中国再生能源投资(00987) - 2024 - 中期财报

Corporate Information Directors The board comprises executive directors, including the Chairman and CEO, and independent non-executive directors - Executive Directors include Mr. Huang Gang (Chairman and CEO), Ms. Liu Hui, Mr. Huang Zhiliang, and Mr. Li Zhaoyi[1] - Independent Non-Executive Directors include Mr. Zheng Yuhe, Mr. Tian Yuchuan, and Mr. Zhang Songyi[1] Auditor The company's auditor is Union Power HK CPA Limited, a firm of practicing accountants and registered public interest entity auditors - The auditor is Union Power HK CPA Limited[1] Company Secretary The company secretary is Mr. Lai Kam Kuen - The company secretary is Mr. Lai Kam Kuen[1] Principal Bankers The company's principal bankers include Bank of Communications, China Construction Bank, China Merchants Bank, Dah Sing Bank, Industrial and Commercial Bank of China, and Shanghai Pudong Development Bank - Principal bankers include Bank of Communications, China Construction Bank, China Merchants Bank, Dah Sing Bank, Industrial and Commercial Bank of China, and Shanghai Pudong Development Bank[1] Registered and Business Offices The company's registered office is in the Cayman Islands, with its Hong Kong head office and principal place of business located in Nanyang Centre, Tsim Sha Tsui East, Kowloon, Hong Kong - The registered office is located at Cricket Square, Hutchins Drive, Cayman Islands[1] - The Hong Kong head office and principal place of business are located at 9th Floor, Tower 1, Nanyang Centre, 75 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong[2][3] Share Registrars and Contact Information The company's principal share registrar is Suntera (Cayman) Limited, and its Hong Kong branch share registrar is Hong Kong Central Share Registrar Limited, with contact details provided - The principal share registrar is Suntera (Cayman) Limited[2] - The Hong Kong branch share registrar is Hong Kong Central Share Registrar Limited[2] - Company email is info@cre987.com, website is www.cre987.com, and stock code is 987[2] Management Discussion and Analysis Financial Review The Group's revenue and profit significantly declined due to unfavorable wind conditions, with improved liquidity and reduced bank borrowings 2024 H1 Key Financial Metrics Comparison | Metric | H1 2024 (HK$ million) | H1 2023 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 74.3 | 97.8 | -24% | | Gross Profit | 10.5 | 31.8 | -67% | | Finance Costs | 7.0 | 13.8 | -49% | | Net Profit from Associates | 22.1 | 42.2 | -48% | | Profit Attributable to Equity Holders after Tax | 11.7 | 35.9 | -67% | | Earnings Per Share (HK cents) | 0.47 | 1.43 | -67% | Liquidity and Financial Resources | Metric | June 30, 2024 (HK$ million) | December 31, 2023 (HK$ million) | | :--- | :--- | :--- | | Total Bank Borrowings | 241.7 | 287.8 | | Bank Balances and Cash | 174.4 | 164.3 | | Net Gearing Ratio | 4% | 7% | - The book value of assets pledged by the Group's subsidiaries was approximately HK$501.4 million, a decrease from HK$789.4 million at the end of 2023[5] - The Group had no contingent liabilities as of June 30, 2024[5] Business Review China's GDP growth slowed in H1 2024, impacting consumer demand, while the Group's wind power generation decreased due to unfavorable wind conditions despite increased national renewable energy capacity - China's GDP grew by 5.0% year-on-year in Q1 2024, slowing to 4.7% in Q2, falling short of the government's full-year target of 5%[6] - China's wind power installed capacity increased by 20.0% to 467 GW, with total wind power generation growing by approximately 10% to 508,800 GWh[6] - The average wind speed at the Group's wind farms decreased from 6.2 meters/second in the same period of 2023 to 5.8 meters/second[6] - The company's wind farms generated a total of 690.6 GWh in H1 2024, a year-on-year decrease of 11.4%[6] - Curtailment improved, decreasing from 10.6% in the same period of 2023 to 6.2%[6] Mudanjiang and Muling Wind Farms Mudanjiang and Muling Wind Farms, with a total installed capacity of 59.5 MW, experienced a 15.1% decrease in power generation in H1 2024 due to poor wind resources and increased curtailment - Total installed capacity is 59.5 MW, with the Group holding 86% and 86.7% equity interests respectively[6] - Power generation in H1 2024 was approximately 24.2 GWh, a 15.1% decrease compared to the same period last year[6] Siziwang Qi Phase I and II Wind Farms Siziwang Qi Phase I and II Wind Farms, wholly-owned by the Group with 99 MW installed capacity, saw a 5.1% decrease in power generation in H1 2024 due to reduced wind resources - Total installed capacity is 99 MW, wholly-owned by the Group[7] - Power generation in H1 2024 was approximately 107.0 GWh, a 5.1% decrease compared to the same period last year[7] Danjinghe Wind Farm Danjinghe Wind Farm, with 200 MW installed capacity and 40% effective interest held by the Group, experienced a 16.0% decrease in power generation in H1 2024 due to reduced wind resources - Installed capacity is 200 MW, with the Group holding 40% effective interest[7] - Power generation in H1 2024 was approximately 196.7 GWh, a 16.0% decrease compared to the same period last year[7] Changma Wind Farm Changma Wind Farm, with 201 MW installed capacity and 40% effective interest held by the Group, experienced a 9.5% decrease in power generation in H1 2024 due to reduced wind resources - Installed capacity is 201 MW, with the Group holding 40% effective interest[7] - Power generation in H1 2024 was approximately 212.2 GWh, a 9.5% decrease compared to the same period last year[7] Lunaobao Wind Farm Lunaobao Wind Farm, with 100.5 MW installed capacity and 30% effective interest, saw a 10.6% increase in power generation in H1 2024 due to reduced curtailment from new transmission lines, despite decreased wind resources - Installed capacity is 100.5 MW, with the Group holding 30% effective interest[8] - Power generation in H1 2024 was approximately 104.4 GWh, a 10.6% increase compared to the same period last year[8] - Curtailment decreased due to new transmission lines[8] Songxian Wind Farm Songxian Wind Farm, wholly-owned by the Group with 74 MW installed capacity, experienced a significant 38.5% decrease in power generation in H1 2024 due to severely reduced wind resources and turbine freezing from abnormal cold weather - Total installed capacity is 74 MW, wholly-owned by the Group[8] - Power generation in H1 2024 was approximately 46.1 GWh, a 38.5% decrease compared to the same period last year[8] - Power generation was affected by abnormal cold weather and freezing of some wind turbines[8] Nanxun Distributed Solar Project The Nanxun Distributed Solar Project, the Group's first wholly-owned rooftop solar project with 4 MWp installed capacity, generated approximately 2.2 GWh in H1 2024, a 4.3% decrease - Installed capacity is 4 MWp, the Group's first wholly-owned distributed rooftop solar project[8] - Power generation in H1 2024 was approximately 2.2 GWh, a 4.3% decrease compared to the same period last year[8] Business Model and Risk Management The Group operates as an investor and operator in China's renewable energy sector, focusing on acquiring, developing, constructing, and operating power plants while integrating risk management into daily operations across six key categories - The primary business is acting as an investor and operator in China's renewable energy sector, providing stable electricity to customers[9][12] - The Group's strategy is "Grow, Expand, Endure," aiming for continuous development of renewable energy projects, enhanced profitability, and sustainable value creation for shareholders[10][12] - Risk management is integrated into daily business processes, with existing and emerging risks identified and reviewed semi-annually, categorized into policy and regulatory, legal and compliance, safety, health and environment, financial, operational, and reputational risks[10][11][12] Outlook The Group anticipates improved China GDP growth in H2 2024 with government stimulus, and expects long-term curtailment reduction due to increased grid investment, while cautiously pursuing new projects and considering existing wind farm upgrades - China's GDP growth is expected to improve in H2 2024, with government policies aimed at stimulating domestic demand and the property market[13] - The National Energy Administration will accelerate transmission project construction, expecting curtailment to decrease in the long term[13] - The Group will cautiously invest in new projects when returns are attractive and consider upgrading existing wind farms to significantly enhance generation capacity and output[13][14][17] Employees As of June 30, 2024, the Group employed 95 staff in Hong Kong and mainland China, focusing on talent acquisition, retention, and development, with compensation based on performance and market conditions - As of June 30, 2024, the Group employed a total of 95 staff[15][18] - The Group strengthens human resources through external recruitment and internal transfers, and appoints technical consultants to support project development and operations[15][18] - Employee remuneration is determined based on job nature, individual performance, overall Group performance, and prevailing market conditions[15][18] Environmental, Social and Governance Matters As an early investor in China's renewable energy sector, the Group actively contributes to environmental protection and low-carbon development, with its operating assets meeting all environmental regulations and significantly reducing carbon emissions - The Group has been actively involved in environmental protection and low-carbon development in China since 2006[16][19] - In H1 2024, the Group's operating assets complied with all local environmental regulatory requirements[20][22] - Total power generation of 692.8 GWh resulted in a reduction of approximately 225,000 tonnes of coal consumption and 535,000 tonnes of carbon emissions[20][22] - The Group values building strong relationships with stakeholders by maintaining close ties with government, local authorities, and State Grid Corporation[21][22] General Information Directors' Interests in Securities As of June 30, 2024, the company's directors and chief executives held long positions in the shares of the company and its associated corporations, with Mr. Huang Gang and Ms. Liu Hui holding substantial interests Directors' Long Positions in Company Shares and Related Shares (June 30, 2024) | Director Name | Nature of Interest | Number of Company Shares and Related Shares | Approximate Percentage of Company's Existing Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Huang Gang | Corporate | 1,833,696,937 | 73.168% | | Mr. Huang Gang | Joint | 41,661,439 | 1.662% | | Ms. Liu Hui | Family | 1,833,696,937 | 73.168% | | Ms. Liu Hui | Joint | 41,661,439 | 1.662% | | Mr. Huang Zhiliang | Joint | 2,051,401 | 0.082% | | Mr. Li Zhaoyi | Personal | 8,550 | 0.001% | Directors' Long Positions in Shares of Associated Corporation HKC (Holdings) Limited (June 30, 2024) | Director Name | Nature of Interest | Number of Associated Corporation Shares and Related Shares | Approximate Percentage of Associated Corporation's Existing Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Huang Gang | Corporate | 511,074,246 | 100.000% | | Ms. Liu Hui | Family | 346,657,938 | 67.829% | | Ms. Liu Hui | Corporate | 164,416,308 | 32.171% | Substantial Shareholders' Interests in Securities As of June 30, 2024, Claudio Holdings Limited was a substantial shareholder, holding approximately 73.168% of the company's issued share capital, with other entities also holding significant stakes Substantial Shareholders' Long Positions in Company Shares and Related Shares (June 30, 2024) | Name/Entity | Nature of Interest | Number of Company Shares and Related Shares | Approximate Percentage of Company's Existing Issued Share Capital | | :--- | :--- | :--- | :--- | | Claudio Holdings Limited | Corporate | 1,833,696,937 | 73.168% | | HKC (Holdings) Limited | Beneficial Owner | 1,403,352,050 | 56.000% | | Genesis Capital Group Limited | Beneficial Owner | 276,065,897 | 11.016% | | Creator Holdings Limited | Beneficial Owner | 154,278,990 | 6.156% | Interim Dividend The Board does not recommend the payment of 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[32] Audit Committee The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2024 - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2024[32] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2024 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2024[32] Corporate Governance The company complied with the Corporate Governance Code for the six months ended June 30, 2024, with the exception of the Chairman and Chief Executive Officer roles being held by the same individual, a structure the Board believes does not impair the balance of power - The company complied with the code provisions of the Corporate Governance Code for the six months ended June 30, 2024, with the exception of the roles of Chairman and Chief Executive Officer being held by the same individual[32][33] - The Board believes the current structure does not impair the balance of power between the Board and management and will review it from time to time[33] Model Code for Securities Transactions by Directors The company has adopted the Model Code as its code of conduct for directors' securities transactions, with all directors confirming compliance, and has also adopted a code for relevant employees no less exacting than the Model Code - The company has adopted the Model Code as its code of conduct for directors' securities transactions, and all directors have confirmed compliance[33] - The company has also adopted a code for relevant employees' dealings in company securities, with terms no less exacting than the Model Code[33] Constitutional Documents of the Company To align with paperless listing mechanisms and electronic dissemination of corporate communications, the company amended its Articles of Association via a special resolution passed at the AGM on May 31, 2024, and published the updated version - To comply with the latest regulatory requirements for paperless listing mechanisms and electronic dissemination of corporate communications, the company has amended its Articles of Association[33] - A special resolution approving the amendments was passed at the Annual General Meeting on May 31, 2024[33] - The company has published the updated consolidated version of its Memorandum and Articles of Association on the Stock Exchange and the company's website[34][37] Appointment of Executive Director Ms. Liu Hui was appointed as an Executive Director and a member of the Executive Committee of the company on May 31, 2024 - Ms. Liu Hui was appointed as an Executive Director and a member of the Executive Committee of the company on May 31, 2024[35][38] Update on Directors' Information Ms. Liu Hui was appointed as an Executive Director on May 31, 2024, and Mr. Zhang Songyi resigned as a director of Athenex, Inc. in September 2023 - Ms. Liu Hui was appointed as an Executive Director and a member of the Executive Committee of the company on May 31, 2024[36][39] - Mr. Zhang Songyi resigned as a director of Athenex, Inc., a NASDAQ-listed company, in September 2023[37][39] Report on Review of Interim Financial Information Introduction The auditor has reviewed the interim financial information of China Renewable Energy Investment Limited and its subsidiaries for the six months ended June 30, 2024, with the company's directors responsible for its preparation - The auditor has reviewed the Group's interim financial information for the six months ended June 30, 2024[40][41] - The company's directors are responsible for the preparation and presentation of this interim financial information in accordance with HKAS 34 "Interim Financial Reporting"[40][41] Scope of Review The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is significantly less in scope than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[42][43] - The scope of the review is significantly less than that of an audit, therefore no audit opinion is expressed[42][43] Conclusion Based on the review, the auditor found no matters suggesting that the interim financial information was not prepared in all material respects in accordance with HKAS 34 - The auditor found no matters that lead them to believe the interim financial information is not prepared in all material respects in accordance with HKAS 34 "Interim Financial Reporting"[44][45] Condensed Consolidated Statement of Comprehensive Income Financial Performance Overview For the six months ended June 30, 2024, the Group's revenue decreased by 24% to HK$74.3 million, leading to a 67% reduction in gross profit and a shift to an operating loss, resulting in a 67% decrease in profit attributable to equity holders Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 74,299 | 97,820 | -24.1% | | Cost of Sales | (63,807) | (65,997) | -3.3% | | Gross Profit | 10,492 | 31,823 | -67.0% | | Other Income | 2,942 | 3,409 | -13.7% | | Administrative Expenses | (14,881) | (19,771) | -24.7% | | Operating (Loss)/Profit | (1,447) | 15,461 | -109.4% | | Finance Costs — Net | (7,014) | (13,849) | -49.4% | | Share of Results of Associates | 22,134 | 42,246 | -47.6% | | Profit Before Income Tax | 13,673 | 43,858 | -68.8% | | Income Tax Expense | (3,285) | (8,819) | -62.8% | | Profit for the Period | 10,388 | 35,039 | -70.4% | | Profit Attributable to Equity Holders of the Company | 11,662 | 35,853 | -67.5% | | Basic and Diluted Earnings Per Share (HK cents) | 0.47 | 1.43 | -67.1% | - Total comprehensive loss for the period was HK$28,954 thousand, a narrower loss compared to HK$43,926 thousand in the prior year[46][47] Condensed Consolidated Statement of Financial Position Overview of Assets, Equity and Liabilities As of June 30, 2024, the Group's total assets decreased to HK$2,155.2 million, with declines in non-current assets but increases in current receivables and cash, while total equity and liabilities also decreased, notably in bank borrowings Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 805,426 | 873,421 | | Interests in Associates | 765,780 | 824,173 | | Total Non-Current Assets | 1,599,954 | 1,730,040 | | Trade and Other Receivables (Current) | 369,940 | 345,343 | | Cash and Cash Equivalents | 174,419 | 164,290 | | Total Current Assets | 555,214 | 521,174 | | Total Assets | 2,155,168 | 2,251,214 | | Total Equity | 1,832,496 | 1,873,981 | | Bank Borrowings (Non-Current) | 213,480 | 244,461 | | Current Portion of Bank Borrowings (Current) | 28,170 | 43,339 | | Total Liabilities | 322,672 | 377,233 | - Construction in progress increased from HK$364 thousand at the end of 2023 to HK$1,412 thousand as of June 30, 2024[48] Condensed Consolidated Statement of Changes in Equity Equity Movements For the six months ended June 30, 2024, equity attributable to owners of the company decreased from HK$1,882.1 million to HK$1,841.8 million, primarily due to negative exchange reserve impacts and dividends paid, offsetting the profit for the period Condensed Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Total Equity at January 1 | 1,873,981 | 1,914,742 | | Profit/(Loss) for the Period | 10,388 | 35,039 | | Total Other Comprehensive (Loss)/Income for the Period | (39,342) | (78,965) | | Total Comprehensive (Loss)/Income for the Period | (28,954) | (43,926) | | Dividends Paid | (12,531) | (12,531) | | Total Equity at June 30 | 1,832,496 | 1,858,285 | - Exchange reserve attributable to owners of the company further decreased from HK$(95,200) thousand at the beginning of the year to HK$(134,641) thousand[50] Condensed Consolidated Statement of Cash Flows Cash Flow Activities For the six months ended June 30, 2024, net cash from operating activities significantly decreased, while net cash from investing activities also declined, and net cash used in financing activities was primarily for bank loan repayments and dividend payments, resulting in an increase in period-end cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 28,324 | 62,028 | | Net Cash from Investing Activities | 46,137 | 122,207 | | Net Cash Used in Financing Activities | (61,952) | (199,010) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 12,509 | (14,775) | | Cash and Cash Equivalents at June 30 | 174,419 | 212,544 | - Dividends received from associates amounted to HK$46,380 thousand, a significant decrease from HK$135,639 thousand in the prior year[51] - Bank loan repayments totaled HK$41,023 thousand, and dividends paid were HK$12,531 thousand[51] Notes to the Condensed Consolidated Interim Financial Information 1 General Information China Renewable Energy Investment Limited primarily engages in renewable energy business in the PRC, with its shares listed on the Main Board of the Hong Kong Stock Exchange, and Mr. Huang Gang as the ultimate controlling party - The Group primarily engages in the renewable energy business, mainly located in the People's Republic of China[52] - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[52] - The ultimate holding company is Claudio Holdings Limited, and the ultimate controlling party is Mr. Huang Gang, the company's Chairman, Chief Executive Officer, and Executive Director[52] 2 Basis of Preparation The unaudited condensed consolidated interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements for the year ended December 31, 2023 - The unaudited condensed consolidated interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting"[52] - It should be read in conjunction with the annual financial statements for the year ended December 31, 2023[52] 3 Accounting Policies During this interim period, the Group first applied amendments to Hong Kong Financial Reporting Standards, which had no significant impact on the financial position or performance for the current or prior periods - During this interim period, the Group first applied amendments to HKFRS 16, HKAS 1, HKAS 7, and HKFRS 7[53] - These amendments had no significant impact on the Group's financial position and performance for the current and prior periods[53] 4 Critical Accounting Estimates and Judgements The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and the key sources of estimation uncertainty are consistent with those used in the 2023 annual consolidated financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[53] - The critical judgments and key sources of estimation uncertainty made in this interim financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2023[53] 5 Revenue and Other Income For the six months ended June 30, 2024, the Group's revenue primarily from electricity sales totaled HK$74.3 million, a 24% year-on-year decrease, with significant contributions from electricity tariff subsidies and three major customers Revenue and Other Income (For the six months ended June 30) | Category | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Sales of Electricity | 74,299 | 97,820 | | VAT Refund | 2,909 | 3,387 | | Total Other Income | 2,942 | 3,409 | - Electricity sales include HK$39.7 million (2023: HK$51.0 million) of electricity tariff subsidies owed by state grid companies[55][56] - The Group had three customers whose revenue exceeded 10% of the Group's total revenue, amounting to HK$38.2 million, HK$24.3 million, and HK$9.5 million respectively[57] 6 Operating (Loss)/Profit For the six months ended June 30, 2024, the Group's operations shifted from a profit to a loss of HK$1.4 million, primarily due to depreciation of property, plant and equipment, employee benefit expenses, and net exchange losses Operating (Loss)/Profit Key Items (For the six months ended June 30) | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Auditor's Remuneration | (330) | (330) | | Amortisation of Intangible Assets | (332) | (362) | | Depreciation of Property, Plant and Equipment | (48,548) | (52,859) | | Depreciation of Right-of-Use Assets | (711) | (692) | | Net Exchange Loss | (750) | (4,590) | | Employee Benefit Expenses | (12,432) | (12,572) | | Legal and Professional Fees | (476) | (1,438) | 7 Finance Income and Costs For the six months ended June 30, 2024, the Group's net finance costs significantly decreased to HK$7.0 million from HK$13.8 million in the prior year, mainly due to lower interest expenses on bank borrowings and no interest expense on amounts due to a shareholder Finance Income and Costs (For the six months ended June 30) | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | (8,340) | (11,431) | | Interest Expense on Amount Due to a Shareholder | — | (4,259) | | Interest Income from Bank Deposits | 1,326 | 1,841 | | Finance Costs — Net | (7,014) | (13,849) | 8 Income Tax Expense For the six months ended June 30, 2024, income tax expense significantly decreased to HK$3.3 million from HK$8.8 million, primarily due to increased deferred income tax credits and a withholding tax refund, with certain subsidiaries enjoying tax incentives Income Tax Expense (For the six months ended June 30) | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Current Income Tax | (1,665) | (3,150) | | Withholding Tax on Dividends | (3,160) | (5,949) | | Deferred Income Tax Credit/(Expense), Net | 1,540 | (6,816) | | Withholding Tax Refund on Dividends Paid in Prior Years | — | 7,096 | | Income Tax Expense | (3,285) | (8,819) | - Two of the Group's subsidiaries enjoy a 3-year full tax exemption followed by a 50% tax exemption for the subsequent 3 years[64] - A subsidiary established in Inner Mongolia is eligible for the Western Development Enterprise Income Tax Incentive, enjoying a preferential tax rate of 15% until December 31, 2030[64] - Hong Kong tax resident companies may enjoy a 5% withholding tax rate on dividends (compared to 10% in the same period of 2023)[65] 9 Dividends A final dividend of HK$0.5 cents per share for 2023, totaling HK$12.5 million, was paid on June 21, 2024, and the Board resolved not to declare any interim dividend for the six months ended June 30, 2024 - The 2023 final dividend of HK$0.5 cents per ordinary share, amounting to HK$12,531,000, was paid on June 21, 2024[65] - The Board resolved not to declare any interim dividend for the six months ended June 30, 2024[65] 10 Earnings Per Share For the six months ended June 30, 2024, earnings per share attributable to owners of the company significantly decreased to HK$0.47 cents from HK$1.43 cents in the prior year, with basic and diluted EPS being the same due to no dilutive equity instruments Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (HK$ thousand) | 11,662 | 35,853 | | Weighted Average Number of Ordinary Shares (thousand shares) | 2,506,157 | 2,506,157 | | Earnings Per Share (HK cents) | 0.47 | 1.43 | - For the six months ended June 30, 2024 and 2023, the company had no dilutive equity instruments, thus basic and diluted earnings per share were the same[69] 11 Capital Expenditure For the six months ended June 30, 2024, the net book value of property, plant and equipment decreased, while construction in progress increased, with additions to property, plant and equipment and construction in progress during the period Capital Expenditure Changes (For the six months ended June 30) | Item | Net Book Value at Beginning of 2024 (HK$ thousand) | Net Book Value at End of 2024 (HK$ thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 873,421 | 805,426 | | Right-of-Use Assets | 13,451 | 12,410 | | Intangible Assets | 1,372 | 1,048 | | Construction in Progress | 364 | 1,412 | - Additions to property, plant and equipment amounted to HK$584 thousand, and additions to construction in progress were HK$1,071 thousand during the period[70] 12 Prepayments, Trade and Other Receivables As of June 30, 2024, the Group's total trade receivables were HK$299.4 million, including HK$292.4 million in electricity tariff subsidies expected to be fully recovered, with other receivables comprising deductible input VAT and dividends from associates Prepayments, Trade and Other Receivables (As of June 30) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Non-Current Other Receivables | 13,878 | 17,259 | | Current Trade Receivables | 299,382 | 289,572 | | Current Prepayments and Other Receivables | 70,558 | 55,771 | | Total | 383,818 | 362,602 | - Trade receivables include HK$292.4 million (2023: HK$281.3 million) of electricity tariff subsidies, which are expected to be fully recoverable[76][78] - Other receivables include HK$24.7 million of deductible input VAT and HK$52.3 million of dividends receivable from associates[81][83] 13 Share Capital As of June 30, 2024, the company's issued and fully paid share capital remained unchanged at 2,506,157,464 ordinary shares with a par value of HK$0.01 each, totaling HK$25.1 million Share Capital Status (As of June 30) | Item | Number of Shares | HK$ thousand | | :--- | :--- | :--- | | Issued and Fully Paid Share Capital (June 30, 2024) | 2,506,157,464 | 25,062 | 14 Trade and Other Payables As of June 30, 2024, the Group's total trade and other payables decreased to HK$49.6 million from HK$55.0 million at the end of 2023, primarily comprising payables for the acquisition and construction of property, plant and equipment Trade and Other Payables (As of June 30) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 390 | 506 | | Payables for Acquisition and Construction of Property, Plant and Equipment | 44,894 | 46,733 | | Other Payables and Accruals | 4,301 | 7,806 | | Total | 49,585 | 55,045 | - The aging analysis of trade payables shows that all trade payables are within 12 months[86] 15 Financial Risk Management The Group's operations are exposed to foreign currency, interest rate, credit, and liquidity risks, with no significant changes in risk management processes or policies since the end of 2023, and carrying amounts of financial instruments approximate their fair values - The Group's operations are exposed to foreign currency risk, interest rate risk, credit risk, and liquidity risk[87] - There have been no significant changes in risk management processes or policies since the end of 2023[87] - The carrying amounts of trade receivables, cash, and borrowings approximate their fair values, and the Group has no assets and liabilities measured at fair value[87] 16 Commitments As of June 30, 2024, the Group had contracted but unprovided capital expenditure of HK$6.5 million for renewable energy projects, and total future lease payments for land and buildings not yet commenced amounted to HK$0.3 million - As of June 30, 2024, contracted but unprovided capital expenditure for renewable energy projects amounted to HK$6.5 million[88] - Total future lease payments for land and buildings under lease not yet commenced amounted to HK$0.3 million[88] 17 Related Party Transactions For the six months ended June 30, 2024, the Group engaged in transactions with related parties, including office sharing, administrative services, and leases with HKC (Holdings) Limited, and provided a bank loan guarantee for an associate - The company entered into an office sharing agreement with HKC (Holdings) Limited for a consideration of HK$1.6 million[88] - Administrative service fees of HK$1.1 million, office rent of HK$0.8 million, and rooftop rent of HK$0.2 million were paid to HKC (Holdings) Limited[88][89] - The company entered into loan financing agreements with Creator Holdings Limited and Genesis Capital Venture Limited, allowing it to borrow up to HK$300 million, but no amounts had been drawn down as of June 30, 2024[89] - As of June 30, 2024, the Group provided a bank loan guarantee for an associate, with the outstanding amount being HK$6.4 million[90][92]