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].