河北建设(01727) - 2024 - 中期业绩

Announcement Information Hebei Construction Group Co., Ltd. released its unaudited interim consolidated results for the six months ended June 30, 2024 - Hebei Construction Group Co., Ltd. announced its unaudited interim consolidated results for the six months ended June 30, 2024[1] - The company's stock code is 1727, and the announcement date is August 26, 2024[1] Financial Highlights This section provides an overview of the company's key financial metrics for the first half of 2024, including revenue, net profit, and earnings per share 2024 H1 Financial Highlights | Indicator | June 30, 2024 (RMB) | Same Period 2023 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 11.015 billion yuan | (Not provided) | Decreased by 26% | | Net Profit | 121 million yuan | (Not provided) | Increased by 9% | | Earnings Per Share | 0.07 yuan | 0.07 yuan | Unchanged | Business Review This section reviews the company's construction engineering contracting business, including new contracts, in-progress, and completed projects - The company primarily engages in construction engineering contracting, including building construction, infrastructure construction, and specialized and other construction engineering[4] 2024 H1 New Contract Value Overview | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 13.960 | 14.335 | Decreased by 2.62% | | Beijing-Tianjin-Hebei Region Share | 88.91% | 91.24% | Decreased by 2.33 percentage points | | Other Regions Share | 11.09% | 8.76% | Increased by 2.33 percentage points | Company Business Overview The company is a leading non-state-owned construction group in China, with core businesses in building construction, infrastructure construction, and specialized and other construction engineering 2024 H1 New Contract Value by Business Segment | Business Segment | 2024 Share | 2023 Share | Change | | :--- | :--- | :--- | :--- | | Building Construction Engineering | 55.98% | 53.54% | Increased by 2.44 percentage points | | Infrastructure Construction Engineering | 18.77% | 32.21% | Decreased by 13.44 percentage points | | Specialized and Other Construction Engineering | 25.25% | 14.25% | Increased by 11.00 percentage points | Building Construction Business The company primarily provides services as a general contractor for residential, public, industrial, and commercial building projects - The company acts as a general contractor, responsible for all major aspects of building construction projects, including construction, foundation, curtain wall, decoration, and fire protection engineering[7] New Contract Value and Segment Share for Building Construction Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 7.815 | 7.675 | Increased by 1.82% | | Residential Building Engineering Share | 34.54% | 27.18% | Increased by 7.36 percentage points | | Public Building Engineering Share | 46.87% | 50.97% | Decreased by 4.10 percentage points | | Industrial Building Engineering Share | 18.59% | 21.74% | Decreased by 3.15 percentage points | | Commercial Building Engineering Share | 0.00% | 0.11% | Decreased by 0.11 percentage points | Infrastructure Construction Business The company provides construction engineering contracting services for municipal and transportation infrastructure projects, primarily for local governments - The infrastructure construction business primarily serves municipal and transportation projects, with local governments as main clients[8] New Contract Value and Segment Share for Infrastructure Construction Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 2.620 | 4.617 | Decreased by 43.25% | | Municipal Infrastructure Construction Engineering Share | 62.43% | 69.91% | Decreased by 7.48 percentage points | | Transportation Infrastructure Construction Engineering Share | 37.57% | 30.09% | Increased by 7.48 percentage points | Specialized and Other Construction Engineering Contracting Business The company undertakes projects with professional qualifications in mechanical and electrical installation, steel structure construction, and decoration - The specialized and other construction engineering contracting business covers areas such as mechanical and electrical installation, steel structure construction, and decoration[9] New Contract Value and Segment Share for Specialized and Other Construction Engineering Contracting Business | Indicator | 2024 (RMB billion yuan) | 2023 (RMB billion yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 3.525 | 2.042 | Increased by 72.62% | | Mechanical and Electrical Installation Share | 25.20% | 35.37% | Decreased by 10.17 percentage points | | Steel Structure Share | 0.17% | 4.10% | Decreased by 3.93 percentage points | | Decoration and Renovation Share | 5.25% | 23.73% | Decreased by 18.48 percentage points | | Other Construction Business Share | 69.38% | 36.79% | Increased by 32.59 percentage points | Representative New Contracts This section highlights key new contracts signed in H1 2024, primarily in Hebei Province, across various construction types - Representative new contracts are mainly concentrated in Hebei Province, including residential buildings, public buildings, mechanical and electrical installations, and water conservancy and hydropower projects[10] - The EPC general contract for the North China Electric Power University Science and Technology Industrial Park supporting infrastructure project has a contract value of RMB 1.370 billion[10] Representative Projects Under Construction This section showcases various ongoing projects across multiple provinces and construction types, including public, residential, and infrastructure - Projects under construction are widely distributed in Hebei Province and other provinces and cities, including Xinjiang, Inner Mongolia, Beijing, Shandong, Jiangsu, Tibet, Anhui, Heilongjiang, Chongqing, Qinghai, Guizhou, and Zhejiang[11][12][13] - The China Academy of Chinese Medical Sciences Guang'anmen Hospital Baoding Hospital project has an executed contract value of RMB 1.943 billion, the largest among the listed projects[11] - The EPC general contract for the Innovation Manufacturing Industrial Park Infrastructure Project has an executed contract value of RMB 1.362 billion[16] Representative Completed Projects This section lists representative completed projects, including university buildings, urban renewal, and industrial parks, with varying contract values - Completed projects cover public buildings, residential buildings, industrial buildings, municipal infrastructure construction, and other construction businesses[18] - The China Western (Guangyuan) Green Home Furnishing Industrial City Start-up Zone Construction Project has an executed contract value of RMB 1.050 billion[18] Scientific Research Achievements and Awards This section provides an overview of the company's technological advancements, platform development, and intellectual property achievements in H1 2024 - In the first half of 2024, the company's scientific and technological work achieved significant progress in research and development, platform construction, and intellectual property[20] - Eight construction science and technology plan projects and 15 new technology application demonstration projects were approved by the Hebei Provincial Department of Housing and Urban-Rural Development, along with five science and technology plan projects by the Hebei Provincial Construction Industry Association[20] - The company received one 2023 Hebei Provincial Science and Technology Cooperation Award and 28 2024 Hebei Provincial Construction Industry Science and Technology Progress Awards, including three first prizes[20] - As of the end of June 2024, 70 new patents were authorized (including 4 invention patents), and 32 new patent applications were filed[20] Future Outlook This section outlines the company's strategic focus on strengthening organization, enhancing cash flow, expanding markets, fostering innovation, and improving project quality - The company will focus on strengthening organizational construction and various system operations to continuously increase cash flow sufficiency and navigate economic cycles[22] - It will continue to intensify regional and industry market development, strictly control market entry, and ensure high-quality projects[22] - The company will vigorously promote innovative and entrepreneurial organizations, explore new upstream and downstream areas, and support young talent in unleashing their creativity[22] - It will continuously improve project delivery quality, standardize construction site safety production and VIS image building, and actively strive for high-quality projects at all levels[22] Financial Review This section provides a detailed analysis of the company's financial performance, including revenue, costs, profits, and key financial positions - In the first half of 2024, the company's revenue decreased by RMB 3.933 billion to RMB 11.015 billion, primarily due to a decline in revenue from the construction engineering contracting segment[23] - Net profit increased by approximately RMB 9.69 million to RMB 121 million[34] 2024 H1 Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Current Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Quick Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Gearing Ratio | 93.5% | 92.1% | Increased by 1.4 percentage points | | Return on Assets (non-annualized) | 0.2% | 0.2% | Unchanged | | Return on Equity (non-annualized) | 1.9% | 2.6% | Decreased by 0.7 percentage points | Revenue, Cost of Sales, and Gross Profit H1 2024 revenue decreased, primarily due to a decline in the construction engineering contracting segment, impacting all major business lines - The decrease of RMB 3.894 billion in revenue from the construction engineering contracting segment was the main reason for the overall revenue decline[23] Operating Performance of Construction Engineering Contracting Segment (H1 2024 vs H1 2023) | Business | 2024 Revenue (RMB billion yuan) | 2024 Cost (RMB billion yuan) | 2024 Gross Margin (%) | 2023 Revenue (RMB billion yuan) | 2023 Cost (RMB billion yuan) | 2023 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Building Construction | 6.984 | 6.628 | 5.1 | 9.430 | 8.985 | 4.7 | | Infrastructure Construction | 3.099 | 2.880 | 7.1 | 4.109 | 3.846 | 6.4 | | Specialized and Other Construction | 0.725 | 0.686 | 5.4 | 1.163 | 1.109 | 4.6 | | Total | 10.808 | 10.194 | 5.7 | 14.702 | 13.940 | 5.2 | - Building construction business revenue decreased by RMB 2.446 billion, affected by a sluggish real estate market and slower project progress[24] - Infrastructure construction business revenue decreased by RMB 1.010 billion, mainly due to slower growth in infrastructure investment and fewer new contracts signed[24] - Specialized and other construction business revenue decreased by RMB 438 million due to fewer new projects[25] Selling Expenses Selling expenses for H1 2024 were RMB 0.97 million, showing a minor increase year-on-year Selling Expenses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 0.97 | (Not provided) | Minor increase | Administrative Expenses Administrative expenses decreased in H1 2024, mainly due to reduced staff remuneration, benefits, and social insurance Administrative Expenses | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 212 | (Not provided) | Decreased by 67.57 | - The decrease in administrative expenses was primarily attributable to reduced staff remuneration, benefits, and social insurance expenses[27] Research and Development Expenses R&D expenses decreased in H1 2024, primarily due to fewer new R&D projects initiated Research and Development Expenses | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | R&D Expenses | 33.22 | (Not provided) | Decreased by 36.10 | - The decrease in R&D expenses was mainly due to fewer new R&D projects initiated during the reporting period[28] Credit Impairment Losses Credit impairment losses decreased in H1 2024, mainly due to reduced bad debt provisions for high-risk customers Credit Impairment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Credit Impairment Losses | 76.76 | (Not provided) | Decreased by 10.28 | - The decrease in credit impairment losses was primarily due to a reduction in bad debt provisions for customers with significant default risks during the period[29] Asset Impairment Losses Asset impairment loss reversals increased in H1 2024, primarily due to lower original contract asset values from decreased revenue Asset Impairment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Asset Impairment Loss Reversal | 36.78 | 9.67 | Increased by 27.11 | - The increase in asset impairment loss reversals was mainly due to a decrease in the original value of contract assets resulting from lower revenue, which in turn reduced the new provision for bad debts on contract assets[30] Investment Losses Investment losses decreased in H1 2024, mainly due to reduced losses from long-term equity investments accounted for using the equity method Investment Losses | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Investment Losses | 1.90 | 8.38 | Decreased by 6.48 | - The decrease in investment losses was primarily due to a reduction in losses from long-term equity investments accounted for using the equity method[32] Income Tax Expense Income tax expense decreased in H1 2024, primarily due to some subsidiaries utilizing prior year deductible losses Income Tax Expense | Indicator | Jan-Jun 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 35.09 | 45.78 | Decreased by 10.69 | - The decrease in income tax expense was mainly due to certain subsidiaries utilizing deductible losses from previous years[33] Net Profit Net profit for H1 2024 increased to RMB 121 million, up by approximately RMB 9.69 million year-on-year Net Profit | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Year-on-Year Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Net Profit | 121 | (Not provided) | Increased by 9.69 | Liquidity, Financial Resources, and Capital Structure The Group primarily funds operations through cash generated from operating activities and interest-bearing borrowings - The Group primarily funds its operations through cash generated from operating activities and interest-bearing borrowings[34] Cash and Cash Equivalents | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 4.840 | 6.528 | Decreased by 1.688 | Cash and Bank Balances Cash and bank balances decreased as of June 30, 2024, primarily due to net cash outflow from operating activities Cash and Bank Balances | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 6.143 | 7.689 | Decreased by 1.546 | - The decrease in cash and bank balances was primarily due to net cash outflow from operating activities[35] Financial Policy The Group regularly monitors cash flow and balances to maintain optimal liquidity for operations and growth strategies - The Group regularly monitors cash flow and cash balances, striving to maintain optimal liquidity levels to support operations and growth strategies[36] - In the future, the Group intends to continue funding its operations through cash generated from operating activities and interest-bearing borrowings[36] Long-term Equity Investments Long-term equity investments decreased as of June 30, 2024, mainly due to the disposal of an investment in Rongcheng County Hengda Construction Investment Co., Ltd Long-term Equity Investments | Indicator | June 30, 2024 (RMB million yuan) | December 31, 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Long-term Equity Investments | 470 | 501 | Decreased by 30.77 | - The decrease in long-term equity investments was primarily due to the disposal of the long-term equity investment in Rongcheng County Hengda Construction Investment Co., Ltd. during the period[37] Accounts Receivable and Long-term Receivables Net accounts receivable decreased as of June 30, 2024, while long-term receivables (including current portion) showed a minor decrease Accounts Receivable and Long-term Receivables | Indicator | June 30, 2024 (RMB billion yuan/million yuan) | December 31, 2023 (RMB billion yuan/million yuan) | Change (RMB billion yuan/million yuan) | | :--- | :--- | :--- | :--- | | Net Accounts Receivable | 7.164 | 7.479 | Decreased by 314 million yuan | | Long-term Receivables (incl. current portion) | 219 | 222 | Decreased by 2.58 million yuan | Other Receivables Other receivables increased as of June 30, 2024, with a minor overall change Other Receivables | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Other Receivables Balance | 2.408 | 2.298 | Increased by 0.110 | Contract Assets and Contract Liabilities for Construction Services Net contract assets decreased due to lower revenue, while contract liabilities increased due to new projects with advance payments Contract Assets and Contract Liabilities | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Net Contract Assets | 40.494 | 42.108 | Decreased by 1.614 | | Contract Liabilities | 6.937 | 6.704 | Increased by 0.233 | - The decrease in contract assets was primarily due to lower revenue during the reporting period[41] - The increase in contract liabilities was mainly due to new projects undertaken during the period that received advance payments for engineering work[41] Investments in Other Equity Instruments Carrying value of investments in other equity instruments increased due to fair value appreciation from market conditions Investments in Other Equity Instruments | Indicator | June 30, 2024 (RMB million yuan) | December 31, 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Carrying Value of Investments in Other Equity Instruments | 594 | 589 | Increased by 5.40 | - The increase was primarily due to the fair value appreciation of some investments in other equity instruments held, influenced by market conditions[42] Borrowings Interest-bearing borrowings slightly increased as of June 30, 2024 Interest-bearing Borrowings | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Interest-bearing Borrowings | 5.941 | 5.736 | Increased by 0.205 | Bills Payable and Accounts Payable Accounts payable decreased due to lower project volumes and increased cash payments, while bills payable increased due to higher proportion of bill payments Bills Payable and Accounts Payable | Indicator | June 30, 2024 (RMB billion yuan) | December 31, 2023 (RMB billion yuan) | Change (RMB billion yuan) | | :--- | :--- | :--- | :--- | | Accounts Payable Balance | 30.776 | 34.488 | Decreased by 3.712 | | Bills Payable Balance | 1.219 | 1.036 | Increased by 0.184 | - The decrease in accounts payable was mainly due to lower project volumes and an increased proportion of cash payments for major materials and subcontracting[43] - The increase in bills payable was primarily due to the Group increasing the proportion of payments made via bills[43] Capital Expenditures Capital expenditures decreased in H1 2024, primarily due to no significant purchases of fixed assets or construction in progress Capital Expenditures | Indicator | H1 2024 (RMB million yuan) | Same Period 2023 (RMB million yuan) | Change (RMB million yuan) | | :--- | :--- | :--- | :--- | | Capital Expenditures | 15 | (Not provided) | Decreased by 36 | - The decrease in capital expenditures was mainly due to no significant purchases of fixed assets or construction in progress during the reporting period[44] Capital Commitments The Group had no significant capital commitments as of June 30, 2024 - As of June 30, 2024, the Group had no significant capital commitments[44] Financial Ratios As of June 30, 2024, current and quick ratios both increased, while the gearing ratio slightly rose and return on equity decreased 2024 H1 Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Current Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Quick Ratio (times) | 1.1 | 1.0 | Increased by 0.1 | | Gearing Ratio | 93.5% | 92.1% | Increased by 1.4 percentage points | | Return on Assets (non-annualized) | 0.2% | 0.2% | Unchanged | | Return on Equity (non-annualized) | 1.9% | 2.6% | Decreased by 0.7 percentage points | Significant Acquisitions or Disposals The Group had no significant acquisitions or disposals during the reporting period - The Group had no significant acquisitions or disposals during the reporting period[45] Contingent Liabilities Contingent liabilities include bank credit financing guarantees to third parties and contingent liabilities from pending litigations or arbitrations Contingent Liabilities | Type | Amount (RMB million yuan) | | :--- | :--- | | Bank credit financing guarantees to third parties | 655 | | Contingent liabilities from pending litigations or arbitrations | 44 | RMB Exchange Rate Fluctuations and Exchange Risk The Group has no significant foreign exchange fluctuation risk as most business and bank loans are transacted in RMB, with no hedging policy in place - The Group's vast majority of business and all bank loans are transacted in RMB, thus there is no significant foreign exchange fluctuation risk[48] - The Group currently has no hedging policy against foreign exchange risk[48] Significant Subsequent Events The Group had no significant subsequent events as of the announcement date - As of the date of this announcement, the Group had no significant subsequent events[48] Other Information This section covers dividend policy, corporate governance, securities dealings by directors and supervisors, share transactions, and audit committee review - The Board does not recommend an interim dividend for the first half of 2024[48] - The company is committed to maintaining high corporate governance standards, complies with the Corporate Governance Code, and has reviewed its interim results[48] Dividends The Board does not recommend an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[48] Corporate Governance Practices The company is committed to high corporate governance standards and has complied with all code provisions of the Corporate Governance Code - The company is committed to achieving and maintaining a high level of corporate governance and has established an effective corporate governance structure[48] - For the six months ended June 30, 2024, the company has complied with all code provisions of the Corporate Governance Code[48] Securities Transactions by Directors and Supervisors The company adopted the Model Code for securities transactions by directors and supervisors, and all confirmed compliance during the period - The company has adopted the Model Code as the code of conduct for directors and supervisors in dealing in the company's securities[50] - All directors and supervisors confirmed compliance with the required standards set out in the Model Code during the reporting period[50] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period, and held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[51] - As of the end of the reporting period, neither the company nor its subsidiaries held any treasury shares[51] Audit Committee Review of Interim Results The Audit Committee reviewed and confirmed the Group's interim results announcement and unaudited interim financial statements - The company's Audit Committee has reviewed and confirmed the Group's interim results announcement and unaudited interim financial statements for the six months ended June 30, 2024[52] - The Audit Committee members include Ms. Shen Lifeng (Chairperson), Mr. Li Baoyuan, Ms. Chen Xin, and Mr. Chen Yisheng[52] Interim Consolidated Statement of Financial Position This section presents the Group's consolidated financial position, including total assets, liabilities, and equity, as of June 30, 2024 Interim Consolidated Statement of Financial Position Key Data (RMB thousand yuan) | Item | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Total Current Assets | 55,123,491 | 58,298,210 | -3,174,719 | | Total Non-current Assets | 6,532,017 | 6,587,387 | -55,370 | | Total Assets | 61,655,508 | 64,885,597 | -3,230,089 | | Liabilities | | | | | Total Current Liabilities | 52,098,989 | 55,795,695 | -3,696,706 | | Total Non-current Liabilities | 3,201,036 | 2,862,046 | +338,990 | | Total Liabilities | 55,300,025 | 58,657,741 | -3,357,716 | | Equity | | | | | Total Equity Attributable to Owners of the Parent | 6,180,966 | 6,047,329 | +133,637 | | Non-controlling Interests | 174,517 | 180,527 | -6,010 | | Total Equity | 6,355,483 | 6,227,856 | +127,627 | Interim Consolidated Statement of Profit or Loss This section presents the Group's consolidated financial performance, including revenue, costs, and net profit, for the six months ended June 30, 2024 Interim Consolidated Statement of Profit or Loss Key Data (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 11,015,171 | 14,948,567 | -3,933,396 | | Cost of Sales | 10,365,625 | 14,145,504 | -3,779,879 | | Selling Expenses | 967 | 488 | +479 | | Administrative Expenses | 212,043 | 279,616 | -67,573 | | Research and Development Expenses | 33,224 | 69,325 | -36,101 | | Finance Costs | 178,624 | 180,874 | -2,250 | | Investment Income | (1,900) | (8,382) | +6,482 | | Credit Impairment Losses | (76,763) | (87,044) | +10,281 | | Asset Impairment Losses | 36,784 | 9,672 | +27,112 | | Operating Profit | 157,082 | 157,071 | +11 | | Total Profit | 155,973 | 156,976 | -1,003 | | Income Tax Expense | 35,094 | 45,785 | -10,691 | | Net Profit | 120,879 | 111,191 | +9,688 | | Net Profit Attributable to Owners of the Parent | 126,889 | 116,796 | +10,093 | | Basic and Diluted Earnings Per Share (yuan/share) | 0.07 | 0.07 | Unchanged | Notes to the Financial Statements This section provides detailed explanations and breakdowns for various items in the financial statements - The financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting issued by the Ministry of Finance and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58] Basis of Preparation of Financial Statements The financial statements are prepared in accordance with CAS 32 and HKEX Listing Rules, presented on a going concern basis - The financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting issued by the Ministry of Finance and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58] - These financial statements are presented on a going concern basis[58] Accounts Receivable and Long-term Receivables Accounts receivable primarily from construction contracts with 1-3 month credit terms, and long-term receivables from BOT water supply services - Accounts receivable primarily consists of receivables from construction contracting business, with credit terms typically ranging from 1 to 3 months and no interest charged[59] Accounts Receivable Aging Analysis (RMB thousand yuan) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 5,695,664 | 6,323,895 | | 1 to 2 years | 1,434,845 | 1,246,093 | | 2 to 3 years | 719,675 | 668,913 | | Over 3 years | 837,989 | 687,655 | | Total | 8,688,173 | 8,926,556 | | Less: Provision for bad debts on accounts receivable | 1,523,683 | 1,447,583 | | Total | 7,164,490 | 7,478,973 | - Long-term receivables primarily represent receivables from build-operate-transfer (BOT) water supply services, which will be settled in installments over a period of 1 to 25 years[61] Accounts Payable Accounts payable are non-interest bearing, with the majority due within one year - Accounts payable are non-interest bearing, with the aging period calculated from the date of purchase recognition[63] Accounts Payable Aging Analysis (RMB thousand yuan) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 20,779,256 | 23,269,785 | | 1 to 2 years | 6,641,392 | 8,134,270 | | 2 to 3 years | 1,785,633 | 1,714,512 | | Over 3 years | 1,569,888 | 1,369,488 | | Total | 30,776,169 | 34,488,055 | Operating Revenue H1 2024 operating revenue was RMB 11.015 billion, primarily from construction engineering contracts in mainland China Operating Revenue Composition (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Principal Business Revenue | 10,808,378 | 14,702,101 | | Other Business Revenue | 206,793 | 246,466 | | Total | 11,015,171 | 14,948,567 | - Revenue from contracts with customers primarily originates from building construction engineering, infrastructure construction engineering, and specialized and other construction engineering[67] - The main operating region is China (excluding Hong Kong, Macau, and Taiwan), with revenue recognized primarily over a period of time[67] Income Tax Expense H1 2024 income tax expense was RMB 35.09 million, calculated at 25% of estimated taxable income in China Income Tax Expense Composition (RMB thousand yuan) | Item | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Current Income Tax Expense | 57,793 | 71,214 | | Deferred Income Tax Expense | (22,699) | (25,429) | | Total | 35,094 | 45,785 | - The Group's income tax is accrued at 25% of the estimated taxable income derived within China[73] Earnings Per Share Basic and diluted EPS for H1 2024 remained at RMB 0.07, calculated based on net profit attributable to ordinary shareholders Earnings Per Share (yuan/share) | Indicator | Jan-Jun 2024 | Jan-Jun 2023 | | :--- | :--- | :--- | | Basic Earnings Per Share (continuing operations) | 0.07 | 0.07 | - Net profit attributable to ordinary shareholders of the company was RMB 126,889 thousand, and the weighted average number of ordinary shares outstanding was 1,761,383,500 shares[76] - The Group has no dilutive potential ordinary shares, therefore, diluted earnings per share are equal to basic earnings per share[76] Dividends No interim dividend was proposed for the six months ended June 30, 2024 - No interim dividend was proposed for the six months ended June 30, 2024[77] Definitions This section provides definitions for key terms and abbreviations used throughout the report - This section provides definitions for key terms and abbreviations used in the report[78][79] - "The Company" refers to Hebei Construction Group Co., Ltd., whose H shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 15, 2017 (stock code: 1727)[78] - "Reporting Period" refers to the six-month period from January 1, 2024, to June 30, 2024[79]