中国心连心化肥(01866) - 2025 - 中期财报

China XLX Culture The company adheres to an integrity-driven culture and a spirit of self-reliance, aiming to create maximum societal value with minimal resources, focusing on proactivity and results - The company adheres to a culture of integrity and the spirit of "striving hard to meet others' needs"[8] - Committed to creating the greatest value for society with the fewest resources[8] - Corporate culture emphasizes self-accountability, proactivity, and results over process[9] Company Profile China XLX Fertiliser aims to be China's most respected fertilizer group, pursuing efficient, high-end, and lean development through "fertilizer-based, high-quality growth" and "low-cost differentiation" strategies, guided by six core principles - Corporate Vision: Committed to becoming China's most respected fertilizer enterprise group[14] - Core Mission: Achieve efficient, high-end, and lean development for the group[14] - Adheres to two major development and operating strategies: "fertilizer as foundation, high-quality development" and "low-cost differentiation"[15] - Six development principles include strategic direction, pursuit of excellence, pragmatic and efficient management, key capability enhancement, development risk control, and customer orientation[16][17][18][19][20][21] Corporate Information This section details China XLX Fertiliser's key corporate information, including board members, committees, senior management, stock code, and company website - Board members include Executive Directors Liu Xingxu (Chairman), Zhang Qingjin, Yan Yunhua, and Independent Non-executive Directors Wang Jianyuan, Li Shengxiao, Wang Weiren, Li Hongxing[22] - Established Audit Committee, Remuneration Committee, and Nomination Committee, each chaired by an Independent Non-executive Director[22] - Chief Executive Officer is Song Wanlei, and Chief Financial Officer and Data Protection Officer is Wang Yonghong[24] - Company stock code is 1866, and the company website is **www.chinaxlx.com.hk**[27](index=27&type=chunk) Management Discussion and Analysis This report covers China XLX Fertiliser's H1 2025 performance, showing 5% revenue growth despite a 19% net profit decline due to lower gross profit, with strategic projects advancing Business Review H1 2025 saw product prices rebound in Q2, driving a 5% revenue increase to RMB12.666 billion, but overall gross profit fell 13% and net profit 13% (9% ex-non-recurring items), despite strong Q2 performance 2025年上半年简明综合全面收入表关键数据 | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Comprehensive Revenue | 12,666,000 | 12,061,000 | +5% | | Overall Gross Profit | - | - | -13% | | Net Profit Attributable to Owners | 88,000 (Decrease) | - | -13% | | Net Profit Attributable to Owners (Excluding Non-recurring Items) | - | - | -9% | | Q2 Net Profit Quarter-on-Quarter Growth | 259,000 | - | +104% | - Urea product gross profit decreased by nearly 44% year-on-year, primarily contributing to the decline in the group's overall gross profit[30] - Q2 urea and melamine average selling prices increased by 10% and 11% quarter-on-quarter, respectively[31] - Q2 compound fertilizer and melamine sales volumes increased by 29% and 20% quarter-on-quarter, respectively[31] Fertiliser Segment The fertiliser segment saw mixed H1 2025 results: urea revenue fell 16% (price down 19%, volume up 4%, gross margin down 10pp), while compound fertilizer revenue grew 5% (volume up 8%, gross margin down 2pp) Urea H1 2025 urea sales revenue fell 16% to RMB3.225 billion (price down 19%, volume up 4%), with gross margin dropping from 31% to 21%, partially offset by cost optimization | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 3,225,000 | 3,834,000 | -16% | | Average Selling Price | - | - | -19% | | Sales Volume | - | - | +4% | | Export Volume | - | - | +47,000 tonnes | | Gross Margin | 21% | 31% | -10 percentage points | - Urea prices increased by 10% quarter-on-quarter in Q2[35] - Dual-coal blending technology reduced front-end coal gasification production costs by 1%; coal prices decreased by 20% year-on-year, leading to a 7% reduction in average production costs[36] Compound Fertilisers H1 2025 compound fertilizer sales revenue grew 5% to RMB3.566 billion (volume up 8%), but gross margin fell 2 percentage points due to rising raw material costs | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 3,566,000 | 3,410,000 | +5% | | Sales Volume | - | - | +8% | | High-efficiency Fertilizer Sales Volume | - | - | +11% | | Gross Margin | 16% | 18% | -2 percentage points | - The Guangxi production base successfully commenced operations, serving market demand in Guangdong, Guangxi, and Hainan[37] - Prices of key compound fertilizer raw materials, potash and phosphate, continued to rise by 24% and 6% year-on-year, respectively, leading to a 1% increase in production costs[40] Chemical Segment H1 2025 chemical segment performance varied: methanol revenue up 27% (volume up 28%); liquid ammonia revenue down 20% (gross margin up 2pp); melamine revenue down 5% (gross margin up 1pp); and DMF revenue down 1% (gross margin up 5pp) Methanol H1 2025 methanol sales revenue grew 27% to RMB1.642 billion (volume up 28%), with gross margin stable at 8%, supported by strategic supplier agreements and increased exports | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 1,642,000 | 1,291,472 | +27% | | Sales Volume | - | - | +28% | | Gross Margin | 8% | 8% | Flat | - Stabilized selling prices and increased methanol export volumes through strategic long-term agreements with upstream suppliers[41] Liquid Ammonia H1 2025 liquid ammonia sales revenue fell 20% to RMB533 million (volume down 6%, price down 15%), but gross margin rose 2 percentage points to 13% due to a 16% average cost reduction | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 533,000 | 668,000 | -20% | | Sales Volume | - | - | -6% | | Selling Price | - | - | -15% | | Gross Margin | 13% | 11% | +2 percentage points | - The Xinxiang base implemented a flexible "methanol-up, ammonia-down" adjustment strategy, leading to a 6% year-on-year decrease in self-produced liquid ammonia volume[43] - Liquid ammonia trade volume increased by 2% year-on-year, compensating for the reduction in self-produced external sales[43] - Average costs decreased by 16% year-on-year, with raw coal procurement costs down 14% and total ammonia steam consumption down 2%[47] Melamine H1 2025 melamine sales revenue fell 5% to RMB378 million (price down 9%, volume up 5%), with gross margin rising 1 percentage point to 31% due to overseas market expansion and 10% average cost reduction | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 378,000 | 397,466 | -5% | | Average Selling Price | - | - | -9% | | Sales Volume | - | - | +5% | | Gross Margin | 31% | 30% | +1 percentage point | - Actively adjusted domestic and international trade marketing proportions, vigorously expanded overseas markets, adding new markets such as Germany, Poland, and Spain[48] - The Xinjiang base effectively reduced production costs by 5% through multi-coal blending technology, leading to a 10% year-on-year decrease in average costs[49] DMF H1 2025 DMF sales revenue slightly fell 1% to RMB587 million (price down 9%, volume up 9%), but gross margin significantly rose 5 percentage points to 18% due to a 15% average cost reduction | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 587,000 | 595,295 | -1% | | Selling Price | - | - | -9% | | Sales Volume | - | - | +9% | | Gross Margin | 18% | 13% | +5 percentage points | - Achieved strategic cooperation with leading downstream pesticide enterprises and actively built stable export channels and cooperation systems[52] - Average costs decreased by 15% year-on-year, with raw coal procurement prices down 15% and steam consumption per tonne down 25%[53] Other Income and Expenses H1 2025 saw net other income surge 79% to RMB200 million, selling and distribution expenses up 4%, G&A expenses down 0.3% (5% ex-share-based compensation), finance costs down 14%, and income tax down 13%, leading to a 19% overall profit decline Other Income, Net H1 2025 net other income reached RMB200 million, up 79%, driven by RMB45 million in government grants, RMB34 million from byproduct sales, and RMB7 million reduced loss from asset disposals | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other Income, Net | 200,000 | 112,000 | +79% | | Government Grants | - | - | +45,000 | | Net Profit from Byproduct Sales | - | - | +34,000 | | Reduced Loss from Fixed Asset Disposal | - | - | +7,000 | Selling and Distribution Expenses H1 2025 selling and distribution expenses rose 4% to RMB392 million, driven by new marketing models, expanded channels, increased sales volumes, and greater overseas market development, leading to a RMB14 million increase in service fees | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 392,000 | 378,000 | +4% | | Increase in Service Fees | - | - | +14,000 | - Promotion of new marketing models, further expansion of terminal channels, and significant increase in sales volume across all products[57] - Continuously increased efforts in overseas market development, leading to growth in export volumes[57] General and Administrative Expenses H1 2025 G&A expenses slightly fell 0.3% to RMB700 million (5% ex-share-based compensation), driven by RMB27 million in salary savings, RMB6 million in reduced repair costs, and RMB4 million in lower testing fees from efficiency improvements | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 700,000 | 702,000 | -0.3% | | Share-based Compensation Management Expenses | 35,000 | - | - | | Actual Management Expenses (Excluding Share-based Compensation) | - | - | -5% | | Reduction in Management Personnel Salary Expenses | 27,000 | - | - | | Reduction in Repair Expenses | 6,000 | - | - | | Reduction in Testing and Inspection Expenses | 4,000 | - | - | - Streamlined organizational structure and management personnel allocation, deploying managers to front-line production, sales, and service roles[59] - Implemented digital monitoring and preventive maintenance for key equipment, reducing the frequency of abnormal shutdowns for inspection and repair[59] Finance Costs H1 2025 finance costs decreased 14% to RMB230 million, driven by debt structure optimization, diversified financing, and replacing high-interest loans, reducing the average loan interest rate by 0.8 percentage points | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Finance Costs | 230,000 | 266,000 | -14% | | Average Loan Interest Rate | - | - | -0.8 percentage points | - Continuously optimized debt structure, diversified financing channels, and actively communicated with financial institutions[60] - Fully capitalized on interest rate reduction opportunities to advance the replacement of high-interest loans[60] Income Tax Expenses H1 2025 income tax expenses decreased 13% to RMB161 million, mainly due to lower profitability | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Income Tax Expenses | 161,000 | 184,000 | -13% | | Primary Influencing Factor | Decline in profitability | - | - | Profit During the Period H1 2025 profit for the period fell 19% to RMB757 million, mainly due to a RMB316 million gross profit reduction, partially offset by RMB88 million higher other income and RMB24 million expense savings | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 757,000 | 938,000 | -19% | | Gross Profit Reduction | 316,000 | - | - | | Increase in Other Income | 88,000 | - | - | | Savings in Three Major Expenses | 24,000 | - | - | Prospects H2 outlook: stable urea prices with potential coal-driven fluctuations, positive chemical industry, and rising demand for high-efficiency fertilizers. The group will focus on advanced R&D, low-cost operations, and differentiated products, with key projects in Jiangxi (Q3 2025) and Xinxiang (Q1 2026) set to boost cash flow and long-term value by 2027 - Domestic nitrogen fertilizer market urea prices are expected to remain stable in H2, but a rebound in coal prices may support periodic upward fluctuations[66] - The supply-demand pattern in the chemical industry is expected to improve, with the industry's prosperity likely to show a stable upward trend[66] - Accelerated agricultural modernization and continuous expansion of grain planting areas are driving increasing rigid demand for high-efficiency fertilizers[66] - Focused on R&D and application of technologies such as slow-release, controlled-release, and water-fertilizer integration, promoting planting models that save water and fertilizer, and increase yield and efficiency[67] - Centered on humic acid as a core product, building differentiated product and service competition, providing full-chain services for large farmers[69] - Jiangxi Base Phase II project is scheduled for commissioning in Q3 2025, and the Xinxiang Base chemical new materials project in Q1 2026[70] - By 2027, all the group's under-construction capacities are expected to be fully released, with cash flow significantly exceeding capital expenditure, forming a positive cycle of "investment, output, and development"[70] Directors' and Chief Executive's Interests in Shares As of June 30, 2025, directors and chief executives held long positions in company shares, with Mr. Liu Xingxu holding 34.25%, Ms. Yan Yunhua 20.12%, and Mr. Zhang Qingjin 0.24%, reflecting strong alignment with company interests | Name of Director/Chief Executive | Total Interests (Shares) | Approximate % of the Company's Issued Share Capital | | :--- | :--- | :--- | | Mr. Liu Xingxu | 439,565,999 | 34.25% | | Mr. Zhang Qingjin | 3,045,000 | 0.24% | | Ms. Yan Yunhua | 258,220,000 | 20.12% | | Mr. Wang Jianyuan | 100,000 | 0.01% | - Mr. Liu Xingxu beneficially owns 42% equity in Pioneer Top and has full discretionary voting rights over Pioneer Top[79] - Ms. Yan Yunhua holds 100% interest in Rosy Top Limited and, as trustee of the employee trust, has full discretionary voting rights over Mirth Power's shares in the company[79] - Equity derivatives represent interests in restricted shares granted under the company's share award scheme (but not yet vested)[79] Substantial Shareholders' Interests in Shares As of June 30, 2025, substantial shareholders include Pioneer Top (controlled by Mr. Liu Xingxu) and Mirth Power (an employee trust controlled by Ms. Yan Yunhua), holding 5% or more of issued shares | Name of Substantial Shareholder | Capacity | Number of Issued Ordinary Shares in which Interests are Held | Approximate % of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Pioneer Top | Beneficial Owner | 435,313,999 | 33.92% | | Teeroy Limited | Trustee | 247,484,848 | 19.28% | | Mirth Power | Beneficial Owner | 211,939,848 | 16.52% | | Clever Sunshine | Beneficial Owner | 35,545,000 | 2.76% | - Pioneer Top is beneficially owned by Mr. Liu Xingxu with 42% equity and he has full discretionary voting rights[89] - Mirth Power is a trust holding shares for 1,245 group employees, with Ms. Yan Yunhua as the trustee, who has full discretionary voting rights over Mirth Power's shares[89] Supplementary Information This section provides supplementary details on operational and financial risks, contingent liabilities, litigation, asset charges, investments, future plans, share award scheme, governance, share repurchases, and employee policies 1. Operational and Financial Risks The group faces market, commodity, interest rate, limited FX, inflation, liquidity (31.28% debt due within one year), and debt-to-asset ratio risks (up 2pp to 63.5%), with Jiangxi Phase II project expected to stabilize H2 cash flow and the ratio - Key market risks include changes in average selling prices of major products, changes in raw material (primarily coal) costs, and fluctuations in interest and exchange rates[90] - Regarding liquidity risk, as of June 30, 2025, approximately RMB4.859 billion (31.28%) of debt is due within one year, and the company is adjusting its loan structure and securing sufficient long-term bank credit[96][98] Debt-to-Asset Ratio | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Debt-to-Asset Ratio | 63.5% | 61.5% | +2 percentage points | - The increase in the debt-to-asset ratio was mainly due to new loans of approximately RMB2.67 billion, all of which were medium-to-long-term loans, optimizing the overall debt structure[227] - The Jiangxi Phase II project is progressing as planned and is expected to commence production in Q3, providing strong support for H2 cash flow and ensuring the debt-to-asset ratio remains reasonable and stable[228] 2. 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[100] 3. Material Litigation and Arbitration As of June 30, 2025, the group was not involved in any material litigation or arbitration - As of June 30, 2025, the group was not involved in any material litigation or arbitration[101] 4. Charge on the Group's Assets As of June 30, 2025, the group had no other charges on its assets beyond those disclosed in this report - As of June 30, 2025, the group had no other charges on its assets beyond those disclosed in this report[102] 5. Significant Investments The group made no significant investments during the six months ended June 30, 2025 - The group made no significant investments during the six months ended June 30, 2025[103] 6. Future Plans for Material Investments or Capital Assets As of June 30, 2025, the group had no other plans for material investments or capital assets - As of June 30, 2025, the group had no other plans for material investments or capital assets[104] 7. Share Award Scheme Adopted on May 17, 2024, the share award scheme incentivizes talent with HK$1.5 per share awards, vesting based on 2024/2025 performance, with a 10% issued share limit. 35,245,000 shares partially vested, and 51,386,300 shares (approx. 4.01%) remain available - The Share Award Scheme was adopted on May 17, 2024, with a 10-year validity, aiming to recognize contributions, incentivize retention, and attract talent[106][107][114] - The award price was HK$1.5 per share, equivalent to 46.43% of the closing price on February 5, 2024, designed to provide sufficient incentive[112][114] - Vesting conditions include company performance targets (2024 revenue growth no less than 2% or net profit no less than RMB1.65 billion; 2025 revenue growth no less than 4% or net profit no less than RMB1.8 billion) and individual performance assessment targets[116][117] Vesting Schedule for Awarded Shares | Performance Period | Vesting Period | Percentage of Awarded Shares Available for Vesting | | :--- | :--- | :--- | | Year Ended December 31, 2024 | First Vesting Period | 50% of Awarded Shares for Relevant Individual Selected Participants | | Year Ended December 31, 2025 | Second Vesting Period | Remaining 50% of Awarded Shares for Relevant Individual Selected Participants | - The scheme's authorized limit is 10% of the total issued shares on the adoption date (i.e., 121,876,300 shares)[121] Summary of Share Awards | Category of Participants | Unvested as at January 1, 2025 (Shares) | Vested during the Reporting Period (Shares) | Unvested as at June 30, 2025 (Shares) | | :--- | :--- | :--- | :--- | | Directors, Chief Executives or Substantial Shareholders and their Associates | 3,750,000 | 1,875,000 | 1,875,000 | | Other Connected Persons | 15,540,000 | 7,770,000 | 7,770,000 | | Other Selected Participants (468 persons) | 51,140,000 | 25,420,000 | 25,420,000 | | Total | 70,790,000 | 35,245,000 | 35,245,000 | - As of the reporting date, the total number of shares available for issue under the Share Award Scheme is 51,386,300 shares, representing approximately 4.01% of the company's issued shares[126] 8. Audit Committee The Audit Committee reviewed the group's accounting principles, internal controls, and H1 2025 interim results, which are not yet externally audited - The Audit Committee has reviewed the group's adopted accounting principles and standards, and discussed and reviewed internal controls and reporting matters[134] - The Audit Committee has reviewed the interim results for the six months ended June 30, 2025, but these results have not yet been reviewed or audited by the company's external auditors[134] 9. Compliance with the Corporate Governance Code The company is committed to good corporate governance practices and has complied with all code provisions in Appendix C1 Part 2 of the Listing Rules for the six months ended June 30, 2025 - The company has complied with all code provisions set out in Appendix C1 Part 2 of the Listing Rules for the six months ended June 30, 2025[135] 10. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers The Board has adopted the Model Code in Appendix C3 of the Listing Rules as its standard for directors' securities transactions, and all directors confirmed compliance for the six months ended June 30, 2025 - The Board has adopted the Model Code set out in Appendix C3 of the Listing Rules as its standard for directors' securities transactions[139] - All directors of the company have complied with the standards prescribed by the Model Code for the six months ended June 30, 2025[139] 11. Purchase, Sales or Redemption of the Company's Securities For H1 2025, the company repurchased 1,006,000 shares for HK$5.318 million (0.078% of issued shares), aiming to boost shareholder returns and optimize capital structure, with these shares held as treasury stock for future incentive plans Share Repurchases | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid (HK$) | Lowest Price Paid (HK$) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | :--- | :--- | | June | 1,006,000 | 5.44 | 5.19 | 5,318,363 | - Repurchased shares accounted for approximately 0.078% of the issued shares as of June 30, 2025[140] - The share repurchases were based on the company's confidence in its long-term business prospects and potential growth, aiming to optimize capital structure, enhance earnings per share, net asset value per share, and overall shareholder returns[140] - As of June 30, 2025, the company held 1,006,000 treasury shares, intended for employee share incentive plans and other corporate purposes[143][144] 13. Employees and Remuneration Policy As of June 30, 2025, the group had 11,945 employees; remuneration is market and performance-based, with benefits, training, and incentive plans to enhance skills and reward performance Employee Headcount | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Employees | 11,945 | 11,787 | +158 | - Employee remuneration is determined considering market conditions and individual performance, with benefits such as medical and life insurance, and sales personnel receiving commissions and bonuses based on sales performance[145] - Provides continuous training for all employees (including directors and senior management) to enhance professional skills and work performance[145] - An employee incentive plan has been implemented to reward outstanding employees[145] 14. Significant Events After the Period No significant events affecting the group occurred from the end of H1 2025 to the date of this report - No significant events affecting the group occurred from the end of H1 2025 to the date of this report[146] 15. Disclosure on the Websites of the SEHK and the Company This report has been published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company (www.chinaxlx.com.hk) - This report is published on the SEHK website (http://www.hkexnews.hk) and the *company website (http://www.chinaxlx.com.hk)**[147](index=147&type=chunk) 16. Corporate Communications The company confirmed shareholder preferences for corporate communication language and receipt method, allowing changes and free printed copies, with this interim report available in both Chinese and English - The company has confirmed shareholders' preferences for the language version (i.e., English and/or Chinese) and method of receipt (i.e., printed copy or via the company website) of corporate communications[149] - Shareholders have the right to change their choices for the language version and method of receipt of corporate communications at any time, and may request free printed copies[149][150] - Both Chinese and English versions of this interim report are printed in the same booklet, and shareholders will receive both versions simultaneously[152] Condensed Consolidated Statement of Comprehensive Income H1 2025 condensed consolidated comprehensive income shows revenue up 5% to RMB12.666 billion, but gross profit fell 13.4%, and profit for the period decreased 19.3% to RMB757 million, with basic EPS down 8.7% H1 2025 Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 12,665,749 | 12,060,957 | +604,792 | +5.0% | | Cost of Sales | (10,625,565) | (9,705,237) | (920,328) | +9.5% | | Gross Profit | 2,040,184 | 2,355,720 | (315,536) | -13.4% | | Other Income, Net | 200,104 | 112,462 | +87,642 | +78.0% | | Selling and Distribution Expenses | (391,594) | (377,726) | (13,868) | +3.7% | | General and Administrative Expenses | (700,460) | (701,849) | +1,389 | -0.2% | | Finance Costs | (229,716) | (265,997) | +36,281 | -13.6% | | Profit Before Tax | 918,518 | 1,122,610 | (204,092) | -18.2% | | Income Tax Expense | (161,402) | (184,124) | +22,722 | -12.3% | | Profit for the Period | 757,116 | 938,486 | (181,370) | -19.3% | | Profit Attributable to Owners of the Company | 599,295 | 686,996 | (87,701) | -12.8% | | Basic Earnings Per Share (RMB cents) | 51.50 | 56.4 | (4.9) | -8.7% | | Diluted Earnings Per Share (RMB cents) | 50.93 | 56.3 | (5.37) | -9.5% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets grew to RMB36.041 billion and net assets to RMB13.142 billion, with significant increases in property, plant, and equipment, cash, receivables, and inventories, while total liabilities rose, notably non-current interest-bearing borrowings by 40.7% June 30, 2025 Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | Property, Plant and Equipment | 25,192,472 | 22,981,051 | +2,211,421 | +9.6% | | Inventories | 1,889,737 | 1,710,320 | +179,417 | +10.5% | | Trade and Bills Receivables | 1,425,684 | 974,669 | +451,015 | +46.3% | | Cash and Cash Equivalents | 2,357,938 | 887,226 | +1,470,712 | +165.8% | | Liabilities | | | | | | Interest-bearing Bank and Other Borrowings (Current) | 4,858,594 | 5,267,226 | (408,632) | -7.8% | | Interest-bearing Bank and Other Borrowings (Non-current) | 10,673,109 | 7,588,086 | +3,085,023 | +40.7% | | Trade Payables | 1,883,340 | 1,581,482 | +301,858 | +19.1% | | Equity | | | | | | Net Assets | 13,142,126 | 12,521,788 | +620,338 | +5.0% | | Total Assets | 36,041,315 | 32,518,244 | +3,523,071 | +10.8% | | Total Liabilities | 22,899,189 | 19,996,456 | +2,902,733 | +14.5% | Condensed Consolidated Statement of Changes in Equity H1 2025 total equity grew 5% to RMB13.142 billion, with RMB757 million profit partially offset by RMB122 million dividends to non-controlling shareholders and net share repurchases, reflecting capital structure adjustments H1 2025 Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (RMB'000) | June 30, 2025 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Total Equity | 12,521,788 | 13,142,126 | +620,338 | | Equity Attributable to Owners of the Company | 8,961,167 | 9,554,168 | +593,001 | | Non-controlling Interests | 3,560,621 | 3,587,958 | +27,337 | | Profit for the Period | - | 757,116 | +757,116 | | Dividends Paid to Non-controlling Shareholders | - | (122,078) | (122,078) | | Repurchase of Shares (Net) | (98,433) | (54,266) | +44,167 | | Acquisition of Non-controlling Interests | - | (9,858) | (9,858) | Condensed Consolidated Statement of Cash Flows H1 2025 condensed consolidated cash flows show net cash from operations down 39.9% to RMB1.247 billion, net cash used in investing up 66.3% to RMB2.073 billion, and net cash from financing up 9873% to RMB2.297 billion, with period-end cash up 17.1% to RMB2.358 billion H1 2025 Condensed Consolidated Statement of Cash Flows Key Data | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 1,246,933 | 2,075,084 | (828,151) | -39.9% | | Net Cash Used in Investing Activities | (2,072,769) | (1,246,595) | (826,174) | +66.3% | | Net Cash Generated from Financing Activities | 2,296,549 | 23,029 | +2,273,520 | +9872.9% | | Net Increase in Cash and Cash Equivalents | 1,470,713 | 851,517 | +619,196 | +72.7% | | Cash and Cash Equivalents at End of Period | 2,357,939 | 2,014,075 | +343,864 | +17.1% | - Expenditure for the acquisition of property, plant, and equipment was RMB2.556 billion, with proceeds from disposal amounting to RMB5.686 million[162] - Proceeds from loans and borrowings were RMB7.461 billion, and repayment of loans and borrowings was RMB4.782 billion[162] Notes to the Condensed Consolidated Interim Financial Information These notes explain H1 2025 condensed consolidated interim financial information, covering corporate details, accounting policies, product performance, income/expenses, finance costs, profit, tax, dividends, EPS, investments, cash, prepayments, inventories, receivables/payables, PPE, borrowings, and debt-to-asset ratio 1. Corporate Information China XLX Fertiliser, incorporated in Singapore on July 17, 2006, and listed on the HKEX, primarily engages in investment holding, with subsidiaries focused on R&D, production, and trading of differentiated products like urea, compound fertilizers, methanol, liquid ammonia, melamine, and DMF across China - The company was incorporated in Singapore on July 17, 2006, and its shares are listed on the Main Board of the Hong Kong Stock Exchange[164] - The company's principal business is investment holding, with subsidiaries primarily engaged in the R&D, production, and trading of differentiated products such as urea, compound fertilizers, methanol, liquid ammonia, melamine, and DMF[164] - The group's headquarters and main operating locations are in Xinxiang, Henan; Manas County, Changji Prefecture, Xinjiang; Jiujiang, Jiangxi; and Guigang, Guangxi, China[164] 2.1 Basis of Preparation These financial statements are prepared under Singapore FRS (International) and IFRS, using historical cost (except for fair value equity investments), presented in RMB, rounded to the nearest thousand - Financial statements are prepared in accordance with Singapore Financial Reporting Standards (International) and International Financial Reporting Standards[165] - Prepared using the historical cost convention, except for equity investments at fair value through profit or loss, which are measured at fair value[166] - Financial statements are presented in RMB, with all amounts rounded to the nearest thousand[166] 2.2 Changes in Accounting Policies and Disclosures Accounting policies align with the 2024 consolidated report, with new IFRS amendments (IFRS 9, 7, 11, 18, 19) adopted, which directors expect will not significantly impact initial application period financial statements - Accounting policies are consistent with the 2024 consolidated financial report, but new International Financial Reporting Standards have been adopted for the first time[169] New International Financial Reporting Standards Adopted | Description | Effective Date | | :--- | :--- | | Amendments to IFRS 9 and IFRS 7 Financial Instruments: Classification and Measurement | January 1, 2026 | | Annual Improvements to IFRS 11 | January 1, 2026 | | IFRS 18 Presentation and Disclosure in Financial Statements | January 1, 2027 | | IFRS 19 Subsidiaries without Public Accountability: Disclosures | January 1, 2027 | | Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | - The company's directors expect that the adoption of the above other standards and interpretations will not have a significant impact on the financial statements in the period of initial application[170] 3. Product Performance Contribution This section analyzes H1 2025 and H1 2024 product contributions to revenue and segment profit, categorized into fertilizer (urea, compound fertilizer) and chemical (methanol, liquid ammonia, melamine, DMF) segments, plus other products - The group is segmented into Fertiliser, Chemical, Pharmaceutical Intermediates, Gas, and Equipment segments[173] H1 2025 Major Product Revenue and Segment Profit (RMB'000) | Product | Revenue | Segment Profit | | :--- | :--- | :--- | | Urea | 3,225,357 | 662,636 | | Compound Fertiliser | 3,566,305 | 563,356 | | Methanol | 1,641,974 | 138,724 | | Liquid Ammonia | 533,249 | 69,437 | | Melamine | 377,812 | 116,775 | | DMF | 587,071 | 108,294 | | Others | 2,733,981 | 380,962 | | Total | 12,665,749 | 2,040,184 | Others include Organic Amine (RMB285M), Furfural Furfuryl Alcohol (RMB233M), Polyoxymethylene (RMB230M), Humic Acid (RMB217M), Pharmaceutical Intermediates (RMB227M), Equipment Segment (RMB161M) H1 2024 Major Product Revenue and Segment Profit (RMB'000) | Product | Revenue | Segment Profit | | :--- | :--- | :--- | | Urea | 3,834,000 | 1,181,231 | | Automotive Urea Solution | 166,095 | 30,017 | | Compound Fertiliser | 3,410,034 | 604,853 | | Methanol | 1,291,472 | 102,136 | | Melamine | 397,466 | 119,114 | | DMF | 595,295 | 76,639 | | Pharmaceutical Intermediates | 234,089 | (1,441) | | Others | 2,132,506 | 243,171 | | Total | 12,060,957 | 2,355,720 | *Others include Liquid Ammonia (RMB668M), Organic Amine (RMB275M), Humic Acid (RMB201M), Furfuryl Alcohol (RMB163M) 4. Revenue and Other Income/(Expenses), Net This section analyzes H1 2025 and H1 2024 revenue and other income/expenses: sales of goods revenue up 5%, net other income up 78% (from grants and byproduct sales), and total other expenses significantly down due to reduced asset disposal losses Revenue (Sales of Goods) (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of Goods | 12,665,749 | 12,060,957 | Other Income (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank Interest Income | 6,913 | 13,714 | | Net Profit from Byproduct Sales | 82,334 | 47,937 | | Service Fee Income | 4,910 | 5,802 | | Penalty Income | 5,147 | 1,325 | | Government Grants | 93,841 | 49,214 | | Investment Income | 1,328 | 1,517 | | Amortization of Deferred Grants | 8,335 | 5,714 | | Others | 4,130 | 14,216 | | Total Other Income | 206,938 | 139,439 | Other Expenses (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss on Disposal of Property, Plant and Equipment | (3,397) | (10,287) | | Gain/(Loss) on Fair Value Change of Equity Investments | 1,824 | (163) | | Donations | (5,024) | (2,951) | | Gain/(Loss) on Fair Value Change of Derivative Financial Instruments | 1,449 | (1,089) | | Others | (1,686) | (12,487) | | Total Other Expenses | (6,834) | (26,977) | Other Income, Net (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Other Income, Net | 200,104 | 112,462 | 5. Finance Costs In H1 2025, the group's finance costs were RMB230 million, a 13.6% decrease from RMB266 million in H1 2024, reflecting efforts to optimize debt structure and reduce average loan interest rates Finance Costs (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Bank Loans, Bank Overdrafts and Other Borrowings | 229,716 | 265,997 | 6. Profit Before Tax This section lists key expense items deducted in calculating the group's profit before tax, including cost of inventories sold, depreciation of property, plant and equipment, depreciation of right-of-use assets, amortization of intangible assets, and employee benefit expenses (including directors' emoluments) Profit Before Tax Deductions (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 10,625,565 | 9,705,237 | | Depreciation of Property, Plant and Equipment | 882,851 | 787,913 | | Depreciation of Right-of-Use Assets | 24,275 | 21,660 | | Amortization of Intangible Assets | 6,650 | 8,112 | | Employee Benefit Expenses (Including Directors' Emoluments) | 1,266,891 | 1,221,372 | 7. Income Tax Expense The company (Singapore-registered, 17% tax rate) and its China subsidiaries (25% rate, 17 at 15% preferential) reported H1 2025 income tax expenses of RMB161 million, down 13% due to lower profitability - The company, incorporated in Singapore, is subject to a 17% income tax rate[190] - Mainland China subsidiaries are subject to a 25% income tax rate, with 17 subsidiaries enjoying a preferential 15% rate due to high-tech enterprise awards[191] Income Tax Expense (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Expense for the Period | 161,402 | 184,124 | | Total Tax Expense for the Period | 161,402 | 184,124 | 8. Dividend For the six months ended June 30, 2025, the company proposed and declared a final dividend of RMB334 million for the year ended December 31, 2024. No interim dividend was proposed or declared for H1 2025 | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | 2024 Final Dividend | 333,643,000 | - | | 2023 Final Dividend | - | 292,503,000 | | H1 2025 Interim Dividend | None | None | 9. Earnings Per Share Attributable to Ordinary Equity Holders of the Company This section details H1 2025 basic and diluted EPS calculations: basic EPS was RMB51.50 cents, diluted EPS RMB50.93 cents, considering weighted average shares and restricted share plan dilution Earnings Per Share Calculation Data | Indicator | H1 2025 (Shares) | H1 2024 (Shares) | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares in Issue for Basic EPS Calculation | 1,218,233,000 | 1,218,040,000 | | Dilutive Effect – Restricted Share Incentive Plan | 13,589,000 | – | | Total (for Diluted EPS Calculation) | 1,231,822,000 | 1,218,040,000 | Number of Issued and Fully Paid Ordinary Shares (Shares) | Date | Number of Shares | | :--- | :--- | | June 30, 2025 | 1,283,241,000 | | December 31, 2024 | 1,283,241,000 | 10. Equity Investments at Fair Value Through Profit or Loss As of June 30, 2025, non-current equity investments (unlisted China) remained at RMB6.708 million, while current equity investments (listed Singapore/Hong Kong) grew from RMB7.83 million to RMB9.654 million Equity Investments at Fair Value Through Profit or Loss (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current | | | | Unlisted Equity Investments (China) | 6,708 | 6,708 | | Current | | | | Listed Equity Investments (Singapore) | 4,129 | 3,408 | | Listed Equity Investments (Hong Kong) | 5,525 | 4,422 | | Total Current | 9,654 | 7,830 | - The above investments in equity securities have no fixed maturity dates or yields[203] 11. Cash and Cash Equivalents and Pledged Time Deposits As of June 30, 2025, cash and bank balances surged to RMB2.358 billion, while pledged time deposits fell to RMB346 million; RMB is convertible via authorized banks, and bank deposits bear floating interest rates Cash and Cash Equivalents and Pledged Time Deposits (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Time Deposits | 346,252 | 628,615 | | Less: Pledged Time Deposits | (346,252) | (628,615) | | Cash and Bank Balances | 2,357,938 | 887,226 | | Cash and Cash Equivalents | 2,357,938 | 887,226 | - Cash and bank balances denominated in RMB amounted to RMB2.358 billion[206] - RMB is not freely convertible into other currencies but is permitted to be exchanged through banks authorized to conduct foreign exchange business[206] 12. Prepayments As of June 30, 2025, non-current prepayments, primarily for property, plant, and equipment, decreased to RMB678 million. Current prepayments, mainly deposits to suppliers, slightly increased to RMB787 million Prepayments (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current | | | | Prepayments for Purchase of Property, Plant and Equipment | 677,730 | 880,221 | | Current | | | | Deposits Paid to Suppliers | 787,193 | 773,613 | 13. Inventories As of June 30, 2025, the group's total inventories increased to RMB1.89 billion. Raw materials decreased, while components and spare parts, work-in-progress, and finished goods all increased. Inventory impairment provisions slightly rose Inventory Composition (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 630,566 | 759,279 | | Components and Spare Parts | 398,906 | 152,589 | | Work-in-Progress | 35,531 | 76,401 | | Finished Goods | 843,014 | 738,403 | | Provision for Impairment of Inventories | (18,280) | (16,352) | | Total | 1,889,737 | 1,710,320 | 14. Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables grew to RMB1.426 billion, with both categories increasing; trade receivables are interest-free, settled within 30-180 days, and the group has no significant concentrated credit risk Trade and Bills Receivables (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 908,431 | 531,011 | | Bills Receivables | 517,253 | 443,658 | | Total | 1,425,684 | 974,669 | Trade Receivables Ageing Analysis (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 434,595 | 304,676 | | 1 to 3 months | 316,189 | 121,367 | | 3 to 6 months | 93,289 | 52,588 | | 6 to 12 months | 64,358 | 52,380 | - Trade receivables are interest-free and generally settled within 30 to 180 days, while bills receivables are generally settled within 90 to 180 days[211] 15. Trade Payables As of June 30, 2025, the group's total trade payables increased to RMB1.883 billion, with a significant rise in payables due within 1 to 3 months. Trade payables are interest-free, typically settled within 30 to 90 days, and denominated in RMB Trade Payables Ageing Analysis (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 591,352 | 1,224,101 | | 1 to 3 months | 1,081,705 | 164,892 | | 3 to 6 months | 66,378 | 72,259 | | 6 to 12 months | 73,800 | 66,046 | | Over 12 months | 70,105 | 54,182 | | Total | 1,883,340 | 1,581,482 | - Trade payables are interest-free, generally settled within 30 to 90 days, and denominated in RMB[218] 16. Property, Plant, Equipment and Land Use Rights In H1 2025, the group paid approximately RMB2.556 billion for the acquisition of property, plant, equipment, and land use rights, an increase from the prior year, while proceeds from disposals amounted to approximately RMB5.686 million Property, Plant, Equipment and Land Use Rights Transactions (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Payments for Purchase of Property, Plant and Equipment and Land Use Rights | 2,556,108 | 1,894,882 | | Proceeds from Disposal of Property, Plant and Equipment and Land Use Rights | 5,686 | 5,205 | 17. Interest-Bearing Bank and Other Borrowings As of June 30, 2025, total interest-bearing borrowings rose to RMB15.532 billion, with non-current debt increasing, optimizing the long-to-short-term ratio from 6:4 to 7:3. RMB4.836 billion in bank loans are due within one year, with 91% of working capital loans replaceable to ease short-term pressure Total Interest-Bearing Bank and Other Borrowings (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Borrowings | 4,858,594 | 5,267,226 | | Non-current Borrowings | 10,673,109 | 7,588,086 | | Total | 15,531,703 | 12,855,312 | - The group actively adjusted its debt structure, with the long-term to short-term borrowing ratio shifting from 6:4 at the beginning of the period to 7:3 at the end of the reporting period[224] - Approximately RMB4.836 billion in bank loans are due within one year, of which approximately RMB2.364 billion are medium-to-long-term project loans rolling into the one-year period, and approximately RMB2.472 billion are one-year working capital loans[224][225] - 91% of working capital loans are eligible for replacement, which helps reduce financing costs and effectively alleviate short-term liquidity pressure[225] - Secured bank loans amounted to RMB2.502 billion, collateralized by certain of the group's property, plant, and equipment projects[224] 18. Debt-to-Asset Ratio As of H1 2025, the debt-to-asset ratio rose 2 percentage points to 63.5%, mainly due to RMB2.67 billion in new medium-to-long-term loans that optimized debt structure, with the Jiangxi Phase II project expected to stabilize the ratio in H2 Debt-to-Asset Ratio | Indicator | H1 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 63.5% | 61.5% | - The increase in the debt-to-asset ratio was due to new loans increasing by approximately RMB2.67 billion from the beginning of the period, with all new additions being medium-to-long-term loans[227] - The medium-to-long-term loan maturities not only match project construction cycles but also effectively optimize the overall debt structure and reduce short-term repayment pressure[227] - The Jiangxi Phase II project is progressing as planned and is expected to commence production in Q3, providing strong support for H2 cash flow and ensuring the debt-to-asset ratio remains within a reasonable range and stable[228]