慧居科技(02481) - 2025 - 中期财报

Company Information This section provides fundamental company information, including governance structure, key personnel, and essential contact and listing details - The company's board of directors includes executive directors Mr. Li Baoshan (Chairman), Mr. Liu Zhigang, Mr. Luo Wei; non-executive directors Mr. Miao Wenbin, Mr. Ma Fulin, Ms. Xu Lijie; and independent non-executive directors Dr. Xie Xiaodong, Mr. Zhang Haogang, Dr. Zhu Qing[5] - The Audit Committee comprises Mr. Zhang Haogang (Chairman), Mr. Miao Wenbin, and Dr. Zhu Qing[5] - The company's registered office and headquarters are located at Room 202, 2nd Floor, No. 15 Shuangliang Road, Ligang Street, Jiangyin City, Jiangsu Province, China, with its principal place of business in Hong Kong at Unit B, 17th Floor, United Centre, Admiralty[5] - The company's stock code is 2481, and its auditor is PricewaterhouseCoopers[7] Financial Performance Summary This section outlines key financial performance metrics for the six months ended June 30, 2025, including revenue, profit, and per-share earnings, with comparative data Financial Performance Summary for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (Approx. %) | | :--- | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | -8.9% | | Profit and Total Comprehensive Income Attributable to Owners of the Company | 111,741 | 112,287 | -0.5% | | Earnings Per Share (Basic and Diluted) Attributable to Owners of the Company | 0.37 | 0.37 | 0% | Financial Position Summary as of June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (Approx. %) | | :--- | :--- | :--- | :--- | | Total Assets | 5,519,318 | 5,966,668 | -7.5% | | Equity Attributable to Owners of the Company | 1,237,002 | 1,174,722 | +5.3% | | Total Liabilities | 3,991,268 | 4,537,820 | -12.0% | Management Discussion and Analysis This section provides comprehensive insights into the company's operational performance, financial health, industry dynamics, and strategic outlook for the reporting period Industry Review This section reviews the growth of China's heating and energy management industries, emphasizing the impact of clean heating trends and supportive government policies - China's total heating service area grew from 8.8 billion square meters in 2018 to 11.5 billion square meters in 2023, with a compound annual growth rate of 5.5%, projected to reach 13.8 billion square meters by 2027[11] - Government policies encourage clean heating, promoting industrial waste heat and geothermal energy to align with carbon peak and carbon neutrality goals[11] - China's heating facility engineering construction service market is projected to grow to RMB 70.8 billion by 2027, driven by upgrades to existing facilities, new energy-saving construction, and government policy support[12] - China's EMC (Energy Management Contract) industry is developing rapidly, with government incentives including tax breaks, interest subsidies, and financial rewards to encourage energy saving[13] Business Review This section details the company's business performance, including revenue breakdown by service type and notable awards received during the reporting period - The company is one of China's leading non-state-owned inter-provincial heating service providers, establishing a leading position in the "Three Norths" region heating service industry[14] - During the reporting period, total revenue was approximately RMB 759.6 million, a year-on-year decrease of 8.9%; profit attributable to owners of the company was approximately RMB 111.7 million, a year-on-year decrease of 0.5%[14] - Heating service revenue was approximately RMB 723.2 million, a year-on-year increase of 3.8%, primarily due to an increase in heating area, with total actual heating service area increasing by 3.5% to approximately 50.2 million square meters[16] Revenue from Heating and Heat Transmission and Distribution Customers (by Customer Type) | Customer Type | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Residential | 342,745 | 59.8% | 331,490 | 60.1% | | Non-residential | 230,369 | 40.2% | 219,913 | 39.9% | | Total | 573,114 | 100.0% | 551,403 | 100.0% | - Revenue from heating-related engineering construction services was approximately RMB 23.3 million, a significant year-on-year decrease of 80.9%, mainly due to fewer pipeline network construction and heat exchange station projects[22] - EMC service revenue was RMB 1.5 million, remaining flat compared to the same period[24] - Other business revenue was approximately RMB 11.6 million, a year-on-year decrease of 15.9%, primarily due to a decline in heat transmission service revenue[25] - The company and its subsidiaries received multiple honors and awards during the reporting period, including "2024 Outstanding Overseas Listed Company" and "2024 Outstanding Contribution Enterprise to County Economic Development"[26] Financial Review This section analyzes key financial metrics, including revenue, costs, profits, and expenses, explaining the drivers behind changes in the company's financial performance Comparison of Consolidated Statement of Comprehensive Income for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | | Cost of sales | (520,005) | (600,205) | | Gross profit | 239,566 | 233,794 | | Operating profit | 184,260 | 199,175 | | Profit before income tax | 175,915 | 190,581 | | Profit and total comprehensive income for the period | 148,664 | 154,654 | | Profit attributable to owners of the Company | 111,741 | 112,287 | - Total revenue decreased by 8.9% year-on-year to RMB 759.6 million, primarily due to a decline in engineering construction service revenue[31] - Cost of sales decreased by 13.4% year-on-year to RMB 520.0 million, mainly due to a reduction in engineering construction services[32] - Gross profit increased by 2.5% year-on-year to RMB 239.6 million, with gross margin improving from 28.0% to 31.5%, primarily benefiting from cost control measures and a reduction in the scale of engineering construction services operations[34][35] - Administrative expenses increased by 3.1% year-on-year to RMB 72.4 million, mainly due to increased employee benefit expenses[36] - Reversal of impairment losses on financial assets and contract assets was approximately RMB 3.4 million, a significant decrease from RMB 19.4 million in the same period last year, primarily due to fewer bad debt reversals[37] - Other income decreased by 4.3% year-on-year to RMB 17.6 million, mainly due to reduced government grants[38] - Other losses, net, increased by 77.3% year-on-year to RMB 3.9 million, primarily due to increased fair value losses on investment properties[40] - Finance income decreased by 25.7% year-on-year to RMB 7.5 million, mainly due to lower bank deposit interest income; finance costs decreased by 21.0% year-on-year to RMB 18.4 million, primarily due to reduced borrowings[41] - Profit for the period decreased by 3.9% year-on-year to RMB 148.7 million, mainly due to a decrease in the reversal of impairment losses on financial assets and contract assets[43] - Profit attributable to owners of the company decreased by 0.5% year-on-year to RMB 111.7 million, consistent with the trend of reduced profit for the period[44] Liquidity and Financial Resources This section details the company's liquidity, leverage, borrowing profile, foreign exchange risk, capital commitments, and asset pledges Cash and Cash Equivalents | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 309,100 | 645,700 | | Restricted cash | 31,000 | 74,200 | - Current assets were approximately RMB 1,074.2 million, current liabilities were approximately RMB 1,511.9 million, resulting in a current ratio of approximately 0.7 times (December 31, 2024: 0.8 times)[45] - The gearing ratio (total borrowings divided by total equity) was 0.5 as of June 30, 2025, consistent with December 31, 2024[46] - Total bank borrowings were approximately RMB 695.9 million, with approximately RMB 338.6 million repayable within one year; the weighted average effective interest rate was 4.23% per annum (December 31, 2024: 4.43%)[48][50] - Some bank borrowings are guaranteed by the company and secured by trade receivables or intangible assets[49] - Capital commitments were approximately RMB 32.3 million, primarily related to intangible assets for expanding existing and preparing new heating service projects[52] - There were no significant investments, acquisitions, or disposals; intangible assets (approximately RMB 732.0 million) and trade receivables (approximately RMB 137.9 million) were pledged as collateral for bank borrowings[53][54] - The Group has no significant contingent liabilities[55] - The company's financial management policy is to invest surplus cash reserves in low-risk, short-term financial products to generate income, managed by professionals[56] Employment, Remuneration Policies and Training This section details the company's employee numbers, welfare expenses, remuneration policies, and training initiatives, highlighting its commitment to staff development - As of June 30, 2025, the Group had 830 employees, with total employee benefit expenses of approximately RMB 46.6 million[58] - Remuneration packages include basic salary, performance-based pay, and allowances, determined by qualifications, expertise, and experience[58] - The company complies with China's social welfare regulations, providing employees with benefits such as pension, medical, unemployment, work injury, maternity insurance, and housing provident fund[58] - The company invests in continuous education and training programs for management and general staff, focusing on operations, technical knowledge, workplace safety, and environmental protection[58] Quantitative and Qualitative Disclosures About Financial Risks This section outlines the company's financial risk exposures and management strategies, with detailed disclosures referenced elsewhere - The Group's operations face market risk, credit risk, and liquidity risk, with risk management plans designed to mitigate financial market unpredictability and minimize negative impacts[59] - There have been no significant changes in risk factors and management policies since the year ended December 31, 2024; detailed information can be found in Note 5 of the interim report[59] Outlook This section outlines the company's strategic plans for the second half of 2025, focusing on business expansion, operational efficiency, digital transformation, and carbon-neutral heating technology R&D - In the second half of 2025, the company will adopt a "scale + quality" dual-driven strategy, focusing on expanding new heating services (including steam heating) and steadily advancing project implementation in key provinces of North China[60] - Regionally, the focus will be on the Bohai Rim Economic Circle (Liaodong Peninsula, Shandong Peninsula, and Beijing-Tianjin-Hebei region), while also prioritizing Inner Mongolia and Shanxi as key development areas[60] - Operationally, the company will optimize diversified heat sources (including waste heat recovery), promote clean operations and intelligent dispatching, reduce pipeline energy loss, and enhance service quality and operational efficiency[60] - The company will continue to improve its digital heating service platform, establish an R&D team to enhance functional development, and achieve optimized management, intelligence, and safety[61] - Operating a heating technology center within the Carbon Neutral Central Research Institute, the company will actively research new energy heating service applications, formulate carbon-neutral heating technology development plans, and promote the adoption of new energy solutions[63] Events After the Reporting Period This section confirms no significant events impacting financial position or operations occurred between the reporting period end and the interim report publication date - The Board is not aware of any significant events after the reporting period and up to the date of this interim report that would have a material impact on the Group's financial position or operations[64] Future Material Investments and Plans for Capital Assets This section confirms no future material investments or new capital asset plans as of the interim report date - As of the date of this interim report, the company has no plans for any future material investments or new capital assets[65] Other Information This section provides supplementary information on corporate governance, shareholding, securities trading, dividend policy, use of proceeds, and significant legal matters Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation This section discloses the interests and short positions of directors, supervisors, and the chief executive in the company's shares and debentures as of June 30, 2025 Shareholdings of Directors, Supervisors and Chief Executive | Name | Position | Class of Shares | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Li Baoshan | Executive Director | H Shares | Beneficial Owner | 6,000,000 | 1.99% | | Mr. Miao Wenbin | Non-executive Director | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Ma Fulin | Non-executive Director | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Ma Peilin | Supervisor | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Chen Zhen | Supervisor | H Shares | Spouse's Interest | 201,000,000 | 66.66% | - Hongda Group Co., Ltd. holds 201,000,000 H shares, wholly owned by Shuangliang Technology, which is held by individual shareholders including Mr. Miao Wenbin, Mr. Ma Fulin, and Mr. Ma Peilin, who are collectively deemed controlling shareholders with 66.66% equity interest[68] Directors' Rights to Acquire Shares or Debentures This section confirms no directors, their spouses, or minor children were granted or exercised rights to acquire company shares or debentures during the reporting period - During the reporting period, no director or their respective spouse or children under the age of 18 were granted any rights to acquire benefits by subscribing for shares or debentures of the company, nor did they exercise such rights[70] Interests and/or Short Positions of Substantial Shareholders in Shares and Underlying Shares This section discloses substantial shareholders' interests and short positions in the company's shares and underlying shares as of June 30, 2025 Shareholdings of Substantial Shareholders | Name/Entity | Class of Shares | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Hongda Group Co., Ltd. | H Shares | Beneficial Owner | 201,000,000 | 66.66% | | Shuangliang Technology | H Shares | Interest in Controlled Corporation | 201,000,000 | 66.66% | | Hong Kong Star One Investment Management Co., Ltd. | H Shares | Beneficial Owner | 15,660,000 | 5.19% | | Ms. Zhou Xiaoping | H Shares | Interest in Controlled Corporation | 15,660,000 | 5.19% | | Jianggang International Investment Co., Ltd. | H Shares | Beneficial Owner | 14,823,000 | 4.91% | | Jiangyin State-owned Capital Holding Group Financial Investment Co., Ltd. | H Shares | Interest in Controlled Corporation | 14,823,000 | 4.91% | | Jiangyin State-owned Capital Holding (Group) Co., Ltd. | H Shares | Interest in Controlled Corporation | 14,823,000 | 4.91% | - Hongda Group Co., Ltd., Shuangliang Technology, and individual shareholders (Mr. Miao Shuangda, Mr. Miao Wenbin, Mr. Jiang Rongfang, Mr. Ma Peilin, Mr. Ma Fulin, Mr. Miao Zhiqiang, Mr. Miao Heida, and Ms. Miao Shuya) are collectively deemed a group of controlling shareholders of the company, indirectly and jointly holding 201,000,000 H shares[74][79] Purchase, Sale or Redemption of Listed Securities This section confirms no purchase, sale, or redemption of listed securities by the company or its subsidiaries, and no treasury shares held during the reporting period - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and no treasury shares were held as of June 30, 2025[77] Interim Dividend This section confirms no interim dividends were declared or paid by the company during the reporting period - During the reporting period, the company did not declare or pay any interim dividends (same period: nil)[78] Corporate Governance Practices This section confirms the company's adherence to the Corporate Governance Code, with continuous review and enhancement of internal controls - The company has adopted the Corporate Governance Code as its own corporate governance code and complied with all its principles and code provisions during the reporting period[80][81] - The company continuously reviews and strengthens internal controls and procedures to adapt to regulatory changes and best practice developments[80] Compliance with the Model Code for Securities Transactions This section confirms compliance with a securities transaction code for directors and supervisors, no less stringent than the Model Code - The company has adopted a code of conduct for securities transactions by directors and supervisors, with terms no less stringent than the Model Code, and all directors and supervisors have confirmed compliance with it[82] Directors' Responsibilities for Financial Statements This section clarifies directors' responsibilities for preparing and timely publishing the Group's financial statements in compliance with regulations and accounting standards - The directors confirm their responsibility for preparing the Group's financial statements and accounts, ensuring compliance with relevant regulations and applicable accounting standards, and timely publication by the company[83] Changes in Information of Directors, Supervisors and Senior Management This section discloses changes in directors, supervisors, and senior management information, primarily Nomination Committee member adjustments, during the reporting period - Mr. Li Baoshan ceased to be the Chairman and a member of the Nomination Committee; Dr. Zhu Qing was appointed as the Chairman, and Ms. Xu Lijie was appointed as a member of the Nomination Committee, effective August 22, 2025[87] Audit Committee and Review of Interim Financial Information This section details the Audit Committee's composition and review of interim financial information, confirming compliance with accounting standards and adequate disclosure - The Audit Committee comprises two independent non-executive directors (Mr. Zhang Haogang, Dr. Zhu Qing) and one non-executive director (Mr. Miao Wenbin)[85] - The Audit Committee has reviewed the Group's unaudited interim results for the reporting period, deeming them prepared in accordance with applicable accounting standards and relevant requirements, with adequate disclosure[85] Change in Use of Proceeds from Listing This section discloses the reallocation of unused listing proceeds from the "Xinmi Heating Project" to the "Baotou Project Construction," detailing the rationale and anticipated benefits - The company decided to reallocate the unused portion of net proceeds originally designated for the "Xinmi Heating Preparation and Expansion Project" to the "Baotou Project Construction"[88] Comparison of Changes in Use of Proceeds from Listing | Use of Proceeds | Planned Allocation Before Revision (RMB millions) | Planned Allocation After Revision (RMB millions) | Amount Utilized as of June 30, 2025 (RMB millions) | Unutilized Amount After Reallocation (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Lanzhou Peak Shaving Boiler Construction | 85.3 | 85.3 | 42.3 | 43.0 | | Xinmi Heating Preparation and Expansion Project | 68.2 | 18.7 | 18.7 | — | | Baotou Project Construction | — | 49.5 | — | 49.5 | | Working Capital and Other General Corporate Purposes | 17.1 | 17.1 | 17.1 | — | | Total | 170.6 | 170.6 | 78.1 | 92.5 | - The primary reasons for the change are that the Baotou project is approaching a significant payment milestone, and the Xinmi project's secondary transmission and distribution pipeline network is largely complete with contingency funds available[91][93] - The Board believes this change will enable the company to more effectively deploy financial resources, aligning with the Group's overall business strategy and the best interests of shareholders[94] Material Litigation This section confirms no material litigation, arbitration, or administrative proceedings significantly impacting the company's financial position or operating results as of June 30, 2025 - As of June 30, 2025, the company was not involved in any material litigation, arbitration, or administrative proceedings that would have a significant adverse impact on its financial position or operating results[95] Interim Condensed Consolidated Statement of Comprehensive Income This table presents the unaudited consolidated statement of comprehensive income for the six months ended June 30, 2025, detailing revenue, costs, profits, and tax expenses with comparative figures Interim Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | | Cost of sales | (520,005) | (600,205) | | Gross profit | 239,566 | 233,794 | | Administrative expenses | (72,427) | (70,229) | | Reversal of impairment losses on financial assets and contract assets | 3,441 | 19,411 | | Other income | 17,568 | 18,446 | | Other losses — net | (3,888) | (2,247) | | Operating profit | 184,260 | 199,175 | | Finance income | 7,481 | 10,077 | | Finance costs | (18,432) | (23,250) | | Finance costs — net | (10,951) | (13,173) | | Share of profit of associates accounted for using the equity method | 2,606 | 4,579 | | Profit before income tax | 175,915 | 190,581 | | Income tax expense | (27,251) | (35,927) | | Profit and total comprehensive income for the period | 148,664 | 154,654 | | Profit attributable to owners of the Company | 111,741 | 112,287 | | Non-controlling interests | 36,922 | 42,367 | | Basic and diluted earnings per share (RMB) | 0.37 | 0.37 | Interim Condensed Consolidated Statement of Financial Position This table presents the unaudited consolidated statement of financial position as of June 30, 2025, detailing assets, equity, and liabilities with comparative audited data Interim Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | ASSETS | | | | Non-current assets | 4,445,093 | 4,496,680 | | Current assets | 1,074,225 | 1,469,988 | | TOTAL ASSETS | 5,519,318 | 5,966,668 | | EQUITY | | | | Equity attributable to owners of the Company | 1,237,002 | 1,174,722 | | Non-controlling interests | 291,048 | 254,126 | | TOTAL EQUITY | 1,528,049 | 1,428,848 | | LIABILITIES | | | | Non-current liabilities | 2,479,404 | 2,624,658 | | Current liabilities | 1,511,864 | 1,913,162 | | TOTAL LIABILITIES | 3,991,268 | 4,537,820 | | TOTAL EQUITY AND LIABILITIES | 5,519,318 | 5,966,668 | Interim Condensed Consolidated Statement of Changes in Equity This table presents the unaudited consolidated statement of changes in equity for the six months ended June 30, 2025, detailing movements in share capital, reserves, retained earnings, and non-controlling interests Interim Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Metric | Share capital (RMB thousands) | Other reserves (RMB thousands) | Retained earnings (RMB thousands) | Total (RMB thousands) | Non-controlling interests (RMB thousands) | Total equity (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 301,600 | 391,499 | 481,623 | 1,174,722 | 254,126 | 1,428,848 | | Profit for the period | — | — | 111,741 | 111,741 | 36,922 | 148,663 | | Total comprehensive income | — | — | 111,741 | 111,741 | 36,922 | 148,663 | | Dividends | — | — | (49,462) | (49,462) | — | (49,462) | | Balance at June 30, 2025 | 301,600 | 391,499 | 543,902 | 1,237,001 | 291,048 | 1,528,049 | | Balance at January 1, 2024 | 301,600 | 354,800 | 399,408 | 1,055,808 | 243,197 | 1,299,005 | | Profit for the period | — | — | 112,287 | 112,287 | 42,367 | 154,654 | | Total comprehensive income | — | — | 112,287 | 112,287 | 42,367 | 154,654 | | Dividends | — | — | (45,240) | (45,240) | (71,500) | (116,740) | | Balance at June 30, 2024 | 301,600 | 354,800 | 466,455 | 1,122,855 | 223,228 | 1,346,083 | Interim Condensed Consolidated Statement of Cash Flows This table presents the unaudited consolidated statement of cash flows for the six months ended June 30, 2025, detailing cash flows from operating, investing, and financing activities, and ending cash balances Interim Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (138,796) | (154,772) | | Net cash used in investing activities | (95,651) | (134,209) | | Net cash used in financing activities | (102,142) | (78,177) | | Net decrease in cash and cash equivalents | (336,590) | (367,158) | | Cash and cash equivalents at beginning of period | 645,680 | 713,175 | | Cash and cash equivalents at end of period | 309,090 | 346,017 | Notes to the Interim Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering accounting policies, estimates, risk management, and specific financial statement line items 1 General Information This section provides general information about Huiju Technology Co., Ltd., including its establishment, business, listing, controlling shareholder, and financial reporting details - Huiju Technology Co., Ltd. was established in China on September 3, 2010, primarily engaged in heating and related services[108] - The company's H shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on July 10, 2023[108] - The company is controlled by Hongda Group Co., Ltd., which is held by individual shareholders including Mr. Miao Shuangda[108] - The interim financial information is presented in RMB and was approved for issue by the Board of Directors on August 22, 2025, and is unaudited[108][109] 2 Basis of Presentation This section explains the interim financial information's preparation under IAS 34 and the rationale for the going concern basis despite net current liabilities - The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements for the year ended December 31, 2024[110] - As of June 30, 2025, the Group had net current liabilities of RMB 437,639,000, but considering the nature of contract liabilities (not involving future cash outflows) and available unused bank facilities, management believes the Group will have sufficient financial resources to support operations, thus preparing on a going concern basis[110][111] - As of June 30, 2025, the Group had unused bank facilities of RMB 502 million, available for drawdown over various future periods[111] 3 Principal Accounting Policies This section confirms consistent accounting policies with the prior year and details the impact assessment of newly adopted revised standards - The accounting policies adopted are consistent with those described in the annual financial statements for the year ended December 31, 2024[112] New and Revised Standards Effective on or After January 1, 2024 | Standard | Description | Effective Date | | :--- | :--- | :--- | | IFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | January 1, 2024 | | IAS 1 (Amendments) | Classification of Liabilities as Current or Non-current | January 1, 2024 | | IAS 1 (Amendments) | Non-current Liabilities with Covenants | January 1, 2024 | | IAS 7 and IFRS 7 (Amendments) | Supplier Finance Arrangements | January 1, 2024 | - The adoption of these revised standards has not had any significant impact on the Group's results and financial position[114] - New standards and amendments to existing standards issued but not yet effective include IFRS 9 and 7 (Amendments), IFRS 19, IFRS 18, etc., which management expects will not have a significant impact upon adoption[119] 4 Critical Accounting Estimates and Judgments This section explains that critical accounting estimates and judgments for interim financial information are consistent with those applied in the annual financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[120] - The significant judgments made by management and the key sources of estimation uncertainty in preparing this interim financial information are the same as those applied in the annual financial statements for the year ended December 31, 2024[120] 5 Financial Risk Management This section outlines the company's financial risk exposures (market, credit, liquidity) and management policies, including liquidity maturity analysis and fair value estimates - The Group's operations face market risk, credit risk, and liquidity risk, with risk management plans focused on mitigating financial market unpredictability[121] - There have been no significant changes in risk factors and management policies since the year ended December 31, 2024[122] - Management monitors rolling forecasts of liquidity reserves and cash equivalents, expecting to fund future cash flow requirements through cash generated from operations and available bank facilities[123] Maturity Analysis of Financial Liabilities (June 30, 2025) | Category | On demand or within 1 year (RMB thousands) | 1 to 2 years (RMB thousands) | 2 to 5 years (RMB thousands) | Over 5 years (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Lease liabilities | 728 | 503 | 1,038 | 1,120 | 3,389 | | Borrowings | 406,497 | 114,171 | 189,390 | 47,110 | 757,168 | | Trade and other payables | 913,416 | 26,740 | 25,985 | — | 966,141 | | Total | 1,320,641 | 141,414 | 216,413 | 48,230 | 1,726,698 | - For the six months ended June 30, 2025 and 2024, no financial assets were classified as Level 3 instruments[128] 6 Seasonal or Cyclical Operations This section explains the seasonal nature of heating services, with revenue and operating profit concentrated in the first and fourth fiscal quarters - The company's heating service period typically runs from October to April of the following year, with revenue and operating profit relatively evenly distributed across the first and fourth fiscal quarters[129] - For the year ended December 31, 2024, 45% of the cumulative heating and heat transmission and distribution revenue in the first half related to the 2023-2024 heating service period, while the remaining 55% accumulated in the second half related to the 2024-2025 heating service period[129] 7 Revenue and Segment Information This section details revenue by service type and recognition timing, noting the company operates as a single segment with all revenue and non-current assets from China Revenue from Contracts with Customers (For the Six Months Ended June 30) | Service/Product Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Heating and heat transmission and distribution | 665,502 | 643,893 | | Engineering construction services | 23,321 | 122,202 | | Connection fees | 57,666 | 52,591 | | Heat transmission services | 1,589 | 2,128 | | Sale of goods | 694 | 1,986 | | Energy management services | 1,488 | 1,488 | | Design services | 4,892 | 2,974 | | Others | 4,419 | 6,737 | | Total | 759,571 | 833,999 | - Revenue recognition timing: RMB 8,663 thousand recognized at a point in time (2024: RMB 8,891 thousand), and RMB 750,908 thousand recognized over time (2024: RMB 825,108 thousand)[130] - The Group is primarily engaged in heating and related services in China, with the chief operating decision-maker reviewing this business as a single operating segment[131] - All of the Group's revenue and non-current assets originate from China[132][133] - Contract liabilities primarily arise from heating-related customer prepayments and connection fees, typically received before contract performance[134] 8 Expenses by Nature This section details expenses by nature, including heat purchase, construction, amortization, and employee benefits, with comparative figures Expenses by Nature (For the Six Months Ended June 30) | Expense Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Heat purchase costs | 230,049 | 225,422 | | Construction costs | 23,005 | 110,209 | | Amortisation of intangible assets | 112,144 | 108,147 | | Materials consumed | 63,594 | 65,472 | | Utility costs | 54,375 | 56,810 | | Employee benefit expenses | 46,560 | 45,843 | | Depreciation of property, plant and equipment | 14,934 | 9,209 | | Maintenance expenses | 5,197 | 5,932 | | Entertainment expenses | 5,742 | 5,622 | | Travel expenses | 3,646 | 4,485 | | Consultancy and professional service fees | 4,011 | 2,006 | | Total | 592,432 | 670,434 | 9 Other Income This section details other income, primarily government grants and rental income, and clarifies the nature of the grants Other Income (For the Six Months Ended June 30) | Income Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 9,953 | 10,496 | | Rental income | 7,615 | 7,950 | | Total | 17,568 | 18,446 | - Government grants are primarily related to heating operations, used to subsidize the acquisition or construction of heating facilities or to compensate for project losses, and are non-recurring in nature[138] 10 Other Losses — Net This section details other losses, net, primarily fair value losses on investment properties and foreign exchange losses, with comparative figures Other Losses — Net (For the Six Months Ended June 30) | Loss Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value losses on investment properties | (4,830) | (5,325) | | Gain on settlement of trade receivables | — | 2,043 | | Foreign exchange (losses) / gains | (363) | 1,097 | | Loss on derecognition of a subsidiary | — | (181) | | (Loss) / gain on disposal of property, plant and equipment | (9) | 2 | | Others | 1,315 | 117 | | Total | (3,888) | (2,247) | 11 Finance Income and Costs This section details the components of finance income and costs, including interest income and expense, and presents the net finance costs Finance Income (For the Six Months Ended June 30) | Income Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 2,812 | 3,972 | | Interest income from financing arrangements | — | 1,070 | | Interest income from finance leases to related parties | 521 | 541 | | Interest income on lease receivables | 4,148 | 4,494 | | Total | 7,481 | 10,077 | Finance Costs (For the Six Months Ended June 30) | Cost Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on borrowings | (15,405) | (18,454) | | Interest expense on lease liabilities | (78) | (580) | | Interest expense on instalment payments for acquisition of intangible assets | (1,907) | (2,866) | | Interest expense on government loans | — | (464) | | Major overhaul provision | (943) | (886) | | Interest expense on sale and leaseback | (100) | — | | Total | (18,432) | (23,250) | | Finance costs — net | (10,951) | (13,173) | 12 Income Tax Expense This section details income tax expense, including current and deferred tax, and explains the recognition basis and estimated average annual tax rate Income Tax Expense (For the Six Months Ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax — China corporate income tax | 32,343 | 39,257 | | Deferred income tax | (5,092) | (3,330) | | Total | 27,251 | 35,927 | - Income tax expense is recognized based on management's estimated weighted average annual effective income tax rate for the entire fiscal year, with an estimated average annual tax rate of 15% for the year ended June 30, 2025 (2024: 19%)[143] 13 Earnings Per Share This section provides the calculation for basic and diluted earnings per share, noting they are identical due to no potential dilutive ordinary shares Basic Earnings Per Share (For the Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousands) | 111,741 | 112,287 | | Weighted average number of ordinary shares in issue (thousands) | 301,600 | 301,600 | | Basic earnings per share (RMB per share) | 0.37 | 0.37 | - There were no potential dilutive ordinary shares outstanding as of June 30, 2025 and 2024, thus diluted earnings per share are the same as basic earnings per share[145] 14 Dividends This section confirms no interim dividends were declared or paid by the company during the reporting period - For the six months ended June 30, 2025, the company did not declare or pay any interim dividends (for the six months ended June 30, 2024: nil)[146] 15 Investments Accounted for Using the Equity Method This section details changes in the carrying amount of equity method investments, including opening balance, additions, and share of net profit Changes in Carrying Amount of Investments Accounted for Using the Equity Method (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Opening balance | 126,232 | 110,132 | | Additions | 8,000 | — | | Share of net profit | 2,606 | 4,579 | | Closing balance | 136,838 | 114,711 | 16 Property, Plant and Equipment This section details changes in property, plant, and equipment carrying amounts, including additions, disposals, and depreciation, and addresses buildings without ownership certificates Changes in Net Carrying Amount of Property, Plant and Equipment (For the Six Months Ended June 30, 2025) | Item | Buildings (RMB thousands) | Machinery and equipment (RMB thousands) | Motor vehicles (RMB thousands) | Office and electronic equipment (RMB thousands) | Leasehold improvements (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net carrying amount at January 1, 2025 | 119,303 | 59,908 | 5,299 | 4,322 | 729 | 189,561 | | Additions | 2,556 | 1,772 | 2,832 | 658 | 3,992 | 11,809 | | Disposals | — | (731) | (75) | (101) | — | (907) | | Depreciation | (3,534) | (9,333) | (999) | (896) | (1,077) | (15,839) | | Net carrying amount at June 30, 2025 | 118,325 | 51,615 | 7,058 | 3,983 | 3,644 | 184,624 | - As of June 30, 2025, the carrying amount of buildings for which property ownership certificates have not yet been obtained or transfer procedures not completed was RMB 24,273,000[148] - The directors believe the Group has the legal and effective right to occupy and use these buildings, will obtain relevant ownership certificates in due course, and will not face significant penalties for their temporary use in business operations[149] 17 Investment Properties This section details changes in investment property carrying amounts, including additions and fair value adjustments, and reports related rental income and fair value losses Changes in Carrying Amount of Investment Properties (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Opening balance | 373,179 | 344,197 | | Additions | — | 41,274 | | Net fair value adjustment losses | (4,830) | (5,325) | | Closing balance | 368,349 | 380,146 | Amounts Recognized in Profit or Loss from Investment Properties (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Rental income from operating leases | 7,615 | 7,950 | | Fair value losses | (4,830) | (5,325) | 18 Intangible Assets This section details changes in intangible asset carrying amounts, including goodwill and operating concessions, impairment test results, amortization, and collateral status Changes in Net Carrying Amount of Intangible Assets (For the Six Months Ended June 30, 2025) | Item | Goodwill (RMB thousands) | Operating concessions (RMB thousands) | Software (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Net carrying amount at January 1, 2025 | 9,047 | 3,580,205 | 11,003 | 3,600,255 | | Additions | — | 60,462 | — | 60,462 | | Amortisation | — | (111,558) | (41) | (111,599) | | Net carrying amount at June 30, 2025 | 9,047 | 3,529,109 | 10,962 | 3,549,118 | - There were no indications of impairment for goodwill related to Taiyuan Renewable Energy during the reporting period, thus no impairment provision was required[154] - Impairment test results for intangible assets related to Shuozhou Renewable Energy indicated no further impairment charges were required, but management believes any reasonably possible change in key assumptions would lead to further impairment recognition[155] - Amortization expenses for intangible assets were primarily recognized in cost of sales (RMB 111,584 thousand) and administrative expenses (RMB 560 thousand)[156] - As of June 30, 2025, intangible assets with a carrying amount of approximately RMB 732,049,000 were pledged as collateral for bank borrowings[156] 19 Trade Receivables This section details trade receivables, including related party and third-party amounts, lease receivables, impairment provisions, aging analysis, and collateral Trade Receivables (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Included in current assets | | | | Trade receivables — related parties | 2,409 | 2,712 | | Trade receivables — third parties | 637,909 | 623,927 | | Lease receivables | 18,904 | 18,904 | | Less: Impairment provision for trade and lease receivables | (88,564) | (69,709) | | Subtotal (Current) | 570,658 | 575,834 | | Included in non-current assets | | | | Lease receivables | 80,701 | 93,576 | | Less: Impairment provision for lease receivables | — | (22,000) | | Subtotal (Non-current) | 80,701 | 71,576 | | Total | 651,359 | 647,410 | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 403,268 | 389,079 | | 1 to 2 years | 172,483 | 176,229 | | 2 to 3 years | 28,001 | 37,291 | | Over 3 years | 36,566 | 24,040 | | Total | 640,317 | 626,639 | - The Group generally does not offer credit terms to customers, and trade receivables are denominated in RMB[158][160] - As of June 30, 2025, trade receivables with a carrying amount of approximately RMB 137,900,000 were pledged as collateral for bank borrowings[160] 20 Cash and Cash Equivalents This section details cash and cash equivalents, including bank and hand cash, restricted cash, its purpose, and the denomination currency Cash and Cash Equivalents (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash at bank | 340,105 | 719,796 | | Cash on hand | 10 | 59 | | Less: Restricted cash | (31,025) | (74,175) | | Cash and cash equivalents | 309,090 | 645,680 | - Restricted cash is primarily used as margin for issuing bank acceptance bills (RMB 21,025,000) and as a deposit for leased heat pipeline storage services (RMB 10,000,000)[159] Denomination Currency of Cash and Cash Equivalents (As of June 30, 2025) | Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | HKD | 6,303 | 67,292 | | USD | — | 18,578 | | RMB | 284,208 | 578,388 | | Total | 309,089 | 645,680 | 21 Share Capital This section details the company's share capital, including ordinary share count and total amount, confirming no changes during the reporting period Share Capital (As of June 30, 2025) | Item | Number of ordinary shares | Total (RMB thousands) | | :--- | :--- | :--- | | As of June 30, 2025 and December 31, 2024 | 301,600,000 | 301,600 | 22 Borrowings This section details the company's borrowings, including current and non-current bank loans, collateral, guarantees, weighted average interest rate, and currency denomination Borrowings (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Included in non-current liabilities: | | | | Bank borrowings — secured and guaranteed | 417,545 | 535,587 | | Less: Current portion of non-current liabilities | (60,228) | (108,554) | | Subtotal (Non-current) | 357,317 | 427,033 | | Included in current liabilities: | | | | Bank borrowings — secured and guaranteed | 136,322 | 99,651 | | Bank borrowings — unsecured and guaranteed | 142,000 | 34,000 | | Bank borrowings — unsecured | — | 57,500 | | Current portion of non-current liabilities | 60,228 | 108,554 | | Subtotal (Current) | 338,550 | 299,705 | | Total | 695,867 | 726,738 | - Multiple bank borrowings are guaranteed by the company and secured by trade receivables or intangible assets[164] - As of June 30, 2025, the weighted average effective interest rate for borrowings was 4.23% per annum (December 31, 2024: 4.43%), and all borrowings are denominated in RMB[164] 23 Trade and Other Payables This section details trade and other payables, including related party amounts and intangible asset acquisition payables, and provides an aging analysis for trade payables Trade and Other Payables (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Included in current liabilities | | | | Trade payables — related parties | 2,498 | 1,551 | | Trade payables — third parties | 483,609 | 480,665 | | Bills payable | 41,033 | 64,368 | | Amounts due to related parties and advances from related parties | 7,326 | 9,610 | | Amounts payable for acquisition of intangible assets | 186,829 | 196,291 | | Accrued employee benefits | 15,326 | 33,288 | | Other taxes payable | 20,957 | 32,088 | | Dividends payable to non-controlling interests | 46,280 | 46,280 | | Instalment payments for acquisition of intangible assets | 37,356 | 38,318 | | Others | 15,391 | 42,702 | | Subtotal (Current) | 883,524 | 975,960 | | Included in non-current liabilities | | | | Other payables — third parties (instalment payments for acquisition of intangible assets) | 16,961 | 29,442 | | Total | 900,485 | 1,005,402 | Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 318,173 | 376,207 | | 1 to 2 years | 78,143 | 44,523 | | 2 to 3 years | 28,512 | 21,560 | | Over 3 years | 61,280 | 39,926 | | Total | 486,107 | 482,216 | - The Group's trade and other payables are denominated in RMB[167] 24 Provisions This section explains the recognition and measurement of service concession facility maintenance provisions for contractual obligations to maintain or restore operating facilities Provisions (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Service concession facility maintenance provision | 41,670 | 38,113 | - Provisions are recognized in accordance with service concession agreements to fulfill contractual obligations to maintain operating facilities at a specific service quality level and/or restore the plant to a designated state at the end of the service concession period[168] 25 Commitments This section lists the company's short-term lease commitments and contracted capital expenditures, primarily for intangible assets Short-term Lease Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Not later than 1 year | 401 | 74 | Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Intangible assets | 32,346 | 29,192 | 26 Related Party Transactions This section discloses details of the company's related party transactions and balances, including purchases, leases, and sales Transactions with Related Parties (For the Six Months Ended June 30) | Type of Transaction | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Entities controlled or significantly influenced by certain shareholders | | | | Purchase of property, plant, equipment and services | 1,172 | 3,516 | | Lease arrangements | 6 | 9 | | Associates | | | | Sale of goods or services | 3,256 | 3,706 | | Purchase of property, plant, equipment and services | — | 1,007 | | Lease arrangements | 942 | 1,022 | Balances with Related Parties (As of June 30, 2025) | Type of Balance | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Entities controlled or significantly influenced by certain shareholders | | | | Trade and other payables | 7,330 | 8,247 | | Prepayments and other receivables | 2,776 | — | | Associates | | | | Trade receivables | 2,409 | 2,712 | | Lease receivables | 20,870 | 20,423 | | Trade and other payables | 2,494 | 2,914 | 27 Contingencies This section confirms the company had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025 and December 31, 2024, the Group had no significant contingent liabilities[172] 28 Events After the Reporting Period This section confirms no significant subsequent events requiring adjustment or additional disclosure occurred after June 30, 2025, up to the interim financial information publication date - Except as disclosed elsewhere in the interim financial information, no significant events after June 30, 2025, and up to the date of issue of this interim financial information, have occurred that would require adjustment to or additional disclosure in these interim financial information[173] Definitions This section defines key terms and terminology used throughout the interim report to ensure clear understanding - This section contains definitions of key terms and terminology used in the interim report, such as "Audit Committee," "Baotou Project," "Corporate Governance Code," "China," "the Company," "EMC," "the Group," "H Shares," "RMB," "SFO," "Shuangliang Technology," etc[175][177]