华润建材科技(01313) - 2024 - 中期业绩

Company Profile and Financial Summary Overview of Key Financial Performance 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 Condensed Consolidated Statement of Comprehensive Income 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 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 Basis of Preparation and Principal Accounting Policies 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] - 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][10] Segment Information 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] 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 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 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 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] Earnings Per Share 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 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][20] Interim Dividend Declaration and Payment Arrangements for Interim Dividend 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] - The total dividend amount is approximately HKD 139.7 million, to be paid on or about October 25, 2024[21] - 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] Suspension of Share Register Procedures 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] Business Environment Analysis Macroeconomic Overview 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] - National fixed asset investment (excluding rural households) increased by 3.9% year-on-year to RMB 24.5 trillion[23] - 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] Real Estate Market and Urban Development 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] - 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] - 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] Industry Overview and Policies Cement Industry Performance and Capacity 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] - Cement output in the Group's major operating regions (such as Guangdong, Guangxi, Fujian, etc.) all experienced negative year-on-year growth[25] - 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] Energy Saving, Emission Reduction, and Green Development 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] - 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] - 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] Energy Consumption and Carbon Emission Management 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] - 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] - 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] Industrial Structure and Safety Production 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] - 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] Transformation and Innovation New Business Development 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] - In basic building materials, approximately 9 million tons of new annual aggregates capacity were added, further enhancing aggregates production capacity[29] - In functional building materials, the national layout for engineered stone has been initially completed, with continuous product iteration and upgrades[29] Aggregates Business 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] - 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] - 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] Functional Building Materials Business 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] - 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] - 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] New Materials Business 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] - 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] - 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] Green and Sustainable Development 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] - 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] - 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] Digital Transformation 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] - 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] - 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] Smart Factory 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] - 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] Smart Applications and Industrial Internet 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] - 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] - 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] Smart Logistics 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] - 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] Smart Marketing 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] - 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] Research and Development and Innovation 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] - 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] - 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] Production Capacity and Cost Management Changes in Production Capacity and Utilization Rate 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] 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 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] - 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] - In mine safety management, safety levels are enhanced by strengthening design review, slope stability analysis, and promoting digital smart mine construction[34] Procurement Management 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][55] - 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] - 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] Logistics Management 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] - 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] Marketing and Brand Building Product Promotion 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] - 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] - 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] Brand Building 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] - 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] - Fully utilizing communication channels such as official accounts and video accounts in conjunction with offline marketing to continuously expand brand exposure[39] Employee Information Employee Profile and Costs 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] 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] Talent Development 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] Business Review Revenue Analysis 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] 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][54] Cost of Sales 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] - 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] - 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] Gross Profit and Gross Profit Margin 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] - 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] 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 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] - 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] - 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] Results of Associates and Joint Ventures 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] - 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] Net Profit Margin 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] Liquidity and Financial Resources Sources of Funds and Cash Position 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] 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 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] - 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] Medium-Term Notes and Financial Management 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] - The Group adopts a prudent and cautious financial policy for financial management, with centralized management of cash, financing, and investment activities[67] - 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] Net Current Liabilities and Future Solvency 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] - 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] Pledged Assets and Contingent Liabilities 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] - 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] Future Plans and Capital Expenditure Capital Expenditure Budget and Funding 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] - 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] Strategy and Outlook Macro Policy Orientation 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] - 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] - 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] - 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] Group's Future Strategy 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] - 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] - 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] Corporate Governance and Others Corporate Governance 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] Dealings in Listed Securities 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] Review of Interim Report and Acknowledgements 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] - 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] Publication of Interim Report 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]