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春城热力(01853) - 2025 - 中期财报
CHUNCHENG HEATCHUNCHENG HEAT(HK:01853)2025-09-22 10:29

Company Information This section provides essential company details, including registration, stock information, and board/committee member changes Company Details Jilin Province Chuncheng Heating Company Limited is a heating enterprise registered in Changchun, Jilin Province, China, with its Hong Kong office located in Hopewell Centre, Wan Chai, and its website at www.cc-tp.com.cn - The company's Chinese name is 吉林省春城熱力股份有限公司, and its English name is Jilin Province Chuncheng Heating Company Limited7 - The company's registered address and China headquarters/principal place of business are located at Building 28, Area B, Nanhu Avenue Community, 998 Nanhu Avenue, Nanguan District, Changchun City, Jilin Province, China7 - The company's Hong Kong office is located on the 46th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong7 Company Stock Profile The company's stock short name is "Chuncheng Heating" and its stock code is "1853" - The company's stock short name is "Chuncheng Heating" and its stock code is "1853"8 Board of Directors and Committee Members During the reporting period, there were changes in the company's board members, including appointments and resignations of executive, non-executive, independent non-executive, and employee directors, with adjustments also made to the chairpersons and members of the Audit, Remuneration, Nomination, and Strategy Committees - Mr. Zhang Liming was appointed as an Executive Director (Vice Chairman) effective May 16, 20259 - Mr. Song Chi serves as a Non-Executive Director (Chairman)9 - Mr. Chen Shenghui was appointed as Chairman of the Audit Committee effective May 16, 2025, and Ms. Du Jie was appointed as Chairman of the Remuneration Committee effective May 16, 20259 - The Strategy Committee had only two members between March 28, 2025, and May 16, 2025, which did not comply with the minimum requirement of three members as stipulated in its terms of reference82 Other Important Information The company's Joint Company Secretaries are Mr. Wan Tao and Mr. Li Zhongcheng, the H Share Registrar is Hong Kong Registrars Limited, and the auditor is Lixin Certified Public Accountants (Special General Partnership) - The Joint Company Secretaries are Mr. Wan Tao and Mr. Li Zhongcheng11 - The H Share Registrar is Hong Kong Registrars Limited11 - The auditor is Lixin Certified Public Accountants (Special General Partnership)11 Interim Financial Summary This section provides a high-level overview of the company's consolidated income statement and balance sheet for the interim period Consolidated Income Statement Summary for the Six Months Ended June 30, 2025 For the six months ended June 30, 2025, the company's operating revenue increased by 3.14% year-on-year to RMB 93,513.43 10,000 yuan, but total profit and net profit both decreased to RMB 14,363.57 10,000 yuan and RMB 10,690.34 10,000 yuan, respectively Consolidated Income Statement Summary (January-June 2025 vs January-June 2024) | Consolidated Income Statement Item | January–June 2025 (RMB 10,000 yuan) | January–June 2024 (RMB 10,000 yuan) | | :--- | :--- | :--- | | Operating Revenue | 93,513.43 | 90,662.93 | | Total Profit | 14,363.57 | 20,061.72 | | Income Tax Expense | 3,673.23 | 5,247.52 | | Net Profit | 10,690.34 | 14,814.20 | Consolidated Balance Sheet Summary as of June 30, 2025 As of June 30, 2025, the company's total assets and total liabilities decreased compared to the end of 2024, while total shareholders' equity increased, indicating an improvement in capital structure Consolidated Balance Sheet Summary (June 30, 2025 vs December 31, 2024) | Consolidated Balance Sheet Item | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | | :--- | :--- | :--- | | Total Non-current Assets | 109,076.02 | 106,903.13 | | Total Current Assets | 137,735.49 | 267,680.47 | | Total Assets | 246,811.51 | 374,583.61 | | Total Non-current Liabilities | 11,511.63 | 12,370.21 | | Total Current Liabilities | 120,293.55 | 257,897.41 | | Total Liabilities | 131,805.19 | 270,267.63 | | Total Shareholders' Equity | 115,006.32 | 104,315.98 | Management Discussion and Analysis This section reviews the company's business performance, financial position, and outlook for the second half of 2025 I. Business Review In the first half of 2025, the Group achieved growth in heating, construction, maintenance, design, and other businesses, while prioritizing safety and making progress in technology R&D, particularly in environmental facility upgrades and equipment management system optimization - The Group upheld an innovative development philosophy, optimized resource allocation, explored energy-saving potential, coordinated development with safety, promoted high-quality development of its heating production business, and successfully achieved its targets for the first half of the year17 1. Heating Business As of June 30, 2025, the Group's heating area and customer base both grew, with heating business revenue increasing by 2.89% year-on-year, while residential users continued to account for the vast majority, and total heat purchase volume slightly decreased but utilization remained stable Heating Business Key Data (June 30, 2025 vs Same Period in 2024) | Indicator | June 30, 2025 | Same Period in 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Heating Area | 69.826 million sq m | 67.437 million sq m | 2.389 million sq m | 3.54% | | Number of Heating Customers | 572,273 households | 552,448 households | 19,825 households | 3.59% | | Heating Business Revenue | RMB 926.33 million | RMB 900.32 million | RMB 26.01 million | 2.89% | Customer Type and Revenue Contribution (June 30, 2025 vs June 30, 2024) | Customer Type | Number of Customers June 30, 2025 | Percentage June 30, 2025 | Number of Customers June 30, 2024 | Percentage June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Residential Users | 505,761 | 88.38% | 493,789 | 89.38% | | Non-residential Users | 66,512 | 11.62% | 58,659 | 10.62% | | Total | 572,273 | 100% | 552,448 | 100% | Purchased Heat Usage Data (January-June 2025 vs January-June 2024) | Indicator | January–June 2025 (GJ) | January–June 2024 (GJ) | | :--- | :--- | :--- | | Estimated Heat Purchase Quota | 13,670,000 | 13,900,000 | | Transferred Heat Purchase Quota | 1,128,955 | 1,152,499 | | Actual Consumption | 11,282,780 | 11,557,948 | | Total Heat Purchased | 12,411,736 | 12,710,447 | | Utilization Rate | 82.54% | 83.15% | - The Group resold approximately 1.13 million GJ of heat purchase quota to four heating service providers, collecting RMB 6.30 million in heat transmission fees22 2. Construction, Maintenance, Design, and Other This business covers peripheral services in the heating industry chain, primarily in Northeast China, with revenue increasing by 39.60% year-on-year to RMB 8.80 million in the first half of 2025, undertaking several key engineering projects - Revenue from construction, maintenance, design, and other businesses was RMB 8.80 million, an increase of RMB 2.49 million or 39.60% compared to RMB 6.31 million in the same period of 202423 - In the first half of the year, a total of 15 engineering construction projects, 2 engineering maintenance projects, and 9 design service projects were undertaken, including key projects such as "Changchun Aviation Expo Park Pipeline Network Project" and "Design of Primary Heating Network Project Outside the Red Line of Erdao District Digital Economy Dual Innovation Industrial Park Infrastructure Construction Project"26 3. Safety Management The Group places high importance on safety production, fully implements government directives, strictly fulfills safety management responsibilities, and reported no major safety accidents during the period - The Group fully implemented the decisions and deployments of government departments at all levels regarding safety production, strictly adhered to the "three management, three must" requirements, and promoted a stable and improving safety production situation27 - During the reporting period, the Group experienced no major safety accidents27 4. Technology and Research & Development The Group deepened environmental facility upgrades, completed SCR ultra-low emission modification tests for boilers, and independently developed and deployed an "Equipment Ledger Management System," enhancing equipment management refinement and obtaining two utility model patents in the first half of the year - SCR ultra-low emission modification tests were conducted on 15 boilers in 3 boiler rooms, with all boilers reaching national super emission standards, expected to reduce particulate matter emissions by 60% and sulfur dioxide and nitrogen oxide emissions by 65% during the 2025-2026 heating season28 - The independently developed "Equipment Ledger Management System" was fully optimized and officially put into use, attaching QR code nameplates containing basic information to over 20,000 pieces of equipment, enabling scan-to-query technical files28 - During the reporting period, the Group obtained 2 utility model patents issued by the National Intellectual Property Administration28 II. Financial Position and Operating Results In the first half of 2025, the company's overall revenue grew, but increased costs, higher bad debt provisions, and a significant rise in finance costs led to a decrease in gross profit, total profit, and net profit; liquidity declined, capital expenditures significantly increased, and several major asset acquisitions were undertaken 1. Revenue For the six months ended June 30, 2025, the Group's revenue was RMB 93,513.43 10,000 yuan, a year-on-year increase of 3.14%, primarily driven by increased heating business revenue Revenue by Segment (January-June 2025 vs January-June 2024) | Segment | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heating Subtotal | 92,633.19 | 90,032.39 | 2.89% | | — Heat Fee Revenue | 88,492.36 | 85,999.63 | 2.90% | | — Pipeline Construction Fees | 3,510.82 | 3,362.49 | 4.41% | | — Pipeline Transmission Fees | 630.01 | 670.27 | –6.01% | | Construction, Maintenance & Design Services Subtotal | 880.24 | 630.54 | 39.60% | | — Engineering Construction | 571.05 | 189.54 | 201.28% | | — Engineering Maintenance | 0.69 | 254.14 | –99.73% | | — Design Services | 10.06 | 167.68 | –94.00% | | — Other | 298.44 | 19.18 | 1,456.00% | | Total | 93,513.43 | 90,662.93 | 3.14% | 2. Other Income and Net Other Gains For the six months ended June 30, 2025, the Group's other income and net other gains amounted to RMB 1,553.79 10,000 yuan, a year-on-year increase of 34.00%, primarily due to increased government grants and bank deposit interest income Other Income and Net Other Gains (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB 10,000 yuan) | January–June 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Other Income and Net Other Gains | 1,553.79 | 1,159.57 | 34.00% | | Other Gains | 412.78 | 280.42 | 47.20% | | Bank Deposit Interest Income | 1,138.38 | 876.34 | 29.90% | - Other gains increased primarily due to an increase in government grants, such as heating subsidies, received in January-June 2025 compared to the same period in 202433 - Bank deposit interest income increased primarily due to an increase in bank deposits in January-June 202533 3. Operating Costs For the six months ended June 30, 2025, the Group's operating costs were RMB 74,546.93 10,000 yuan, a year-on-year increase of 8.58%, mainly due to increased costs in heating business and construction, maintenance, and design services, with coal costs significantly rising by 122.10% due to new peak-shaving coal-fired boilers Operating Costs by Business Segment (January-June 2025 vs January-June 2024) | Business Segment | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heating | 73,521.52 | 68,032.99 | 8.07% | | Construction, Maintenance & Design Services | 1,025.41 | 626.10 | 63.78% | | Total | 74,546.93 | 68,659.08 | 8.58% | Operating Costs Breakdown for Heating Business (January-June 2025 vs January-June 2024) | Heating Sales Cost Item | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heat Purchase Cost | 43,695.97 | 41,977.82 | 4.09% | | Coal | 4,613.22 | 2,077.11 | 122.10% | | Maintenance and Repair | 689.60 | 686.36 | 0.47% | | Labor | 7,683.60 | 7,664.11 | 0.25% | | Depreciation and Amortization | 6,905.98 | 6,412.17 | 7.70% | | Utilities | 4,937.60 | 4,478.63 | 10.25% | | Input VAT Transfer Out | 2,974.63 | 2,879.11 | 3.32% | | Other | 2,020.91 | 1,857.67 | 8.79% | | Total | 73,521.52 | 68,032.99 | 8.07% | - Coal costs significantly increased by 122.10% to RMB 4,613.22 10,000 yuan, primarily due to the addition of new peak-shaving coal-fired boilers and increased coal consumption during the period40 - The operating cost increase for construction, maintenance, and design services was 63.78%, largely consistent with the increase in revenue from this business44 4. Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, the Group's gross profit was RMB 18,966.50 10,000 yuan, a year-on-year decrease of 13.80%, mainly due to increased costs from a higher proportion of coal-fired heating due to new peak-shaving coal-fired boilers Gross Profit (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Gross Profit | 18,966.50 | 22,003.84 | 13.80% | - The decrease in gross profit was primarily due to the addition of new peak-shaving coal-fired boilers during the period, which increased the proportion of coal-fired heating and led to higher costs45 5. Administrative Expenses For the six months ended June 30, 2025, the Group's administrative expenses were RMB 4,270.31 10,000 yuan, a slight year-on-year decrease of 1.21%, remaining largely consistent with the prior period Administrative Expenses (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Administrative Expenses | 4,270.31 | 4,322.72 | 1.21% | 6. Finance Costs For the six months ended June 30, 2025, the Group's finance costs were RMB 939.79 10,000 yuan, a significant year-on-year increase of 446.07%, primarily due to increased interest expenses from higher bank loans Finance Costs (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Finance Costs | 939.79 | 172.10 | 446.07% | - The significant increase in finance costs was primarily due to an increase in bank loans during the period compared to the prior period, leading to higher interest expenses47 7. Income Tax Expense For the six months ended June 30, 2025, the Group's income tax expense was RMB 3,673.23 10,000 yuan, a year-on-year decrease of 30.00%, primarily due to a decrease in total profit Income Tax Expense (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Income Tax Expense | 3,673.23 | 5,247.52 | 30.00% | - The decrease in income tax expense was primarily due to a decrease in total profit during the period48 8. Profit for the Period For the six months ended June 30, 2025, the Group's profit for the period was RMB 10,690.34 10,000 yuan, a year-on-year decrease of 27.84%, mainly affected by lower gross profit and increased bad debt provisions Profit for the Period (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Profit for the Period | 10,690.34 | 14,814.20 | 27.84% | - The decrease in profit for the period was primarily due to a RMB 3,007.34 10,000 yuan decrease in gross profit compared to the same period last year, and an additional RMB 2,383.51 10,000 yuan provision for bad debts this period compared to the prior year50 9. Profit Attributable to Owners of the Company For the six months ended June 30, 2025, profit attributable to owners of the company was RMB 10,690.34 10,000 yuan, a year-on-year decrease of 27.84%, consistent with the profit for the period Profit Attributable to Owners of the Company (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 10,690.34 | 14,814.20 | 27.84% | 10. Liquidity and Capital Resources As of June 30, 2025, the Group's cash and cash equivalents were RMB 46,036.36 10,000 yuan, a decrease of 16.88% from the end of 2024, mainly due to increased cost expenditures from new peak-shaving coal-fired boilers Cash and Cash Equivalents (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 46,036.36 | 55,382.60 | 16.88% | - The decrease in cash and cash equivalents was primarily due to the addition of new peak-shaving coal-fired boilers during the period, which increased the proportion of coal-fired heating and led to higher cost expenditures52 11. Capital Expenditures For the six months ended June 30, 2025, the Group's capital expenditures were RMB 12,402.99 10,000 yuan, a significant year-on-year increase of 106.17%, primarily due to the purchase of coal-fired boilers from the controlling shareholder Capital Expenditures (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Capital Expenditures | 12,402.99 | 6,016.00 | 106.17% | - The increase in capital expenditures was primarily due to the Group's purchase of coal-fired boilers from the controlling shareholder during the period53 12. Capital Structure As of June 30, 2025, the Group's owners' equity was RMB 115,006.32 10,000 yuan, an increase of RMB 10,690.34 10,000 yuan from the end of 2024, mainly attributable to the increase in profit for the period, with total interest-bearing bank and other borrowings approximately RMB 54,800.00 10,000 yuan at a fixed annual interest rate of 3.2–3.9% Owners' Equity (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Owners' Equity | 115,006.32 | 104,315.98 | 10,690.34 | - The increase in owners' equity was primarily due to an increase in profit for the period54 - Total interest-bearing bank and other borrowings were approximately RMB 54,800.00 10,000 yuan, with a fixed annual interest rate of 3.2–3.9%54 - As of June 30, 2025, the Group's cash and cash equivalents exceeded its total interest-bearing liabilities54 13. Significant Acquisitions and Disposals During the reporting period, the company completed the acquisition of certain buildings, coal-fired boilers, and ancillary equipment from Changre Group and entered into multiple heat production asset acquisition agreements with the controlling shareholder group, all constituting connected transactions and major transactions - On January 15, 2025, the company completed the acquisition of certain buildings, coal-fired boilers, and ancillary equipment from Changre Group for a consideration of RMB 82,886,461.00 yuan55 - The company entered into an asset transfer agreement with Changre Group to conditionally agree to purchase land, pipelines, machinery, equipment, and vehicles for a consideration of RMB 113,930,021.65 yuan (Proposed Acquisition I)57 - Yatai Heating entered into an asset transfer agreement with Changre Group to conditionally agree to purchase machinery and equipment for a consideration of RMB 16,457,865.00 yuan (Proposed Acquisition II)58 - The company entered into an asset transfer agreement with Jilin Heating to conditionally agree to purchase machinery and equipment for a consideration of RMB 475,980.76 yuan (Proposed Acquisition III)59 - Proposed Acquisitions I, II, and III all constitute connected transactions of the company and, together with the previous acquisition, constitute major transactions of the company, none of which were completed as of the reporting date59 14. Pledge of Assets As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets61 15. Contingent Matters As of June 30, 2025, the Group had no significant contingent matters - As of June 30, 2025, the Group had no significant contingent matters62 III. Outlook for the Second Half of 2025 The Group will focus on improving heating quality and reducing energy consumption in the second half of the year, concentrating on its core heating business, strengthening energy management, and accelerating project progress to ensure stable heating, lower costs, and strict adherence to safety standards 1. Focus on Core Heating Business, Strengthen Service Foundation In the second half of the year, the company will continue to deepen its core heating business, ensure stable heating production operations, optimize user services, pre-stock coal for winter peak shaving, and improve its emergency response system - Continue to deepen the core heating business, comprehensively ensure stable heating production operations, and continuously optimize user service processes and quality based on user needs63 - Plan ahead and scientifically deploy winter peak-shaving coal reserves to ensure sufficient and stable coal supply63 - Further improve the heating emergency response system to enhance the ability to respond to sudden heating failures63 2. Strengthen Energy Management, Uncover Cost Reduction Potential The Group will reduce energy consumption through refined management and technological innovation, strengthen real-time analysis and dynamic control of key indicators such as "water, electricity, heat, and coal," and increase equipment maintenance and technological transformation efforts to achieve cost reduction - Energy management will be a key link in improving corporate efficiency, effectively reducing energy consumption through refined management and technological innovation64 - Strengthen real-time analysis and dynamic control of key indicators such as "water, electricity, heat, and coal"64 - Further increase efforts in equipment maintenance and technological transformation to improve boiler energy efficiency and achieve optimization and cost reduction goals in production and operations64 3. Accelerate Project Progress, Strictly Adhere to Safety Bottom Line The Group will accelerate the progress of key engineering projects, optimize construction organization, strictly implement the safety production responsibility system, strengthen risk control and hidden danger investigation and rectification, and ensure the achievement of a zero-accident target - Accelerate the progress of key engineering projects, optimize construction organization, and ensure the smooth implementation of all projects as planned65 - Strictly implement the safety production responsibility system, fully implement the "one post, dual responsibility" requirement65 - Strengthen risk-based hierarchical control and hidden danger investigation and rectification, establish a normalized and institutionalized safety inspection mechanism, and ensure the achievement of a zero-accident target65 IV. Events After Reporting Period Except for the significant acquisition matters disclosed in this report, there were no other significant events after the reporting period - Except as disclosed in this report, there were no significant events after the reporting period66 Corporate Governance Report This section details the company's corporate governance framework, compliance with codes, and the responsibilities and activities of its board and committees Corporate Governance Practices The company is committed to enhancing corporate governance, having established a modern corporate governance structure comprising the general meeting of shareholders, the Board of Directors, the Supervisory Committee (now abolished), and senior management, in reference to the Corporate Governance Code and Articles of Association - The company has established a modern corporate governance structure with effective checks and balances and independent operation, comprising the general meeting of shareholders, the Board of Directors, the Supervisory Committee (abolished on May 16, 2025), and senior management, in reference to Part 2 of the Corporate Governance Code and the requirements of the Articles of Association68 Compliance with Corporate Governance Code The company's Board of Directors is committed to maintaining high corporate governance standards and has adopted the principles of the Corporate Governance Code, with the company having complied with the code provisions during the reporting period, except for a brief vacancy in the General Manager position - The Directors believe that, except for a brief vacancy in the General Manager position (a deviation from Code Provision C.2.1), the company has complied with the applicable code provisions of the Corporate Governance Code during the reporting period69 - Since April 16, 2025, Mr. Zhang Liming has been appointed as the General Manager of the company, and the company has re-complied with Code Provision C.2.1 of the Corporate Governance Code69 Compliance with Model Code for Securities Transactions by Directors and Relevant Employees The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed strict compliance with this Model Code during the reporting period, with no breaches identified by the company - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the standard code for securities transactions by its Directors and relevant employees70 - All Directors have confirmed that, for the six months ended June 30, 2025, each Director has strictly complied with the standards set out in the Model Code70 Directors' Responsibilities for Financial Statements The Directors confirm their responsibility for preparing the company's financial statements and accounts, ensuring compliance with relevant regulations and accounting standards, and timely publication - The Directors confirm their responsibility for preparing the company's financial statements and accounts, ensuring that the company's financial statements are prepared in compliance with relevant regulations and applicable accounting standards, and ensuring the timely publication of the company's financial statements71 Independent Non-Executive Directors The company has appointed a sufficient number of independent non-executive directors with appropriate professional qualifications in accordance with the Listing Rules; during the reporting period, there were changes in the independent non-executive directors, and meetings were held to review profit distribution plans and the implementation of connected transactions - The company has appointed a sufficient number of independent non-executive directors with appropriate professional qualifications or relevant accounting or financial management expertise in accordance with the Listing Rules72 - Effective May 16, 2025, the company's independent non-executive directors are Ms. Zhang Yan, Ms. Du Jie, and Mr. Chen Shenghui72 - The first meeting of independent non-executive directors in 2025 was held on March 28, 2025, primarily reviewing the company's 2024 profit distribution plan and the implementation of 2024 connected transactions74 Audit Committee The company established an Audit Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and meetings were held to review important proposals such as financial monitoring, internal control, risk management, and annual financial reports - Effective May 16, 2025, the Audit Committee comprises Mr. Chen Shenghui (Chairman), Mr. Yang Zhongshi, and Ms. Zhang Yan75 - For the six months ended June 30, 2025, the Audit Committee held 1 meeting, reviewing and approving proposals regarding the effectiveness of financial monitoring, internal control, and risk management, the 2024 annual final accounts report, and the 2024 audited consolidated financial statements76 Remuneration Committee The company established a Remuneration Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and meetings were held to review the remuneration of directors, supervisors, and senior management, as well as remuneration policies - Effective May 16, 2025, the Remuneration Committee comprises Ms. Du Jie (Chairman), Mr. Xu Chungang, and Mr. Chen Shenghui77 - For the six months ended June 30, 2025, the Remuneration Committee held 1 meeting, reviewing proposals regarding the remuneration of directors, supervisors, and senior management, as well as remuneration policies and structure78 Nomination Committee The company established a Nomination Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and two meetings were held to review proposals such as board structure, director nominations, and independence assessments - Effective May 16, 2025, the Nomination Committee comprises Ms. Zhang Yan (Chairman), Mr. Shi Mingjun, and Ms. Du Jie80 - For the six months ended June 30, 2025, the Nomination Committee held 2 meetings, reviewing and approving proposals regarding the board structure, directors' leadership capabilities and contributions, assessment of independent non-executive directors' independence, and nominations for director candidates81 Strategy Committee The company established a Strategy Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and it briefly did not meet the minimum requirement of three members; the committee held a meeting to review the 2024 Environmental, Social and Governance Report - Effective May 16, 2024, the Strategy Committee comprises Mr. Song Chi (Chairman), Mr. Zhang Liming, and Ms. Zhang Yan82 - Between March 28, 2025, and May 16, 2025, the Strategy Committee had only two members, which did not comply with the provisions of the Strategy Committee's terms of reference82 - The company held the first meeting of the Strategy Committee in 2025 on March 28, 2025, which approved the proposal regarding the 2024 Environmental, Social and Governance Report (near final draft)83 Other Information This section covers various other corporate details, including share capital, dividends, securities transactions, and related party loan arrangements Share Capital As of June 30, 2025, the company's total share capital was 466,700,000 shares, comprising 350,000,000 domestic shares and 116,700,000 H shares, each with a par value of RMB 1.00 yuan, and no new shares were issued during the reporting period - As of June 30, 2025, the company's total share capital was 466,700,000 shares, divided into 350,000,000 domestic shares and 116,700,000 H shares, each with a par value of RMB 1.00 yuan85 - No new shares were issued for cash by the company after the listing of H shares on the Main Board of the Hong Kong Stock Exchange85 Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 202586 Purchase, Sale or Redemption of the Company's Listed Securities or Redeemable Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed or redeemable securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed or redeemable securities87 - As of June 30, 2025, the company held no treasury shares87 Convertible Securities, Options, Warrants or Similar Rights For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued or granted any convertible securities, options, warrants, or other similar rights, nor were any related conversion or subscription rights exercised - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued or granted any convertible securities, options, warrants, or other similar rights, nor were any conversion or subscription rights exercised under any convertible securities, options, warrants, or other similar rights issued or granted by the company or any of its subsidiaries at any time88 Issuance of Bonds For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued bonds - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued bonds89 Loan Arrangements to Entities The company provided a loan arrangement of up to RMB 300 million to its controlling shareholder, Changre Group, under a loan agreement at an annual interest rate of 4.5%, with a total of RMB 256 million provided as of the reporting date - The company agreed to provide a loan of up to RMB 300 million to Changre Group at an annual interest rate of 4.5% from December 24, 2024, to December 31, 202990 - As of the date of this report, the total amount provided by the company to Changre Group under the loan agreement was RMB 256 million90 Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2025, none of the company's directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations - As of June 30, 2025, none of the company's directors or chief executive had any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations that were required to be notified to the company and the Hong Kong Stock Exchange under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance91 Major Shareholders' Interests and Short Positions in Shares As of June 30, 2025, Changchun Heating (Group) Co., Ltd. was the company's largest shareholder, holding 69.75% of the total share capital, with China Foreign Economy and Trade Trust Co., Ltd. and Northeast Asia Wanzhong Venture Capital Investment Management (Jilin) Co., Ltd. also holding significant proportions of H shares Major Shareholders' Interests and Short Positions in Shares (June 30, 2025) | Shareholder Name | Share Class | Capacity | Number of Shares Held (shares) | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Changchun Heating (Group) Co., Ltd. | Domestic Shares | Beneficial Owner | 325,500,000(L) | 69.75 | | Changchun State-owned Capital Operation Group Co., Ltd. | Domestic Shares | Beneficial Owner | 24,500,000(L) | 5.25 | | China Foreign Economy and Trade Trust Co., Ltd. | H Shares | Trustee | 30,500,000(L) | 6.54 | | Northeast Asia Wanzhong Venture Capital Investment Management (Jilin) Co., Ltd. | H Shares | Beneficial Owner | 17,090,000(L) | 3.66 | Changes in Directors' and Supervisors' Information Mr. Yang Zhongshi and Mr. Shi Mingjun resigned from their directorships at Changchun Yatai Heating Co., Ltd., and at the general meeting of shareholders on May 16, 2025, the company approved the abolition and dissolution of the Supervisory Committee, with its powers to be exercised by the Audit Committee - Mr. Yang Zhongshi and Mr. Shi Mingjun resigned from their directorships at Changchun Yatai Heating Co., Ltd. on May 28, 202599 - At the general meeting of shareholders on May 16, 2025, the company approved the resolution to abolish and dissolve the Supervisory Committee; since then, the company no longer has a Supervisory Committee or supervisors, and the powers of the Supervisory Committee are exercised by the Audit Committee99 Employees and Remuneration Policy As of June 30, 2025, the Group had 1,578 employees, with remuneration comprising basic salary and performance bonuses, the latter determined based on the Group's performance and appraisal results - As of June 30, 2025, the Group had 1,578 employees100 - The Group's employee remuneration consists of two parts: basic salary and performance bonus, with performance bonuses determined based on the Group's performance and performance appraisal results100 Review of Interim Results The company's Audit Committee, together with its independent auditor, reviewed the interim results for the six months ended June 30, 2025, and agreed with the accounting treatments adopted by the company - The company's Audit Committee and its independent auditor reviewed the Group's interim results for the six months ended June 30, 2025, and agreed with the accounting treatments adopted by the company101 Significant Legal Proceedings As of June 30, 2025, the company was not involved in any significant legal proceedings or arbitrations - As of June 30, 2025, the company was not involved in any significant legal proceedings or arbitrations102 Consolidated Balance Sheet As of June 30, 2025, the Group's total assets were RMB 2,468,115,112.11 yuan, a decrease from RMB 3,745,836,079.66 yuan as of December 31, 2024, with a significant reduction in current assets, a slight increase in non-current assets, a corresponding decrease in total liabilities, and an increase in total shareholders' equity Consolidated Balance Sheet Key Items (June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB yuan) | December 31, 2024 (RMB yuan) | | :--- | :--- | :--- | | Cash and Bank Balances | 466,963,585.84 | 1,455,774,167.52 | | Accounts Receivable | 244,452,946.72 | 292,454,028.46 | | Prepayments | 181,596,601.93 | 696,052,863.29 | | Other Receivables | 400,997,081.49 | 143,150,344.45 | | Total Current Assets | 1,377,354,891.21 | 2,676,804,769.68 | | Fixed Assets | 855,582,330.61 | 850,266,318.15 | | Total Non-current Assets | 1,090,760,220.90 | 1,069,031,309.98 | | Total Assets | 2,468,115,112.11 | 3,745,836,079.66 | | Short-term Borrowings | 548,000,000.00 | 616,185,080.42 | | Accounts Payable | 92,403,741.86 | 288,333,372.32 | | Contract Liabilities | 500,029,011.51 | 1,436,470,122.36 | | Total Current Liabilities | 1,202,935,543.39 | 2,578,974,059.36 | | Total Liabilities | 1,318,051,863.21 | 2,702,676,267.57 | | Total Equity Attributable to Owners of the Parent Company | 1,150,063,248.90 | 1,043,159,812.09 | | Total Shareholders' Equity | 1,150,063,248.90 | 1,043,159,812.09 | Consolidated Income Statement For the six months ended June 30, 2025, the Group's total operating revenue was RMB 935,134,299.91 yuan, and net profit was RMB 106,903,436.81 yuan, a decrease from the same period last year, with basic earnings per share at RMB 0.23 yuan Consolidated Income Statement Key Items (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB yuan) | January–June 2024 (RMB yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 935,134,299.91 | 906,629,256.98 | | Operating Costs | 745,469,319.23 | 686,590,830.07 | | Total Profit | 143,635,744.05 | 200,617,153.89 | | Income Tax Expense | 36,732,307.24 | 52,475,162.44 | | Net Profit | 106,903,436.81 | 148,141,991.45 | | Net Profit Attributable to Owners of the Parent Company | 106,903,436.81 | 148,141,991.45 | | Basic Earnings Per Share | 0.23 | 0.32 | | Diluted Earnings Per Share | 0.23 | 0.32 | Consolidated Cash Flow Statement For the six months ended June 30, 2025, the Group's net cash flow from operating activities was negative RMB 532,929,124.31 yuan, net cash flow from investing activities was negative RMB 378,122,771.99 yuan, and net cash flow from financing activities was negative RMB 77,758,685.38 yuan, resulting in a net decrease in cash and cash equivalents of negative RMB 988,810,581.68 yuan Consolidated Cash Flow Statement Key Items (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB yuan) | January–June 2024 (RMB yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | –532,929,124.31 | –495,519,463.70 | | Net Cash Flow from Investing Activities | –378,122,771.99 | –60,160,031.26 | | Net Cash Flow from Financing Activities | –77,758,685.38 | –1,536,081.67 | | Net Increase in Cash and Cash Equivalents | –988,810,581.68 | –557,215,576.63 | | Cash and Cash Equivalents at End of Period | 460,363,585.84 | 553,826,033.28 | Consolidated Statement of Changes in Equity As of June 30, 2025, total equity attributable to owners of the parent company was RMB 1,150,063,248.90 yuan, an increase of RMB 106,903,436.81 yuan from the beginning of the year, primarily due to the comprehensive income for the period Changes in Equity Attributable to Owners of the Parent Company (January-June 2025) | Item | Share Capital (RMB yuan) | Other Comprehensive Income (RMB yuan) | Special Reserves (RMB yuan) | Surplus Reserve (RMB yuan) | Retained Earnings (RMB yuan) | Total Shareholders' Equity (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at End of Previous Year | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 513,062,175.52 | 1,043,159,812.09 | | Balance at Beginning of Current Year | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 513,062,175.52 | 1,043,159,812.09 | | Changes for the Current Year | — | — | — | — | 106,903,436.81 | 106,903,436.81 | | (I) Total Comprehensive Income | — | — | — | — | 106,903,436.81 | 106,903,436.81 | | Balance at End of Current Period | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 619,965,612.33 | 1,150,063,248.90 | Notes to Financial Statements This section provides detailed explanations of the company's fundamental information, basis of financial statement preparation, significant accounting policies, and specific financial statement items I. Company Overview Jilin Province Chuncheng Heating Company Limited, formerly Jilin Province Changre New Energy Co., Ltd., was listed on the Hong Kong Stock Exchange in October 2019, with a share capital of 466.70 million shares, primarily engaged in the heating industry, and its ultimate controlling party is the Changchun Municipal People's Government State-owned Assets Supervision and Administration Commission - Jilin Province Chuncheng Heating Company Limited, formerly Jilin Province Changre New Energy Co., Ltd., was registered on October 23, 2017, and restructured into a joint-stock company in April 2018127 - The company was listed on the Hong Kong Stock Exchange in October 2019, with an initial public offering of 116.7 million H shares to overseas investors127 - As of December 31, 2024, the company's share capital was 466.70 million shares, with a registered capital of RMB 466.70 million yuan, and its ultimate controlling party is the Changchun Municipal People's Government State-owned Assets Supervision and Administration Commission128 - The company operates in the heating industry, with its main products and services including new energy technology development; heating production and supply; heating engineering design, installation services; contract energy management; and sales of cables, electrical equipment, household appliances, flooring, tiles, thermostats, and heating ancillary products128 II. Basis of Preparation of Financial Statements These financial statements are prepared in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance, applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules and the Hong Kong Companies Ordinance, and on a going concern basis - These financial statements are prepared in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance and the applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules, and also comply with the applicable disclosure requirements of the Hong Kong Companies Ordinance131 - These financial statements are prepared on a going concern basis, and the company has evaluated its ability to continue as a going concern for 12 months from the end of the reporting period, finding no significant doubts132 III. Significant Accounting Policies and Accounting Estimates This section details the significant accounting policies and estimates followed in preparing the financial statements, including financial instruments, inventories, fixed assets, revenue recognition, employee benefits, government grants, and deferred income tax, also disclosing the impact of accounting policy changes on financial position and operating results 1. Statement of Compliance with Enterprise Accounting Standards These financial statements comply with the requirements of the Enterprise Accounting Standards issued by the Ministry of Finance, truly and completely reflecting the company's financial position as of June 30, 2025, and its operating results and cash flows for January-June 2025 - These financial statements comply with the requirements of the Enterprise Accounting Standards issued by the Ministry of Finance, truly and completely reflecting the company's financial position as of June 30, 2025, and its operating results and cash flows for January-June 2025133 2. Accounting Period The company's accounting year runs from January 1 to December 31 of the Gregorian calendar - An accounting year runs from January 1 to December 31 of the Gregorian calendar134 3. Operating Cycle The company's operating cycle is 12 months - The company's operating cycle is 12 months135 4. Functional Currency The company uses Renminbi as its functional currency - The company uses Renminbi as its functional currency136 5. Accounting Methods for Business Combinations Under Common Control and Not Under Common Control For business combinations under common control, the company measures the acquired assets and liabilities at their carrying amounts in the ultimate controlling party's consolidated financial statements, with the difference adjusted to capital reserve or retained earnings; for business combinations not under common control, they are measured at fair value on the acquisition date, with the difference recognized as goodwill or included in current profit or loss - For business combinations under common control, the assets and liabilities acquired by the combining party are measured at their carrying amounts in the ultimate controlling party's consolidated financial statements, with the difference adjusted to capital reserve or retained earnings138 - For business combinations not under common control, the combination cost is measured at fair value on the acquisition date; if it exceeds the fair value share of identifiable net assets, the difference is recognized as goodwill, and if it is less, it is included in current profit or loss138 6. Criteria for Determining Control and Preparation Methods for Consolidated Financial Statements The company determines the scope of consolidation based on control, prepares consolidated financial statements by treating the entire enterprise group as a single accounting entity, and eliminates the effects of internal transactions, with detailed provisions for accounting treatments of increasing or disposing of subsidiaries, purchasing minority interests, and partially disposing of equity - The scope of consolidation for consolidated financial statements is determined based on control, including the company and all its subsidiaries139 - The company treats the entire enterprise group as a single accounting entity, prepares consolidated financial statements according to uniform accounting policies, and eliminates the effects of internal transactions140 - Detailed provisions are made for the accounting treatment of increasing subsidiaries (under common control and not under common control), disposing of subsidiaries (general treatment and step-by-step disposal), purchasing minority interests in subsidiaries, and partially disposing of equity without losing control143145148149 7. Classification of Joint Arrangements and Accounting Methods for Joint Operations Joint arrangements are classified into joint operations and joint ventures; the company recognizes its separately held and proportionally shared assets, liabilities, revenues, and expenses for joint operations, and accounts for investments in joint ventures using the equity method - Joint arrangements are classified into joint operations and joint ventures152 - The company recognizes its separately held and proportionally shared assets, liabilities, revenues from selling its share of output, revenues from joint operations' sales of output, and expenses incurred separately and proportionally in joint operations157 - The company accounts for investments in joint ventures using the equity method154 8. Criteria for Determining Cash and Cash Equivalents Cash refers to the company's cash on hand and deposits readily available for payment, while cash equivalents are short-term, highly liquid investments readily convertible to known amounts of cash with insignificant risk of changes in value - Cash refers to the company's cash on hand and deposits readily available for payment155 - Cash equivalents refer to the company's held investments that are short-term, highly liquid, readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value155 9. Foreign Currency Transactions and Translation of Foreign Currency Financial Statements Foreign currency transactions are translated using the spot exchange rate on the transaction date; foreign currency monetary items at the balance sheet date are translated at the spot exchange rate, with exchange differences recognized in current profit or loss; for foreign currency financial statements, balance sheet items are translated at the spot exchange rate on the balance sheet date, and income statement items at the spot exchange rate on the transaction date - Foreign currency transactions are translated using the spot exchange rate on the transaction date156 - At the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date, with exchange differences recognized in current profit or loss (except for those related to the acquisition or construction of qualifying assets)156 - When translating foreign currency financial statements, assets and liabilities in the balance sheet are translated using the spot exchange rate at the balance sheet date, owners' equity items (except "undistributed profits") are translated using the spot exchange rate at the time of occurrence, and income and expense items in the income statement are translated using the spot exchange rate on the transaction date159 10. Financial Instruments The company classifies financial assets based on its business model and contractual cash flow characteristics into those measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss; financial liabilities are classified as measured at fair value through profit or loss or at amortized cost, with detailed provisions for recognition, measurement, derecognition, and impairment testing of various financial instruments - Financial assets are classified as measured at amortized cost, at fair value through other comprehensive income (debt instruments or equity instruments), and at fair value through profit or loss161163168169170 - Financial liabilities are classified as measured at fair value through profit or loss and at amortized cost163171174 - The company applies impairment accounting based on expected credit losses for financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income (debt instruments), and financial guarantee contracts188 - For accounts receivable and contract assets, regardless of whether they contain a significant financing component, the company always measures their loss allowance at an amount equal to the expected credit losses over the entire lifetime190 11. Inventories Inventories are classified as raw materials, revolving materials, and merchandise, initially measured at cost, valued using the first-in, first-out method when issued, and accounted for using the perpetual inventory system; at the balance sheet date, inventories are measured at the lower of cost and net realizable value, with provision for inventory write-downs - Inventories are classified as raw materials, revolving materials, and merchandise, initially measured at cost, and valued using the first-in, first-out method when issued194195 - The perpetual inventory system is adopted196 - At the balance sheet date, inventories are measured at the lower of cost and net realizable value, and a provision for inventory write-downs is made when cost exceeds net realizable value198 12. Contract Assets The company presents as contract assets its right to consideration in exchange for goods or services that it has transferred to a customer (if that right is conditioned on something other than the passage of time), and always measures their loss allowance at an amount equal to the expected credit losses over the entire lifetime - The company presents as contract assets its right to consideration in exchange for goods or services that it has transferred to a customer (and that right is conditioned on something other than the passage of time)199 - The expected credit losses for contract assets are always measured at an amount equal to the expected credit losses over the entire lifetime200 13. Assets Held for Sale and Discontinued Operations The company classifies non-current assets or disposal groups whose carrying amount will be recovered principally through a sale transaction rather than through continuing use as held for sale, and recognizes impairment provisions; discontinued operations refer to a component of an entity that has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations, with its profit or loss separately presented in the income statement - Non-current assets or disposal groups whose carrying amount will be recovered principally through a sale transaction rather than through continuing use are classified as held for sale, and an impairment provision is recognized when the carrying amount exceeds the fair value less costs to sell203204 - Discontinued operations are separately distinguishable components that meet specific conditions and have been disposed of or classified as held for sale, with their continuing and discontinued operations' profit or loss presented separately in the income statement205 14. Long-term Equity Investments The company accounts for long-term equity investments in subsidiaries using the cost method and in associates and joint ventures using the equity method, with detailed provisions for determining common control and significant influence, initial investment cost, subsequent measurement, and profit or loss recognition, including accounting treatment for disposal of long-term equity investments - The company accounts for long-term equity investments in subsidiaries using the cost method and in associates and joint ventures using the equity method213214 - Common control refers to shared control over an arrangement, and significant influence refers to the power to participate in the financial and operating policy decisions of the investee209 - Initial investment cost is determined differently for those formed through business combinations (under common control and not under common control) and those acquired by other means210211 - Upon disposal of long-term equity investments, the difference between their carrying amount and the actual consideration received is recognized in current profit o