汇力资源(01303) - 2025 - 中期财报

Company Information Board of Directors and Committee Composition The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure sound corporate governance - Board members include Mr. Cui Yazhou (Chairman), Mr. Ye Xin, Ms. Wang Qian, Mr. Zhou Jianzhong (Executive Directors), Mr. Cao Ye (Non-executive Director), and Ms. Xiang Siying, Mr. Ruan Guantong, Mr. Chen Bingquan (Independent Non-executive Directors)[2] - The Audit Committee, Remuneration Committee, and Nomination Committee are all chaired or served by independent non-executive directors Ms. Xiang Siying and Mr. Ruan Guantong, ensuring independent oversight[2] Company Secretary and Independent Auditor Mr. Xian Liwen serves as the Company Secretary, and Zhonghui Anda Certified Public Accountants Limited is the independent auditor, responsible for the company's compliance and audit work - Mr. Xian Liwen is the Company Secretary, and Zhonghui Anda Certified Public Accountants Limited is the independent auditor[2] Registered Office and Principal Place of Business The company is registered in the Cayman Islands, with principal places of business in Shenzhen, China, and Wan Chai, Hong Kong, and share registrars in the Cayman Islands and Hong Kong - The registered office is in the Cayman Islands, with principal places of business at Room 01C, 20th Floor, Block A, Donghai International Center, Futian, Shenzhen, China, and Units 36-40, 50th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong[2][3] - The share registrars are Codan Trust Company (Cayman) Limited in the Cayman Islands and Tricor Investor Services Limited in Hong Kong[3] Company Website and Stock Code The company's website is www.huili.hk, and its stock code is 1303 - The company's website is www.huili.hk, and its stock code is 1303[3] Interim Condensed Consolidated Statement of Comprehensive Income Results from Continuing Operations For the six months ended June 30, 2025, revenue from continuing operations slightly decreased, gross profit significantly declined, leading to a substantial drop in profit for the period Comparison of Key Financial Indicators for Continuing Operations (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited, Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,357,566 | 1,359,778 | -0.16% | | Cost of sales | (1,304,505) | (1,229,559) | +6.10% | | Gross profit | 53,061 | 130,219 | -59.25% | | Operating profit | 25,286 | 141,130 | -82.09% | | Profit before income tax | 26,294 | 139,225 | -81.12% | | Profit for the period from continuing operations | 17,715 | 117,968 | -84.98% | | Profit for the period attributable to equity holders of the Company | 17,715 | 117,032 | -84.86% | | Basic and diluted earnings per share (RMB cents) | 0.84 | 6.08 | -86.18% | - Gross profit significantly decreased by 59.25%, primarily due to the continuous decline in coal prices, severely compressing the gross profit margin of the coal trading business[4][91] - Operating profit decreased by 82.09% year-on-year, reflecting the combined impact of lower gross profit and increased administrative expenses[4][93] Discontinued Operations In the first half of 2025, the company had no discontinued operations, compared to a loss of RMB 985 thousand from discontinued operations in the same period of 2024 Loss for the Period from Discontinued Operations (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the period from discontinued operations | – | (985) | - The company completed the disposal of its entire equity interest in Hami Jinhua Mineral Resources Development Co., Ltd. (Hami Jinhua) on September 29, 2024, terminating its mining business[68] Total Comprehensive Income Total comprehensive income for the period was RMB 17,381 thousand, a significant decrease from RMB 117,141 thousand in the prior year, mainly due to reduced profit from continuing operations Total Comprehensive Income (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Total comprehensive income for the period | 17,381 | 117,141 | - Fair value changes of financial assets (debt instruments) at fair value through other comprehensive income resulted in a loss of RMB 334 thousand, compared to a gain of RMB 158 thousand in the prior year[5] Interim Condensed Consolidated Statement of Financial Position Overview of Assets As of June 30, 2025, the company's total assets decreased to RMB 2,357,291 thousand, primarily due to reductions in inventories, trade receivables, and bills receivable within current assets Comparison of Asset Composition (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 385,334 | 400,199 | -3.71% | | Total current assets | 1,971,957 | 2,273,518 | -13.10% | | Total assets | 2,357,291 | 2,673,717 | -11.84% | | Inventories | 569,057 | 793,403 | -28.28% | | Trade and bills receivables | 355,984 | 659,808 | -46.04% | | Cash and cash equivalents | 896,941 | 655,837 | +36.76% | - Cash and cash equivalents significantly increased by 36.76%, indicating enhanced company liquidity[6][102] Overview of Liabilities and Equity As of June 30, 2025, total liabilities decreased, while capital and reserves attributable to equity holders of the company increased, and net current assets remained robust Comparison of Liabilities and Equity Composition (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total current liabilities | 1,119,258 | 1,448,620 | -22.73% | | Total non-current liabilities | 156,589 | 161,034 | -2.76% | | Total liabilities | 1,275,847 | 1,609,654 | -20.74% | | Net current assets | 852,699 | 824,898 | +3.37% | | Capital and reserves attributable to equity holders of the Company | 1,081,444 | 1,064,063 | +1.63% | | Share capital | 181,896 | 181,896 | 0.00% | | Share premium | 789,776 | 789,776 | 0.00% | - Trade payables significantly decreased by 20.89%, from RMB 1,252,414 thousand to RMB 990,680 thousand[6][28] Interim Condensed Consolidated Statement of Changes in Equity Analysis of Changes in Equity As of June 30, 2025, total equity attributable to equity holders of the company increased to RMB 1,081,444 thousand, primarily driven by total comprehensive income for the period and appropriations to statutory reserves Changes in Equity Attributable to Equity Holders of the Company (RMB thousands) | Indicator | 2025 Jan 1 (Audited) | Total comprehensive income for the period | Appropriation to statutory reserve | 2025 June 30 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 181,896 | – | – | 181,896 | | Share premium | 789,776 | – | – | 789,776 | | Other reserves | (18,678) | (334) | – | (19,012) | | Statutory reserve | 49,398 | – | 2,841 | 52,239 | | Retained earnings | 61,671 | 17,715 | (2,841) | 76,545 | | Subtotal | 1,064,063 | 17,381 | – | 1,081,444 | - In the same period of 2024, the company's share capital and share premium increased due to the issuance of shares for the acquisition of a subsidiary, and total comprehensive income of RMB 117,190 thousand was recognized[8] Interim Condensed Consolidated Statement of Cash Flows Cash Flow Analysis For the six months ended June 30, 2025, the company's operating cash flow significantly improved from negative to positive, leading to a substantial increase in cash and cash equivalents at period-end Comparison of Cash Flows (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from / (used in) operating activities | 248,099 | (213,530) | Significantly improved | | Net cash used in investing activities | (3,235) | (17,761) | -81.89% | | Net cash used in financing activities | (2,586) | (1,987) | +30.15% | | Net increase / (decrease) in cash and cash equivalents | 242,278 | (233,278) | Significantly improved | | Cash and cash equivalents at end of period | 896,941 | 241,786 | +270.15% | - Net cash from operating activities improved significantly from a net outflow of RMB 213,530 thousand in the same period of 2024 to a net inflow of RMB 248,099 thousand in the same period of 2025, indicating enhanced operating efficiency and cash management capabilities[10] - Net cash used in investing activities significantly decreased, primarily due to reduced capital expenditure on property, plant, and equipment[10][49] Notes to the Interim Condensed Consolidated Financial Information 1 General Information The company was incorporated in the Cayman Islands, primarily engaged in coal trading, coal processing services, and supply chain management services, and changed its registered office and principal place of business on January 13, 2025 - The company was incorporated in the Cayman Islands on February 19, 2010, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 12, 2012[11] - During the period, the Group was principally engaged in coal trading, providing coal processing services, and supply chain management services in China[11] - The company's registered office and principal place of business changed to Units 36–40, 50th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong, effective January 13, 2025[11] 2 Basis of Preparation The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and applicable disclosure provisions of the Listing Rules, based on historical cost, except for certain financial assets - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure provisions of the Listing Rules[13] - The statements are presented in RMB and were approved and authorized for issue by the Board of Directors on August 27, 2025[12] - The basis of preparation is historical cost, except for financial assets at fair value through other comprehensive income and derivative financial assets measured at fair value[15] 3 Changes in Accounting Policies The Group has adopted new and revised Hong Kong Financial Reporting Standards, which are not considered to have a significant impact on the financial statements for the period, and future standards are also not expected to have a material effect - The Group has initially adopted Hong Kong Accounting Standard 21 (Amendment) "Lack of Exchangeability," which specifies how an entity should assess whether a currency is exchangeable and how to determine the spot exchange rate when exchangeability is lacking[16][17] - The Group believes that the adoption of these new and revised Hong Kong Financial Reporting Standards has no significant impact on the amounts reported and/or disclosures contained in the interim condensed consolidated financial statements for the period[17] - The Group is evaluating new and revised standards effective for accounting periods beginning in 2026 or 2027 that have not been early adopted, with preliminary results indicating no significant impact is expected[18] 4 Estimates Management is required to make significant judgments, estimates, and assumptions in preparing the financial statements, which are consistent with those applied in the 2024 annual financial statements, and actual results may differ from these estimates - The significant judgments made by management and the key sources of estimation uncertainty in preparing the interim condensed consolidated financial statements are the same as those applied in the 2024 annual financial statements[20] 5 Financial Risk Management The Group faces market risks (foreign exchange and interest rate), credit risk, liquidity risk, and concentration risk, with no significant changes in risk management policies since December 31, 2024. Fair values of financial instruments are categorized into a three-level hierarchy - The Group's operations are exposed to market risks (including foreign exchange risk and interest rate risk), credit risk, liquidity risk, and concentration risk[21] - There have been no significant changes in risk management policies since December 31, 2024[22] Fair Value Hierarchy of Financial Instruments (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Derivative financial assets (Level 2) | – | 1,504 | | Financial assets at fair value through other comprehensive income (Level 2) | – | 541 | - For the six months ended June 30, 2025 and 2024, there were no transfers between Level 1 and Level 2 fair value measurements, nor any transfers into or out of Level 3[26] 6 Segment Information The Group treats its coal business as a single operating segment, with primary revenue derived from the Chinese market, covering coal trading, processing, and supply chain management services - The Group's coal business is considered a single operating segment, and therefore, no separate segment analysis is presented in the interim condensed consolidated financial report[27] Revenue from Contracts with Customers by Category (RMB thousands) | Category | 2025 June 30 (Unaudited) | 2024 June 30 (Unaudited) | | :--- | :--- | :--- | | Major geographical markets | | | | －China | 1,357,566 | 1,359,778 | | Major products and services | | | | －Trading of coal and provision of coal processing services | 1,294,494 | 1,329,032 | | －Coal supply chain management services | 63,072 | 30,746 | | Timing of revenue recognition | | | | －At a point in time | 1,357,566 | 1,359,778 | - Revenue from coal supply chain management services significantly increased by 105.15%, from RMB 30,746 thousand to RMB 63,072 thousand year-on-year[31][29] Geographical Information (RMB thousands) | Region | 2025 June 30 (Unaudited) Revenue | 2024 June 30 (Unaudited) Revenue | 2025 June 30 (Unaudited) Specific non-current assets | 2024 Dec 31 (Audited) Specific non-current assets | | :--- | :--- | :--- | :--- | :--- | | China | 1,357,566 | 1,359,778 | 369,859 | 377,738 | | Hong Kong | – | – | 4,555 | 5,515 | | Singapore | – | – | 1,109 | 1,797 | | Total | 1,357,566 | 1,359,778 | 375,523 | 385,050 | 7 Other (Losses) / Gains – Net The period recorded a net other loss of RMB 8,649 thousand, primarily due to net exchange losses and reduced government grants Comparison of Other (Losses) / Gains – Net (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net exchange (losses) / gains | (10,088) | 4,138 | | Government grants | 502 | 4,737 | | Other (losses) / gains – net | (8,649) | 9,479 | - Net exchange difference turned from a gain of RMB 4,138 thousand in 2024 to a loss of RMB 10,088 thousand in 2025, primarily from financial assets denominated in USD and HKD due to the depreciation of USD and HKD against RMB[35][94] - Government grants significantly decreased from RMB 4,737 thousand to RMB 502 thousand[35] 8 Finance Income / (Costs) – Net Net finance income for the period was RMB 1,008 thousand, a significant improvement from net finance costs of RMB 1,940 thousand in the prior year, mainly driven by increased interest income Comparison of Finance Income / (Costs) – Net (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Finance income (interest income) | 5,029 | 1,141 | | Finance costs | (4,021) | (3,081) | | Finance income / (costs) – net | 1,008 | (1,940) | - Interest income significantly increased from RMB 1,141 thousand to RMB 5,029 thousand, primarily from bank cash[36][96] - Finance costs slightly increased, mainly comprising interest on lease liabilities, interest on loans from former shareholders of a subsidiary, and interest on loans from a shareholder of the company[36] 9 Profit Before Income Tax Profit before income tax was RMB 26,294 thousand, a significant decrease from RMB 139,225 thousand in the prior year, primarily affected by reduced gross profit and increased administrative expenses Comparison of Key Deductions for Profit Before Income Tax (RMB thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Cost of inventories | 1,206,708 | 1,157,369 | | Depreciation of right-of-use assets | 2,771 | 2,496 | | Depreciation of property, plant and equipment | 15,172 | 4,761 | | Employee costs | 56,521 | 41,787 | - Depreciation of property, plant and equipment significantly increased, mainly due to the coal shed owned by Changzhi Desheng being put into use in the second half of 2024[38][93] - Employee costs increased, primarily because excess social insurance accruals for 2023 were reversed in prior periods, resulting in lower employee costs in those periods[38][93] 10 Income Tax Expense Income tax expense for the period was RMB 8,579 thousand, a significant reduction from the prior year, mainly due to lower China corporate income tax expense and preferential tax rates for some subsidiaries Comparison of Income Tax Expense (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current tax – China corporate income tax | 4,601 | 18,844 | | Deferred tax | 3,978 | 2,386 | | Income tax expense | 8,579 | 21,230 | - China corporate income tax expense significantly decreased from RMB 18,844 thousand to RMB 4,601 thousand[40][97] - The Group's PRC subsidiaries are subject to a corporate income tax rate of 25%, but some subsidiaries qualifying as small-profit enterprises enjoy preferential tax rates, with Hainan Runce and Shenzhen Runce enjoying a preferential tax rate of 15% respectively[43][44] 11 Earnings / (Loss) Per Share Basic and diluted earnings per share for the period were RMB 0.84 cents, a significant decrease from RMB 6.08 cents in the prior year, consistent with the trend of reduced profit for the period Comparison of Earnings / (Loss) Per Share (RMB cents) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit / (loss) attributable to equity holders of the Company (RMB thousands) | 17,715 | 117,032 | | Weighted average number of ordinary shares in issue (thousands) | 2,103,141 | 1,924,198 | | Basic and diluted earnings / (loss) per share | 0.84 | 6.08 | - Diluted earnings per share were equal to basic earnings per share as there were no potential dilutive ordinary shares outstanding during the period and the prior year[46] 12 Dividends The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[47] 13 Property, Plant and Equipment Capital expenditure on property, plant and equipment for the period was RMB 8,417 thousand, a significant decrease from the prior year, with no disposal activities Capital Expenditure on Property, Plant and Equipment (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Capital expenditure | 8,417 | 23,215 | - For the six months ended June 30, 2025 and 2024, there were no disposals of property, plant and equipment[49] 14 Trade and Bills Receivables Net trade and bills receivables significantly decreased, and the provision for expected credit losses was reversed, indicating progress in the company's receivables management Comparison of Net Trade and Bills Receivables (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Net trade receivables | 297,422 | 523,073 | -43.15% | | Net bills receivables | 58,562 | 136,735 | -57.17% | | Total net trade and bills receivables | 355,984 | 659,808 | -46.04% | Changes in Loss Allowance for Trade and Bills Receivables (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Balance at January 1 | 18,848 | 5,603 | | (Reversal of) / expected credit losses recognized during the period | (10,955) | 603 | | Balance at June 30 | 7,893 | 6,206 | - A reversal of expected credit loss provision of RMB 10,955 thousand was recognized during the period, compared to a loss recognition of RMB 603 thousand in the prior year, reflecting improved credit risk management[55][95] 15 Other Receivables and Prepayments Net other receivables and prepayments slightly decreased, with a reversal of impairment loss provision for other receivables Comparison of Net Other Receivables and Prepayments (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Consideration receivable from disposal of a subsidiary | 94,000 | 94,000 | | Net other receivables | 100,345 | 101,617 | | Deposits paid to suppliers – third parties | 10,293 | 13,567 | | Prepayments to suppliers – third parties | 20,483 | 29,731 | | Other recoverable taxes | 18,854 | 17,510 | | Total net other receivables and prepayments | 149,975 | 162,425 | Changes in Loss Allowance for Other Receivables (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Balance at January 1 | 63,310 | 63,501 | | Reversal of expected credit losses recognized during the period | (4,919) | (495) | | Exchange differences | (1,816) | 2,358 | | Balance at June 30 | 56,575 | 65,364 | - A reversal of expected credit loss provision for other receivables of RMB 4,919 thousand was recognized during the period, compared to a reversal of RMB 495 thousand in the prior year[57][95] 16 Trade Payables Total trade payables significantly decreased, primarily concentrated within 3 months aging Aging Analysis of Trade Payables (RMB thousands) | Aging | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Up to 3 months | 747,204 | 1,067,251 | | 3 to 6 months | 242,790 | 4,785 | | 6 to 12 months | 196 | 179,990 | | Over 12 months | 490 | 388 | | Total | 990,680 | 1,252,414 | - Total trade payables decreased by 20.89% from RMB 1,252,414 thousand as of December 31, 2024, to RMB 990,680 thousand as of June 30, 2025[58] 17 Other Payables and Accruals Total other payables and accruals slightly decreased, mainly comprising other payables, salaries and welfare payable, accrued taxes, and interest on shareholder loans Comparison of Other Payables and Accruals (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Other payables | 46,731 | 41,564 | | Salaries and welfare payable | 25,778 | 25,204 | | Accrued taxes (excluding income tax) | 6,424 | 19,983 | | Interest payable on loan from a shareholder of the Company | 2,510 | 1,308 | | Total | 81,443 | 88,059 | - Accrued taxes (excluding income tax) significantly decreased from RMB 19,983 thousand to RMB 6,424 thousand[60] 18 Share Capital and Share Premium As of June 30, 2025, the company's issued share capital and share premium remained stable, consistent with January 1, 2025 Comparison of Share Capital and Share Premium (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Number of shares (thousands) | 2,103,141 | 2,103,141 | | Share capital | 181,896 | 181,896 | | Share premium | 789,776 | 789,776 | | Total | 971,672 | 971,672 | - In the first half of 2024, the company issued 156,600,000 ordinary shares for the acquisition of CCB Logistics, leading to an increase in share capital and share premium[62][64] 19 Acquisition of CC Bong Logistics Limited ("CCB Logistics") The Group completed the acquisition of 100% equity interest in CCB Logistics on January 24, 2024, aiming to strengthen coal trading and supply chain management services, and recognized a bargain purchase gain as a result - The Group entered into a sale and purchase agreement on December 29, 2023, to acquire 100% equity interest in CCB Logistics for RMB 77,558 thousand, with the acquisition completed on January 24, 2024[63] - CCB Logistics and its subsidiaries are engaged in coal supply chain management services, and this acquisition will help the Group strengthen its existing coal trading business and supply chain management service capabilities[63] Fair Value of Identifiable Assets and Liabilities Acquired in CCB Logistics Acquisition (RMB thousands) | Item | Amount | | :--- | :--- | | Net identifiable assets acquired | 97,629 | | Consideration | (77,558) | | Bargain purchase gain on acquisition of a subsidiary | 20,071 | - The acquisition consideration was settled by issuing 156,600,000 ordinary shares of the company (RMB 42,909 thousand) and issuing a promissory note with a principal amount of HKD 37,360,000 (RMB 34,649 thousand)[64] - The business combination resulted in a bargain purchase gain of approximately RMB 20,071 thousand, primarily due to the decrease in the fair value of consideration shares caused by the fall in the closing price of the company's ordinary shares on the acquisition date[66] 20 Discontinued Operations The Group completed the disposal of Hami Jinhua Mineral Resources Development Co., Ltd. on September 29, 2024, terminating its mining business, and there were no losses from discontinued operations in the current period - The Group entered into an equity transfer agreement with an independent third party in July 2024 to dispose of 95% equity interest in Hami Jinhua Mineral Resources Development Co., Ltd., with the disposal completed on September 29, 2024[68] - Hami Jinhua was engaged in mining, beneficiation, and sales of lead and zinc products, and the Group has terminated its mining business after the disposal[68] Analysis of Loss for the Period from Discontinued Operations (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss from discontinued operations | – | (985) | | Loss before income tax | – | (1,012) | | Income tax credit | – | 27 | | Loss for the period | – | (985) | 21 Related Party Transactions The Group's primary related party is Tianyuan International Limited, holding 24.8% of the company's equity, and key management personnel compensation decreased during the period - Tianyuan International Limited, holding 24.8% equity interest in the company, is a related party of the Group[75] Comparison of Key Management Personnel Compensation (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Basic salaries, allowances and other benefits | 2,683 | 3,387 | | Contributions to retirement benefit schemes | 102 | 89 | | Total | 2,785 | 3,476 | 22 Capital Commitments As of June 30, 2025, the Group's capital commitments for the acquisition of property and equipment were RMB 1,457 thousand, a significant decrease from December 31, 2024 Comparison of Capital Commitments (RMB thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :--- | :--- | :--- | | Capital expenditure contracted for but not provided in the consolidated financial statements for the acquisition of property and equipment | 1,457 | 10,255 | 23 Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[78] Management Discussion and Analysis Business Review The Group primarily engages in coal business, including processing, supply chain management, and trading. The Chinese coal market experienced continuous price declines due to increased domestic output, decreased imports, and insufficient downstream demand, but the company effectively hedged some risks by expanding supply chain management services - China's coal consumption accounts for 53.2% of national energy consumption, indicating a significantly higher reliance on coal than the global average[80] - In the first half of 2025, raw coal output from industrial enterprises above designated size was 2.40 billion tonnes, up 5.4% year-on-year, while coal and lignite imports decreased by 11.1%[80][81] - Coal inventories at major Bohai Rim ports remained high, with average daily inventory in the first half of the year up 24.7% compared to the same period in 2024, reflecting relatively slow consumption of imported coal[82] - The China Coal Index 5500K experienced a continuous unilateral decline during the period, falling from RMB 770 per tonne to RMB 620 per tonne, indicating a pattern of expanding output and falling prices[84] - The Group conducts coal trading and washing businesses through Changzhi Runce, Hainan Runce, and Shanxi Fanpo, and provides coal supply chain management services through Shenzhen Runce, Shanxi Magao, Changzhi Desheng, and Luyuan Xinneng[85][86][87] - The company has initiated photovoltaic projects, aiming to promote decarbonization, achieve integrated development of coal-based energy with multiple green energy sources, and expand green transformation channels for its coal business[88] Performance Review During the period, the company's revenue slightly decreased, but gross profit significantly contracted due to falling coal prices. Administrative expenses and staff costs increased, but net finance income turned positive, and income tax expense decreased Comparison of Key Financial Indicators in Performance Review (RMB millions) | Indicator | 2025 First Half | 2024 First Half | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,358 | 1,360 | -0.2% | | Cost of sales | 1,305 | 1,230 | +6.1% | | Gross profit | 53.1 | 130.2 | -59.3% | | Administrative expenses | 33.6 | 18.9 | +77.8% | | Other (losses) / gains – net | (8.6) | 9.5 | Significantly deteriorated | | Finance income / (costs) – net | 1.0 | (1.9) | Significantly improved | | Income tax expense | 8.6 | 21.3 | -59.6% | - The continuous decline in coal prices severely compressed the gross profit margin of the coal trading business, but the gross profit of coal supply chain management services significantly increased, effectively offsetting some of the decline[91] - The increase in administrative expenses was mainly due to higher depreciation expenses and staff costs[93] - Net other losses primarily resulted from net exchange losses of approximately RMB 10.1 million, compared to net exchange gains of RMB 4.1 million in the prior year[94] - Other operating gains primarily arose from reversal of expected credit loss provisions for trade and bills receivables of approximately RMB 11.0 million and reversal of expected credit loss provisions for other receivables of approximately RMB 4.9 million[95] - There were no significant debt securities investments during the period, and capital expenditure was RMB 8.4 million, a significant decrease from RMB 23.2 million in the prior year[98][99] Liquidity and Financial Resources The company's financial position remained robust, with increased equity attributable to owners, decreased total assets, significantly grown cash and cash equivalents, a healthy net cash position, and no outstanding interest-bearing bank loans Comparison of Liquidity and Financial Resources (RMB millions) | Indicator | 2025 June 30 | 2024 Dec 31 | Change (%) | | :--- | :--- | :--- | :--- | | Equity attributable to owners | 1,081.4 | 1,064.1 | +1.6% | | Total assets | 2,357.3 | 2,673.7 | -11.8% | | Bank and cash balances | 896.9 | 655.8 | +36.8% | | Net cash position | 768.5 | 526.5 | +45.9% | - The Group invests surplus cash in low-risk fixed deposits denominated in USD to earn additional returns[100][103] - The Group has no outstanding interest-bearing bank loans[102] - The Group obtained loans from the former shareholders of CCB Logistics and a shareholder of the company, both of which are unsecured loans[102] Key Risks The Group faces foreign exchange risk and credit risk. Foreign exchange risk is managed through a dedicated team and forward contracts, while credit risk from trade receivables is managed through strict controls and regular assessments - The Group's business is primarily conducted in RMB, but international coal supply chain trading involves USD transactions, exposing it to potential foreign currency risk between USD and RMB[106] - The company has established a dedicated team to monitor foreign exchange fluctuations, assess risks, and formulate appropriate hedging strategies, utilizing foreign currency forward contracts to manage foreign exchange risk[106] - The Group faces credit risk in its coal business, primarily from trade and bills receivables, managed through strict control over outstanding receivables and regular review of overdue balances[107] - As of June 30, 2025, the loss allowance for total trade and bills receivables was approximately RMB 7.9 million, a decrease from RMB 18.8 million as of December 31, 2024[107] Pledge of the Company's Assets, Commitments and Contingent Liabilities As of June 30, 2025, and December 31, 2024, the Group had no other significant asset pledges, commitments, or contingent liabilities beyond those disclosed in notes 22 and 23 to the financial statements - Except as disclosed in Notes 22 and 23, the Group had no other contracted capital expenditure, commitments, or pledges of the company's assets as of June 30, 2025, and December 31, 2024[109] Dividends The directors do not recommend the payment of any interim dividend for the current period - The directors do not recommend the payment of any interim dividend for the current period (prior period: nil)[110] Human Resources and Share Option Scheme As of June 30, 2025, the Group's employee headcount decreased, while total staff costs increased. The company provides comprehensive employee benefits and training, and has a share option scheme to incentivize staff, but no options were granted or exercised during the period Comparison of Human Resources | Indicator | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Number of employees | 839 | 999 | | Total staff costs (RMB millions) | 56.5 | 41.8 | - Employee remuneration is primarily determined by their job nature, performance, and length of service with the Group, and includes discretionary bonuses, pension schemes, medical plans, and social insurance[111] - The Group encourages employees to attend job-related external training and provides new employees with training on relevant regulations and safety awareness[111] - Directors and employees are eligible to participate in the share option scheme, but no share options were granted, exercised, lapsed, or outstanding during the period and as of June 30, 2025[111] Future Outlook and Prospects In the second half of the year, China's coal market supply-demand relationship is expected to recover, with potential coal price rebound. The Group will continue to strengthen coal trading and supply chain management services, promote green transformation through photovoltaic projects, and enhance risk management - In the first half of 2025, coal demand remained sluggish, while supply increased rather than decreased, leading to coal prices falling back to pre-2021 surge levels and a significant contraction in gross profit margins[112] - The National Energy Administration issued a notice to inspect excessive coal mine production, expecting a slowdown in domestic coal supply growth and a further reduction in coal imports[113] - National electricity consumption is expected to grow by approximately 6–8% in the second half of 2025 compared to the same period in 2024, with thermal coal power generation expected to maintain high consumption levels, suggesting the current coal price trough may represent the annual low point[113] - The Group actively expands revenue sources by maintaining long-term cooperative relationships with major coal trading customers, resulting in significant growth in coal trading volume and a substantial increase in revenue and gross profit from coal supply chain management services[114] - The Group strengthened market and operational risk management, leading to reduced trade receivables and inventories, increased cash and cash equivalents, and initiated legal proceedings against one of its coal business customers to recover outstanding debts[115] - The company has commenced the development and construction of photovoltaic projects, aiming to promote decarbonization and foster the integrated development of coal-based energy with green energy[115] Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company or any Associated Corporation As of June 30, 2025, directors Mr. Cui Yazhou and Mr. Ye Xin held shares in the company through controlled corporations, representing 24.77% and 6.55% of the issued share capital, respectively Directors' and Chief Executive's Interests in Shares (Long Positions) | Name | Nature of Interest | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Tianyuan International Limited | Beneficial owner | 521,000,000 (L) | 24.77% | | Mr. Cui Yazhou | Interest in controlled corporation | 521,000,000 (L) | 24.77% | | Fulian Holdings Limited | Beneficial owner | 137,792,017 (L) | 6.55% | | Mr. Ye Xin | Interest in controlled corporation | 137,792,017 (L) | 6.55% | - Mr. Cui Yazhou is the legal and beneficial owner of Tianyuan International Limited, and Mr. Ye Xin is the legal and beneficial owner of Fulian Holdings Limited[119] Substantial Shareholders' and Other Persons' Interests and Short Positions in the Shares and Underlying Shares As of June 30, 2025, Mr. Feng Yuantao, Mr. Bong Chin Chung, China Clean Energy Technology Co., Ltd. (and its controlled person Mr. Li Langwei), and Baicheng International Group Limited (and its controlled persons Ms. Gao Miaomiao and Mr. Cao Jianwei) were the company's substantial shareholders Substantial Shareholders' and Other Persons' Interests in Shares (Long Positions) | Name | Nature of Interest | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Feng Yuantao | Beneficial owner | 306,522,040 (L) | 14.57% | | Mr. Bong Chin Chung | Beneficial owner | 242,419,957 (L) | 11.53% | | China Clean Energy Technology Co., Ltd. | Beneficial owner | 170,000,000 (L) | 8.08% | | Mr. Li Langwei | Interest in controlled corporation | 170,000,000 (L) | 8.08% | | Baicheng International Group Limited | Beneficial owner | 147,000,000 (L) | 6.99% | | Ms. Gao Miaomiao | Interest in controlled corporation | 147,000,000 (L) | 6.99% | | Mr. Cao Jianwei | Interest in controlled corporation | 147,000,000 (L) | 6.99% | - Mr. Li Langwei is the legal and beneficial owner of China Clean Energy Technology Co., Ltd., and Ms. Gao Miaomiao and Mr. Cao Jianwei respectively hold 85% and 15% of the issued share capital of Baicheng International Group Limited[125] Material Contracts During the period, no director or their associates had a material direct or indirect interest in any significant transaction, arrangement, or contract concerning the Group's business with the company or any of its subsidiaries, fellow subsidiaries, or parent company - During the period or at the end of the period, no director or their associates had a material direct or indirect interest in any significant transaction, arrangement, or contract concerning the Group's business with the company or any of its subsidiaries, fellow subsidiaries, or parent company[122] Management Contracts During the period, the company did not enter into or maintain any contracts concerning the management and administration of the whole or any substantial part of its business - During the period, the company did not enter into or maintain any contracts concerning the management and administration of the whole or any substantial part of its business[123] Directors' Interests in Competing Business No director or their associates are engaged in any business that competes or may compete, directly or indirectly, with the Group's business - No director or their associates are engaged in any business that constitutes or may constitute direct or indirect competition with the Group's business[124] Share Option Scheme The company has a share option scheme to incentivize and retain talent, covering a wide range of eligible participants, with subscription prices not lower than specific market prices and total options limited to 10% of issued shares. No options were granted, exercised, cancelled, or lapsed during the period - The share option scheme was adopted on May 28, 2021, with a ten-year validity period, aiming to incentivize and reward eligible participants and attract valuable human resources[126] - Eligible participants include directors, employees, shareholders, business partners, contractors, consultants, suppliers, customers, etc[127] - The share option subscription price shall not be less than the highest of the closing price on the offer date, the average closing price for the preceding five business days, and the nominal value of the shares[127] - The total number of shares that may be issued under the share option scheme shall not exceed 10% of the issued shares on the date of approval of the scheme, currently 162,000,000 shares, representing 7.7% of the issued shares[129] - As of January 1, 2025, and June 30, 2025, there were no outstanding share options, and no share options were granted, exercised, cancelled, or lapsed during the period[131] Purchase, Redemption or Sale of Securities Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the period, and no treasury shares were held - Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the period[132] - As of June 30, 2025, the company held no treasury shares[132] Issue of Equity Securities During the period, the company did not issue any equity securities or sell treasury shares for cash - During the period, the company did not issue any equity securities (including securities convertible into equity securities) or sell treasury shares for cash[133] Compliance with Corporate Governance Code The company is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for the non-segregation of the roles of Chairman and Chief Executive, with Chief Executive duties performed by other executive directors and senior management - The company has taken appropriate steps to adopt and comply with the provisions of its Corporate Governance Practices Code, in compliance with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[134] - According to Code Provision C.2.1, the roles of Chairman and Chief Executive should be separate and not performed by the same individual. The company does not have a Chief Executive, and these duties are performed by other executive directors and senior management[134] Directors' Securities Transactions The company's directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules throughout the period - Following specific enquiries with all directors, the directors confirmed that they have complied with the required standards set out in the Model Code throughout the period[136] Changes in Directors' Information Independent non-executive director Mr. Ruan Guantong was appointed as an independent non-executive director of Cast Emperor Holdings Group Limited on June 18, 2025, with no other changes in directors' information - Independent non-executive director Mr. Ruan Guantong was appointed as an independent non-executive director of Cast Emperor Holdings Group Limited on June 18, 2025[137] Review by Audit Committee The Audit Committee has reviewed the interim results for the period. The committee, composed of three independent non-executive directors, aims to review and monitor the Group's financial reporting process, internal control systems, and risk management systems - The Audit Committee comprises three independent non-executive directors, at least one of whom possesses appropriate professional qualifications or accounting or related financial management expertise[138] - The interim results for the period are unaudited but have been reviewed by the Audit Committee[138] Past Performance and Forward-Looking Statements This report contains forward-looking statements regarding the company's financial condition, operating results, and business, which are based on current expectations, but actual results may differ materially due to known and unknown risks and uncertainties - The Group's results and operating performance contained in this report are historical in nature, and past performance is not a guarantee of the Group's future performance[139] - Forward-looking statements involve inherent risks and uncertainties, and various factors could cause actual results to differ materially from those expressed, implied, or projected in any forward-looking statement or risk assessment[139] Publication of Interim Results and Interim Report The interim results announcement and this interim report have been published on the website of The Stock Exchange of Hong Kong Limited and the company's website for viewing - The interim results announcement and this interim report are available for viewing on the website of The Stock Exchange of Hong Kong Limited (http://www.hkex.com.hk) and the company's website (http://www.huili.hk)[140](index=140&type=chunk)