Financial Performance - Hilong achieved a revenue of RMB 4,251.5 million in 2023, representing an increase of approximately 38.4% compared to 2022, with a net profit of RMB 171.5 million[5]. - Total revenue increased by RMB 1,178.6 million or 38.4% from RMB 3,072.9 million in 2022 to RMB 4,251.5 million in 2023[20]. - The oilfield equipment manufacturing and services segment generated revenue of RMB 2,614.4 million, a significant increase of 37.5% year-on-year, driven by rising oil demand and increased capital expenditure in the upstream sector[7]. - The oilfield services segment recorded revenue of RMB 1,168.9 million, up 10.5% from 2022, benefiting from sustained capital expenditure by upstream companies[9]. - The marine engineering services segment saw revenue rise to RMB 468.2 million, a remarkable increase of 311.9% year-on-year, reflecting the company's transformation into a high-tech EPCIC contractor[10]. - Gross profit increased by RMB 230.4 million or 33.6% from RMB 685.1 million in 2022 to RMB 915.5 million in 2023, with a gross margin of 21.5%, down 0.8% from the previous year[26]. - Profit attributable to owners of the company increased from RMB 105.6 million in 2022 to RMB 148.7 million in 2023[33]. - The company reported a significant increase in revenue for the fiscal year ending December 31, 2023, with total revenue reaching approximately $500 million, representing a year-over-year growth of 15%[104]. Market Strategy and Expansion - Hilong's strategic focus includes expanding into high-end markets in the Middle East, the US, and Canada, enhancing the reputation of its drilling products[11]. - The company aims to expand its market presence in regions such as the Middle East, Southeast Asia, and West Africa, focusing on high-tech service contracts[14]. - The company is actively expanding into high-technology integrated package services, successfully completing a drilling package contract in Iraq[68]. - The company plans to enhance its product offerings, including high-strength, corrosion-resistant drill tools, and smart drilling rods, while also investing in automation and new technology development[76]. - The company will actively pursue new contracts in Nigeria, Ecuador, Iraq, Oman, Brazil, and Kuwait, while diversifying its service offerings in drilling and well services[78]. - The company expects to benefit from increased upstream oil and gas capital expenditures in Saudi Arabia, UAE, and Iraq, which will create significant opportunities in the Middle East market[75]. Technological Innovation and R&D - The company is focusing on technological innovation and digital transformation, aiming to evolve into a light-asset, digital, and high-tech intelligent enterprise[5]. - The company plans to enhance R&D in high-strength drill rods, eco-friendly threaded drill rods, and smart drilling technologies, focusing on differentiated market opportunities[12]. - The company has made significant advancements in technology research and development, including the completion of high-strength and high-sulfur-resistant drill rod projects, with orders received from North American markets[72]. - The company is committed to increasing its technological capabilities and research levels to shorten drilling completion cycles and enhance core competitiveness[13]. - The company has established a research team with rich product technology service and system management experience, focusing on technological innovation and digital transformation[65]. Financial Management and Efficiency - The company is actively managing accounts receivable and inventory to improve asset operational efficiency, maintaining relatively stable cash flow in 2023[5]. - Trade receivables turnover days decreased from 173 days in 2022 to 146 days in 2023, indicating faster collection from international oil and gas companies[40]. - The company has strengthened cash flow management through accounts receivable and inventory management, maintaining relatively stable cash flow in 2023[63]. - The company has implemented measures to prevent future violations of trading regulations by reminding directors of compliance importance[123]. - The company is undergoing an independent internal control review to address identified deficiencies in its risk management and internal control systems, with recommendations being implemented to ensure ongoing effectiveness[188]. Corporate Governance - The company has strengthened its governance framework, enhancing transparency and accountability measures in line with best practices[116]. - The board of directors has confirmed compliance with the corporate governance code throughout the year[119]. - The company adopted the standard code for securities trading by directors, ensuring adherence to regulations during the reporting period[120]. - The board consists of a balanced mix of executive and non-executive directors, ensuring strong independent judgment[125]. - The company has established written guidelines for employees regarding insider trading, aligning with the standard code[123]. Shareholder Engagement - The company expressed gratitude to shareholders and employees for their contributions, emphasizing the importance of their efforts for future growth[15]. - The board of directors held an annual general meeting with full attendance from most members, demonstrating commitment to shareholder engagement[198]. - The board has taken multiple plans and measures to improve the group's liquidity and financial condition, as detailed in the consolidated financial statements[175]. Risk Management - The company has established a risk management system that aligns with its strategic objectives and complies with relevant laws and regulations[181]. - The audit committee monitors the effectiveness of the risk management and internal control systems and reports to the board[180]. - The company emphasizes cost-effective risk management procedures to enhance the efficiency and effectiveness of its risk management systems[182]. - An internal audit team has been established to regularly assess the adequacy and effectiveness of the company's risk management and internal control systems, reporting results every six months to the audit committee and board[189]. Employee and Management Changes - The company employed a total of 2,370 full-time employees as of December 31, 2023, down from 3,245 employees a year earlier[58]. - The company’s employee costs (excluding directors' remuneration) totaled RMB 773.2 million[59]. - The company plans to appoint a new CEO by the end of November 2024, deviating from the code provision C.2.1 from October 15, 2024[134]. - The company’s chairman, Zhang Jun, was appointed as CEO on October 15, 2024, bringing over 34 years of experience in the oil industry[92].
海隆控股(01623) - 2024 - 年度财报