北京控股环境集团(00154) - 2024 - 中期财报

Company Information and Structure Company Basic Information This chapter provides core information about the company's basic registration details, board of directors and committee members, main office addresses, website, stock code, auditor, and principal bankers - Company Chairman and CEO is Mr. Chen Xinguo, Dr. Huan Guocang, an independent non-executive director, chairs the Audit Committee, and Dr. Jin Lizuo chairs the Remuneration Committee[2] - The company's auditor is Ernst & Young, and its principal bankers include Bank of China (Hong Kong) and several major banks in mainland China[2] Company Structure and Key Projects The report outlines the company's equity structure, showing Beijing Enterprises Holdings Limited as the major shareholder, and lists multiple solid waste treatment projects, primarily waste-to-energy plants, operated in mainland China with their respective shareholding percentages - Beijing Enterprises Holdings Limited holds 49.23% of Beijing Enterprises Environment Group Limited, making it the major controlling shareholder[3] - The company operates multiple waste-to-energy projects across Beijing, Jiangsu, Shandong, Hunan, Heilongjiang, Hubei, and Hainan, with most shareholdings exceeding 80%, and some being 100% owned[4] Management Discussion and Analysis Business Review In the first half of 2024, the company's core business was solid waste treatment with a total capacity of 12,850 tons per day, achieving a 9.7% year-on-year increase in operating revenue by expanding sludge co-disposal and heating businesses, while divesting the ecological construction services segment to focus on core operations Continuing Operations: Solid Waste Treatment In the first half of 2024, the solid waste treatment segment, as the core continuing operation, saw significant growth in overall operating metrics, with waste intake, power generation, and grid-connected power all increasing year-on-year, while co-processing businesses like heating and sludge treatment surged over 70%, driving a 9.7% increase in operating revenue and 13.2% in gross profit, though engineering construction revenue declined 51% due to fewer large projects Major Operating Data for H1 2024 | Indicator | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | | Household Waste Intake | 2.2018 million tons | +8.7% | | Power Generation | 861 million kWh | +9.8% | | Grid-Connected Power | 725 million kWh | +9.5% | | Heating and Steam Supply | 70.3 thousand tons | +107.8% | | Sludge Treatment | 307 thousand tons | +74.8% | Segment Revenue and Gross Profit | Business Segment | H1 2024 Revenue (RMB) | Year-on-Year Change | H1 2024 Gross Profit (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Production and Operation Business | 614 million yuan | +9.7% | 289 million yuan | +13.2% | | Engineering Construction Business | 189 million yuan | -51% | 25 million yuan | -64.5% | Discontinued Operations: Ecological Construction Services To focus resources on core solid waste treatment, the Group completed the sale of Beijing BEHL Ecological Construction Group Co., Ltd. equity in June 2024, formally terminating the ecological construction services business, which recorded a loss of RMB 7.78 million during the period - The company completed the sale of BEHL Ecological equity in June 2024, terminating its ecological construction services business to focus resources on the solid waste treatment market[8] - The discontinued ecological construction services business recorded a loss of RMB 7.78 million during the reporting period[8] Outlook Facing a challenging market, the Group plans to seize strategic opportunities in the solid waste market during the critical '14th Five-Year Plan' period, focusing on enhancing existing project capacity utilization, securing new projects, and actively expanding asset-light businesses like entrusted operations and equipment EPC to create a second growth curve and elevate business performance - Future strategic priorities include enhancing existing project capacity, securing new market projects, and expanding asset-light businesses such as entrusted operations and equipment EPC to create a second growth curve[9] Financial Review In the first half of 2024, the Group's total revenue from continuing operations was RMB 803 million, a 15.0% year-on-year decrease, primarily due to a 51.0% drop in waste-to-energy plant construction revenue, yet core solid waste treatment and power/steam sales revenue grew 9.7%, gross profit slightly decreased 3.5% to RMB 313 million, but overall gross margin improved from 34.3% to 39.0%, and profit for the period increased 2.6% to RMB 142 million Revenue and Gross Profit For the six months ended June 30, 2024, the Group's continuing operations revenue decreased 15.0% year-on-year to RMB 803 million, mainly due to a 51.0% reduction in waste-to-energy plant construction revenue, while core waste treatment, power, and steam sales revenue grew 9.7% to RMB 614 million, and gross profit slightly declined 3.5% to RMB 313 million, but overall gross margin improved from 34.3% to 39.0% due to a higher proportion of high-margin operating business Segment Revenue and Gross Profit (For the six months ended June 30) | Item (RMB million) | 2024 Revenue | 2023 Revenue | 2024 Gross Profit | 2023 Gross Profit | 2024 Gross Margin | 2023 Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Solid Waste Treatment and Power & Steam Sales | 614.33 | 559.92 | 288.74 | 255.10 | 47.0% | 45.6% | | Waste-to-Energy Plant Construction and Related Services | 188.90 | 385.55 | 24.66 | 69.50 | 13.1% | 18.0% | | Total | 803.23 | 945.47 | 313.40 | 324.60 | 39.0% | 34.3% | Other Income, Expenses and Tax During the period, net other income and gains were RMB 33.75 million, a year-on-year decrease mainly due to reduced VAT refunds, administrative expenses increased 21.2% to RMB 102 million with R&D expenses surging 55.9%, finance costs significantly decreased 31.0% to RMB 56.03 million, and income tax expense increased 18.8% to RMB 33.59 million - Administrative expenses increased by 21.2% year-on-year, primarily due to a 55.9% increase in research and development expenses from RMB 13.37 million to RMB 20.84 million[14] - Finance costs significantly decreased by 31.0% year-on-year, from RMB 81.22 million to RMB 56.03 million[16] - Income tax expense increased by 18.8% year-on-year, with the effective tax rate rising from 17.1% to 18.2%[17] EBITDA and Profit for the Period In the first half of 2024, the Group's total EBITDA was RMB 328 million, a 8.3% year-on-year decrease, however, total profit for the period increased 2.6% to RMB 142 million, with profit from continuing operations growing 10.0% to RMB 151 million, indicating strengthened profitability in core businesses effectively offsetting losses from discontinued operations Profit and EBITDA Summary (For the six months ended June 30, RMB million) | Item | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total | | | | | EBITDA | 328.46 | 358.30 | -8.3% | | Profit for the period | 142.11 | 138.50 | +2.6% | | Profit attributable to equity holders of the Company | 133.45 | 131.60 | +1.4% | | Continuing Operations | | | | | EBITDA | 334.22 | 347.45 | -3.8% | | Profit for the period | 150.58 | 136.85 | +10.0% | | Profit attributable to equity holders of the Company | 141.23 | 130.51 | +8.2% | Financial Position Analysis As of June 30, 2024, the Group's total assets were RMB 9.759 billion, total liabilities were RMB 6.030 billion, and net assets were RMB 3.729 billion, with the company selling BEHL Ecological equity during the period and no other significant investments, while franchise rights increased due to the Shiyan project and contract assets significantly decreased due to the termination of ecological construction business, and total bank and other borrowings were RMB 4.491 billion with trade payables decreasing Balance Sheet Overview (RMB) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 9.759 billion yuan | 9.897 billion yuan | | Total Liabilities | 6.030 billion yuan | 6.241 billion yuan | | Net Assets | 3.729 billion yuan | 3.656 billion yuan | - The net book value of franchise rights increased by RMB 69 million to RMB 2.789 billion, primarily due to construction investment in the Shiyan project[26] - Contract assets significantly decreased by RMB 290 million to RMB 82 million due to the termination of ecological construction services[29] - Trade and bills receivables increased by RMB 104 million to RMB 811 million, mainly due to an increase in grid-connected electricity tariff receivables[31] Liquidity and Financial Resources As of June 30, 2024, the Group faced liquidity pressure with current liabilities (RMB 3.773 billion) exceeding current assets (RMB 2.789 billion), however, considering stable cash flows from solid waste treatment and the controlling company's commitment not to demand repayment of shareholder loans, the Board believes the Group has sufficient cash resources for continuous operation - As of the end of the reporting period, the Group's cash and cash equivalents were RMB 1.173 billion, and bank and other borrowings were RMB 4.491 billion[38] - The Group has a liquidity shortfall, with current liabilities exceeding current assets, but controlling companies Idata and Beijing Enterprises have pledged financial support and will not demand repayment of shareholder loans to ensure the company's liquidity[38] Key Performance Indicators During the reporting period, the company's profitability indicators for continuing operations improved, with gross margin, operating profit margin, and net profit margin all increasing year-on-year, while the asset-liability structure remained relatively stable, with the current ratio flat, debt-to-asset ratio slightly decreasing, and net debt-to-equity ratio slightly increasing Key Performance Indicators (KPIs) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Continuing Operations | | | | Gross Margin | 39.0% | 34.3% | | Operating Profit Margin | 29.9% | 26.1% | | Net Profit Margin | 18.7% | 14.5% | | Financial Ratios | June 30, 2024 | December 31, 2023 | | Current Ratio (times) | 0.74 | 0.74 | | Debt-to-Asset Ratio (Total Liabilities / Total Assets) | 61.8% | 63.1% | | Net Debt-to-Equity Ratio (Net Debt / Total Equity) | 89.0% | 88.2% | Other Financial Information In the first half of 2024, the Group's total capital expenditure was RMB 143 million, primarily for the construction and renovation of waste-to-energy plants, with capital commitments for service concession arrangements totaling RMB 261 million at period-end, and limited foreign exchange exposure as most transactions are denominated in RMB, while contingent liabilities mainly comprise performance guarantees of RMB 70 million, and employee count decreased from 1,248 to 1,112 due to the sale of the ecological construction business - Total capital expenditure for the first half was RMB 143 million, mainly for the construction and renovation of waste-to-energy plants[40] - Most of the Group's transactions are denominated in RMB, and the presentation currency is also RMB, resulting in controllable foreign exchange risk[41] - As of June 30, 2024, the Group's employee count was 1,112, a decrease from the beginning of the year, primarily due to the sale of the ecological construction services business[42] Interim Condensed Consolidated Financial Information Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company's continuing operations generated RMB 803 million in revenue and RMB 151 million in profit, with total profit for the period reaching RMB 142 million after accounting for losses from discontinued operations, a 2.6% year-on-year increase, and profit attributable to equity holders of the company was RMB 133 million, with basic earnings per share of 8.89 RMB cents Consolidated Statement of Profit or Loss Summary (For the six months ended June 30, RMB thousand) | Item | 2024 (Unaudited) | 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Revenue from Continuing Operations | 803,230 | 945,465 | | Profit for the period from continuing operations | 150,578 | 136,855 | | (Loss)/Profit for the period from discontinued operations | (8,465) | 1,647 | | Profit for the period | 142,113 | 138,502 | | Profit attributable to equity holders of the Company | 133,445 | 131,596 | | Basic earnings per share (RMB cents) | 8.89 | 8.77 | Interim Condensed Consolidated Statement of Comprehensive Income Building on a profit for the period of RMB 142 million, and considering exchange differences from translating overseas operations, total comprehensive income for the period was RMB 116 million, compared to RMB 164 million in the prior period, with RMB 108 million attributable to equity holders of the company Consolidated Statement of Comprehensive Income Summary (For the six months ended June 30, RMB thousand) | Item | 2024 (Unaudited) | 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Profit for the period | 142,113 | 138,502 | | Other comprehensive (loss)/income for the period | (25,885) | 25,110 | | Total comprehensive income for the period | 116,228 | 163,612 | | Attributable to equity holders of the Company | 107,657 | 156,889 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 9.759 billion, total liabilities were RMB 6.030 billion, and total equity was RMB 3.729 billion, with non-current assets forming a significant portion, primarily including franchise rights, goodwill, and receivables under service concession arrangements, while liabilities were mainly composed of bank and other borrowings Statement of Financial Position Summary (RMB thousand) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Assets | 9,759,415 | 9,897,162 | | Total Non-Current Assets | 6,970,914 | 6,902,334 | | Total Current Assets | 2,788,501 | 2,994,828 | | Total Liabilities | 6,030,074 | 6,240,802 | | Total Non-Current Liabilities | 2,257,422 | 2,168,066 | | Total Current Liabilities | 3,772,652 | 4,072,736 | | Total Equity | 3,729,341 | 3,656,360 | Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, total equity increased from RMB 3.656 billion at the beginning of the year to RMB 3.729 billion, primarily driven by the RMB 142 million profit recorded during the period, partially offset by exchange differences losses - Total equity at the beginning of the period was RMB 3.656 billion, total comprehensive income for the period was RMB 116 million, and with other changes, total equity at period-end increased to RMB 3.729 billion[49] Interim Condensed Consolidated Statement of Cash Flows In the first half of 2024, net cash generated from operating activities was RMB 69.19 million, net cash used in investing activities was RMB 194 million, primarily for additions to franchise rights, and net cash generated from financing activities was RMB 83.50 million, mainly from new bank loans, resulting in a net decrease in cash and cash equivalents of RMB 41.46 million to RMB 1.173 billion at period-end Consolidated Statement of Cash Flows Summary (For the six months ended June 30, RMB thousand) | Item | 2024 (Unaudited) | 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Net cash generated from operating activities | 69,188 | 37,460 | | Net cash used in investing activities | (194,142) | (188,085) | | Net cash generated from/(used in) financing activities | 83,498 | (512,222) | | Net decrease in cash and cash equivalents | (41,456) | (662,847) | | Cash and cash equivalents at beginning of period | 1,209,940 | 2,328,991 | | Cash and cash equivalents at end of period | 1,173,014 | 1,672,180 | Notes to the Financial Statements The notes to the financial statements detail the basis of preparation, accounting policies, segment information, and specific composition and changes of each account, highlighting that the financial statements are prepared on a going concern basis with liquidity support from the controlling company, solid waste treatment as the core operating segment, revenue primarily from waste treatment and power sales, and the ecological construction services business as a discontinued operation sold during the period - The financial statements are prepared on a going concern basis, and despite current liabilities exceeding current assets, the Board believes the controlling shareholder's financial support commitment ensures the company's continuous operation[53] - The Group's operating segments primarily include the solid waste treatment segment (continuing operations) and the ecological construction services segment (sold during the period and classified as discontinued operations)[56] - The company completed the sale of 51% equity in Beijing BEHL Ecological Construction Group Co., Ltd. (BEHL Ecological) on June 19, 2024, for a cash consideration of RMB 41.49 million, with this business classified as a discontinued operation[18][72] - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[76] Disclosable Information Directors' and Major Shareholders' Interests This section discloses the list of company directors and their changes during the reporting period, confirming no material interests in company contracts, and details the interests of directors and major shareholders in the company's shares, with controlling shareholder Beijing Enterprises Holdings Limited holding a total of 50.40% of shares as of June 30, 2024 - Executive Director Mr. Wu Guangfa holds 10,392,755 shares of the company, representing 0.69% of the total share capital[110] Major Shareholder Holdings (June 30, 2024) | Shareholder Name | Total Holdings | Percentage of Share Capital | | :--- | :--- | :--- | | Idata | 738,675,000 shares | 49.23% | | Beijing Enterprises | 756,120,000 shares | 50.40% | | Cosmos Friendship Limited | 347,000,000 shares | 23.13% | - The report confirms that as of the reporting date, not less than 25% of the total issued shares of the company are held by the public, complying with listing rules requirements[116] Corporate Governance Corporate Governance Practices and Compliance The company complied with most provisions of the Corporate Governance Code during the reporting period, but with certain deviations, such as the Chairman and CEO being the same person, which the Board believes benefits current business development, and the Audit Committee reviewed these interim results, while the Board assumes full responsibility for the Group's risk management and internal control systems and conducts regular reviews - The company deviated from the Corporate Governance Code in several aspects, including: the Chairman and CEO being the same person (Mr. Chen Xinguo); some independent non-executive directors not attending the annual general meeting; the Chairman not holding meetings with non-executive directors without executive directors present; and board meetings not being held at least quarterly[119] - The Audit Committee, comprising three independent non-executive directors, reviewed the Group's interim results, financial position, and risk management for the six months ended June 30, 2024[122] - The Board confirms full responsibility for the Group's risk management and internal control systems and conducts regular reviews[123]