Financial Performance - Revenue for 2021 reached RMB 1,278.8 million, an increase of 11.9% from RMB 1,142.9 million in 2020[10] - Gross profit for 2021 was RMB 132.0 million, down from RMB 288.4 million in 2020, indicating a significant decline[11] - Overall gross profit margin decreased to 11.6% in 2021 from 22.6% in 2020[12] - The sewage treatment operation gross profit margin improved to 13.5% in 2021 from 8.4% in 2020[12] - The Group recorded a net loss of approximately RMB94.0 million for the year ended 31 December 2021, compared to a profit of approximately RMB59.8 million in 2020[25] - Revenue from construction services decreased by approximately RMB253.5 million, or approximately 23.2%, from approximately RMB1,112.7 million in 2020 to approximately RMB854.8 million in 2021[33] - The overall revenue of the Group decreased by approximately RMB135.9 million, or approximately 10.6%, from approximately RMB1,278.8 million in 2020 to approximately RMB1,142.9 million in 2021[51] - Basic and diluted loss per share for the year ended 31 December 2021 was RMB0.15, down from earnings of RMB0.10 per share in 2020[125] Liquidity and Financial Ratios - The gearing ratio increased to 40.6% in 2021 from 23.4% in 2020, indicating higher financial leverage[15] - The current ratio slightly decreased to 1.5 in 2021 from 1.6 in 2020, suggesting a minor decline in liquidity[17] - The Group aims to strengthen its liquidity condition to capture new business opportunities when the operating environment recovers[29] - As of 31 December 2021, the Group had cash and cash equivalents of approximately RMB93.0 million, a decrease from approximately RMB200.9 million as of 31 December 2020[128] - The Group's net current assets as of 31 December 2021 were approximately RMB472.1 million, representing a decrease of approximately RMB199.6 million from approximately RMB671.7 million as of 31 December 2020[128] Revenue Sources and Business Segments - Revenue from leasing of construction machinery, equipment, and tools increased by approximately RMB111.3 million, or approximately 84.0%, from approximately RMB132.5 million in 2020 to approximately RMB243.8 million in 2021[34] - The Construction service segment accounted for approximately 74.8% of the Group's total revenue in 2021, down from approximately 87.0% in 2020[53] - The revenue from Sewage treatment operation and Others remained relatively stable during the year ended 31 December 2021[57] - The Group has developed a more balanced source of income by generating additional leasing income for the year[28] Impairment and Credit Risk - The total loss allowance over trade and bills receivables and contract assets amounted to approximately RMB302.0 million as at 31 December 2021, up from approximately RMB163.8 million as at 31 December 2020[25] - The total impairment losses on trade receivables and contract assets recognized in profit or loss for the year ended 31 December 2021 amounted to approximately RMB138.3 million, an increase from approximately RMB114.8 million in 2020[42] - The Group's credit risk is primarily associated with trade receivables, bills receivable, and contract assets, which are mainly from real estate companies or main contractors in the PRC[69][73] - The Group has initiated cost reduction measures since the last quarter of 2021, including streamlining headcount and restructuring remuneration packages to manage administrative expenses[67] Management and Corporate Governance - The company has complied with the applicable code provisions set out in the Corporate Governance Code for the year ended December 31, 2021, with one noted deviation[200] - The Board is committed to maintaining a high standard of corporate governance and strives to create long-term value for shareholders[199] - The company will continuously review and improve its corporate governance practices to maintain high business ethics across the organization[199] Future Outlook and Strategic Initiatives - The company plans to focus on expanding its sewage treatment operations and enhancing construction service capabilities in the upcoming year[9] - The management provided a positive outlook for 2022, projecting a revenue growth of 10% to 15% driven by ongoing projects and new contracts[30] - The company aims to enhance its overall operation and business development through its R&D team led by Mr. He[148] - The Group plans to continue managing credit risk and balancing revenue sources to create long-term value for shareholders amid a challenging operating environment[44]
建中建设(00589) - 2021 - 年度财报