东方电气(01072) - 2025 - 中期业绩

Performance Highlights Total operating revenue and net profit grew double-digit, EPS increased, but no interim dividend is recommended Performance Metrics | Metric | H1 2025 (RMB) | Year-on-year Growth (%) | | :--- | :--- | :--- | | Total Operating Revenue | 38.151 billion yuan | 14.03 | | Net Profit Attributable to Parent Company Shareholders | 1.910 billion yuan | 12.91 | | Earnings Per Share | 0.60 yuan | 11.11 | | New Orders | 65.485 billion yuan | - | - The Board does not recommend an interim dividend[3] Financial Data Consolidated Balance Sheet Total assets and liabilities increased as of June 30, 2025, primarily due to current assets and liabilities, reflecting business expansion Consolidated Balance Sheet Summary | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 156,365,516,952.35 | 142,009,284,851.87 | 10.11 | | Total Current Assets | 109,233,007,187.22 | 93,779,782,264.73 | 16.48 | | Total Non-current Assets | 47,132,509,765.13 | 48,229,502,587.14 | -2.27 | | Total Liabilities | 110,961,852,559.50 | 98,867,036,719.24 | 12.23 | | Total Current Liabilities | 99,545,692,215.46 | 88,912,969,103.87 | 11.96 | | Total Non-current Liabilities | 11,416,160,344.04 | 9,954,067,615.37 | 14.64 | | Total Owners' Equity | 45,403,664,392.85 | 43,142,248,132.63 | 5.24 | Consolidated Income Statement H1 2025 saw significant growth in total operating revenue, net profit, operating profit, and total profit, reflecting strong operating results Consolidated Income Statement Summary | Metric | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | Year-on-year Growth (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 38,150,951,534.17 | 33,457,011,207.05 | 14.03 | | Total Operating Costs | 35,297,964,520.14 | 31,496,571,965.14 | 12.07 | | Operating Profit | 2,506,386,064.16 | 2,110,327,011.43 | 18.77 | | Total Profit | 2,493,970,886.62 | 2,106,680,483.47 | 18.38 | | Net Profit | 2,060,843,811.02 | 1,808,543,831.83 | 13.95 | | Net Profit Attributable to Owners of the Parent Company | 1,909,795,846.06 | 1,691,463,127.79 | 12.91 | | Basic Earnings Per Share | 0.60 | 0.54 | 11.11 | Notes to Financial Statements Financial notes provide context on statement preparation, accounts receivable/payable aging, retained earnings, revenue/cost composition, income tax, and EPS calculation 1. Basis of Preparation of Financial Statements Financial statements are prepared on a going concern basis, adhering to Chinese accounting standards and HKEX rules, and reviewed by the Audit and Risk Committee - Financial statements are prepared on a going concern basis, adhering to Chinese Enterprise Accounting Standards, HKEX Listing Rules, and the Hong Kong Companies Ordinance[14] - The unaudited interim consolidated results have been reviewed by the company's Audit and Risk Committee[3] 2. Accounts Receivable Accounts receivable increased 11.86% to 14.033 billion yuan as of June 30, 2025, with most due within one year and rising bad debt provisions Accounts Receivable Aging | Accounts Receivable Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 1 year | 10,200,421,873.10 | 9,166,698,541.03 | | 1 to 2 years | 2,661,670,703.81 | 2,912,482,204.67 | | 2 to 3 years | 2,229,504,238.98 | 1,573,780,667.10 | | 3 to 4 years | 913,146,125.86 | 709,985,357.44 | | 4 to 5 years | 501,544,472.18 | 454,092,052.84 | | Over 5 years | 1,322,948,541.31 | 1,349,940,684.20 | | Subtotal | 17,829,235,955.24 | 16,166,979,507.28 | | Less: Provision for Bad Debts | 3,796,132,598.52 | 3,621,665,242.31 | | Total | 14,033,103,356.72 | 12,545,314,264.97 | 3. Accounts Payable Accounts payable increased 22.78% to 30.489 billion yuan as of June 30, 2025, with over 87% due within 1 year, indicating short-term payment pressure Accounts Payable Aging | Accounts Payable Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 1 year (inclusive) | 26,789,569,066.29 | 21,233,568,378.41 | | 1-2 years (inclusive) | 1,600,932,313.61 | 1,598,639,709.95 | | 2-3 years (inclusive) | 907,965,838.73 | 897,115,396.62 | | Over 3 years | 1,190,461,458.21 | 1,103,721,536.48 | | Total | 30,488,928,676.84 | 24,833,045,021.46 | 4. Retained Earnings Period-end retained earnings grew to 23.234 billion yuan, driven by increased net profit attributable to parent company owners, after accounting for dividends Retained Earnings Summary | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Retained Earnings at Beginning of Year | 22,690,605,142.05 | 21,337,876,676.79 | | Add: Net Profit Attributable to Owners of the Parent Company for the Period | 1,909,795,846.06 | 2,922,100,908.48 | | Less: Dividends Payable on Ordinary Shares | 1,366,315,211.38 | 1,480,812,259.51 | | Retained Earnings at End of Period | 23,234,085,776.73 | 22,690,605,142.05 | 5. Operating Revenue and Operating Costs H1 2025 total operating revenue was 38.151 billion yuan, costs 31.820 billion yuan, with principal business dominating, and minor contributions from interest and fee income Operating Revenue and Costs by Item | Item | Jan-Jun 2025 Revenue (RMB) | Jan-Jun 2025 Costs/Expenses (RMB) | | :--- | :--- | :--- | | Principal Business | 37,356,037,058.24 | 31,761,317,378.63 | | Other Businesses | 267,590,248.17 | 44,563,749.34 | | Interest Income | 527,283,936.51 | 13,609,163.85 | | Fee and Commission Income | 40,291.25 | 1,007,374.98 | | Total | 38,150,951,534.17 | 31,820,497,666.80 | 6. Income Tax Expense H1 2025 income tax expense rose 45.28% to 433.13 million yuan, influenced by current and deferred tax changes, with varied subsidiary tax rates Income Tax Expense Summary | Item | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | | :--- | :--- | :--- | | Current Income Tax Expense | 558,567,226.55 | 452,874,009.90 | | Deferred Income Tax Expense | (125,440,150.95) | (154,737,358.26) | | Total | 433,127,075.60 | 298,136,651.64 | - Some of the company's overseas subsidiaries pay income tax according to local laws, some companies enjoy a 15% preferential corporate income tax rate, and other enterprises apply a 25% corporate income tax rate[20] 7. Earnings Per Share H1 2025 basic and diluted EPS increased to 0.60 yuan from 0.54 yuan, driven by growth in consolidated net profit attributable to parent company shareholders Earnings Per Share Summary | Item | Jan-Jun 2025 (RMB/share) | Jan-Jun 2024 (RMB/share) | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.60 | 0.54 | | Diluted Earnings Per Share | 0.60 | 0.54 | - Earnings per share are calculated based on the consolidated net profit attributable to ordinary shareholders of the parent company divided by the weighted average number of ordinary shares outstanding[21][22] - The repurchase and cancellation of 17,334 restricted A-shares during the period did not affect the basic earnings per share calculation and had no dilutive effect on earnings per share[22] 8. Segment Reporting The company reports five operating segments; in H1 2025, all segments contributed significantly to revenue and profit, with Clean and Efficient Energy Equipment and Renewable Energy Equipment as primary revenue sources Segment Performance | Segment | Jan-Jun 2025 Operating Revenue (RMB) | Jan-Jun 2025 Operating Profit (RMB) | | :--- | :--- | :--- | | Renewable Energy Equipment | 11,586,066,450.35 | 1,054,645,641.23 | | Clean and Efficient Energy Equipment | 21,509,586,514.79 | 2,897,714,809.58 | | Engineering and Supply Chain Business | 4,127,676,462.02 | 212,805,235.94 | | Modern Manufacturing Services | 3,994,895,452.40 | 1,498,371,868.76 | | Emerging Growth Industries | 6,263,638,892.26 | 666,916,311.86 | | Total (after offset) | 38,150,951,534.17 | 2,506,386,064.16 | - In H1 2025, the company's total assets were 156.366 billion yuan, and total liabilities were 110.962 billion yuan[24] 9. Dividends The company distributed a 2024 final dividend of 1.366 billion yuan on August 22, 2025, but the Board does not recommend an interim dividend for H1 2025 - The company distributed a final dividend for 2024 on August 22, 2025, amounting to RMB 4.03 per 10 shares (tax inclusive), totaling RMB 1,366,315,211.38 in cash dividends[26] - The Board recommends no interim dividend for the six months ended June 30, 2025[26] Management Discussion and Analysis I. Overview of Industry and Principal Business During the Reporting Period The company operates in the high-end energy equipment industry, providing diverse energy, environmental, and chemical products and services globally, with its core business in advanced power equipment unchanged Industry Overview As a leading global power generation equipment supplier and EPC contractor, the company operates in nearly 90 countries, demonstrating strong competitiveness with advanced manufacturing and leading technologies - The company operates in the high-end energy equipment industry, providing various energy, environmental, chemical products, system integration, and logistics services to global energy operators[27] - The company's principal business includes the development, design, manufacturing, and sales of advanced equipment for wind, solar, hydro, nuclear, gas, and thermal power, chemical vessels, energy-saving and environmental protection, power electronics and control, hydrogen energy, and energy storage, along with engineering contracting and services[27] - The company is one of the world's largest power generation equipment suppliers and power plant EPC contractors, with products and services spanning nearly 90 countries and regions[27] Macroeconomic and Industry Environment H1 2025 saw global slowdown and geopolitical conflicts, but China's economy remained stable, with domestic power capacity up 18.7% and increased power/grid investments, signaling a favorable energy equipment market - In H1 2025, global economic growth slowed, geopolitical conflicts intensified, and the international trade order suffered severe setbacks[29] - China's national economy advanced despite pressure, operating steadily with key indicators exceeding expectations and maintaining a stable and positive development trend[29] Key Macroeconomic and Industry Indicators | Metric | Jan-Jun 2025 | Year-on-year Growth (%) | | :--- | :--- | :--- | | Total Electricity Consumption | 4,841.8 billion kWh | 3.7 | | National Cumulative Installed Power Generation Capacity (as of end of June) | 3.65 billion kW | 18.7 | | Investment in Power Generation Projects | 363.5 billion yuan | 5.9 | | Investment in Power Grid Projects | 291.1 billion yuan | 14.6 | - Overall, the energy equipment industry maintains a favorable market outlook[29] II. Discussion and Analysis of Operations H1 2025 saw significant progress in industrial development, technological innovation, reform, operational management, and risk control, with new effective orders growing 16.78% year-on-year 1. Industrial Development The company maintained leading market share in hydro, nuclear, and gas power, achieved overseas breakthroughs for 50MW gas turbines, secured 20MW offshore wind orders, advanced hydrogen energy projects, and topped out the world's largest CO2 storage project, with new orders up 16.78% - Hydropower order quality significantly improved, and nuclear and gas power market share remained industry-leading[30] - 50MW heavy-duty gas turbine achieved a breakthrough in overseas orders from "zero"[30] - Wind power secured 20MW-class offshore wind turbine bulk orders, with Ruoqiang and Burqin new energy equipment manufacturing bases successively put into operation[30] - Hydrogen energy won the Panzhihua 30 heavy-duty truck demonstration project, 1,000 standard cubic meter alkaline electrolyzer systems achieved order breakthroughs, and the Tibet hydrogen production and refueling integrated demonstration project was commissioned[30] - The main structure of the main plant for the world's largest CO2 energy storage project topped out[30] New Effective Orders | Metric | Jan-Jun 2025 (RMB) | Year-on-year Growth (%) | | :--- | :--- | :--- | | New Effective Orders | 65.485 billion yuan | 16.78 | Composition of New Effective Orders | Composition of New Effective Orders | Proportion (%) | | :--- | :--- | | Clean and Efficient Energy Equipment | 37.59 | | Renewable Energy Equipment | 30.82 | | Engineering and International Supply Chain | 11.51 | | Modern Manufacturing Services | 8.80 | | Emerging Growth Industries | 11.27 | 2. Technological Innovation The company achieved significant technological innovation, with breakthroughs in 500MW hydro, 15MW gas turbines, 26MW/17MW offshore wind, and key biomass/hydrogen pilot platforms, integrating tech and industrial innovation - The stator frame and rotor bracket of the Zala 500MW impulse hydro-generator unit passed assembly acceptance[31] - The 15MW heavy-duty gas turbine operated stably at design conditions, 26MW-class semi-direct drive offshore wind turbine blades passed static load tests, and the 17MW direct-drive floating offshore wind turbine rolled off the production line[31] - Key technologies for biomass gasification fluidised bed were successfully developed, and the megawatt-scale chemical looping combustion pilot platform and hydrogen industry technology pilot platform were selected for the first batch of key cultivation by the Ministry of Industry and Information Technology[31] - Self-developed marine anti-corrosion materials were applied to 20MW offshore wind turbines, achieving integrated development of technological and industrial innovation[31] 3. Deepening Reform The company deepened its three-system reform with 13 measures, launched new pilots, promoted IP empowerment, and established employee stock ownership; corporate governance improved, with key subsidiaries recognized as central SOE reform benchmarks - Comprehensively deepened the three-system reform, formulating 13 specific measures to implement reforms in cadre, personnel, and remuneration systems[31] - Launched the second batch of internal reform pilots, focusing on key and difficult tasks such as improving and perfecting industrial incubation mechanisms[31] - Actively promoted the reform of empowering employees with intellectual property rights from work-related technological achievements, establishing employee stock ownership and pilot project management systems[31] - Dongfang Electric, Dongfang Steam Turbine, Dongfang Boiler, and Dongfang Wind Power were all recognized as benchmark enterprises in the central SOE "Science and Technology Reform Action" and "Double Hundred Action" 2024 annual special assessment[31] 4. Operational Management The company advanced world-class value creation, digitalized business-finance integration with 9 modules, deepened lean management, and promoted intelligent transformation, developing the 'Dongfang Zhiyuan' AI model and a digital shielded pump workshop - Diligently carried out the world-class enterprise value creation initiative, with Dongfang Boiler's case selected as an excellent case for state-owned enterprise value creation[31] - Promoted the digital transformation of business and finance integration, implementing 9 major modules such as establishing bidding budget BOMs, creating procurement business-finance linkages, and optimizing manufacturing cost allocation[31] - Deeply promoted "intelligent transformation and digital upgrading," successfully developing the first domestic vertical large model for the energy equipment industry, "Dongfang Zhiyuan," launching an intelligent technology intelligence system, and completing a digital workshop for shielded pumps[31] 5. Risk Control The company strengthened risk control through a full-level supervision system, new compliance/trademark systems for real-time contract risk monitoring, focused on key project risk resolution, enhanced company-wide compliance, and ensured production safety, with no major incidents in H1 - Strengthened the full-level penetration supervision system, establishing new compliance and trademark management systems to achieve real-time monitoring and full-process control of contract risks[32] - Organized a focused effort to address key project risks, formulating collection targets and control plans on a "one project, one policy" basis[32] - Emphasized production safety responsibilities, promoting dynamic clearance of major accident hazards, with no major safety or environmental incidents occurring in H1[32] III. Analysis of Core Competencies During the Reporting Period As a leading global high-end energy equipment developer and EPC contractor, the company boasts strong technological innovation, a diversified 'six power, six industry' layout, advanced manufacturing, robust market capabilities, and deep brand heritage - The company is based on the development, design, manufacturing, sales, and service of high-end energy equipment, actively aligning with national strategies[33] - Continuously optimized the industrial structure of "six power sources in parallel" (wind, solar, hydro, nuclear, gas, and clean coal power) and "six industries in synergy" (high-end petrochemical equipment, energy saving and environmental protection, engineering and international trade, modern manufacturing services, power electronics and control, and emerging industries)[33] - Possesses advantages such as outstanding technological innovation capabilities, diversified and comprehensive industrial layout, advanced manufacturing and service capabilities, strong market development capabilities, and deep cultural and brand heritage[33] IV. Key Operating Performance During the Reporting Period Total operating revenue and net profit attributable to shareholders achieved double-digit growth; this section analyzes key financial statement changes and operating revenue by industry, product, and region (I) Analysis of Principal Business H1 2025 operating revenue rose 14.26% (clean energy driven), costs up 12.45%; financial expenses decreased (exchange gains), R&D increased, investment income grew, but impairment losses worsened; operating cash flow turned negative, financing cash flow increased significantly Analysis of Key Financial Statement Items | Item | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 37,623,627,306.41 | 32,928,476,029.89 | 14.26 | Growth in Clean and Efficient Energy Equipment segment revenue | | Operating Costs | 31,805,881,127.97 | 28,285,631,299.74 | 12.45 | Increased with sales volume | | Selling Expenses | 317,891,455.51 | 289,344,237.26 | 9.87 | Increase in employee compensation | | Administrative Expenses | 1,372,877,949.96 | 1,339,624,220.93 | 2.48 | Minor change | | Financial Expenses | (378,088.72) | 45,144,897.96 | -100.84 | Increase in exchange gains | | R&D Expenses | 1,569,565,190.21 | 1,347,828,439.49 | 16.45 | Continued increase in R&D investment | | Other Income | 249,603,044.12 | 403,016,183.28 | -38.07 | Decrease in additional VAT deduction for advanced manufacturing | | Investment Income | 141,074,666.85 | (39,626,483.54) | N/A | Increase in profits from investee companies | | Fair Value Change Gains | (75,264,776.76) | 28,344,053.76 | -365.54 | Decline in fair value of held-for-trading stocks | | Credit Impairment Losses | (209,697,186.94) | 14,429,465.02 | -1,553.33 | Increase in bad debt provisions for accounts receivable based on aging portfolio | | Asset Impairment Losses | (456,796,895.04) | (259,118,589.34) | N/A | Increase in bad debt provisions for contract assets based on aging portfolio | | Net Cash Flow from Operating Activities | (556,466,428.94) | 4,064,695,241.25 | -113.69 | Increase in operating cash outflow for purchases | | Net Cash Flow from Financing Activities | 5,221,093,225.62 | 952,099,163.96 | 448.38 | Increase in raised funds and borrowings | 2. Analysis of Operating Performance by Industry, Product or Region H1 2025 saw revenue growth and improved gross margins for Renewable Energy and Clean & Efficient Energy Equipment, while Engineering & Supply Chain and Modern Manufacturing Services experienced revenue and gross margin declines Operating Revenue by Product | Product Segment | Revenue (RMB) | Year-on-year Revenue Change (%) | Gross Margin (%) | Year-on-year Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | | Renewable Energy Equipment | 10,424,515,008.11 | 26.90 | 10.12 | Increase 4.83 | | Clean and Efficient Energy Equipment | 16,767,014,023.55 | 19.21 | 17.28 | Increase 1.83 | | Engineering and Supply Chain Business | 3,138,302,302.66 | -11.30 | 6.78 | Decrease 1.91 | | Modern Manufacturing Services | 3,426,318,160.59 | -2.69 | 43.73 | Decrease 3.82 | | Emerging Growth Industries | 4,394,802,039.26 | 6.73 | 15.18 | Increase 1.35 | - Revenue growth in Renewable Energy Equipment business was primarily due to increased wind turbine deliveries and wind power scale, with gross margin improvement mainly from wind turbine sales for the Mulei Dongxin Wind Resource Project and high-margin offshore wind power projects[42] - Revenue growth in Clean and Efficient Energy Equipment business was primarily due to the company seizing market opportunities, with increases in nuclear power and coal power businesses[42] - Revenue decline in Engineering and Supply Chain Business was primarily due to a reduction in the company's trading business[42] 2. Operating Revenue by Region H1 2025 domestic operating revenue increased 17.71%, while overseas revenue decreased 24.19%, indicating a primary focus on the domestic market Operating Revenue by Region | Region | Total Operating Revenue (RMB) | Year-on-year Change (%) | | :--- | :--- | :--- | | Domestic | 35,923,133,595.79 | 17.71 | | Overseas | 2,227,817,938.38 | -24.19 | | Total | 38,150,951,534.17 | 14.03 | (II) Analysis of Assets and Liabilities As of June 30, 2025, the asset-liability ratio increased to 70.96%, with controllable asset structure risk; this section details asset/liability changes, bank borrowings, cash, FX risk, and asset pledges 1. Asset and Liability Status Significant changes occurred in various asset and liability items, with substantial increases in loans to banks, financing receivables, inventories, contract assets, and long-term borrowings, while certain current and non-current assets/liabilities decreased Changes in Key Asset and Liability Items | Item Name | June 30, 2025 (RMB) | Change from Year-end (%) | Explanation of Change | | :--- | :--- | :--- | :--- | | Loans to Banks | 1,460,597,736.03 | 74.60 | Increase in interbank lending by the affiliated finance company | | Financing Receivables | 2,426,759,434.04 | 25.90 | Increase in bank acceptance bills received | | Inventories | 27,286,777,778.40 | 25.83 | Increase in work-in-progress | | Contract Assets | 17,287,432,592.98 | 21.24 | Increase in unbilled completed work and quality assurance deposits | | Non-current Assets Due Within One Year | 719,624,820.93 | -69.26 | Recovery of loans due within one year by the affiliated finance company | | Other Current Assets | 2,248,590,487.71 | 70.72 | Increase in input VAT to be deducted | | Long-term Receivables | 115,852,508.51 | 429.51 | Increase in installment sales of goods | | Construction in Progress | 1,700,377,412.70 | 19.13 | Increase in projects such as innovation and overseas business centers | | Deposits Absorbed and Interbank Deposits | 4,767,478,788.41 | 110.89 | Increase in deposits absorbed by the affiliated finance company | | Taxes Payable | 542,820,096.49 | -30.64 | Decrease in corporate income tax payable compared to year-start | | Other Payables | 2,969,389,239.35 | 83.93 | Increase in dividends payable due to declared dividends | | Non-current Liabilities Due Within One Year | 257,381,612.74 | -22.34 | Decrease in lease liabilities due within one year | | Other Current Liabilities | 1,248,522,114.44 | -28.86 | Decrease in output VAT amount for contract liabilities | | Long-term Borrowings | 3,434,875,573.97 | 58.50 | Increase in project borrowings | 2. Capital and Liability Ratios As of June 30, 2025, the asset-liability ratio increased to 70.96% (up 1.34 percentage points), with asset structure risk remaining controllable Capital and Liability Ratios Summary | Item | Period-end (%) | Year-start (%) | Year-on-year Increase (percentage points) | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio | 70.96 | 69.62 | 1.34 | - The company's asset structure risk remains controllable[48] 3. Bank Borrowings As of June 30, 2025, financial institution borrowings due within one year were 102 million yuan, over one year 2.153 billion yuan, primarily RMB-denominated fixed-rate borrowings of 1.948 billion yuan, with good credit and financing capabilities - As of June 30, 2025, financial institution borrowings due within one year amounted to RMB 102 million, and those due in over one year were RMB 2.153 billion[48] - Borrowings are primarily denominated in RMB, with fixed-rate financial institution borrowings totaling RMB 1.948 billion[48] - The company possesses good bank credit ratings and financing capabilities[48] 4. Cash and Cash Equivalents As of June 30, 2025, RMB comprised 94.63% of cash and cash equivalents, with USD at 3.59% Cash and Cash Equivalents by Currency | Currency Type | Proportion of Cash and Cash Equivalents (%) | | :--- | :--- | | RMB | 94.63 | | USD | 3.59 | 5. Foreign Exchange Risk Management Expanding international operations increase foreign exchange rate risk, which the company prudently manages using hedging tools like forward foreign exchange settlements - The expansion of international operations has made foreign exchange rate risk a significant factor affecting operating results[48] - The company prudently uses hedging tools such as forward foreign exchange settlements to control exchange rate fluctuation risks, with the objective of hedging[48] 6. Asset Pledges As of June 30, 2025, the company had 307 million yuan in bank borrowings pledged by concession rights, 1.582 billion yuan by electricity tariff collection rights, and other pledges on assets - As of June 30, 2025, pledged bank borrowings amounted to approximately RMB 307 million, primarily secured by concession rights, with a net value of RMB 452 million for the concession rights[49] - Additionally, there were pledged borrowings of RMB 1.582 billion, secured by electricity tariff collection rights[49] - Some plant machinery and equipment and land use rights have been pledged to obtain borrowings, which are still in the disbursement process as of the end of this period[49] (III) Potential Risks The company faces price, emerging industry, and international operation risks, addressed by cost management, strategy optimization, application expansion, and enhanced international risk identification 1. Price Risk Strategic emerging industry product and raw material prices face cyclical fluctuations, managed by strengthening material price analysis, procurement planning, and project target cost management - Sales prices of some products in strategic emerging industries are subject to periodic fluctuations with market conditions, and cyclical fluctuations in raw material prices also bring uncertainty[50] - Control measures include guiding enterprises to conduct major material price analysis and trend forecasting, preparing procurement planning and inventory plans, strengthening procurement cost control, and enhancing project target cost management to improve project marginal contribution[50] 2. Emerging Industry Transformation and Development Risk Investing in strategic emerging industries carries risks of uncertain tech routes, long incubation, and low initial returns; the company responds by boosting R&D, expanding applications, enhancing supply chain resilience, cutting costs, and optimizing strategies - Emerging industries face uncertainties in technological routes and market applications, have relatively long industrial incubation periods, and relatively low initial returns[50] - Control measures include continuously strengthening investment in technological innovation, actively engaging with the government to expand application scenarios, enhancing industrial chain and supply chain resilience, vigorously expanding the domestic market, reducing production and operating costs, and improving competitiveness[51] - Further deepening research on the development trends, technological paths, and business models of strategic emerging industries, benchmarking against leading industry enterprises, and dynamically optimizing and adjusting development strategies to drive rapid acquisition of bulk orders and promote large-scale industrial development through new industries, new models, and new drivers[51] 3. International Operations Risk International operations face significant uncertainties from geopolitical risks, major power competition, and supply chain restructuring; the company will strengthen international analysis, accelerate clean energy innovation, expand markets, and enhance compliance with multilateral rules - International geopolitical risks are prominent, major power competition is complex, global industrial chains are accelerating restructuring, and world economic growth is weak, bringing significant uncertainties to the company's international market expansion and overseas project execution[51] - Control measures include strengthening attention, analysis, and judgment of international situations, accelerating technological innovation in clean energy such as wind, solar, and storage, actively expanding international markets, improving overseas marketing and planning, and continuously enhancing international brand influence[52] - Strengthening research and response to multilateral institutional rules such as the World Bank, focusing on risk identification, prevention, and response in sensitive countries and regions, and deepening two-way compliance to improve precise compliance capabilities[52] Events After Reporting Period No events significantly impacting the company and its subsidiaries have occurred since the end of this reporting period - No events that would significantly impact the company and its subsidiaries have occurred since the end of this reporting period[53] (V) Outlook for H2 2025 In H2 2025, the company will leverage its SOE mission to cultivate sustainable development, pursue high-quality growth, emphasize stable operations, optimize investment, and promote coordinated development, aiming for a successful '14th Five-Year Plan' conclusion and a strong '15th Five-Year Plan' foundation - In H2 2025, the company will seize the new mission and positioning of state-owned enterprises, fully leverage development opportunities, and actively cultivate sustainable development capabilities[54] - The fundamental pursuit is high-quality development, emphasizing stable operations, optimizing investment structure, and promoting coordinated development[54] - Strive for a successful conclusion to the "14th Five-Year Plan" and lay a solid foundation for the "15th Five-Year Plan" development[54] V. Other Matters 1. Capital Structure As of June 30, 2025, total share capital was 3.390 billion yuan (3.050 billion A-shares, 340 million H-shares); 273 million A-shares were issued, raising 4.117 billion yuan for acquisitions, construction, and working capital Share Capital Structure | Share Class | Number of Shares as of June 30, 2025 | Proportion of Total Issued Share Capital (%) | | :--- | :--- | :--- | | A-shares | 3,050,360,326 | 89.97 | | H-shares | 340,000,000 | 10.03 | | Total | 3,390,360,326 | 100 | - On April 14, 2025, the company issued 272,878,203 A-shares to specific investors at an issue price of RMB 15.11 per share[56] - The net proceeds from this A-share issuance amounted to RMB 4,116,565,363.01, which will be used for equity acquisitions, construction projects, and supplementing working capital[56] 2. Purchase, Sale or Repurchase of the Company's Listed Securities The company repurchased and cancelled 17,334 restricted A-shares; no other purchases, sales, or redemptions of listed securities were made by the company or its subsidiaries - During the reporting period, the company repurchased and cancelled a total of 17,334 restricted A-shares granted to one incentive recipient that had not yet been unblocked[58] - Other than the aforementioned matter, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[58] 3. Significant Acquisitions and Disposals of Subsidiaries and Associates For the six months ended June 30, 2025, there were no significant acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, there were no significant acquisitions or disposals of subsidiaries and associates[59] 4. External Guarantees and Performance As of June 30, 2025, total guarantees were 92.5 million yuan (0.20% of net assets), including equity pledges for three wind power companies and a payment/performance guarantee for an associate - As of June 30, 2025, the company's total guarantees amounted to RMB 92.5 million, representing 0.20% of the company's net assets[61] - The company provided guarantees totaling RMB 68 million to three wind power companies in Inner Mongolia, secured by 20% equity stakes in each[60] - Controlling subsidiary Dongfang Electric Corporation Dongfang Steam Turbine Co., Ltd. provided a guarantee of RMB 24.5 million to its associate, Mitsubishi Heavy Industries Dongfang Gas Turbine (Guangzhou) Co., Ltd[60] 5. Significant Litigation and Arbitration Matters For the six months ended June 30, 2025, and up to this announcement date, the company was not involved in any significant litigation or arbitration, with no known outstanding or threatened claims - For the six months ended June 30, 2025, and up to the date of this announcement, the company was not involved in any significant litigation or arbitration[62] - To the best of the directors' knowledge, there were no outstanding or threatened significant litigations or claims against the company[62] 6. Employees and Remuneration Policy As of June 30, 2025, the company had 18,511 employees, with 1.407 billion yuan in remuneration paid; it continuously improves wage mechanisms, optimizes income distribution favoring core technical and frontline roles, and strengthens performance management and long-term incentives for key talents 1. Number of Employees As of June 30, 2025, the company had a total of 18,511 employees Number of Employees | Metric | June 30, 2025 | | :--- | :--- | | Total Number of Employees | 18,511 | 2. Employee Remuneration As of June 30, 2025, the company paid 1.407 billion yuan in employee remuneration during the reporting period Total Employee Remuneration | Metric | Jan-Jun 2025 (RMB) | | :--- | :--- | | Total Employee Remuneration | 1,407,480,200.00 | 3. Remuneration Policy The company continuously improves its wage determination mechanism, coordinating performance targets and contributions to control wage levels; income distribution favors core technical and frontline roles, strengthening performance management and long-term incentives for key talents - Improved the total wage determination mechanism, coordinating business performance assessment targets, growth rates, and profit contributions to reasonably control enterprise wage levels[63] - Income distribution favors core technical positions and frontline arduous and hazardous roles[63] - Strengthened company-wide performance management, promoted the application of performance management systems, improved various special award policies, and continuously implemented long-term incentives, particularly favoring scientific and high-skilled talents[63] 4. Training Programs The company develops annual training plans focusing on talent building, strategic emerging industry development, technological innovation, and international operations; programs prioritize innovative, application-oriented, and skilled talents, covering various areas, in collaboration with universities, and continuously enhance online training platforms - Developed annual unified training plans focusing on talent team building, strategic emerging industry development, technological innovation, and international operational capability enhancement[64] - Training programs prioritize the development of innovative, application-oriented, and skilled talents, covering cadre capabilities, group and cultural development, technological innovation, lean management, international operations, human resources, and legal risk control[64] - Collaborated with universities such as Tsinghua University and Sichuan University to organize key programs like training for young scientific and technological leaders and mid-to-senior level leaders[64] - Continuously advanced the construction of online training platforms, strengthened online training course development, enriched training formats, enhanced training base construction, and created high-quality training programs[64] Corporate Governance During the reporting period, the company fully complied with HKEX Corporate Governance Code and Standard Securities Dealing Code for Directors; the Audit and Risk Committee reviewed and approved interim results and accounting policies; information disclosure complies with regulations 7. Corporate Governance Code The company fully complied with all applicable code provisions of the HKEX Corporate Governance Code during this period - The company fully complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during this period[65] 8. Standard Securities Dealing Code for Directors The company adopted the Standard Securities Dealing Code for Directors as the conduct standard for directors and supervisors, who complied with it as of June 30, 2025 - The company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers as the standard of conduct for directors and supervisors[66] - As of June 30, 2025, the company's directors and supervisors have complied with the standards set out in the Standard Code regarding securities transactions by directors and supervisors[66] 9. Audit and Risk Committee The Audit and Risk Committee, comprising one non-executive and three independent non-executive directors, reviewed and approved H1 2025 interim results and accounting policies - The Audit and Risk Committee is composed of one non-executive director and three independent non-executive directors[67] - The committee reviewed and approved the Group's interim results for the six months ended June 30, 2025, and agreed with the accounting policies adopted by the company[67] 10. Information Disclosure This announcement is published on the HKEX and company websites; the half-yearly report will be published and mailed to shareholders; prepared in Chinese and English, Chinese version prevails in case of discrepancy - This announcement has been published on the HKEX website and the company's website[68] - The half-yearly report containing all information required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited will be published on the aforementioned websites and mailed to the company's shareholders in due course[68] - This announcement is prepared in both Chinese and English, with the Chinese version prevailing in case of any discrepancy in interpretation[69]