中國地熱能產業發展集團有限公司 CHINA GEOTHERMAL INDUSTRY DEVELOPMENT GROUP LIMITED (於假曼群島註冊成立之有限公司) 股份代號: 8128 科 技 與 資 源 結 合 中期業績報告 2019 中國地熱能產業發展集團有限公司 二零一九年中期業績報告 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交 所上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風 險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市 場。 香港交易及結算所有限公司及聯交所對本報告之內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示概不就本報告全部或任何部份內容而產生或因倚 賴該等內容而引致之任何損失承擔任何責任。 1 香港聯合交易所有限公司（「聯交所」）GEM之特色 本報告乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨在提供有關 中國地熱能產業發展集團有限公司（「本公司」）之資 ...

Financial Performance - For the three months ended March 31, 2019, the revenue was approximately HKD 68,889,000, a decrease of about HKD 88,786,000 compared to HKD 157,675,000 in the same period last year[5][11]. - The net loss after tax for the period was approximately HKD 19,549,000, compared to a profit of HKD 4,178,000 in the same period last year[6][13]. - The gross profit margin decreased from approximately 37.9% in the previous year to about 14.2% in the current period, primarily due to investments in new market developments[11]. - Total revenue for the first quarter of 2019 was HKD 68,889,000, down 56.3% from HKD 157,675,000 in the first quarter of 2018[30]. - Revenue from the sale, installation, and maintenance of shallow geothermal energy utilization systems was HKD 64,806,000, a decrease of 56.4% from HKD 148,683,000 year-over-year[30]. - Rental income decreased to HKD 3,872,000 from HKD 8,992,000, reflecting a decline of 56.9% compared to the previous year[30]. - The company reported a loss of HKD 19,549,000 for the first quarter of 2019, compared to a profit of HKD 4,178,000 in the same period of 2018, representing a significant decline[19]. - The group reported a pre-tax loss attributable to equity holders of the parent company of HKD (19,493,000) for the three months ended March 31, 2019, compared to a profit of HKD 6,550,000 in the same period of 2018[43]. Expenses and Cost Management - Selling and distribution expenses decreased to approximately HKD 6,638,000 from HKD 6,989,000 in the previous year, reflecting the company's cost control efforts[12]. - Administrative expenses decreased by approximately HKD 3,328,000 or 11.8% compared to the same period last year, mainly due to reduced employee compensation and benefits[13]. - Financing costs for the period were approximately HKD 11,588,000, down from HKD 12,399,000 in the previous year[13]. - The group's sales cost for the three months ended March 31, 2019, was HKD 59,088,000, a decrease of 39.9% compared to HKD 97,876,000 in the same period of 2018[35]. - The group's employee benefits expenses, including salaries for directors and key management personnel, decreased to HKD 16,585,000, down 29.6% from HKD 23,564,000 in the same period of 2018[35]. - The minimum lease payments under operating leases decreased to HKD 931,000 from HKD 1,192,000 year-on-year[35]. Income and Gains - Other income and gains increased from approximately HKD 229,000 in the previous year to about HKD 11,270,000 in the current period, mainly due to adjustments in accounts payable and increased interest income[11]. - Other income and gains totaled HKD 11,270,000, a significant increase from HKD 229,000 in the same period last year[32]. Taxation - The income tax expense for the group was HKD 776,000 for the three months ended March 31, 2019, significantly lower than HKD 4,637,000 in the same period of 2018[36]. - The group did not generate taxable profits in Hong Kong, resulting in no provision for Hong Kong profits tax for the three months ended March 31, 2019[36]. - The group’s net taxable profit attributable to its Chinese operations was subject to the relevant tax rate for the Chinese corporate income tax provision[37]. Strategic Goals and Future Plans - The company aims to enhance the awareness of renewable shallow geothermal energy as an alternative heating source and improve operational quality and standards in 2019[14][16]. - The company plans to strengthen cost control, budget assessment, service quality, brand building, and market expansion as part of its strategic goals for 2019[16]. Shareholding and Options - Mr. Xu Shengheng holds 711,646,600 shares, representing 17.67% of the company, and has options for an additional 37,725,148 shares[68]. - Ms. Chen Huiji owns 58,290,400 shares, which is 1.45% of the company, with options for 43,788,119 shares[68]. - Mr. Wang Manquan has 716,800 shares, accounting for 0.02%, and options for 30,314,851 shares[68]. - Mr. Jia Wenzeng has options for 4,827,920 shares, with no direct shareholding[70]. - Mr. Wu Desheng holds options for 3,143,762 shares, with no direct shareholding[71]. - The total number of unexercised options for Mr. Xu is 37,725,148 shares[75]. - The total number of unexercised options for Ms. Chen is 43,788,119 shares[75]. - The total number of unexercised options for Mr. Wang is 30,314,851 shares[77]. - The total number of unexercised options for Mr. Jia is 4,827,920 shares[77]. - The total unexercised share options as of March 31, 2019, amount to 486,182,851 shares[87]. - As of March 31, 2019, China Energy Conservation and Environmental Protection (Hong Kong) Investment Limited holds 1,190,000,000 shares, representing a 29.55% stake in the company[81]. - The total interest of China Energy Conservation Group Limited in the company is also 1,190,000,000 shares, equating to a 29.55% stake[81]. Corporate Governance - The company has established an audit committee to oversee financial reporting, risk management, and internal control systems[91]. - The audit committee consists of four independent non-executive directors, with Mr. Jia Wenzeng serving as the chairman[91]. - The company has not adopted a code of conduct for securities trading by directors but has confirmed compliance with GEM listing rules[92]. - The company has no known competition or conflicts of interest involving its directors or major shareholders[90]. - There were no share buybacks, redemptions, or sales of listed securities by the company or its subsidiaries during the review period[93].

Financial Performance - The company's revenue for the year decreased by 49% to approximately HKD 396,793,000, down from HKD 778,153,000 in 2017[8] - The company recorded a loss of HKD 418,511,000 for the year, compared to a profit of HKD 3,962,000 in the previous year[8] - Adjusted loss, excluding goodwill and other receivables impairment of approximately HKD 207,402,000, was HKD 211,109,000[8] - The company's total revenue for the year ended December 31, 2018, was approximately HKD 396,793,000, a decrease of 49.0% compared to HKD 778,153,000 in 2017[27] - The net loss for the year was approximately HKD 418,511,000, compared to a profit of HKD 3,962,000 in the previous year[27] - The gross profit for 2018 was approximately HKD 29,799,000, resulting in a gross margin of 7.5%, down from 21.1% in 2017, reflecting a decline of approximately 13.6%[29] Market Conditions and Business Strategy - The decline in revenue was primarily due to a slowdown in the domestic real estate market, impacting the company's smart heating engineering projects[8] - The company initiated management transformation and business model adjustments starting from Q4 of the previous year to adapt to market changes[8] - The company is investing in multiple demonstration projects in regions such as Zhangjiakou, Handan, and Tianjin to develop new markets[8] - The potential market for geothermal energy in northern China is estimated to be over HKD 30 trillion, with rural markets exceeding HKD 1 trillion[9] - The company aims to enhance public awareness of renewable geothermal energy as a heating alternative and improve construction quality and operational reliability[10] - The company plans to strengthen standard formulation and execution, as well as improve assessment and incentive policies for better performance[10] Operational and Financial Management - The company aims to strengthen project cost control and management capabilities to offset the impact on gross margins due to increased competition in the geothermal energy market[13] - The total assets of the company as of December 31, 2018, were approximately HKD 2,493,664,000, down from HKD 3,100,265,000 in 2017[24] - As of December 31, 2018, the group's net current liabilities amounted to approximately HKD 590,281,000, an increase from HKD 288,559,000 in 2017[40] - The group had cash and cash equivalents of approximately HKD 72,934,000 as of December 31, 2018, down from HKD 122,004,000 in 2017[42] - The group's debt ratio increased to approximately 49% as of December 31, 2018, compared to 37% in 2017, due to impairment losses on trade receivables and goodwill[49] Human Resources and Employee Relations - The group employed approximately 650 staff as of December 31, 2018, a slight decrease from 660 in 2017[50] - The company emphasizes the importance of employee relations, ensuring reasonable compensation and regular reviews of benefits and training opportunities[111] - No workplace accidents leading to strikes or fatalities were reported during the year, highlighting the company's commitment to a safe working environment[111] Corporate Governance and Compliance - The company has established systems to ensure compliance with regulatory requirements, including the Securities and Futures Ordinance and GEM Listing Rules[110] - The board of directors includes a mix of executive and non-executive members, with key appointments and changes noted throughout the year[114][118] - The company has received annual independence confirmations from all independent non-executive directors, affirming their independent status[182] - The company has insurance coverage for directors against liabilities arising from company affairs, which is reviewed annually[183] Future Outlook and Growth Initiatives - The company has set a revenue target of $200 million for the next fiscal year, reflecting a 25% increase compared to the previous year[79] - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[81] - A strategic acquisition of a local competitor is in progress, which is anticipated to enhance the company's service capabilities and increase market penetration by 15%[82] - The company has invested $5 million in research and development for innovative geothermal technologies, aiming to improve efficiency by 20%[83] - Future outlook remains positive, with projected annual growth rates of 18% over the next five years[84] Environmental and Sustainability Efforts - The company is focusing on sustainability initiatives, aiming for a 50% reduction in carbon emissions by 2025[85] - The operational cost of shallow geothermal heating is one-fourth that of electric heating, making it a cost-effective alternative for clean heating solutions[69] - The company has installed geothermal heat pump systems in most of its offices in China, significantly reducing electricity consumption and environmental impact[108] - The company is committed to reviewing its environmental practices and implementing more sustainable measures in its operations[109]