首创环境(03989) - 2019 - 中期财报

Company Information This section details the company's fundamental registration, governance, and operational support entities - This section provides a detailed list of the company's core corporate governance and operational support entities, including basic registration information, board members, committee compositions, main office addresses, auditors, legal advisors, principal bankers, and share registrars[6] Management Discussion and Analysis Business Review and Outlook In H1 2019, the company expanded its domestic waste treatment business with 10 new projects and RMB 2.87 billion investment, while maintaining stable overseas operations through BCG NZ - Despite macroeconomic uncertainties, the company benefited from China's policy support for the green economy and environmental protection industry, viewing it as a new growth driver and unprecedented opportunity[7] H1 2019 Market Expansion Achievements | Metric | Value | | :--- | :--- | | New Projects | 10 | | Total Investment | Approximately RMB 2.87 billion | | New Annual Designed Treatment Capacity | 2.265 million tons of municipal solid waste | | New Daily Treatment Capacity | 6,300 tons | H1 2019 Domestic Project Operating Data | Metric | Value | | :--- | :--- | | Municipal Solid Waste Processed | Approximately 1.92 million tons | | Waste Electrical Appliances Disassembled | Approximately 1.62 million units | | On-grid Power Generation | 145 million kWh | - As of June 30, 2019, the company had a domestic project pipeline of 73 projects with a total investment of approximately RMB 18.7 billion and a total designed annual municipal solid waste treatment capacity of approximately 15.99 million tons[12] - In overseas markets, the company holds a 51% stake in BCG NZ, New Zealand's largest waste management service provider, which holds over 30% market share and serves over 200,000 customers in New Zealand[13] Financial Review In H1 2019, profit attributable to owners increased by 99% to RMB 171.2 million, driven by domestic project growth and impairment reversal, despite a 75.3% rise in finance costs due to green bond issuance H1 2019 Key Financial Indicators | Metric | H1 2019 | H1 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Owners | RMB 171.2 million | RMB 86 million | +99% | | Waste Treatment Business Revenue | RMB 2.8368 billion | - | +27.0% | | Gross Profit Margin | Approximately 27.5% | - | - | | Administrative Expenses | RMB 321.9 million | - | +8.8% | | Finance Costs | RMB 213.5 million | - | +75.3% | - A significant reason for the substantial profit growth was the reversal of prior year impairment losses and recovery of related interest for the Nanchang project, impacting net profit by approximately RMB 59.8 million[14] Financial Position Summary (As of June 30, 2019) | Metric | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | RMB 16.2644 billion | - | | Gearing Ratio | Approximately 69% | Approximately 68% | | Current Ratio | Approximately 1.46 | Approximately 1.59 | | Cash and Bank Balances | RMB 1.9247 billion | RMB 2.4115 billion | | Outstanding Borrowings | RMB 6.4040 billion | RMB 5.8347 billion | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2019[26] Review Report on Interim Condensed Consolidated Financial Statements This section presents the independent auditor's review report on the interim condensed consolidated financial statements, confirming their preparation in accordance with relevant accounting standards - Independent auditor Ernst & Young conducted a review of the company's interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[30] - The review concluded that the auditor found no matters leading them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34, Interim Financial Reporting[31] Interim Financial Report Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2019, revenue increased by 27.0% to RMB 2.837 billion, gross profit rose by 43.4% to RMB 779 million, and profit attributable to owners grew 99.0% to RMB 171 million Statement of Profit or Loss Summary (For the six months ended June 30) | Metric (RMB thousands) | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,836,775 | 2,233,769 | +27.0% | | Gross Profit | 778,717 | 543,041 | +43.4% | | Profit Before Tax | 344,771 | 194,632 | +77.1% | | Profit for the Period | 232,825 | 144,247 | +61.4% | | Profit Attributable to Owners of the Parent | 171,194 | 86,036 | +99.0% | | Basic Earnings Per Share | RMB 1.20 cents | RMB 0.60 cents | +100% | Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2019, total comprehensive income was RMB 206 million, with RMB 153 million attributable to owners of the parent, after accounting for profit for the period and other comprehensive income items Statement of Comprehensive Income Summary (For the six months ended June 30) | Metric (RMB thousands) | 2019 | 2018 | | :--- | :--- | | Profit for the Period | 232,825 | 144,247 | | Other Comprehensive Income for the Period (after tax) | (27,229) | (75,183) | | Total Comprehensive Income for the Period | 205,596 | 69,064 | | Total Comprehensive Income Attributable to Owners of the Parent | 152,907 | 42,237 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2019, total assets increased by 9.2% to RMB 16.264 billion, with total liabilities at RMB 11.209 billion and net assets at RMB 5.055 billion, driven by growth in non-current assets Statement of Financial Position Summary | Metric (RMB thousands) | June 30, 2019 | December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 11,981,970 | 10,545,812 | +13.6% | | Total Current Assets | 4,282,460 | 4,340,221 | -1.3% | | Total Assets | 16,264,430 | 14,886,033 | +9.2% | | Total Current Liabilities | 2,940,387 | 2,723,517 | +8.0% | | Total Non-current Liabilities | 8,268,918 | 7,358,598 | +12.4% | | Total Liabilities | 11,209,305 | 10,082,115 | +11.2% | | Net Assets | 5,055,125 | 4,803,918 | +5.2% | | Equity Attributable to Owners of the Parent | 3,515,269 | 3,362,362 | +4.5% | Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2019, equity attributable to owners of the parent increased from RMB 3.362 billion to RMB 3.515 billion, primarily driven by profit and total comprehensive income for the period - The increase in equity attributable to owners of the parent during the period was primarily driven by current period profit, alongside the combined impact of exchange rate fluctuations, fair value changes in financial assets, and cash flow hedges[41] Interim Condensed Consolidated Statement of Cash Flows In H1 2019, net cash outflow from operating activities was RMB 471 million, net cash outflow from investing activities was RMB 497 million, and net cash inflow from financing activities was RMB 433 million, resulting in a RMB 546 million decrease in cash and cash equivalents Statement of Cash Flows Summary (For the six months ended June 30) | Metric (RMB thousands) | 2019 | 2018 | | :--- | :--- | | Net Cash Flows Used in Operating Activities | (470,779) | (142,629) | | Net Cash Flows Used in Investing Activities | (496,631) | (441,999) | | Net Cash Flows From Financing Activities | 432,517 | 976,303 | | Net Decrease in Cash and Cash Equivalents | (534,893) | 391,675 | | Cash and Cash Equivalents at Beginning of Period | 2,403,522 | 892,790 | | Cash and Cash Equivalents at End of Period | 1,857,178 | 1,290,421 | Notes to Interim Condensed Consolidated Financial Statements These notes detail accounting policies, key estimates, and judgments, covering the adoption of HKFRS 16, segment information, revenue breakdown, borrowings, related party transactions, and fair value of financial instruments 3. Accounting Policies and Disclosures Changes The most significant accounting policy change was the adoption of HKFRS 16 Leases, leading to the recognition of RMB 280 million in right-of-use assets and lease liabilities as of January 1, 2019 - The adoption of HKFRS 16 Leases significantly impacted the statement of financial position by increasing both assets and liabilities, and altered the presentation of subsequent lease-related expenses in the statement of profit or loss from operating lease rentals to depreciation and interest expenses[52][56] 4. Operating Segment Information The Group's operations are segmented by geography into China and New Zealand, with China's waste treatment and waste-to-energy segment showing significant revenue growth in H1 2019 Segment Revenue and Results (For the six months ended June 30) | Segment (RMB thousands) | 2019 Revenue | 2018 Revenue | 2019 Results | 2018 Results | | :--- | :--- | :--- | :--- | :--- | | China | 1,646,779 | 1,114,964 | 148,538 | 55,936 | | New Zealand | 1,189,996 | 1,118,805 | 84,287 | 88,311 | | Total | 2,836,775 | 2,233,769 | 232,825 | 144,247 | 5. Revenue, Other Income and Gains Total Group revenue is primarily derived from construction services under service concession arrangements, waste collection, landfill services, and electrical appliance dismantling, with construction services being the largest and fastest-growing component Revenue from Contracts with Customers (For the six months ended June 30) | Revenue Source (RMB thousands) | 2019 | 2018 | | :--- | :--- | | Construction services under service concession arrangements | 1,056,702 | 835,022 | | Waste collection services | 750,084 | 726,487 | | Landfill services | 257,985 | 216,295 | | Electrical appliance dismantling | 215,231 | 97,888 | | Operation services under service concession arrangements | 190,661 | 96,954 | | Others | 274,320 | 198,036 | 21. Interest-bearing Bank and Other Borrowings As of June 30, 2019, total interest-bearing borrowings amounted to RMB 6.404 billion, comprising RMB 2.759 billion in secured and RMB 3.645 billion in unsecured borrowings, with approximately 79% classified as non-current liabilities Borrowing Structure (As of June 30, 2019) | Category (RMB thousands) | Amount | | :--- | :--- | | Secured bank and other borrowings | 2,758,850 | | Unsecured bank and other borrowings | 3,645,123 | | Total | 6,403,973 | | Of which: Due within one year | 1,326,134 | | Of which: Non-current portion | 5,077,839 | 26. Related Party Transactions The Group engages in various related party transactions, primarily with its controlling shareholder Beijing Capital Group and its subsidiaries, including significant interest payments and guarantee fees - The Group's financing activities are highly dependent on the support of its controlling shareholder, Beijing Capital Group, and its subsidiaries, including direct loans, guarantees, and keepwell undertakings for bond issuance[130][131][137] Disclosure of Interests and Other Information Major Shareholders' Interests This section discloses major shareholders' equity, with Beijing Capital Group Company Limited holding a combined 66.92% stake through its subsidiaries as of June 30, 2019 Major Shareholders' Shareholding (As of June 30, 2019) | Shareholder Name | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Capital (Hong Kong) Limited | Beneficial owner | 6,449,026,736 | 45.11% | | Capital Huaxing International Investment Limited | Beneficial owner | 3,116,767,072 | 21.80% | | Beijing Capital Group Company Limited | Interest in controlled corporation | 9,565,793,808 | 66.92% | Corporate Governance The company maintains high corporate governance standards, fully complying with the HKEX Corporate Governance Code, with the Audit Committee reviewing interim results and external auditors conducting an independent review - The company complied with all code provisions of the HKEX Corporate Governance Code during the review period[164] - The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, internal controls, and the unaudited interim results[166]