水发兴业能源(00750) - 2025 - 中期财报

Corporate Information This section details the company's board, committees, advisors, bankers, and registration particulars Board of Directors The Board of Directors experienced changes, with Mr. Wang Jian resigning as Chairman, Mr. Zhou Guangyan acting as Chairman, and Mr. Guo Peidong appointed President - Mr. Wang Jian resigned as Chairman on March 21, 2025, with Mr. Zhou Guangyan (Vice Chairman) serving as acting Chairman[6] - Mr. Guo Peidong was appointed President on March 21, 2025[6] Committees The company maintained an Audit Committee, Remuneration Committee, and Nomination Committee, with their chairmen and members specified - The Audit Committee is chaired by Mr. Yi Yongfa, with members including Mr. Xiao Chuangying and Dr. Tan Hongwei[7] - The Remuneration Committee is chaired by Dr. Tan Hongwei, with members including Mr. Zhou Guangyan, Mr. Guo Peidong, Mr. Xiao Chuangying, and Mr. Yi Yongfa[7][8] - The Nomination Committee is chaired by Mr. Zhou Guangyan, with members including Mr. Guo Peidong, Mr. Xiao Chuangying, Mr. Yi Yongfa, and Dr. Tan Hongwei[9][10] Advisors and Bankers The company appointed Messrs. Mak & Co. Solicitors as legal advisors, Rongcheng (Hong Kong) CPA Limited as auditors, and collaborates with major banks - Legal advisor is Messrs. Mak & Co. Solicitors (for Hong Kong law)[9][10] - Auditor is Rongcheng (Hong Kong) CPA Limited[9][10] - Principal bankers include Agricultural Bank of China, HSBC, and Bank of China[9][10] Company Details The company is registered in Bermuda, with its Hong Kong head office in Shun Tak Centre and stock code 750 - Registered office is located at Clarendon House, Bermuda[11][12] - Hong Kong head office and principal place of business are in China Merchants Tower, Shun Tak Centre, Hong Kong[11][12] - The company's stock code is 750[12] Corporate Governance This section outlines the company's adherence to corporate governance standards, including directors' securities transactions and audit committee responsibilities Corporate Governance Overview The company confirmed compliance with all applicable provisions and principles of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules - The company has adopted and complied with all applicable provisions and principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[13][15] Standard Code for Directors' Securities Transactions The company adopted the Model Code in Appendix C3 of the Listing Rules, with all directors confirming compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[14][16] - All directors confirmed compliance with the Model Code and its code of conduct during the reporting period[14][16] Audit Committee Responsibilities The Audit Committee reviewed the Group's unaudited condensed interim financial information and results, which external auditors also reviewed - The Audit Committee has reviewed the Group's unaudited condensed interim financial information and interim results for the reporting period[17][19] - Although the interim financial results are unaudited, they have been reviewed by external auditors in accordance with Hong Kong Standard on Review Engagements 2410[17][19] Listed Securities Transactions Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[18][20] Other Information This section covers employee and remuneration policies, share option schemes, share award plans, and interests of directors and substantial shareholders Employees and Remuneration Policy As of June 30, 2025, the Group's headcount was 1,012, a decrease from 2024, with remuneration policies aligned to market practices and optimized resource allocation Changes in Total Employees | Date | Total Employees | | :--- | :------- | | June 30, 2025 | 1,012 | | December 31, 2024 | 1,072 | - The Group's remuneration policy aligns with local market practices, reviewed annually, covering salaries, provident funds, medical insurance, and performance bonuses[22][26] - In the first half of 2025, the Group optimized human resource allocation through integration, organizational streamlining, and objective employee management[23][26] Share Option Scheme The 2008 share option scheme terminated in 2018, but granted options remain valid until 2027; some options lapsed during the reporting period - The share option scheme was adopted on December 19, 2008, to incentivize or reward eligible individuals who have contributed to the Group[24][25][27][28] - The scheme terminated on December 19, 2018, but granted options remain valid until May 21, 2027[41][43] Details of Share Option Movements (Year Ended June 30, 2025) | Participant Name or Category | Balance as at January 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | Balance as at June 30, 2025 | Grant Date | Exercise Period | Exercise Price (HKD) | | :----------------- | :------------------- | :--------- | :--------- | :--------- | :--------- | :------------------- | :--------- | :--------- | :------------- | | Employees | 2,008,778 | – | – | – | 2,008,778 | – | 22/5/2015 | 22/5/2016–21/5/2025 | 11.65 | | Employees | 2,008,777 | – | – | – | 2,008,777 | – | 22/5/2015 | 22/5/2017–21/5/2025 | 11.65 | | Employees | 2,008,777 | – | – | – | 2,008,777 | – | 22/5/2015 | 22/5/2018–21/5/2025 | 11.65 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2018–21/5/2027 | 3.55 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2019–21/5/2027 | 3.55 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2020–21/5/2027 | 3.55 | | Total | 18,026,332 | – | – | – | 6,026,332 | 12,000,000 | | | | New Share Option Scheme A new share option scheme, adopted in 2018 to incentivize employees and consultants, allows for 83,407,319 shares (3.31% of issued capital), with no options granted during the period - The new share option scheme was adopted on June 4, 2018, with a validity period of 10 years[49][53][64][69] - The scheme aims to reward directors, employees, consultants, or suppliers who have contributed to the Group[50][51][54][55] Number of Shares under New Share Option Scheme | Metric | Number of Shares | | :--- | :------- | | Maximum number of shares issuable | 83,407,319 shares | | Percentage of issued share capital | 3.31% | - As of June 30, 2025, there were no outstanding, unexercised, vested, cancelled, or lapsed share options under the new share option scheme[65][70] Share Award Plan The 2020 share award plan, adopted to reward contributors, has a limit of 3% of issued shares (75,632,453 shares), with 18,132,453 awards available as of June 30, 2025 - The share award plan was adopted on December 29, 2020, with a validity period of 6 years[67][71][87][90] - The plan aims to recognize and reward contributions of eligible individuals to the Group's growth and development through awarded shares[68][72] Share Award Plan Limit | Metric | Number of Shares | | :--- | :------- | | Plan limit (as % of total issued shares) | 3% (75,632,453 shares) | | Awards available for grant as at June 30, 2025 | 18,132,453 shares | | Maximum allocation per participant (as % of issued share capital) | 1% | Details of Share Award Movements (Six Months Ended June 30, 2025) | Participant Name or Category | Balance as at January 1, 2025 (thousands) | Granted during the period (thousands) | Exercised during the period (thousands) | Cancelled during the period (thousands) | Lapsed during the period (thousands) | Balance as at June 30, 2025 (thousands) | Grant Date | Exercise Period | Exercise Price (HKD) | | :----------------- | :--------------------------- | :---------------- | :---------------- | :---------------- | :---------------- | :--------------------------- | :--------- | :------- | :------------- | | Director Mr. Chen Fushan | 1,400 | – | – | – | – | 1,400 | 29/12/2020 | N/A | N/A | | Employees | 54,600 | – | – | – | – | 54,600 | 29/12/2020 | N/A | N/A | Directors' Rights and Interests No directors or associates were granted rights or options to subscribe for shares or debentures; Mr. Chen Fushan held a beneficial interest in 1,400,000 company shares as of June 30, 2025 - During the reporting period, no directors or their respective associates were granted any rights or options by the company or its subsidiaries to subscribe for shares or debentures[95][96] Directors' Interests in the Company's Shares (As of June 30, 2025) | Name | Name of Company/Associated Corporation | Capacity | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--------- | :---------------- | :------- | :------- | :--------- | :------------- | | Mr. Chen Fushan | The Company | Beneficial Interest | Long Position | 1,400,000 | 0.05% | Substantial Shareholders' Interests As of June 30, 2025, Water Development (HK) Holding Co., Limited and Water Development Group Co., Ltd. were substantial shareholders (74.09% combined), with Strong Eagle Holdings Ltd. and Mr. Liu Hongwei also holding significant equity Substantial Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder | Long/Short Position | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :----------------------- | :------ | :----------------- | :------------ | :------------- | | Water Development (HK) Holding Co., Limited | Long Position | Beneficial Owner | 1,687,008,585 | 66.92% | | | Long Position | Person with security interest in shares | 180,755,472 | 7.17% | | Water Development Group Co., Ltd. | Long Position | Interest in controlled corporation | 1,867,764,057 | 74.09% | | Strong Eagle Holdings Ltd. | Long Position | Beneficial Owner | 203,802,750 | 8.01% | | Mr. Liu Hongwei | Long Position | Interest in controlled corporation | 202,038,750 | 8.01% | - Water Development (HK) Holding Co., Limited is 100% beneficially owned by Water Development Group Co., Ltd[114] - Strong Eagle Holdings Ltd. is owned by Mr. Liu Hongwei, Mr. Sun Jinli, Mr. Xie Wen, Mr. Xiong Shi, and Mr. Zhuo Jianming, with 53%, 15%, 13%, 10%, and 9% respectively[114] Public Float and Director Changes The company maintained a sufficient public float, with no significant changes in directors' information during the reporting period - As of the reporting date, the company maintained a public float of not less than 25% as stipulated by the Listing Rules[108][112] - For the six months ended June 30, 2025, and up to the reporting date, there were no changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules[109][113] Management Discussion and Analysis This section provides an overview of the Group's financial performance, business operations, and future outlook, including key financial metrics and strategic initiatives Results Overview For the six months ended June 30, 2025, revenue grew 22.5% to RMB 1.685 billion due to clean energy EPC, but a lower gross margin resulted in a loss attributable to owners Key Financial Indicators for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :------------- | :--------------------------- | :--------------------------- | :------------ | | Revenue | 1,685 | 1,376 | 22.5 | | Profit for the period | 2.37 | 11.14 | (78.7) | | Loss attributable to owners | (19.18) | (16.46) | (16.5) | | Earnings per share | (0.008) | (0.007) | (14.3) | | Overall gross profit margin | 21.0% | 32.3% | (11.3)pp | | Net cash from operating activities | 158 | (128) | 223.3 | | Finance costs | - | - | (14.6) | - Revenue growth was primarily due to increased clean energy EPC revenue, stable operation of self-owned power stations, and the Group's expansion into solar and wind EPC projects[116][117][119] - The decline in gross profit margin was mainly due to intense market competition in new energy EPC and traditional glass curtain wall businesses, though it rebounded from the end of 2024[118][120] - The contract value of newly signed contracts and ongoing uncompleted projects is approximately RMB 4 billion[122][124] Business Review The Group focused on core clean energy, achieving significant EPC revenue growth and overseas market expansion, while strategically reducing traditional curtain wall business and maintaining stable power sales - The Group consolidated its development, investment, construction, and operation of photovoltaic and wind power projects, expanding the influence of its Grade-A general contracting qualification in the EPC market[123][125] Revenue by Category (Six Months Ended June 30, 2025) | Revenue Category | 2025 (RMB million) | 2024 (RMB million) | Increase/(Decrease) % | Revenue Share % | | :--------------- | :------------------- | :------------------- | :------------- | :-------- | | Clean Energy EPC | 835.2 | 342.8 | 143.6 | 49.6 | | Curtain Wall and Green Building | 197.2 | 227.4 | (13.3) | 11.7 | | Power Sales | 329.1 | 328.7 | 0.1 | 19.5 | | Product Sales | 303.8 | 419.7 | (27.6) | 18.0 | | Others | 19.6 | 57.3 | (65.8) | 1.2 | | Total Revenue | 1,684.9 | 1,375.9 | 22.5 | 100.0 | - Clean energy EPC revenue significantly increased by 143.6%, primarily due to market development and increased project acquisition with the Grade-A general contracting qualification for power engineering construction[129][131] - Overseas market expansion yielded fruitful results, including projects like Hong Kong Airport Green Building, Outlying Islands Photovoltaic Power Station, Sydney One Circular Quay, Japan Photovoltaic Power Station Cluster, and Angola Government Building Curtain Wall in Africa[130][132] - Total revenue from curtain wall and green building business decreased by 13.3%, mainly due to the Group's strategic adjustment to reduce the proportion of traditional curtain wall business to mitigate real estate market impact[134][137] - Total power sales revenue slightly increased by 0.1%, with self-owned power stations exceeding 1.27 GW in capacity and power generation increasing by 6.8% year-on-year to 509.3 million kWh[135][137] - Total product sales revenue decreased by 27.6%, primarily due to a decline in solar product sales revenue[136][137] Financial Review The Group saw revenue growth but lower gross margins, increased other income, slightly higher distribution expenses, and reduced administrative costs, maintaining strong liquidity, increased capital expenditure, optimized debt, and no significant contingent liabilities Revenue Composition (Six Months Ended June 30, 2025) | Revenue Category | Amount (RMB million) | Share % | | :--------------- | :------------------- | :---- | | Clean Energy EPC | 835.20 | 49.6 | | Curtain Wall and Green Building | 197.17 | 11.7 | | Power Sales | 329.09 | 19.5 | | Product Sales | 303.81 | 18.0 | | Other Businesses | 19.58 | 1.2 | | Total Revenue | 1,685 | 100 | Gross Profit Margin Changes | Category | Six Months Ended June 30, 2025 (%) | Year Ended December 31, 2024 (%) | Six Months Ended June 30, 2024 (%) | | :--------------- | :------------------------- | :------------------------ | :------------------------- | | Clean Energy EPC | 5.0 | 4.8 | 20.7 | | Curtain Wall and Green Building | 3.4 | 0.6 | 7.7 | | Subtotal for Construction Contracts | 4.7 | 4.1 | 15.5 | | Power Sales | 56.0 | 56.0 | 56.0 | | Product Sales | 37.9 | 28.1 | 34.2 | | Others | 34.0 | 67.0 | 50.4 | | Overall Gross Profit Margin | 21.0 | 16.8 | 32.3 | - Other income and gains increased by RMB 20.41 million or 66.2% year-on-year, mainly from design consulting fee compensation, increased rental income, and bond interest rate reduction gains[144][145] - Distribution expenses increased by 4.7% year-on-year, while administrative expenses decreased by 4.7% year-on-year, primarily due to human resource and cost control[146][147][151][152] - As of June 30, 2025, the Group's outstanding bank and other loans were approximately RMB 6.482 billion, and outstanding bonds were approximately RMB 1.518 billion[148][153] Debt Structure (As of June 30, 2025) | Category | Amount (RMB billion) | Interest Rate Range | | :--------------- | :----------------- | :----------- | | Bonds | 1.518 | 3.45%–3.80% | | Bank Loans | 2.400 | 2.80%–4.85% | | Finance Leases | 4.082 | 3.60%–6.37% | | Total | 8.000 | | - Capital expenditure during the reporting period was RMB 285 million, primarily for the construction of self-owned power stations[149][154] - During the reporting period, 48% equity (representing 19.2% effective interest) in Water Development Clean Energy Co., Ltd. was sold to Xinxing New Energy (Guangdong) Investment Co., Ltd[159][163] - The Group has limited foreign currency risk, with its main operations conducted in RMB[161][164] Outlook The Group will optimize asset structure, enhance gross margins, reduce financial costs, and expand into overseas markets and new materials to achieve long-term strategic goals - The Group will focus on core businesses, deploying high-return, low-risk energy projects through efficient regional and technological combinations, and optimizing EPC costs through lean operations to improve gross profit margins[166][168] - In H1 2025, new grid-connected installed capacity was 281 MWp, with 577 MWp projected for the full year; disposal of inefficient assets saved RMB 12.7 million and recovered RMB 9.56 million in funds[167][169] - The Group reduced financing costs by covering short-term debt with long-term debt and replacing high-cost funds with low-cost funds; financing costs decreased by 40 basis points and finance expenses by RMB 39.76 million in H1[171][173] - Overseas markets will leverage a "technology customization + local deep cultivation" dual-engine strategy to accelerate expansion into clean energy markets in Japan, Africa (South Africa, Kenya, Tanzania), and Central Asia (Kyrgyzstan)[172][174] - The new materials business will adhere to a "quality first" strategy, fully developing automotive dimming film business, achieving formula upgrades to product iterations, and securing 3 invention patents[176][177][179] Dividend The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[181][183] Events After the Reporting Period There were no significant events after the reporting period for the Group - There were no significant events after the reporting period for the Group[182][184] Independent Auditor's Review Report This section presents the independent auditor's review report on the condensed consolidated financial statements, outlining the scope and conclusion of their review Introduction Rongcheng (Hong Kong) CPA Limited reviewed China Water Affairs Xingye Energy Group Limited's condensed consolidated financial statements for the six months ended June 30, 2025 - Rongcheng (Hong Kong) CPA Limited has reviewed the company's condensed consolidated financial statements for the six months ended June 30, 2025[187][188] - Directors are responsible for the preparation and presentation of the condensed consolidated financial statements in accordance with International Accounting Standard 34[187][188] Scope of Review The review, conducted under Hong Kong Standard on Review Engagements 2410, has a narrower scope than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[190][193] - The scope of a review is substantially less than an audit, and therefore no audit opinion is expressed[190][193] Auditor's Conclusion The auditor found no matters suggesting the condensed consolidated financial statements were not prepared, in all material respects, according to International Accounting Standard 34 - Based on the review, the auditor found no matters that would lead them to believe the condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34[192][195] - The comparative financial statements for the six months ended June 30, 2024, were reviewed by another auditor who expressed an unmodified conclusion[191][194] Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including the statement of comprehensive income, financial position, changes in equity, cash flows, and explanatory notes Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, revenue grew 22.5%, but declining gross profit led to a significant decrease in profit for the period and a loss attributable to owners Summary of Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------- | :------------------- | | Revenue | 1,684,853 | 1,375,933 | | Cost of sales | (1,330,524) | (931,075) | | Gross profit | 354,329 | 444,858 | | Operating profit | 228,530 | 293,577 | | Net finance costs | (220,138) | (257,688) | | Profit before income tax | 7,935 | 36,037 | | Income tax expense | (5,562) | (24,900) | | Profit for the period | 2,373 | 11,137 | | Loss attributable to owners of the company | (19,184) | (16,461) | | Basic loss per share | RMB (0.008) | RMB (0.007) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets and liabilities slightly decreased, while total equity remained relatively stable Summary of Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------- | :----------- | :------------- | | Total assets | 22,478,160 | 22,805,882 | | Total non-current assets | 8,956,216 | 8,803,397 | | Total current assets | 13,521,944 | 14,002,485 | | Total equity | 5,261,658 | 5,303,749 | | Total liabilities | 17,216,502 | 17,502,133 | | Total non-current liabilities | 5,491,740 | 5,074,520 | | Total current liabilities | 11,724,762 | 12,427,613 | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners decreased due to period loss and exchange differences, while non-controlling interests increased Summary of Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Metric | June 30, 2025 | January 1, 2025 | | :------------------- | :----------- | :----------- | | Total equity attributable to owners of the company | 4,167,325 | 4,231,924 | | Non-controlling interests | 1,094,333 | 1,071,825 | | Total equity | 5,261,658 | 5,303,749 | | (Loss)/Profit for the period | (19,184) | - | | Exchange differences arising from translation of financial statements | (45,339) | - | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, operating activities generated net cash, while investing and financing activities resulted in net cash outflows, leading to a net decrease in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------- | :------------------- | | Net cash generated from operating activities | 157,744 | (127,953) | | Net cash used in investing activities | (230,168) | (380,831) | | Net cash used in financing activities | (480,130) | (1,166,013) | | Net decrease in cash and cash equivalents | (552,554) | (1,674,797) | | Cash and cash equivalents at end of period | 270,257 | 215,953 | Notes to the Condensed Consolidated Financial Statements The notes provide detailed information on the Group's principal activities, accounting policies, estimates, segment information, income, costs, tax, loss per share, balance sheet items, equity, options, payables, borrowings, bonds, deferred income, dividends, liabilities, commitments, related party transactions, and financial instrument fair value - The Group is principally engaged in traditional curtain wall, wind farm construction, and design, manufacture, supply, and installation of building-integrated photovoltaic systems, as well as manufacturing and sales of solar products[206][210] - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and on a going concern basis[208][209][211] Revenue by Segment (RMB thousands) | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | 2025 Share % | 2024 Share % | | :--------------- | :------------------- | :------------------- | :---------- | :---------- | | Construction services | 1,032,373 | 570,211 | 61.27 | 41.44 | | Product sales | 303,808 | 419,657 | 18.03 | 30.50 | | Power sales | 329,087 | 328,733 | 19.53 | 23.89 | | Others | 19,585 | 57,332 | 1.17 | 4.17 | | Total Revenue | 1,684,853 | 1,375,933 | 100.00 | 100.00 | Revenue by Geographical Location (RMB thousands) | Region | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | 2025 Share % | 2024 Share % | | :--------------- | :------------------- | :------------------- | :---------- | :---------- | | Domestic – Mainland China | 1,479,394 | 1,191,517 | 87.81 | 86.60 | | Overseas | 205,459 | 184,416 | 12.19 | 13.40 | | Total Revenue | 1,684,853 | 1,375,933 | 100.00 | 100.00 | Net Finance Costs (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------- | :------------------- | | Total finance costs | 227,988 | 267,747 | | Total finance income | (7,850) | (10,059) | | Net finance costs | 220,138 | 257,688 | - As of June 30, 2025, the Group's property, plant, and equipment with a net book value of approximately RMB 5,690,216 thousand were pledged as collateral for bank and other loans[266] - As of June 30, 2025, total trade receivables and electricity tariff subsidies receivable amounted to RMB 7,931,457 thousand, with zero expected credit loss for electricity tariff subsidies receivable[285][289] - As of June 30, 2025, the loan balance due to the ultimate holding company, Water Development Group, was RMB 3,085,724 thousand, unsecured, bearing interest at an average annual rate of 6%, and repayable on demand[353] - As of June 30, 2025, the Group's total borrowings were RMB 6,482,081 thousand, and bonds payable were RMB 1,518,484 thousand[319][328]