 2,052 | 112 | 9,471 | | Annual Average Utilization Rate | 73.1% | 34.2% | 4.5% | 51.2% | - National policies promoting higher entry rates for professional electroplating enterprises into industrial parks present growth opportunities, with the Group planning to expand leasable area and wastewater treatment capacity through new park developments like Qingshen and East China[83](index=83&type=chunk)[145](index=145&type=chunk)[216](index=216&type=chunk) [Operating Performance Analysis](index=27&type=section&id=%E7%BB%8F%E8%90%A5%E4%B8%9A%E7%BB%A9%E5%88%86%E6%9E%90) Total revenue in 2022 increased by **18.1%** to **RMB 1.1 billion**, with all business segments growing, including **22.8%** growth in leasing and facility usage, **21.4%** in wastewater treatment and utilities, and **6.4%** in sales of goods and ancillary services - Revenue from leasing and facility usage services increased by **22.8%** to **RMB 413 million**, primarily due to an increase in average leased area and higher unit rental prices[88](index=88&type=chunk) - Wastewater treatment fee revenue increased by **26.8%** to **RMB 233 million**, mainly due to increased freshwater consumption from larger leased areas and higher unit treatment fees[89](index=89&type=chunk) - Steam fee revenue increased by **18.2%** to **RMB 121 million**, primarily due to increased steam consumption and temporary price adjustments due to rising natural gas costs[89](index=89&type=chunk) - Consumables sales revenue grew to **RMB 218 million**, mainly driven by improved chemical quality, increased tenant orders, and higher unit selling prices[91](index=91&type=chunk) [Operating Cost Analysis](index=29&type=section&id=%E8%90%A5%E8%BF%90%E6%88%90%E6%9C%AC%E5%88%86%E6%9E%90) Total operating costs in 2022 increased by **12.4%** to **RMB 862 million**, with significant increases in cost of inventories by **10.6%**, staff costs by **30.5%**, utility costs by **29.5%**, and depreciation and amortization by **7.6%** - Cost of inventories: Increased by **10.6%** to **RMB 342 million**, due to higher sales volume and increased unit cost of raw materials[226](index=226&type=chunk) - Depreciation and amortization: Increased by **7.6%** to **RMB 219 million**, due to newly added operational investment properties and plant and equipment[147](index=147&type=chunk) - Staff costs: Increased by **30.5%** to **RMB 133 million**, due to an increase in employee headcount and salary adjustments for business development[93](index=93&type=chunk) - Utility costs: Increased by **29.5%** to **RMB 32.9 million**, due to increased wastewater treatment volume and water and electricity consumption from larger leased areas[119](index=119&type=chunk) [Financial Position Analysis](index=32&type=section&id=%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) Driven by revenue growth, operating profit increased by **49.1%** to **RMB 254 million** in 2022, with the operating profit margin rising from **18.3%** to **23.1%**, while finance costs increased by **11.0%**, and net current liabilities expanded to **RMB 855 million**, with the adjusted net debt-to-equity ratio increasing to **1.46** - Profit from operations increased by **49.1%** to **RMB 254 million**, with the operating profit margin rising from **18.3%** to **23.1%**[121](index=121&type=chunk) - Finance costs increased by **11.0%** to **RMB 101 million**, primarily due to an increase in the average balance of bank loans[285](index=285&type=chunk) Adjusted Net Debt-to-Equity Ratio | Item (RMB thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total liabilities (borrowings and lease liabilities) | 2,234,003 | 1,664,714 | | Less: Cash and deposits | (238,754) | (115,302) | | **Adjusted net debt** | **1,995,249** | **1,549,412** | | Total equity | 1,365,453 | 1,241,635 | | **Adjusted net debt-to-equity ratio** | **1.46** | **1.25** | [Significant Investments and Capital Commitments](index=38&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E4%B8%8E%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) In 2022, the Group entered into several significant construction agreements for projects including the East China Park, Tianjin Bingang Park, and Taixing Economic Development Zone, with total contracted but unpaid capital expenditures amounting to approximately **RMB 390 million** at year-end, primarily for plant and wastewater treatment facilities - During the year, the Group entered into several significant construction agreements for plant construction in Taixing Economic Development Zone and Tianjin Bingang Park[269](index=269&type=chunk)[130](index=130&type=chunk)[294](index=294&type=chunk) - As of December 31, 2022, the Group's contracted but unpaid capital expenditures amounted to approximately **RMB 390 million** (2021: **RMB 344 million**)[271](index=271&type=chunk) [Corporate Governance and Other Matters](index=41&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E4%B8%8E%E5%85%B6%E4%BB%96%E4%BA%8B%E9%A1%B9) The company maintained high corporate governance standards, addressed a temporary non-compliance issue, executed share repurchases to enhance shareholder value, and completed a significant post-period acquisition to increase its stake in a key subsidiary [Corporate Governance](index=41&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company is committed to high corporate governance standards, having complied with the Corporate Governance Code in 2022, with a temporary non-compliance regarding independent non-executive directors resolved post-year-end, and the Audit Committee having reviewed the annual results - Due to the resignation of independent non-executive director Mr. Li Yinquan on December 22, 2022, the company temporarily failed to comply with listing rules regarding the number of independent non-executive directors and the composition of the Audit Committee[299](index=299&type=chunk) - On March 1, 2023, Mr. Liu Da was appointed as an independent non-executive director and Chairman of the Audit Committee, bringing the company back into compliance with relevant listing rules[110](index=110&type=chunk) - The Audit Committee has reviewed the Group's annual results for the current year[151](index=151&type=chunk) [Share Repurchases](index=42&type=section&id=%E8%82%A1%E4%BB%BD%E5%9B%9E%E8%B4%AD) To enhance shareholder value, the company repurchased **8,724,000 shares** on the Stock Exchange in 2022 for approximately **HKD 8.8 million**, with **6,986,000** of these shares subsequently cancelled - In 2022, the company repurchased a total of **8,724,000 shares** on the Stock Exchange at a total cost of approximately **HKD 8.8 million** (equivalent to approximately **RMB 7.86 million**)[136](index=136&type=chunk) - The company believes that share repurchases enhance net asset value per share and/or earnings per share, aligning with shareholders' best interests[136](index=136&type=chunk) - The company cancelled **1,412,000 shares** and **5,574,000 shares** of repurchased stock in May and October 2022, respectively[112](index=112&type=chunk) [Events After Reporting Period](index=43&type=section&id=%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) Subsequent to December 31, 2022, a significant transaction occurred on February 20, 2023, where a company subsidiary agreed to acquire an additional **38.72% equity stake** in Tianjin Bingang for approximately **RMB 194 million**, increasing the company's total ownership to **89.72%** - On February 20, 2023, a company subsidiary entered into an equity transfer agreement to acquire an additional **38.72% equity interest** in Tianjin Bingang for approximately **RMB 193.6 million**[277](index=277&type=chunk) - Upon completion of the acquisition, the company's equity interest in Tianjin Bingang will increase from **51%** to **89.72%**[277](index=277&type=chunk)

Financial Performance - The company's revenue for the six months ended June 30, 2022, was approximately RMB 535.0 million, an increase of about RMB 101.9 million compared to RMB 433.0 million for the same period in 2021[13]. - Profit attributable to equity shareholders for the same period was approximately RMB 52.6 million, up by RMB 15.8 million from RMB 36.9 million in the previous year[13]. - The group's revenue for the review period was approximately RMB 535.0 million, representing an increase of about 23.5% compared to the same period in 2021, driven by growth across all three business segments[41]. - Revenue from leasing and facility services increased by approximately RMB 44.2 million or 27.7% to RMB 203.8 million compared to RMB 159.6 million for the six months ended June 30, 2021[46]. - Wastewater treatment fees rose by approximately RMB 22.2 million or 26.5% to RMB 105.8 million from RMB 83.6 million for the six months ended June 30, 2021[48]. - Steam fees increased by approximately RMB 10.9 million or 22% to RMB 60.2 million from RMB 49.4 million for the six months ended June 30, 2021[49]. - Sales of goods and raw materials increased by approximately RMB 23.9 million or 26.3% to RMB 115.0 million from RMB 91.0 million for the six months ended June 30, 2021[51]. - Operating profit increased by approximately RMB 38.2 million or 45.0% to about RMB 123.1 million, with the operating profit margin rising from 19.6% to 23.0%[65]. - Profit before tax increased by approximately RMB 29.3 million to about RMB 73.8 million, driven by the factors mentioned above[70]. - Net profit attributable to equity shareholders was RMB 52,632,000, compared to RMB 36,857,000 in 2021, marking an increase of 42.7%[158]. - Total comprehensive income for the period was RMB 47,029,000, compared to RMB 30,977,000 in 2021, reflecting a growth of 51.9%[163]. Operational Highlights - The total leasable area across three strategic surface treatment circular economy industrial parks was approximately 855,000 square meters, with an overall occupancy rate of 89.0%[17]. - The occupancy rates for the Guangdong Huizhou, Tianjin Binhai, and Jingzhou parks were 93.3%, 91.2%, and 51.4%, respectively[21]. - The company processed an average daily wastewater treatment volume of 8,961 tons, with a utilization rate of 48.4%[22]. - The group's daily wastewater treatment capacity reached approximately 18,500 tons, with an average daily treatment volume of about 8,961 tons and a utilization rate of approximately 48.4% as of June 30, 2022[23]. - The Qing Shen Park project is expected to increase the group's wastewater treatment capacity by 5,000 tons per day upon completion in Q3 2022, with a planned maximum capacity of 20,000 tons per day[34]. - The Hua Dong Park project is projected to add 5,500 tons per day to the group's wastewater treatment capacity upon completion in Q3 2023, with a maximum planned capacity of 5,500 tons per day[34]. - The group plans to increase the maximum wastewater treatment capacity at the Guangdong Huizhou Park from 10,000 tons to 15,000 tons per day, pending government approval[34]. - The total building area available for lease in the Qing Shen Park is planned to be 676,000 square meters, with the first phase expected to add 134,000 square meters upon completion in Q3 2022[35]. - The Hua Dong Park's first phase is expected to add 121,000 square meters of leaseable area upon completion in Q3 2023[36]. Financial Position - As of June 30, 2022, total bank loans and borrowings amounted to approximately RMB 1,897.5 million, with a capital debt ratio of about 145.9%[84]. - The company's net debt stood at RMB 1,778.4 million as of June 30, 2022, an increase from RMB 1,549.4 million as of December 31, 2021[91]. - The adjusted net debt-to-equity ratio increased to 1.37 as of June 30, 2022, compared to 1.25 as of December 31, 2021[91]. - The company reported cash and cash equivalents of RMB 80.5 million as of June 30, 2022, down from RMB 112.2 million as of December 31, 2021[91]. - The total current liabilities decreased to RMB 1,091.9 million from RMB 1,109.0 million, resulting in a net current liability of RMB 728.8 million, down from RMB 758.7 million[86]. - The company's equity attributable to shareholders reached RMB 1,087,531 thousand, up from RMB 1,038,776 thousand, representing a growth of 4.7%[174]. Costs and Expenses - Total operating costs increased by approximately RMB 70.8 million or 20.1% to RMB 422.8 million from RMB 352.0 million for the six months ended June 30, 2021[55]. - Employee costs increased by approximately RMB 15.9 million or 34.9% to RMB 61.1 million from RMB 45.2 million for the six months ended June 30, 2021[58]. - Inventory costs rose by approximately RMB 41.4 million or 30.5% to RMB 176.9 million from RMB 135.5 million for the six months ended June 30, 2021[57]. - Other expenses increased by approximately RMB 1.5 million or 2.4% to about RMB 63.2 million compared to RMB 61.7 million for the six months ended June 30, 2021, primarily due to increased other taxes and professional service fees[63]. Future Outlook - The company plans to continue expanding its market presence and enhancing its environmental technology services[14]. - The company plans to continue expanding its leasing and facility services to drive future growth[46]. - The company plans to continue as a going concern based on future cash flow forecasts and financing capabilities[196]. - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[171]. Corporate Governance - The board recommended not to declare an interim dividend for the six months ended June 30, 2022, consistent with the previous year[121]. - The board of directors has confirmed compliance with the corporate governance code during the review period[146]. - The audit committee, established on June 18, 2019, oversees the financial reporting process and internal controls, ensuring compliance with relevant regulations[152]. Employee Information - As of June 30, 2022, the company had 833 full-time employees, an increase from 687 full-time employees as of June 30, 2021[115]. - Employee costs, including director remuneration, amounted to approximately RMB 61.1 million, representing an increase of about 34.9% compared to RMB 45.2 million for the six months ended June 30, 2021[115]. - The company has implemented various employee welfare plans, including basic medical insurance and unemployment insurance as per local regulations[119].

Financial Performance - The company recorded revenue of RMB 927.8 million for the year ended December 31, 2021, an increase of RMB 203.0 million or 28.0% compared to the previous year[13]. - The profit attributable to shareholders decreased to RMB 55.9 million, a decline of RMB 46.7 million or 45.5%, primarily due to rising material costs, increased depreciation, and higher financing costs[13]. - The company's revenue for the year was approximately RMB 927.8 million, an increase of about 28.0% compared to RMB 724.7 million in 2020[21]. - The profit attributable to equity shareholders was approximately RMB 55.9 million, a decrease of about 45.5% from RMB 102.6 million in 2020[21]. - Revenue from leasing and facility usage services increased by 19.8% to approximately RMB 335.9 million, attributed to an increase in the average daily rented area[55]. - Wastewater treatment fees increased from approximately RMB 151.9 million for the year ended December 31, 2020, to approximately RMB 183.6 million, representing a growth of RMB 31.8 million or 20.9%[57]. - Steam fees rose from approximately RMB 82.8 million for the year ended December 31, 2020, to approximately RMB 102.6 million, an increase of RMB 19.8 million or 23.9%[58]. - Utility system maintenance fees increased from approximately RMB 59.3 million for the year ended December 31, 2020, to approximately RMB 70.7 million, reflecting a rise of RMB 11.4 million or 19.2%[59]. - Sales of consumables surged from approximately RMB 126.6 million for the year ended December 31, 2020, to approximately RMB 204.5 million, an increase of RMB 77.9 million[62]. - Operating costs rose to approximately RMB 766.9 million, with significant increases in depreciation and amortization costs, which grew from approximately RMB 168.4 million to approximately RMB 203.6 million, a rise of RMB 35.2 million or 20.9%[63][64]. - Employee costs rose from approximately RMB 69.3 million to approximately RMB 102.3 million, an increase of 47.6%[66]. - Operating profit decreased from approximately RMB 173.3 million to approximately RMB 170.2 million, a decline of RMB 3.2 million or 1.8%[75]. - Financing costs surged from approximately RMB 52.9 million to approximately RMB 91.4 million, an increase of RMB 38.4 million or 72.6%[77]. - The group acquired properties, plants, and equipment at a cost of approximately RMB 392.0 million for the year ended December 31, 2021, compared to RMB 402.2 million for the year ended December 31, 2020[83]. - Investment properties were purchased at a cost of approximately RMB 120.7 million, with an additional RMB 9.6 million transferred from right-of-use assets for the year ended December 31, 2021, down from RMB 163.5 million in 2020[84]. - The balance of construction in progress increased by approximately RMB 13.3 million to RMB 376.6 million as of December 31, 2021, primarily due to an increase of RMB 509.0 million for the development of investment properties and wastewater treatment facilities[85]. - As of December 31, 2021, the group's current assets were RMB 350.3 million, while current liabilities were RMB 1,109.0 million, resulting in a net current liability of approximately RMB 758.7 million[88]. - The total borrowings and other debts amounted to RMB 1,664.0 million as of December 31, 2021, an increase from RMB 1,248.997 million in 2020[91]. - The group's debt-to-equity ratio was approximately 134.0% as of December 31, 2021, compared to 107.2% in 2020[92]. - Capital expenditures for the year were approximately RMB 627.6 million, up from RMB 536.3 million in 2020, primarily for the acquisition of investment properties and equipment[98]. - The group had pledged assets with a carrying value of approximately RMB 725.2 million and RMB 291.7 million in land use rights as collateral for bank loans and other borrowings totaling approximately RMB 1,664.0 million[99]. - As of December 31, 2021, the company's distributable reserves amounted to approximately RMB 506,870,000, a decrease from RMB 532,617,000 as of December 31, 2020[180]. - The company repurchased a total of 140,000 shares at a total cost of HKD 126,480, equivalent to approximately RMB 103,410, enhancing shareholder value[182]. Operational Developments - The company has commenced construction of the Qing Shen Surface Treatment Circular Economy Industrial Park, expected to start operations in the second half of 2022, with 16 tenants already signed up[14]. - The company aims to enhance its wastewater treatment capabilities and expand its operations in regions with high demand for surface treatment services, focusing on the core business of electroplating wastewater treatment[14]. - The company plans to consider expanding into hazardous waste treatment and electroplating equipment businesses to increase revenue and improve cash flow[14]. - The total leasable area across three surface treatment circular economy industrial parks was 804,000 square meters, with an overall occupancy rate of 90.4%, up from 89.1% in 2020[24]. - The Guangdong Huizhou Park had a 100.0% occupancy rate, while the Tianjin Binhai Park had an occupancy rate of 86.8% and the Huazhong Park had 48.6%[24]. - The total daily wastewater treatment capacity reached 18,500 tons, with an average daily treatment volume of approximately 9,115 tons, resulting in an average utilization rate of 49.3%[32]. - The average daily wastewater treatment capacity utilization for the Guangdong Huizhou Park was 74.1%, an increase of 8.3 percentage points compared to 2020[32]. - The company holds 83 registered patents and has 15 patents pending as part of its commitment to improving wastewater treatment effectiveness and reuse rates[34]. - The company participated in five exhibitions and nine seminars during the year to establish customer relationships[35]. - The company plans to increase the wastewater treatment capacity in Guangdong Huizhou from 10,000 tons per day to 15,000 tons per day, with the application currently under review by local government[40]. - The construction of the Qing Shen Industrial Park has commenced, with a planned maximum wastewater treatment capacity of 20,000 tons per day, and the first phase expected to handle 5,000 tons per day upon completion[40]. - The company has successfully acquired land rights for two plots totaling 129,747 square meters in Jiangsu Taixing for the establishment of a new surface treatment circular economy industrial park[39]. - The company aims to expand its rental building area by constructing additional factories in Guangdong Huizhou, with the first phase involving four buildings totaling approximately 48,000 square meters[43]. - The company has initiated the construction of the East China Industrial Park, which will have a maximum wastewater treatment capacity of 5,500 tons per day[40]. - The company is committed to developing more surface treatment circular economy industrial parks to enhance revenue through increased customer acquisition[39]. - The total planned rental building area for the Qing Shen Industrial Park is 676,000 square meters, with the first phase expected to be operational by June 30, 2022[43]. - The company is utilizing internal resources and/or bank loans to fund the expansion of its existing surface treatment circular economy industrial parks[44]. - The company has entered into a 20-year lease agreement for a plot of land in Tianjin, along with related environmental service contracts, to expand its operations[104]. - The company successfully acquired land use rights for approximately 84,220 square meters in Sichuan Province, as part of its strategy to develop a surface treatment circular economy industrial park[109]. - An investment agreement was signed for a joint venture with an initial registered capital of RMB 220 million, aimed at constructing a circular economy industrial park in Jiangsu Province[111]. - The company secured land use rights for two plots totaling approximately 129,747 square meters in Jiangsu Province through a public tender[114]. - A transfer agreement was made for the sale of wastewater treatment facilities for RMB 37 million, along with a leaseback agreement for RMB 39.2 million over two years[115]. Employee and Governance - As of December 31, 2021, the company had 799 full-time employees, an increase of approximately 33% from 602 employees in 2020[116]. - Employee costs, including director remuneration, amounted to RMB 102.3 million, representing a significant increase of approximately 476% compared to RMB 69.3 million for the year ended December 31, 2020[116]. - The group's compensation policy is based on employee performance, qualifications, and overall business performance[198]. - No compensation was paid to any directors or the five highest-paid individuals as bonuses for joining or as severance during the year[199]. - No directors waived or agreed to waive any compensation during the year[200]. - The board consists of seven directors, including four executive directors and three independent non-executive directors, ensuring a diverse governance structure[128]. - Mr. Li Xujian has over 43 years of experience in overall business management and oversees the financial management of Huizhou Jinmao Industrial Investment Co., Ltd.[130]. - Mr. Huang Shaobo, the Chief Financial Officer, has over 28 years of experience in accounting, asset evaluation, and M&A consulting, contributing to the group's financial planning and corporate development[134]. - The company has appointed independent non-executive directors with extensive legal and financial backgrounds, enhancing governance and independent advice to the board[135][141]. - The board includes members with significant experience in public service and corporate governance, ensuring a diverse and knowledgeable leadership team[137][143]. - The financial management team has a strong background in both domestic and international markets, enhancing the company's strategic positioning[142]. - The independent directors provide critical oversight and strategic guidance, ensuring the company's long-term sustainability and compliance[135][141]. - The company emphasizes employee training and has implemented an employee stock option plan to incentivize and reward eligible directors and employees[116]. Risk Management and Compliance - The company faces compliance risks related to environmental, safety, and health laws in China, which may require significant upgrades to wastewater treatment technologies and facilities[161]. - The company requires substantial funding for the establishment of surface treatment circular economy industrial parks, and any failure to secure sufficient funding could adversely affect its financial condition and future prospects[162]. - The company has limited foreign currency risk as most transactions are conducted in the functional currency, with no need for foreign currency hedging policies due to minimal potential impact from exchange rate fluctuations[120]. - Interest rate risk primarily arises from floating-rate bank loans, which the management closely monitors to manage the company's exposure[121]. - Credit risk is limited due to trade receivables, with deposits collected from customers to mitigate potential credit risks[122]. - The company maintains a policy of regular monitoring of its liquidity needs and compliance with borrowing covenants to ensure sufficient cash reserves[123]. - The company has complied with relevant laws and regulations that significantly impact its operations and has not identified any major legal or regulatory issues affecting its business[164]. - The company is committed to monitoring changes in environmental, safety, and health laws and regulations, providing regular internal training for employees[161]. - The company's financial performance and future outlook may be significantly affected by market downturns in the electroplating industry[157]. Corporate Social Responsibility - The company is committed to sustainable development in line with national strategies for carbon neutrality and aims to improve ecological environments while reducing industrial wastewater pollution[17]. - The company emphasizes the importance of high-standard wastewater treatment capabilities to attract surface treatment enterprises to its qualified parks[17]. - The board expresses gratitude to employees, customers, suppliers, and investors for their ongoing support and contributions to the company's steady development[17]. - The company has been recognized for its contributions to community and industry, with board members receiving awards for outstanding achievements[138]. - The company made charitable donations totaling RMB 35,000 during the year[181]. - The company is committed to environmental sustainability and has not encountered any non-compliance with relevant laws and regulations in its operations[173]. - The company aims to promote high-quality economic development and ecological protection through strategic planning and capital market engagement[173]. - The company has established close relationships with employees, customers, and business partners to drive sustainable development[170]. - The company will disclose further details regarding its environmental policies and performance in the upcoming annual environmental, social, and governance report[174].

Kimou Environmental Holding Limited 金 茂 源 環 保 控 股 有 限 公 司 (於開曼群島註冊成立的有限公司) 股份代號 : 6805 明報告 目 錄 2 18 26 4 22 23 24 28 30 45 綜合損益及其他全面收益表 綜合財務狀況表 綜合損益表 綜合權益變動表 公司資料 管理層討論及分析 企業管治及其他資料 簡明綜合現金流量表 未經審核中期財務報告附註 致董事會之審閱報告 公司資料 | --- | --- | --- | --- | --- | --- | |-------------------------------------------|-------|-------|--------------------------------------|-------|-------| | | | | | | | | 上市地點 | | | 公司秘書 | | | | 香港聯合交易所有限公司 | | | 嚴洛鈞先生 | | | | 股份代號 | | | 授權代表 | | | | 6805 | | | 張梁洪先生 | | | | | | | 李旭江先生 | | ...