Financial Position - As of June 30, 2023, the company reported non-current assets of RMB 822,984,000, an increase from RMB 769,340,000 as of December 31, 2022, representing a growth of approximately 6.96%[13] - The company's current assets totaled RMB 921,838,000 as of June 30, 2023, compared to RMB 909,293,000 at the end of 2022, indicating a slight increase of about 1.8%[13] - Total liabilities as of June 30, 2023, were RMB 921,718,000, up from RMB 780,326,000 at the end of 2022, reflecting an increase of approximately 18.1%[13] - The company reported a net asset value of RMB 602,339,000 as of June 30, 2023, which is consistent with RMB 602,620,000 reported at the end of 2022, showing stability in equity[14] - The company’s total equity remained stable at RMB 602,339,000 as of June 30, 2023, compared to RMB 602,620,000 at the end of 2022, reflecting no significant changes in shareholder equity[14] - As of June 30, 2023, total borrowings amounted to approximately RMB 739.7 million, an increase from RMB 655.9 million as of December 31, 2022[95] - The group's debt-to-equity ratio increased to 122.8% as of June 30, 2023, from 108.8% as of December 31, 2022, primarily due to increased bank borrowings during the period[113] Revenue and Profitability - For the six months ended June 30, 2023, the company recorded revenue of approximately RMB 1,476.1 million, a decrease of 7.6% compared to RMB 1,598.1 million in the same period of 2022[39] - The decline in revenue was primarily due to a significant drop in market prices for self-produced animal nutrition products, leading to decreased sales in mainland China[39] - The total comprehensive income for the six months ended June 30, 2023, was RMB (281) thousand, compared to RMB 168,054 thousand for the same period in 2022[19] - The company reported a profit of RMB 881 thousand for the six months ended June 30, 2023, compared to a profit of RMB 170,804 thousand for the same period in 2022[19] - Gross profit for the six months ended June 30, 2023, was approximately RMB 166.6 million, down from RMB 377.1 million for the same period in 2022, resulting in a gross margin of 11.3% compared to 23.6%[57][65] - The company recorded a profit of approximately RMB 0.9 million for the six months ended June 30, 2023, a significant decrease from RMB 170.8 million for the same period in 2022[70] Operational Performance - The company’s trade receivables increased to RMB 221,892,000 as of June 30, 2023, from RMB 219,351,000 at the end of 2022, marking a growth of approximately 1.1%[13] - The company’s inventory stood at RMB 360,425,000 as of June 30, 2023, slightly up from RMB 359,140,000 at the end of 2022, indicating a marginal increase of about 0.36%[13] - The company incurred a net cash outflow from investing activities of RMB 99,948 thousand for the six months ended June 30, 2023, compared to RMB 104,735 thousand in the same period of 2022[19] - The company raised new borrowings of RMB 265,152 thousand during the six months ended June 30, 2023, compared to RMB 253,516 thousand in the same period of 2022[19] - The company’s capital expenditure amounted to approximately RMB 24.0 million, an increase from RMB 17.0 million as of December 31, 2022, primarily for the purchase of machinery and equipment[122] Market Conditions - The overall financial performance was impacted by a downturn in the domestic and global chemical intermediate markets, driven by a decline in the real estate market and rising interest rates[38] - Despite a 50% increase in sales volume of choline chloride, the gross profit and gross margin decreased by approximately 45% and 10%, respectively, due to oversupply in the market and declining prices[50] - The company anticipates that the termination of paraxylene sales since July 2022 will narrow the profit margins from this product line[39] - The global iodine market prices remained at historical highs during the period, but the company could not expand gross margins through strategic procurement plans[50] Corporate Governance - The board of directors resolved not to declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[8] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2023[7] - The company did not recommend any interim dividend for the six months ended June 30, 2023, consistent with the previous year[143] - The company confirmed compliance with all corporate governance codes except for the separation of the Chairman and CEO roles, which is under review[166] - Mr. Yin holds approximately 55.31% of the company's issued share capital, making him the controlling shareholder[159] Employee and Administrative Expenses - The total employee cost for the six months ended June 30, 2023, was approximately RMB 62.2 million, compared to RMB 59.5 million for the same period in 2022, with a total of 1,108 employees as of June 30, 2023, up from 969 in 2022[125] - Administrative expenses increased from approximately RMB 53.4 million to approximately RMB 56.7 million, primarily due to increased feasibility study costs for potential expansion plans[87] Research and Development - Research and development expenses are recognized as incurred, reflecting the nature of the activities aimed at improving production efficiency and developing production equipment[88] - Research and development expenses decreased from approximately RMB 359 million for the six months ended June 30, 2022, to approximately RMB 318 million for the six months ended June 30, 2023, due to completed production technology enhancement projects[106] Cash Flow and Liquidity - As of June 30, 2023, the net cash generated from operating activities was RMB 26,987 thousand, a significant improvement from a net cash outflow of RMB 86,550 thousand in the same period of 2022[19] - The company maintained a prudent treasury policy, ensuring a good liquidity position throughout the period, with a focus on continuous credit reviews of customers to mitigate credit risk[120] - As of June 30, 2023, the company had restricted bank deposits of approximately RMB 49.0 million, up from RMB 33.9 million as of December 31, 2022[142] Future Plans and Investments - The company plans to fund future acquisitions through internal funds and other fundraising activities, including issuing new debt or equity instruments[147] - The group has invested approximately RMB 10 million in acquiring land use rights in Vietnam to expand production capacity for choline chloride and iodine derivatives[109] - The company has no major investments or capital asset plans for the coming year, aside from those disclosed in the prospectus[129]

Financial Performance - The company's net profit attributable to shareholders for the year ended December 31, 2022, was approximately RMB 274.6 million, an increase from RMB 130.7 million in 2021, representing a growth of 109.5%[25] - For the fiscal year ending December 31, 2022, the company recorded revenue of approximately RMB 3,378.7 million, an increase of 19.3% compared to RMB 2,833.3 million in 2021[42] - Gross profit for the same period was approximately RMB 657.9 million, representing a 38.2% increase from RMB 476.1 million in 2021[42] - Net profit for the year was approximately RMB 274.6 million, a significant increase of 110.1% compared to RMB 130.7 million in 2021[42] - The company's total assets reached approximately RMB 1,678.6 million as of December 31, 2022, up from RMB 1,367.3 million in 2021, with cash and cash equivalents amounting to RMB 103.2 million[119] - The debt-to-equity ratio improved to 108.8% as of December 31, 2022, down from 203.8% in 2021, primarily due to increased profits during the year[120] Revenue Breakdown - Revenue from the polyurethane materials segment decreased from approximately RMB 845.0 million in 2021 to approximately RMB 698.8 million in 2022, a decline of 17.4% due to reduced demand in the construction and home appliance industries[27] - Revenue from glycol, a new trading product produced by a third party, was approximately RMB 131.0 million in 2022, up from RMB 111.9 million in 2021, indicating a growth of 17.3%[30] - The company's self-manufactured chemical products generated revenue of RMB 2,326.9 million, accounting for 68.9% of total revenue, up from 59.6% in 2021[55] - Revenue from third-party manufactured chemicals was RMB 1,038.5 million, representing 30.7% of total revenue, down from 40.0% in 2021[55] - Sales of choline chloride in the animal nutrition chemicals segment accounted for approximately 75% of the segment's revenue, increasing from RMB 727.6 million in 2021 to 904.0 million in 2022[57] - Revenue from the sales of iodine and iodine derivatives increased from RMB 585.9 million in 2021 to RMB 754.0 million in 2022, primarily due to rising average selling prices[59] Expenses and Costs - Tax expenses increased from approximately RMB 15.3 million in 2021 to approximately RMB 33.4 million in 2022, aligning with the increase in profit before tax[6] - Financial costs increased from approximately RMB 29.8 million in 2021 to approximately RMB 37.0 million in 2022, primarily due to higher average levels of outstanding term loans and loans from related parties[5] - Sales cost increased from approximately RMB 2,357.2 million for the year ended December 31, 2021, to approximately RMB 2,720.8 million for the year ended December 31, 2022, due to rising raw material prices in various business segments[61] - R&D expenses increased from approximately RMB 592 million for the year ended December 31, 2021, to approximately RMB 773 million for the year ended December 31, 2022, primarily due to increases in raw material costs, employee costs, and electricity costs[139] Production and Capacity Expansion - The company is expanding its production capacity by establishing a new plant in the Tai'an Daiyue Chemical Industrial Park, focusing on the production of trimethylamine and various pharmaceutical intermediates[47] - A new production facility is being established in the western area of the existing production plant in Tai'an, which will include facilities for producing trimethylamine and a pilot plant for various pharmaceutical intermediates[116] - The company invested VND 33,880,000,000 (approximately RMB 10 million) to acquire land use rights in Binh Duong Province, Vietnam, expected to expand production of choline chloride and iodine derivatives for export to Western countries[116] Market and Business Environment - The contribution of revenue from outside mainland China decreased from approximately 18.5% in 2021 to 17.6% in 2022, primarily due to reduced sales of animal nutrition chemicals amid ongoing COVID-19 impacts[18] - The company remains vigilant regarding the ongoing impacts of the COVID-19 pandemic and international events on its financial advisory, brokerage, asset management, and investment management services[20] - The increase in profits is attributed to the recovery of operations in mainland China post-COVID-19, despite rising sales and distribution expenses and increased research and development costs[44] Risk Management - The group faces various risks including market risk, credit risk, and liquidity risk, which may impact its financial condition and operational performance[101] - The group's credit risk is primarily attributed to trade receivables, with management implementing measures to minimize this risk[136] - The group has not implemented any foreign currency hedging policies but monitors foreign exchange risks[102] Corporate Governance and Social Responsibility - The company has actively participated in sustainable development and social responsibility, adhering to environmental laws and regulations[153] - The group made charitable donations totaling approximately RMB 197,000 in the fiscal year ending December 31, 2022, compared to zero in 2021[160] - The company has not encountered any significant violations of applicable laws and regulations that would materially impact its business and operations for the year ended December 31, 2022[130] Shareholder Information - The company did not declare any final dividend for the year ended December 31, 2022, consistent with the previous year[70] - The board does not recommend the payment of any dividends for the year ended December 31, 2022, consistent with 2021[131] - The company's reserves available for distribution to shareholders as of December 31, 2022, amounted to approximately RMB 835 million, an increase from RMB 769 million in 2021[183]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 GHW International （於開曼群島註冊成立的有限公司） （股份代號：9933） 年 度 業 績 公 告 截 至2022年12月31日 止 年 度 財務摘要 • 截至2022年12月31日止年度，本集團的收益達約人民幣3,378.7百萬元，與 2021年同期相較，增加約人民幣545.4百萬元或19.3%。 • 截至2022年12月31日止年度，本集團的毛利達約人民幣657.9百萬元，與 2021年同期相較，增加約人民幣181.8百萬元或38.2%。 • 截至2022年12月31日止年度，本集團的淨溢利達約人民幣274.6百萬元，與 2021年同期相較，增加約人民幣143.9百萬元或110.1%。 • 截至2022年12月31日止年度，本集團的每股基本盈利達約人民幣0.275元， ...

Revenue and Profitability - For the six months ended June 30, 2022, GHW International reported revenue of approximately RMB 1,598.1 million, an increase of 34.8% compared to RMB 1,185.8 million in the same period last year[10]. - The net profit attributable to the owners of the company for the six months ended June 30, 2022, was approximately RMB 170.8 million, a significant increase of 531.8% compared to RMB 27.0 million for the same period in 2021[12]. - Gross profit rose from approximately RMB 173.8 million for the six months ended June 30, 2021, to approximately RMB 377.1 million for the same period in 2022, driven by higher average selling prices of key products and effective procurement strategies[12]. - Total revenue for the six months ended June 30, 2022, was RMB 1,598.1 million, compared to RMB 1,185.8 million for the same period in 2021, representing a year-on-year increase of 35.0%[14]. - The company reported a profit before tax of RMB 199,079 thousand, up from RMB 31,424 thousand in the previous year, reflecting a growth of 532%[102]. - The total comprehensive income for the period was RMB 168,054 thousand, compared to RMB 28,716 thousand for the same period in 2021, indicating a significant increase[106]. Revenue Breakdown by Segment - Revenue from animal nutrition chemicals increased significantly from approximately RMB 369.1 million to RMB 565.4 million, primarily due to higher average selling prices of choline chloride and betaine[18]. - Revenue from pharmaceutical products and intermediates increased from approximately RMB 268.8 million to RMB 370.0 million, driven by higher average selling prices of iodine and iodine derivatives[23]. - Revenue from fine chemicals rose from approximately RMB 153.8 million to RMB 351.6 million, attributed to increased sales of cashew phenol and isooctanoic acid, as well as new trading products like ethylene glycol[22]. - Sales of polyurethane materials decreased from approximately RMB 389.0 million to RMB 304.8 million, mainly due to a reduction in sales volume of MDI and TDI products[16]. Market and Operational Factors - The increase in revenue was primarily driven by higher market prices for key products such as choline chloride and betaine, along with increased sales of self-manufactured products like iso-octanoic acid and cashew phenol due to market share growth[11]. - The company experienced a decline in sales volume for third-party manufactured trade products, specifically polymer MDI and TDI, due to operational disruptions in European and American production facilities caused by severe weather in Q1 2021[11]. - The impact of the COVID-19 pandemic in early 2022 affected downstream industries in China, particularly the construction and home appliance sectors, leading to decreased demand for polymer MDI and TDI[11]. Research and Development - The company emphasizes the importance of research and development in production processes and product customization capabilities to enhance its competitive edge in the market[7]. - The company plans to expand its research and development efforts, particularly in artificial intelligence system upgrades and production technology improvements, which have led to increased R&D expenditures[12]. - R&D expenses increased from approximately RMB 21.6 million for the six months ended June 30, 2021, to approximately RMB 35.9 million for the six months ended June 30, 2022, primarily due to rising raw material costs of about RMB 8.0 million, employee costs of about RMB 1.6 million, and electricity costs of about RMB 3.1 million[34]. Financial Position and Assets - As of June 30, 2022, total assets reached approximately RMB 1,661.6 million, up from RMB 1,367.3 million as of December 31, 2021, while cash and bank balances were approximately RMB 70.9 million, compared to RMB 58.0 million[41]. - The company's debt-to-equity ratio improved to 133.5% as of June 30, 2022, down from 203.8% as of December 31, 2021, primarily due to increased profits during the period[42]. - Total borrowings amounted to approximately RMB 760.0 million as of June 30, 2022, an increase from RMB 691.2 million as of December 31, 2021[41]. Expenses and Costs - Sales and distribution expenses rose from approximately RMB 63.5 million to RMB 82.1 million, primarily due to increased employee compensation and logistics costs[32]. - Administrative expenses increased from approximately RMB 45.2 million to RMB 53.4 million, mainly due to performance bonuses linked to improved operational results[33]. - Financial costs rose from approximately RMB 13.0 million for the six months ended June 30, 2021, to approximately RMB 18.2 million for the six months ended June 30, 2022, mainly due to an increase in average borrowing levels during the period[35]. Risks and Challenges - The company faces significant risks due to the COVID-19 pandemic, which has delayed the expansion plans for the new production facility[46]. - The company is exposed to currency risk due to transactions conducted in currencies other than its functional currency[50]. - The group faced foreign exchange risks due to transactions primarily denominated in RMB and USD, but did not undertake any financial instruments to hedge these risks during the period[58]. Shareholder and Management Information - The major shareholder, Mr. Yin, held approximately 55.31% of the company's issued share capital, totaling 553,141,500 shares[84]. - The group did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[63]. - The company did not enter into any stock-linked agreements during the reporting period[89].

Financial Performance - The company reported revenue of approximately RMB 2,833.3 million for the fiscal year 2021, an increase of 34.7% compared to RMB 2,103.9 million in 2020[11]. - Gross profit for the fiscal year 2021 was approximately RMB 476.1 million, representing a 74.2% increase from RMB 273.3 million in 2020[11]. - The company achieved a net profit of approximately RMB 130.7 million in 2021, recovering from a net loss of RMB 5.2 million in 2020[11]. - The company reported a net profit attributable to shareholders of approximately RMB 130.7 million for the year ended December 31, 2021, compared to a loss of RMB 5.2 million in 2020, resulting in a basic earnings per share of RMB 13.1, up from a loss of RMB 0.5 per share in 2020[14]. - The profit attributable to the owners of the company for the year ended December 31, 2021, was approximately RMB 130.7 million, compared to a loss of RMB 5.2 million in 2020[29]. - Gross profit increased from approximately RMB 273.3 million for the year ended December 31, 2020, to approximately RMB 476.1 million for the year ended December 31, 2021[30]. - The company recorded a profit of approximately RMB 1,307 million for the year ended December 31, 2021, compared to a loss of approximately RMB 52 million for the year ended December 31, 2020[53]. Revenue Segments - The animal nutrition chemicals segment saw significant growth in revenue, gross profit, and gross margin due to rising market prices for key products like choline chloride and betaine[11]. - The fine chemicals segment also experienced substantial growth, with revenue contributions from self-manufactured products and the introduction of ethylene glycol, generating approximately RMB 111.9 million in revenue[13]. - The iodine and iodine derivatives segment generated gross profit exceeding RMB 109.3 million, up from RMB 41.3 million the previous year, driven by increased demand in downstream industries[13]. - Revenue from the polyurethane materials segment increased from approximately RMB 700.3 million in 2020 to approximately RMB 844.9 million in 2021, primarily due to higher average selling prices of key products[34]. - The animal nutrition chemicals segment generated revenue of RMB 952.2 million, accounting for 33.6% of total revenue, compared to RMB 757.9 million and 36.0% in 2020[33]. - The fine chemicals segment's revenue increased to RMB 438.9 million, representing 15.5% of total revenue, up from RMB 212.6 million and 10.1% in 2020[33]. - The pharmaceutical products and intermediates segment generated revenue of RMB 585.9 million, accounting for 20.7% of total revenue, compared to RMB 423.3 million and 20.1% in 2020[33]. Market Expansion and Strategy - The company plans to explore new overseas markets, including Brazil and Indonesia, to expand its customer base for betaine products[11]. - The company continues to enhance its brand, explore new overseas markets, and expand production lines for new products despite challenges posed by the pandemic[16]. - The company is focused on becoming one of the largest suppliers of application chemical intermediates globally, particularly in the animal nutrition and feed additive sectors[17]. - The company plans to establish a new production facility in the Tai'an Daiyue Chemical Industry Park, which will include production for trimethylamine and various pharmaceutical intermediates, aiming to capture market share amid challenging conditions[20]. Financial Position and Assets - Total assets as of December 31, 2021, were RMB 1,367.3 million, compared to RMB 1,021.7 million in 2020, while total liabilities increased to RMB 1,028.2 million from RMB 816.3 million[8]. - The company's net asset value rose to RMB 339.1 million in 2021, up from RMB 205.5 million in 2020[8]. - The company's debt, including loans from a related company, increased to approximately RMB 6,912 million as of December 31, 2021, from RMB 5,629 million in 2020[57]. - The debt-to-equity ratio improved to 203.8% as of December 31, 2021, down from 273.9% in 2020, primarily due to increased profits during the year[58]. Costs and Expenses - Financial costs have increased due to a rise in average bank and other borrowings, including bank-discounted receivables and loans from related companies[14]. - Selling and distribution expenses rose from approximately RMB 117.2 million for the year ended December 31, 2020, to approximately RMB 143.2 million for the year ended December 31, 2021, attributed to increased logistics costs[48]. - Administrative expenses increased from approximately RMB 83.0 million for the year ended December 31, 2020, to approximately RMB 102.6 million for the year ended December 31, 2021, due to severance payments and increased employee bonuses[49]. - R&D expenses increased from approximately RMB 43.3 million for the year ended December 31, 2020, to approximately RMB 59.2 million for the year ended December 31, 2021, driven by higher raw material costs and consulting fees for new potential pharmaceutical products[50]. Risk Management - The company is facing risks related to market fluctuations, including currency and interest rate risks, which could impact financial performance[63][64]. - Credit risk is primarily associated with trade receivables, and the company has implemented measures to mitigate this risk, including credit limits and monitoring procedures[67]. - The company has no current foreign currency hedging policy but monitors foreign exchange risks and will consider hedging as necessary[64]. - The company aims to maintain a reasonable balance between fixed and floating rate borrowings to manage interest rate risks effectively[66]. Corporate Governance - The company has a risk management committee in place, indicating a structured approach to identifying and mitigating potential risks[86]. - The company has a diverse board of directors, including independent non-executive members with extensive academic and industry backgrounds, enhancing governance and oversight[88][89][90]. - The company has established a comprehensive environmental policy and performance metrics, reflecting its commitment to sustainability[92]. - The company has adopted the corporate governance code and complied with all provisions except for one specific deviation[156]. - The audit committee, consisting of three independent non-executive directors, has reviewed the group's financial reporting procedures and risk management systems[153]. Shareholder Information - The controlling shareholder, Mr. Yin, holds approximately 55.31% of the company's issued share capital[128]. - The total number of shares held by major shareholders is significant, with the largest single holding being 553,141,500 shares[145]. - The company did not recommend any final dividend for the year ended December 31, 2021, consistent with 2020[102]. Operational Challenges - The ongoing pandemic has significantly impacted the supply chain, product demand, and operational capabilities, affecting the company's expansion plans and creditworthiness of trade receivables[16]. - The construction of new production facilities has been affected by delays in normal operations due to the pandemic, impacting the overall project timeline[61]. - The group's trading activities in Ukraine were suspended due to the Russian invasion, significantly impacting the subsidiary's business, although their financial contribution was minimal[148].

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Financial Performance - The company reported revenue of approximately RMB 2,103.9 million for the fiscal year ending December 31, 2020, representing a 7.0% increase from RMB 1,966.1 million in 2019[17]. - Gross profit for the year was RMB 273.3 million, up from RMB 245.7 million in 2019, indicating a positive trend in profitability[10]. - The company experienced a loss before tax of RMB 6.6 million, compared to a profit of RMB 31.8 million in the previous year[10]. - The company reported a loss attributable to owners of approximately RMB 5.2 million for the year ended December 31, 2020, compared to a profit of RMB 29.1 million in 2019, marking a decrease of 112.8%[21]. - The company recorded a net foreign exchange loss of approximately RMB 15.7 million, contrasting with a net gain of RMB 6.4 million in the previous year, primarily due to the depreciation of the US dollar against the RMB[21]. - The company experienced significant increases in sales and distribution expenses due to rising logistics costs amid the pandemic[21]. - The company recorded a foreign exchange loss of approximately RMB 15.7 million during the year, compared to a foreign exchange gain of RMB 6.4 million in the previous year[35]. - The company recorded a loss of approximately RMB 5.2 million for the year ended December 31, 2020, compared to a profit of approximately RMB 29.1 million for the year ended December 31, 2019[69]. Revenue Segments - The increase in revenue was primarily driven by the animal nutrition chemicals segment, which saw increased production capacity starting in the second half of 2020[17]. - The animal nutrition chemicals segment generated revenue of RMB 757.9 million, accounting for 36.0% of total revenue, up from 30.7% in 2019[38]. - Revenue from animal nutrition chemicals rose from approximately RMB 603.5 million for the year ended December 31, 2019, to approximately RMB 757.9 million for the year ended December 31, 2020, mainly due to increased sales of choline chloride and betaine[43]. - Revenue from polyurethane materials increased from approximately RMB 654.6 million for the year ended December 31, 2019, to approximately RMB 700.3 million for the year ended December 31, 2020, primarily due to increased average selling prices and sales volume of polymer MDI[39]. - The polyurethane materials segment maintained stable supply throughout the year, contributing to revenue growth despite challenges from the COVID-19 pandemic[17]. - Revenue from fine chemicals decreased from approximately RMB 257.0 million for the year ended December 31, 2019, to approximately RMB 212.6 million for the year ended December 31, 2020, primarily due to reduced demand caused by the COVID-19 pandemic[46]. - Revenue from pharmaceutical products and intermediates slightly decreased from approximately RMB 438.1 million to approximately RMB 423.3 million, mainly due to decreased sales of iodine and cefoperazone dispersible tablets[47]. Assets and Liabilities - Total assets increased to RMB 1,021.7 million in 2020 from RMB 855.2 million in 2019, while total liabilities rose to RMB 816.3 million from RMB 740.7 million[11]. - The net asset value of the company improved to RMB 205.5 million in 2020, up from RMB 114.6 million in 2019[11]. - Borrowings, including loans from related parties, increased to approximately RMB 562.9 million as of December 31, 2020, from RMB 501.5 million in 2019[73]. - The company's debt-to-equity ratio improved to 279.3% as of December 31, 2020, down from 437.8% in 2019[73]. Operational Strategies - The company is focused on expanding its production capabilities and enhancing its market presence in response to demand fluctuations[17]. - Future strategies may include further investments in technology and potential market expansion initiatives to mitigate risks associated with supply chain disruptions[17]. - The company plans to establish a new production facility in the Tai'an Daiyue Chemical Industrial Park to expand production of trimethylamine and pharmaceutical intermediates[34]. - The company aims to utilize market consolidation opportunities through the new production facility to capture market share from competitors[34]. - The company aims to become one of the largest suppliers of application chemical intermediates, particularly in the animal nutrition and feed additive sectors[24]. Research and Development - R&D expenses increased from approximately RMB 34.7 million for the year ended December 31, 2019, to approximately RMB 43.3 million for the year ended December 31, 2020, driven by costs related to technical improvements and new product development[62]. - The company has a strong emphasis on research and development, particularly in the pharmaceutical sector, as indicated by the involvement of independent directors with expertise in drug development[116][119]. Market Conditions - The company noted a decrease in sales revenue from third-party produced chemicals due to the impact of the pandemic[17]. - Despite a decline in sales volume in the first half of 2020 due to the pandemic, the sales volume of polymer MDI increased in the second half of 2020 due to economic recovery in China and supply disruptions from a major European producer[19]. - The polyurethane materials market faced challenges in 2020 due to the pandemic and falling oil prices, leading to temporary production halts among downstream customers[25]. - The ongoing impact of the COVID-19 pandemic on the group's overall business remains unclear, with management monitoring the situation closely[108]. Governance and Management - The company has established a risk management committee to oversee potential risks and ensure compliance with industry standards[112][115]. - The management team includes experienced professionals with backgrounds in finance, sales strategy, and risk management, enhancing the company's operational efficiency[115][119][120]. - The company emphasizes high-quality board governance and internal controls to ensure transparency and accountability to shareholders[198]. Shareholder Information - The company did not recommend any dividend payment for the year ended December 31, 2020, consistent with 2019[133]. - The group did not declare any final dividend for the year ended December 31, 2020, consistent with the previous year[99]. - As of December 31, 2020, the company's distributable reserves amounted to approximately RMB 79.5 million, compared to zero in 2019[136]. Risks and Challenges - The company faces significant risks including market risk, credit risk, and liquidity risk, which may affect its financial condition and operational performance[82]. - The group’s financial performance and position are influenced by various risks, including market risk, credit risk, and liquidity risk[129]. - The company does not currently have a foreign currency hedging policy but monitors foreign exchange risks and will consider hedging when necessary[83].

Revenue Performance - Revenue from the polyurethane materials segment decreased from approximately RMB 331.9 million for the six months ended June 30, 2019, to approximately RMB 234.7 million for the six months ended June 30, 2020, primarily due to a decline in sales volume and average selling prices of key products [18]. - Total revenue for the six months ended June 30, 2020, was RMB 892.8 million, a decrease from RMB 935.3 million for the same period in 2019, representing a decline of approximately 4.5% [19]. - Revenue from polyurethane materials decreased from RMB 331.9 million (35.5% of total revenue) in 2019 to RMB 234.7 million (26.3% of total revenue) in 2020 [19]. - Revenue from animal nutrition chemicals increased from RMB 278.9 million (29.8% of total revenue) in 2019 to RMB 357.2 million (40.0% of total revenue) in 2020, primarily due to increased sales of choline chloride and betaine [23]. - Revenue from fine chemicals dropped from approximately RMB 126.5 million in 2019 to about RMB 91.8 million in 2020, attributed to decreased demand due to the COVID-19 pandemic [25]. - Revenue from pharmaceutical products and intermediates slightly increased from RMB 193.3 million in 2019 to RMB 204.8 million in 2020, driven by higher average prices and increased sales of iodine derivatives [26]. - Revenue from Europe increased from approximately RMB 65.4 million for the six months ended June 30, 2019, to approximately RMB 104.3 million for the six months ended June 30, 2020, primarily due to increased sales of animal nutrition chemicals to existing and new customers [28]. - Revenue from Asia (excluding China and Vietnam) slightly increased from approximately RMB 41.1 million to RMB 43.9 million during the same period, mainly due to increased sales of animal nutrition chemicals to new customers [28]. - Revenue from Vietnam decreased from approximately RMB 69.9 million to RMB 55.8 million, primarily due to reduced sales from polyurethane materials caused by the COVID-19 pandemic [30]. Impact of COVID-19 - The outbreak of COVID-19 significantly impacted financial performance, with a decline in demand for third-party manufactured products due to factory closures and trade activity disruptions [10]. - The company experienced a significant decline in sales volume for polyurethane materials due to the COVID-19 pandemic, impacting demand across various sectors [21]. - The company faced significant challenges in export sales due to ongoing COVID-19 outbreaks in Asia, Europe, the US, and other Western countries [10]. - The company experienced a significant impact on operations due to the COVID-19 pandemic, leading to a reduction in revenue and an increase in government subsidies [121]. - The construction of the new production facility has faced delays due to the COVID-19 pandemic, impacting the timeline for utilizing the raised funds [53]. - The board remains vigilant regarding the impact of the COVID-19 pandemic on the overall project risks and timelines [55]. Financial Position - Total assets as of June 30, 2020, reached approximately RMB 1,067.1 million, up from RMB 855.2 million as of December 31, 2019 [48]. - Total borrowings and loans from a related company amounted to approximately RMB 601.2 million as of June 30, 2020, compared to RMB 501.5 million as of December 31, 2019 [48]. - The debt-to-equity ratio decreased to 2.7 as of June 30, 2020, from 3.9 as of December 31, 2019, primarily due to an increase in equity post-listing [49]. - The company’s total liabilities increased to RMB 581,243 as of June 30, 2020, with current liabilities amounting to RMB 418,302, up from RMB 311,987 as of December 31, 2019 [159]. - The company’s cash and cash equivalents increased to RMB 42,991 thousand from RMB 35,716 thousand, showing improved liquidity [112]. - The company reported a net cash inflow from financing activities of RMB 176,917 thousand, an increase of 100.9% compared to RMB 87,930 thousand in the same period of 2019 [119]. - The company incurred a net cash outflow from investing activities of RMB (74,109) thousand, which is a significant increase from RMB (33,477) thousand in the same period of 2019 [119]. - The company’s total liabilities increased due to new bank loans amounting to RMB 314,092 thousand, compared to RMB 284,951 thousand in the same period of 2019 [119]. Operational Highlights - The company operates four main business segments: polyurethane materials, animal nutrition chemicals, fine chemicals, and pharmaceutical products and intermediates [12]. - The performance of self-manufactured products in the animal nutrition chemicals segment, particularly choline chloride, remained strong despite market fluctuations due to COVID-19 [11]. - The company continues to provide a comprehensive range of services in the chemical supply chain, including pre-sales consultation, sales of chemical products, and after-sales technical support [9]. - The company aims to increase market share for choline chloride and betaine, benefiting from economies of scale and improved gross margins [11]. - The company’s marketing efforts have contributed to increased sales of choline chloride and betaine over the past few years [11]. Expenses and Costs - Total sales cost decreased from approximately RMB 813.3 million to RMB 772.2 million, driven by declining sales volume and raw material prices, particularly in the polyurethane materials and fine chemicals segments [32]. - Gross profit slightly decreased from approximately RMB 122.0 million to RMB 120.5 million, while the overall gross margin increased from about 13.0% to 13.5% due to economies of scale in the animal nutrition chemicals segment [33]. - Selling and distribution expenses increased from approximately RMB 46.1 million to RMB 54.4 million, primarily due to increased sales volume of animal nutrition chemicals, particularly exports of choline chloride [37]. - Administrative expenses slightly increased from approximately RMB 36.9 million to RMB 39.4 million, mainly due to increased audit and professional service fees following the company's listing on the Hong Kong Stock Exchange [38]. - R&D expenses increased from approximately RMB 14.1 million for the six months ended June 30, 2019, to approximately RMB 16.8 million for the six months ended June 30, 2020, primarily due to increased raw material costs for two iodine derivative products [39]. - Financial costs rose from approximately RMB 7.4 million for the six months ended June 30, 2019, to approximately RMB 13.7 million for the six months ended June 30, 2020, mainly due to increased bank borrowings and discounted notes [41]. Shareholder and Governance - The company did not recommend any interim dividend for the six months ended June 30, 2020, consistent with the previous year [70]. - The company did not enter into any related party transactions that required disclosure under the listing rules during the reporting period [87]. - The company confirmed compliance with the standards of the securities trading code by all directors since the listing date [81]. - The company has established an audit committee to oversee financial reporting and risk management, consisting of three independent non-executive directors [107]. - The company adopted a share option scheme on December 16, 2019, effective from January 21, 2020, to incentivize selected participants for their contributions [92]. Future Plans and Investments - The group plans to establish a new production facility in the existing production area of Tai'an, focusing on the production of trimethylamine and various pharmaceutical intermediates [44]. - The company plans to develop pharmaceutical intermediates for moxifloxacin hydrochloride tablets to remain competitive against a rival offering lower prices [55]. - The group maintained a cautious treasury policy, ensuring a good liquidity position throughout the period [63]. - The group’s capital expenditure during the period amounted to approximately RMB 204 million, a decrease from RMB 297 million in 2019 [65]. - As of June 30, 2020, the group's capital commitments were approximately RMB 530 million, significantly higher than RMB 42 million as of December 31, 2019, primarily related to the establishment of a new production facility and the purchase of machinery and equipment [67].

Financial Performance - The company reported revenue of approximately RMB 1,966.1 million for the fiscal year ended December 31, 2019, a decrease of 8.7% compared to RMB 2,152.9 million in 2018[13]. - Gross profit for the year was RMB 245.7 million, down from RMB 309.6 million in the previous year[7]. - Net profit attributable to the company was approximately RMB 29.1 million, a significant decline of 60.8% from RMB 74.3 million in 2018, resulting in basic earnings per share of RMB 0.039[15]. - Total revenue for the year ended December 31, 2019, was approximately RMB 1,966.1 million, a decrease from RMB 2,152.9 million in 2018, representing a decline of about 8.7%[29]. - Revenue from the polyurethane materials segment decreased from RMB 881.6 million in 2018 to RMB 654.6 million in 2019, a decline of approximately 25.7%[30]. - Revenue from the animal nutrition chemicals segment fell from RMB 702.7 million in 2018 to RMB 603.5 million in 2019, a decrease of about 14.1%[32]. - Revenue from fine chemicals decreased from approximately RMB 286.8 million in 2018 to about RMB 257.0 million in 2019, primarily due to reduced sales of methyl isobutyl ketone and terephthalic acid[35]. - Revenue from pharmaceutical products and intermediates increased from approximately RMB 270.7 million for the year ended December 31, 2018, to approximately RMB 438.1 million for the year ended December 31, 2019, primarily due to increased sales volume and average selling prices of iodine and iodine derivatives[37]. - Revenue from cashew phenol increased from approximately RMB 27.5 million for the year ended December 31, 2018, to approximately RMB 61.9 million for the year ended December 31, 2019[36]. - The total gross profit from the business segments was affected by the decrease in raw material and inventory costs, which fell from approximately RMB 1,758.7 million in 2018 to approximately RMB 1,626.9 million in 2019[46]. - Gross profit decreased from approximately RMB 309.6 million in 2018 to approximately RMB 245.7 million in 2019, with a gross margin decline from 14.4% to 12.5%[47]. Market Conditions - The decrease in revenue was primarily due to reduced demand for animal nutrition chemicals and polyurethane materials, linked to the African swine fever outbreak in China[14]. - The outbreak of African swine fever has been largely controlled, with the number of breeding sows starting to rise since October 2019, leading to increased demand for choline chloride due to the recovery of the pig farming industry[17]. - The polyurethane market faced temporary contraction in 2019 due to increased supply stability and reduced demand from downstream industries, particularly the automotive sector[18]. - The company anticipates that the polyurethane market will gradually maintain an upward trend, supported by the growing demand in the cold chain logistics market[18]. - The development of China's free trade zones, supported by government policies, is expected to create significant opportunities for the cold chain logistics market[18]. Sales and Marketing Strategies - The company adjusted the price of choline chloride to increase market share, leading to a growth in sales volume despite lower average prices[14]. - The average selling price of choline chloride remained low throughout 2019 due to market conditions[14]. - Sales of choline chloride and betaine increased from approximately 103,000 tons in 2018 to 119,000 tons in 2019, and from 7,261 tons in 2018 to 9,157 tons in 2019, respectively[20]. - The sales volume of choline chloride increased from approximately 103,000 tons in 2018 to about 119,000 tons in 2019, indicating a growth strategy's effectiveness despite revenue decline[34]. - The company aims to expand its market share in choline chloride through increased marketing efforts and customer engagement[34]. - The company aims to expand its market presence in China, Southeast Asia, Europe, and the United States through its extensive global operations and sales network[16]. Production and Facilities - The company plans to establish a new production facility in the Tai'an Daiyue Chemical Industrial Park, which will include production of trimethylamine and various pharmaceutical intermediates[21]. - The company successfully acquired land for the new production facility, which will enhance its production capabilities and market share[21]. - Approximately 60.4% or RMB 39.8 million of the net proceeds from the global offering will be used for the construction of production facilities for trimethylamine[64]. - The company will utilize small-scale production systems to test and validate new pharmaceutical intermediate production technologies before scaling up[60]. Financial Position and Assets - Total assets as of December 31, 2019, were RMB 855.2 million, with total liabilities of RMB 740.7 million, resulting in a net asset value of RMB 114.6 million[8]. - Borrowings increased to approximately RMB 501.5 million as of December 31, 2019, compared to RMB 198.4 million in 2018[63]. - The group had restricted bank deposits of approximately RMB 1,088 million as of December 31, 2019, compared to RMB 259 million in 2018[77]. - The group’s capital expenditure for the year amounted to approximately RMB 607 million, an increase from RMB 289 million in 2018[75]. Governance and Management - GHW International's executive team has over 20 years of experience in the applied chemical products industry, with key members holding significant roles in various subsidiaries[89][90][91][93]. - The company has a strong focus on strategic planning, management oversight, and financial health, led by its founder and CEO, Mr. Yin Yanbin[89]. - GHW International has been actively involved in the management and coordination of sales strategies and business operations across its subsidiaries[90][91]. - The company emphasizes capital and financial management, with a dedicated team overseeing administrative and IT functions[90][91]. - The company has adopted corporate governance practices in line with the listing rules since its listing date on January 21, 2020[159]. - The board consists of executive directors and independent non-executive directors, with a total of 9 members as of December 31, 2019[166]. - The audit committee consists of three independent non-executive directors, overseeing financial reporting and risk management[153]. - The company has established an internal audit function to conduct annual financial audits and assess the adequacy and effectiveness of risk management and internal control systems[194]. Risks and Uncertainties - The impact of the COVID-19 outbreak on the company's operations in China remains unclear, with management monitoring the situation closely[22]. - The company faces various risks including market risk, credit risk, and liquidity risk, which may impact its financial condition and operational performance[66]. Community Engagement - The company reported a total revenue of approximately RMB 881,000 for charitable donations in the fiscal year ending December 31, 2019, compared to RMB 12,000 in 2018, indicating a significant increase in community engagement[116].