中庆股份(01855) - 2024 - 中期财报

Company Information This section provides essential identification and contact details for Zonqing Environmental Co., Ltd., including its governance structure and external professional network Board of Directors and Committees This section lists the board members of Zonqing Environmental Co., Ltd. and their roles in various committees, clarifying key personnel in the company's governance structure - The Chairman of the Board is Mr. Sun Juqing (Non-executive Director), and the Vice Chairman and CEO is Mr. Liu Haitao (Executive Director)[6] - The Audit Committee Chairman is Mr. Li Guodong, the Remuneration Committee Chairman is Mr. Yin Jun, and the Nomination Committee Chairman is Mr. Gao Xiangnong[6] Professional Advisors and Banks This section provides information on Zonqing Environmental Co., Ltd.'s external professional service providers, including auditors, legal advisors, and principal bankers, showcasing the company's external network - The company's auditor is KPMG[6] - Legal advisors are Messrs. Chow & Cheung, Solicitors and Commerce & Finance Law Offices (Beijing)[6] - Principal bankers include Bank of China (Hong Kong) Limited, China Everbright Bank Co., Ltd. Changchun Branch, China Merchants Bank Changchun Branch, and Industrial Bank Co., Ltd. Changchun Branch[6] Company Contact Information This section lists Zonqing Environmental Co., Ltd.'s key contact and identification information, including its head office, Hong Kong principal place of business, registered office, share registrar, stock code, and company website - The company's head office and principal place of business in China are located at 3/F, Zhongqing Building, 5888 Fuzhi Avenue, Jingyue High-tech Development Zone, Changchun City, Jilin Province, China[7] - The principal place of business in Hong Kong is Unit 18, 9/F, Block B, Ka Lok Industrial Centre, 491–501 Castle Peak Road, Tsuen Wan, Hong Kong[7] - The company's stock code is 1855, and its website is www.zonqing.net[7](index=7&type=chunk) Management Discussion and Analysis This section provides an overview of the company's operational performance, financial position, liquidity, and capital structure, along with key developments and risks during the reporting period Business Review and Outlook In the first half of 2024, the Group expanded into urban park, road greening, and water ecological smart operation and maintenance businesses, securing new contracts worth RMB 1,249.72 million despite a challenging economic environment - The Group continued to strengthen its existing product lines, expanding into new and upgraded urban parks, urban road greening, and smart operation and maintenance services for water ecosystems, while firmly pursuing its national development strategy and deepening its presence in external markets[8] - In the first half of 2024, the Group submitted 344 bids, achieved a successful bid rate of approximately 44.48%, and secured new project contracts totaling approximately RMB 1,249.72 million[8] - Key successful bids included the 'Three Roads and Two Streams' Urban Improvement Project (Phase II) EPC (approximately RMB 407.76 million), the New Urbanization Construction Project (Phase I) Operation and Maintenance (Section II) (approximately RMB 198.49 million), and the Xiaokaiyuan Plot Resettlement Housing Project (approximately RMB 110.16 million)[8] - Jinghe Design Group Co., Ltd. passed the Changchun municipal-level enterprise technology center assessment; Zhongbang Ecological Environment and Changchun Urban Construction Maintenance Group Co., Ltd. obtained national-level 'Credit Star Certificates' (7-star and 6-star). In the first half, the Group obtained 2 invention patents, 5 utility model patents, 1 software copyright, 6 provincial construction methods, and 70 innovation achievements[8] - The global economy is stabilizing but growth has not returned to pre-pandemic levels; China's GDP grew 5.0% year-on-year in the first half, with 4.7% growth in Q2, a slowdown from Q1[10] - The total output value of the construction industry reached RMB 13,831.2 billion in the first half, a 4.8% year-on-year increase. Infrastructure investment (broad-based) grew 7.7% year-on-year, but traditional infrastructure investment faces pressure, and local government fiscal pressure is gradually emerging[10] - Looking ahead to the second half, the Group will continue to leverage its integrated cultural, commercial, tourism, and industrial synergistic businesses, deepen its layout in cultural tourism operations, and consider upgrading qualifications and applying for national, provincial, and municipal excellent design and engineering awards[11] Financial Review In the first half of 2024, the Group's total revenue decreased by 14.7% to RMB 775.6 million, while urban operation and maintenance services revenue significantly increased by 100.3%, and gross profit rose by 20.1% due to cost optimization Total Revenue Change | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Revenue | 775.6 | 909.8 | -14.7% | - The decrease in revenue was primarily due to fewer newly approved large contracts and slower project progress in the first half of 2024, influenced by external factors[12] Segment Revenue Change | Segment | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Urban Renewal Construction Services | 613.0 | 783.6 | -21.8% | | Urban Operation and Maintenance Services | 123.6 | 61.7 | +100.3% | | Design and Consulting Services | 39.0 | 64.6 | -39.6% | - The growth in urban operation and maintenance services revenue was mainly due to the initial success of the Group's operational business transformation and further optimization of its operational business structure[14] Gross Profit Change | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Gross Profit | 175.4 | 145.9 | +20.1% | - The increase in gross profit was mainly due to higher gross profit margins for completed and ongoing projects in the first half of 2024 compared to the same period last year, as well as the company's continued implementation of lean management and supply chain optimization, leading to reduced costs[16] Selling Expenses Change | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Selling Expenses | 12.5 | 7.5 | +66.7% | - The increase in selling expenses was primarily due to the establishment of new external markets, leading to increased personnel and rental costs[18] Expected Credit Loss Change | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Impairment Loss | 60.0 | 24.4 | +145.9% | - The significant increase in impairment loss was mainly due to the slow turnover of trade and other receivables and contract assets in the first half of 2024[19] Finance Costs Change | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :------- | | Finance Costs | 25.0 | 32.3 | -22.6% | - The decrease in finance costs was primarily due to the timely replacement of high-interest debt when market interest rates declined, effectively reducing financing costs[20] Share of Profit/Loss of Associates and Joint Ventures | Indicator | H1 2024 (million RMB) | H1 2023 (million RMB) | Change (million RMB) | | :--- | :-------------------------- | :-------------------------- | :------------------ | | Share of profit of associates | 0.4 | 0.9 | -0.5 | | Share of (loss)/profit of joint ventures | -0.3 (loss) | 1.5 (profit) | -1.8 | - The fluctuation in the share of profit or loss of joint ventures was mainly due to an increase in expected credit losses for that joint venture[22] Liquidity and Capital Structure As of June 30, 2024, the Group's net current assets slightly increased, cash and cash equivalents significantly decreased, and total borrowings rose, leading to a capital gearing ratio increase from 1.05 times to 1.08 times Net Current Assets Change | Indicator | June 30, 2024 (million RMB) | Dec 31, 2023 (million RMB) | Change (%) | | :--- | :--------------------------- | :---------------------------- | :------- | | Net Current Assets | 386.8 | 377.2 | +2.6% | - The increase in net current assets was mainly due to an increase in contract assets[24] Cash and Cash Equivalents Change | Indicator | June 30, 2024 (million RMB) | Dec 31, 2023 (million RMB) | Change (%) | | :--- | :--------------------------- | :---------------------------- | :------- | | Cash and Cash Equivalents | 61.2 | 210.4 | -70.9% | Total Borrowings Change | Indicator | June 30, 2024 (million RMB) | Dec 31, 2023 (million RMB) | Change (%) | | :--- | :--------------------------- | :---------------------------- | :------- | | Total Borrowings | 856.3 | 806.3 | +6.2% | - Approximately RMB 775.7 million of borrowings are repayable within one year[25] Capital Gearing Ratio Change | Indicator | June 30, 2024 | Dec 31, 2023 | Change | | :--- | :------------ | :------------- | :--- | | Capital Gearing Ratio | 1.08 times | 1.05 times | +0.03 times | - The increase in the capital gearing ratio was mainly due to an increase in bank and other borrowings and a decrease in total equity due to dividend distribution[26] - As of June 30, 2024, the Group had not breached any loan covenants related to bank and other borrowings[25] Material Matters and Risks In the first half of 2024, the Group had no major acquisitions or disposals, nor significant future investment plans, while providing guarantees for joint ventures and associates' bank loans totaling approximately RMB 34.7 million - The Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures in the first half of 2024[27] - As of June 30, 2024, the Group provided guarantees for bank loans granted to Tianjun Tourism, a joint venture, with an outstanding balance of RMB 23,275,000[28] - As of June 30, 2024, the Group provided guarantees for bank loans granted to Changchun Xianbang, an associate, with an outstanding balance of RMB 11,413,000[29] - The total financial guarantees issued were approximately RMB 34.7 million (June 30, 2024) and approximately RMB 37.0 million (December 31, 2023)[30] - As of the date of this report, the Group had no specific plans for any material investments or capital assets[31] - Given that the Group's operations are primarily located in China and denominated in RMB, currency risk is minimal[31] Other Information This section covers dividend policy, employee information, equity disclosures for directors and major shareholders, and the company's corporate governance and compliance practices Dividends and Employees The Board recommended no interim dividend for the first half of 2024, and as of June 30, 2024, the Group had 849 employees with established remuneration and welfare policies reviewed by the Remuneration Committee - The Directors recommended no interim dividend for the first half of 2024 (first half of 2023: nil)[31] - As of June 30, 2024, the Group had 849 employees[31] - The Group has formulated a 'Remuneration Management Policy' and welfare system, with the Remuneration Committee reviewing the remuneration policies and structures for directors, senior management, and employees[31] Equity Disclosure This section details the share interests of directors and major shareholders in the company and its associated corporations as of June 30, 2024, confirming the company maintained sufficient public float Directors' Long Positions in Shares | Director Name | Nature of Interest | Related Company | Number of Shares Held/Interested | Approximate % of Issued Share Capital | | :--------- | :----------- | :------------------- | :----------------------- | :----------------------- | | Mr. Sun Juqing | Spouse's Interest | Zhongqing International Investment Co., Ltd. | 181,202,166 | 65.89% | | Mr. Liu Haitao | Controlled Corporation Interest | Zhongbang International Investment Co., Ltd. | 14,054,104 | 5.11% | Directors' Long Positions in Ordinary Shares of Associated Corporations | Director Name | Name of Associated Corporation | Capacity | Long/Short Position | Number of Shares Held in Associated Corporation | % of Shareholding | | :--------- | :----------- | :--------- | :-------- | :----------------------- | :--------- | | Mr. Sun Juqing | Zhongqing International | Beneficial Owner | Long | 62 | 62% | | Mr. Liu Haitao | Zhongqing International | Beneficial Owner | Long | 5 | 5% | | Mr. Liu Haitao | Zhongbang International | Beneficial Owner | Long | 6,011 | 60.11% | | Mr. Shao Zhangguang | Zhongqing International | Beneficial Owner | Long | 5 | 5% | Major Shareholders' Interests and Short Positions in Shares and Underlying Shares | Shareholder Name/Name | Nature of Interest | Long/Short Position | Number of Shares | Approximate % of Issued Share Capital | | :------------- | :----------- | :-------- | :---------- | :----------------------- | | Zhongqing International | Beneficial Owner | Long | 181,202,166 | 65.89% | | Ms. Zhao Hongyu | Controlled Corporation Interest | Long | 181,202,166 | 65.89% | | Mr. Sun Juqing | Spouse's Interest | Long | 181,202,166 | 65.89% | | Zhongbang International | Beneficial Owner | Long | 14,054,104 | 5.11% | | Mr. Liu Haitao | Controlled Corporation Interest | Long | 14,054,104 | 5.11% | | Ms. Wang Tiannv | Spouse's Interest | Long | 14,054,104 | 5.11% | - In the first half of 2024, the Company maintained a sufficient public float as required by the Listing Rules[40] Corporate Governance and Compliance This section outlines Zonqing Environmental Co., Ltd.'s corporate governance practices, including business demarcation with controlling shareholders, shareholder rights protection, EGM mechanisms, director nomination procedures, share option scheme, securities trading compliance, post-reporting period share subdivision, and compliance with the Corporate Governance Code - The municipal construction businesses carried out by the Group and Zhongqing Investment Group are distinguishable in terms of geographical location and nature of services provided, with no material conflicts of interest[40] - To protect shareholders' interests and rights, all substantially separate matters should be proposed as separate resolutions at general meetings, and all resolutions will be voted on by poll[41] - Shareholders holding not less than one-tenth of the voting rights in the Company's share capital have the right to request the Board to convene an extraordinary general meeting at any time[42] - Shareholders intending to nominate a person for election as a director at a general meeting must submit a written notice and relevant information to the company within the prescribed period[44] - The Company has adopted a share option scheme to provide incentives to individuals who contribute to the company, but no share options have been granted under the scheme since its listing up to June 30, 2024[45] - In the first half of 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[46] - Material related party transactions entered into by the Group in the first half of 2024 are set out in Note 19 and have complied with the disclosure requirements of Chapter 14A of the Listing Rules[48] - The Board implemented a share subdivision, effective August 1, 2024, whereby every existing issued and unissued share of HKD 0.001 par value in the Company's share capital was subdivided into three (3) subdivided shares of HKD 0.0003 par value each[50] - The Company has adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance[51] - The Group's unaudited interim results for the six months ended June 30, 2024, have been reviewed by the Audit Committee[52] Consolidated Statement of Profit or Loss In the first half of 2024, Zonqing Environmental Co., Ltd.'s revenue decreased by 14.7% to RMB 775.6 million, while gross profit increased by 20.1% to RMB 175.4 million, with profit for the period remaining stable at RMB 43.4 million Key Data from Consolidated Statement of Profit or Loss | Indicator | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | Change (%) | | :--- | :------------------------ | :------------------------ | :------- | | Revenue | 775,648 | 909,819 | -14.7% | | Cost of sales | (600,287) | (763,885) | -21.4% | | Gross Profit | 175,361 | 145,934 | +20.1% | | Operating Profit | 72,036 | 75,986 | -5.2% | | Profit before tax | 47,141 | 46,077 | +2.3% | | Profit for the period | 43,412 | 43,491 | -0.2% | | Profit attributable to equity holders of the Company | 34,259 | 37,102 | -7.7% | | Earnings per share (RMB cents) | 12 | 13 | -7.7% | Consolidated Statement of Profit or Loss and Other Comprehensive Income In the first half of 2024, Zonqing Environmental Co., Ltd.'s profit for the period was RMB 43.4 million, and total comprehensive income was RMB 43.9 million, an increase from RMB 40.3 million in the prior period, mainly due to a net change from loss to gain in fair value reserve for equity investments at fair value through other comprehensive income Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | Change (%) | | :--- | :------------------------ | :------------------------ | :------- | | Profit for the period | 43,412 | 43,491 | -0.2% | | Other comprehensive income for the period | 504 | (3,182) | +115.8% | | Total comprehensive income for the period | 43,916 | 40,309 | +8.9% | - Among other comprehensive income, the net change in fair value reserve for equity investments at fair value through other comprehensive income shifted from a loss of RMB 4,272 thousand in the first half of 2023 to a gain of RMB 66 thousand in the first half of 2024[56] Consolidated Statement of Financial Position As of June 30, 2024, Zonqing Environmental Co., Ltd.'s total assets slightly decreased, but net current assets increased, with significant increases in intangible assets and right-of-use assets, and total equity growing to RMB 793.8 million Key Data from Consolidated Statement of Financial Position | Indicator | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | Change (%) | | :--- | :------------------------- | :-------------------------- | :------- | | Non-current assets | 504,745 | 483,933 | +4.3% | | Current assets | 3,352,217 | 3,362,493 | -0.3% | | Current liabilities | 2,965,388 | 2,985,285 | -0.7% | | Net current assets | 386,829 | 377,208 | +2.6% | | Non-current liabilities | 97,736 | 91,672 | +6.6% | | Total Equity | 793,838 | 769,469 | +3.2% | - Intangible assets increased from RMB 1,938 thousand to RMB 7,703 thousand, and right-of-use assets increased from RMB 7,871 thousand to RMB 15,324 thousand[57] - Contract assets increased from RMB 1,118,463 thousand to RMB 1,376,653 thousand, while cash and cash equivalents decreased from RMB 210,405 thousand to RMB 61,190 thousand[58] - Bank and other borrowings (current portion) increased from RMB 726,263 thousand to RMB 775,700 thousand[59] Consolidated Statement of Changes in Equity For the six months ended June 30, 2024, Zonqing Environmental Co., Ltd.'s total equity increased from RMB 769.5 million at the beginning of the period to RMB 793.8 million, with profit for the period at RMB 43.4 million and total comprehensive income at RMB 43.9 million Change in Total Equity | Indicator | Jan 1, 2024 (thousand RMB) | June 30, 2024 (thousand RMB) | Change (thousand RMB) | | :--- | :------------------------ | :------------------------ | :---------------- | | Total Equity | 769,469 | 793,838 | +24,369 | - Profit for the period was RMB 43,412 thousand, other comprehensive income was RMB 504 thousand, and total comprehensive income was RMB 43,916 thousand[64] - Dividends paid by the Company for shares amounted to RMB (19,747) thousand[64] Condensed Consolidated Statement of Cash Flows In the first half of 2024, Zonqing Environmental Co., Ltd.'s net cash used in operating activities significantly increased to RMB 182.8 million, net cash used in investing activities was RMB 36.4 million, and net cash generated from financing activities was RMB 69.9 million, resulting in a decrease in cash and cash equivalents to RMB 61.2 million at period-end Cash Flow Overview | Activity Type | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | Change (thousand RMB) | | :------- | :------------------------ | :------------------------ | :---------------- | | Net cash used in operating activities | (182,791) | (29,602) | -153,189 | | Net cash (used in)/generated from investing activities | (36,366) | 200,226 | -236,592 | | Net cash generated from/(used in) financing activities | 69,938 | (259,805) | +329,743 | | Net decrease in cash and cash equivalents | (149,219) | (89,181) | -60,038 | | Cash and cash equivalents at June 30 | 61,190 | 131,057 | -69,867 | - The significant increase in net cash used in operating activities was mainly due to cash used in operations increasing from RMB (23,113) thousand to RMB (147,797) thousand, and income tax paid increasing from RMB (6,489) thousand to RMB (34,994) thousand[65] - Cash outflows from investing activities primarily included payments for advances to related parties of RMB (154,842) thousand, payments for advances to third parties of RMB (15,009) thousand, and payments for loans granted to a joint venture of RMB (23,493) thousand[65] - Cash inflows from financing activities primarily originated from proceeds from bank and other borrowings of RMB 1,051,220 thousand and proceeds from advances from related parties of RMB 39,502 thousand[65] Notes to the Unaudited Interim Financial Report This section provides detailed explanatory notes to the unaudited interim financial statements, covering accounting policies, segment information, financial instrument disclosures, and related party transactions Company and Basis of Preparation This section outlines Zonqing Environmental Co., Ltd.'s registration, listing, principal business activities, ultimate controlling parties, and the basis of preparation for the interim financial report, including adopted accounting policy amendments - Zonqing Environmental Co., Ltd. was incorporated in the Cayman Islands on March 8, 2019, and listed on The Stock Exchange of Hong Kong Limited on January 6, 2021[66] - The Group is principally engaged in construction and maintenance services for landscaping, ecological restoration, and public works projects, provision of environmental sanitation services, and other related projects, and is ultimately controlled by Mr. Sun Juqing and Ms. Zhao Hongyu[66] - The interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 'Interim Financial Reporting'[67] - The Group has applied amendments to IAS 1 regarding classification of liabilities, IFRS 16 regarding lease liabilities in a sale and leaseback, and IAS 7 and IFRS 7 regarding disclosure of supplier finance arrangements[69][70] - In June 2023, the Group acquired an 87.5% equity interest in Jilin Modern Zhongqing for a consideration of RMB 305,756,000, expanding its business into the municipal construction sector[67] Operating Performance Analysis This section analyzes the Group's revenue composition, segment results, profit before tax sources, income tax calculation, and earnings per share, highlighting a decrease in total revenue but significant growth in urban operation and maintenance services revenue - The Group manages its business through three reportable segments: urban renewal construction services, urban operation and maintenance services, and design and consulting services[71] Revenue Breakdown by Major Product or Service | Segment | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | | :--- | :------------------------ | :------------------------ | | Urban Renewal Construction Services Revenue | 613,016 | 783,582 | | Urban Operation and Maintenance Services Revenue | 123,617 | 61,674 | | Design and Consulting Services Revenue | 39,015 | 64,563 | | Total | 775,648 | 909,819 | Gross Profit by Reportable Segment | Segment | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | | :--- | :------------------------ | :------------------------ | | Urban Renewal Construction Services | 143,449 | 115,975 | | Urban Operation and Maintenance Services | 28,045 | 9,977 | | Design and Consulting Services | 3,867 | 19,982 | | Total Gross Profit | 175,361 | 145,934 | Finance Costs | Item | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | | :--- | :------------------------ | :------------------------ | | Interest on bank and other borrowings and related party loans | 24,847 | 32,224 | | Interest on lease liabilities | 113 | 105 | | Total | 24,960 | 32,329 | - Research and development costs in the first half of 2024 were RMB 36,677 thousand, a decrease from RMB 54,418 thousand in the first half of 2023[81] - Four of the Group's subsidiaries established in China have obtained approval from tax authorities to pay tax at a preferential rate of 15% as high-tech enterprises and enjoy an additional 100% deductible tax credit for eligible R&D costs[84] - Basic earnings per share were calculated based on profit attributable to equity holders of the Company of RMB 34,259,000 and 275,000,000 ordinary shares issued during the interim period, amounting to RMB 12 cents[85] - For the six months ended June 30, 2024 and 2023, there were no outstanding potentially dilutive shares, thus diluted earnings per share were the same as basic earnings per share[86] Notes to the Statement of Financial Position This section details the Group's contract assets and liabilities, trade receivables and payables, cash and cash equivalents, accrued expenses and other payables, bank and other borrowings, and deferred tax assets and liabilities as of June 30, 2024 Contract Assets | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Contract Assets | 1,376,653 | 1,118,463 | - The increase in contract assets was mainly due to amounts due from third parties increasing from RMB 1,201,777 thousand to RMB 1,455,722 thousand[87] Contract Liabilities | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Contract Liabilities | 555,845 | 602,071 | - The decrease in contract liabilities was mainly due to amounts due to third parties decreasing from RMB 549,741 thousand to RMB 504,721 thousand[89] Trade Receivables and Bills Receivable | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Trade Receivables and Bills Receivable | 1,644,050 | 1,765,115 | Ageing Analysis of Trade Receivables and Bills Receivable (Net of Loss Allowance) | Ageing | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Within 1 year | 707,380 | 927,684 | | 1 to 2 years | 333,151 | 265,083 | | 2 to 3 years | 326,344 | 346,694 | | 3 to 4 years | 123,423 | 102,359 | | 4 to 5 years | 56,365 | 31,098 | | Over 5 years | 97,387 | 92,197 | | Total | 1,644,050 | 1,765,115 | Cash and Cash Equivalents | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Cash and Cash Equivalents | 61,190 | 210,405 | | Restricted bank deposits | 14,846 | 20,346 | - Restricted bank deposits are primarily deposits pledged as security for bills issued and bank loans obtained by the Group[94] Trade Payables and Bills Payable | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Trade Payables and Bills Payable | 1,354,125 | 1,389,181 | Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Within 1 year | 718,606 | 1,078,377 | | 1 to 3 years | 454,224 | 190,745 | | Over 3 years | 181,295 | 120,059 | | Total | 1,354,125 | 1,389,181 | Accrued Expenses and Other Payables | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Accrued Expenses and Other Payables | 245,526 | 211,540 | Bank and Other Borrowings | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Total Bank and Other Borrowings | 856,256 | 806,210 | | Repayable within 1 year or on demand | 775,700 | 726,263 | | Repayable after 1 year but within 2 years | 78,734 | 78,135 | | Repayable after 2 years but within 5 years | 1,822 | 1,812 | - Certain bank loans of the Group are secured by trade receivables and contract assets (RMB 65,416 thousand) and bank deposits (RMB 10,000 thousand)[103] - As of June 30, 2024, no covenants related to bank loans were breached[106] Deferred Tax Assets and Liabilities | Item | June 30, 2024 (thousand RMB) | Dec 31, 2023 (thousand RMB) | | :--- | :------------------------- | :-------------------------- | | Net Deferred Tax Assets | 103,671 | 93,921 | | Net Deferred Tax Liabilities | (9,865) | (10,476) | - As of June 30, 2024, the issued and fully paid ordinary shares were 275,000,000 shares with a par value of HKD 0.001 each[109] - The Directors did not recommend the payment of a dividend for the six months ended June 30, 2024. For the six months ended June 30, 2024, a final dividend of RMB 19,747,000 was declared for the year ended December 31, 2023[111] Financial Instruments and Commitments This section describes the Group's fair value measurement methods for financial instruments, primarily involving Level 3 valuations for other equity investments, and discloses capital commitments and contingent liabilities, including bank loan guarantees for joint ventures and associates - The fair value of the Group's financial instruments measured on a recurring basis at the end of the reporting period, primarily other equity investments, is categorized under Level 3 valuation[113] - Valuation techniques for other equity investments include the market comparable company approach (discount for lack of marketability: 20.5%) and the discounted cash flow method (discount rates: 7% and 9.3%)[114] Fair Value Changes of Unlisted Equity Securities | Item | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | | :--- | :------------------------ | :------------------------ | | As at January 1 | 70,141 | 75,622 | | Net unrealized gain/(loss) recognized in other comprehensive income during the period | 78 | (4,186) | | As at June 30 | 70,219 | 71,436 | - As of June 30, 2024, authorized but not contracted capital commitments amounted to RMB 12,304 thousand[118] - The Group has issued guarantees for bank loans granted to Tianjun Tourism, a joint venture, with an outstanding balance of RMB 23,275,000 as of June 30, 2024[119] - The Group has issued guarantees for bank loans granted to Changchun Xianbang, an associate, with an outstanding balance of RMB 11,413,000 as of June 30, 2024[120] Material Related Party Transactions This section details significant related party transactions between the Group and key management personnel, Zhongqing Investment and its subsidiaries, joint ventures, associates, and companies managed by Zhongqing Investment's key management personnel, including service provision, goods purchases, loan transactions, and financial guarantees Key Management Personnel Remuneration | Item | H1 2024 (thousand RMB) | H1 2023 (thousand RMB) | | :--- | :------------------------ | :------------------------ | | Salaries and other emoluments | 6,045 | 3,762 | | Defined contribution retirement plan contributions | 509 | 282 | | Total | 6,554 | 4,044 | - Transactions with Zhongqing Investment and its subsidiaries, joint ventures, and associates include providing construction, surveying, design, technical consulting, and other services (RMB 27,675 thousand), receiving services (RMB 433 thousand), purchasing goods (RMB 1,712 thousand), and significant loan and advance transactions[123] - Transactions with a joint venture primarily involved income from financial guarantees issued of RMB 1,225 thousand and loans granted to a related party of RMB 23,493 thousand[124] - Transactions with an associate primarily involved providing construction services of RMB 9,271 thousand, loans granted to a related party of RMB 5,840 thousand, and income from financial guarantees issued of RMB 1,087 thousand[124] - Transactions with companies managed by key management personnel of Zhongqing Investment included providing other services (RMB 8,120 thousand) and purchasing goods (RMB 17,365 thousand)[126] - All advances to and from related parties are unsecured, interest-free, and have no fixed repayment terms. All loans from and to related parties are unsecured and have fixed repayment terms[130] Non-Adjusting Events After the Reporting Period Subsequent to the reporting period, the Board implemented a share subdivision, effective August 1, 2024, splitting each share of HKD 0.001 par value into three subdivided shares of HKD 0.0003 par value each - Effective August 1, 2024, every existing issued and unissued share of HKD 0.001 par value in the Company's share capital was subdivided into three (3) subdivided shares of HKD 0.0003 par value each[132] - Following the share subdivision, the Company's authorized share capital became HKD 10,000,000, divided into 30,000,000,000 subdivided shares, of which 825,000,000 subdivided shares are issued and fully paid[132] Definitions and Glossary of Technical Terms This chapter provides definitions for key terms and technical vocabulary used throughout the report, ensuring a clear understanding of the content for readers - Provides clear definitions for commonly used terms in the report such as 'first half of 2023', 'first half of 2024', 'Articles of Association', 'Board', 'Corporate Governance Code', 'Controlling Shareholder', 'Listing Rules', 'RMB', 'Shares', 'Stock Exchange', 'Ultimate Controlling Shareholder', and 'Zhongqing Investment'[134][135][136]