滨海投资(02886) - 2025 - 中期业绩

Financial Highlights Key Financial Highlights Binhai Investment Company Limited's unaudited results for the six months ended June 30, 2025, show a 17% YoY revenue decline to HK$2,931,118 thousand, while profit for the period grew 3% Key Financial Summary for H1 2025 | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,931,118 | 3,530,446 | -17% | | Gross Profit | 310,051 | 343,366 | -10% | | Profit for the Period | 176,506 | 171,176 | 3% | | Basic Earnings Per Share Attributable to Owners of the Company | 12.54 cents | 12.41 cents | 1% | | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 7,997,546 | 7,749,788 | 3% | | Total Equity | 2,400,459 | 2,304,146 | 4% | | Total Liabilities | 5,597,087 | 5,445,642 | 3% | Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statement of Profit or Loss For the six months ended June 30, 2025, revenue decreased by 17% YoY, but profit for the period increased by 3% due to a significant rise in other net gains and lower finance costs Key Data from Condensed Consolidated Interim Statement of Profit or Loss | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,931,118 | 3,530,446 | -17% | | Cost of sales and services | (2,621,067) | (3,187,080) | -17.7% | | Gross Profit | 310,051 | 343,366 | -10% | | Other income | 13,016 | 25,568 | -49.1% | | Administrative expenses | (90,086) | (81,603) | +10.4% | | R&D expenses | (50,447) | (57,506) | -12.3% | | Other net gains | 64,072 | 4,024 | +1492.3% | | Operating Profit | 257,759 | 255,145 | +1.0% | | Net finance costs | (43,419) | (59,450) | -26.9% | | Profit for the period | 176,506 | 171,176 | +3.1% | | Profit attributable to owners of the Company | 172,815 | 167,924 | +2.9% | | Basic earnings per share | 12.54 cents | 12.41 cents | +1.0% | Condensed Consolidated Interim Statement of Comprehensive Income For the six months ended June 30, 2025, total comprehensive income for the period surged by 119.9% YoY to HK$244,612 thousand, driven by a turnaround in other comprehensive income Key Data from Condensed Consolidated Interim Statement of Comprehensive Income | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Profit for the period | 176,506 | 171,176 | +3.1% | | Other comprehensive income/(loss) | 68,106 | (59,960) | From loss to gain | | Total comprehensive income for the period | 244,612 | 111,216 | +119.9% | | Total comprehensive income for the period attributable to owners of the Company | 239,096 | 109,640 | +118.1% | Condensed Consolidated Interim Statement of Financial Position As of June 30, 2025, total assets grew to HK$7,997,546 thousand, while current liabilities exceeded current assets by approximately HK$2,536,894 thousand Key Data from Condensed Consolidated Interim Statement of Financial Position | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Property, plant and equipment | 6,304,670 | 5,985,500 | +5.3% | | Investments in associates and joint ventures | 316,016 | 302,781 | +4.4% | | Total current assets | 1,056,238 | 1,121,309 | -5.8% | | Total Assets | 7,997,546 | 7,749,788 | +3.2% | | Equity and Liabilities | | | | | Equity attributable to owners of the Company | 2,329,105 | 2,221,739 | +4.8% | | Total Equity | 2,400,459 | 2,304,146 | +4.2% | | Total non-current liabilities | 2,003,955 | 2,422,971 | -17.3% | | Total current liabilities | 3,593,132 | 3,022,671 | +18.9% | | Total Liabilities | 5,597,087 | 5,445,642 | +2.8% | - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately HK$2,536,894 thousand, but management believes it has sufficient financial resources to support its operations and meet its financial obligations for the next 12 months[18] Condensed Consolidated Interim Statement of Changes in Equity For the six months ended June 30, 2025, total equity increased to HK$2,400,459 thousand, positively impacted by profit and other comprehensive income, alongside dividend payments and share repurchases Key Data from Condensed Consolidated Interim Statement of Changes in Equity | Indicator | January 1, 2025 (HK$ thousands) | June 30, 2025 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 2,221,739 | 2,329,105 | +4.8% | | Non-controlling interests | 82,407 | 71,354 | -13.4% | | Total Equity | 2,304,146 | 2,400,459 | +4.2% | | Profit for the period (attributable to owners of the Company) | - | 172,815 | - | | Other comprehensive income for the period (attributable to owners of the Company) | - | 66,281 | - | | Approved prior year's dividend | - | (104,428) | - | | Repurchase of treasury shares | - | (3,424) | - | | Approved redemption of preference shares | - | (24,033) | - | Condensed Interim Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash from operating activities decreased by 43.3% YoY, while financing activities shifted from a net outflow to a net inflow of HK$89,906 thousand Key Data from Condensed Interim Consolidated Statement of Cash Flows | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 37,619 | 66,306 | -43.3% | | Net cash outflow from investing activities | (205,469) | (138,207) | +48.7% | | Net cash inflow/(outflow) from financing activities | 89,906 | (48,378) | From outflow to inflow | | Net decrease in cash and cash equivalents | (77,944) | (120,279) | -35.2% | | Cash and cash equivalents at end of period | 325,767 | 662,189 | -50.8% | Notes to the Condensed Consolidated Interim Financial Statements General Information Binhai Investment Company Limited is incorporated in Bermuda with its principal place of business in Hong Kong, and its ordinary shares are listed on the Hong Kong Stock Exchange - The Company is incorporated in Bermuda, with its ordinary shares listed on the Hong Kong Stock Exchange and its principal place of business in Hong Kong[14] - TEDA HK (an indirect subsidiary of TEDA) holds approximately 42.18% of the Company's total issued ordinary shares, making it the largest ultimate shareholder; Great Wall Gas Investment (Hong Kong) Limited (a wholly-owned subsidiary of Sinopec) holds approximately 29.52%, making it the second-largest ultimate shareholder[15] - The Group's condensed consolidated interim financial statements are presented in Hong Kong dollars, while the functional currency of the Company and its subsidiaries is Renminbi[15] Basis of Preparation The financial statements are prepared under HKAS 34 and HKEX Listing Rules, using the historical cost basis, with the going concern basis deemed appropriate despite net current liabilities - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Hong Kong Stock Exchange Listing Rules, using the historical cost basis[16][17] - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately HK$2,536,894 thousand, but management considers the going concern basis appropriate based on profitability and secured loan facilities of approximately HK$1,151,739 thousand[18] Accounting Policies The accounting policies adopted are consistent with the 2024 annual financial statements, with the adoption of amendments to HKAS 21 having no significant impact on the Group - The accounting policies are consistent with the 2024 annual consolidated financial statements, and the adoption of amendments to HKAS 21 "Lack of Exchangeability" had no significant impact[19][20] Estimates The preparation of interim financial information involves management judgments and estimates, with the sources of uncertainty remaining consistent with the 2024 annual financial statements - The preparation of interim financial information involves management judgments, estimates, and assumptions, with the sources of significant estimation uncertainty remaining the same as in the 2024 annual consolidated financial statements[21] Financial Risk Management and Financial Instruments The Group is exposed to market, credit, and liquidity risks, with no significant changes in risk management policies since year-end and no use of derivative financial instruments for hedging - The Group's operations are exposed to market risk (foreign exchange, cash flow, and fair value interest rate risk), credit risk, and liquidity risk, with no derivative financial instruments used for hedging during the period[22] - There have been no significant changes in risk management policies or the contractual undiscounted cash outflows of financial liabilities since the end of 2024[23][24] - Fair value measurements are analyzed using a three-level hierarchy, with no transfers between levels during the period and no significant changes in business or economic conditions affecting fair values[24][25] Segment Information The Group has created a new "Value-added Services" segment by combining sales of gas appliances, minor installation, maintenance, and insurance agency services to provide more relevant information - The Group has combined the sales of gas appliances, minor installation services, maintenance services, and insurance agency services into a new "Value-added Services" segment to provide more relevant and comparable financial information[27] Segment Revenue and Results for H1 2025 | Segment | Revenue (HK$ thousands) | % of Total | Segment Results (Gross Profit, HK$ thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Piped natural gas sales | 2,741,373 | 93.5% | 189,140 | 61.0% | | Engineering construction and natural gas pipeline installation services | 124,976 | 4.3% | 71,909 | 23.2% | | Natural gas pipeline transmission services | 27,099 | 0.9% | 23,603 | 7.6% | | Value-added services | 37,670 | 1.3% | 25,399 | 8.2% | | Total | 2,931,118 | 100% | 310,051 | 100% | Segment Revenue and Results for H1 2024 | Segment | Revenue (HK$ thousands) | % of Total | Segment Results (Gross Profit, HK$ thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Piped natural gas sales | 3,295,229 | 93.3% | 188,923 | 55.0% | | Engineering construction and natural gas pipeline installation services | 167,572 | 4.7% | 102,248 | 29.8% | | Natural gas pipeline transmission services | 32,391 | 0.9% | 28,436 | 8.3% | | Value-added services | 35,254 | 1.0% | 23,759 | 6.9% | | Total | 3,530,446 | 100% | 343,366 | 100% | Other Income For the six months ended June 30, 2025, other income was HK$13,016 thousand, a 49.1% YoY decrease, primarily due to a significant reduction in government grants Details of Other Income | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Government grants | 9,665 | 22,644 | -57.3% | | Maintenance and renovation service income | 2,924 | 2,638 | +10.8% | | Rental income | 427 | 286 | +49.3% | | Total | 13,016 | 25,568 | -49.1% | Other Net Gains For the six months ended June 30, 2025, other net gains surged to HK$64,072 thousand, a 1492.3% YoY increase, mainly driven by compensation for pipeline relocation and a shift from net exchange loss to gain Details of Other Net Gains | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net compensation income for relocation of natural gas pipelines | 54,538 | 19,031 | +186.6% | | Net exchange gain/(loss) | 11,444 | (23,696) | From loss to gain | | Net gain on disposal of subsidiaries | 487 | 2,853 | -82.9% | | Total | 64,072 | 4,024 | +1492.3% | Cost of Sales and Services, Administrative Expenses and R&D Expenses For the six months ended June 30, 2025, total costs and expenses decreased by 17% YoY to HK$2,761,600 thousand, primarily due to a significant reduction in natural gas procurement costs Details of Cost of Sales and Services, Administrative Expenses and R&D Expenses | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Natural gas procurement costs | 2,385,024 | 2,942,825 | -19.0% | | Employee benefit expenses | 139,370 | 121,200 | +15.0% | | Depreciation | 104,347 | 103,993 | +0.3% | | Total cost of sales and services, administrative expenses and R&D expenses | 2,761,600 | 3,326,189 | -17.0% | Finance Income and Costs For the six months ended June 30, 2025, net finance costs decreased significantly by 26.9% YoY to HK$43,419 thousand, driven by lower interest expenses and increased capitalization Details of Finance Income and Costs | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Interest income on bank deposits | 2,071 | 15,179 | -86.4% | | Interest expense | (83,544) | (110,409) | -24.4% | | Less: Amount capitalized in construction in progress | 38,054 | 35,780 | +6.3% | | Net finance costs | (43,419) | (59,450) | -26.9% | Income Tax Expense For the six months ended June 30, 2025, income tax expense rose by 39% YoY to HK$45,279 thousand, mainly due to an increase in current income tax Details of Income Tax Expense | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Current income tax | 45,524 | 30,980 | +46.9% | | Deferred income tax expense | (245) | 1,616 | From expense to credit | | Total | 45,279 | 32,596 | +39.0% | - The Group is subject to a two-tiered profits tax rate, with high-tech enterprises like Tianjin Clean Energy enjoying a preferential rate of 15%[35] - Binhai HK obtained a Certificate of Resident Status in 2022, allowing it to apply a reduced dividend withholding tax rate[35] Dividends The Board proposed a final dividend of HK$0.076 per ordinary share for 2024, totaling approximately HK$104,428 thousand, which was approved and paid, with no interim dividend declared for the current period - The 2024 final dividend of HK$0.076 per ordinary share, totaling approximately HK$104,428 thousand, was approved on May 9, 2025, and paid on June 10, 2025[37] - The Board has decided not to declare an interim dividend for the six months ended June 30, 2025[38] Earnings Per Share For the six months ended June 30, 2025, both basic and diluted earnings per share were 12.54 HK cents, showing a slight increase compared to the same period last year Earnings Per Share Data | Indicator | June 30, 2025 (HK cents) | June 30, 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic earnings per share | 12.54 | 12.41 | +1.0% | | Diluted earnings per share | 12.54 | 12.41 | +1.0% | Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant, and equipment increased to HK$6,304,670 thousand, mainly driven by additions and positive exchange differences Changes in Property, Plant and Equipment | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net book value at beginning of period | 5,985,500 | 6,007,569 | -0.4% | | Additions | 224,477 | 163,149 | +37.6% | | Depreciation expense | (95,745) | (95,578) | +0.2% | | Exchange differences | 193,198 | (123,319) | From negative to positive | | Net book value at end of period | 6,304,670 | 5,951,540 | +5.9% | Accounts Receivable and Other Receivables As of June 30, 2025, total accounts receivable and other receivables increased to HK$351,028 thousand, with the Group offering credit periods of 90 to 180 days Total Accounts Receivable and Other Receivables | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total accounts receivable and other receivables | 351,028 | 304,602 | +15.2% | - The Group offers a 90-day credit period to piped natural gas and transmission service customers, and a 180-day credit period to engineering and installation service customers[44] Aging Analysis of Accounts Receivable | Aging | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | 0-90 days | 88,075 | 65,725 | | 91-180 days | 5,249 | 20,059 | | 181-365 days | 35,033 | 27,778 | | Over 365 days | 201,738 | 196,293 | | Total | 330,095 | 309,855 | Share Capital As of June 30, 2025, the company's total share capital decreased to HK$258,292 thousand, primarily due to the redemption of some redeemable preference shares Share Capital Composition | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Ordinary shares (issued and fully paid) | 138,325 | 138,325 | 0% | | Redeemable preference shares (authorized, issued and fully paid) | 119,967 | 144,000 | -16.7% | | Total | 258,292 | 282,325 | -8.5% | Accounts Payable and Other Payables As of June 30, 2025, total accounts payable and other payables amounted to HK$1,226,107 thousand, a slight increase from the end of 2024 Total Accounts Payable and Other Payables | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Accounts payable and other payables | 1,226,107 | 1,204,412 | +1.8% | Aging Analysis of Accounts Payable | Aging | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | 0-90 days | 113,751 | 174,303 | | 91-180 days | 64,790 | 51,766 | | 181-365 days | 124,697 | 101,772 | | Over 365 days | 358,255 | 319,469 | | Total | 661,493 | 647,310 | Borrowings As of June 30, 2025, total borrowings increased to HK$3,706,434 thousand, with a significant rise in current borrowings increasing short-term repayment pressure Total Borrowings and Composition | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total non-current borrowings | 1,849,470 | 2,258,172 | -18.1% | | Total current borrowings | 1,856,964 | 1,071,352 | +73.3% | | Total Borrowings | 3,706,434 | 3,329,524 | +11.3% | - In April 2025, the company fully repaid the RMB tranche of its syndicated loan, approximately HK$238 million, with the remaining USD tranche due in June 2026[49] - Secured bank borrowings are guaranteed by the charging rights of certain subsidiaries and certain accounts receivable, while other borrowings are secured by the equity of a subsidiary and natural gas pipeline assets with a net book value of approximately HK$348 million[51] Deferred Income As of June 30, 2025, total deferred income was HK$142,627 thousand, comprising government grants and construction project subsidies to be recognized over the assets' useful lives Details of Deferred Income | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Government grants | 52,260 | 57,433 | -9.0% | | Construction project subsidies | 90,367 | 87,832 | +2.9% | | Total | 142,627 | 145,265 | -1.8% | - Government grants and construction project subsidies will be credited to profit or loss on a straight-line basis over the 30-year estimated useful life of the related gas pipeline assets[52] Deferred Income Tax As of June 30, 2025, the net deferred tax asset was HK$26,617 thousand and the net deferred tax liability was HK$7,047 thousand, arising from various temporary differences Deferred Tax Assets and Liabilities | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Deferred tax assets | 51,905 | 53,375 | -2.8% | | Set-off against deferred tax liabilities | (25,288) | (22,602) | +11.9% | | Net deferred tax assets | 26,617 | 30,773 | -13.5% | | Deferred tax liabilities | 32,335 | 34,866 | -7.3% | | Set-off against deferred tax assets | (25,288) | (22,602) | +11.9% | | Net deferred tax liabilities | 7,047 | 12,264 | -42.6% | Commitments As of June 30, 2025, the Group had capital commitments that were contracted but not provided for - As of June 30, 2025, the Group had capital commitments that were contracted but not provided for[55] Related Party Transactions The Group engaged in numerous transactions with entities controlled by its major shareholders, TEDA and Sinopec, and other related parties in the ordinary course of business - The Company's largest ultimate shareholder is TEDA (42.18% holding), and the second-largest is Sinopec (29.52% holding)[57] Transactions with Related Parties (H1 2025) | Transaction Type | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Piped natural gas sales | 196,975 | 197,629 | -0.3% | | Engineering construction and natural gas pipeline installation services | 2,554 | 2,783 | -8.3% | | Natural gas procurement | 460,532 | 990,910 | -53.5% | | Purchase of gasoline and others | 10,593 | 787 | +1245.9% | | Interest expense (paid to Sinopec-controlled entities) | 6,424 | 6,510 | -1.3% | | Other service fees | 7,900 | 8,029 | -1.6% | Balances with Related Parties (as of June 30, 2025) | Balance Type | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Accounts receivable and other receivables | 11,603 | 11,566 | +0.3% | | Prepayments | 24,404 | 47,224 | -48.3% | | Accounts payable and other payables | 11,054 | 8,201 | +34.8% | | Contract liabilities | 10,652 | 16,412 | -35.1% | | Borrowings (from Sinopec-controlled entities) | 328,740 | 319,354 | +2.9% | - The Group conducts various transactions with other state-controlled entities in China on terms comparable to those with non-state-controlled entities[71][72][74] Key Management Personnel Remuneration | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Fees | 1,328 | 1,275 | +4.2% | | Remuneration, share options and other allowances | 1,798 | 2,460 | -26.9% | | Retirement benefits | 130 | 124 | +4.8% | Business Review Piped Natural Gas Sales Affected by a warm winter and slow economic recovery, the Group's total gas sales volume fell 14% to 1.14 billion cubic meters, leading to a 17% YoY revenue decline - In H1 2025, China's apparent natural gas consumption decreased by 0.9% YoY, while the Group's total gas sales volume fell by 14% to 1.14 billion cubic meters[76] Piped Natural Gas Sales Revenue | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Piped natural gas sales revenue | 2,741,373 | 3,295,229 | -17% | Engineering Construction and Natural Gas Pipeline Installation Services Revenue from engineering and installation services decreased by 25% YoY to HK$124,976 thousand due to the slow recovery of China's real estate market - Impacted by the slow recovery of China's real estate market, revenue from engineering construction and natural gas pipeline installation services decreased by 25% YoY to HK$124,976 thousand[77] - The Group's total user base grew by 1% to 2.47 million households, and the urban medium-pressure gas pipeline network expanded by 38 km to approximately 4,014 km[77] Natural Gas Pipeline Transmission Services For the six months ended June 30, 2025, the Group's gas transmission volume was approximately 311,520,000 cubic meters, with revenue declining 16% YoY to HK$27,099 thousand Natural Gas Pipeline Transmission Services Revenue | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Natural gas pipeline transmission services revenue | 27,099 | 32,391 | -16% | - Natural gas, as a clean and efficient energy source, plays a key role in addressing environmental pollution and transitioning to sustainable energy systems, aligning with China's green energy initiatives[78] Value-added Services Revenue from value-added services grew by 7% YoY to HK$37,670 thousand, driven by strong growth in sales of gas appliances, maintenance, and insurance agency services Breakdown of Value-added Services Revenue | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total value-added services revenue | 37,670 | 35,254 | +7% | | Gas appliance sales revenue | 9,931 | 7,167 | +39% | | Minor installation services revenue | 18,464 | 20,652 | -11% | | Maintenance services revenue | 4,177 | 3,195 | +31% | | Insurance agency services revenue | 5,098 | 4,240 | +20% | Real Estate Business The Group holds a commercial land plot in Tianjin Airport Economic Area and plans to sell the property under construction to focus on its core gas business - The Group holds a commercial land plot of approximately 15,899.6 square meters in the Tianjin Airport Economic Area with a 40-year land use right from December 31, 2009[80] - In line with its strategic focus on the gas business, management plans to sell the property under construction and has engaged agents and potential buyers[80] Outlook Market Environment and Trends China's natural gas market was weak in H1 2025, but the Group's Q2 sales volume grew 13% YoY, and supportive government policies are expected to aid margin recovery for city gas enterprises - In H1 2025, China's natural gas market was weak, with apparent consumption decreasing by 0.9% YoY[81] - The Group's total gas sales volume fell 14% in H1, but rose 13% YoY in Q2, indicating strong underlying growth potential despite the impact of a warm winter[81] - China's real estate market is recovering slowly, but key indicators are stabilizing, suggesting a return to optimism is expected[82] - Government initiatives promoting cost pass-through mechanisms for residential gas will help city gas enterprises recover gross margins and optimize pricing linkage[82] Business Development Strategy The Group will pursue a diversified gas sourcing strategy, deepen partnerships with suppliers, and accelerate the development of value-added services to create a new profit growth engine - The Group will adhere to a diversified gas sourcing strategy, strengthening cooperation with major upstream suppliers to ensure supply security and stability[83] - Value-added services have become a core business, with revenue and gross profit up 7% YoY in H1, driven by a 39% increase in "Tai Yue Jia" gas appliance sales revenue[84] - The Group is expanding its value-added services by enriching product categories, launching kitchen renovation services, and planning to complete an e-commerce platform in H2[84] - A government notice promoting home and kitchen appliance "renewal" is expected to boost the growth of value-added services[84] Financing Strategy Through diversified financing channels and structural optimization, the Group reduced its comprehensive financing rate to 4.67% in H1 2025, resulting in a HK$26.87 million YoY decrease in interest expenses - The Group effectively controlled loan interest rates and reduced overall financing costs through diversified financing channels and structural optimization[85] Comprehensive Financing Rate and Interest Expense | Indicator | H1 2025 | End of 2024 | | :--- | :--- | :--- | | Comprehensive financing rate | 4.67% | 5.29% (estimated) | | YoY decrease in interest expense | HK$26.87 million | - | H2 Outlook The Group will focus on stable growth in its city gas business, accelerate value-added services, and advance integrated energy projects to transform into an integrated energy service provider - In H2, China's natural gas market may face growing domestic supply while LNG imports are constrained by high international prices and weak demand[86] - The Group will ensure stable growth in its city gas business, accelerate the development of value-added services, and expedite the implementation of integrated energy demonstration projects to transform into an integrated energy service provider[86] - The company is confident in achieving stable and restorative profit growth in 2025, creating sustainable returns for shareholders[86] Financial Review Gross Profit Margin In H1 2025, the consolidated gross profit margin was 10.6%, an increase from 9.7% in the prior year period, primarily due to improved margins from piped natural gas sales Consolidated Gross Profit and Gross Profit Margin | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit | 310,051 | 343,366 | -10% | | Consolidated Gross Profit Margin | 10.6% | 9.7% | +0.9 p.p. | - The increase in consolidated gross profit margin was mainly due to the improved gross profit margin of piped natural gas sales[87] Administrative Expenses Administrative expenses for H1 2025 were approximately HK$90 million, an increase of about HK$8 million or 10% compared to the same period last year Administrative Expenses | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 90,086 | 81,603 | +10% | Profit Attributable to Owners of the Company For H1 2025, profit attributable to owners of the Company was approximately HK$173 million, a 3% YoY increase, mainly due to higher other income and lower finance costs Profit Attributable to Owners of the Company | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 172,815 | 167,924 | +3% | - The increase in profit was primarily due to higher other income and reduced finance costs[89] Basic Earnings Per Share Basic earnings per share for H1 2025 was 12.54 HK cents, an increase of 0.13 HK cents compared to the same period last year Basic Earnings Per Share | Indicator | H1 2025 (HK cents) | H1 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share | 12.54 | 12.41 | +0.13 cents | Capital Liquidity and Financial Resources The Group is financed through operating cash flows and borrowings, with total borrowings increasing to HK$3,706,434 thousand, a current ratio of 0.29, and a gearing ratio of 58% - The Group finances its capital liquidity needs primarily through cash flows from operating activities and interest-bearing bank loans and other borrowings[91] Capital Liquidity Indicators | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total borrowings | 3,706,434 | 3,329,524 | +11.3% | | Cash and bank deposits | 391,851 | 415,125 | -5.6% | | Current assets | 1,056,238 | 1,121,309 | -5.8% | | Current ratio | 0.29 | 0.37 (estimated) | -0.08 | | Gearing ratio | 58% | 56% | +2 p.p. | - The company is reviewing existing loans due in 2025 and plans to negotiate with potential financiers for refinancing at more competitive rates[92] Borrowing Structure As of June 30, 2025, total borrowings were HK$3,706,434 thousand, with 82% denominated in RMB, 75% at floating rates, and short-term borrowings totaling HK$1,856,964 thousand - As of June 30, 2025, total borrowings were HK$3,706,434 thousand, with 18% denominated in USD and 82% in RMB[93] - 25% of borrowings are at fixed interest rates and 75% are at floating rates, with short-term borrowings and the current portion of long-term borrowings totaling HK$1,856,964 thousand[93] Directors' Opinion on Adequacy of Working Capital Despite net current liabilities of approximately HK$2,536,894 thousand, the Board believes the Group will have sufficient working capital to meet its financial obligations for the next twelve months - Although current liabilities exceeded current assets by approximately HK$2,536,894 thousand as of June 30, 2025, the Board is of the opinion that the Group will have sufficient working capital to meet its financial obligations for the next twelve months[94] Risks Arising from Exchange Rate Fluctuations The Group faces foreign exchange risk from its HKD and USD denominated deposits and borrowings, recording a net exchange gain of approximately HK$11 million in H1 2025, and currently has no hedging policy - The Group is exposed to foreign exchange risk as some deposits and bank borrowings are denominated in HKD and USD, resulting in a net exchange gain of approximately HK$11 million from financing activities in H1 2025[95] - The Group currently does not have a foreign currency hedging policy but management monitors the risk and will consider hedging if necessary[95] Treasury Policy For the six months ended June 30, 2025, the Group adopted a prudent financial management approach, focusing on careful capital and cash flow management to maintain a strong liquidity position - The Group adopts a prudent financial management approach, focusing on careful capital and cash flow management to maintain a strong capital liquidity position[96] Pledge of Group's Assets As of June 30, 2025, a 50% equity interest in Tianjin Clean Energy and pipeline network assets with a net book value of approximately HK$347,729 thousand were pledged as security for borrowings - As of June 30, 2025, a 50% equity interest in Tianjin Clean Energy, valued at approximately HK$658,353 thousand, was pledged as security for other borrowings[97] - Pipeline network and equipment with a net book value of approximately HK$347,729 thousand were also pledged as collateral for other borrowings[97] Other Information Dividend Policy The Board approved and paid the final dividend for 2024 but did not declare an interim dividend for the first half of 2025 Final Dividend The Board proposed a final dividend of HK$0.076 per ordinary share for 2024, totaling approximately HK$104,428 thousand, which was approved on May 9, 2025, and paid on June 10, 2025 - The 2024 final dividend of HK$0.076 per ordinary share, totaling approximately HK$104,428 thousand, was approved on May 9, 2025, and paid on June 10, 2025[98] Interim Dividend The Board of Directors did not declare an interim dividend for the first half of 2025 - The Board of Directors did not declare the payment of an interim dividend for the first half of 2025[99] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[100] Significant Investments For the six months ended June 30, 2025, the Company did not hold any significant investments - For the six months ended June 30, 2025, the Company did not hold any significant investments[101] Significant Acquisitions and Disposals of Subsidiaries and Associates For the six months ended June 30, 2025, the Group did not conduct any significant acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, the Group did not conduct any significant acquisitions or disposals of subsidiaries and associates[102] Significant Events After the End of the Financial Period As of the date of this results announcement, no significant events affecting the Group have occurred since the end of the financial period - As of the date of this results announcement, no significant events affecting the Group have occurred since the end of the financial period[103] Future Plans for Significant Investments and Capital Assets The Group currently has no future plans for significant investments or capital assets - The Group currently has no future plans for significant investments or capital assets[104] Employees and Remuneration Policy As of June 30, 2025, the Group had 1,740 employees and is committed to providing competitive remuneration, a safe work environment, and training opportunities Number of Employees As of June 30, 2025, the Group had a total of 1,740 employees, a slight decrease from the end of 2024 Number of Employees and Salaries | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of employees | 1,740 | 1,746 | | Salaries and wages (H1) | HK$139 million | HK$121 million (H1 2024) | Remuneration Policy The Group offers competitive remuneration packages based on market rates and employee performance, along with discretionary bonuses, training opportunities, and comprehensive benefits - The Group provides competitive remuneration packages determined by market rates, employee performance, qualifications, and experience, with discretionary bonuses[107] - The Group offers training opportunities and benefits including pension, unemployment, work-related injury, medical, and maternity insurance, as well as a housing provident fund[107] - The Company adopted a share option scheme on January 13, 2021, as an incentive and reward for directors, senior management, and eligible employees[107] Corporate Governance The Group has an Audit Committee and complies with the code of conduct for directors' securities transactions and the Corporate Governance Code Audit Committee The Audit Committee, comprising four independent non-executive directors, has reviewed the Group's unaudited interim consolidated results - The Audit Committee consists of four independent non-executive directors, with the chairman Mr. Lau Siu Ki and Dr. Tang Lai Wah being qualified accountants[108] - The Audit Committee has reviewed the Group's unaudited consolidated results for the period and provided advice and comments on the interim report[108] Code of Conduct for Directors' Securities Transactions The Company has adopted a code of conduct for directors' securities transactions that is no less exacting than the Model Code in the Listing Rules, and all directors have confirmed compliance - The Company has adopted a code of conduct for directors' securities transactions with terms no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all directors have confirmed compliance during the period[109] Corporate Governance Code The Company has complied with the applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period - The Company has complied with the applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period[110] Purchase, Sale and Redemption of Listed Securities During the period, the Company repurchased 3,138,000 ordinary shares for approximately HK$3,417,520 and resolved to redeem 480,650 redeemable preference shares for HK$24,032,500 Details of Share Repurchases in H1 2025 | Month of Purchase | Number of Shares Repurchased (thousands) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | | January | 816 | 918,080 | | March | 1,060 | 1,155,020 | | April | 806 | 875,820 | | May | 256 | 262,620 | | June | 200 | 205,980 | | Total | 3,138 | 3,417,520 | - The share repurchases were intended to increase the net asset value per share and/or earnings per share of the Company, and the repurchased shares are held as treasury shares[111] - The Board resolved to redeem 480,650 redeemable preference shares from TEDA HK at HK$50 per share, for a total of HK$24,032,500, with the redemption amount yet to be paid[111] Board of Directors As of the announcement date, the Board of Directors comprises three executive directors, three non-executive directors, and four independent non-executive directors - As of the announcement date, the Board consists of three executive directors (Zhang Wang, Wang Xin, Gao Liang), three non-executive directors (Zhang Changliang, Shen Hongliang, Xia Binhui), and four independent non-executive directors (Ip Shing Hing, Lau Siu Ki, Lo Man Yue, Tang Lai Wah)[113]