Student Enrollment and Education Services - The total number of full-time students in the group’s schools for the 2021/2022 academic year was 25,797[17] - The average tuition fees for Lingnan Vocational Technical College and Lingnan Modern Technician College were RMB 16,429 and RMB 10,838, respectively[17] - The average boarding fees for the two colleges were RMB 1,641 and RMB 1,586, respectively[17] - The group operates two schools in the Guangdong-Hong Kong-Macao Greater Bay Area, focusing on vocational education and training[11] - The company emphasizes the positive policy environment for vocational education, highlighting government support for the sector[18] - The group aims to enhance its educational offerings by integrating industry and education, promoting school-enterprise cooperation[18] - The company plans to develop high-level vocational colleges and programs to meet the growing demand for skilled talent[18] - The group is positioned to benefit from the implementation of the Private Education Promotion Law, which encourages investment in vocational education[18] - The company is committed to expanding its educational services, including continuing education and vocational skills certification training[15] - The company is committed to developing vocational education in the Guangdong-Hong Kong-Macao Greater Bay Area, which contributed 11.0% of China's nominal GDP in 2021 despite accounting for less than 1% of the country's land area[26] Financial Performance - The company's revenue decreased by approximately 7.5% from about RMB 286.0 million for the six months ended June 30, 2021, to about RMB 264.5 million for the six months ended June 30, 2022, primarily due to a reduction in full-time student enrollment at Lingnan Vocational Technical College[34] - Gross profit decreased by approximately 13.1% from about RMB 141.4 million for the six months ended June 30, 2021, to about RMB 122.9 million for the reporting period, with the gross profit margin declining from approximately 49.4% to about 46.4%[36] - Other income and gains decreased by approximately 45.4% from about RMB 54.4 million for the six months ended June 30, 2021, to about RMB 29.7 million for the six months ended June 30, 2022, primarily due to a reduction in rental income and gains from property sales[37] - Profit for the period decreased by approximately 26.8% from RMB 1,265 million for the six months ended June 30, 2021, to RMB 927 million for the six months ended June 30, 2022[45] - Adjusted net profit decreased by approximately RMB 416 million or 31.0% compared to the same period last year, with an adjusted net profit margin declining from approximately 47.0% to 35.0%[46] - Revenue for the six months ended June 30, 2022, was RMB 264,548,000, a decrease of 7.5% compared to RMB 286,045,000 for the same period in 2021[110] - Gross profit for the same period was RMB 122,857,000, down 13.1% from RMB 141,421,000 in 2021[110] - Net profit for the period was RMB 92,663,000, down 26.8% compared to RMB 126,530,000 in 2021[110] Expenses and Costs - The cost of sales decreased by approximately 2.0% from about RMB 144.6 million for the six months ended June 30, 2021, to about RMB 141.7 million for the six months ended June 30, 2022, mainly due to a reduction in employee costs[35] - Sales and distribution expenses increased by approximately 2.4% from RMB 84 million for the six months ended June 30, 2021, to RMB 86 million for the six months ended June 30, 2022, primarily due to increased recruitment costs at Lingnan Modern Vocational Technical College[40] - Administrative expenses decreased by approximately 11.3% from RMB 389 million for the six months ended June 30, 2021, to RMB 345 million for the six months ended June 30, 2022, mainly due to a reduction in listing expenses by RMB 78 million[41] - Other expenses decreased by approximately 21.2% from RMB 104 million for the six months ended June 30, 2021, to RMB 82 million for the six months ended June 30, 2022, primarily due to reduced rental income costs from terminated leases[42] - Financing costs decreased by approximately 20.2% from RMB 94 million for the six months ended June 30, 2021, to RMB 75 million for the six months ended June 30, 2022, due to the repayment of certain borrowings[44] Assets and Liabilities - As of June 30, 2022, the net current assets were approximately RMB 1,740 million, a decrease of about 16.1% from RMB 2,075 million as of December 31, 2021[49] - Interest-bearing bank and other borrowings amounted to approximately RMB 2,435 million as of June 30, 2022, with effective interest rates ranging from approximately 5.2% to 6.8%[50] - The leverage ratio decreased from approximately 18.4% as of December 31, 2021, to approximately 16.4% as of June 30, 2022, primarily due to a reduction in interest-bearing borrowings[58] - Cash and cash equivalents were RMB 282,492,000, down from RMB 482,393,000 at the end of 2021[114] - Current liabilities decreased to RMB 293,441,000 from RMB 423,777,000 in the previous year[116] Shareholder Information - As of June 30, 2022, the company had issued a total of 1,334,000,000 shares, with major shareholders holding significant stakes, including Mr. He Huishan with 620,000,000 shares (46.48%) and Ms. He Huifen with 190,000,000 shares (14.24%)[63] - Zhihui Guang Limited, owned by Mr. He Huishan and Ms. Zhou Lanqing, holds 570,000,000 shares, representing 42.73% of the company[71] - The group maintained a total of 1,334,000,000 ordinary shares issued and fully paid as of June 30, 2022, unchanged from December 31, 2021[171] Governance and Compliance - The company has complied with all provisions of the corporate governance code during the reporting period[94] - The board confirmed that there were no conflicts of interest or competitive businesses related to the company's operations during the reporting period[106] - The company has taken measures to monitor regulatory changes related to compliance risks associated with the 2016 Decision and 2021 Implementation Regulations[107] Future Plans and Investments - The company plans to expand its campus network through mergers and acquisitions, focusing on high-quality vocational schools and non-academic training institutions in the Guangdong-Hong Kong-Macao Greater Bay Area[30] - The company aims to enhance its performance growth through four strategies, including internal growth in academic vocational education, external mergers and acquisitions, expansion of auxiliary education services, and international cooperation[27][30][31][32] - The company plans to upgrade Lingnan Vocational and Technical College to a bachelor's level vocational university, with expected completion between 2022 and 2023[88] - The company has extended the timeline for acquiring other schools and education service providers to expand its school network from 2022 to 2023 due to the need for more time to find suitable acquisition targets[90] Government Grants and Income - The company received government grants totaling RMB 2,270,000 during the reporting period, compared to RMB 1,649,000 in the same period of 2021[125] - Government grants related to assets were RMB 2,730,000, an increase from RMB 2,530,000 in the previous year[141] - Government grants related to income were RMB 2,126,000, down from RMB 2,474,000 in 2021[141] Acquisitions - In March 2022, the company entered into an agreement to acquire 80% of Qingyuan Lingnan Youjia Automotive Training Co., Ltd. for a total consideration of RMB 3,600,000[93] - The identifiable net assets of Lingnan Automobile Training at the acquisition date amounted to RMB 685,000, with cash and cash equivalents of RMB 1,500,000[174] - Since the acquisition, Lingnan Automobile Training has contributed a loss of RMB 96,000 to the group's consolidated profit for the six months ended June 30, 2022[177]

Financial Data and Key Indicators Changes - The company achieved a revenue of approximately 500 million RMB in the fiscal year 2021, representing an 11.2% increase compared to the previous year [5] - Gross profit was 201.6 million RMB, a decrease of approximately 7.4 million RMB due to increased costs in labor, property, and teaching expenses [5][6] - The net profit for the year was 154 million RMB, reflecting a decrease of 9.7% compared to the previous year [5][6] Business Line Data and Key Indicators Changes - The vocational college contributed 400 million RMB in revenue with an 8.7% positive growth [6][7] - The modern technical college achieved nearly 100 million RMB in revenue, a 23% increase year-on-year, contributing 48.8 million RMB in gross profit [7] - Adult education services provided quality services to 35,349 individuals, generating 39.2 million RMB in revenue, a 21% increase [7] Market Data and Key Indicators Changes - The total number of students enrolled across the two colleges was 25,797, with a slight decrease of 4.6% compared to the previous year [6][7] - The employment rate for graduates from both colleges reached over 99% in 2021 [6] Company Strategy and Development Direction and Industry Competition - The company aims to integrate internal and external resources to build higher-level vocational colleges and provincial-level high-standard technician colleges [2][3] - The focus is on high-quality development in vocational education, aligning with national policies to enhance the attractiveness and quality of vocational training [2][10] - The company is actively expanding its campus network and enhancing cooperation with over 1,000 enterprises to deepen industry-education integration [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of vocational education, citing strong government support and the potential for growth in the sector [4][10] - The company plans to adapt to changes in national policies, particularly regarding the transition from diploma to degree-level vocational education [10][11] - Future growth is expected to come from the implementation of the undergraduate strategy and expansion of adult education services [31][32] Other Important Information - The company plans to distribute approximately 60.63 million RMB as dividends, with a payout of 5.6 HKD per share [6] - The asset-liability ratio stands at 36.1%, indicating a stable financial position [5] Q&A Session All Questions and Answers Question: What are the specific plans for upgrading the colleges to universities? - The company is planning to upgrade Lingnan Vocational Technical College to offer undergraduate programs between 2023 and 2024, with part of the professional undergraduate courses already established [17] Question: What impact does the revised Vocational Education Law have on the industry and the company? - The revised law enhances the status of vocational education, emphasizing equal opportunities with general education and promoting industry-education integration, which aligns with the company's strengths [18][19] Question: What are the reasons for the decrease in gross profit and net profit? - The decrease is attributed to rising costs in labor, property, and teaching expenses, although adjusted net profit remained stable at approximately 179 million RMB [20] Question: Will the company expand its business outside the Greater Bay Area? - The company has established good cooperation with institutions in Southeast Asia and plans to further develop these partnerships as the pandemic situation improves [21] Question: What is the current student capacity and utilization rate? - The total number of full-time students is 27,987, with an overall utilization rate of 83.2% [22] Question: What is the timeline for the completion of the undergraduate transition? - The transition is expected to begin with professional approvals in 2023-2024, aiming for full implementation during the 14th Five-Year Plan period [29] Question: What is the company's approach to international cooperation? - The company is committed to international education, with ongoing collaborations with institutions in South Korea, Malaysia, and Germany, and plans to open overseas campuses when conditions permit [30]

Financial Performance - In the fiscal year 2021, the company reported revenue of RMB 499,621,000, representing a 11.2% increase from RMB 449,350,000 in 2020[22] - The gross profit for 2021 was RMB 201,614,000, with a gross margin of approximately 40.4%[22] - The company had a net profit of RMB 153,938,000 in 2021, a decrease of 9.7% compared to RMB 170,501,000 in 2020[22] - The group's revenue increased by approximately 11.2% year-on-year to RMB 499.6 million, driven by growth in student enrollment and average tuition fees[26] - Adjusted net profit remained stable at RMB 179.3 million compared to RMB 182.3 million in the previous fiscal year[26] - Gross profit decreased by approximately 3.5% from about RMB 209.0 million to approximately RMB 201.6 million, with the gross margin declining from about 46.5% to approximately 40.4%[55] - Other income and gains increased by approximately 30.6% from about RMB 85.9 million to approximately RMB 112.2 million, driven by termination lease income and property sales[56] - The total distributable reserves of the company as of December 31, 2021, amounted to approximately RMB 399.8 million, with about RMB 60.6 million proposed as the final dividend for the year[138] - The board proposed a final dividend of HKD 0.056 per share for the year ending December 31, 2021, to reward shareholders[26] Assets and Liabilities - As of December 31, 2021, total assets amounted to RMB 1,855,196,000, while total liabilities were RMB 823,448,000, resulting in total equity of RMB 1,455,525,000[22] - Non-current assets increased to RMB 1,647,693,000 in 2021, up from RMB 1,562,515,000 in 2020[22] - Current assets increased by RMB 274.7 million to approximately RMB 631.3 million, primarily due to funds raised from a global offering[67] - Current liabilities decreased by approximately 21.2% from RMB 537.9 million to RMB 423.8 million, reflecting payments related to acquisitions and reduced student-related liabilities[68] - Cash and cash equivalents increased by approximately 67.3% from RMB 284.4 million to RMB 482.4 million, mainly due to funds raised from the global offering[69] - Property, plant, and equipment increased by approximately 11.7% from RMB 1,019.1 million to RMB 1,138.5 million, driven by new campus developments and equipment purchases[74] - The leverage ratio decreased from approximately 43.0% as of December 31, 2020, to approximately 18.4% as of December 31, 2021, due to a reduction in interest-bearing bank and other borrowings and an increase in total equity following the global offering[84] Student Enrollment and Educational Services - The company enrolled 25,797 full-time students in the 2021/2022 academic year, with 72.7% studying in TMT and healthcare-related fields[5] - The total number of full-time students for the 2021/2022 academic year was 25,797, with enrollment at Lingnan Modern Technician College increasing by 23.9% to 7,900 students[26] - Average tuition fees for Lingnan Vocational Technical College and Lingnan Modern Technician College rose by 7.1% and 3.4% to RMB 16,677 and RMB 11,918, respectively[26] - The company has diversified its educational offerings, providing over 70 programs across various disciplines[6] - The company plans to expand its educational services, including continuing education programs and vocational skills training[7] - The group plans to expand its vocational education network in the Guangdong-Hong Kong-Macao Greater Bay Area, focusing on both academic and non-academic vocational training markets[45] Strategic Initiatives and Growth Plans - The company aims to enhance its market position through strategic initiatives and potential acquisitions in the vocational education sector[7] - The group plans to upgrade Lingnan Vocational Technical College to a vocational undergraduate institution, requiring targeted student scale control and increased infrastructure investment[27] - The group aims to expand non-academic vocational training and explore partnerships with leading industry companies to establish industry colleges[29] - The group will focus on integrating education and industry to cultivate high-quality technical talent for the Guangdong-Hong Kong-Macao Greater Bay Area[29] - The company is actively pursuing strategic acquisitions to enhance its educational offerings, with a target of acquiring two smaller educational institutions by the end of the year[106] Management and Governance - The management team has extensive experience in the education sector, with key members holding significant positions in various educational institutions[97] - The company has been managing overall operations and investments in the education sector since its establishment in 1995, with over 26 years of experience in education management[105] - The company has a strong management team with diverse expertise in finance, law, and education, enhancing its strategic decision-making capabilities[121] - The company aims to leverage its management's extensive experience to enhance corporate governance and financial oversight[112] - The company’s governance structure includes a review of the independence of its directors annually[155] Shareholder Information - As of December 31, 2021, the company had a total of 1,334,000,000 shares issued[170] - Mr. He Huishan holds 620,000,000 shares, representing approximately 46.48% of the company's equity[158] - Ms. He Huifen and Ms. He Huifang each hold 190,000,000 shares, representing approximately 14.24% of the company's equity[158] - The company has a significant concentration of ownership, with major shareholders holding substantial stakes[166] - The company has confirmed the independence of its independent non-executive directors as of December 31, 2021[155] Capital Raising and Financial Instruments - The company completed a global offering of 334,000,000 shares, representing 25% of the total shares, at a price of HKD 1.59 per share[177] - The net proceeds from the global offering amounted to approximately HKD 446.0 million[178] - 55% of the net proceeds (HKD 245.3 million) is allocated to increase student capacity by upgrading Lingnan Vocational Technical College to a bachelor's level institution[179] - 20% of the net proceeds (HKD 89.2 million) is designated for acquiring other schools and education service providers to expand the school network, with the timeline extended to 2023[181] - The company has not engaged in any acquisitions or disposals of subsidiaries or associated companies during the reporting period[173] Corporate Social Responsibility - The company has established a charity foundation aimed at supporting underprivileged students, with an initial funding of $1 million[107] - The company made charitable donations of approximately RMB 3.3 million during the reporting period[142] - The company has received recognition for its contributions to women's education initiatives, being awarded the "Outstanding Contribution Award" by the Guangdong Women's Entrepreneur Association[102] Environmental and Regulatory Compliance - The company emphasizes strict environmental protection measures to comply with current environmental laws and regulations[133] - The company has maintained a public float of no less than 25% of its issued shares since its listing date[146]

Student Enrollment and Tuition - The total number of full-time students in the 2020/2021 academic year was 27,033[21] - The average tuition fees for Lingnan Vocational Technical College and Lingnan Modern Technician College were RMB 16,275 and RMB 11,948, respectively[21] - The average boarding fees for the two colleges were RMB 1,746 and RMB 1,479, respectively[21] Market Position and Strategy - The company holds approximately 5.8% and 0.5% market shares in the Greater Bay Area and China, respectively, as the largest private vocational education service provider in the region[15] - The company operates two schools in the Greater Bay Area, namely Lingnan Vocational Technical College and Lingnan Modern Technician College[15] - The company is aligned with national policies that encourage and support vocational education, indicating broad future development potential[26] - The implementation of the "Regulations on the Promotion of Private Education in the People's Republic of China" includes several encouraging policies for vocational education[22] - The company plans to deepen industry-education integration and school-enterprise cooperation as part of its future strategy[22] - The company aims to enhance the adaptability of vocational education and accelerate the construction of a modern vocational education system[23] - The company is committed to cultivating high-quality technical and skilled talents in response to national educational reforms[22] Financial Performance - Revenue increased by approximately 21.3% from about RMB 235.8 million to approximately RMB 286.0 million during the reporting period[32] - Sales costs rose by approximately 29.2% from about RMB 111.9 million to approximately RMB 144.6 million, primarily due to increased employee costs and new educational services[35] - Gross profit increased by approximately 14.1% from about RMB 123.9 million to approximately RMB 141.4 million, with a decrease in gross margin from about 52.6% to approximately 49.4%[36] - Other income and gains rose by approximately 62.4% from about RMB 33.5 million to approximately RMB 54.4 million, driven by increased rental income and property sales[37] - Administrative expenses increased by approximately 36.5% from about RMB 28.5 million to approximately RMB 38.9 million, mainly due to higher salaries and listing expenses[41] - The net profit for the period increased by approximately 22.3% from about RMB 103.4 million to approximately RMB 126.5 million[46] Expansion Plans - The group plans to expand its campus network through mergers and acquisitions, focusing on quality institutions within the Guangdong-Hong Kong-Macao Greater Bay Area[30] - The group aims to enhance its performance through internal growth in vocational education and the establishment of new campuses[28] - The group is actively expanding auxiliary education services, including adult continuing education and vocational skills certification training[31] - The group is seeking to establish new vocational education sites in the Greater Bay Area to strengthen its market position[28] Financial Position and Liabilities - As of June 30, 2021, the net current liabilities decreased by approximately 40.8% to RMB 107.4 million from RMB 181.3 million as of December 31, 2020[49] - Current assets decreased from approximately RMB 356.6 million as of December 31, 2020, to approximately RMB 206.9 million as of June 30, 2021, a reduction of RMB 149.7 million[49] - Current liabilities decreased from approximately RMB 537.9 million as of December 31, 2020, to approximately RMB 314.4 million as of June 30, 2021, reflecting a decrease of RMB 223.5 million[50] - As of June 30, 2021, interest-bearing bank and other borrowings amounted to approximately RMB 299.2 million, with RMB 90.9 million due within one year[51] - The leverage ratio decreased from approximately 43.0% as of December 31, 2020, to approximately 29.6% as of June 30, 2021, primarily due to a reduction in interest-bearing borrowings[59] - The company had cash and cash equivalents of approximately RMB 123.8 million as of June 30, 2021, ensuring sufficient liquidity for daily operations and capital expenditures[53] - The investment in financial products decreased by approximately 35.6% from about RMB 20.2 million as of December 31, 2020, to about RMB 13.0 million as of June 30, 2021[54] - The company did not have any significant contingent liabilities or guarantees as of June 30, 2021[55] Shareholder Information - As of June 30, 2021, the company had a total of 1,334,000,000 shares issued, with major shareholders holding significant stakes[73] - Mr. He Huishan holds 620,000,000 shares, representing approximately 46.48% of the company's equity[64] - Ms. He Huifen and Ms. He Huifang each hold 190,000,000 shares, accounting for about 14.24% of the company's equity[64] - Zhihui Guang Limited, owned by Mr. He Huishan and Ms. Zhou Lanqing, holds 570,000,000 shares, which is approximately 42.73% of the company[73] - The company's stock option plan was approved on June 23, 2021, allowing for a maximum of 133,400,000 shares to be issued, representing about 10% of the total shares as of the listing date[77] - The company has no other disclosed interests or positions in its shares by directors or senior management as of the report date[70] - The beneficial ownership in Guangzhou Lingnan Education Group Limited shows Mr. He Huishan with 18,000,000 shares, or 60.00%[69] - The company has not granted, exercised, canceled, or allowed any stock options under the plan since its adoption[77] - The report indicates that there are no other significant interests or positions in the company's shares that require disclosure under the Securities and Futures Ordinance[76] - The company’s governance structure includes significant control by its major shareholders, reflecting a concentrated ownership model[73] Global Offering and Capital Use - The company raised approximately HKD 448.6 million from the global offering after deducting underwriting commissions and other expenses[81] - 334 million shares, representing 25% of the total shares, were issued to the public at a price of HKD 1.59 per share during the global offering[82] - 55% of the net proceeds (HKD 246.7 million) will be used to increase student capacity by upgrading Lingnan Vocational and Technical College to a bachelor's level vocational university[82] - 20% of the net proceeds (HKD 89.7 million) is allocated for acquiring other schools and education service providers to expand the school network[82] - The company does not recommend any dividend distribution for the six months ended June 30, 2021[83] - The statutory capital of the company is HKD 100 million, divided into 10 billion shares with a par value of HKD 0.01 each[82] - The company plans to purchase approximately 400,200 square meters of land for educational expansion[82] - The company has not engaged in any significant acquisitions or disposals during the reporting period[86] Compliance and Governance - The company has complied with all corporate governance codes since the listing date[87] - There have been no changes in the compliance status of the company's contractual arrangements under the Foreign Investment Law since the listing date[97] Revenue Breakdown - For the six months ended June 30, 2021, total revenue reached RMB 286,045,000, a 21.3% increase from RMB 235,771,000 in the same period of 2020[132] - Tuition fees contributed RMB 259,185,000, up from RMB 231,743,000, reflecting an increase of 11.8% year-on-year[132] - Boarding fees surged to RMB 23,147,000 from RMB 3,766,000, marking a significant increase of 514.5%[132] - Other educational service fees rose to RMB 3,713,000, compared to RMB 262,000, indicating a substantial increase of 1,319.5%[132] - Total other income and gains amounted to RMB 54,404,000, up from RMB 33,468,000, representing a growth of 62.4%[135] Contract Liabilities and Future Revenue - The balance of contract liabilities at the end of the reporting period was RMB 20,482,000, a decrease from RMB 167,856,000 at the beginning of the year[137] - The confirmed revenue related to contract liabilities for the six months ended June 30, 2021, was RMB 167,856,000, compared to RMB 158,841,000 for the same period in 2020, representing an increase of approximately 5.4%[139] - Tuition fees accounted for RMB 149,233,000 of the confirmed revenue, a decrease from RMB 155,444,000 in the previous year, indicating a decline of about 4.0%[139] Employee and Operational Expenses - The group reported employee benefits expenses of RMB 86,434,000 for the six months ended June 30, 2021, up from RMB 74,294,000 in the same period of 2020, reflecting an increase of approximately 16.4%[143] - Depreciation of property, plant, and equipment increased to RMB 22,483,000 from RMB 18,115,000, marking a rise of about 24.5%[143] - The group did not declare or pay any dividends during the reporting period, consistent with the previous year[153] Earnings Per Share - The basic earnings per share for the six months ended June 30, 2021, was calculated based on a weighted average of 1,000,000,000 ordinary shares, unchanged from the previous year[154] - For the six months ended June 30, 2021, the group reported a basic and diluted earnings per share of RMB 126,530,000, compared to RMB 103,448,000 for the same period in 2020, representing an increase of approximately 22.3%[158] Asset Management - The group acquired property, plant, and equipment at a cost of RMB 34,458,000 for the six months ended June 30, 2021, down from RMB 47,606,000 for the same period in 2020, indicating a decrease of about 27.6%[161] - The group sold assets with a net book value of RMB 5,830,000, generating a net gain of RMB 8,940,000 for the six months ended June 30, 2021, compared to a net loss of RMB 8,000 for the same period in 2020[161] - As of June 30, 2021, the accounts receivable aged analysis showed a total of RMB 3,605,000, down from RMB 7,168,000 as of December 31, 2020, reflecting a decrease of approximately 49.7%[162] Related Party Transactions - The group reported a total issued share capital of RMB 11,124,000 as of June 30, 2021, an increase from RMB 9,000 as of December 31, 2020, due to capital issuance[167] - The group had capital commitments of RMB 12,896,000 for property, plant, and equipment as of June 30, 2021, down from RMB 24,994,000 as of December 31, 2020, indicating a reduction of about 48.3%[170] - Rental income from related parties amounted to RMB 20,381,000 for the six months ended June 30, 2021, compared to RMB 17,339,000 for the same period in 2020, representing an increase of approximately 11.8%[175] - The group had no significant contingent liabilities or guarantees as of June 30, 2021, consistent with the previous year[169] Financial Instruments and Fair Value - The fair value of financial instruments is assessed to be similar to their carrying amounts due to their short maturity periods[186] - The group’s financial department, led by the financial manager, is responsible for determining the fair value measurement policies and processes for financial instruments[186] - The group believes that the valuation methods used for estimating fair value are reasonable and appropriate for the reporting periods[188] - As of June 30, 2021, the fair value of financial assets measured at fair value through profit or loss was RMB 13,000 thousand, a decrease from RMB 20,190 thousand as of December 31, 2020, representing a decline of approximately 35.5%[189] - The non-current portion of interest-bearing bank and other borrowings was RMB 208,244 thousand as of June 30, 2021, down from RMB 282,588 thousand as of December 31, 2020, indicating a reduction of about 26.3%[191] - There were no transfers between Level 1 and Level 2 fair value measurements for financial assets and liabilities during the reporting period, nor were there any transfers into or out of Level 3[191]