Financial Performance - For the first half of 2022, the revenue of China Gas was RMB 636.43 million, representing a year-on-year increase of 7.8%[14]. - The Group's revenue for the reporting period was approximately RMB636.43 million, representing an increase of approximately 7.80% compared to RMB590.36 million for the same period in 2021[42]. - Gross profit for the reporting period was approximately RMB143.45 million, an increase of approximately 28% from RMB111.68 million for the same period in 2021, mainly due to higher revenue and improved efficiency[44]. - Profit attributable to owners for the reporting period was approximately RMB41.63 million, compared to a loss of approximately RMB39.58 million for the same period in 2021[44]. - The company reported a total comprehensive income of RMB 36,667,290 for the six months ended June 30, 2022, compared to a loss of RMB 39,303,407 in the same period of 2021, indicating a turnaround in performance[170]. - The company recorded a profit attributable to owners of the Company of RMB 41,630,615 for the period, compared to a loss of RMB 39,582,107 in the prior year[163]. - Total comprehensive income for the period was RMB 36,667,290, compared to a loss of RMB 39,303,407 in the same period of 2021[163]. Economic Context - China's GDP for the first half of 2022 was RMB 56,264.2 billion, with a year-on-year growth of 2.5%[14]. - The impact of the COVID-19 pandemic affected China's economic growth, which fell short of initial expectations[14]. - China's GDP growth target for 2022 is 5.5%, with a recorded increase of only 2.5% in the first half of 2022, but recovery is expected in the latter half[37]. Industry Performance - The national crude steel output from January to June 2022 was 527 million tons, a year-on-year decrease of 36.45 million tons or 6.5%[14]. - The steel industry in China showed a generally stable performance in the first half of 2022, despite a negative trend after a favorable start[14]. - The Group's performance was influenced by the overall stability of the steel industry in China during the reporting period[14]. - The pipeline industrial gas business remained stable compared to the same period last year, benefiting from the gradual release of production capacity from HBIS Group[14]. - The sales volume and price of the new product krypton xenon increased during the reporting period[14]. Revenue Breakdown - For the six months ended June 30, 2022, the total sales of the Company's pipeline industrial gas reached 1,629.71 million Nm3, generating revenue of RMB 410.80 million[29]. - The sales of liquefied industrial gas totaled 75,054 tons, with revenue of RMB 103.19 million during the same period[29]. - Revenue from LNG and gas transmission service was RMB 113.70 million, while other revenue amounted to RMB 8.7 million[29]. - Revenue from the supply of liquefied industrial gas increased by approximately 8.45% to RMB103.19 million, compared to RMB95.15 million for the same period in 2021[45]. - Revenue from the supply of LNG and gas transmission services increased significantly by approximately 67.80% to RMB113.70 million, compared to RMB67.76 million for the same period in 2021[45]. Expenses and Liabilities - Selling and marketing expenses increased by approximately 5.14% to RMB0.95 million, attributed to the launch of a new product[51]. - Administrative expenses increased by approximately 11.30% to RMB39.86 million, primarily due to increased remuneration-related expenses[51]. - Expected credit losses for trade receivables amounted to RMB3.46 million, mainly due to an increase in trade receivables with aging periods of more than 6 months[52]. - Finance costs for the Reporting Period decreased by approximately 3.86% to approximately RMB13.03 million, mainly due to a decrease in interest expenses as the Group's bank borrowings decreased[54]. - Income tax expense for the Reporting Period increased by approximately 4.09% to RMB20.00 million, due to the increase in operating profit of certain subsidiaries[55]. Current Assets and Liabilities - The Group recorded total current assets of approximately RMB905.07 million as at 30 June 2022, representing an increase of approximately 11.69% compared to approximately RMB810.32 million as at 31 December 2021[60]. - Total current liabilities increased to approximately RMB1,031.85 million as at 30 June 2022, representing an increase of RMB244.02 million compared to approximately RMB787.83 million as at 31 December 2021[60]. - The current ratio of the Group was approximately 0.88 as at 30 June 2022, down from approximately 1.03 as at 31 December 2021[60]. - The Group's net debt was approximately RMB296.58 million as at 30 June 2022, down from RMB317.89 million as at 31 December 2021[55]. Shareholder Structure - As of June 30, 2022, Huitang Zhihe (Hong Kong) Co., Limited holds 431,904,000 shares, representing approximately 35.99% of the company's issued share capital[99]. - China Gas Investors Ltd. owns 468,096,000 shares, accounting for approximately 39.01% of the company's issued share capital[99]. - Huang He Investment Limited also holds 468,096,000 shares, which is about 39.01% of the company's issued share capital[101]. - The interests in shares are primarily held by controlled corporations, indicating significant ownership concentration among a few shareholders[99][101]. - The concentration of ownership may impact the company's market strategies and expansion plans moving forward[99][101]. Corporate Governance - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period, except for the separation of roles between the chairman and chief executive[91]. - The company has appointed Mr. Yao Li as the chairman of the Board and Mr. Li Libing as the chief executive officer as of March 31, 2022[92]. - The audit committee has reviewed the unaudited interim condensed consolidated financial information for the reporting period[96]. Share Option Scheme - The Share Option Scheme was adopted on June 17, 2020, and is effective for 10 years starting from December 29, 2020[109]. - The purpose of the Share Option Scheme is to motivate Eligible Persons to optimize their future contributions and reward past contributions[109]. - The scheme aims to attract and retain individuals significant to the Group's performance, growth, or success[109]. - The maximum number of shares to be issued upon exercise of all outstanding share options shall not exceed 30% of the shares in issue at any time[114]. - No options were granted by the Company under the Share Option Scheme since the Date of Adoption, and there were no outstanding share options as of June 30, 2022[118]. Legal and Compliance Issues - The Company received a writ of summons on May 4, 2022, related to a legal claim against it and other parties[123]. - An independent investigation committee was established on March 24, 2021, to address matters raised by the previous auditor[189]. - The Independent Investigation was completed in March 2022, focusing on the financial impact of certain transactions conducted by the Group[196]. - The investigation included reviewing internal control policies and procedures related to the transactions[194]. - The company did not perform background checks or due diligence on the Borrowers and Company D before entering into the Loan Transactions and the Note Investment[150].
CGII HLDGS(01940) - 2022 - 中期财报