汇舸环保(02613) - 2025 - 中期业绩

Company Overview Overview of the Reporting Period Shanghai Huige Environmental Technology Group Co., Ltd. (the Group) faced severe challenges in H1 2025, with significant declines in both revenue and profit, and the Board does not recommend an interim dividend Performance Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143.5 | 336.5 | -57.4% | | Profit | 6.1 | 82.1 | -92.6% | | Basic Earnings Per Share | 0.18 RMB | 2.75 RMB | -93.5% | - The Board does not recommend an interim dividend for the reporting period[3] Company Background The Group, established in China in 2017 and restructured in 2022, listed its H-shares on the Hong Kong Stock Exchange in January 2025, primarily providing marine environmental solutions and services - The company was established in China on May 31, 2017, and restructured into a joint-stock company on December 28, 2022[24] - The company's H-shares were listed on the Hong Kong Stock Exchange on January 9, 2025[24] - The Group is a supplier of marine desulfurization systems, marine energy-saving devices, marine clean energy supply systems, and marine services[25] Operating Performance Analysis Geographical Market Analysis The Group's H1 2025 revenue from both mainland China and overseas significantly declined due to long order cycles, geopolitical tensions, tariff fluctuations, and tight shipyard schedules Revenue by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 78,769 | 191,771 | -58.9% | 54.9% | 57.0% | | Overseas | 64,717 | 144,695 | -55.3% | 45.1% | 43.0% | | Total | 143,486 | 336,466 | -57.4% | 100.0% | 100.0% | - The decline in mainland China revenue is primarily due to the longer delivery cycles of most new orders received in early 2025, which have not yet been completed and recognized[4] - The decrease in overseas revenue is mainly attributed to geopolitical tensions, recent tariff fluctuations, and rising dry dock fees during peak shipyard schedules, leading overseas shipowners to delay non-urgent vessel modifications[5] Business Segment Analysis The Group's revenue performance varied across business segments, with significant declines in marine desulfurization systems and energy-saving devices, while clean energy supply systems saw substantial growth and marine services also decreased Revenue by Business Segment | Business Segment | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Marine Desulfurization Systems | 45,173 | 204,402 | -77.9% | 31.5% | 60.7% | | Marine Energy-Saving Devices | 7,688 | 22,557 | -65.9% | 5.4% | 6.7% | | Marine Clean Energy Supply Systems | 36,316 | 13,288 | 173.3% | 25.3% | 3.9% | | Marine Services | 54,309 | 96,219 | -43.6% | 37.8% | 28.7% | | Total | 143,486 | 336,466 | -57.4% | 100.0% | 100.0% | - Revenue from marine desulfurization systems decreased by 77.9%, mainly due to new shipbuilding projects being in the installation and commissioning phase without final delivery, and rising dry dock fees in Chinese shipyards reducing shipowners' willingness to undertake modifications[6] - Revenue from marine clean energy supply systems significantly increased by 173.3%, benefiting from global growth in new energy shipbuilding orders and the company's R&D investments and cost reductions in clean energy technologies[9] Customer Analysis The Group's revenue remains highly concentrated among a few major customers, but revenue from Customer D saw significant growth, reflecting the company's strategy to mitigate concentration risk and diversify revenue streams Revenue by Customer | Customer | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Customer A | 39,316 | 66,876 | -41.2% | 27.4% | 19.9% | | Customer B | 23,522 | 73,237 | -67.9% | 16.4% | 21.8% | | Customer C | 19,452 | 79,292 | -75.5% | 13.6% | 23.6% | | Customer D | 16,465 | 11 | 149,581.8% | 11.5% | 0.0% | | Other Customers | 44,731 | 117,050 | -61.8% | 31.1% | 34.7% | | Total | 143,486 | 336,466 | -57.4% | 100.0% | 100.0% | - Revenue from Customer D significantly increased from RMB 11 thousand in H1 2024 to RMB 16.5 million in H1 2025[11] - The company aims to reduce customer concentration risk by developing emerging markets, enriching its product portfolio, and enhancing brand awareness[11] R&D Progress The Group continues its R&D investments, achieving new advancements in marine energy-saving devices and clean energy supply systems, including the successful development of the Stirling reliquefaction system and optimization of the dual-alkali carbon capture system, alongside securing new patents - The Stirling reliquefaction system was successfully developed, utilizing the inverse Stirling cycle principle to prevent overpressure risks in storage tanks and reduce greenhouse gas emissions[13] - The dual-alkali carbon capture system has entered its second phase of trials, focusing on acquiring more comprehensive data and experience for solid-liquid separation solutions[15] - During the reporting period, 6 new patents were successfully granted (including 3 invention patents), bringing the cumulative total to 86 patents (including 45 invention patents)[14] Market Outlook Despite short-term geopolitical and tariff challenges, the Group remains strategically focused on the sustainable development of the shipping industry, benefiting from long-term demand for IMO regulations and ESG solutions, with significant growth in backlog orders and plans to consolidate its leadership through technological advantages and market penetration - The Group's total backlog orders amounted to RMB 861.7 million, an increase of 47.8% from RMB 583.1 million as of December 31, 2024[16] - The long-term demand trend for marine environmental, social, and governance (ESG) solutions remains unchanged, with mature clean energy technologies and the exemplary role of leading shipping companies benefiting the Group's growth[17] - The company plans to deepen its penetration into regulation-driven markets like Europe and leverage the capital advantages from its H-share listing (end-of-period cash reserves of RMB 296.7 million) to continue strategic R&D investments (this period's RMB 9.6 million)[18][19] Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's revenue and profit significantly declined in H1 2025, with a corresponding decrease in gross profit and earnings per share, reflecting challenging operating conditions Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 143,486 | 336,466 | | Cost of Sales | (99,050) | (193,684) | | Gross Profit | 44,436 | 142,782 | | Profit for the Period | 6,061 | 82,082 | | Profit for the Period Attributable to Owners of the Company | 6,945 | 82,494 | | Basic Earnings Per Share (RMB) | 0.18 | 2.75 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets increased, primarily driven by higher financial assets, cash and cash equivalents, and trade and other receivables within current assets, while total equity decreased Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 106,525 | 67,080 | | Current Assets | 716,423 | 386,539 | | Current Liabilities | 138,843 | 293,740 | | Net Current Assets | 247,696 | 422,683 | | Total Equity | 284,232 | 487,823 | | Non-current Liabilities | 30,544 | 41,385 | - Financial assets at fair value through profit or loss within current assets increased from RMB 19,768 thousand to RMB 137,896 thousand, and cash and bank balances increased from RMB 133,402 thousand to RMB 296,677 thousand[22] - Trade and other payables increased from RMB 87,872 thousand to RMB 127,235 thousand, primarily influenced by dividends payable[23] Notes to the Financial Statements General Information This section outlines the company's establishment, restructuring, listing history, and primary business scope, confirming that interim financial information is presented in RMB and is unaudited - The company was established in China on May 31, 2017, and restructured into a joint-stock company on December 28, 2022[24] - The company's H-shares were listed on the Hong Kong Stock Exchange on January 9, 2025[24] - The Group primarily provides marine desulfurization systems, marine energy-saving devices, marine clean energy supply systems, and marine services[25] Basis of Preparation The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules[26] Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, and amendments to International Financial Reporting Standards have been applied without significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value[27] - IAS 21 (Amendment) "Lack of Exchangeability" was first applied during this interim period, but it had no significant impact on the financial position or performance[28] Revenue The Group's H1 2025 revenue significantly decreased, mainly due to reduced revenue from marine desulfurization systems and energy-saving devices, though marine clean energy supply systems revenue grew substantially, with all revenue recognized at a point in time Revenue by Service Type | Service Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Marine Desulfurization Systems | 45,173 | 204,402 | | Marine Energy-Saving Devices | 7,688 | 22,557 | | Marine Clean Energy Supply Systems | 36,316 | 13,288 | | Marine Services | 54,309 | 96,219 | | Total | 143,486 | 336,466 | Revenue by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 78,769 | 191,771 | | Overseas | 64,717 | 144,695 | | Total | 143,486 | 336,466 | - All revenue is recognized at a point in time[30] Segment Information The Group operates as a single operating segment, encompassing marine desulfurization, energy-saving, clean energy solutions, and global marine services, with non-current assets primarily concentrated in mainland China - The chief operating decision-maker considers the Group to have only one operating segment, which includes marine desulfurization solutions, marine energy-saving and carbon reduction solutions, marine clean energy solutions, and global marine services[31] Non-current Assets by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 63,519 | 65,340 | | Overseas | 565 | 168 | | Total | 64,084 | 65,508 | Other Income The Group's other income primarily comprises interest income and government grants, with government grants significantly increasing during the reporting period Other Income | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 2,794 | 2,435 | | Government Grants | 2,376 | 185 | | Other | 3 | 11 | | Total | 5,173 | 2,631 | - Government grants are unconditional, approved by local Chinese government authorities, and recognized upon receipt of payment[34] Other Gains and Losses The Group's other gains and losses shifted from a gain in H1 2024 to a loss in H1 2025, primarily due to net foreign exchange losses Other Gains and Losses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Foreign Exchange (Loss) Gain | (3,175) | 5,470 | | Fair Value Gain on Financial Assets at Fair Value Through Profit or Loss | 1,882 | – | | Loss on Disposal of Equipment | – | (121) | | Other | (4) | (4) | | Total | (1,297) | 5,345 | Profit Before Tax for the Period This section details the expenses deducted from (or included in) profit before tax for the period, including depreciation, amortization, and staff costs, reflecting the composition of various operating expenses Items Deducted from (or Included in) Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 2,148 | 2,290 | | Depreciation of Right-of-Use Assets | 1,174 | 764 | | Amortization of Other Intangible Assets | 118 | 8 | | Auditor's Remuneration | 1,190 | 894 | | Directors' and Supervisors' Remuneration | 7,035 | 8,472 | | Staff Costs (excluding changes in capitalized amounts) | 18,997 | 25,671 | | Amortization of Contract Costs | 11,669 | 18,982 | | Expenses Recognized as Cost of Inventories (excluding inventory write-downs) | 93,190 | 190,325 | | Inventory (Reversal) Write-down | (90) | 394 | Income Tax Expense The Group's income tax expense primarily consists of China corporate income tax, Singapore income tax, Hong Kong profits tax, and Portugal income tax, with a significant reduction in total income tax expense during the reporting period Income Tax Expense | Tax Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | China Corporate Income Tax | 26 | 11,314 | | Singapore Income Tax | 504 | 827 | | Hong Kong Profits Tax | 499 | 305 | | Portugal Income Tax | 18 | – | | Deferred Tax | (595) | 1,290 | | Total | 452 | 13,736 | Earnings Per Share Basic earnings per share attributable to owners of the company was RMB 0.18, a significant decrease from the prior year, with no diluted earnings presented as performance conditions for potential ordinary shares were not met Earnings Per Share | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company | 6,945 | 82,494 | | Weighted Average Number of Ordinary Shares Issued | 39,558 | 30,000 | | Basic Earnings Per Share (RMB) | 0.18 | 2.75 | - As of June 30, 2025, the performance conditions for share options had not been met, so the exercise of share options was not assumed in calculating diluted earnings per share[40] Dividends The final dividend for the year ended December 31, 2024, was paid in July 2025, and no interim dividend is recommended for the current interim period - The final dividend of RMB 1.5 per ordinary share, totaling RMB 60 million, for the year ended December 31, 2024, was paid in July 2025[42] - The Board does not recommend an interim dividend for the six months ended June 30, 2025[80] Trade and Other Receivables The Group's total trade and other receivables significantly increased, primarily driven by growth in prepayments and deposits for the acquisition of active vessels, while trade receivables decreased Trade and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (net of allowance) | 48,606 | 80,220 | | Prepayments | 146,190 | 31,571 | | Bills Receivable | 5,834 | 9,262 | | Recoverable VAT | 1,734 | 1,413 | | Letter of Credit and Bank Guarantee Deposits | 4,976 | 13,934 | | Deposits for Acquisition of Active Vessels | 39,372 | – | | Total | 249,281 | 165,617 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 21,750 | 47,232 | | 31 to 90 days | 5,405 | 30,035 | | 91 to 180 days | 4,781 | 2,775 | | 181 to 365 days | 16,615 | 151 | | Over 1 year | 55 | 27 | | Total | 48,606 | 80,220 | - The Group typically grants customers a credit period of 30 days or an agreed period[43] Trade and Other Payables The Group's total trade and other payables increased, primarily due to the recognition of dividends payable, with the aging structure of trade payables indicating a higher proportion of short-term liabilities Trade and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables — Third Parties | 43,305 | 40,822 | | Bills Payable | 9,265 | 14,862 | | Accrued Wages | 3,257 | 7,608 | | Other Payables — Third Parties | 7,890 | 17,627 | | Accrued Expenses | 3,253 | 5,776 | | Dividends Payable | 60,000 | – | | Other Taxes Payable | 265 | 1,177 | | Total | 127,235 | 87,872 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 90 days | 32,025 | 8,986 | | 91 to 180 days | 4,227 | 19,394 | | 181 to 365 days | 3,403 | 9,204 | | Over 365 days | 3,650 | 3,238 | | Total | 43,305 | 40,822 | - The Group's average credit period for purchases of goods and services is 90 days[46] Financial Review and Analysis Revenue Analysis The Group's H1 2025 revenue significantly decreased by 57.4%, primarily due to geopolitical factors, tariff fluctuations, customer shipyard schedule adjustments, and long order delivery cycles Revenue Performance | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143.5 | 336.5 | -57.4% | - The decrease in revenue is mainly due to geopolitical tensions and recent tariff fluctuations impacting China's shipbuilding and shipping industries[48] - Most new orders have longer delivery cycles and have not yet been completed and recognized as revenue[48] Gross Profit and Gross Margin Analysis The Group's gross profit and gross margin both significantly declined, primarily due to reduced gross profit from marine desulfurization systems, energy-saving devices, and marine services, coupled with an increased revenue share from marine clean energy supply systems and marine services, leading to an overall gross margin decrease Gross Profit and Gross Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 44.4 | 142.8 | -68.9% | | Gross Margin | 31.0% | 42.4% | -11.4 percentage points | - Gross profit from marine desulfurization systems decreased from RMB 107.2 million to RMB 16.1 million[49] - The decline in gross margin is partly due to the increased revenue contribution from marine clean energy supply systems and marine services, where the operating cost ratio is higher as these businesses have not yet achieved full self-production[50] Other Income Analysis The Group's other income increased by 100% year-on-year, primarily driven by a substantial increase in government grants aimed at incentivizing operating activities Other Income | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 5.2 | 2.6 | 100.0% | | Government Grants | 2.4 | 0.2 | 1100.0% | - The increase in government grants is due to more subsidies awarded by local Chinese government authorities to incentivize the Group's operating activities[51] Other Gains and Losses Analysis The Group's other gains and losses shifted from a gain in the prior year to a loss in the reporting period, primarily due to foreign exchange losses resulting from the depreciation of USD and HKD against RMB Other Gains and Losses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Other Gains and Losses | (1.3) (Loss) | 5.3 (Gain) | - A net foreign exchange loss of RMB 3.2 million was recorded during the reporting period, compared to a net foreign exchange gain of RMB 5.5 million in the prior year[52] - This is mainly due to the depreciation of the USD and HKD against the RMB during the reporting period, leading to significant exchange losses on monetary assets denominated in USD/HKD[52] Expense Analysis The Group's various expenses generally decreased during the reporting period, with distribution and selling expenses seeing the largest reduction, while finance costs increased Distribution and Selling Expenses Distribution and selling expenses significantly decreased by 52.9%, primarily due to a notable reduction in sales commissions Distribution and Selling Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution and Selling Expenses | 9.7 | 20.6 | -52.9% | | Sales Commissions | 4.4 | 14.8 | -70.3% | Administrative Expenses Administrative expenses slightly decreased by 2.1% Administrative Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 23.0 | 23.5 | -2.1% | Research and Development Expenses Research and development expenses slightly decreased by 5.0% Research and Development Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 9.6 | 10.1 | -5.0% | Impairment Loss Under Expected Credit Loss Model Impairment loss under the expected credit loss model shifted from a loss to a gain, primarily due to a reversal of impairment loss resulting from a decrease in trade receivables balance Impairment Loss (Gain) | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Impairment Loss (Gain) | 1.7 (Gain) | (0.3) (Loss) | - This is mainly due to a decrease in the balance of trade receivables, leading to a reversal of previously recognized impairment losses on trade receivables[56] Finance Costs Finance costs significantly increased by 200%, primarily due to an increase in the average balance of bank borrowings Finance Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 1.2 | 0.4 | 200.0% | - The increase in finance costs is mainly due to a higher average balance of bank borrowings during the reporting period compared to H1 last year[57] Income Tax Expense Analysis Income tax expense significantly decreased by 96.4%, primarily due to a reduction in profit before tax Income Tax Expense | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 0.5 | 13.7 | -96.4% | - The decrease in income tax expense is mainly due to a lower profit before tax in H1 2025 compared to H1 2024[58] Profit for the Period The Group's profit for the period significantly decreased by 92.6% to RMB 6.1 million, reflecting a substantial decline in overall operating performance Profit for the Period | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 6.1 | 82.1 | -92.6% | Balance Sheet Items Analysis The Group's balance sheet items showed several changes during the reporting period, with significant increases in inventories, financial assets, cash and cash equivalents, and trade and other payables, reflecting business expansion and financing activities Property, Plant and Equipment Total property, plant and equipment slightly decreased by 3.6%, primarily due to depreciation recognized during the reporting period Property, Plant and Equipment | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 45.1 | 46.8 | -3.6% | - The decrease is mainly due to depreciation recognized during the reporting period[60] Inventories Total inventories significantly increased by 89.5%, primarily due to the rapid growth in new and backlog orders, leading to substantial increases in raw materials, work-in-progress, and finished goods Inventories | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Finished Goods | 43,891 | 24,177 | | Raw Materials and Consumables | 3,898 | 1,143 | | Work-in-Progress | 6,423 | 3,329 | | Total | 54,212 | 28,649 | - The increase in inventories is mainly due to the rapid growth in new orders and backlog orders during the reporting period[63] Trade and Other Receivables Total trade and other receivables increased by 50.5%, primarily driven by growth in prepayments and deposits for the acquisition of active vessels, while trade receivables and letters of credit and bank guarantee deposits decreased Trade and Other Receivables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 249.3 | 165.6 | 50.5% | - Prepayments increased from RMB 31.6 million to RMB 146.2 million[66] - Deposits of RMB 39.4 million were paid for the acquisition of active vessels during the reporting period[66] Financial Assets at Fair Value Through Profit or Loss Financial assets significantly increased by 596.5%, primarily comprising highly liquid, low-risk wealth management products subscribed by the Group Financial Assets at Fair Value Through Profit or Loss | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Financial Assets | 137.9 | 19.8 | 596.5% | - These financial assets refer to wealth management products subscribed by the Group from independent third parties, including US Treasury bills and other cash and cash equivalents, which are principal-protected and yield-guaranteed[65] Restricted Bank Deposits Restricted bank deposits decreased by 28.0%, mainly due to the release of deposits upon the expiry of certain bank guarantees Restricted Bank Deposits | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Restricted Bank Deposits | 5.4 | 7.5 | -28.0% | - The decrease is mainly due to the release of deposits upon the expiry of certain bank guarantees[67] Cash and Cash Equivalents Cash and cash equivalents significantly increased by 122.4%, primarily attributable to proceeds from the H-share issuance and bank borrowings Cash and Cash Equivalents | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 296.7 | 133.4 | 122.4% | - The increase is mainly attributable to proceeds received from the issuance of the company's H-shares and proceeds from bank borrowings[68] Trade and Other Payables Trade and other payables increased by 44.7%, primarily attributable to dividends payable of RMB 60.0 million Trade and Other Payables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Other Payables | 127.2 | 87.9 | 44.7% | - The increase is mainly attributable to dividends payable of RMB 60.0 million, which were subsequently paid in July 2025[71] Liquidity and Capital Management Liquidity and Financial Resources The Group possesses sufficient working capital, with a significant increase in cash and cash equivalents, primarily benefiting from H-share issuance proceeds and bank borrowings Cash and Cash Equivalents | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 296.7 | 133.4 | 122.4% | - The increase is mainly due to proceeds received from the issuance of the company's H-shares and an increase in proceeds from bank borrowings during the reporting period[72] Order Book As of June 30, 2025, the Group's total backlog orders significantly increased, with marine desulfurization systems and marine services contributing the most to the order value Order Book by Business Segment | Business Segment | June 30, 2025 (Number of Orders) | June 30, 2025 (Contract Value, RMB million) | December 31, 2024 (Number of Orders) | December 31, 2024 (Contract Value, RMB million) | | :--- | :--- | :--- | :--- | :--- | | Marine Desulfurization Systems | 185 | 308.9 | 185 | 140.4 | | Marine Energy-Saving Devices | 44 | 29.1 | 32 | 20.9 | | Marine Clean Energy Supply Systems | 96 | 146.7 | 70 | 148.6 | | Marine Services | 637 | 377.0 | 649 | 273.2 | Debt Position The Group's total debt significantly increased, primarily due to an increase in bank borrowings Debt Position | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Debt | 171.0 | 41.9 | 308.1% | - The increase in debt is mainly due to an increase in bank borrowings[73] Pledged Assets As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[74] 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[76] Material Acquisitions and Disposals During the reporting period, the Group did not undertake any material acquisition or disposal transactions - For the period ended June 30, 2025, the Group did not undertake any material acquisition or disposal transactions[77] Foreign Exchange Risk The Group primarily faces foreign exchange risk from USD-denominated currencies and has established risk management strategies and policies, although a foreign currency hedging policy has not yet been implemented - The Group primarily faces foreign exchange risk from USD-denominated currencies[78] - The Group has not yet established a foreign currency hedging policy but has developed risk management strategies and policies for foreign exchange forward and option contracts[78] Corporate Governance and Employees Employees and Remuneration As of June 30, 2025, the Group's employee count increased, with remuneration packages determined based on job responsibilities, position level, professional experience, and performance Employee Count | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 126 | 111 | +15 | - Remuneration packages are determined with reference to job responsibilities, position level, professional experience, and work performance[79] Interim Dividend The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend an interim dividend for the six months ended June 30, 2025[80] Corporate Governance Code The Group is committed to maintaining high standards of corporate governance and has complied with all code provisions set out in Appendix C1 of the Listing Rules - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules[81] - During the reporting period, the company complied with all code provisions set out in Part 2 of the Corporate Governance Code[81] Standard Securities Trading Code The company has adopted the Standard Securities Trading Code set out in Appendix C3 of the Listing Rules, and all directors and supervisors complied with it during the reporting period - The company has adopted the Standard Securities Trading Code set out in Appendix C3 of the Listing Rules[82] - Upon inquiry, all directors and supervisors confirmed their compliance with the Standard Code throughout the reporting period[82] Measures to Avoid Potential Conflicts of Interest The company has implemented measures to ensure good corporate governance and avoid potential conflicts of interest with controlling shareholders, and independent non-executive directors have confirmed the absence of such conflicts - The company has taken measures to ensure good corporate governance standards and avoid potential conflicts of interest between the Group and its controlling shareholders[83] - The independent non-executive directors have conducted an annual review and confirmed no knowledge of any conflicts of interest between the Group and its controlling shareholders[83] Listing Securities Transactions From the H-share listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - From the listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[84] Review of Interim Results The company's audit committee has reviewed the Group's interim financial information and deemed it compliant with accounting standards, rules, and regulations - The company's audit committee has reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025[85] - The audit committee believes that the interim financial results comply with relevant accounting standards, rules, and regulations, and appropriate disclosures have been made[85] Post-Reporting Period Events and Others Material Events After Reporting Period Subsequent to the reporting period, the Group adopted a restricted share scheme to incentivize eligible participants, which was approved by shareholders, and the company's non-H share equity was approved for delisting from the National Equities Exchange and Quotations system - The Group adopted a restricted share scheme, allowing for the grant of up to 4,000,000 shares to eligible participants, which was approved by shareholders on August 1, 2025[86] - The company's non-H shares were delisted from the National Equities Exchange and Quotations system effective August 27, 2025[88] Publication of Interim Results and Report This announcement has been published on the HKEX and company websites, and the interim report will be dispatched to shareholders and published in due course - This announcement has been published on the HKEX website www.hkexnews.hk and the company's website www.contioceangroup.com[89](index=89&type=chunk) - The company's interim report for the period ended June 30, 2025, will be dispatched to shareholders and published on the HKEX and the company's respective websites in due course[89] Acknowledgement The Board expresses gratitude to all colleagues for their dedication, focus, loyalty, and integrity, as well as to shareholders, customers, banks, and other business partners for their trust and support - The Board expresses its gratitude to all colleagues for their efforts, dedication, loyalty, and integrity, and to all shareholders, customers, banks, and other business partners for their trust and support[90] Board of Directors As of the announcement date, the Board of Directors includes executive directors Mr. Zhou Yang, Mr. Zhao Mingzhu, Mr. Chen Zhiyuan, Mr. Shu Huadong, and Mr. Chen Rui, along with independent non-executive directors Dr. Guan Yanmin, Mr. Zhu Rongyuan, and Ms. Wu Xianqiao - The Board of Directors includes executive directors Mr. Zhou Yang, Mr. Zhao Mingzhu, Mr. Chen Zhiyuan, Mr. Shu Huadong, and Mr. Chen Rui[92] - Independent non-executive directors include Dr. Guan Yanmin, Mr. Zhu Rongyuan, and Ms. Wu Xianqiao[92]