Financial Performance - For the nine months ended September 30, 2024, the company's revenue was RMB 15,774.6 million, a decrease of 13.1% compared to RMB 18,146.8 million for the same period in 2023[1] - The net profit attributable to the company's owners for the same period was RMB 308.6 million, down 51.6% from RMB 637.8 million in 2023[1] - The basic earnings per share decreased to RMB 0.044 from RMB 0.091 year-on-year[2] - The company reported a gross profit of RMB 2,397.7 million for the nine months ended September 30, 2024, down from RMB 2,805.6 million in 2023[2] - The consolidated revenue for the period reached RMB 15,774,600,000, representing a decrease of 13.1% from RMB 18,146,800,000 in the same period of 2023[12] - The consolidated gross profit for the period was RMB 2,397,700,000, down 14.5% from RMB 2,805,600,000 in the same period of 2023[13] - The consolidated gross profit margin for the period was 15.2%, a decrease of 0.3 percentage points from 15.5% in the same period of 2023[13] - The decline in earnings and revenue was primarily attributed to lower selling prices of cement and concrete products compared to the previous year[13] Assets and Liabilities - Total assets as of September 30, 2024, amounted to RMB 73,085.2 million, reflecting a slight increase of 0.4% from RMB 72,792.2 million at the end of 2023[1] - The equity attributable to the company's owners was RMB 44,270.4 million, with a debt ratio of 38.6%, up from 36.9% in the previous year[1] - The total liabilities as of September 30, 2024, were RMB 15,672.4 million, compared to RMB 10,979.9 million at the end of 2023[4] - The company’s total equity increased slightly to RMB 45,889.1 million from RMB 45,747.2 million at the end of 2023[5] Cash and Inventory - The company's cash and bank balances decreased to RMB 1,698.6 million from RMB 2,603.7 million at the end of 2023[3] - The company’s inventory increased to RMB 2,197.7 million from RMB 1,896.0 million year-on-year[3] Dividends - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2024, compared to HKD 0.041 per share for the same period in 2023[10] - The company did not recommend any dividend for the three months ended September 30, 2024, compared to no dividend for the same period in 2023[10] Currency and Reporting - The company adopted RMB as the presentation currency for its financial statements starting from 2023[11] Share Information - The weighted average number of shares for basic earnings per share calculation remained at 6,982,937,817 for both periods[8]

Company Overview - The total number of issued shares of China Resources Building Materials Technology Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[4]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[4]. - The company changed its name from China Resources Cement Holdings Limited to China Resources Building Materials Technology Holdings Limited on November 3, 2023[4]. Financial Performance - For the six months ended June 30, 2024, the Group's unaudited consolidated turnover was RMB 10,311.7 million, a decrease of 13.9% compared to the same period last year[31]. - The unaudited consolidated profit attributable to owners of the Company for the period was RMB 165.8 million, representing a decrease of 70.2% from the corresponding period last year[32]. - Basic earnings per share for the period was RMB 0.024, down from RMB 0.080 in the previous year[31]. - The consolidated gross profit for the Period was RMB 1,544.8 million, representing a decrease of 23.3% from RMB 2,012.9 million for the corresponding period in 2023 (Restated) and a gross margin of 15.0%, down 1.8 percentage points from 16.8%[128]. - The company's total comprehensive income for the period was RMB 110,050,000, compared to RMB 476,453,000 in the prior year, a decrease of around 77.0%[171]. Operational Insights - The management discussion and analysis section provides insights into operational performance and strategic initiatives for future growth[6]. - The company is focused on expanding its market presence and enhancing its product offerings through new technologies and innovations[6]. - Significant events planned for 2024 include potential mergers and acquisitions to strengthen market position[6]. - The company aims to improve operational efficiency and reduce costs through strategic investments in technology[6]. - Future outlook indicates a commitment to sustainable practices and increasing production capacity to meet market demand[6]. Production Capacity - As of June 30, 2024, the Group operates 101 cement grinding lines with an annual production capacity of 90.2 million tons[21]. - The Group has 49 clinker production lines with an annual production capacity of 63.3 million tons[21]. - The Group operates 64 concrete batching plants with an annual production capacity of 39.8 million cubic meters[21]. - The Group's annual production capacity of aggregates in operation reached approximately 93.5 million tons, with an expected total capacity of 135.7 million tons upon completion of all projects[90]. Market and Product Focus - The main markets for the Group's products include Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan[20]. - The Group's products are primarily used in infrastructure projects such as railways, highways, subways, and power stations[20]. - The Group's operations are supported by a well-established logistics network including waterways, railways, and roads[20]. Sustainability and Innovation - The Group emphasizes corporate social responsibility, focusing on energy saving, emission reduction, and the development of new products and technologies[25]. - The Group is actively participating in the green, low-carbon transformation initiatives set forth by the Chinese government[47]. - The Group's carbon capture and utilization research platform aims for an annual CO2 capture capacity of 100,000 tons, contributing to carbon neutrality in the cement industry[106]. - The Group's focus on green and sustainable development includes initiatives for carbon peaking and carbon neutrality, aligning with national environmental goals[62]. Financial Position and Management - The Group's total assets as of June 30, 2024, were RMB 72,614.3 million, slightly down from RMB 72,792.2 million as of December 31, 2023[28]. - The equity attributable to owners of the Company was RMB 44,210.4 million, an increase from RMB 44,108.5 million at the end of 2023[28]. - The Group's net current liabilities were RMB 5,317.9 million as of June 30, 2024, indicating a need for careful liquidity management[141]. - The Group's capital management is centralized and regularly monitored to ensure sufficient cash reserves for both short-term and long-term liquidity needs[139]. Governance and Compliance - The company has complied with the applicable provisions of the Corporate Governance Code during the reporting period[150]. - Changes in the board of directors include the retirement of Mr. IP Shu Kwan Stephen as of May 24, 2024[150]. - Mr. NG Kam Wah Webster has been appointed as a member of the Competition Commission for a period of two years starting May 1, 2024[150]. Market Trends and Economic Indicators - In the first half of 2024, China's GDP grew by 5.0% year-on-year to RMB 61.7 trillion[39]. - National fixed asset investment (FAI) increased by 3.9% year-on-year to RMB 24.5 trillion[39]. - The floor space of commodity housing sold in China decreased by 19.0% year-on-year to 480 million m², with sales amounting to RMB 4.7 trillion, a 25.0% year-on-year decline[42].

[Company Profile and Financial Summary](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Overview of Key Financial Performance](index=1&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%A6%82%E8%A6%BD) China Resources Cement Holdings Limited recorded revenue of RMB 10,311.7 million in the first half of 2024, a year-on-year decrease of 13.9%, with profit attributable to owners significantly declining by 70.2% to RMB 165.8 million Overview of Key Financial Data for H1 2024 | Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,311.7 | 11,974.6 | (13.9)% | | Profit attributable to owners of the company | 165.8 | 556.0 | (70.2)% | | Basic EPS (RMB) | 0.024 | 0.080 | (70.0)% | | Interim Dividend per Share (HKD) | 0.02 | 0.041 | (51.2)% | | Total Assets (as of June 30) | 72,614.3 | 72,792.2 (as of Dec 31) | (0.2)% | | Equity attributable to owners of the company (as of June 30) | 44,210.4 | 44,108.5 (as of Dec 31) | 0.2% | | Gearing Ratio (as of June 30) | 38.8% | 36.9% (as of Dec 31) | 1.9 percentage points | | Net Asset Value per Share (RMB) (as of June 30) | 6.33 | 6.32 (as of Dec 31) | 0.2% | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) In the first half of 2024, the Group's revenue decreased by 13.9% to RMB 10,311.7 million, and gross profit decreased by 23.3% to RMB 1,544.8 million, with profit before tax and profit for the period significantly declining by 68.2% and 74.5% respectively Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) (Restated) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,311,717 | 11,974,578 | (13.9)% | | Gross Profit | 1,544,795 | 2,012,923 | (23.3)% | | Profit Before Tax | 237,887 | 747,954 | (68.2)% | | Profit for the Period | 135,220 | 529,539 | (74.5)% | | Profit Attributable to Owners of the Company | 165,764 | 555,953 | (70.2)% | | Basic EPS (RMB) | 0.024 | 0.080 | (70.0)% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, the Group's total assets slightly decreased by 0.2% to RMB 72,614.3 million, with net current liabilities expanding to RMB 5,317.9 million primarily due to increased bank loans, while equity attributable to owners of the company slightly increased by 0.2% Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2024 (RMB thousand) | Dec 31, 2023 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 65,067,238 | 65,101,967 | (0.1)% | | Current Assets | 7,547,068 | 7,690,270 | (1.9)% | | Current Liabilities | 12,864,933 | 10,979,935 | 17.2% | | Net Current Liabilities | (5,317,865) | (3,289,665) | (61.6)% | | Non-current Liabilities | 13,919,171 | 16,065,133 | (13.3)% | | Equity Attributable to Owners of the Company | 44,210,360 | 44,108,463 | 0.2% | | Total Equity | 45,830,202 | 45,747,169 | 0.2% | [Notes to the Financial Statements](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation and Principal Accounting Policies](index=5&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules, adopting the historical cost basis, consistent with 2023 accounting policies, with no significant impact from 2024 revised standards - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules of the Stock Exchange[8](index=8&type=chunk) - Accounting policies are consistent with the 2023 annual consolidated financial statements, with only the adoption of revised standards effective January 1, 2024, and these revisions have no significant impact on the financial statement amounts and disclosures[9](index=9&type=chunk)[10](index=10&type=chunk) [Segment Information](index=5&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments include cement, concrete, and aggregates and others, with the aggregates and others segment performing strongly in the first half of 2024, while the cement segment's performance significantly declined - The Group's operating and reportable segments are cement, concrete, and aggregates and others, with revenue derived from the sale of goods[11](index=11&type=chunk) Overview of Segment Results (RMB thousand) | Segment | H1 2024 Revenue | H1 2024 Segment Results | H1 2023 Revenue (Restated) | H1 2023 Segment Results (Restated) | | :--- | :--- | :--- | :--- | :--- | | Cement | 6,891,141 | 254,495 | 9,286,659 | 881,596 | | Concrete | 1,736,957 | 75,076 | 1,483,772 | (28,860) | | Aggregates and Others | 1,683,619 | 329,217 | 1,204,147 | 252,396 | | **Total** | **10,311,717** | **658,788** | **11,974,578** | **1,105,132** | [Finance Costs](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) In the first half of 2024, the Group's total finance costs were RMB 256.4 million, a slight decrease from the same period last year, with interest on bank loans and medium-term notes remaining the main components Composition of Finance Costs (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Interest on bank loans and medium-term notes | 240,119 | 254,742 | | Interest on loans from non-controlling shareholders | 2,646 | 4,836 | | Environmental restoration provision | 15,149 | 13,764 | | Payables for acquisition of assets | 23,835 | 33,229 | | Lease liabilities | 5,960 | 4,871 | | **Total** | **287,709** | **311,442** | | Less: Amount capitalized as property, plant and equipment | (31,278) | (50,802) | | **Net Finance Costs** | **256,431** | **260,640** | [Profit Before Tax](index=7&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E7%9B%88%E5%88%A9) In the first half of 2024, the Group's profit before tax was net of major expenses such as staff costs, impairment losses on trade receivables, amortization of mining rights, and depreciation of property, plant and equipment, with amortization of mining rights and depreciation of property, plant and equipment increasing Major Adjustments to Profit Before Tax (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Total staff costs | 1,284,462 | 1,313,975 | | Impairment losses on trade receivables | 37,223 | 73,665 | | Amortization of mining rights | 226,828 | 132,833 | | Depreciation of property, plant and equipment | 990,155 | 952,369 | | Depreciation of right-of-use assets | 119,213 | 100,781 | | Interest income | (19,508) | (43,879) | [Taxation](index=8&type=section&id=%E7%A8%85%E9%A0%85) In the first half of 2024, the Group's total taxation was RMB 102.7 million, a significant decrease from the same period last year, with the effective tax rate rising to 43.2% due to results of associates, exchange differences, and PRC withholding tax Composition of Taxation (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Current tax | 261,066 | 313,681 | | Deferred tax | (158,399) | (95,266) | | **Total Taxation** | **102,667** | **218,415** | - Hong Kong profits tax is calculated at **16.5%**, PRC corporate income tax at **25%**, and includes a **5%** dividend withholding tax and deferred tax on estimated distributed profits[16](index=16&type=chunk) [Earnings Per Share](index=8&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) In the first half of 2024, basic earnings per share attributable to owners of the company were RMB 0.024, a significant decrease from RMB 0.080 in the same period last year, with diluted earnings per share not presented due to the absence of potential ordinary shares Calculation of Basic Earnings Per Share (RMB thousand) | Indicator | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Profit attributable to owners of the company for basic EPS | 165,764 | 555,953 | | Weighted average number of shares | 6,982,937,817 | 6,982,937,817 | | Basic EPS (RMB) | 0.024 | 0.080 | [Trade and Other Receivables and Payables](index=9&type=section&id=%E6%87%89%E6%94%B6%E5%8F%8A%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) As of June 30, 2024, total trade receivables increased to RMB 2,545.6 million, while total trade payables decreased to RMB 2,428.6 million, with the Group granting customers 0 to 60 days credit and obtaining 30 to 90 days credit from suppliers Trade Receivables (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Trade receivables from third parties | 2,330,047 | 1,540,201 | | Trade receivables from related parties | 215,598 | 179,421 | | **Total** | **2,545,645** | **1,719,622** | Trade Payables (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Trade payables to third parties | 2,340,293 | 2,882,184 | | Trade payables to related parties | 88,334 | 96,435 | | **Total** | **2,428,627** | **2,978,619** | - The average credit period for trade receivables is **0 to 60 days**, and for trade payables is **30 to 90 days**[18](index=18&type=chunk)[20](index=20&type=chunk) [Interim Dividend](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) [Declaration and Payment Arrangements for Interim Dividend](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E5%AE%A3%E6%B4%BE%E5%8F%8A%E6%B4%BE%E4%BB%98%E5%AE%89%E6%8E%92) The Board resolved to declare an interim dividend of HKD 0.02 per share for the first half of 2024, a decrease from the prior year, with payment scheduled for October 25, 2024, and shareholders having the option to receive it in HKD or RMB - The interim dividend for the first half of 2024 is **HKD 0.02 per share**, a decrease from HKD 0.041 per share in the same period of 2023[21](index=21&type=chunk) - The total dividend amount is approximately **HKD 139.7 million**, to be paid on or about October 25, 2024[21](index=21&type=chunk) - Shareholders may elect to receive the dividend in HKD or RMB at a specified exchange rate (**HKD 1 to RMB 0.91654**), with the record date being September 20, 2024[21](index=21&type=chunk) [Suspension of Share Register Procedures](index=10&type=section&id=%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E6%89%8B%E7%BA%8C%E6%9A%AB%E5%81%9C) To determine the entitlement to the interim dividend, the company will suspend share transfer registration procedures from September 16 to September 20, 2024 - Share transfer registration procedures will be suspended from **Monday, September 16, 2024**, to **Friday, September 20, 2024**[22](index=22&type=chunk) [Business Environment Analysis](index=11&type=section&id=%E7%87%9F%E5%95%86%E7%92%B0%E5%A2%83%E5%88%86%E6%9E%90) [Macroeconomic Overview](index=11&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E6%A6%82%E8%A6%BD) In the first half of 2024, China's economy operated steadily, with GDP growing by 5.0% and fixed asset investment by 3.9%, as the government issued ultra-long-term special treasury bonds and local government bonds to support infrastructure investment, which rose by 5.4% - In the first half of 2024, China's GDP grew by **5.0% year-on-year** to **RMB 61.7 trillion**[23](index=23&type=chunk) - National fixed asset investment (excluding rural households) increased by **3.9% year-on-year** to **RMB 24.5 trillion**[23](index=23&type=chunk) - The government plans to issue **RMB 1 trillion** in ultra-long-term special treasury bonds and has issued approximately **RMB 1.8 trillion** in new local government bonds to support infrastructure construction, with national infrastructure investment rising by **5.4% year-on-year**[23](index=23&type=chunk) [Real Estate Market and Urban Development](index=12&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E5%B8%82%E5%A0%B4%E5%8F%8A%E5%9F%8E%E5%B8%82%E7%99%BC%E5%B1%95) China's real estate market remains in a period of transformation and adjustment, with commercial housing sales area and sales value decreasing by 19.0% and 25.0% respectively in the first half of 2024, while the government actively promotes "three major projects" to foster high-quality urban development - In the first half of 2024, national commercial housing sales area decreased by **19.0% year-on-year** to **480 million square meters**, and sales value decreased by **25.0% year-on-year** to **RMB 4.7 trillion**[24](index=24&type=chunk) - National real estate development investment decreased by **10.1% year-on-year** to **RMB 5.3 trillion**, with new housing starts and completed housing areas decreasing by **23.7%** and **21.7%** respectively[24](index=24&type=chunk) - The Chinese government is steadily advancing "three major projects" including affordable housing construction, urban village renovation, and dual-use public infrastructure development to address real estate market changes and promote high-quality urban development[24](index=24&type=chunk) [Industry Overview and Policies](index=12&type=section&id=%E8%A1%8C%E6%A5%AD%E6%A6%82%E8%A6%BD%E5%8F%8A%E6%94%BF%E7%AD%96) [Cement Industry Performance and Capacity](index=12&type=section&id=%E6%B0%B4%E6%B3%A5%E8%A1%8C%E6%A5%AD%E8%A1%A8%E7%8F%BE%E5%8F%8A%E7%94%A2%E8%83%BD) In the first half of 2024, national cement output decreased by 10.0% to 850 million tons, with cement output in major operating regions also generally declining, while the industry added approximately 3.4 million tons of clinker capacity, including 1.5 million tons in Hunan - In the first half of 2024, national cement output decreased by **10.0% year-on-year** to **850 million tons**[25](index=25&type=chunk) - Cement output in the Group's major operating regions (such as Guangdong, Guangxi, Fujian, etc.) all experienced negative year-on-year growth[25](index=25&type=chunk) - Two new clinker production lines were added nationwide, increasing annual capacity by approximately **3.4 million tons**, with one new clinker production line in Hunan adding approximately **1.5 million tons** of annual capacity[25](index=25&type=chunk) [Energy Saving, Emission Reduction, and Green Development](index=13&type=section&id=%E7%AF%80%E8%83%BD%E6%B8%9B%E6%8E%92%E8%88%87%E7%B6%A0%E8%89%B2%E7%99%BC%E5%B1%95) The Chinese government actively promotes the green and low-carbon transformation of the cement industry, implementing ultra-low emission upgrades with a target of 50% clinker capacity in key regions completing upgrades by the end of 2025, and advancing energy saving and carbon reduction in the construction sector by requiring all new buildings to comply with green building standards - China's Ministry of Ecology and Environment and four other departments jointly issued the "Opinions on Promoting the Implementation of Ultra-Low Emissions in the Cement Industry," aiming for **50% of cement clinker capacity** in key regions to complete upgrades by the end of 2025[26](index=26&type=chunk) - The "Action Plan for Accelerating Energy Saving and Carbon Reduction in the Construction Sector" specifies that by 2025, all new urban buildings will fully implement green building standards[26](index=26&type=chunk) - The "Special Action Plan for Energy Saving and Carbon Reduction in the Cement Industry" targets controlling cement clinker capacity at around **1.8 billion tons** by the end of 2025, with comprehensive energy consumption per unit product reduced by **3.7%** compared to 2020[26](index=26&type=chunk) [Energy Consumption and Carbon Emission Management](index=14&type=section&id=%E8%83%BD%E8%80%97%E8%88%87%E7%A2%B3%E6%8E%92%E6%94%BE%E7%AE%A1%E7%90%86) The government released the "2024-2025 Energy Saving and Carbon Reduction Action Plan," strengthening carbon emission intensity management and promoting the inclusion of the cement industry in the national carbon emission trading market, while revising capacity replacement measures to encourage industrial waste utilization in cement kilns and strictly prohibit inter-provincial replacement - The "2024-2025 Energy Saving and Carbon Reduction Action Plan" requires strengthening capacity and output control in the building materials industry, strictly regulating new building material project access, and promoting energy-saving and carbon-reducing upgrades in the building materials industry[27](index=27&type=chunk) - China's Ministry of Ecology and Environment has compiled documents such as the "Guidelines for Accounting and Reporting of Greenhouse Gas Emissions by Enterprises - Cement Clinker Production" to prepare for the inclusion of the cement industry in the national carbon emission trading market[27](index=27&type=chunk) - The "Implementation Measures for Capacity Replacement in the Cement and Glass Industries (2024 Draft for Comment)" encourages the comprehensive utilization of industrial waste in cement kilns and strictly prohibits inter-provincial replacement to optimize industrial layout[27](index=27&type=chunk) [Industrial Structure and Safety Production](index=15&type=section&id=%E7%94%A2%E6%A5%AD%E7%B5%90%E6%A7%8B%E8%88%87%E5%AE%89%E5%85%A8%E7%94%A2%E7%94%9F) The government highly values safety production, issuing the "Key Points for Mine Safety Production Work in 2024" and the "Three-Year Action Plan for Fundamental Safety Production Improvement (2024-2026)," aiming to deepen the investigation of hidden disaster factors, advance proactive management of major hazards, and enhance intrinsic safety levels - The "Key Points for Mine Safety Production Work in 2024" proposes measures such as deepening the investigation of hidden disaster factors, advancing proactive management of major hazards, and strengthening intelligent mine construction[28](index=28&type=chunk) - The "Three-Year Action Plan for Fundamental Safety Production Improvement (2024-2026)" aims to enhance intrinsic safety levels over three years and accelerate the modernization of safety production governance systems and capabilities[28](index=28&type=chunk) [Transformation and Innovation](index=15&type=section&id=%E8%BD%89%E5%9E%8B%E8%88%87%E5%89%B5%E6%96%B0) [New Business Development](index=15&type=section&id=%E6%96%B0%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95) The Group actively seizes new business development opportunities, optimizing its business structure, with rapid development in the aggregates business, initial completion of the national layout for engineered stone, and concrete utilized as a sales channel for cement and aggregates - The Group actively seizes new business development opportunities, fully leveraging the integrated synergistic advantages of cement, aggregates, and concrete, achieving rapid development in the aggregates business and initial success in optimizing its business structure[29](index=29&type=chunk) - In basic building materials, approximately **9 million tons** of new annual aggregates capacity were added, further enhancing aggregates production capacity[29](index=29&type=chunk) - In functional building materials, the national layout for engineered stone has been initially completed, with continuous product iteration and upgrades[29](index=29&type=chunk) [Aggregates Business](index=21&type=section&id=%E9%AA%A8%E6%96%99%E6%A5%AD%E5%8B%99) In the first half of 2024, the Group accelerated the construction and commissioning of aggregates projects, adding approximately 9 million tons of annual capacity, with subsidiaries' operational capacity around 93.5 million tons and associates' attributable capacity around 3.6 million tons, and total capacity expected to significantly increase upon full completion - In the first half of 2024, the Group added approximately **9 million tons** of annual aggregates capacity in Zhaoqing, Guangdong, Guigang, Guangxi, and other locations[41](index=41&type=chunk) - As of June 30, 2024, subsidiaries' operational (including trial production) annual aggregates capacity was approximately **93.5 million tons**, with associates' attributable annual aggregates capacity around **3.6 million tons**[41](index=41&type=chunk) - Upon full completion, the Group's annual aggregates capacity controlled through subsidiaries is expected to reach **135.7 million tons**, with associates' and joint ventures' attributable capacity around **13.5 million tons**[41](index=41&type=chunk) [Functional Building Materials Business](index=21&type=section&id=%E5%8A%9F%E8%83%BD%E5%BB%BA%E6%9D%90%E6%A5%AD%E5%8B%99) The Group has initially completed its national layout for engineered stone, adding multiple production lines with an annual capacity of 26.1 million square meters, and by optimizing its marketing system and brand promotion, it signed 4 strategic key accounts and achieved cost reduction and efficiency improvement through measures like centralized procurement and formula optimization - The Group has initially completed its national layout for engineered stone, with new production lines commissioned in Dongguan and Laibin, and current annual engineered stone capacity is approximately **26.1 million square meters**[42](index=42&type=chunk) - Through professional exhibitions, showroom development, and digital marketing, the "Runpin" brand exposure continues to expand, and **4 new strategic key accounts** have been signed[42](index=42&type=chunk) - Cost reduction and efficiency improvement in the engineered stone business are deepened through measures such as centralized procurement, raw material substitution, formula optimization, and process adjustments[43](index=43&type=chunk) [New Materials Business](index=22&type=section&id=%E6%96%B0%E6%9D%90%E6%96%99%E6%A5%AD%E5%8B%99) The Group continues to explore new materials, with the high-purity quartz sand project for photovoltaic new energy having completed pilot line bidding, and the Hubei Chongyang calcium oxide project and Guangxi Guigang calcium-based project, both with mining rights, expected to commence production in 2024, adding annual capacities of 250,000 tons of calcium oxide and 500,000 tons of calcium oxide plus 100,000 tons of calcium hydroxide, respectively - The high-purity quartz sand project for photovoltaic new energy has completed the bidding for its **500-ton pilot line**[43](index=43&type=chunk) - The Hubei Chongyang calcium oxide project and Guangxi Guigang calcium-based project have both obtained mining rights, with resource reserves of approximately **84 million tons** and **110 million tons** respectively[43](index=43&type=chunk) - The Hubei Chongyang calcium oxide project (annual capacity of **250,000 tons**) and the Guangxi Guigang high-end calcium-based project (annual capacity of **500,000 tons of calcium oxide** and **100,000 tons of calcium hydroxide**) are both expected to commence production in 2024[43](index=43&type=chunk) [Green and Sustainable Development](index=16&type=section&id=%E7%B6%A0%E8%89%B2%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95) The Group focuses on "ecology, environmental protection, safety, and intensive resource utilization" as its main work theme, actively promoting industrial transformation and upgrading, and practicing green and sustainable development, adding 5 new provincial or autonomous region-level green mines in the first half of the year and receiving industry recognition for technological innovation and ESG performance - The Group focuses on "ecology, environmental protection, safety, and intensive resource utilization" as its main work theme, actively engaging in energy saving, emission reduction, pollution reduction, and carbon reduction initiatives[30](index=30&type=chunk) - In the first half of 2024, **5 new provincial or autonomous region-level green mines** were added, bringing the total to **9 national-level green mines** and **21 provincial or autonomous region-level green mines**[30](index=30&type=chunk) - The Group has been selected for the "China ESG Listed Companies Pioneer 100" list for two consecutive years, ranking **13th**, with its ESG performance at a "five-star" level[30](index=30&type=chunk) [Digital Transformation](index=22&type=section&id=%E6%95%B8%E5%AD%97%E5%8C%96%E8%BD%89%E5%9E%8B) As a digital intelligence benchmark enterprise of China Resources Group, the Group continues to advance digital and intelligent construction by promoting "Lighthouse Factory" experience, independently developing AI intelligent solutions, launching multiple management systems, and participating in industry standard setting, thereby comprehensively enhancing management and operational efficiency - The Group independently developed an AI intelligent solution for machine vision inspection of alternative fuels, successfully applied in multiple bases, reducing coal consumption[44](index=44&type=chunk) - Safety production management systems and quality management systems were launched in multiple bases, and information systems coverage was completed for **19 new bases**, achieving "business online, standardized management, and integrated business and finance"[45](index=45&type=chunk) - Intelligent logistics systems were promoted and launched in **6 aggregates and cement bases**, achieving an innovative upgrade from cement "one-card" to "one-code" access[45](index=45&type=chunk) [Smart Factory](index=22&type=section&id=%E6%99%BA%E8%83%BD%E5%B7%A5%E5%BB%A0) The Group promotes "Lighthouse Factory" advanced manufacturing experience, independently developing an AI intelligent solution for machine vision inspection of alternative fuels, effectively reducing calciner temperature standard deviation and coal consumption, while also promoting ERP systems to the engineered stone industry to aid smart manufacturing - The Group independently developed an AI intelligent solution for machine vision inspection of alternative fuels, replacing manual inspection with "advanced control + machine vision detection technology" to reduce calciner temperature standard deviation and coal consumption[44](index=44&type=chunk) - ERP systems for the engineered stone industry are being promoted to Shandong Runhe New Material Co., Ltd. and others, gradually advancing the digital construction of the engineered stone business[44](index=44&type=chunk) [Smart Applications and Industrial Internet](index=23&type=section&id=%E6%99%BA%E8%83%BD%E6%87%89%E7%94%A8%E8%88%87%E5%B7%A5%E6%A5%AD%E4%BA%92%E8%81%AF%E7%B6%B2) The Group deepens digital empowerment, launching safety production and quality management systems in multiple bases and completing information system coverage for 19 new bases, while jointly applying with China Resources Group for a Guangdong Province Industrial Internet identification and resolution innovative application project to promote cement quality and logistics traceability - Safety production management systems and quality management systems were launched in multiple bases, and the new national standard GB175-2023 "Common Portland Cement" was implemented at the system level[45](index=45&type=chunk) - Information system coverage was completed for **19 new bases** including aggregates and new materials, rapidly achieving "business online, standardized management, and integrated business and finance"[45](index=45&type=chunk) - Jointly applied with China Resources Group for a Guangdong Province Industrial Internet identification and resolution innovative application project, advancing the launch of three application scenarios: cement quality traceability, logistics traceability, and equipment operation and maintenance[45](index=45&type=chunk) [Smart Logistics](index=23&type=section&id=%E6%99%BA%E8%83%BD%E7%89%A9%E6%B5%81) In the first half of the year, the Group completed the promotion and launch of smart logistics systems in 6 aggregates and cement bases, and upgraded the cement "one-card" to "one-code" access, simplifying pickup processes and reducing hardware operation and maintenance costs - In the first half of the year, smart logistics systems were promoted and launched in **6 aggregates and cement bases**, including Jingang, Runlong, and Heqing[45](index=45&type=chunk) - Achieved an innovative upgrade from cement "one-card" to "one-code" access, further simplifying driver pickup processes and reducing base hardware operation and maintenance costs[45](index=45&type=chunk) [Smart Marketing](index=23&type=section&id=%E6%99%BA%E8%83%BD%E7%87%9F%E9%8A%B7) In the first half of the year, the Group fully launched digital transformation projects for marketing models across its major regional cement, aggregates, concrete, tile adhesive, and engineered stone businesses, achieving 100% coverage, with the e-commerce platform's cumulative shipment volume approximately 220 million tons and around 40,000 registered users - In the first half of the year, digital transformation projects for marketing models were fully launched across major regional cement, aggregates, concrete, tile adhesive, and engineered stone businesses, achieving **100% coverage**[46](index=46&type=chunk) - The e-commerce platform's cumulative shipment volume was approximately **220 million tons**, with around **40,000 registered users**, **541 cumulative carriers**, and approximately **96,000 cumulative vehicles (vessels)**[46](index=46&type=chunk) [Research and Development and Innovation](index=24&type=section&id=%E7%A0%94%E7%99%BC%E8%88%87%E5%89%B5%E6%96%B0) The Group has 588 scientific and technological talents, including over 80 full-time R&D personnel, and in the first half of the year, it actively promoted the R&D of new products and technologies, including rotary kiln/step kiln technology, raw meal additives, in-situ CO2 self-enrichment process, and carbon-fixing aerated concrete products, holding 325 valid patents with 16 new authorized patents in the first half - The Group has **588 scientific and technological talents**, including over **80 full-time R&D personnel**, comprising professor-level senior engineers, doctors, and masters[47](index=47&type=chunk) - Successfully developed rotary kiln/step kiln technology and equipment, independently developed raw meal additives, and established a carbon utilization research platform, with an initial **100,000 tons of CO2 capture capacity per year**[47](index=47&type=chunk) - As of June 30, 2024, the company holds a total of **325 valid patents** (including **87 invention patents**), with **16 new authorized patents** in the first half of the year[47](index=47&type=chunk) [Production Capacity and Cost Management](index=17&type=section&id=%E7%94%A2%E8%83%BD%E8%88%87%E6%88%90%E6%9C%AC%E7%AE%A1%E7%90%86) [Changes in Production Capacity and Utilization Rate](index=17&type=section&id=%E7%94%A2%E8%83%BD%E8%AE%8A%E5%8C%96%E5%8F%8A%E5%88%A9%E7%94%A8%E7%8E%87) In the first half of 2024, the Group's clinker and cement capacities remained unchanged, while total annual concrete capacity increased by approximately 1.35 million cubic meters, with cement production line utilization slightly increasing to 64.2%, concrete utilization significantly rising to 27.1%, and clinker utilization slightly decreasing - Clinker and cement capacities remained unchanged, while total annual concrete capacity increased by approximately **1.35 million cubic meters** compared to the end of 2023[31](index=31&type=chunk) Production Line Utilization Rate | Product | H1 2024 Utilization Rate | H1 2023 Utilization Rate | | :--- | :--- | :--- | | Cement | 64.2% | 63.6% | | Clinker | 75.6% | 78.9% | | Concrete | 27.1% | 21.3% | [Operating Cost Management](index=17&type=section&id=%E9%81%8B%E7%87%9F%E6%88%90%E6%9C%AC%E7%AE%A1%E7%90%86) Focusing on "strengthening fundamentals for upgrades, driving transformation through technological innovation," the Group built full value chain cost analysis capabilities, systematically reduced production costs, and promoted the "Four-Year Action Plan for Energy Saving and Carbon Reduction," with 21 production lines achieving GB16780 Level 1 energy consumption benchmark, increasing capacity share to 44% - The Group built full value chain cost analysis capabilities, systematically reducing production costs, with most product costs significantly lower than the same period last year and budget[33](index=33&type=chunk) - Standard coal consumption per ton of clinker product decreased compared to the 2023 average; production lines achieving GB16780 Level 1 energy consumption benchmark increased by **7 to 21**, raising capacity share from **33% to 44%**[33](index=33&type=chunk) - In mine safety management, safety levels are enhanced by strengthening design review, slope stability analysis, and promoting digital smart mine construction[34](index=34&type=chunk) [Procurement Management](index=18&type=section&id=%E6%8E%A1%E8%B3%BC%E7%AE%A1%E7%90%86) In the first half of 2024, the Group's total coal procurement was approximately 3.6 million tons, with average prices decreasing by 18.7%, and it plans to continue strategic cooperation with major domestic coal suppliers and expand direct procurement channels for Australian coal, while reducing costs for blended materials and aggregates procurement through various channel optimization and negotiation strategies - In the first half of 2024, total coal procurement was approximately **3.6 million tons**, with an average price of **RMB 828 per ton**, a **18.7% decrease** from the same period last year[35](index=35&type=chunk)[55](index=55&type=chunk) - In the future, the Group will maintain strategic cooperation with major domestic coal suppliers, establish direct procurement channels for Australian coal, and continue to explore other supply channels with price advantages[36](index=36&type=chunk) - For blended materials and aggregates procurement, costs are reduced through measures such as broadening procurement channels, developing direct sourcing, strengthening regional centralized procurement, and price negotiations[36](index=36&type=chunk) [Logistics Management](index=19&type=section&id=%E7%89%A9%E6%B5%81%E7%AE%A1%E7%90%86) In the first half of 2024, the Group's logistics costs showed an overall downward trend through measures such as optimizing routes, adjusting vessel types, planning two-way logistics, and exploring new energy electric vehicle businesses, while maintaining an annual transportation capacity of approximately 45.9 million tons in the Xijiang River basin and controlling 30 transit warehouses with an annual transit capacity of 31.5 million tons - Logistics costs showed an overall downward trend through measures such as optimizing routes, adjusting vessel types, planning two-way logistics, and exploring new energy electric vehicle businesses[37](index=37&type=chunk) - The Group has an annual transportation capacity of approximately **45.9 million tons** in the Xijiang River basin, controls **30 transit warehouses** with an annual transit capacity of **31.5 million tons**, consolidating its dominant position in South China[37](index=37&type=chunk) [Marketing and Brand Building](index=20&type=section&id=%E5%B8%82%E5%A0%B4%E7%87%9F%E9%8A%B7%E8%88%87%E5%93%81%E7%89%8C%E5%BB%BA%E8%A8%AD) [Product Promotion](index=20&type=section&id=%E7%94%A2%E5%93%81%E6%8E%A8%E5%BB%A3) The Group continues to promote special products such as nuclear power cement and road Portland cement, enhancing its differentiated competitive advantage, with nuclear power cement application expanding to nuclear island domes and road Portland cement successfully applied in major airport pavement projects - Continuously promoting special products such as nuclear power cement and road Portland cement to enhance differentiated competitive advantages[38](index=38&type=chunk) - Nuclear power cement application expanded to the nuclear island domes of nuclear power projects; road Portland cement was successfully applied in Fuzhou Airport Phase II and Xiamen New Airport pavement pouring projects[38](index=38&type=chunk) - Special products such as medium-heat and low-heat cement are applied in major national infrastructure projects like the Yalin section of the Sichuan-Tibet Railway and multiple hydropower station projects[38](index=38&type=chunk) [Brand Building](index=20&type=section&id=%E5%93%81%E7%89%8C%E5%BB%BA%E8%A8%AD) The Group is committed to comprehensively enhancing the "Runfeng" brand influence, adding over 1,200 new partners through the "Key User and Decoration Company Special Enhancement Program," while continuously building the unified brand "Runpin" for its functional building materials business, expanding brand exposure through professional exhibitions, showrooms, and digital media - Through the launch of the "Key User and Decoration Company Special Enhancement Program" and surveys, over **1,200 new key users and decoration companies** were partnered, enhancing the "Runfeng" brand reputation[39](index=39&type=chunk) - Continuously building the unified brand "Runpin" for functional building materials business, shaping brand image through professional exhibitions, showrooms, and "Master Lectures" and other activities[39](index=39&type=chunk) - Fully utilizing communication channels such as official accounts and video accounts in conjunction with offline marketing to continuously expand brand exposure[39](index=39&type=chunk) [Employee Information](index=25&type=section&id=%E5%83%B1%E5%93%A1%E4%BF%A1%E6%81%AF) [Employee Profile and Costs](index=25&type=section&id=%E5%83%B1%E5%93%A1%E6%A6%82%E6%B3%81%E5%8F%8A%E6%88%90%E6%9C%AC) As of June 30, 2024, the Group employed a total of 17,165 full-time employees, a slight decrease from the end of 2023, with total staff costs (including directors' emoluments) at RMB 1,284.5 million, a year-on-year decrease of 2.2% - As of June 30, 2024, the Group employed a total of **17,165 full-time employees**, with **359 in Hong Kong** and **16,806 in mainland China**[48](index=48&type=chunk) Employee Functional Distribution | Function | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Management | 475 | 481 | | Finance, Administration and Others | 2,336 | 2,381 | | Production Personnel | 9,325 | 9,973 | | Technical Personnel | 4,265 | 4,408 | | Marketing Personnel | 764 | 696 | | **Total** | **17,165** | **17,939** | - Total staff costs (including directors' emoluments) for the first half of 2024 were approximately **RMB 1,284.5 million**, a **2.2% decrease** from RMB 1,314.0 million in the same period last year[49](index=49&type=chunk) [Talent Development](index=25&type=section&id=%E4%BA%BA%E6%89%8D%E5%9F%B9%E9%A4%8A) Based on the "14th Five-Year Plan" talent development program, the Group is committed to building a "3+1" talent team, conducting specialized talent training, and providing career guidance and follow-up training for young employees - Based on the "14th Five-Year Plan" talent development program, the Group is committed to building a "3+1" talent team and gradually conducting specialized talent training[50](index=50&type=chunk) [Business Review](index=26&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) [Revenue Analysis](index=26&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D%E5%88%86%E6%9E%90) In the first half of 2024, the Group's consolidated revenue was RMB 10,311.7 million, a year-on-year decrease of 13.9%, with average selling prices of cement, clinker, concrete, and aggregates all decreasing, but aggregates sales volume significantly increasing by 107.3% - Consolidated revenue for the first half of 2024 reached **RMB 10,311.7 million**, a **13.9% decrease** from the same period last year[52](index=52&type=chunk) Product Sales Volume, Average Selling Price, and Revenue (RMB thousand) | Product | H1 2024 Sales Volume (thousand tons/cubic meters) | H1 2024 Average Selling Price (RMB) | H1 2024 Revenue | H1 2023 Sales Volume (thousand tons/cubic meters) | H1 2023 Average Selling Price (RMB) | H1 2023 Revenue (Restated) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 27,687 | 240.0 | 6,644,876 | 28,521 | 315.9 | 9,009,615 | | Clinker | 1,276 | 193.0 | 246,265 | 1,023 | 270.8 | 277,044 | | Concrete | 5,057 | 343.5 | 1,736,957 | 3,803 | 390.1 | 1,483,772 | | Aggregates | 29,497 | 36.8 | 1,086,961 | 14,230 | 35.6 | 506,350 | | Others | - | - | 596,658 | - | - | 697,797 | | **Total** | - | - | **10,311,717** | - | - | **11,974,578** | - External sales volume of aggregates significantly increased by **107.3%**, while the average selling prices of cement, clinker, and concrete decreased by **24.0%**, **28.7%**, and **11.9%** respectively[53](index=53&type=chunk)[54](index=54&type=chunk) [Cost of Sales](index=27&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) In the first half of 2024, the Group's average coal procurement price decreased by 18.7%, and both unit coal consumption and standard coal consumption per ton of clinker decreased, leading to a 21.3% reduction in average coal cost per ton of clinker, with average electricity cost and consumption per ton of cement also decreasing concurrently - The average coal procurement price was **RMB 828 per ton**, a **18.7% decrease** from the same period last year[55](index=55&type=chunk) - Unit coal consumption per ton of clinker decreased from **134.2 kg to 129.9 kg**, and standard coal consumption decreased from **99.5 kg to 97.2 kg**[55](index=55&type=chunk) - Average electricity cost per ton of cement decreased by **8.0%** from **RMB 31.3 to RMB 28.8**, with electricity consumption at **68.1 kWh**[55](index=55&type=chunk) [Gross Profit and Gross Profit Margin](index=27&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) In the first half of 2024, the Group's consolidated gross profit was RMB 1,544.8 million, a year-on-year decrease of 23.3%, and the consolidated gross profit margin decreased by 1.8 percentage points to 15.0%, primarily due to lower selling prices of cement products and concrete - Consolidated gross profit was **RMB 1,544.8 million**, a **23.3% decrease** from the same period last year[56](index=56&type=chunk) - The consolidated gross profit margin was **15.0%**, a **1.8 percentage point decrease** from the same period last year, mainly due to lower selling prices of cement products and concrete[56](index=56&type=chunk) Product Gross Profit Margin | Product | H1 2024 Gross Profit Margin | H1 2023 Gross Profit Margin (Restated) | | :--- | :--- | :--- | | Cement | 12.5% | 16.1% | | Clinker | 2.5% | 7.7% | | Concrete | 12.6% | 10.4% | | Aggregates | 39.4% | 55.0% | [Other Income and Expenses](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E8%B2%BB%E7%94%A8) In the first half of 2024, other income decreased by 20.0% to RMB 140.2 million, sales and distribution expenses decreased by 3.6% but their percentage of consolidated revenue increased to 2.0%, and general and administrative expenses decreased by 2.7% but their percentage of consolidated revenue increased to 9.2% - Other income was **RMB 140.2 million**, a **20.0% decrease** from the same period last year[57](index=57&type=chunk) - Sales and distribution expenses decreased by **3.6%** to **RMB 208.1 million**, with their percentage of consolidated revenue increasing from **1.8% to 2.0%**[57](index=57&type=chunk) - General and administrative expenses decreased by **2.7%** to **RMB 944.4 million**, with their percentage of consolidated revenue increasing from **8.1% to 9.2%**[58](index=58&type=chunk) [Results of Associates and Joint Ventures](index=28&type=section&id=%E8%81%AF%E7%96%B2%E5%8F%8A%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) In the first half of 2024, the Group's associates incurred a loss of RMB 65.2 million, an expansion from the loss in the same period last year, while joint ventures generated a profit of RMB 24.1 million, slightly lower than the same period last year - Associates incurred a loss of **RMB 65.2 million**, an expansion from the loss of RMB 23.1 million in the same period last year[59](index=59&type=chunk) - Joint ventures generated a profit of **RMB 24.1 million**, a slight decrease from the profit of RMB 28.4 million in the same period last year[60](index=60&type=chunk) [Net Profit Margin](index=28&type=section&id=%E6%B7%A8%E5%88%A9%E6%BD%A4%E7%8E%87) In the first half of 2024, the Group's net profit margin was 1.3%, a decrease of 3.1 percentage points from 4.4% in the same period last year, reflecting a decline in profitability - The Group's net profit margin for the period was **1.3%**, a **3.1 percentage point decrease** from **4.4%** (restated) in the same period last year[61](index=61&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) [Sources of Funds and Cash Position](index=29&type=section&id=%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E5%8F%8A%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) The Group's sources of funds primarily include internal funds, bank loans, medium-term notes, related party loans, and operating cash flow, with cash and bank balances (including pledged deposits) at RMB 1,454.7 million as of June 30, 2024, a decrease from the end of 2023 - The Group's sources of funds primarily include internal funds, bank loans, medium-term notes, loans from related parties, issuance of equity securities, and cash flows from operations[62](index=62&type=chunk) Cash and Bank Balances (RMB thousand) | Currency | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | HKD | 177,483 | 185,521 | | RMB | 1,454,678 | 2,888,053 | | USD | 153 | 153 | [Bank and Other Borrowings](index=29&type=section&id=%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E8%B2%B8) As of June 30, 2024, the Group's total bank and other borrowings were RMB 17,143.6 million, with floating-rate borrowings accounting for approximately 77%, and borrowings due within one year amounting to RMB 5,395.0 million, while the Group has RMB 23,506.7 million in unutilized bank loan facilities and complies with all financial covenants Bank and Other Borrowings (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Bank loans | 15,952,256 | 16,090,113 | | Medium-term notes | 1,000,000 | - | | Loans from related parties | 191,325 | 191,325 | | **Total** | **17,143,581** | **16,281,438** | - Fixed-rate and floating-rate borrowings were **RMB 3,892.8 million** and **RMB 13,250.8 million** respectively[64](index=64&type=chunk) - Borrowings due within one year amounted to **RMB 5,395.0 million**. The Group has **RMB 23,506.7 million** in unutilized bank loan facilities and complies with financial covenants requiring a net gearing ratio not exceeding **180%**[66](index=66&type=chunk) [Medium-Term Notes and Financial Management](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E7%A5%A8%E6%93%9A%E5%8F%8A%E8%B2%A1%E5%8B%99%E7%AE%A1%E7%90%86) The Group has been approved to register medium-term notes totaling RMB 15 billion and issued the first tranche of RMB 1 billion in April 2024 to repay domestic bank borrowings, while adopting a prudent and cautious financial management policy and regularly monitoring liquidity needs and foreign currency risks - The Group has been approved to register medium-term notes totaling **RMB 15 billion** and issued the first tranche of **RMB 1 billion** in April 2024, with a coupon rate of **2.44%** and a three-year term[67](index=67&type=chunk) - The Group adopts a prudent and cautious financial policy for financial management, with centralized management of cash, financing, and investment activities[67](index=67&type=chunk) - The Group currently has no foreign currency hedging policy, but management regularly monitors relevant foreign currency risks, with non-RMB denominated debt accounting for **12% of total debt**[67](index=67&type=chunk) [Net Current Liabilities and Future Solvency](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B2%A0%E5%80%B5%E6%B7%A8%E5%80%BC%E5%8F%8A%E6%9C%AA%E4%BE%86%E5%84%AA%E4%BB%98%E8%83%BD%E5%8A%9B) As of June 30, 2024, the Group's net current liabilities were RMB 5,317.9 million, but the Board believes the Group is capable of meeting its future financial obligations, considering existing cash, unutilized credit facilities, and anticipated sources of funds - As of June 30, 2024, the Group's net current liabilities were **RMB 5,317.9 million**[68](index=68&type=chunk) - The Board believes that the Group will be able to meet its financial obligations as they fall due in the foreseeable future, primarily based on cash, unutilized bank loan facilities, medium-term note facilities, and anticipated internally generated funds[68](index=68&type=chunk) [Pledged Assets and Contingent Liabilities](index=31&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%80%B5) As of June 30, 2024, the Group had no pledged assets, and contingent liabilities primarily consisted of bank loan guarantees granted to associates and joint ventures, with an utilized amount of RMB 1,402.1 million - As of June 30, 2024, the Group had no pledged assets[69](index=69&type=chunk) - The Group has issued guarantees for bank loan facilities granted to associates and joint ventures, totaling **RMB 1,966.1 million**, of which **RMB 1,402.1 million** has been utilized[69](index=69&type=chunk) [Future Plans and Capital Expenditure](index=31&type=section&id=%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA) [Capital Expenditure Budget and Funding](index=31&type=section&id=%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA%E9%A0%90%E7%AE%97%E5%8F%8A%E6%8B%A8%E4%BB%98) As of June 30, 2024, the Group's outstanding capital expenditure for expansion plans yet to be invested was approximately RMB 4,697.3 million, with total estimated capital expenditure payments for the second half of 2024 at approximately RMB 2,836.6 million, to be funded by borrowings and internally generated funds - As of June 30, 2024, the Group's outstanding capital expenditure for expansion plans yet to be invested was approximately **RMB 4,697.3 million**[70](index=70&type=chunk) - Total estimated capital expenditure payments for the second half of 2024 are approximately **RMB 2,836.6 million**, to be funded by borrowings and internally generated funds[70](index=70&type=chunk) [Strategy and Outlook](index=31&type=section&id=%E6%88%B0%E7%95%A5%E8%88%87%E5%89%8D%E6%99%AF) [Macro Policy Orientation](index=31&type=section&id=%E5%AE%8F%E8%A7%80%E6%94%BF%E7%AD%96%E5%B0%8E%E5%90%91) The Chinese government adheres to seeking progress while maintaining stability, strengthening macroeconomic regulation, and coordinating new urbanization with comprehensive rural revitalization, with proactive fiscal policies continuing to support infrastructure construction, the real estate market building a new development model, and rural construction advancing, all providing demand support for the building materials industry - The Chinese government adheres to seeking progress while maintaining stability, strengthening macroeconomic regulation, and coordinating new urbanization with comprehensive rural revitalization to promote high-quality economic development[71](index=71&type=chunk) - Proactive fiscal policies will enhance the带动 effect of government investment, timely issue and utilize ultra-long-term special treasury bonds, and support the implementation of "two major" projects[72](index=72&type=chunk) - The real estate market will coordinate research on policy measures to digest existing housing inventory and optimize incremental housing, build a new development model, and introduce multiple housing loan support policies[72](index=72&type=chunk) - The Central Document No. 1 proposes advancing comprehensive rural revitalization, including the construction of "four good rural roads" and renovation of dilapidated rural houses, which is beneficial for supporting demand in the cement and other building materials industries[72](index=72&type=chunk) [Group's Future Strategy](index=32&type=section&id=%E9%9B%86%E5%9C%98%E6%9C%AA%E4%BE%86%E6%88%B0%E7%95%A5) The Group will accelerate the layout of strategic emerging industries, promote green development, and foster an innovative and entrepreneurial spirit, focusing on "strengthening fundamentals for upgrades, driving transformation through technological innovation" to deepen reforms, increase R&D investment, achieve green and intelligent industrial upgrades, and strive to build a world-class building materials technology enterprise - The Group will accelerate the layout of strategic emerging industries, promote green development, and foster an innovative and entrepreneurial spirit to inject lasting momentum into the enterprise's high-quality development[72](index=72&type=chunk) - Focusing on the annual management theme of "strengthening fundamentals for upgrades, driving transformation through technological innovation," the Group will deeply implement reform and enhancement actions and accelerate the pace of traditional industry upgrades[72](index=72&type=chunk) - Increase R&D investment, empower traditional businesses with technological innovation for green and intelligent industrial upgrades, and strive to build a world-class building materials technology enterprise[72](index=72&type=chunk) [Corporate Governance and Others](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96) [Corporate Governance](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) In the first half of 2024, the company complied with the applicable code provisions contained in Part 2 of Appendix C1 to the Listing Rules - The company complied with the applicable code provisions contained in Part 2 of Appendix C1 to the Listing Rules during the period[73](index=73&type=chunk) [Dealings in Listed Securities](index=33&type=section&id=%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities in the first half of 2024 - Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities during the period[73](index=73&type=chunk) [Review of Interim Report and Acknowledgements](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E5%AF%A9%E9%96%B1%E5%8F%8A%E8%87%B4%E8%AC%9D) The company's interim report for the first half of 2024 has been reviewed by the Audit Committee, and the Board expresses sincere gratitude to all stakeholders for their contributions and continued support - The company's interim report for the period has been reviewed by the company's Audit Committee[74](index=74&type=chunk) - The Board thanks the directors, management team, and all employees for their contributions, and shareholders, customers, suppliers, business partners, and other stakeholders for their continued trust and support[74](index=74&type=chunk) [Publication of Interim Report](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E7%99%BB%E8%BC%89) The company's interim report for the first half of 2024 will be published on the HKEXnews website and the company's website in due course - The company's interim report for the period will be published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.cr-bmt.com) in due course[74](index=74&type=chunk)

Revenue Performance - Revenue for the three months ended March 31, 2024, was RMB 4,788.4 million, a decrease of 5.6% compared to RMB 5,070.2 million for the same period in 2023[2] - The consolidated revenue for the period reached RMB 4,788,400,000, a decrease of 5.6% compared to RMB 5,070,200,000 in the same period last year[15] Profitability - Gross profit for the period was RMB 661.5 million, up from RMB 607.5 million in the previous year[4] - The consolidated gross profit for the period was RMB 661,500,000, an increase of 8.9% from RMB 607,500,000 in the same period last year[18] - The consolidated gross profit margin improved to 13.8%, up 1.8 percentage points from 12.0% in the same period last year[18] - The company reported a pre-tax loss of RMB 14.5 million, significantly improved from a loss of RMB 45.1 million in the previous year[4] - Other income decreased to RMB 56.3 million from RMB 70.5 million year-on-year[4] Net Loss - The net loss attributable to the company's owners for the period was RMB 28.9 million, compared to a loss of RMB 30.0 million in the same period last year[2] - The company reported a loss attributable to owners of RMB 28,900,000 for the period, compared to a loss of RMB 30,000,000 in the same period last year[19] Assets and Liabilities - The total assets attributable to the company's owners were RMB 72,921.6 million, with a debt-to-equity ratio of 39.3%, compared to 36.9% in the previous year[2] Share Performance - Basic loss per share remained at RMB 0.004 for both periods[4] Inventory and Cash Flow - Inventory increased to RMB 2,318.6 million from RMB 1,896.0 million year-on-year[5] - Cash and bank balances decreased to RMB 1,711.7 million from RMB 2,603.7 million[5] Dividend - The company has not declared an interim dividend for the current period, consistent with the previous year[2] - The company did not recommend any dividend payment for the period ending March 31, 2023[14] Sales Volume and Revenue Breakdown - The sales volume of cement was 12,637 thousand tons, with an average selling price of RMB 245.8 per ton, resulting in revenue of RMB 3,106,631,000[16] - The sales volume of clinker was 396 thousand tons, with an average selling price of RMB 197.8 per ton, generating revenue of RMB 78,433,000[16] - The sales volume of concrete was 2,305 thousand cubic meters, with an average selling price of RMB 354.9 per cubic meter, leading to revenue of RMB 817,997,000[16] - The sales volume of aggregates was 14,158 thousand tons, with an average selling price of RMB 37.4 per ton, resulting in revenue of RMB 529,515,000[16] Regional Sales Performance - The sales performance by region showed Guangdong with 5,854 thousand tons sold, generating revenue of RMB 1,514,920,000[17]

Company Overview - The total number of issued shares of China Resources Building Materials Technology Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[5]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[5]. - The company changed its name from China Resources Cement Holdings Limited to China Resources Building Materials Technology Holdings Limited on November 3, 2023[5]. - The company is the holding entity for all cement and concrete operations of China Resources Group, which was established on March 13, 2003[4]. - The company has undergone significant changes in its corporate structure, including privatization and re-listing, impacting its operational strategy[4]. Financial Performance - The Group's turnover for 2023 was RMB 25,549.6 million, a decrease from RMB 36,929.2 million in 2022[55]. - The profit attributable to owners of the Company for 2023 was RMB 643.8 million, down from RMB 1,612.6 million in 2022[55]. - The Group's EBITDA for 2023 was RMB 4,082.0 million, compared to RMB 4,418.8 million in 2022[55]. - The consolidated turnover for the year ended 31 December 2023 amounted to RMB 25,549.6 million, representing a decrease of 12.9% compared to the previous year[58]. - The consolidated profit attributable to owners of the Company for the year ended 31 December 2023 was RMB 643.8 million, a decrease of 60.1% year-on-year[58]. - Basic earnings per share for the year was RMB 0.092[58]. - The total distribution for the year ended 31 December 2023 will be HK$0.047 per share, down from HK$0.129 per share in 2022[59]. - An interim dividend of HK$0.041 per share was declared for 2023, compared to HK$0.12 per share in 2022[58]. - The final dividend recommended for the year ended 31 December 2023 is HK$0.006 per share, down from HK$0.009 per share in 2022[58]. Production Capacity and Operations - The Group operates 101 cement grinding lines and 49 clinker production lines, with annual production capacities of 90.2 million tons of cement and 63.3 million tons of clinker respectively[33]. - The concrete batching plants have an annual production capacity of 38.4 million cubic meters[33]. - The Group's annual production capacity for concrete is supported by 63 concrete batching plants[33]. - The Group owns a total of 74 cement grinding lines, 30 clinker production lines, and 20 concrete batching plants, with total annual production capacities of 64.7 million tons of cement, 37.0 million tons of clinker, and 8.5 million m³ of concrete[35]. - The Group's facilities are strategically located to optimize production and distribution efficiency[33]. Market and Sales - The Group's products are primarily used in infrastructure projects such as railways, highways, subways, bridges, airports, ports, dams, hydroelectric power stations, and nuclear power stations[33]. - The main sales regions for the Group's products include Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan[33]. - The Group's aggregates business is being vigorously developed to increase market share and accelerate project construction[112]. - The Group's aggregates projects are positioned as a key profit contributor, enhancing construction, operation, and sales capabilities[115]. Environmental and Regulatory Compliance - The Group's emission concentrations of nitrogen oxides, particulate matters, and sulphur dioxide are better than the national standard limits of pollutant emissions[36]. - The Chinese government aims for 50% of cement clinker production capacity in key regions to complete ultra-low emissions transformation by the end of 2025, and 80% by the end of 2028[74]. - The Group's competitiveness in energy saving and carbon reduction is crucial for sustainable development, with ongoing efforts to promote alternative fuels and improve energy efficiency[109]. - The Group has implemented a "Four-Year Action Plan for Energy Saving and Carbon Reduction" to enhance operational management and control in basic building materials[112]. Research and Development - The Group continued to increase investment in research and development, promoting the upgrade of cement production lines and the application of grinding aids for raw materials[90]. - The Group's research and development team consists of 607 technology talents, including 5 professor-level senior engineers and 17 doctorate holders[159]. - The Group has initiated research on new materials, including silicon-based materials, basalt materials, and energy storage battery materials, to support enterprise transformation[161]. - The Group established the Engineered Stone Technology and Engineering Innovation Center in June 2023, enhancing its research and development capabilities[167]. Strategic Initiatives - The Group revised its "Fourteenth Five-Year Plan" development strategy, focusing on a business portfolio of "4+1" including cement, aggregates, concrete, engineered stone, and new materials[100]. - In 2024, the Group aims to enhance core competitiveness through increased R&D investment and promote green and intelligent upgrades in traditional industries[102]. - The Group's annual management theme for 2024 is "strengthening the foundations and grasping upgrades, technological innovation promotes transformation"[102]. Human Resources and Talent Development - As of December 31, 2023, the Group employed a total of 17,939 employees, a decrease from 19,046 employees as of December 31, 2022[165]. - The Group's average age of managerial staff is approximately 47 years, with 84% holding university degrees or above[166]. - The Group's focus on talent development is based on the "3+1" talent team cultivation plan, which includes special talent training programs[166]. Logistics and Supply Chain - The Group's annual shipping capacity along the Xijiang River was approximately 39.9 million tons, ensuring stable logistics capabilities for business operations[120]. - The Group controlled the operation of 30 silo terminals with a total annual capacity of approximately 30.9 million tons, primarily located in the Pearl River Delta Region of Guangdong[120]. - The Group implemented measures to reduce shipping costs through optimizing tender schemes and introducing multiple logistics providers[120]. Customer Satisfaction and Brand Development - The customer satisfaction rate reached 98.19% in 2023, reflecting a year-on-year increase of 0.57%[128]. - The Group established 19 brand flagship stores and 5 specialty stores to enhance the "Runpin" brand image and product system[128]. - The Group's "Runpin" brand received multiple industry awards, including the "Most Impetuous Enterprise Award" and the "Golden Orchid Award" in the ceramic tile adhesives sector[143].

Financial Performance - Revenue for 2023 decreased by 12.9% to RMB 25,549.6 million compared to RMB 29,332.4 million in 2022[2] - Net profit attributable to the company's owners dropped by 60.1% to RMB 643.8 million from RMB 1,612.6 million in 2022[2] - Gross profit for 2023 was RMB 3,761.954 million, down from RMB 4,616.301 million in 2022[4] - Basic earnings per share for 2023 were RMB 0.092, a significant decrease from RMB 0.231 in 2022[5] - The company's pre-tax profit for 2023 was RMB 1,897,264 thousand, compared to RMB 1,942,553 thousand in 2022[14] - The company's basic earnings per share for 2023 were RMB 643,821 thousand, a significant decrease from RMB 1,612,583 thousand in 2022[19] - The company's comprehensive revenue for the year ended December 31, 2023, was RMB 25,549,600,000, a decrease of 12.9% compared to RMB 29,332,400,000 in the previous year (restated)[61] - The company's comprehensive gross profit in 2023 was RMB 3,762 million, a decrease of 18.5% compared to RMB 4,616.3 million in 2022[65] - The comprehensive gross profit margin in 2023 was 14.7%, a decrease of 1.0 percentage points compared to 15.7% in 2022[65] - The company's net profit margin in 2023 was 2.4%, a decrease of 2.9 percentage points compared to 5.3% in 2022[70] - The actual tax rate in 2023 was 32.3%, compared to 18.2% in 2022[69] - The company's joint ventures generated a profit of RMB 46.6 million in 2023, compared to a loss of RMB 60.8 million in 2022[69] Assets and Liabilities - Total assets increased by 1.3% to RMB 72,792.2 million as of December 31, 2023, compared to RMB 71,855.9 million in 2022[2] - Fixed assets increased to RMB 31,172.910 million in 2023 from RMB 28,109.417 million in 2022[6] - Cash and bank balances stood at RMB 2,603.664 million as of December 31, 2023, up from RMB 1,948.876 million in 2022[6] - Total current liabilities decreased to RMB 10,979.935 million in 2023 from RMB 13,673.142 million in 2022[6] - The company's equity attributable to owners increased slightly by 0.6% to RMB 44,108.5 million in 2023[2] - The gearing ratio rose to 36.9% in 2023 from 33.5% in 2022[2] - Non-current liabilities increased to RMB 16,065,133 thousand in 2023, up from RMB 12,922,681 thousand in 2022, primarily due to an increase in bank loans[7] - Total equity remained stable at RMB 45,747,169 thousand in 2023, compared to RMB 45,260,117 thousand in 2022[7] - Trade receivables decreased to RMB 1,719,622 thousand in 2023 from RMB 2,591,078 thousand in 2022[21] - Trade payables increased to RMB 2,978,619 thousand in 2023 from RMB 2,895,815 thousand in 2022[23] - Total accounts receivable as of December 31, 2023, amounted to RMB 2,978,619 thousand, compared to RMB 2,895,815 thousand in 2022[24] - Total bank and other borrowings as of December 31, 2023, were RMB 16,281,438 thousand, compared to RMB 14,679,372 thousand in 2022[73] - Fixed-rate and floating-rate bank and other borrowings as of December 31, 2023, were RMB 3,184,300,000 and RMB 13,097,100,000, respectively[73] - Unused bank loan facilities as of December 31, 2023, amounted to RMB 22,076,200,000[74] - Non-RMB denominated debt accounted for 13% of the company's total debt as of December 31, 2023[75] - The company's net current liabilities as of December 31, 2023, were RMB 3,289,700,000[75] Segment Performance - Revenue from the cement segment decreased to RMB 19,435,964 thousand in 2023 from RMB 23,729,742 thousand in 2022[13] - Revenue from the concrete segment decreased to RMB 3,425,643 thousand in 2023 from RMB 4,539,637 thousand in 2022[13] - Revenue from the aggregates and other segment increased to RMB 3,550,216 thousand in 2023 from RMB 1,825,588 thousand in 2022[13] - Total revenue for 2023 was RMB 25,549,648 thousand, down from RMB 29,332,435 thousand in 2022[13] - Segment performance for cement was RMB 814,698 thousand in 2023, compared to RMB 129,434 thousand for concrete and RMB 815,636 thousand for aggregates and other[13] - The company's cement, clinker, concrete, and aggregate external sales decreased by 5,400,000 tons, 400,000 tons, 1,500,000 cubic meters, and increased by 30,500,000 tons, respectively, compared to 2022, representing decreases of 7.5%, 12.2%, 13.6%, and an increase of 201.5%[61] - Cement sales volume in 2023 was 66,728 thousand tons, a decrease of 7.5% compared to 72,110 thousand tons in 2022[62] - The average selling price of cement in 2023 was RMB 273.9 per ton, a decrease of 11.2% compared to RMB 308.4 per ton in 2022[63] Operational Metrics - The company's cement, clinker, and concrete production line utilization rates for 2023 were 71.8%, 81.0%, and 25.9%, respectively, compared to 81.6%, 90.5%, and 29.3% in 2022[36] - The company's clinker production capacity remained at approximately 1.6 million tons per year, while cement production capacity increased to approximately 2.1 million tons per year after technical upgrades[35] - The company reduced standard coal consumption per ton of clinker by 4.34 kg through energy-saving and carbon-reduction initiatives[37] - The company's total concrete production capacity decreased by approximately 50,000 cubic meters in 2023 due to acquisitions, disposals, and capacity adjustments[35] - The company achieved a 33% clinker production capacity meeting the GB16780 first-level energy consumption standard, totaling 20.67 million tons[37] - The company added 36.3 million tons of limestone resources through the acquisition of mining rights in Hunan[35] - The company's coal procurement volume in 2023 was approximately 6.6 million tons, with 82%, 10%, and 8% sourced from northern China, surrounding production bases, and overseas, respectively[39] - The average coal purchase price in 2023 was RMB 929 per ton, a decrease of 12.7% compared to RMB 1,064 per ton in 2022[64] Strategic Initiatives and Future Plans - The company revised its "14th Five-Year Plan" development strategy, focusing on cement, aggregates, concrete, artificial stone, and new materials[79] - The company plans to accelerate the layout of strategic emerging industries and promote green development in 2024[79] - The company aims to increase R&D investment to drive green and intelligent upgrades in traditional businesses[79] - The company is committed to leading digital transformation and building a world-class building materials technology enterprise[79] - The company plans to increase the proportion of imported coal procurement and conduct annual price inquiries with Australian mining companies in 2024[40] - Capital expenditure for expansion plans as of December 31, 2023, was approximately RMB 5,508,000,000, with expected payments of RMB 4,822,800,000 in 2024[77] ESG and Corporate Governance - The company's ESG performance was rated at a five-star level, ranking 13th in the "China ESG Listed Companies Pioneer 100" list[32] - The company's Huarun Cement (Tianyang) Co., Ltd. was recognized as a "Lighthouse Factory" by the World Economic Forum, representing the highest level of intelligent manufacturing and digitalization in the global manufacturing industry[33] - The company has complied with the applicable code provisions of the Corporate Governance Code, except for Code Provision C.2.1, which was rectified on April 18, 2023, with the appointment of Mr. Jing Shiqing as the new President and Executive Director[80] - The company did not repurchase, sell, or redeem any of its listed securities during the year[81] - The Board proposed a final dividend of HKD 0.006 per share for the year ended December 31, 2023, compared to HKD 0.009 per share in 2022, with a total distribution of HKD 0.047 per share for 2023 (2022: HKD 0.129 per share)[82] - The final dividend will be paid in HKD by default, with an option for shareholders to receive it in RMB based on the exchange rate published by the People's Bank of China on May 24, 2024[82] - The company will suspend share transfer registration from May 21 to May 24, 2024, and from June 3 to June 7, 2024, for the final dividend distribution[83] - The annual report for the year ended December 31, 2023, has been reviewed by the company's audit committee[84] - The company expressed gratitude to its directors, management team, employees, shareholders, customers, suppliers, and other stakeholders for their contributions and support[85] - As of the announcement date, the executive directors include Mr. Ji Youhong and Mr. Jing Shiqing, with non-executive and independent non-executive directors also listed[86] Market and Industry Trends - China's GDP grew by 5.2% in 2023, reaching RMB 126.1 trillion[25] - National fixed asset investment (excluding rural households) increased by 3.0% to RMB 50.3 trillion in 2023[25] - Guangdong's GDP reached RMB 13.6 trillion in 2023, with a growth rate of 4.8%[25] - National infrastructure investment (excluding power, heat, gas, and water production) rose by 5.9% in 2023[25] - Railway fixed asset investment increased by 7.5% to RMB 764.5 billion in 2023[25] - National real estate development investment decreased by 9.6% to RMB 11.1 trillion in 2023[26] - National cement production decreased by 0.7% to approximately 2.02 billion tons in 2023[27] - Guangdong's cement production was approximately 143 million tons in 2023, a decrease of 5.8%[27] - National clinker production capacity increased by 24.9 million tons with 17 new clinker production lines added[28] - Guangdong added 1 clinker production line, increasing clinker production capacity by 1.6 million tons[28] - Guangxi added 2 clinker production lines, increasing clinker production capacity by 3.3 million tons[28] - Guizhou added 2 clinker production lines, increasing clinker production capacity by 2.5 million tons[28] - Hunan added 2 clinker production lines, increasing clinker production capacity by 2.8 million tons[28] - By the end of 2025, 50% of clinker production capacity in key regions is targeted to complete ultra-low emission transformation[28] - By the end of 2028, 80% of clinker production capacity nationwide is targeted to complete ultra-low emission transformation[28] Innovation and Technology - The company successfully acquired mining rights for limestone resources in Guangxi and Guangdong, expanding clinker and aggregate resources[31] - The company's new dry-process clinker production line in Hunan was successfully ignited after technical, energy consumption, and environmental upgrades[31] - The company's precast concrete component projects are expected to reach an annual design capacity of 1.4 million cubic meters upon completion[31] - The company's artificial stone Oracle EBS system has been successfully piloted and is operating stably at Dongguan and Laibin factories[52] - The company has implemented 3 AI algorithms in its advanced control and quality management systems across multiple bases[52] - The company has completed information system coverage for 19 new bases in aggregates and new materials, achieving business digitization and management standardization[52] - The company's smart logistics system has been promoted and implemented in 10 aggregate bases and 1 cement base, achieving unmanned weighing and semi-automated loading, improving shipping efficiency[54] - The company's digital transformation project for marketing has been fully launched in major regions, covering 100% of cement, aggregate, concrete, and tile adhesive businesses, with artificial stone business also being promoted online[55] - The company holds 323 valid patents, including 60 invention patents and 263 utility model patents, with 32 new patents authorized in 2023, an increase of 11.0% compared to the previous year[57] - The company has 607 scientific and technological talents, including 2 group-level leading talents, 6 company-level leading talents, 6 company-level backbone talents, and 26 company-level young talents[56] Sales and Distribution - The company's e-commerce platform had a cumulative shipment volume of approximately 180 million tons, with 35,000 registered users, 517 carriers, and 87,000 vehicles (ships) as of December 31, 2023[55] - The company's e-commerce platform had a cumulative delivery business volume of 294,000 tons and a credit line of approximately RMB 1.36 billion as of December 31, 2023[55] - The company's sales and distribution expenses in 2023 were RMB 506.2 million, an increase of 11.2% compared to RMB 455.3 million in 2022[66] - The company's general and administrative expenses in 2023 were RMB 2,322.1 million, a decrease of 4.9% compared to RMB 2,440.7 million in 2022[67] - The company's "Runfeng" brand terminal coverage rate reached 92.2%, with 3 new brand image stores added, and customer satisfaction increased by 0.57% to 98.19%[44] - The company's new strategic customers in 2023 contributed over RMB 24 million in contract value, with 15 new projects signed totaling over RMB 40 million[49] Production and Capacity - The company's aggregate business has a planned annual production capacity of approximately 14.75 million tons through subsidiaries and 1.36 million tons through joint ventures and associates[46] - The company has 6 concrete prefabricated component projects with a total planned annual production capacity of approximately 1.4 million cubic meters[47] - The company's Guangdong Fengkai autoclaved aerated concrete block and panel production line project has a planned annual production capacity of 400,000 cubic meters for panels and 200,000 cubic meters for blocks[47] - The company's inorganic artificial stone production capacity will reach 26.1 million square meters annually after all ongoing projects are completed[48] - The company's new intelligent inorganic artificial stone production line in Laibin, Guangxi, has a planned annual capacity of 6 million square meters, with the first phase (3 million square meters) operational since December 2023[48] - The company's Hubei Chongyang calcium oxide project has a resource reserve of approximately 84 million tons, with a planned annual production capacity of 250,000 tons, expected to be operational by 2024[50] - The company's Guangxi Guigang high-end calcium-based project has a resource reserve of approximately 110 million tons, with planned annual production capacities of 500,000 tons of calcium oxide and 100,000 tons of calcium hydroxide, expected to be operational by 2024[50] - The company's Guangxi Tianyang cement production base achieved a 24% reduction in CO2 emissions, a 105% increase in per capita cement production, and a 56% reduction in unplanned equipment downtime[52] - The company's Guangxi Tianyang cement production base improved quality stability by 25% and reduced average customer delivery time by 39%[52] Logistics and Supply Chain - The company's annual transportation capacity in the Xijiang River Basin is approximately 39.9 million tons, with 30 transit warehouses mainly located in the Guangdong Pearl River Delta region, with an annual transit capacity of about 30.9 million tons[41] - The company's nuclear cement is supplied to 5 nuclear power projects in Zhejiang, Fujian, Guangdong, and Hainan, with new supply to the Hainan Changjiang Nuclear Power Phase II project[42] - The company's "Runfeng" brand low-heat cement has been successfully applied in hydropower stations and railway construction projects in Yunnan, including the Sichuan-Tibet Railway project[43] Human Resources - The company's total employee costs for 2023 were RMB 3,056,899 thousand, slightly lower than RMB 3,071,704 thousand in 2022[17] - The company employed 17,939 full-time employees as of December 31, 2023, with 343 working in Hong Kong and 17,596 in mainland China[58] - The company's management team consists of 481 members, with 86% male and 14% female, and 84% holding a university degree or above[59] Other Financial Metrics - Interest income for 2023 was RMB 77,759 thousand, while financial expenses were RMB 535,814 thousand[13] - Interest income for 2023 was RMB 77,759 thousand, a decrease from RMB 100,419 thousand in

Financial Performance - For the nine months ended September 30, 2023, the company's revenue was HKD 17,892.7 million, a decrease of 26.1% compared to HKD 24,196.1 million for the same period in 2022[2] - The profit attributable to the company's owners for the same period was HKD 710.2 million, down 61.3% from HKD 1,837.5 million in 2022[2] - Basic earnings per share for the nine months ended September 30, 2023, were HKD 0.102, compared to HKD 0.263 for the same period in 2022[4] - The gross profit for the nine months was HKD 2,408.2 million, down from HKD 3,820.3 million in 2022[4] - The total revenue for the period was HKD 17,892,700,000, representing a decrease of 26.1% from HKD 24,196,100,000 in the previous year[13] - The gross profit for the period was HKD 2,408,200,000, down 37.0% from HKD 3,820,300,000 year-on-year, with a gross margin of 13.5%, down from 15.8%[16] Assets and Equity - The total assets as of September 30, 2023, were HKD 80,672.5 million, a slight increase of 0.1% from HKD 80,613.8 million at the end of 2022[2] - The company's equity attributable to owners was HKD 48,198.3 million, down 2.1% from HKD 49,233.4 million[2] - The total equity attributable to owners decreased to HKD 48,198.3 million from HKD 49,233.4 million[7] Debt and Liabilities - The debt-to-equity ratio increased to 39.8% from 33.4% in the previous year[2] - Non-current liabilities increased to HKD 18,436.7 million from HKD 14,466.7 million in the previous year[6] Sales and Revenue Breakdown - Cement sales volume was 45,555,000 tons with an average selling price of HKD 324.2 per ton, resulting in revenue of HKD 14,767,883,000, compared to 52,534,000 tons and HKD 363.1 per ton in the previous year[14][15] - The average selling price of clinker was HKD 276.7 per ton, with a total revenue of HKD 493,134,000 from a sales volume of 1,782,000 tons[14] - The average selling price of concrete was HKD 423.0 per cubic meter, generating revenue of HKD 2,631,664,000 from a sales volume of 6,222,000 cubic meters[14] Dividends - The interim dividend declared was HKD 0.041 per share for the six months ended June 30, 2023, down from HKD 0.12 per share for the same period in 2022[12] - The company did not recommend any dividend for the three months ended September 30, 2023, consistent with the same period in 2022[12] Currency Impact - The company experienced a depreciation of approximately 5.9% in the RMB against the HKD compared to the same period last year[13] Gross Margins - The cement gross margin was 14.1%, down from 16.2% in the previous year, while the gross margins for clinker and concrete were 5.3% and 11.2%, respectively[16]

Company Overview - The total number of issued shares of China Resources Cement Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[4]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[3]. - The registered office is located in the Cayman Islands, while the principal place of business is in Hong Kong[10]. - The company operates as the holding entity for all cement and concrete operations of China Resources Group, emphasizing its strategic importance in the construction materials sector[3]. - The company has a dedicated investor relations consultant to manage communications with stakeholders[10]. Financial Performance - For the six months ended June 30, 2023, the Group reported a turnover of HK$12,172.6 million, a decrease of 24.5% compared to the same period last year[26][30]. - The profit attributable to owners of the Company for the same period was HK$620.9 million, down 65.6% year-on-year, with basic earnings per share of HK$0.089[26][30]. - The consolidated turnover for the first half of 2023 amounted to HK$12,172.6 million, representing a decrease of 24.5% from HK$16,116.5 million in the same period last year[123]. - Gross profit for the period was HK$1,902,495, down 42.4% from HK$3,302,684 in the previous year[182]. - Basic earnings per share decreased to HK$0.089, down 65.5% from HK$0.258 in the same period last year[182]. Production Capacity and Operations - As of June 30, 2023, the Group operates 101 cement grinding lines with an annual production capacity of 90.1 million tons and 49 clinker production lines with a capacity of 63.6 million tons[16]. - The Group has 63 concrete batching plants with an annual production capacity of 38.5 million cubic meters[16]. - The Group's total annual production capacities include 64.7 million tons of cement, 37.0 million tons of clinker, and 8.5 million m³ of concrete, with attributable capacities of 22.3 million tons of cement, 12.1 million tons of clinker, and 3.9 million m³ of concrete[19][20]. - The Group's facilities are supported by a well-established logistics network including waterways, railways, and roads[15]. - The Group's business includes limestone excavation, cement, clinker, and concrete production, sales, and distribution[15]. Market and Economic Context - In the first half of 2023, China's GDP grew by 5.5% year-on-year to RMB59.3 trillion, with national fixed asset investment increasing by 3.8% to RMB24.3 trillion[39]. - Infrastructure investment in China rose by 7.2% year-on-year in the first half of 2023, with road and waterway investments growing by 9.8%[41]. - The real estate market showed signs of stabilization, with total sales area decreasing by 5.3% to 600 million square meters, while sales revenue increased by 1.1% to RMB6.3 trillion[41]. Corporate Governance - The report outlines the company's corporate governance structure, including various committees such as the Audit Committee and Risk and Compliance Committee[9]. - The interim report for the six months ended June 30, 2023, was reviewed by the Audit Committee[180]. Environmental and Social Responsibility - The Group's emission concentrations of nitrogen oxides, particulate matters, and sulphur dioxide are better than national pollutant emission standards, reflecting its commitment to corporate social responsibility[20][21]. - The Group is committed to promoting green and low-carbon transformation in line with national policies to achieve carbon peaking and neutrality goals[53]. - The Chinese government emphasized the importance of production safety and occupational health to ensure sustainable development in the building materials industry[53]. Strategic Initiatives - The company is focused on expanding its market presence and enhancing operational efficiencies through strategic initiatives[6]. - The Group is actively enhancing research and development of new products, materials, and technologies to seize new business opportunities and promote sustainable development[20][21]. - The Group's strategic focus includes digital transformation, innovation in research and development, and enhancing operational efficiency and quality[75]. Dividends and Shareholder Information - The Group plans to distribute an interim dividend of HK$0.041 per share, totaling approximately HK$286.3 million, compared to HK$838 million in the previous year[30]. - No shares were repurchased, sold, or redeemed by the company or its subsidiaries during the reporting period[180]. Financial Management and Liabilities - The Group had net current liabilities of HK$1,836.8 million as of June 30, 2023, but is confident in meeting its financial obligations due to sufficient cash reserves and available banking facilities[153]. - Bank loans amounted to HK$19,183.2 million as of June 30, 2023, compared to HK$15,836.6 million at the end of 2022[144]. - The Group adopts robust treasury policies, with centralized management of financing and investment activities to ensure liquidity needs are met[150]. Research and Development - The Group's research and development team consists of 329 technology talents, including 66 dedicated R&D personnel and 68 specialists in intelligentization and digitalization[115]. - The Group actively engaged in research on new materials such as silicon-based materials and perovskite solar cells to support technological transformation[117]. Awards and Recognition - The Group's efforts in technological innovation were recognized with awards in April, including first, second, and third prizes in the State-owned Enterprise Digital Scenario Innovation Competition[67]. - The Group's "Runpin" inorganic engineered stone has received industry recognition and awards, including the "Building Materials Science and Technology Progress Award" from the China Building Materials Federation[102].

[Performance Overview](index=1&type=section&id=I.%20Performance%20Overview) [Condensed Consolidated Performance Overview](index=1&type=section&id=Condensed%20Consolidated%20Performance%20Overview) The Group's H1 2023 saw significant declines in revenue and profit attributable to owners, with basic EPS and interim dividends falling and the gearing ratio rising Key Financial Data for H1 2023 (Unaudited) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,172.6 | 16,116.5 | (24.5)% | | Profit Attributable to Owners of the Company | 620.9 | 1,804.5 | (65.6)% | | Basic Earnings Per Share (HKD) | 0.089 | 0.258 | - | | Interim Dividend Per Share (HKD) | 0.041 | 0.12 | - | | Total Assets | 81,656.8 | 80,613.8 (Dec 31, 2022) | 1.3% | | Equity Attributable to Owners of the Company | 48,174.8 | 49,233.4 (Dec 31, 2022) | (2.2)% | | Gearing Ratio | 41.2% | 33.4% (Dec 31, 2022) | 7.8 percentage points | | Net Asset Value Per Share - Book (HKD) | 6.90 | 7.05 (Dec 31, 2022) | (2.1)% | [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's H1 2023 revenue and gross profit significantly declined, leading to substantial reductions in profit before tax and profit for the period, with profit attributable to owners down 65.6% Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,172,621 | 16,116,525 | (24.5)% | | Cost of Sales | (10,270,126) | (12,813,841) | (19.8)% | | Gross Profit | 1,902,495 | 3,302,684 | (42.4)% | | Other Income | 564,232 | 581,555 | (3.0)% | | Selling and Distribution Expenses | (243,897) | (275,955) | (11.6)% | | General and Administrative Expenses | (1,098,808) | (1,233,506) | (10.9)% | | Exchange Gains (Losses) | 1,886 | (67,510) | Significant improvement | | Finance Costs | (295,642) | (171,161) | 72.7% | | Share of Results of Associates | (27,819) | 11,805 | Turned from profit to loss | | Share of Results of Joint Ventures | 32,200 | (26,220) | Turned from loss to profit | | Profit Before Tax | 834,647 | 2,121,692 | (60.7)% | | Taxation | (244,475) | (357,708) | (31.6)% | | Profit for the Period | 590,172 | 1,763,984 | (66.6)% | | Profit for the Period Attributable to Owners of the Company | 620,931 | 1,804,538 | (65.6)% | | Basic Earnings Per Share (HKD) | 0.089 | 0.258 | (65.5)% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets slightly increased, net current liabilities significantly improved, while equity attributable to owners slightly decreased and non-current liabilities rose Condensed Consolidated Statement of Financial Position (As at Period End) | Metric | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 69,931,717 | 70,792,481 | (1.2)% | | Current Assets | 11,725,053 | 9,821,282 | 19.4% | | Current Liabilities | 13,561,875 | 15,306,813 | (11.4)% | | Net Current Liabilities | (1,836,822) | (5,485,531) | 66.5% (Improvement) | | Total Assets Less Current Liabilities | 68,094,895 | 65,306,950 | 4.3% | | Non-current Liabilities | 18,328,367 | 14,466,682 | 26.7% | | Equity Attributable to Owners of the Company | 48,174,845 | 49,233,446 | (2.2)% | | Total Equity | 49,766,528 | 50,840,268 | (2.1)% | [Notes to the Financial Statements](index=5&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Appendix 16 of the HKEX Listing Rules and HKAS 34 - The condensed consolidated financial statements are prepared in accordance with Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[7](index=7&type=chunk) [Principal Accounting Policies](index=5&type=section&id=Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain items measured at fair value, and adopted revised standards effective January 1, 2023, with no significant impact - The financial statements are prepared principally under the historical cost convention, except for investment properties, equity investments at fair value through other comprehensive income, and certain trade receivables[8](index=8&type=chunk) - The Group has first applied the amendments to Hong Kong Financial Reporting Standards issued by the HKICPA and mandatorily effective from January 1, 2023, including the definition of accounting estimates and deferred tax related to assets and liabilities arising from a single transaction, with no significant impact on the amounts reported or disclosures in the financial statements[8](index=8&type=chunk) [Segment Information](index=5&type=section&id=Segment%20Information) The Group's operating and reportable segments are cement and concrete, with H1 2023 showing significant profit from cement but a loss from concrete, as reviewed by internal management reports - The Group's operating and reportable segments are cement and concrete, with all revenue derived from the sale of goods, recognized upon delivery[9](index=9&type=chunk) Segment Results and Revenue (For the Six Months Ended June 30) | Metric | 2023 Cement (HKD Thousand) | 2023 Concrete (HKD Thousand) | 2022 Cement (HKD Thousand) | 2022 Concrete (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | External Sales Revenue | 10,497,190 | 1,675,431 | 13,247,514 | 2,869,011 | | Segment Results | 1,325,406 | (87,338) | 2,084,043 | 11,613 | [Finance Costs](index=7&type=section&id=Finance%20Costs) The Group's H1 2023 total finance costs significantly increased by 72.7% year-on-year, primarily due to higher interest on bank loans and asset acquisition payables Breakdown of Finance Costs (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank loans | 288,395 | 177,068 | 62.9% | | Interest on loans from an indirect holding company | - | 13,516 | (100.0)% | | Interest on loans from non-controlling shareholders | 5,441 | 5,680 | (4.1)% | | Environmental restoration provision | 15,584 | - | - | | Payables for acquisition of assets | 37,634 | 13,300 | 183.0% | | Lease liabilities | 5,515 | 5,511 | 0.1% | | Subtotal | 352,569 | 215,075 | 63.9% | | Amount capitalized as property, plant and equipment | (56,927) | (43,914) | 29.6% | | **Total Finance Costs** | **295,642** | **171,161** | **72.7%** | [Profit Before Tax](index=7&type=section&id=Profit%20Before%20Tax) In H1 2023, the Group's profit before tax significantly decreased, positively impacted by reduced impairment losses on bad debts, but offset by increased staff costs, depreciation, and decreased interest income Adjustments to Profit Before Tax (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total staff costs | 1,487,670 | 1,449,261 | 2.6% | | Impairment losses on bad debts | 82,789 | 183,653 | (54.9)% | | Reversal of impairment losses on other receivables | (28,312) | - | - | | Amortisation of mining rights | 150,392 | 114,080 | 31.8% | | Depreciation of property, plant and equipment | 1,078,261 | 987,675 | 9.2% | | Depreciation of right-of-use assets | 114,103 | 99,388 | 14.8% | | Short-term lease payments | 9,465 | 13,623 | (30.5)% | | Variable lease payments - motor vehicles | 152,375 | 257,788 | (40.9)% | | Gain on disposal of a subsidiary | - | (239,072) | (100.0)% | | Interest income | (49,297) | (80,600) | (38.8)% | [Taxation](index=8&type=section&id=Taxation) The Group's H1 2023 total taxation decreased by 31.6% year-on-year, mainly due to reduced PRC corporate income tax and deferred tax, with the effective tax rate significantly rising to 29.3% Breakdown of Taxation (For the Six Months Ended June 30) | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax | 351,108 | 667,229 | (47.4)% | | Hong Kong profits tax | 8,554 | 9,710 | (11.9)% | | PRC corporate income tax | 342,554 | 657,519 | (47.9)% | | Deferred tax | (106,633) | (309,521) | 65.5% (Decrease) | | Hong Kong deferred tax | 274 | (956) | Turned from negative to positive | | PRC deferred tax | (106,907) | (308,565) | 65.3% (Decrease) | | **Total Taxation** | **244,475** | **357,708** | **(31.6)%** | | Effective tax rate | 29.3% | 16.9% | 12.4 percentage points | | Adjusted effective tax rate | 27.7% | 19.5% | 8.2 percentage points | - Hong Kong profits tax is calculated at a rate of **16.5%**, while PRC corporate income tax is calculated at **25%**, including a **5%** dividend withholding tax and deferred tax on estimated distributed profits[16](index=16&type=chunk) [Earnings Per Share](index=8&type=section&id=Earnings%20Per%20Share) Basic earnings per share attributable to owners of the Company decreased by 65.5% year-on-year due to a significant decline in profit Basic Earnings Per Share Calculation (For the Six Months Ended June 30) | Metric | 2023 (HKD Thousand) | 2022 (HKD Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 620,931 | 1,804,538 | (65.6)% | | Weighted average number of shares | 6,982,937,817 | 6,982,937,817 | 0.0% | | **Basic Earnings Per Share (HKD)** | **0.089** | **0.258** | **(65.5)%** | - Diluted earnings per share is not presented as the Company has no unissued potential ordinary shares[17](index=17&type=chunk) [Trade Receivables](index=9&type=section&id=Trade%20Receivables) As of June 30, 2023, the Group's total trade receivables increased by 14.3% year-on-year, with a significant increase in the 0-90 day aging category Breakdown and Aging Analysis of Trade Receivables | Item | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables from third parties | 3,174,983 | 2,806,745 | 13.1% | | Trade receivables from related parties | 141,351 | 93,915 | 50.5% | | **Total Trade Receivables** | **3,316,334** | **2,900,660** | **14.3%** | | **Aging Analysis** | | | | | 0 to 90 days | 2,151,923 | 1,371,303 | 56.9% | | 91 to 180 days | 190,183 | 425,260 | (55.3)% | | 181 to 365 days | 505,213 | 582,207 | (13.3)% | | Over 365 days | 469,015 | 521,890 | (10.2)% | - The Group grants customers an average credit period of 0 to 60 days from the invoice date[18](index=18&type=chunk) [Trade Payables](index=9&type=section&id=Trade%20Payables) As of June 30, 2023, the Group's total trade payables decreased by 7.8% year-on-year, with a slight decrease in the 0-90 day aging category Breakdown and Aging Analysis of Trade Payables | Item | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables to third parties | 2,883,007 | 3,134,309 | (8.0)% | | Trade payables to related parties | 103,806 | 107,498 | (3.4)% | | **Total Trade Payables** | **2,986,813** | **3,241,807** | **(7.8)%** | | **Aging Analysis** | | | | | 0 to 90 days | 2,821,425 | 3,037,448 | (7.1)% | | 91 to 180 days | 70,515 | 119,481 | (41.0)% | | 181 to 365 days | 71,068 | 74,628 | (4.7)% | | Over 365 days | 23,805 | 10,250 | 132.2% | - The Group typically obtains credit periods of 30 to 90 days from its suppliers[21](index=21&type=chunk) [Dividend Policy](index=10&type=section&id=IV.%20Dividend%20Policy) [Interim Dividend](index=10&type=section&id=Interim%20Dividend) The Board declared an interim dividend of **HKD 0.041** per share for H1 2023, a significant decrease from the prior year, with shareholders having the option to receive it in HKD or RMB cash Interim Dividend Overview | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Interim Dividend Per Share | HKD 0.041 | HKD 0.12 | | Total Amount | Approx. HKD 286,300,000 | Approx. HKD 838,000,000 | | Payment Date | October 27, 2023 | - | | Dividend Currency Option | HKD (default) or RMB (RMB 0.03764284 per share) | - | - Shareholders must submit the dividend currency election form by 4:30 p.m. on October 13, 2023, otherwise they will automatically receive the dividend in HKD[23](index=23&type=chunk) [Closure of Register of Members](index=10&type=section&id=Closure%20of%20Register%20of%20Members) To determine interim dividend entitlements, the Company will suspend share transfer registration from September 18 to 22, 2023, requiring shareholders to complete transfers by September 15, 2023 - The register of members will be closed from Monday, September 18, 2023, to Friday, September 22, 2023[24](index=24&type=chunk) - To qualify for the interim dividend, all share transfer documents, accompanied by the relevant share certificates, must be lodged with the Company's share registrar no later than 4:30 p.m. on Friday, September 15, 2023[24](index=24&type=chunk) [Business Environment and Industry Analysis](index=11&type=section&id=V.%20Business%20Environment%20and%20Industry%20Analysis) [Business Environment](index=11&type=section&id=Business%20Environment) In H1 2023, China's economy recovered with **5.5% GDP growth**, increased fixed asset and infrastructure investments, a stabilizing real estate market despite declining sales, and proactive government policies for urban renewal and rural revitalization H1 2023 China Macroeconomic Indicators | Metric | H1 2023 | Y-o-Y Change (%) | | :--- | :--- | :--- | | Gross Domestic Product | RMB 59.3 Trillion | 5.5% | | National Fixed Asset Investment (excluding rural households) | RMB 24.3 Trillion | 3.8% | | National Infrastructure Investment (excluding electricity, heat, gas, and water production and supply) | - | 7.2% | | National Fixed Asset Investment in Highways and Waterways | Approx. RMB 1.5 Trillion | 9.8% | | National Fixed Asset Investment in Railways | RMB 304.9 Billion | 6.9% | | National Commercial Housing Sales Area | 600 Million Sqm | (5.3)% | | National Commercial Housing Sales Value | RMB 6.3 Trillion | 1.1% | | National Real Estate Development Investment | RMB 5.9 Trillion | (7.9)% | | New Housing Construction Area | 500 Million Sqm | (24.3)% | | Housing Completion Area | 340 Million Sqm | 19.0% | - The Chinese government adhered to the general principle of seeking progress while maintaining stability, accelerated the construction of a new development pattern, promoted high-quality development, and saw an overall economic recovery[25](index=25&type=chunk) - The government increased fiscal policy efforts, issuing new special bonds of **RMB 3.8 trillion**, with approximately **RMB 2.17 trillion** issued in H1, prioritizing support for major national strategies and project construction[27](index=27&type=chunk) - The People's Bank of China lowered the reserve requirement ratio by **0.25 percentage points** and reduced the Loan Prime Rate (LPR) to lower financing costs for the real economy and promote stable and healthy development of the real estate market[27](index=27&type=chunk) [Industry Overview](index=13&type=section&id=Industry%20Overview) In H1 2023, national cement output increased by **1.3%**, with varied regional production and new clinker capacity, while the government continued to promote green transformation, energy efficiency, industrial restructuring, and new building material R&D H1 2023 National and Key Regional Cement Output | Region | Cement Output (Ten Thousand Tons) | Y-o-Y Change (%) | | :--- | :--- | :--- | | National | Approx. 950 Million Tons | 1.3% | | Guangdong | 6,670 | 0.5% | | Guangxi | 4,780 | 3.3% | | Fujian | 3,790 | (5.1)% | | Hainan | 730 | (6.8)% | | Yunnan | 4,740 | 3.1% | | Guizhou | 2,710 | (3.8)% | | Shanxi | 2,090 | (4.1)% | | Hunan | 3,600 | 1.5% | - Nine new clinker production lines were added nationwide, increasing annual clinker capacity by approximately **12.9 million tons**, primarily in Guangxi, Guizhou, and Hunan[28](index=28&type=chunk) - The Chinese government is promoting ultra-low emission upgrades in the cement industry, targeting **50%** of clinker capacity in key regions to complete upgrades by end of 2025, and striving for **80%** nationwide by end of 2028[28](index=28&type=chunk) - The 'Guidance on Building a Carbon Peak and Carbon Neutrality Standard System' and 'Energy Efficiency Benchmark and Baseline Levels for Key Industrial Sectors (2023 Edition)' were issued, requiring **25** key sectors, including cement, to complete energy efficiency upgrades by end of 2025[29](index=29&type=chunk) - The 'Notice on Regulating and Improving Sand and Gravel Mining Management' was issued, requiring the maintenance of good mining order and promotion of green development of mineral resources[30](index=30&type=chunk) - The 'Outline for Building a Quality Power' proposes accelerating R&D and application of new building materials such as high-strength, high-durability, recyclable, and green environmental materials, vigorously developing green building materials[30](index=30&type=chunk) [Business Operations and Transformation](index=15&type=section&id=VI.%20Business%20Operations%20and%20Transformation) [Transformation and Innovation](index=15&type=section&id=Transformation%20and%20Innovation) The Group, guided by its '14th Five-Year Plan' strategic blueprint, reorganized its business into four segments, achieving breakthroughs, increasing R&D, promoting green and digital transformation, and gaining industry recognition - The Group's business was re-segmented into four major business sectors: basic building materials, structural building materials, functional building materials, and new materials, actively seizing opportunities to enter new regions such as Hunan, Hubei, and Shandong[31](index=31&type=chunk) - In basic building materials, the Group successfully bid for mining rights to the Longmashan Limestone Mine in Nanning, Guangxi, and the Maoping Mining Area Limestone Mine for cement in Meizhou, Guangdong, expanding aggregate and cement limestone resources[31](index=31&type=chunk) - In structural building materials, the Group has **6** precast concrete component projects, with a designed annual production capacity expected to reach approximately **1.4 million cubic meters** upon full completion[31](index=31&type=chunk) - In functional building materials, the Group optimized its artificial stone business, established a standardized product system, and expanded its inorganic artificial stone production line[31](index=31&type=chunk) - The Group continued to increase R&D investment, advancing clinker production line grate cooler upgrades, optimizing high-efficiency pre-decomposition systems, applying raw material grinding aids, conducting solid waste trials and alternative fuel projects, and promoting photovoltaic power generation[32](index=32&type=chunk) - Actively promoting the application of pure electric mining vehicles, autonomous driving, and digital mines to advance green mine construction[32](index=32&type=chunk) - Awarded first, second, and third prizes in the first 'State-owned Enterprise Digital Scene Innovation Professional Competition' organized by the Chinese government, and the artificial stone project won the Gold Award for Quality Stone Decoration Engineering at the 6th 'Huabiao Cup'[32](index=32&type=chunk) [Production Capacity](index=16&type=section&id=Production%20Capacity) In H1, the Group added limestone resources in Hunan and increased cement capacity, while total annual concrete capacity remained unchanged, but capacity utilization rates for cement, clinker, and concrete all decreased - Hunan Liangtian Cement Co., Ltd. won mining rights, adding **36.3 million tons** of limestone resources, and increased annual cement production capacity to approximately **2.1 million tons** through technological upgrades[33](index=33&type=chunk) - One concrete mixing plant was newly commissioned, two were suspended, and total annual production capacity remained consistent with end-2022[33](index=33&type=chunk) Capacity Utilization Rate (For the Six Months Ended June 30) | Product | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Cement | 63.6% | 69.9% | (6.3) | | Clinker | 78.9% | 87.1% | (8.2) | | Concrete | 21.3% | 28.8% | (7.5) | [Cost Management](index=17&type=section&id=Cost%20Management) In H1, the Group focused on 'systematic reshaping and high-quality development,' deepening operational excellence, implementing energy-saving and carbon reduction initiatives, and effectively lowering coal procurement and logistics costs through optimized procurement and logistics management - The Group comprehensively deepened operational excellence, built a 'grand operation management system,' steadily implemented energy-saving and carbon reduction action plans, and promoted the application of new technologies and innovative achievements[35](index=35&type=chunk) - In mine management, safety and intelligent automation levels were enhanced through controlled blasting, slope management, pure electric mining vehicles, autonomous driving, and digital mine applications[35](index=35&type=chunk) Coal Procurement and Cost Data (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total coal procurement | Approx. **4.6 million tons** | Approx. **4.3 million tons** | 7.0% | | Average coal procurement price | **HKD 1,152 per ton** | **HKD 1,166 per ton** | (1.2)% | | Average calorific value of coal | **5,195 Kcal per Kg** | - | 0.2% | | Unit coal consumption per ton of clinker produced | **134.2 Kg** | **140.9 Kg** | (4.7)% | | Average coal cost per ton of clinker produced | **HKD 154.5** | **HKD 164.3** | (6.0)% | - Overall logistics costs showed a downward trend, achieved by optimizing shipping tender plans, introducing multiple logistics providers for competition, and calculating two-way vehicle and bulk cement transportation costs[37](index=37&type=chunk) - The Group has an annual transportation capacity of approximately **38.6 million tons** in the Xijiang River basin, controls **35** transit warehouses with an annual transit capacity of approximately **31.9 million tons**, consolidating its leading position in South China[37](index=37&type=chunk) [Marketing](index=19&type=section&id=Marketing) In H1, the Group continued to promote specialized products, increased brand investment to enhance 'Runfeng' brand coverage, and expanded into the functional building materials market with the 'Runpin' brand - Continuously and deeply promoting specialized products such as nuclear power cement, road Portland cement, and medium-low heat cement, leveraging differentiated competitive advantages[38](index=38&type=chunk) - The 'Runfeng' brand's terminal coverage rate increased by **2 percentage points** year-on-year to **92%**, and customer appreciation events were upgraded to feature both 'Runfeng' and 'Runpin' brands[39](index=39&type=chunk) - 'Runpin,' as a unified brand for functional building materials, expanded brand exposure by participating in professional exhibitions, operating the 'Runpin Hui' showroom, and engaging in online media integrated communication[39](index=39&type=chunk) [New Business Development](index=20&type=section&id=New%20Business%20Development) The Group actively pursued new business opportunities, with rapid growth in aggregate business, continuously increasing asset and revenue contributions. Prefabricated construction progressed steadily, functional building materials enhanced competitiveness, and new material industries like calcium-based and basalt were actively planned - Aggregate business achieved rapid development, with new business asset and revenue contributions continuously increasing, further enriching high-quality aggregate mine resource reserves[40](index=40&type=chunk)[41](index=41&type=chunk) Aggregate Capacity Overview | Item | Resource Reserves (Ten Thousand Tons) | Planned Annual Capacity (Ten Thousand Tons) | Estimated Commissioning Time | | :--- | :--- | :--- | :--- | | Longmashan Limestone Mine, Nanning, Guangxi | Approx. **7.6 million** | Approx. **500 thousand** | Before end of 2023 | | Anshun Aggregate Concrete Project, Guizhou | - | Approx. **200 thousand** | Completed and commissioned | | Maoping Mining Area Aggregate, Meizhou, Guangdong | Approx. **1.2 million** | Approx. **130 thousand** | End of 2024 | | **Operating Annual Aggregate Capacity (Subsidiaries)** | - | Approx. **8.34 million** | As of June 30, 2023 | | **Operating Annual Aggregate Capacity (Share of Associates)** | - | Approx. **310 thousand** | As of June 30, 2023 | | **Controlled Annual Aggregate Capacity Upon Full Completion (Subsidiaries)** | - | Estimated **14.64 million** | - | | **Controlled Annual Aggregate Capacity Upon Full Completion (Share of Associates/Joint Ventures)** | - | Estimated **1.36 million** | - | - Prefabricated construction business progressed steadily, with Guangdong Zhizhu Jiangmen Precast Concrete Component Project officially in production, designed annual capacity of approximately **50,000 cubic meters**. The Group owns a total of **6** precast concrete component projects, with a designed annual capacity expected to reach approximately **1.4 million cubic meters** upon full completion[42](index=42&type=chunk) - The first phase of the autoclaved aerated concrete block and panel production line project in Fengkai, Guangdong, has commenced trial production, with designed annual capacity of approximately **400,000 cubic meters** for panels and **200,000 cubic meters** for blocks[43](index=43&type=chunk) - In functional building materials, Dongguan Global Classic's expanded inorganic artificial stone production line project has commenced operation, with a planned annual capacity of approximately **1.5 million square meters**, enhancing competitiveness through technological innovation and marketing system optimization[44](index=44&type=chunk) - New materials business actively planned for calcium-based, basalt fiber, and new energy materials, with Hubei Chongyang Calcium Oxide Project and Guangxi Guigang Calcium-based Project both acquiring mining rights, expected to commence production in **2024**[45](index=45&type=chunk) [Digital Transformation](index=22&type=section&id=Digital%20Transformation) The Group continuously advanced digitalization and intelligent construction, building benchmark smart factories, promoting advanced control systems, and achieving digital transformation in artificial stone, logistics, and marketing to enhance operational efficiency and service quality - Building a benchmark full-process smart factory for the cement industry at the Tianyang District cement production base in Guangxi, and a standardized, platform-based lighthouse factory at the Fengkai County cement production base in Guangdong[46](index=46&type=chunk) - The Oracle EBS system for the artificial stone industry was piloted and launched at Dongguan Global Classic, achieving online and refined management of the entire value chain for the stone business[46](index=46&type=chunk) - Actively promoting **5G** technology applications, advancing China Resources' '5G+Industrial Internet' integrated innovation applications, and developing **1** '5G handheld industrial terminal product'[46](index=46&type=chunk) - The all-in-one card smart logistics system was launched across **6** aggregate bases, enabling unattended weighbridges and improving dispatch efficiency and pickup service quality[47](index=47&type=chunk) - The digital transformation project for marketing models was fully launched across major regional cement and tile adhesive businesses, achieving **100%** coverage, with e-commerce platforms accumulating a total shipment volume of approximately **140 million tons**[47](index=47&type=chunk) [Research and Development and Innovation](index=23&type=section&id=Research%20and%20Development%20and%20Innovation) The Group continuously increased R&D investment, built a professional scientific and technological talent team, developed multiple new technologies and products, particularly advancing in solid waste disposal, energy saving, carbon reduction, and carbon utilization, while actively planning for emerging industries and establishing a comprehensive scientific innovation system - As of end-June 2023, the Group had **329** scientific and technological talents, including **66** full-time R&D personnel and **68** intelligent and digital professionals[48](index=48&type=chunk) - Developed a rotary kiln for disposing of heavy, difficult-to-burn, medium-low calorific value solid waste such as municipal solid waste, and a stepping furnace for disposing of light, loose, flammable biomass solid waste[48](index=48&type=chunk) - Researched and promoted the application of raw material roller press and cement grinding energy-saving and carbon reduction technologies, developed in-situ CO2 self-enrichment process re-engineering technology and high-carbon sequestration non-autoclaved aerated concrete products, and built a carbon utilization research platform[48](index=48&type=chunk) - Actively planning for new industries such as silicon-based materials, basalt materials, energy storage battery materials, perovskite solar cells, and aerogel materials[49](index=49&type=chunk) - Organized the 'Runfeng Cup' Innovation Competition and Science and Technology Innovation Forum, formulated incentive mechanisms for scientific research projects, and co-established the 'China Resources Group Energy Saving and Environmental Protection Technology Innovation Alliance' with China Resources Environmental Technology Co., Ltd. and East China University of Science and Technology[49](index=49&type=chunk) [Employee Information](index=24&type=section&id=VII.%20Employee%20Information) [General Information](index=24&type=section&id=General%20Information) As of June 30, 2023, the Group's total full-time employees numbered **18,351**, a slight decrease from end-2022. The management team is predominantly male, mostly holding university degrees or higher, with an average age of approximately **47**, and the Group implements a job-value-based compensation mechanism Employee Headcount and Functional Distribution | Item | June 30, 2023 | December 31, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total full-time employees | 18,351 | 19,046 | (3.6)% | | Hong Kong employees | 350 | 344 | 1.7% | | PRC employees | 18,001 | 18,702 | (3.7)% | | **By Function** | | | | | Management | 482 | 472 | 2.1% | | Finance, Administration and Others | 2,318 | 2,486 | (6.8)% | | Production personnel | 10,489 | 10,941 | (4.1)% | | Technical personnel | 4,374 | 4,426 | (1.2)% | | Marketing personnel | 688 | 721 | (4.5)% | - Among senior and middle management, **87%** are male and **13%** are female; **83%** hold university degrees or above, with an average age of approximately **47**[51](index=51&type=chunk) - The Group has established a compensation distribution mechanism based on job value, combined with performance contribution, individual capabilities, and talent development[52](index=52&type=chunk) [Financial Performance Review](index=25&type=section&id=VIII.%20Financial%20Performance%20Review) [Revenue](index=25&type=section&id=Revenue) The Group's H1 2023 consolidated revenue decreased by **24.5%** year-on-year, primarily due to RMB depreciation against HKD and declines in sales volume and average selling prices of cement, clinker, and concrete products - The Group's functional currency is RMB, with financial data denominated in HKD, and RMB depreciated by approximately **6.3%** against HKD during the period[53](index=53&type=chunk) Product Revenue, Sales Volume, and Average Selling Price (For the Six Months Ended June 30) | Product | 2023 Sales Volume (Thousand Tons/Cubic Meters) | 2023 Average Selling Price (HKD/Ton/Cubic Meter) | 2023 Revenue (HKD Thousand) | 2022 Sales Volume (Thousand Tons/Cubic Meters) | 2022 Average Selling Price (HKD/Ton/Cubic Meter) | 2022 Revenue (HKD Thousand) | Sales Volume Change (%) | Price Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 28,521 | 357.1 | 10,185,884 | 30,669 | 406.2 | 12,457,738 | (7.0)% | (12.1)% | | Clinker | 1,023 | 304.3 | 311,306 | 2,041 | 386.9 | 789,776 | (49.9)% | (21.3)% | | Concrete | 3,803 | 440.5 | 1,675,431 | 5,392 | 532.1 | 2,869,011 | (29.5)% | (17.2)% | | **Total** | - | - | **12,172,621** | - | - | **16,116,525** | - | - | - Approximately **82.8%** of cement products were of 42.5 grade or higher (H1 2022: **83.9%**), and approximately **29.4%** were sold in bags (H1 2022: **27.3%**)[55](index=55&type=chunk) [Cost of Sales](index=26&type=section&id=Cost%20of%20Sales) In H1 2023, coal's share of the Group's cost of sales increased, but average coal cost per ton of clinker decreased due to lower coal procurement prices and improved unit coal consumption. Electricity costs slightly declined, with cost savings from waste heat power generation Composition of Consolidated Cost of Sales (Excluding Related Party Cement Sales) | Cost Category | H1 2023 Share | H1 2022 Share | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Coal | 38.3% | 34.1% | 4.2 | | Electricity | 10.8% | 9.7% | 1.1 | | Materials | 24.4% | 31.2% | (6.8) | | Other costs | 26.5% | 25.0% | 1.5 | - The average electricity cost per ton of cement decreased by **0.5%** from **HKD 36.4** to **HKD 36.2**, with electricity consumption per ton of cement at **71.7 kWh** (H1 2022: **72.1 kWh**)[58](index=58&type=chunk) - Waste heat power generation equipment generated a total of **711.3 million kWh**, accounting for approximately **29.9%** of required electricity consumption, saving costs of approximately **HKD 415 million**[58](index=58&type=chunk) - Repair and maintenance costs included in the cost of sales for cement products amounted to **HKD 351.9 million**, a **39.7%** decrease from the prior year[58](index=58&type=chunk) [Gross Profit and Gross Profit Margin](index=27&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's H1 2023 consolidated gross profit decreased by **42.4%** year-on-year, with the consolidated gross profit margin falling by **4.9 percentage points** to **15.6%**, primarily due to lower product selling prices and sales volumes Gross Profit and Gross Profit Margin (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit (HKD Million) | 1,902.5 | 3,302.7 | (42.4)% | | Consolidated Gross Profit Margin | 15.6% | 20.5% | (4.9) | | Cement Gross Profit Margin | 16.7% | 22.0% | (5.3) | | Clinker Gross Profit Margin | 7.7% | 21.8% | (14.1) | | Concrete Gross Profit Margin | 10.4% | 13.8% | (3.4) | - The decrease in consolidated gross profit and gross profit margin was primarily due to lower product selling prices and sales volumes during the period compared to H1 2022[59](index=59&type=chunk) [Other Income](index=27&type=section&id=Other%20Income) The Group's H1 2023 other income slightly decreased by **3.0%** year-on-year Other Income (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 564.2 | 581.6 | (3.0)% | [Selling and Distribution Expenses](index=27&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's H1 2023 selling and distribution expenses decreased by **11.6%** year-on-year, primarily due to lower sales volume, but increased as a percentage of consolidated revenue Selling and Distribution Expenses (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 243.9 | 276.0 | (11.6)% | | As a percentage of consolidated revenue | 2.0% | 1.7% | 0.3 percentage points | - The decrease in selling and distribution expenses was primarily due to lower sales volume during the period compared to H1 2022[60](index=60&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) The Group's H1 2023 general and administrative expenses decreased by **10.9%** year-on-year, partly due to reduced impairment losses on bad debts, but increased as a percentage of consolidated revenue General and Administrative Expenses (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 1,098.8 | 1,233.5 | (10.9)% | | Decrease in impairment losses on bad debts | 100.9 | - | - | | As a percentage of consolidated revenue | 9.0% | 7.7% | 1.3 percentage points | - The decrease in general and administrative expenses was partly due to a **HKD 100.9 million** reduction in impairment losses on bad debts compared to the prior year[61](index=61&type=chunk) [Share of Results of Associates](index=28&type=section&id=Share%20of%20Results%20of%20Associates) The Group's H1 2023 share of results of associates turned from a profit to a loss year-on-year, primarily impacted by losses from associates in Fujian, Yunnan, and Guangdong Share of Results of Associates (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total share of results of associates | (27.8) | 11.8 | Turned from profit to loss | | Inner Mongolia associate | 22.4 | 72.4 | (69.0)% | | Fujian associate | (38.7) | (11.1) | 248.6% (Loss widened) | | Yunnan associate | 24.7 | (30.9) | Turned from loss to profit | | Guangdong associate | (24.1) | (12.6) | 91.3% (Loss widened) | [Share of Results of Joint Ventures](index=28&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures) The Group's H1 2023 share of results of joint ventures turned from a loss to a profit year-on-year Share of Results of Joint Ventures (For the Six Months Ended June 30) | Metric | H1 2023 (HKD Million) | H1 2022 (HKD Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total share of results of joint ventures | 32.2 | (26.2) | Turned from loss to profit | [Taxation](index=28&type=section&id=Taxation_Review) The Group's H1 2023 effective tax rate significantly increased to **29.3%**, with the adjusted effective tax rate also rising Effective Tax Rate (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Effective tax rate | 29.3% | 16.9% | 12.4 | | Adjusted effective tax rate | 27.7% | 19.5% | 8.2 | [Net Profit Margin](index=28&type=section&id=Net%20Profit%20Margin) The Group's H1 2023 net profit margin significantly decreased by **6.1 percentage points** to **4.8%** Net Profit Margin (For the Six Months Ended June 30) | Metric | H1 2023 | H1 2022 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Net Profit Margin | 4.8% | 10.9% | (6.1) | [Liquidity and Financial Resources](index=28&type=section&id=IX.%20Liquidity%20and%20Financial%20Resources) [Sources of Funds](index=28&type=section&id=Sources%20of%20Funds) The Group's sources of funds primarily include internal funds, bank loans, loans from related parties, issuance of equity securities, and cash flows from operations - The Group's sources of funds primarily include internal funds, bank loans, loans from related parties, issuance of equity securities, and cash flows generated from operations[64](index=64&type=chunk) [Bank and Other Borrowings](index=28&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2023, the Group's total bank and other borrowings increased, with a higher proportion of floating-rate borrowings. The Group holds substantial unutilized bank loan facilities and complies with relevant financial covenants Bank and Other Borrowings Overview | Metric | June 30, 2023 (HKD Thousand) | December 31, 2022 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank loans | 19,183,161 | 15,836,585 | 21.1% | | Loans from related parties | 650,737 | 596,678 | 9.1% | | **Total Borrowings** | **19,833,898** | **16,433,263** | **20.7%** | | Fixed-rate borrowings | 5,234,500 | 5,365,400 | (2.4)% | | Floating-rate borrowings | 14,599,400 | 11,067,900 | 31.9% | | HKD denominated borrowings | 2,300,000 | 2,300,000 | 0.0% | | RMB denominated borrowings | 16,165,937 | 12,624,846 | 28.0% | | Repayable within one year | 3,959,986 | 4,548,117 | (12.9)% | | Unutilized bank loan facilities (RMB) | **RMB 19.4947 billion** | - | - | - The Group's unsecured bank loan facilities amounted to **HKD 2.3 billion** and **RMB 35.0607 billion**, of which **RMB 19.4947 billion** remained unutilized[66](index=66&type=chunk)[67](index=67&type=chunk) - The Group complies with the financial covenants in its bank loan agreements regarding China Resources (Holdings) Company Limited holding no less than **35%** of shares and a net gearing ratio not exceeding **180%**[68](index=68&type=chunk) [Pledge of Assets](index=30&type=section&id=Pledge%20of%20Assets) As of June 30, 2023, the Group had not pledged any assets - As at June 30, 2023, the Group had not pledged any assets[70](index=70&type=chunk) [Contingent Liabilities](index=30&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group provided bank loan guarantees for associates and joint ventures, a portion of which had been utilized Contingent Liabilities Overview | Item | June 30, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Bank loan facility guarantees granted to associates and joint ventures | 2,740,200,000 | 2,109,200,000 | | Amount of guarantees utilized | 1,466,800,000 | 1,360,300,000 | [Future Plans and Capital Expenditure](index=30&type=section&id=Future%20Plans%20and%20Capital%20Expenditure) The Group has substantial future capital expenditure plans, primarily for expansion, to be funded through borrowings and internal resources Expected Future Capital Expenditure | Item | Amount (HKD) | | :--- | :--- | | Capital expenditure contracted but not provided for | Approx. **HKD 7.9707 billion** | | Total capital expenditure payments for H2 2023 | Approx. **HKD 2.9377 billion** | | Total capital expenditure payments for the year ending December 31, 2024 | Approx. **HKD 7.3847 billion** | - Future capital expenditure will be funded by borrowings and internally generated funds[71](index=71&type=chunk) [Strategy and Outlook](index=31&type=section&id=X.%20Strategy%20and%20Outlook) The Group anticipates China's economy to continue stable progress, with government policies in transportation, real estate, and rural revitalization driving medium-to-long-term demand for the building materials sector. The Company will focus on 'systematic reshaping and high-quality development,' optimizing industrial chain layout, accelerating digital and intelligent transformation, increasing R&D investment, and strengthening its '4+1' core businesses to enhance industry leadership - The Chinese government is accelerating the construction of a strong transportation network, with significant increases in railway, highway, waterway, and airport mileage expected by **2027**, driving demand for the building materials industry[72](index=72&type=chunk) - Real estate policies will be timely adjusted and optimized to meet rigid and improved housing demands, actively promoting the construction of affordable housing, urban village renovation, and 'dual-use' public infrastructure[72](index=72&type=chunk) - The rural revitalization strategy will drive infrastructure construction such as rural roads, water supply, power grids, and dilapidated housing renovation, effectively boosting demand for cement and other building materials[72](index=72&type=chunk) - Infrastructure interconnectivity in the Guangdong-Hong Kong-Macao Greater Bay Area will continue to advance, with significant increases in operating and under-construction railway mileage, supporting medium-to-long-term demand for the regional building materials industry[73](index=73&type=chunk) - The Group will focus on the annual theme of 'systematic reshaping and high-quality development,' optimizing industrial chain layout, accelerating digital and intelligent transformation, increasing innovation R&D investment, and expediting strategic emerging industry planning[73](index=73&type=chunk) - In the future, the Group will strengthen and optimize basic and functional building materials businesses, integrate structural building materials, incubate new materials businesses, focusing on '4+1' businesses: cement, aggregates, concrete, artificial stone, and new materials[73](index=73&type=chunk) - Continuously deepening the three core capabilities of 'lowest system cost, regional market leadership, and innovation-driven development,' constantly strengthening operational excellence, enhancing R&D capabilities, accelerating green development, and leading the industry's digital and intelligent transformation[73](index=73&type=chunk) [Other Information](index=32&type=section&id=XI.%20Other%20Information) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code provisions in Appendix 14 of the Listing Rules during the reporting period - The Company has complied with the applicable requirements of the code provisions ('Corporate Governance Code') set out in Part 2 of Appendix 14 to the Listing Rules[74](index=74&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries repurchased, sold or redeemed any of the Company's listed securities during the period[75](index=75&type=chunk) [Review of Interim Report](index=33&type=section&id=Review%20of%20Interim%20Report) The Company's interim report has been reviewed by the Audit Committee - The Company's interim report for the period (with unaudited condensed consolidated financial statements) has been reviewed by the Company's Audit Committee[75](index=75&type=chunk) [Acknowledgement](index=33&type=section&id=Acknowledgement) The Chairman of the Board expressed gratitude to the directors, management team, all employees, shareholders, customers, suppliers, business partners, and other stakeholders for their support to the Group - The Chairman of the Board expressed gratitude for the contributions and hard work of the directors, management team, and all employees, and sincerely thanked shareholders, customers, suppliers, business partners, and other stakeholders for their continued trust and unwavering support[76](index=76&type=chunk) [Publication of Interim Report on HKEX and Company Website](index=33&type=section&id=Publication%20of%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) The Company's interim report will be published on the HKEXnews website and the Company's website in due course - The Company's interim report for the period will be published on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.crcement.com) in due course[77](index=77&type=chunk)

Revenue and Profitability - Revenue for the three months ended March 31, 2023, was HKD 5,293.6 million, a decrease of 24.1% compared to HKD 6,976.7 million in the same period of 2022[4] - The loss attributable to the company's owners for the period was HKD (37.1) million, resulting in a basic loss per share of HKD (0.005), compared to a profit of HKD 729.5 million and a basic earnings per share of HKD 0.104 in the prior year[4] - Gross profit for the period was HKD 582.2 million, down from HKD 1,657.9 million in the same period last year[4] - The consolidated gross profit was HKD 582,200,000, down 64.9% from HKD 1,657,900,000 in the same period of 2022, with a gross profit margin of 11.0%, a decrease of 12.8 percentage points[18] - The decline in gross profit and gross profit margin was mainly due to lower sales prices compared to the same period last year[18] Assets and Equity - Total assets increased by 7.8% to HKD 86,869.2 million as of March 31, 2023, compared to HKD 80,613.8 million as of December 31, 2022[4] - The company's equity attributable to owners was HKD 50,195.0 million, with a debt-to-equity ratio of 45.2%, up from 33.4% in the previous period[4] - The net asset value per share increased to HKD 7.19 from HKD 7.05[4] Other Income and Expenses - Other income decreased to HKD 191.2 million from HKD 394.7 million year-on-year[4] - Other income for the period was HKD 191,200,000, a decline of 51.6% from HKD 394,700,000 in the same period of 2022, primarily due to a one-time gain from the disposal of a subsidiary in the previous year[19] - Sales and distribution expenses were HKD 111,200,000, a decrease of 67.3% from HKD 340,300,000 in the same period of 2022, mainly due to the reclassification of transportation costs[20] Foreign Exchange and Dividends - The company reported a foreign exchange loss of HKD 516.6 million, compared to a loss of HKD 719.1 million in the previous year[4] - The company has not declared an interim dividend for the current period, compared to no dividend declared in the same period last year[4] - The company did not recommend any interim dividend for the period[14] Sales Performance - Cement sales volume was 12,192 thousand tons with an average selling price of HKD 370.9 per ton, generating revenue of HKD 4,522,436,000[17] - The average selling prices for cement, clinker, and concrete were HKD 370.9, HKD 326.5, and HKD 459.8 per ton respectively, compared to HKD 436.4, HKD 414.8, and HKD 564.3 in the same period of 2022[16] Currency Impact - The company experienced a depreciation of approximately 6.8% in the RMB against the HKD compared to the same period in 2022[14] Audit and Review - The financial data for the period has been reviewed by the company's audit committee[12]