Economic Performance - For the first half of 2021, China's GDP was RMB 53.2 trillion, reflecting a 12.7% increase compared to the same period last year[18]. - As of the end of the first half of 2021, China's GDP reached RMB53.2 trillion, representing a 12.7% increase compared to the same period last year[43]. Water Quality and Environmental Initiatives - The proportion of national surface water assessment sections with excellent water quality (Grade I-III) was 81.8%, an increase of 1.0% year-on-year[18]. - The Ministry of Ecology and Environment reported an increase in excellent water quality sections in major river basins, reaching 83.5%[18]. - The proportion of national surface water assessment sections with excellent water quality (Grade I-III) reached 81.8%, an increase of 1.0% over the same period last year[47]. - The Chinese government has implemented effective measures for air, water, and soil pollution control, yielding positive outcomes[18]. - The Group is committed to contributing to environmental protection through alignment with national water pollution treatment efforts[23]. - The Guidance on Promoting Wastewater Resource Utilisation was published by ten departments, emphasizing systematic development in sewage resource utilization[23]. - The Group aims to achieve a reclaimed water utilization rate of 25% or above in cities facing water shortages by 2025, and 35% in the Beijing-Tianjin-Hebei region[23]. - The Group aims to achieve a centralized collection rate of urban domestic sewage of over 70% and a complete urban domestic sewage collection pipe network by 2035[49]. - The Chinese government has set ambitious goals for wastewater treatment and resource utilization, including a target of over 95% wastewater treatment rate in county-level cities by 2025[41]. Financial Performance - For the six months ended June 30, 2021, ELL Environmental recorded revenue of approximately HK$33.0 million, representing a year-on-year increase of 25.2%[30]. - The gross profit for the same period was HK$17.3 million, reflecting a year-on-year increase of 25.8%[30]. - The net loss for the period was HK$1.9 million[30]. - Total revenue increased by HK$6.6 million or 25.2% to HK$33.0 million for the Period from HK$26.4 million for the Last Corresponding Period[59]. - Revenue excluding imputed interest income increased by HK$6.3 million or 32.8% to HK$25.5 million for the Period from HK$19.2 million for the Last Corresponding Period[61]. - Gross profit increased by HK$3.5 million or 25.8% to HK$17.3 million for the Period from HK$13.7 million for the Last Corresponding Period[65]. - Gross profit margin slightly increased to 52.3% for the Period from 52.1% for the Last Corresponding Period[65]. - Profit before tax increased by HK$1.4 million or 482.5% to HK$1.7 million for the Period from HK$0.3 million for the Last Corresponding Period[76]. - Loss attributable to owners of the Company decreased by HK$1.6 million or 32.3% to HK$3.3 million for the Period from HK$4.8 million for the Last Corresponding Period[78]. - Total cost of sales increased by HK$3.1 million or 24.5% to HK$15.7 million for the Period from HK$12.6 million for the Last Corresponding Period[64]. Operational Developments - The Group's wastewater treatment business has seen a water tariff increase from RMB2.67 per tonne to RMB3.43 per tonne effective from April 2021, expected to enhance revenue and gross profit[29]. - The Group is focusing on two overseas projects: biofuel pellet business in Jambi, Indonesia, and a power supply project in Bangka, Indonesia, with operations expected to commence after the completion of the power supply plant in late 2021[24]. - The Group has purchased a turbine generator and a boiler to improve the efficiency of the power supply plant, enhancing value in its power generation business[24]. - The Group plans to explore cooperation opportunities with other power generation plants to diversify its environmental protection business[28]. - The Group anticipates a satisfactory growth in its mainland China business due to the ongoing strong demand for wastewater treatment[35]. - The management will continue to align with national policies to ensure sustainable growth in the Group's domestic operations[35]. - The Group plans to actively coordinate with national policies and seize development opportunities both domestically and internationally[58]. - The Group is committed to sustainable development and aims to contribute to environmental protection while expanding its wastewater treatment market presence[58]. Corporate Governance and Compliance - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period[149]. - All directors confirmed compliance with the Model Code governing securities transactions during the reporting period[150]. - The company maintains a high standard of corporate governance as per the principles set out in the Corporate Governance Code[149]. - The company has established an audit committee to enhance financial reporting and internal controls, comprising three independent non-executive directors[159]. Shareholder Information - As of June 30, 2021, Mr. Chau held 225,000,000 shares, representing approximately 20.32% of the company's shareholding[134]. - Mr. Chan held 353,200,000 shares, accounting for approximately 31.90% of the company's shareholding[134]. - Everbest Environmental held 337,500,000 shares, which is about 30.48% of the total shares[145]. - Wealthy Sea Holdings Limited owned 225,000,000 shares, equivalent to 20.32% of the company's shareholding[145]. - Morgan Top Trading Co., Ltd. had a beneficial interest in 143,300,000 shares, representing 12.94% of the company's shareholding[145]. - Ms. Wong held 18,915,000 shares, contributing to a total of 365,080,000 shares or approximately 32.97% when including interests in controlled corporations[145]. - As of June 30, 2021, no other directors or the chief executive had interests or short positions in shares or debentures of the company or its associated corporations[137]. Cash Flow and Liquidity - As of June 30, 2021, the company's bank balances and cash amounted to HK$84.6 million, an increase of 65.7% from HK$51.1 million as of December 31, 2020[84]. - The company maintained a healthy liquidity position throughout the period, with no unutilized banking facilities[98]. - The net cash flows used in operating activities amounted to HK$11,115,000, an increase from HK$7,446,000 in the previous year[182]. - The company generated net cash flows from investing activities of HK$10,955,000, compared to a cash outflow of HK$4,272,000 in the prior year[182]. - The net cash flows from financing activities were HK$28,978,000, a significant increase from a cash outflow of HK$10,934,000 in the same period last year[182]. - Cash and cash equivalents at the end of the period increased to HK$84,606,000, up from HK$39,894,000 at the end of June 2020[185]. Financial Position - As of June 30, 2021, total assets less current liabilities amounted to HK$435,023,000, an increase from HK$431,720,000 as of December 31, 2020[171]. - Current assets increased to HK$135,533,000 from HK$98,682,000, reflecting a growth of approximately 37.3%[171]. - The company reported a net current asset value of HK$59,593,000, up from HK$53,021,000, indicating a rise of about 12.3%[171]. - Total equity as of June 30, 2021, was HK$378,699,000, compared to HK$375,164,000 at the end of 2020, showing a slight increase of 0.7%[173]. - The company’s borrowings decreased significantly from HK$20,240,000 in December 2020 to HK$35,107,000 by June 2021[173]. - Receivables under service concession arrangements rose to HK$28,502,000, up 30.2% from HK$21,883,000 in the previous period[171]. - Inventories increased to HK$1,109,000 from HK$964,000, reflecting a growth of 15.1%[171]. Dividend Information - The Board declared an interim dividend of HK$0.5 cents per ordinary share for the period, compared to no dividend for the six months ended June 30, 2020[120]. - The interim dividend will be payable on or around September 29, 2021, to shareholders registered by September 15, 2021[124]. - The company paid dividends of HK$798,000 during the period, a decrease from HK$7,186,000 in the previous year[182].
强泰环保(01395) - 2021 - 中期财报