中国建筑兴业(00830) - 2021 - 中期财报

Company Business Structure Company Business Structure The Group's business structure primarily comprises construction engineering and operation management, centrally managed by China State Construction International Holdings Limited - The company's main businesses include construction engineering and operation management[5] Board of Directors and Committees Board of Directors and Committees The Board consists of Chairman Zhang Haipeng, Executive Directors Wu Mingqing (Vice Chairman & CEO) and Wang Hai, Non-executive Director Huang Jiang, and three Independent Non-executive Directors, with audit, remuneration, and nomination committees ensuring robust governance - The Board Chairman is Zhang Haipeng (Non-executive Director), and the Vice Chairman and CEO is Wu Mingqing (Executive Director)[7] - Audit, Remuneration, and Nomination Committees are established, with independent non-executive directors participating and chairing each[7] Company Information Company Information The company is registered in the Cayman Islands, with its principal office in Hong Kong, stock code 00830, and financial calendar details including interim results and dividend distribution - The company's stock code is 00830, and its website is www.cscd.com.hk[8](index=8&type=chunk) 2021 Financial Calendar | Event | Date | | :--- | :--- | | Interim Results Announcement | August 16, 2021 | | Ex-dividend Date | September 7, 2021 | | Closure of Register of Members | September 9 to 10, 2021 | | Record Date | September 10, 2021 | | Interim Dividend Payment | November 12, 2021 | Chairman's Report Performance For the six months ended June 30, 2021, the Group's main business revenue increased by 37.8% to HKD 2.703 billion, and profit attributable to shareholders increased by 45.8% to HKD 226 million H1 2021 Key Financial Performance | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | YoY Growth | | :--- | :--- | :--- | :--- | | Main Business Revenue | 2.703 | 1.961 | 37.8% | | Profit Attributable to Shareholders | 0.226 | 0.155 | 45.8% | | Earnings Per Share (HK cents) | 10.48 | 7.19 | 45.8% | Dividend Distribution The Board declared an interim dividend of HKD 3 cents per share for the period ended June 30, 2021, considering profitability and future development - The Board declared an interim dividend of HKD 3 cents per share[12] Business Review The Group achieved steady progress in construction engineering and operation management in H1 2021, maintaining a leading position in Hong Kong and Macau curtain wall business and expanding in mainland China Market Conditions Global economic recovery in H1 2021 faced challenges from recurring epidemics and rising raw material prices, while China's economy showed strong growth - Global economic recovery faced challenges from recurring epidemics and rising raw material prices[13] - China's economy showed strong growth, supporting domestic consumption recovery[13] - The Group implemented a "Hong Kong and Macau-based, Mainland-reliant, overseas-radiating, internal-external联动" strategy, preparing for cautious bidding[13] Construction Engineering Business Construction engineering, including curtain wall and general contracting, saw steady development, with the curtain wall business maintaining its leading position in Hong Kong and Macau and expanding in mainland China Curtain Wall Engineering Curtain wall business maintained its leading position in Hong Kong and Macau with new major project wins, accelerated expansion in mainland China, and improved efficiency at the Zhuhai production base - Hong Kong and Macau curtain wall business maintained its leading position, securing new major projects including West Mid-Levels Seymour Road residential, Cheung Sha Wan Hing Wah Street residential, Cheung Kong Center II, and Kai Tak Sports Park[15] - China mainland curtain wall market accelerated expansion, winning quality projects such as Zhongzhou International Great Wall Logistics and China State Construction Industrial Base commercial projects[16] - Zhuhai production base's intelligent and automated upgrade significantly improved production capacity and technical levels[16] - North American curtain wall projects slowed due to epidemic and trade friction risks, focusing on existing projects and strengthening cost and contract management[16] General Contracting Engineering General contracting business developed steadily, actively participating in bidding for small and medium-sized housing projects in Hong Kong and exploring internal collaboration opportunities - General contracting business developed steadily, actively participating in bidding for small and medium-sized housing projects in Hong Kong[18] - Stanley Wong Ma Kok Road No. 128 residential project and Henderson Ma Tau Wai project in Hong Kong progressed smoothly[18] Operation Management Business Operation management business, including China Overseas Supervision and Huanggu Thermal Power, progressed steadily, with successful project wins and advancement in Canadian eldercare investment - China Overseas Supervision secured traditional supervision projects and transitioned to full-process consulting, winning the Harbin Institute of Technology (Shenzhen) renovation project[19] - Huanggu Thermal Power strengthened safe operations and energy saving, successfully completing the heating season's production in the first half of the year[19] - Canadian eldercare industry investment and operation business progressed, entering the interior decoration completion and marketing phase[19] Human Resources Management The Group prioritizes talent acquisition, retention, and development through comprehensive HR systems to enhance employee satisfaction and efficiency - The Group adheres to a people-oriented approach, improving recruitment, training, assessment, and incentive systems to enhance employee satisfaction and efficiency[20] - As of June 30, 2021, the Group's total number of employees reached 3,849[21] Social Responsibility The Group actively participates in public welfare activities, earning multiple social responsibility honors, including the "Caring Company" logo for eight consecutive years - The Group actively participated in public welfare activities, receiving multiple social responsibility honors, including the "Caring Company" logo from the Hong Kong Council of Social Service for eight consecutive years[22] Future Outlook The H2 2021 global economic outlook remains uncertain due to the pandemic and inflation, while Hong Kong and Macau economies are expected to recover, and the Greater Bay Area offers significant opportunities - The H2 global economic outlook is highly uncertain, with Hong Kong and Macau economies expected to recover, and the Greater Bay Area construction presenting opportunities[23] - Mainland China's economy has strong growth potential, while the North American construction market may slow down[23] Operating and Development Strategies The Group focuses on curtain wall business as its core, deepening its presence in Hong Kong and Macau, steadily expanding in mainland China, and cautiously developing overseas markets - Curtain wall business is the core, adhering to a "large market, large client, large project" strategy, deeply cultivating Hong Kong and Macau, steadily expanding in mainland China, and cautiously developing overseas markets[24] - Strengthen R&D and innovation capabilities, improve multi-link coordination mechanisms for design, production, and installation, and enhance the comprehensive competitiveness of the curtain wall business[24] - Emphasize design team building, expand the mainland China design team, and strengthen support for overseas personnel[26] Acknowledgements The Chairman extends sincere gratitude to shareholders, clients, suppliers, and all employees for their strong support and hard work - The Chairman expressed gratitude to all stakeholders and employees[27] Management Discussion and Analysis Overall Performance In H1 2021, the Group's total revenue increased by 37.8% to HKD 2.703 billion, with profit attributable to owners rising by 45.8% to HKD 226 million H1 2021 Overall Financial Performance | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Revenue | 2.703 | 1.961 | 37.8% | | Profit Attributable to Owners of the Company | 0.226 | 0.155 | 45.8% | | Basic Earnings Per Share (HK cents) | 10.48 | 7.19 | 45.8% | Segment Analysis All three core business segments—curtain wall, general contracting, and operation management—showed growth in revenue and operating profit in H1 2021 Curtain Wall Business Curtain wall business revenue increased to HKD 1.852 billion, with operating profit rising to HKD 150 million, driven by accelerated project progress in Greater China Curtain Wall Business Performance | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | | :--- | :--- | :--- | | Revenue | 1.852 | 1.312 | | Operating Profit | 0.150 | 0.066 | General Contracting Business General contracting business revenue increased to HKD 290 million, with operating profit rising to HKD 25 million, benefiting from new projects commenced in 2020 General Contracting Business Performance | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | | :--- | :--- | :--- | | Revenue | 0.290 | 0.174 | | Operating Profit | 0.025 | 0.006 | Operation Management Business Operation management business revenue steadily increased to HKD 561 million, with operating profit rising to HKD 160 million, supported by contributions from Shenyang Huanggu Thermal Power Plant and Nanchang Bridge Operation Management Business Performance | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | | :--- | :--- | :--- | | Revenue | 0.561 | 0.475 | | Operating Profit | 0.160 | 0.142 | Administrative, Selling and Other Operating Expenses Administrative, selling, and other operating expenses increased proportionally to HKD 92 million in H1 2021, reflecting the expansion of the three core businesses Administrative, Selling and Other Operating Expenses | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | | :--- | :--- | :--- | | Expenses | 0.092 | 0.084 | Finance Costs The Group's finance costs decreased to HKD 13 million in H1 2021, primarily due to lower borrowing interest rates Finance Costs | Metric | H1 2021 (HKD billion) | H1 2020 (HKD billion) | | :--- | :--- | :--- | | Finance Costs | 0.013 | 0.017 | New Contracts and Projects in Progress As of June 30, 2021, the Group secured new contracts worth HKD 4.55 billion, achieving 56.9% of its annual target, with total outstanding contracts of HKD 21.068 billion - As of June 30, 2021, cumulative new contract value was HKD 4.55 billion, completing 56.9% of the annual target[34] New Contract Value and Projects in Progress (As of June 30, 2021) | Segment Business | New Contract Value (HKD billion) | Total Contract Value (HKD billion) | Uncompleted Contract Value (HKD billion) | | :--- | :--- | :--- | :--- | | Curtain Wall Engineering | 3.474 | 14.463 | 7.824 | | General Contracting Engineering | 0.464 | 5.453 | 2.132 | | Operation Management | 0.612 | 1.152 | 0.619 | | Total | 4.550 | 21.068 | 10.575 | Financial Management As of June 30, 2021, the Group had HKD 577 million in cash and bank balances, HKD 1.178 billion in total bank borrowings, and a net gearing ratio of 38.7% Key Financial Management Indicators (As of June 30, 2021) | Metric | June 30, 2021 (HKD billion) | December 31, 2020 (HKD billion) | | :--- | :--- | :--- | | Bank Balances and Cash | 0.577 | 0.858 | | Total Bank Borrowings | 1.178 | 1.062 | | Net Gearing Ratio | 38.7% | 15.4% | - The Group has approximately HKD 2.543 billion in unutilized bank facilities, ensuring sufficient financial resources[36] Bank Borrowings Maturity Profile (HKD thousand) | Maturity | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Repayable on demand or within one year | 566,546 | 650,710 | | Repayable in the second year | 400,551 | 400,524 | | Repayable in the third to fifth year | 210,977 | 10,932 | | Total Bank Borrowings | 1,178,074 | 1,062,166 | Currency Composition of Bank Deposits (%) | Currency | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | RMB | 36 | 69 | | HKD | 50 | 24 | | USD | 1 | 1 | | MOP | 1 | 1 | | Others | 12 | 5 | Employees and Remuneration Policy As of June 30, 2021, the Group employed 3,849 staff, with an effective management incentive policy and competitive remuneration packages - As of June 30, 2021, the Group had 3,849 employees (December 31, 2020: 3,344 employees)[39] - The Group has an effective management incentive policy and competitive remuneration, including basic salary, allowances, benefits, and discretionary bonuses[39] Foreign Exchange Risk The Group's foreign currency risk primarily arises from operations denominated in USD, RMB, CAD, GBP, and MOP, with management monitoring and considering hedging as needed - Foreign currency risk primarily arises from operating activities denominated in USD, RMB, CAD, GBP, and MOP[40] - The Group currently has no foreign currency hedging policy, but management will monitor and consider hedging major foreign currencies when necessary[40] Unaudited Condensed Consolidated Statement of Profit or Loss Unaudited Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2021, the Group reported revenue of HKD 2.703 billion, gross profit of HKD 381 million, and profit attributable to shareholders of HKD 226 million Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Metric | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 2,703,455 | 1,960,725 | | Cost of Sales | (2,322,367) | (1,693,878) | | Gross Profit | 381,088 | 266,847 | | Other income and gains, net | 9,122 | 15,591 | | Administrative, selling and other operating expenses | (92,300) | (83,917) | | Finance costs | (12,872) | (17,487) | | Profit before tax | 285,038 | 181,034 | | Income tax expense | (63,450) | (28,774) | | Profit for the period | 221,588 | 152,260 | | Profit attributable to owners of the Company | 225,803 | 154,930 | | Non-controlling interests | (4,215) | (2,670) | | Basic and diluted earnings per share | HKD 10.48 cents | HKD 7.19 cents | Unaudited Condensed Consolidated Statement of Comprehensive Income Unaudited Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2021, profit for the period was HKD 222 million, with total comprehensive income of HKD 292 million, primarily due to exchange differences on translating foreign operations Condensed Consolidated Statement of Comprehensive Income Summary (For the six months ended June 30) | Metric | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Profit for the period | 221,588 | 152,260 | | Exchange differences on translating foreign operations | 70,764 | (42,470) | | Total comprehensive income for the period, net of tax | 292,352 | 109,790 | | Total comprehensive income attributable to owners of the Company | 295,538 | 112,222 | | Non-controlling interests | (3,186) | (2,432) | Unaudited Condensed Consolidated Statement of Financial Position Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2021, total assets were HKD 7.742 billion, total liabilities HKD 6.190 billion, and equity attributable to owners of the Company HKD 1.634 billion Condensed Consolidated Statement of Financial Position Summary (As of June 30) | Metric | June 30, 2021 (HKD thousand) | December 31, 2020 (HKD thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 2,199,859 | 2,107,754 | | Interests in infrastructure projects | 98,711 | 132,892 | | Goodwill | 129,649 | 129,649 | | Current assets | | | | Contract assets | 2,070,387 | 1,451,792 | | Trade and other receivables | 1,268,217 | 1,321,016 | | Cash and cash equivalents | 577,271 | 858,154 | | Total assets | 7,742,134 | 7,388,898 | | Current liabilities | | | | Bank borrowings | 566,546 | 650,710 | | Contract liabilities | 539,315 | 778,041 | | Trade and other payables and accrued expenses | 1,558,780 | 1,464,870 | | Non-current liabilities | | | | Contract liabilities | 750,602 | 755,970 | | Bank borrowings | 611,528 | 411,456 | | Equity attributable to owners of the Company | 1,634,209 | 1,403,019 | Unaudited Condensed Consolidated Statement of Changes in Equity Unaudited Condensed Consolidated Statement of Changes in Equity As of June 30, 2021, equity attributable to owners increased from HKD 1.403 billion to HKD 1.634 billion, driven by profit for the period and foreign currency translation reserves Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30) | Metric | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | At January 1 (Attributable to owners of the Company) | 1,403,019 | 1,125,325 | | Profit for the period | 225,803 | 154,930 | | Exchange differences on translating foreign operations | 69,735 | (42,708) | | 2020 Final dividend | (64,666) | — | | At June 30 (Attributable to owners of the Company) | 1,634,209 | 1,237,842 | Unaudited Condensed Consolidated Statement of Cash Flows Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2021, net cash used in operating activities was HKD 356 million, with net cash from financing activities of HKD 167 million Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Metric | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (355,904) | (374,243) | | Net cash used in investing activities | (133,098) | (70,927) | | Net cash from financing activities | 167,041 | 75,267 | | Decrease in cash and cash equivalents | (321,961) | (369,903) | | Cash and cash equivalents at beginning of period | 858,154 | 826,576 | | Effect of foreign exchange rate changes | 41,078 | (19,863) | | Cash and cash equivalents at end of period | 577,271 | 436,810 | Notes to the Unaudited Condensed Consolidated Financial Statements 1 Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKFRS 34 and Appendix 16 of the HKEX Listing Rules, presented at historical cost in HKD - Financial statements are prepared in accordance with Appendix 16 of the HKEX Listing Rules and HKAS 34 "Interim Financial Reporting"[51] - Statements are presented on a historical cost basis and in HKD[52] 2 Changes in Accounting Policies and Disclosures The Group adopted amendments related to interest rate benchmark reform and COVID-19-related rent concessions, which had no significant impact on its performance or financial position - The Group adopted amendments related to interest rate benchmark reform (HKFRS 9) and COVID-19-related rent concessions (HKFRS 16) for the first time this period[53][54] - These amendments had no significant impact on the Group's performance or financial position[54] 3 Estimates Financial statement preparation involves management judgments and assumptions, with significant sources of estimation uncertainty remaining consistent with the prior year - Financial statement preparation involves management judgments, estimates, and assumptions, and actual results may differ from estimates[56] - Significant sources of estimation uncertainty for this period are consistent with the prior year's financial statements[56] 4 Revenue and Segment Information The Group's revenue primarily derives from curtain wall, general contracting, and operation management businesses, with Greater China being the main source of income - The Group primarily engages in curtain wall engineering, general contracting, and operation management, with revenue representing income from engineering and management contracts[57] Segment Results Summary (For the six months ended June 30) | Segment | 2021 Revenue (HKD thousand) | 2020 Revenue (HKD thousand) | 2021 Gross Profit (HKD thousand) | 2020 Gross Profit (HKD thousand) | 2021 Segment Results (HKD thousand) | 2020 Segment Results (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Curtain Wall Engineering | 1,851,965 | 1,312,453 | 180,182 | 103,836 | 149,891 | 65,805 | | General Contracting Engineering | 290,281 | 173,602 | 25,420 | 7,344 | 24,876 | 5,965 | | Operation Management | 561,209 | 474,670 | 175,486 | 155,667 | 160,387 | 142,091 | | Total | 2,703,455 | 1,960,725 | 381,088 | 266,847 | 335,154 | 213,861 | - Curtain wall engineering revenue primarily originated from Greater China, Asia, and other regions (HKD 1.602 billion) and North America (HKD 250 million)[60] 5 Other Income and Gains, Net In H1 2021, other income and gains, net, totaled HKD 9.122 million, mainly from bank interest and sundry income, a decrease from the prior year due to lower exchange gains Other Income and Gains, Net (For the six months ended June 30) | Item | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Bank interest income | 2,918 | 1,447 | | Exchange gains, net | — | 6,526 | | Sundry income | 6,204 | 7,618 | | Total | 9,122 | 15,591 | 6 Finance Costs Net finance costs for H1 2021 decreased to HKD 12.872 million, primarily due to reduced interest on bank borrowings and overdrafts Finance Costs (For the six months ended June 30) | Item | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Interest on bank borrowings and overdrafts | 12,464 | 17,271 | | Interest on lease liabilities | 508 | 695 | | Interest on borrowings from intermediate holding company | 2,112 | 352 | | Total | 15,084 | 18,318 | | Less: Capitalized in property, plant and equipment | (2,212) | (831) | | Net finance costs | 12,872 | 17,487 | 7 Profit Before Tax Profit before tax for H1 2021 was HKD 285 million, after deducting total depreciation expenses of HKD 7.406 million Profit Before Tax Deductions (For the six months ended June 30) | Item | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment (excluding right-of-use assets) | 3,678 | 3,072 | | Depreciation of right-of-use assets | 3,728 | 6,458 | | Total depreciation expenses | 7,406 | 9,530 | 8 Income Tax Expense Net income tax expense for H1 2021 was HKD 63.45 million, comprising Hong Kong, mainland China, and overseas tax provisions, and deferred tax Income Tax Expense (For the six months ended June 30) | Item | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Current tax — Hong Kong | 11,724 | 5,586 | | Current tax — Mainland China and overseas | 20,466 | 30,333 | | Deferred tax, net | 31,260 | (7,145) | | Net income tax expense for the period | 63,450 | 28,774 | - Hong Kong profits tax is calculated at 16.5%, while other regions are based on local laws, interpretations, and practices[68] 9 Dividends The company distributed a 2020 final dividend of HKD 3 cents per share in July 2021 and declared an interim dividend of HKD 3 cents per share for November 2021 - A 2020 final dividend of HKD 3 cents per share, totaling approximately HKD 64.666 million, was distributed in July 2021[70] - The Board declared an interim dividend of HKD 3 cents per share, totaling approximately HKD 64.666 million, to be paid on November 12, 2021[70] 10 Earnings Per Share For the six months ended June 30, 2021, basic and diluted earnings per share were HKD 10.48 cents, based on profit attributable to shareholders of HKD 226 million and 2,155,545 thousand weighted average ordinary shares Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2021 (HKD thousand/thousand shares) | 2020 (HKD thousand/thousand shares) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 225,803 | 154,930 | | Weighted average number of ordinary shares | 2,155,545 | 2,155,545 | | Basic and diluted earnings per share | HKD 10.48 cents | HKD 7.19 cents | - There were no potential dilutive ordinary shares at the end of the period[72] 11 Property, Plant and Equipment During the period, the Group acquired property, plant, and equipment totaling approximately HKD 117 million Property, Plant and Equipment Acquisitions (For the six months ended June 30) | Item | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Acquisition amount | 117,056 | 72,541 | 12 Interests in Infrastructure Projects As of June 30, 2021, total interests in infrastructure projects amounted to HKD 163 million, with an annual yield of 10.2% to 10.7% Interests in Infrastructure Projects (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total interests in infrastructure projects | 163,451 | 193,972 | | Less: Current portion due within one year | (64,740) | (61,080) | | Non-current portion due after one year | 98,711 | 132,892 | - Interests in infrastructure projects yield an annual return of 10.2% to 10.7%[76] 13 Goodwill As of June 30, 2021, the net carrying amount of goodwill was HKD 130 million, primarily allocated to Gamma Group and its North American subsidiaries Goodwill Carrying Amount (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cost | 159,707 | 159,707 | | Accumulated impairment | 30,058 | 30,058 | | Net carrying amount | 129,649 | 129,649 | - Goodwill is primarily allocated to Gamma Group and its North American segment subsidiaries, with recoverable amounts calculated based on value in use[79] 14 Trade and Other Receivables As of June 30, 2021, total trade and other receivables were HKD 1.268 billion, with an average credit period of no more than 90 days for customers Ageing Analysis of Trade and Other Receivables (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Trade receivables | | | | 0–30 days | 230,985 | 500,862 | | 31–60 days | 40,179 | 28,305 | | 61–90 days | 10,691 | 30,393 | | Over 90 days | 270,570 | 135,070 | | Subtotal | 552,425 | 694,630 | | Retention receivables | 598,571 | 570,131 | | Other receivables | 117,221 | 56,255 | | Total | 1,268,217 | 1,321,016 | - The Group generally grants customers an average credit period of no more than 90 days, with retention receivables repaid approximately one year after the project warranty period expires[81] 15 Bank Borrowings As of June 30, 2021, total bank borrowings were HKD 1.178 billion, with an average annual interest rate of 2.51% Total Bank Borrowings (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Bank loans, secured | 12,056 | 11,958 | | Bank loans, unsecured | 1,166,018 | 1,050,208 | | Total | 1,178,074 | 1,062,166 | Bank Borrowings Repayment Period (HKD thousand) | Repayment Period | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Repayable on demand or within one year | 566,546 | 650,710 | | Repayable in the second year | 400,551 | 400,524 | | Repayable in the third to fifth year | 210,977 | 10,932 | | Total | 1,178,074 | 1,062,166 | - As of June 30, 2021, the average annual interest rate for bank loans was 2.51% (December 31, 2020: 2.62%)[84] 16 Trade and Other Payables and Accrued Expenses As of June 30, 2021, total trade and other payables and accrued expenses were HKD 1.559 billion, including trade payables, retention payables, and other accrued expenses Ageing Analysis of Trade and Other Payables and Accrued Expenses (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Trade payables | | | | 0–30 days | 879,789 | 827,777 | | 31–60 days | 42,978 | 26,273 | | Over 60 days | 174,392 | 139,579 | | Subtotal | 1,097,159 | 993,629 | | Retention payables | 320,133 | 276,518 | | Other payables and accrued expenses | 141,488 | 194,723 | | Total | 1,558,780 | 1,464,870 | - As of June 30, 2021, retention payables expected to be due after twelve months amounted to approximately HKD 175 million[85] 17 Share Capital As of June 30, 2021, the company's issued and fully paid share capital consisted of 2,155,545 thousand ordinary shares at HKD 0.01 par value each Share Capital (As of June 30, 2021) | Item | Number of Shares (thousand shares) | Share Capital Amount (HKD thousand) | | :--- | :--- | :--- | | Ordinary shares of HKD 0.01 par value each | 2,155,545 | 21,555 | 18 Commitments As of June 30, 2021, the Group's contracted but unrecognised commitments included capital expenditure for property, plant, and equipment and investments in joint ventures Contracted but Unrecognized Commitments (HKD thousand) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Capital expenditure for property, plant and equipment in progress | 65,441 | 163,526 | | Investments in joint ventures | 3,611 | 8,886 | 19 Related Party Transactions In H1 2021, the Group engaged in various related party transactions, including receiving engineering and service fees from and paying for insurance, materials, and machinery rentals to group companies Summary of Related Party Transactions (For the six months ended June 30) | Transaction Type | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Engineering fees received from group companies | 766,154 | 545,397 | | Service income received from group companies | 52,825 | 31,925 | | Insurance service fees paid to group companies | 10,447 | 7,198 | | Material costs paid to group companies | 1,853 | 3,164 | | Machinery rental fees paid to group companies | 3,299 | 1,597 | Other Information Interim Dividend The Board declared an interim dividend of HKD 3 cents per share, payable on November 12, 2021, to shareholders registered on September 10, 2021 - The Board declared an interim dividend of HKD 3 cents per share, payable on November 12, 2021[87] Closure of Register of Members To determine interim dividend entitlements, the company will suspend share transfer registration from September 9 to September 10, 2021 - To determine interim dividend entitlements, the company will suspend share transfer registration from September 9 to September 10, 2021[88] Share Capital As of June 30, 2021, the company's total issued share capital comprised 2,155,545,000 ordinary shares with a par value of HKD 0.01 each - As of June 30, 2021, the company's total issued share capital was 2,155,545,000 ordinary shares, each with a par value of HKD 0.01[89] Directors' Interests in Shares, Underlying Shares and Debentures As of June 30, 2021, Directors Zhang Haipeng, Wu Mingqing, and Huang Jiang held long positions in the company's shares, with some also holding interests in China State Construction Engineering Corporation Limited A shares Directors' Long Positions in the Company's Shares (As of June 30, 2021) | Director's Name | Capacity | Nature of Interest | Number of Ordinary Shares | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Zhang Haipeng | Beneficial owner | Personal interest | 3,750,000 | 0.174 | | Wu Mingqing | Beneficial owner | Personal interest | 5,000,000 | 0.232 | | Huang Jiang | Beneficial owner | Personal interest | 3,000,000 | 0.139 | - Mr. Zhang Haipeng, Mr. Wang Hai, and Mr. Huang Jiang also held personal interests in A shares of China State Construction Engineering Corporation Limited[91] Substantial Shareholders' Interests in Shares and Underlying Shares of the Company As of June 30, 2021, Capable Holdings Limited held 74.06% of the company's shares, with China State Construction International Holdings Limited and its parent companies deemed to hold the same interest Substantial Shareholders' Long Positions in the Company's Shares (As of June 30, 2021) | Shareholder Name | Capacity | Number of Ordinary Shares | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Capable Holdings Limited | Beneficial owner | 1,596,403,279 | 74.06 | | China State Construction International Holdings Limited | Interest in controlled corporation | 1,596,403,279 | 74.06 | | China Overseas Holdings Limited | Interest in controlled corporation | 1,596,403,279 | 74.06 | | China State Construction Engineering Corporation Limited | Interest in controlled corporation | 1,596,403,279 | 74.06 | | China State Construction Group Co., Ltd. | Interest in controlled corporation | 1,596,403,279 | 74.06 | - Capable Holdings Limited is a wholly-owned subsidiary of China State Construction International, and due to control relationships, China State Construction International, China Overseas, China State Construction Engineering, and China State Construction Group are deemed to hold the same share interest[95] Purchase, Sale or Redemption of the Company's Listed Securities During the six months ended June 30, 2021, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities - During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[97] Corporate Governance The company fully complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the HKEX Listing Rules throughout the reporting period - The company complied with all code provisions of the Corporate Governance Code in Appendix 14 of the HKEX Listing Rules throughout the reporting period[98] Directors' Securities Transactions The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance with the code[99] Review of Accounts The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2021 - The Audit Committee, comprising three independent non-executive directors, reviewed the financial statements in this interim report[100]