台州水务(01542) - 2025 - 中期业绩

Interim Results Highlights The group experienced an 8.5% revenue decrease but significantly narrowed its loss for the period, with a substantial reduction in loss attributable to owners of the parent Key Financial Indicators For the six months ended June 30, 2025, Taizhou Water Group Co., Ltd. saw an 8.5% year-on-year revenue decrease to RMB 274.9 million, but significantly narrowed its loss for the period, with substantial reductions in loss attributable to owners of the parent and basic loss per share; the Board does not recommend an interim dividend Key Financial Indicators | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 274.9 | 300.3 | -8.5% | | Loss for the period | (24.0) | (46.9) | -48.8% | | Loss attributable to owners of the parent | (19.9) | (36.3) | -45.2% | | Basic loss per share (RMB) | (0.10) | (0.18) | -44.4% | - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[3] Interim Condensed Consolidated Financial Statements This section presents the group's financial performance and position, highlighting revenue decline, significant loss reduction, and changes in asset and liability structures Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue decreased year-on-year, but effective control over cost of sales, administrative expenses, and finance costs, coupled with significant growth in other income and gains, led to a substantial narrowing of the loss for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 274,903 | 300,346 | -8.5% | | Cost of sales | (223,005) | (232,713) | -4.2% | | Gross profit | 51,898 | 67,633 | -23.2% | | Other income and gains | 28,399 | 15,248 | +86.2% | | Administrative expenses | (39,260) | (41,343) | -5.0% | | Finance costs | (62,232) | (68,728) | -9.5% | | Loss before tax | (13,877) | (32,755) | -57.6% | | Loss for the period | (24,022) | (46,917) | -48.8% | | Loss attributable to owners of the parent | (19,875) | (36,276) | -45.2% | | Basic and diluted loss per share (RMB) | (0.10) | (0.18) | -44.4% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total non-current assets slightly increased, primarily driven by growth in right-of-use assets; net current liabilities remained negative, but total assets less current liabilities improved, while total equity slightly decreased and the gearing ratio rose Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 5,189,610 | 5,150,848 | +0.75% | | Total current assets | 491,150 | 506,205 | -2.97% | | Total current liabilities | 916,361 | 1,098,904 | -16.61% | | Net current liabilities | (425,211) | (592,699) | -28.3% | | Total assets less current liabilities | 4,725,637 | 4,596,911 | +2.80% | | Total non-current liabilities | 3,773,445 | 3,618,513 | +4.28% | | Net assets | 952,192 | 978,398 | -2.70% | | Total equity | 952,192 | 978,398 | -2.70% | - The increase in right-of-use assets was primarily due to new land use rights acquired by Nanwan Water[48] Notes to the Financial Statements This section provides detailed explanations of the Group's accounting policies, financial performance, and position, including segment information, revenue breakdown, and asset/liability specifics Company and Group Information Taizhou Water Group Co., Ltd. primarily engages in raw water supply, municipal water supply, piped direct drinking water, packaged drinking water, and water pipeline installation services in China - The Company and its subsidiaries are principally engaged in the supply of raw water, municipal water supply, piped direct drinking water, packaged drinking water, and the installation of water transmission pipelines for direct supply and distribution of tap water to end-users[7] Basis of Preparation and Going Concern The interim financial information is prepared in accordance with HKAS 34 and on a going concern basis; despite net current liabilities, the Board believes the Group has sufficient cash flow from available bank facilities and internal funds to continue as a going concern - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting[8] - As at June 30, 2025, the Group recorded net current liabilities of approximately RMB425,211,000[9] - The Directors believe that the Group will have sufficient cash flows to operate as a going concern and to meet its liabilities as and when they fall due in the foreseeable future, and accordingly, the financial statements are prepared on a going concern basis[9] Changes in Accounting Policies This period saw the first-time adoption of revised HKFRS accounting standards, primarily HKAS 21 amendments regarding lack of exchangeability, which had no impact on the interim financial information as the Group's transaction currencies are all exchangeable - The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of the following revised HKFRS accounting standards for the financial information for the current period[10] - The amendments to HKAS 21 clarify how an entity should assess whether a currency is exchangeable into another currency and how an entity should estimate the spot exchange rate when a currency lacks exchangeability[11] - As the currencies in which the Group transacts and the functional currencies used by the Group’s entities to convert to the Group’s presentation currency are all exchangeable, these amendments have no impact on the interim condensed consolidated financial information[11] Operating Segment Information The Group has only one reportable operating segment, water supply and installation of water pipelines, with all revenue and non-current assets generated from and located in mainland China - The Group has only one reportable operating segment, namely water supply and installation of water pipelines[12] Geographical Information All of the Group's revenue and non-current assets are generated from and located in mainland China - All of the Group’s revenue is generated from customers located in mainland China[13] - All of the Group’s non-current assets are located in mainland China[14] Major Customers Information For the six months ended June 30, 2025, revenue contributed by the Group's top four customers all decreased Major Customers Information | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer 1 | 68,717 | 73,247 | | Customer 2 | 64,288 | 80,956 | | Customer 3 | 47,517 | 51,657 | | Customer 4 | 37,612 | 39,468 | Revenue, Other Income and Gains The Group's total revenue decreased by 8.5% year-on-year, primarily due to reduced water sales revenue; however, other income and gains surged by 86.8%, mainly driven by increased government grants Revenue, Other Income and Gains | Revenue Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Water sales | 265,125 | 292,227 | -9.3% | | Installation services | 9,778 | 8,119 | +20.4% | | Total Revenue | 274,903 | 300,346 | -8.5% | | Other income and gains | 28,399 | 15,248 | +86.2% | - Among other income, government grants significantly increased from RMB5,104 thousand in 2024 to RMB21,465 thousand in 2025[17] Components of Loss Before Tax The composition of the Group's loss before tax indicates that cost of inventories sold and depreciation expenses are major expenditures, but increased government grants and improved net impairment losses on financial assets helped reduce the loss Components of Loss Before Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 215,482 | 227,656 | | Cost of services provided | 7,523 | 5,057 | | Depreciation of property, plant and equipment | 94,925 | 97,298 | | Depreciation of right-of-use assets | 5,094 | 5,374 | | Amortisation of other intangible assets | 357 | 92 | | Net impairment losses on trade receivables | (875) | 686 | | Net impairment losses on financial assets | (141) | (694) | | Government grants | (21,465) | (5,104) | | Net exchange differences | 10 | 3 | | Loss/(gain) on disposal of items of property, plant and equipment | 629 | (50) | Finance Costs The Group's finance costs decreased by 9.5% year-on-year, primarily due to reduced interest on bank borrowings and other borrowings, partially offset by a decrease in capitalised interest Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 59,125 | 64,058 | -7.6% | | Interest on other borrowings | 5,744 | 6,497 | -11.6% | | Interest on corporate debt instruments | 1,559 | 2,534 | -38.5% | | Less: Interest capitalised | (4,196) | (4,361) | -3.8% | | Total | 62,232 | 68,728 | -9.5% | Income Tax Income tax expense decreased by 28.9% year-on-year, primarily due to a reduction in the parent company's profit before tax, with some subsidiaries enjoying preferential tax rates for small and micro enterprises Income Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax – PRC | 10,178 | 18,384 | -44.7% | | Deferred tax | (33) | (4,222) | -99.2% | | Total | 10,145 | 14,162 | -28.3% | - Taizhou Environmental Development, Xianzhiquan Water Industry, and Taizhou Bishui Science and Technology Co., Ltd. enjoy a preferential income tax rate of 5%[20] Dividends The Board does not recommend the distribution of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the distribution of a final dividend for the year ended December 31, 2024, nor does it recommend the distribution of any interim dividend for the six months ended June 30, 2025[22] Loss Per Share Attributable to Ordinary Equity Holders of the Parent For the six months ended June 30, 2025, the basic and diluted loss per share attributable to ordinary equity holders of the parent was RMB0.10, an improvement from RMB0.18 in the same period last year Loss Per Share Attributable to Ordinary Equity Holders of the Parent | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent for basic loss per share calculation | (19,875) | (36,276) | | Weighted average number of ordinary shares in issue during the period | 200,000,000 | 200,000,000 | | Basic and diluted loss per share (RMB) | (0.10) | (0.18) | - The Group had no potentially dilutive ordinary shares in issue[24] Property, Plant and Equipment As of June 30, 2025, the carrying amount of property, plant and equipment slightly decreased, primarily due to depreciation of fixed assets Property, Plant and Equipment | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period/year | 4,298,525 | 4,331,872 | | Additions | 4,343 | 162,232 | | Disposals | (644) | (922) | | Depreciation provision for the period/year | (94,925) | (194,657) | | Carrying amount at end of period/year | 4,207,299 | 4,298,525 | - The decrease was mainly due to depreciation of fixed assets[48] Trade Receivables and Bills Receivable As of June 30, 2025, total trade receivables increased to RMB150.5 million, with amounts due from related parties accounting for the largest portion; some trade receivables have been pledged as collateral for bank loans Trade Receivables and Bills Receivable | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 16,353 | 19,271 | | Amounts due from related parties | 186,612 | 177,519 | | Subtotal | 202,965 | 196,790 | | Impairment | (52,502) | (53,377) | | Total | 150,463 | 143,413 | - As at June 30, 2025, certain trade receivables of the Group with a carrying amount of RMB152,951,000 were pledged as collateral for bank loans[30] Aging of Trade Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 85,599 | 120,419 | | 3 to 6 months | 57,888 | 20,345 | | 6 to 12 months | 5,792 | 1,302 | | 1 to 2 years | 1,180 | 1,177 | | 2 to 3 years | 4 | 170 | | Total | 150,463 | 143,413 | Trade Payables As of June 30, 2025, total trade payables slightly decreased, with a significant increase in the proportion of payables over 12 months Aging of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 26,559 | 36,948 | | 3 to 6 months | 40 | 3,342 | | 6 to 12 months | 2,854 | 5,154 | | Over 12 months | 37,349 | 25,709 | | Total | 66,802 | 71,153 | Management Discussion and Analysis This section provides an overview of the industry, the Group's development strategies, a review of business operations, and a detailed analysis of financial performance and position Industry Overview Against the backdrop of "water conservation priority" and rigid water resource constraints, the water supply industry is undergoing policy deepening and efficiency improvements, with policies driving the establishment of water-saving systems, accelerating water resource tax reform and water rights trading, and promoting a transition towards smart, low-carbon, intensive, and sustainable development - The water supply industry has entered a critical stage of policy implementation and efficiency improvement, with five ministries including the Ministry of Water Resources jointly issuing the 'Opinions on Comprehensively Building a Water Conservation Policy System'[33] - Various regions are accelerating the construction of smart water platforms to optimize water supply dispatch and leakage control, enhancing water quality safety[33] - In the future, the water supply industry will further transform towards smart, low-carbon, intensive, and sustainable development[34] Development Strategies and Outlook The Group will align with national "water conservation priority" and "dual carbon" strategies, with smart water services as its core, aiming to build a modern integrated water group by optimizing industrial layout, strengthening its main business, expanding the industrial chain, and fostering new quality productive forces to achieve high-quality development - The Group will closely adhere to the national strategies of "water conservation priority" and "dual carbon", with smart water services as its core engine, aiming to build a modern integrated water group[35] - The Group will optimize its industrial layout, further strengthen and improve its main business, and steadily advance the expansion of its industrial chain around building a higher-standard water supply guarantee system[35] - Accelerate the cultivation and development of new quality productive forces, establish an integrated innovation system of "water services + technology + talent", enhance core functions, and improve core competitiveness[35] Business Review As a leading water supply service provider in Taizhou, the Group's main businesses include raw water, municipal water, and tap water supply, along with installation services; during the reporting period, raw water and municipal water sales volumes decreased, while tap water sales volume and installation service revenue increased, as the Group actively expanded packaged drinking water and piped direct drinking water projects and continued to advance multiple engineering constructions - The Group, as a leading water supply service provider in Taizhou City, primarily engages in the supply of raw water, municipal water, and tap water[36] - The Group owns, operates, and manages the Taizhou City Water Supply System (Phases I, II, III, and IV), with a designed raw water supply capacity of approximately 1,220,000 tons per day and a municipal water supply capacity of 984,000 tons per day[36] Raw Water Supply Projects During the reporting period, raw water sales volume was 61.6 million tons, a decrease of 2.9 million tons compared to the same period last year Raw Water Sales Volume | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Raw water sales volume | 61.6 million tons | 64.5 million tons | -2.9 million tons | Municipal Water Supply Projects During the reporting period, municipal water sales volume was 77.9 million tons, a decrease of 2.8 million tons compared to the same period last year Municipal Water Sales Volume | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Municipal water sales volume | 77.9 million tons | 80.7 million tons | -2.8 million tons | Tap Water Supply Projects During the reporting period, tap water sales volume was 5.8 million tons, a slight increase compared to the same period last year Tap Water Sales Volume | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Tap water sales volume | 5.8 million tons | 5.6 million tons | +0.2 million tons | Installation Services During the reporting period, installation service revenue was approximately RMB9.8 million, an increase of RMB1.7 million compared to the same period last year, primarily due to an increase in "one household, one meter installation projects" Installation Service Revenue | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Installation service revenue | 9.8 | 8.1 | +1.7 | - The increase in installation service revenue was mainly due to an increase in "one household, one meter installation projects"[45] Expansion Projects The Group established Xianzhiquan and Bishui Science and Technology to expand packaged drinking water and piped direct drinking water projects; Xianzhiquan has completed production line acceptance and commenced operation, while Bishui Science and Technology has deployed piped direct drinking water projects in government agencies, enterprises, institutions, and residential communities, with some already in use - The Group successively established Xianzhiquan and Bishui Science and Technology in May and September 2023 to expand packaged drinking water and piped direct drinking water projects[41] - Xianzhiquan has completed production line acceptance and commenced operation, with an estimated annual production capacity of 13,500 tons[41] - Bishui Science and Technology has completed pipeline construction or equipment room construction for 8 piped direct drinking water projects, of which 4 have been put into use[41] Engineering Construction Projects The Group's ongoing engineering projects include Taizhou City Water Supply System (Phases III and IV), Taizhou Southern Water Resources Optimization and Utilization Project, packaged drinking water, and piped direct drinking water projects; some projects have been completed and put into operation or are in trial operation, with ongoing efforts in finalization and brand channel development - Ongoing engineering projects include Taizhou City Water Supply System (Phases III and IV), Taizhou Southern Water Resources Optimization and Utilization Project, packaged drinking water, and piped direct drinking water projects[42] - The second phase expansion project of Taizhou Water Plant has been put into operation; Xianzhiquan Water Industry has completed production line acceptance and commenced operation, and is planning brand channel development[43] - Bishui Science and Technology has deployed piped direct drinking water projects in government agencies, enterprises, institutions, and residential communities, having completed pipeline construction or equipment room construction for 8 projects, with 4 projects already in use and the remaining 4 projects in trial operation[43] Financial Review This section provides a detailed analysis of the Group's financial performance during the reporting period, including major changes in the statement of profit or loss and statement of financial position and their driving factors, revealing decreased revenue, narrowed losses, and shifts in the asset and liability structure Financial Performance Summary | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 274.9 | 300.3 | -8.5% | | Cost of sales | 223.0 | 232.7 | -4.2% | | Gross profit | 51.9 | 67.6 | -23.2% | | Gross profit margin | 18.9% | 22.5% | -3.6 percentage points | | Other income and gains | 28.4 | 15.2 | +86.8% | | Administrative expenses | 39.3 | 41.3 | -4.8% | | Finance costs | 62.2 | 68.7 | -9.5% | | Income tax expense | 10.1 | 14.2 | -28.9% | | Loss after tax | (24.0) | (46.9) | -48.8% | | Loss margin after tax | 8.7% | 15.6% | -6.9 percentage points | - The decrease in municipal water supply revenue was mainly due to lower water prices resulting from the "same price for water across the city" reform policy[44] - The increase in other income and gains was mainly due to financial subsidies received by Nanwan Water from the Yuhuan government[45] Analysis of Major Items in the Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's revenue decline was primarily affected by reduced water sales and lower water prices, but other income and gains significantly increased due to government grants, while administrative expenses and finance costs decreased due to lower labor costs and borrowing rates, ultimately leading to a substantial narrowing of the loss after tax Revenue The Group's total revenue decreased by 8.5% year-on-year, with raw water, municipal water, and tap water sales revenue all declining, while installation service revenue increased by 21.0% due to "one household, one meter installation projects" Revenue by Source | Revenue Source | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Raw water supply | 61.3 | 72.6 | -15.6% | | Municipal water supply | 178.8 | 194.7 | -8.2% | | Tap water supply | 24.0 | 24.6 | -2.4% | | Installation services | 9.8 | 8.1 | +21.0% | | Total Revenue | 274.9 | 300.3 | -8.5% | Cost of Sales Cost of sales decreased by 4.2% year-on-year to RMB223.0 million, primarily due to a reduction in sales volume Cost of Sales | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 223.0 | 232.7 | -4.2% | - The decrease in cost of sales was mainly due to a reduction in sales volume[45] Gross Profit and Gross Profit Margin Gross profit decreased by 23.2% year-on-year to RMB51.9 million, and the gross profit margin declined from 22.5% to 18.9%, primarily impacted by reduced revenue Gross Profit and Gross Profit Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 51.9 | 67.6 | -23.2% | | Gross profit margin | 18.9% | 22.5% | -3.6 percentage points | Other Income and Gains Other income and gains significantly increased by 86.8% year-on-year to RMB28.4 million, primarily benefiting from financial subsidies received by Nanwan Water from the Yuhuan government Other Income and Gains | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 28.4 | 15.2 | +86.8% | - This increase was mainly due to financial subsidies received by Nanwan Water from the Yuhuan government during the reporting period[45] Administrative Expenses Administrative expenses decreased by 4.8% year-on-year to RMB39.3 million, primarily due to reduced labor costs Administrative Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 39.3 | 41.3 | -4.8% | - The decrease in administrative expenses was mainly due to reduced labor costs[45] Finance Costs Finance costs decreased by 9.5% year-on-year to RMB62.2 million, primarily due to a decrease in borrowing interest rates Finance Costs | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 62.2 | 68.7 | -9.5% | - The decrease in finance costs was mainly due to a decrease in borrowing interest rates[45] Income Tax Expense Income tax expense decreased by 28.9% year-on-year to RMB10.1 million, primarily due to a reduction in the parent company's profit before tax Income Tax Expense | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 10.1 | 14.2 | -28.9% | - The decrease in income tax expense was mainly due to a reduction in the parent company's profit before tax[46] Loss After Tax and Loss Margin After Tax Loss after tax significantly narrowed by 48.8% to RMB24.0 million, and the loss margin after tax decreased from 15.6% to 8.7%, primarily benefiting from financial subsidies received by Nanwan Water from the government Loss After Tax and Loss Margin After Tax | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Loss after tax | (24.0) | (46.9) | -48.8% | | Loss margin after tax | 8.7% | 15.6% | -6.9 percentage points | - The reduction in loss was mainly due to financial subsidies received by Nanwan Water from the Yuhuan government during the reporting period[47] Analysis of Major Items in the Consolidated Statement of Financial Position The Group's asset and liability structure shows a decrease in property, plant and equipment due to depreciation, an increase in right-of-use assets due to new land use rights, an improvement in net current liabilities, but an increase in total borrowings leading to a higher gearing ratio Consolidated Statement of Financial Position Major Items | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Property, plant and equipment | 4,207.3 | 4,298.5 | -2.1% | | Right-of-use assets | 411.0 | 363.9 | +12.9% | | Inventories | 4.9 | 5.3 | -7.5% | | Trade receivables | 150.5 | 143.4 | +4.9% | | Prepayments, other receivables and other assets | 43.3 | 35.2 | +23.0% | | Trade payables | 66.8 | 71.2 | -6.2% | | Other payables and accrued expenses | 650.8 | 838.4 | -22.4% | | Deferred government grants | 126.8 | 131.7 | -3.8% | | Cash and bank balances | 291.4 | 321.3 | -9.3% | | Total borrowings and corporate debt instruments | 3,838.0 | 3,669.9 | +4.6% | | Gearing ratio | 403.1% | 375.1% | +28.0 percentage points | - The increase in right-of-use assets was primarily due to new land use rights acquired by Nanwan Water[48] - The decrease in other payables and accrued expenses was mainly due to a reduction in other payables for construction projects[49] - The increase in the gearing ratio was mainly due to new bank and other borrowings of approximately RMB164.5 million for the construction of Taizhou City Water Supply System (Phases III and IV)[49] Significant Investments For the six months ended June 30, 2025, the Group held no significant investments in the equity of any other company - For the six months ended June 30, 2025, the Group held no significant investments in the equity of any other company[50] Interim Dividend The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[51] Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures During the reporting period, the Group had no other material acquisitions or disposals of subsidiaries, associates, or joint ventures - The Group had no other material acquisitions or disposals of subsidiaries, associates, and joint ventures during the reporting period[52] Pledge of the Group's Assets As of the end of the reporting period, the Group's bank borrowings of approximately RMB3,686.5 million were secured by trade receivables and the right to receive future income from the Taizhou City Water Supply System - The Group's bank borrowings of approximately RMB3,686.5 million were secured by the Group's trade receivables and the right to receive future income from the Taizhou City Water Supply System (Phases I, II, III, and IV)[53] Foreign Exchange Risk The Group primarily operates in China, receiving revenue and paying expenses in RMB, and declaring dividends in RMB; a net exchange loss of approximately RMB10,383 was recognized during the reporting period, and foreign currency risk is currently not hedged - The Group operates its businesses in China and receives its revenue and pays its costs/expenses in RMB[54] - The Group recognised a net exchange loss of approximately RMB10,383 during the reporting period[54] - The Group currently does not hedge its foreign currency risk[54] Contingent Liabilities As of the end of the reporting period, the Group had no material contingent liabilities - As at the end of the reporting period, the Group had no material contingent liabilities[55] Other Information This section covers post-reporting period events, employee and remuneration policies, corporate governance practices, securities trading standards, and details on the audit committee and report publication Events After the Reporting Period Subsequent to the reporting period, the Board recommended appointing Grant Thornton as the domestic auditor and re-appointing Ernst & Young as the international auditor, resolutions which were approved by shareholders - The Board resolved on June 27, 2025, to recommend the appointment of Grant Thornton as the Company's domestic auditor and the re-appointment of Ernst & Young as the Company's international auditor[56] - These resolutions were approved by the Company's shareholders at the extraordinary general meeting held on July 18, 2025[56] Employees and Remuneration Policy As of June 30, 2025, the Group had 256 employees, with employee benefit expenses of approximately RMB41.9 million; employee remuneration primarily consists of fixed salaries, supplemented by performance bonuses, paid leave, and various allowances, with no significant labor disputes during the reporting period Employees and Employee Benefit Expenses | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 256 employees | 251 employees | | Employee benefit expenses (RMB million) | 41.9 | 45.9 | - The Group's employees are generally remunerated by fixed salaries and are also entitled to performance bonuses, paid leave, and various allowances[57] Corporate Governance Practices The Group is committed to maintaining high standards of corporate governance, having adopted the principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, and has complied with all code provisions during the reporting period - The Company has adopted the principles of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules as its own corporate governance code[58] - During the reporting period, the Company has complied with all the code provisions set out in the Corporate Governance Code[58] Standard Code for Securities Transactions The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all Directors and Supervisors have confirmed their compliance with the code during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[59] - Each of the Directors and Supervisors has confirmed that they have complied with the required standards set out in the Standard Code during the reporting period[59] Purchase, Sale or Redemption of Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company’s listed securities[60] Audit Committee The Audit Committee has reviewed and approved the accounting principles and practices adopted by the Group, as well as the interim results for the six months ended June 30, 2025, and submitted them to the Board for approval - The Audit Committee has reviewed with management and the Board the accounting principles and practices adopted by the Group and the interim results for the six months ended June 30, 2025[61] - The Audit Committee has also approved the interim results for the six months ended June 30, 2025, and submitted them to the Board for approval[61] Results and Report Publication This interim results announcement has been published on the HKEX and the Company's website, and the 2025 interim report containing all required information will be dispatched to shareholders and published on the websites in due course - This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company’s website (www.zjtzwater.com)[62](index=62&type=chunk) - The Company’s 2025 interim report containing all the information required by the Listing Rules will be despatched to shareholders and published on the respective websites of the Stock Exchange and the Company in due course[62] Board of Directors As of the announcement date, the Board of Directors comprises Mr. Yang Jun, Chairman and Executive Director, Mr. Pan Gang, Executive Director, and several Non-executive Directors and Independent Non-executive Directors - The executive Directors are Mr. Yang Jun and Mr. Pan Gang; the non-executive Directors are Mr. Lin Genman, Ms. Fang Ya, Mr. Yu Yangbin, Mr. Yang Yide, Mr. Lin Yang, Mr. Shao Aiping, Ms. Ying Nan and Mr. Ye Xiaofeng; and the independent non-executive Directors are Mr. Huang Chun, Ms. Hou Meiwen, Mr. Li Weizhong, Ms. Lin Suyan and Mr. Wang Yongyue[63]