CISC(601005)2022-08-30 16:00Financial Performance - The company's operating revenue for the first half of 2022 was CNY 18,016,176, a decrease of 20.53% compared to CNY 22,669,939 in the same period last year[23]. - The net profit attributable to shareholders of the listed company was CNY 516,416, down 80.85% from CNY 2,697,041 in the previous year[23]. - The net cash flow from operating activities was CNY 936,511, a decline of 39.44% compared to CNY 1,546,388 in the same period last year[23]. - The total assets at the end of the reporting period were CNY 39,856,278, a decrease of 7.30% from CNY 42,995,956 at the end of the previous year[23]. - The total profit for the first half of 2022 was RMB 636 million, a decrease of RMB 2.061 billion year-on-year[37]. - The company reported a net profit of 546,619 thousand RMB for the current period, a decrease of 80.72% compared to the same period last year[148]. - The current ratio decreased by 17.24% to 0.72, while the quick ratio dropped by 37.10% to 0.39 due to an increase in current liabilities[148]. - The debt-to-asset ratio improved by 5.41 percentage points to 42.55% compared to the end of the previous year[148]. Production and Operations - In the first half of 2022, the company's production of iron, steel, and finished products decreased by 20.66%, 23.55%, and 21.57% respectively, with total production of 3.698 million tons, 3.846 million tons, and 3.809 million tons[33]. - The company achieved a significant reduction in costs, with improvements in the cost rankings for coking, sintering, and hot rolling processes compared to the previous year[33]. - The average hot charging rate for the hot rolling line reached 78.78% in the first quarter of 2022, marking a significant operational efficiency improvement[33]. - The company is positioned as a major steel producer in the southwestern region of China, benefiting from favorable geographical conditions and strong local demand[32]. Market and Industry Trends - The steel industry experienced a decline in profitability, with total profits in the black metal smelting and rolling processing industry dropping by 68.7% year-on-year, totaling 82.6 billion yuan, while losses for loss-making enterprises increased by 442.4% year-on-year to 41 billion yuan[28]. - As of June 2022, China's crude steel production was 527 million tons, a year-on-year decrease of 6.5%, with June production at 90.73 million tons, down 3.3% month-on-month[28]. - The gross profit margin for the steel industry was 6.82%, down 8.86% year-on-year[40]. Research and Development - Research and development expenses increased by 38.68% to RMB 104,832 thousand due to an increase in R&D projects[36]. - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming quarters[156]. Environmental and Social Responsibility - The company reported that total pollutant emissions in the first half of 2022 did not exceed the permitted total, with no environmental administrative penalties incurred during the reporting period[72]. - The total emission of particulate matter was 155.4 tons, with a concentration below the ironmaking industry air pollutant emission standard[72]. - The company has achieved a wastewater zero discharge project with a new capacity of 10,000 cubic meters per day, meeting COD and ammonia nitrogen discharge standards[76]. - The company has actively participated in social responsibility initiatives, donating RMB 160,000 to various charitable projects[86]. Corporate Governance and Compliance - The company’s audit committee consists of three independent non-executive directors and one non-executive director, ensuring compliance with corporate governance standards[127]. - The company has confirmed compliance with the Hong Kong Stock Exchange's corporate governance code during the reporting period[127]. - The company has not reported any overdue guarantees or liabilities that would require joint liability during the reporting period[124]. Strategic Partnerships and Investments - The company signed a strategic cooperation agreement with Anshan Steel in December 2021, launching a "network steel mill" operational model, which was officially unveiled in February 2022[33]. - The company plans to establish a joint venture with Baosteel Resources Holdings (Shanghai) Co., Ltd. with a registered capital of 180 million RMB, where the company will hold a 19% stake[127]. - The company has invested CNY 34.2 million for a 19% stake in Baowu Jingcheng (Zhoushan) Mining Technology Co., Ltd.[52]. Financial Management - The company reduced interest-bearing liabilities from RMB 10.49 billion at the beginning of the year to RMB 6.91 billion, a decrease of 34%[36]. - The company achieved a net cash outflow from investing activities of RMB 1,841,168 thousand in the first half of 2022, compared to a net outflow of RMB 1,864,545 thousand in the same period of 2021[167]. - The company has not declared any interim dividends for the six months ending June 30, 2022, due to cumulative undistributed profits remaining negative[127].