Summary of the Conference Call Company Overview - The conference call pertains to Far East Horizon Co., Ltd. and its 2024 interim performance results [1] Key Points and Arguments - The call was hosted by the Chairman, Executive Director, and CEO of Far East Horizon, Mr. Kong Fanxing [1] Other Important Content - The presence of key executives indicates a focus on transparency and engagement with stakeholders [1]

Key Points 1. Company and Event Information - **Company**: Yuan Dong Hongxin Co., Ltd. - **Event**: 2024 Mid-Year Financial Results Conference - **Attendees**: Board of Directors Chairman, Executive Director, and CEO of Yuan Dong Hongxin Co., Ltd., Mr. Kong Fanxing, Chairman of the Board of Directors of Hongxin Construction Development Co., Ltd. - **Document ID**: 1

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 （於香港註冊成立的有限公司） （股份代號：3360） 截至二零二四年六月三十日止六個月中期業績公告 | --- | --- | |--------------------|------------------------------------------------------------------------| | | | | 附載的資料之要求。 | 報告全文，並符合香港聯合交易所有限公司證券上市規則有關中期業績初步公告 | | | 承董事局命 | | | 遠東宏信有限公司 主席、行政總裁及執行董事 | | | 孔繁星 | | | | 香港，二零二四年八月九日 於本公告日期，本公司的執行董事為孔繁星先生（主席）、王明哲先生及曹健先 生；本公司非執行董事為陳樹民先生、衛濛濛女士、劉海峰先生、郭明鑑先生及 羅強先生；以及本公司獨立非執行董事為韓小京先生、劉嘉凌先生、葉偉明先生 及黃家輝先生。 →◇γγ ...

Financial Performance and Growth - The company achieved steady growth in revenue and profitability in 2023, with financial business remaining stable and asset quality improving[10] - The company's total assets reached RMB 3,514.83 billion at the end of 2023, a year-on-year increase of 1.29%, with annual revenue of RMB 379.60 billion, up 3.76% year-on-year, and net profit attributable to ordinary shareholders of RMB 6.193 billion, a year-on-year increase of 1.04%[13] - Total revenue for 2023 reached RMB 37,959,798 thousand, a 3.8% increase from RMB 36,585,722 thousand in 2022[19] - Net profit attributable to ordinary shareholders was RMB 6,192,972 thousand in 2023, slightly up from RMB 6,128,954 thousand in 2022[19] - The company's average return on equity was 12.99% in 2023, with a proposed dividend of HKD 0.50 per share[13] - The company's diluted earnings per share were RMB 1.33 in 2023, with an average return on assets of 1.98% and an average return on equity of 12.99%[17] - The company's asset-liability ratio decreased from 84.89% in 2022 to 83.62% in 2023, with net assets per share increasing from RMB 10.49 in 2022 to RMB 11.61 in 2023[18] - The group's revenue for 2023 reached RMB 37,959.798 million, a 3.76% increase compared to the previous year[36][38] - Net profit attributable to ordinary shareholders of the company for 2023 was RMB 6,192.972 million, a 1.04% increase compared to the previous year[36] - The company's total assets increased by 1.29% to RMB 351.48 billion as of December 31, 2023, compared to RMB 346.99 billion in the previous year[80] - The company's cash and cash equivalents increased significantly by 18.54% to RMB 18.85 billion as of December 31, 2023[80] - The company's total liabilities decreased by RMB 640.439 million (0.22%) to RMB 293,913.636 million as of December 31, 2023, with interest-bearing bank and other financing accounting for 86.98% of total liabilities, an increase of 1.65 percentage points compared to the previous year[141][142] - The company's property, plant, and equipment balance was RMB 23,513.055 million, including RMB 18.2 billion for equipment operations and RMB 3.3 billion for hospital buildings and medical equipment[139] - The company's investment in joint ventures and associates amounted to RMB 9,105.237 million, including RMB 5,093.862 million in equity investments in provincial asset management companies[139] - The company's financial assets measured at fair value through profit or loss totaled RMB 8,841.595 million, including RMB 3.22 billion in interest-bearing assets and RMB 2.85 billion in other debt investments[140] - The company's total assets under asset-backed securities/notes decreased by 71.83% to RMB 1,649 million as of December 31, 2023, compared to RMB 5,853 million in the previous year[137] - The company's self-held portion of asset-backed securities/notes decreased by 58.55% to RMB 369.172 million as of December 31, 2023, compared to RMB 890.572 million in the previous year[137][138] - The company's deferred tax assets amounted to RMB 6,052.352 million, primarily due to timing differences between accounting and tax treatments[139] - The company's prepayments and other receivables stood at RMB 4,374.919 million, mainly consisting of prepayments to suppliers for machinery and equipment[139] - The company's restricted deposits amounted to RMB 3,149.062 million as of December 31, 2023[139] - The total interest-bearing bank and other financing of the company amounted to RMB 255,636,145 thousand as of December 31, 2023, an increase of 1.71% compared to the end of the previous year[144] - The proportion of current interest-bearing bank and other financing increased to 51.79% as of December 31, 2023, up from 49.12% at the end of the previous year, mainly due to a reduction in the issuance scale of long-term bonds overseas[145][146] - The proportion of unsecured interest-bearing bank and other financing decreased to 82.13% as of December 31, 2023, down from 84.95% at the end of the previous year, as the company obtained more low-cost funds through asset pledges[147] - Bank loans accounted for 60.87% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 15.91% compared to the end of the previous year, reflecting the company's deepening cooperation with banks[149] - Domestic financing accounted for 84.59% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 3.73% compared to the end of the previous year, as the company balanced domestic and overseas financing channels[150][151] - RMB-denominated financing accounted for 81.35% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 4.56% compared to the end of the previous year, as the company actively promoted RMB financing both domestically and internationally[152][153] - Indirect financing accounted for 69.67% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 15.73% compared to the end of the previous year, as the company optimized its financing structure and increased indirect financing[155] - The total equity of the company amounted to RMB 57,569,600 thousand as of December 31, 2023, an increase of 9.78% compared to the end of the previous year, driven by steady profit growth and the successful listing of Hongxin Construction[156] - Total equity increased by 9.78% to RMB 57.57 billion in 2023, compared to RMB 52.44 billion in 2022[157] - The company's ordinary shareholders' equity rose by 10.72% to RMB 50.10 billion in 2023, up from RMB 45.25 billion in 2022[157] - Non-controlling interests surged by 43.39% to RMB 5.90 billion in 2023, compared to RMB 4.11 billion in 2022[157] - Perpetual securities decreased by 48.91% to RMB 1.57 billion in 2023, down from RMB 3.08 billion in 2022[157] - The company proposed a special dividend in the form of a distribution of approximately 160 million Hongxin Construction shares, representing about 5% of the total issued shares of Hongxin Construction as of December 6, 2023[160] - The total dividend payable for the special dividend in kind was approximately RMB 664 million, based on the closing price of Hongxin Construction shares on December 29, 2023[160] - The listing of Hongxin Construction on the Hong Kong Stock Exchange on May 25, 2023, resulted in an increase of approximately RMB 870 million in the equity attributable to ordinary shareholders of the company[161] - The company updated its medium-term note and perpetual securities program on July 24, 2023, allowing for the issuance of up to USD 4 billion in notes and/or perpetual securities[165] - The company issued and outstanding convertible bonds as of December 31, 2023, include a $300 million bond due in 2025 with a 2.5% annual interest rate, and a $250 million zero-coupon bond due in 2026[166][167] - The net proceeds from the $300 million bond issuance were approximately $296.6 million, with a net conversion price of approximately HK$8.24 per share[166] - The net proceeds from the $250 million bond issuance were approximately $246 million, with a net conversion price of approximately HK$10.01 per share[167] - As of December 31, 2023, the outstanding principal amount of the $300 million bond was $290 million after redeeming $10 million in July 2023[166] - The outstanding principal amount of the $250 million bond remained at $250 million as of December 31, 2023[167] - If all convertible bonds were fully converted, the company would issue 569,336,712 shares, representing approximately 13.19% of the issued share capital as of December 31, 2023[170] - The conversion of all convertible bonds would dilute the shareholding percentage of major shareholders, with China National Chemical Corporation's stake decreasing from 21.31% to 18.83%[171] - The company's credit ratings remained unchanged in 2023, and it has sufficient cash flow and bank credit lines to fully repay the convertible bonds at maturity[173] - The implied internal rate of return for the convertible bonds issued on July 8, 2020, and June 15, 2021, indicates that bondholders will receive equally favorable economic returns whether they choose to convert or redeem the bonds by the end of 2023 to 2025. The corresponding stock prices are HKD 6.59 for 2023 and 2024, and HKD 8.94, 9.12, and 9.30 for 2023, 2024, and 2025, respectively[174] - The conversion prices for the convertible bonds issued in July 2020 and June 2021 were adjusted to HKD 6.48 and HKD 8.35 per share, respectively, due to the payment of special dividends on January 22, 2024. If all conversion rights are exercised, the company will issue 579,227,090 shares[175] - The company's asset-liability ratio was 83.62% as of December 31, 2023, compared to 84.89% in the previous year, reflecting a slight improvement in capital management[177][178] - The risk asset-to-equity ratios for the company's financing leasing subsidiaries were 4.58, 3.49, 1.57, and 4.34 as of December 31, 2023, all of which comply with regulatory requirements[179][180][181][182] - The company's capital expenditure for 2023 was RMB 2,880.915 million, primarily used for property, plant, and equipment additions, as well as external equity investments[183] Credit Ratings and ESG Performance - Far East Horizon's credit rating was confirmed as "BBB-" by S&P Global Ratings with a "stable" outlook, and its standalone credit profile (SACP) was upgraded to "bbb-"[10] - The company received an "A" rating from MSCI for ESG for two consecutive years, with its sustainable financing framework achieving the highest score among Asian financial institutions by Moody's and Fitch[10] Industrial Operations and Market Expansion - Far East Horizon's industrial operations saw breakthroughs, with Hongxin Construction successfully spinning off and listing, and continued expansion in overseas markets[10] - The company's healthcare business, Hongxin Health, returned to normal operating conditions, with operational efficiency continuously improving[10] - Far East Horizon operates in multiple sectors including healthcare, tourism, construction, machinery, chemicals, electronics, consumer goods, logistics, and urban utilities[7] - The company has established a nationwide service network with offices in major cities such as Beijing, Shanghai, Shenzhen, and Chengdu[8] - The company's headquarters is located in Hong Kong, with business operation centers in Shanghai, Tianjin, and Guangzhou[8] - Far East Horizon was listed on the Hong Kong Stock Exchange on March 30, 2011, under the stock code 03360[8] - Far East Horizon has been recognized in the Fortune China 500 and Forbes Global 2000 rankings[7] - The industrial operation segment achieved a total revenue of RMB 14.739 billion in 2023, a year-on-year increase of 11.38%, with its revenue contribution ratio rising from 36.02% to 38.68%[12] - Hongxin Jianfa, a leading equipment operation service provider in China, expanded its overseas market and increased its total revenue to RMB 9.611 billion in 2023, a year-on-year growth of 22.00%, with adjusted annual profit reaching RMB 1.043 billion, up 10.65% year-on-year[12] - Hongxin Jianfa's aerial work platform management scale reached 177,600 units by the end of 2023, ranking first in Asia and top three globally, with material asset management scale of approximately 2.28 million tons, maintaining domestic leadership[12] - Hongxin Health achieved a total revenue of RMB 4.238 billion in 2023, a year-on-year increase of 15.53%, with annual profit surging 252.75% year-on-year to RMB 172 million[12] - The company expanded its overseas market with new outlets in Malaysia and Indonesia, steadily advancing its international business[33] - The company's financial services (interest income) increased by 3.64% to RMB 22,467.103 million, while consulting services (fee income) decreased by 50.82% to RMB 896.331 million[39][40] - Industrial operations revenue increased by 11.38% to RMB 14.739 billion, with Hongxin Construction contributing RMB 9.611 billion (up 22.00%) and Hongxin Health contributing RMB 4.238 billion (up 15.53%)[41] - Non-leasing business accounted for 46.51% of total revenue (pre-tax), with new business directions like inclusive finance and commercial factoring contributing 5.48% of interest income[41] - Interest income from financial services increased by 3.64% to RMB 22.467 billion, accounting for 58.97% of total revenue (pre-tax)[42] - The average yield on interest-earning assets rose to 8.24% in 2023, up 0.24 percentage points from 8.00% in 2022[46] - Interest income from new business directions (inclusive finance, commercial factoring, and asset business) increased by 12.09% to RMB 2.087 billion, with an average yield showing steady growth[44] - Service fee income from consulting services decreased by 50.82% to RMB 896.331 million, accounting for 2.35% of total revenue (pre-tax)[48] - Sales costs increased by 10.10% to RMB 19.959 billion, with financial and consulting division costs rising by 10.82% to RMB 9.982 billion[52] - Hongxin Construction's operating costs increased by 23.28% to RMB 5.849 billion, while Hongxin Health's operating costs rose by 13.13% to RMB 3.473 billion[52] - Financial and consulting division costs increased by 10.82% to RMB 9,982,081 thousand in 2023, accounting for 50.01% of total sales costs[54][57] - Industrial operations division costs rose by 9.39% to RMB 9,976,734 thousand in 2023, with equipment operation costs surging 23.28% to RMB 5,849,180 thousand[54][59] - The company's gross profit decreased by 2.48% to RMB 18,000,983 thousand in 2023, with gross margin dropping from 50.45% to 47.42%[60] - Net interest income declined by 1.46% to RMB 12,485,022 thousand in 2023, while net interest spread increased by 4 basis points to 3.98%[62][64] - Industrial operations division gross profit grew 15.80% to RMB 4,762,537 thousand in 2023, with hospital operations gross profit surging 27.83% to RMB 765,180 thousand[65] - The company's average cost rate for interest-bearing liabilities increased to 4.26% in 2023, up from 4.06% in 2022[56][57] - Interest expense rose 10.82% to RMB 9,982,081 thousand in 2023, outpacing the 3.64% growth in interest income[62] - Equipment operation gross profit increased 20.06% to RMB 3,761,401 thousand in 2023, accounting for 78.98% of industrial operations gross profit[65] - Other income/earnings decreased by 21.55% to RMB 1,559,591 thousand in 2023, with gains from equity and debt investments surging 163.97% to RMB 507,929 thousand[66] - The company's average balance of interest-bearing liabilities increased to RMB 234,089,521 thousand in 2023, up from RMB 221,672,148 thousand in 2022[56] - Government subsidies for the period amounted to approximately RMB 160 million, including VAT deduction benefits, enterprise development subsidies, and government support funds[67] - Sales and administrative expenses increased by 19.59% to RMB 8,121,968 thousand, driven by market expansion strategies[68] - Other expenses decreased by 86.43% to RMB 55,090 thousand, with significant reductions in exchange losses and bank fees[69] - Financial costs decreased slightly by 1.59% to RMB 1,037,956 thousand, primarily related to financing costs for the industrial operations division[70] - Pre-provision profit decreased by 14.66% to RMB 10,614,851 thousand, impacted by rising financing costs and reduced gains from off-balance sheet assets[71] - Asset provisions decreased by 91.05% to RMB 189,591 thousand, with significant reversals in fixed asset provisions due to improved market conditions[72] - Income tax expenses decreased by 5.66% to RMB 3,508,237 thousand, mainly due to a reduction in cross-border withholding taxes[74] - Net profit attributable to ordinary shareholders increased by 1.04% to RMB 6,192,972 thousand, with basic earnings per share rising by 0.68% to RMB 1.47[75][76] - Total assets increased by 1.29% to RMB 351,483,236 thousand, while interest-earning assets decreased by 0.56% to RMB 269,084,739 thousand[79] - The company's total assets increased by 1.29% to RMB 351.48

Financial Performance - Far East Horizon Limited's total revenue for the fiscal year ending December 31, 2023, reached RMB 50.2 billion, representing a year-on-year growth of 12.5%[1] - The company's net profit attributable to shareholders increased by 8.7% to RMB 8.9 billion in 2023[1] - Total revenue for 2023 reached RMB 37.96 billion, a year-on-year increase of 3.76%[13] - Net profit attributable to ordinary shareholders for 2023 was RMB 6.19 billion, up 1.04% year-on-year[13] - The company's average return on equity stood at 12.99% for 2023[13] - The company's return on average equity (ROAE) stood at 15.6% for the fiscal year 2023[1] - Total revenue for 2023 reached RMB 37,959,798 thousand, a 3.8% increase from RMB 36,585,722 thousand in 2022[19] - Net profit attributable to ordinary shareholders was RMB 6,192,972 thousand in 2023, a 1.0% increase from RMB 6,128,954 thousand in 2022[19] - Basic earnings per share (EPS) were RMB 1.47 in 2023, up from RMB 1.46 in 2022[19] - The company's net profit attributable to ordinary shareholders increased by 1.04% to RMB 6,192.972 million[75] - Basic earnings per share increased by 0.68% to RMB 1.47[76] Asset and Liability Management - Far East Horizon's total assets grew by 10.3% to RMB 450.6 billion as of December 31, 2023[1] - The company's total assets amounted to RMB 351.48 billion at the end of 2023, a 1.29% increase from the previous year[13] - Total assets amounted to RMB 351,483,236 thousand in 2023, up 1.3% from RMB 346,995,497 thousand in 2022[20] - The company's total assets increased by 1.29% to RMB 351.48 billion as of December 31, 2023, compared to RMB 346.99 billion in the previous year[80] - The company's total liabilities as of December 31, 2023, were RMB 293,913,636 thousand, a decrease of 0.22% compared to the previous year[141] - The company's asset-liability ratio was 83.62% as of December 31, 2023, compared to 84.89% at the end of 2022, reflecting a slight improvement in capital management[177][178] - The company's cash and cash equivalents increased significantly by 18.54% to RMB 18.85 billion as of December 31, 2023[80] - The company's cash and cash equivalents as of December 31, 2023, were RMB 18,852,540 thousand, ensuring liquidity safety and supporting business development[139] - The company's total assets under asset-backed securities/notes decreased by 71.83% to RMB 1,649 million as of December 31, 2023, compared to RMB 5,853 million in the previous year[137] - The company's self-held portion of asset-backed securities/notes decreased by 58.55% to RMB 369,172 thousand as of December 31, 2023, compared to RMB 890,572 thousand in the previous year[137] Loan and Credit Quality - The company's loan balance increased by 9.8% to RMB 320.4 billion in 2023[1] - Far East Horizon's non-performing loan ratio decreased to 1.2% in 2023, down from 1.5% in the previous year[1] - The non-performing asset ratio decreased to 1.04%, with the overdue interest-bearing assets ratio for over 30 days remaining at 0.91%[11] - The non-performing asset ratio stood at 1.04% in 2023, slightly improved from 1.05% in 2022[21] - The company's non-performing asset ratio decreased to 1.04% in 2023, down from 1.05% in 2022, indicating improved asset quality[104][105] - The non-performing asset ratio decreased from 1.05% at the end of 2022 to 1.04% at the end of 2023[113] - The provision coverage ratio was 227.59% in 2023, down from 239.97% in 2022[21] - The provision coverage ratio for non-performing assets was 227.59% in 2023, down from 239.97% in 2022[124] - The company's loan and receivables provision decreased by 5.41% to RMB 6.32 billion as of December 31, 2023[82] - The company's total overdue interest-bearing assets over 30 days as of December 31, 2023, were RMB 2,449,995 thousand, with 42.84% classified as "special mention" and 41.13% as "doubtful"[132] Business Segments and Revenue Breakdown - The company's healthcare services segment contributed RMB 12.8 billion to total revenue, accounting for 25.5% of the company's overall revenue[7] - The industrial operation segment achieved revenue of RMB 14.74 billion, a year-on-year increase of 11.38%, contributing 38.68% to total revenue[12] - Hongxin Construction Development achieved total revenue of RMB 9.61 billion, a 22.00% year-on-year increase, with adjusted annual profit of RMB 1.04 billion, up 10.65%[12] - Hongxin Health recorded total revenue of RMB 4.24 billion, a 15.53% year-on-year increase, with annual profit surging 252.75% to RMB 172 million[12] - Financial services (interest income) grew to RMB 22,467,103 thousand in 2023, up 3.6% from RMB 21,677,501 thousand in 2022[19] - Industrial operations revenue increased to RMB 14,739,271 thousand in 2023, an 11.4% rise from RMB 13,232,942 thousand in 2022[19] - The financial and consulting segment contributed RMB 23,363.434 million, accounting for 61.32% of total revenue (before taxes and surcharges), a decrease of 0.58% from 2022[38][40] - Industrial operations revenue increased by 11.38% to RMB 14.739 billion, with Hongxin Construction contributing RMB 9.611 billion (up 22.00%) and Hongxin Health contributing RMB 4.238 billion (up 15.53%)[41] - Interest income from financial services increased by 3.64% to RMB 22.467 billion, accounting for 58.97% of total revenue (before taxes and surcharges)[42] - Equipment operation revenue increased by 22.00% to RMB 9.611 billion, accounting for 65.20% of industrial operations revenue[50] - Hospital operation revenue increased by 15.53% to RMB 4.238 billion, accounting for 28.75% of industrial operations revenue[50] International Business and Expansion - Far East Horizon's international business revenue grew by 18.3% to RMB 6.5 billion in 2023[7] - Hongxin Construction Development officially listed on the Hong Kong Stock Exchange on May 25, 2023, becoming the group's first independent industrial platform to enter the international capital market[33] - As of December 31, 2023, Hongxin Construction Development had 490 outlets in mainland China and Hong Kong, covering nearly 200 cities[33] - Hongxin Construction Development ranked 14th among the global top 100 leasing companies as of December 31, 2023[33] - The company's equity attributable to ordinary shareholders increased by approximately RMB 870 million due to the listing of Hongxin Construction Development on the Hong Kong Stock Exchange on May 25, 2023[161] Research and Development - The company's research and development expenditure increased by 20% to RMB 1.2 billion in 2023, focusing on fintech and digital transformation initiatives[7] - The company has upgraded its core business systems, providing more standardized modules and multi-dimensional reporting functions for better risk assessment[193] - The company has integrated more intelligent audit functions into its systems, reducing manual errors and improving efficiency in risk identification and verification[193] Risk Management and Asset Quality - The company's non-performing asset ratio decreased to 1.04% in 2023, down from 1.05% in 2022, indicating improved asset quality[104][105] - The company has established a more sensitive and timely risk monitoring mechanism, focusing on key industries, customers, regions, and major anomalies[101] - The company's intelligent early warning system can predict risks 1-3 months in advance by combining big data AI algorithms with expert experience[102] - The company's normal assets accounted for 92.99% of total interest-bearing assets in 2023, showing a steady increase from 89.34% in 2020[104] - The company's special mention assets decreased to 5.97% of total interest-bearing assets in 2023, down from 7.00% in 2022[105] - The company implemented a five-stage management system for post-lease operations: early warning, decision-making, execution, collection, and write-off, forming a comprehensive closed-loop management system[101] - The company has improved automation levels in various processes, including contract generation, collection follow-up calls, and customer profile generation[102] - The company has strengthened its operational management by reinforcing the three lines of defense in credit processes and improving operational quality across all levels[191] Dividend and Shareholder Returns - The company plans to distribute a dividend of HKD 0.50 per share[13] - The company proposed a special dividend in kind, distributing approximately 160 million shares of Hongxin Construction Development, representing about 5% of its total issued shares as of December 6, 2023[160] Capital and Financing - The company's interest-bearing assets amounted to RMB 269.09 billion at the end of 2023, remaining stable compared to the beginning of the year[11] - The company's interest-earning assets accounted for 74.75% of the company's total assets as of December 31, 2023, showing a slight decrease of 0.13% compared to the previous year[81] - The company's average balance of interest-earning assets increased by 0.67% to RMB 272.824 billion, maintaining stable coverage of high-quality clients in key industries[45] - The company's capital expenditure for 2023 amounted to RMB 2,880.915 million, primarily used for property, plant, and equipment additions, as well as external equity investments[183] - The company updated its medium-term notes and perpetual securities program, allowing the issuance of up to USD 4,000,000,000 in notes and/or perpetual securities[165] - The company issued and outstanding convertible bonds as of December 31, 2023, include a $300 million bond due in 2025 with a 2.5% annual interest rate, and a $250 million zero-coupon bond due in 2026[166][167] - The net proceeds from the $300 million bond issuance were approximately $296.6 million, with a net conversion price of approximately HK$8.24 per share[166] - The net proceeds from the $250 million bond issuance were approximately $246 million, with a net conversion price of approximately HK$10.01 per share[167] - As of December 31, 2023, the outstanding principal amount of the $300 million bond was $290 million after a $10 million redemption in July 2023[166] - The outstanding principal amount of the $250 million bond remained at $250 million as of December 31, 2023[167] - If all convertible bonds were fully converted, the company would issue 569,336,712 shares, representing approximately 13.19% of the issued share capital as of December 31, 2023[170] - The conversion of all convertible bonds would dilute the shareholding of major shareholders, with China National Chemical Corporation's stake decreasing from 21.31% to 18.83%[171] - The company's credit ratings remained unchanged in 2023, and it has sufficient cash flow and bank credit lines to fully repay the bonds if held to maturity[173] - The implied internal rate of return for the convertible bonds issued on July 8, 2020, and June 15, 2021, indicates that bondholders will receive equally favorable economic returns whether they choose to convert or redeem the bonds by the end of 2023, 2024, and 2025, with conversion prices of HKD 6.59, HKD 8.94, HKD 9.12, and HKD 9.30 respectively[174] - The conversion prices for the convertible bonds issued in July 2020 and June 2021 were adjusted to HKD 6.48 and HKD 8.35 per share, respectively, due to the payment of special dividends on January 22, 2024[175] Industry and Regional Focus - The company focuses on industries with high stability, strong growth prospects, and national strategic support, including healthcare, education, public transportation, and infrastructure[186] - The company has optimized its regional economic capability and vitality model, prioritizing key economic zones and cities, and expanding to second and third-tier cities[186] - The company has strengthened its customer base by expanding horizontally along the industrial chain and deepening vertically within regions, improving customer management and quality[188] - The company encourages the development of national-level specialized and innovative SMEs, particularly "little giant" enterprises with a certain scale and history[189] - The company has improved its risk management by integrating industry, regional, and customer perspectives, and enhancing risk assessment for both large corporate clients and SMEs[189] - The company has implemented a joint evaluation model for large corporate clients, involving multi-industry expert reviews and unified credit control[190] - The company has reduced its non-performing asset ratio to 1.04% for the year[190] Interest Rate and Foreign Exchange Risk - The company's floating rate interest-bearing assets increased to RMB 1,889,670 thousand as of December 31, 2023, compared to RMB 1,727,588 thousand in the previous year[194] - The company's floating rate interest-bearing liabilities increased to RMB (104,378,061) thousand as of December 31, 2023, compared to RMB (92,206,276) thousand in the previous year[194] - The company's net exposure to interest rate risk was RMB (23,443,188) thousand as of December 31, 2023, compared to RMB (20,803,201) thousand in the previous year[194] - A 100 basis point increase in interest rates would decrease the company's pre-tax profit by RMB 42,814 thousand as of December 31, 2023, compared to a decrease of RMB 66,264 thousand in the previous year[196] - A 100 basis point decrease in interest rates would increase the company's pre-tax profit by RMB 44,389 thousand as of December 31, 2023, compared to an increase of RMB 68,147 thousand in the previous year[196] - The company's foreign exchange risk exposure was approximately USD 6,084 million as of December 31, 2023, with a hedging ratio of 99.97%[197] - A 1% increase in the RMB exchange rate would increase the company's equity by RMB 143 thousand as of December 31, 2023, compared to an increase of RMB 16,970 thousand in the previous year[199] Government Subsidies and Other Income - Government subsidies rose by 39.97% to RMB 225,377 thousand in 2023, supporting other income/earnings[66] - Government subsidies for the period amounted to approximately RMB 160 million, including VAT deduction benefits, enterprise development subsidies, and government support funds[67] - Equity and debt investment income surged by 163.97% to RMB 507,929 thousand in 2023, contributing to other income/earnings[66] Operational Costs and Expenses - Sales costs increased by 10.10% to RMB 19.959 billion, with financial and consulting division costs rising by 10.82% to RMB 9.982 billion[52] - Financial and consulting division costs increased by 10.82% to RMB 9,982,081 thousand in 2023, accounting for 50.01% of total sales costs[54] - Industrial operations division costs rose by 9.39% to RMB 9,976,734 thousand in 2023, representing 49.99% of total sales costs[54] - Equipment operation costs surged by 23.28% to RMB 5,849,180 thousand in 2023, making up 58.63% of industrial operations division costs[59] - Hospital operation costs grew by 13.13% to RMB 3,472,780 thousand in 2023, accounting for 34.81% of industrial operations division costs[59] - Gross profit decreased by 2.48% to RMB 18,000,983 thousand in 2023, with the gross margin dropping to 47.42% from 50.45% in 2022[60] - Net interest income declined by 1.46% to RMB 12,485,022 thousand in 2023, as interest expense growth outpaced interest income growth[62] - Industrial operations division gross profit increased by 15.80% to RMB 4,762,537 thousand in 2023, driven by strong growth in equipment and hospital operation gross profits[65] - Sales and administrative expenses increased by 19.59% to RMB 8,121.968 million, driven by market expansion strategies[68] - Other expenses decreased by 86.43% to RMB 55.09 million, with significant reductions in exchange losses and bank fees[69] - Financial costs decreased by 1.59% to RMB 1,037.956 million, primarily related to financing costs for the industrial operations division[70] - Pre-provision profit decreased by 14.66% to RMB 10,614.851 million, impacted by rising financing costs and reduced gains from off-balance sheet assets[71] - Asset provisions decreased by 91.05% to RMB 189.591 million, with significant reversals in fixed asset provisions due to improved market conditions[72] - Income tax

Financial Performance - For the third quarter of 2023, the company achieved a slight year-on-year increase in operating revenue and net profit attributable to ordinary shareholders[1]. Asset Management - The total amount of interest-earning assets at the end of the period showed a slight increase compared to the beginning of 2023, with a stable asset quality and non-performing asset ratio[1]. Risk Management - The company maintained a prudent risk management strategy, with effective foreign exchange hedging measures and stable liquidity conditions[2]. Strategic Development - The company plans to continue its "Finance + Industry" development strategy, prioritizing operational safety and efficiency improvements[2]. Stock Options - The number of stock options granted under all stock option plans in 2022 was 33,847,932, representing approximately 0.0081% of the weighted average number of shares issued during the year[3].

Financial Performance - Total revenue for the six months ended June 30, 2023, reached RMB 18,361,807 thousand[9] - Profit attributable to ordinary shareholders for the same period was RMB 3,070,724 thousand[9] - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.73[9] - Diluted earnings per share for the same period was RMB 0.66[10] - Total revenue for the six months ended June 30, 2023, was RMB 18,361,807 thousand, an increase from RMB 17,715,854 thousand in the same period of 2022, representing a growth of 3.65%[12] - Financial services (interest income) amounted to RMB 11,084,837 thousand, up from RMB 10,517,904 thousand year-over-year, reflecting a growth of 5.41%[12] - In the first half of 2023, the company achieved a net profit attributable to ordinary shareholders of RMB 3,070,724 thousand, an increase of 8.19% compared to the same period last year[28] - Basic earnings per share for the first half of 2023 was RMB 0.73, compared to RMB 0.68 in the same period of 2022, marking an increase of 7.35%[12] - The company's gross profit decreased by 5.10% to RMB 8,452,581 thousand, while sales costs increased by 12.49% to RMB 9,909,226 thousand[29] Asset Management - The company's total assets as of June 30, 2023, reached RMB 361,362,852 thousand, compared to RMB 358,485,563 thousand in the previous year, indicating a slight increase of 0.52%[13] - The total equity attributable to ordinary shareholders increased to RMB 47,327,470 thousand as of June 30, 2023, from RMB 42,180,697 thousand in the previous year, reflecting a growth of 12.77%[13] - Cash and cash equivalents increased by 34.45% to RMB 21,382,384 thousand compared to RMB 15,903,843 thousand at the end of the previous year[75] - The company's loan and receivables amounted to RMB 276,744,255 thousand, accounting for 76.59% of total assets, with a year-on-year increase of 3.60%[75] - The total amount of non-performing assets was RMB 2,928,744 thousand, up from RMB 2,831,337 thousand at the end of 2022[117] Risk Management - The company has implemented a five-level classification system for interest-bearing assets to effectively manage and control asset quality and risks[91] - The company emphasizes a proactive approach to risk management, combining online predictive models with offline manual verification for accurate risk assessment[96] - The non-performing asset ratio remained stable at 1.05% as of June 30, 2023, unchanged from the end of 2022, reflecting controlled overall asset quality[104] - The company has upgraded its risk prediction model using big data and AI algorithms, achieving early warning capabilities of 1 to 3 months for identifying risk enterprises[96] - The provision coverage ratio decreased to 234.87% from 239.97% at the end of 2022[115] Market Presence and Strategy - The company aims to integrate industrial and financial services to support sustainable economic development[6] - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service offerings[15] - The company is actively adjusting its service structure to meet customer demands in response to the declining consulting service revenue[39] - The company plans to maintain stable growth in traditional financial services while achieving rapid growth in industrial operations and innovative financial services[72] - The company aims to strengthen its understanding of macroeconomic trends and industry dynamics to better navigate market challenges[178] Healthcare Operations - The healthcare segment saw a significant increase in patient visits and hospital admissions, capitalizing on the post-pandemic recovery[26] - The company plans to continue expanding its healthcare services in county-level markets, aiming to build the largest county health service platform in China[26] - The group operates 29 hospitals with approximately 11,000 open beds, covering regions including East China, South China, North China, Southwest, and Northeast, enhancing its national hospital operation network[200] - The group completed the equity transfer of Zhengzhou Renji Hospital in the first half of 2023, continuing to optimize asset efficiency and accelerate strategic upgrades[200] - The healthcare sector accounted for 16.50% of total assets, increasing from 15.59% at the end of 2022[121] Financing and Capital Structure - The group’s total assets at the beginning of the year were RMB 2,831,337 thousand, showing an increase to RMB 2,928,744 thousand by the end of the period[112] - The total liabilities of the group reached RMB 304,900,349 thousand, an increase of RMB 10,346,274 thousand or 3.51% compared to the end of the previous year[131] - The group's offshore financing increased significantly by 32.88% to RMB 56,972,723 thousand as of June 30, 2023, compared to RMB 42,873,721 thousand at the end of 2022[144] - The company has issued perpetual securities totaling RMB 1,000,000,000 with an initial distribution rate of 4.2% on July 6, 2022[153] - The company plans to potentially issue new perpetual securities based on market conditions and financing needs in the future[156]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 （於香港註冊成立的有限公司） （股份代號：3360） 截至二零二三年六月三十日止六個月中期業績公告 遠東宏信有限公司（「本公司」）董事局（「董事局」）謹此公佈本公司及其附屬公司 （「本集團」）截至二零二三年六月三十日止六個月的未經審核中期業績，連同截至 二零二二年六月三十日止六個月的比較數字。本公告列載本公司二零二三年中期 報告全文，並符合香港聯合交易所有限公司（「聯交所」）證券上市規則（「上市規 則」）中有關中期業績初步公告附載的資料之要求。 承董事局命 遠東宏信有限公司 主席、行政總裁及執行董事 孔繁星 香港，二零二三年八月九日 於本公告日期，本公司執行董事為孔繁星先生（主席）、王明哲先生及曹健先生； 本公司非執行董事為陳樹民先生、衛濛濛女士、劉海峰先生、郭明鑑先生及羅強 ...

Financial Performance - In 2022, the company's revenue and profitability continued to grow, supported by a resilient Chinese economy with a GDP growth of 3%[11] - The total revenue for the year 2022 reached approximately RMB 36.59 billion, an increase of 8.74% compared to the previous year[14] - The net profit attributable to ordinary shareholders was approximately RMB 6.13 billion, reflecting a year-on-year growth of 11.23%[14] - The company’s total assets amounted to RMB 346.99 billion, representing a growth of about 3.31% year-on-year[14] - The average return on equity was 14.13%, maintaining stable returns[14] - Basic earnings per share rose to RMB 1.46, an increase of 7.4% from RMB 1.36 in the previous year[19] - The company's net profit attributable to ordinary shareholders was RMB 6,131,474 thousand, representing a 11.2% increase compared to RMB 5,512,245 thousand in 2021[19] - The average return on assets for 2022 was 1.93%, a slight decrease from 1.96% in 2021[19] - The company reported a net interest margin of 4.67%, an increase from 4.06% in the previous year[19] - The group's total sales cost for the year 2022 was RMB 18,127,725 thousand, an increase of 10.32% from RMB 16,431,419 thousand in 2021[68] - The group's gross profit for 2022 was RMB 18,457,997 thousand, up by RMB 1,245,493 thousand or 7.24% from RMB 17,212,504 thousand in 2021, with gross margins of 50.45% and 51.16% respectively[78] Business Strategy and Operations - The company operates under a "Finance + Industry" strategic framework, focusing on serving enterprise clients and deepening strategic development[11] - The company has established a development positioning of "backed by the mainland, based in Hong Kong, and radiating Southeast Asia" to enhance its market presence[11] - The company has expanded its operational network across major cities in China, including Shanghai, Tianjin, and others, to improve customer service[8] - The company has a diversified business model that integrates financial and industrial capital across various sectors, including healthcare, construction, and logistics[7] - The company emphasizes innovation in products and services to provide tailored comprehensive operational services for clients[7] - The company has focused on technological advancements, implementing various digital tools to enhance operational efficiency and risk management[41] - The company expanded its business departments from 21 to 27 and increased its offices from 27 to 31, enhancing regional support and customer coverage[41] - The company plans to enhance medical services in under-resourced areas and expand into dental and aesthetic medical services[44] - The company plans to spin off its subsidiary, Hongxin Jianfa, for independent listing on the Hong Kong Stock Exchange, which is expected to reduce the debt-to-asset ratio to 84.42%[24] Market and Economic Conditions - Domestic demand showed negative growth with retail sales of consumer goods at RMB 44.0 trillion, a year-on-year decline of 0.2% compared to a 12.5% increase the previous year[32] - Fixed asset investment (excluding rural households) reached RMB 57.2 trillion, growing by 5.1% year-on-year, with infrastructure investment increasing by 9.4% and manufacturing investment by 9.1%[32] - The contribution of net exports to GDP growth was 17.1%, adding 0.5 percentage points, but in Q4, net exports negatively impacted GDP by 1.2 percentage points due to external demand contraction and pandemic disruptions[32] - By the end of 2022, the broad money supply (M2) grew by 11.8% year-on-year, while the total social financing stock increased by 9.6%[34] Asset Quality and Risk Management - The company’s asset quality improved, with the non-performing asset ratio decreasing to 1.05%[12] - The non-performing asset ratio improved to 1.05%, down from 1.06% in the previous year[22] - The proportion of attention-class assets decreased to 7.00% in 2022 from 8.09% in 2021, indicating an improvement in asset quality[129] - The healthcare sector accounted for 14.44% of total attention-class assets, down from 16.11% in the previous year, reflecting the impact of regional pandemic measures[132] - The company upgraded its risk warning system, enhancing the classification model and push frequency of risk information, which improved the timeliness and accuracy of risk data[126] - The company established a leading litigation information management system covering the entire process from filing to execution, enhancing litigation efficiency[126] - The company’s localized asset disposal teams played a crucial role in risk asset management during the pandemic, ensuring rapid response capabilities[125] Shareholder Value and Dividends - The company expresses gratitude to shareholders for their support, which has been crucial for its continued value creation[11] - The company plans to distribute a dividend of HKD 0.49 per share, reaffirming its commitment to shareholder value[14] - The company declared a final dividend of HKD 0.42 per share, which was approved at the annual general meeting on June 8, 2022, and paid on June 30, 2022[191] Financing and Capital Structure - The company issued asset-backed securities including three green bonds and one rural modernization themed product in 2022, enhancing its financing capabilities[172] - The company issued perpetual securities totaling RMB 1,000,000 thousand on July 6, 2022, with an initial distribution rate of 4.2%[194] - The company has outstanding convertible bonds with a principal amount of USD 300,000,000, maturing in 2025, with an annual interest rate of 2.5%[197] - The company plans to issue additional perpetual securities in the future based on market conditions and financing needs[196] - The total liabilities as of December 31, 2022, amounted to RMB 294,554 million, an increase of 4.15% from RMB 282,826 million at the end of the previous year[170] - The total equity of the group as of December 31, 2022, was RMB 52,439,513 thousand, a decrease of RMB 614,597 thousand or 1.16% from the previous year[189] Sector-Specific Performance - The healthcare segment generated revenue of RMB 101 million, down 85.63% from RMB 703 million in 2021, representing only 1.73% of total revenue[52] - The urban public utilities segment remained the largest contributor, accounting for 60.11% of total revenue with RMB 3,519 million, a slight decrease of 5.50% from RMB 3,724 million in 2021[52] - The industrial operations segment achieved revenue of RMB 13,232,942 thousand, a 15.73% increase from the previous year, accounting for 36.02% of total revenue[65] - The financial and consulting segment generated revenue of RMB 23,500,076 thousand, accounting for 63.98% of total revenue, with a growth of 5.16% year-on-year[50]

Financial Performance - Total revenue for the six months ended June 30, 2022, was RMB 17,715,854, representing an increase from RMB 16,184,157 for the same period in 2021, which is a growth of approximately 9.5%[16]. - Profit attributable to ordinary shareholders for the six months ended June 30, 2022, was RMB 2,842,245, up from RMB 2,572,885 in the same period of 2021, reflecting an increase of about 10.5%[16]. - Basic earnings per share for the six months ended June 30, 2022, was RMB 0.68, compared to RMB 0.64 for the same period in 2021, indicating a growth of 6.25%[16]. - The diluted earnings per share for the same period was RMB 0.62[17]. - The pre-tax profit for the first half of 2022 was RMB 4,559,280 thousand, an increase of 8.36% from RMB 4,207,417 thousand in the previous year[40]. - The net profit attributable to ordinary shareholders was RMB 2,842,245 thousand, reflecting a growth of 10.47% compared to RMB 2,572,885 thousand in the prior year[41]. - The gross profit for the first half of 2022 was RMB 8,907,138 thousand, representing an increase of 8.47% from RMB 8,211,587 thousand in the same period of 2021[63]. - The net profit for the period was RMB 287.05 million, representing a 16.53% increase from RMB 246.33 million[191]. Revenue Breakdown - Financial services (interest income) contributed RMB 10,517,904, up from RMB 9,358,025 year-on-year, indicating a growth of 12.4%[20]. - The financial and consulting segment generated revenue of RMB 11,596,385 thousand, accounting for 65.17% of total revenue, with a year-on-year increase of 4.17%[44]. - The industry operation segment reported revenue of RMB 6,197,942 thousand, marking a significant growth of 21.13% from RMB 5,116,738 thousand in the previous year[45]. - Total revenue for the equipment operation segment reached RMB 3,565.17 million, a 46.73% increase compared to RMB 2,429.70 million in the previous year[191]. - Total revenue for the hospital operations segment reached RMB 2,067.03 million, a 4.05% increase from RMB 1,986.54 million in the previous year[196]. Asset and Liability Management - The total assets as of June 30, 2022, reached RMB 358,485,070, up from RMB 333,554,753 in the same period last year, marking a growth of 7.0%[21]. - The total liabilities increased to RMB 309,020,789 from RMB 285,175,866, representing a rise of 8.5%[21]. - The company's total equity for the group was RMB 49,464,281 thousand, a decrease of RMB 3,589,829 thousand or 6.77% compared to the end of the previous year[133]. - The total amount of non-performing assets reached 3,020,332 thousand RMB as of June 30, 2022, compared to 2,751,412 thousand RMB at the end of 2021[105]. - The provision coverage ratio for non-performing assets was 236.30% as of June 30, 2022, slightly down from 241.75% at the end of 2021[110]. Operational Efficiency - The company aims to enhance operational efficiency and management effectiveness while emphasizing differentiated competitive advantages in the market[38]. - The company plans to enhance operational efficiency through group management to better convert sales costs into revenue growth[56]. - The company is focusing on enhancing operational efficiency in inclusive finance, overseas business, PPP investments, and non-performing asset management to ensure high-quality and stable development[37]. - The company plans to enhance operational efficiency and strategic focus in the second half of 2022, aiming for sustainable development[190]. Risk Management - The company maintains a proactive approach to managing asset quality through a five-tier classification system to assess risk and ensure effective resource allocation[92]. - The company has implemented a comprehensive asset management policy, resulting in a continuous improvement in asset quality and safety[98]. - The company emphasizes risk management by integrating industry research with evaluation practices, creating an industry management manual to enhance risk recognition[162]. - The company is committed to optimizing asset allocation by diversifying across industries, regions, and clients, adhering to a principle of reasonable risk dispersion[160]. Financing and Capital Structure - The company issued two green bonds and one rural agricultural modernization asset securitization project in the first half of 2022, supporting sustainable development[124]. - The company completed the issuance of RMB 1 billion perpetual medium-term notes in July 2022, indicating a focus on innovative financing products[124]. - The company has sufficient credit lines from banks, ensuring the ability to repay bondholders in cash if required[145]. - The company plans to potentially issue new perpetual securities based on market conditions and financing needs in the future[133]. Employee and Talent Management - The company has established an effective employee incentive plan linking compensation to overall performance and contributions, rather than just operational results[177]. - The company aims to attract and retain top management talent through its equity incentive plans established in 2014 and 2019[177]. - The company had 23,013 full-time employees as of June 30, 2022, an increase of 571 from the previous year, with approximately 41.9% holding bachelor's degrees or higher[176].