中国淀粉(03838) - 2022 - 年度业绩

Company Information and Preliminary Results This section presents the company's preliminary audited consolidated results for 2022, highlighting revenue growth, increased profitability, and stable earnings per share and proposed dividends Announcement Statement The Board of China Starch Holdings Limited announced its audited consolidated results for the year ended December 31, 2022, with the Hong Kong Exchange disclaiming responsibility for the announcement's content - The company's Board of Directors announced the audited consolidated results for the year ended December 31, 2022[43] - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited assume no responsibility for the contents of this announcement, making no representation as to its accuracy or completeness[57] Preliminary Annual Results Overview The company's FY2022 revenue grew 2.7% to RMB 11,948,852 thousand, with gross profit up 25.0%, operating profit and profit for the year also significantly increasing, while basic earnings per share and proposed final dividend remained stable FY2022 Key Financial Data Overview | Metric | 2022 (RMB '000) | 2021 (RMB '000) | Change | | :------------------------------- | :-------------- | :-------------- | :----- | | Revenue | 11,948,852 | 11,639,315 | +2.7% | | Gross Profit | 1,190,475 | 952,211 | +25.0% | | Operating Profit | 607,326 | 510,539 | +19.0% | | Profit for the Year | 495,432 | 402,830 | +23.0% | | Profit Attributable to Owners | 352,009 | 345,597 | +1.9% | | Basic Earnings Per Share (RMB) | 0.0587 | 0.0577 | +1.7% | | Proposed Final Dividend Per Share (HK cents) | 0.69 | 0.69 | – | Consolidated Financial Statements This section details the company's consolidated financial performance and position for 2022, showing revenue and profit growth, changes in assets and liabilities, and significant increases in research expenses and borrowings Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended December 31, 2022, the company's revenue increased by 2.7% to RMB 11,948,852 thousand, gross profit grew 25.0% to RMB 1,190,475 thousand, with significant increases in operating profit and profit for the year, despite a substantial rise in research expenses Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Metric | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------------------- | :-------------- | :-------------- | | Revenue | 11,948,852 | 11,639,315 | | Cost of Sales | (10,758,377) | (10,687,104) | | Gross Profit | 1,190,475 | 952,211 | | Distribution Expenses | (171,044) | (164,934) | | Administrative Expenses | (207,835) | (192,013) | | Research Expenses | (324,108) | (199,648) | | Other Net Income | 119,838 | 114,923 | | Operating Profit | 607,326 | 510,539 | | Profit Before Income Tax | 621,116 | 511,488 | | Income Tax Expense | (125,684) | (108,658) | | Profit and Total Comprehensive Income for the Year | 495,432 | 402,830 | | Attributable to Owners of the Company | 352,009 | 345,597 | | Non-controlling Interests | 143,423 | 57,233 | - Research expenses significantly increased from RMB 199,648 thousand in 2021 to RMB 324,108 thousand in 2022[59] Consolidated Statement of Financial Position As of December 31, 2022, total assets increased to RMB 5,105,848 thousand, driven by higher inventories and cash and cash equivalents, with total equity also growing, while current liabilities saw significant increases in borrowings and dividends payable Consolidated Statement of Financial Position Summary (Assets) | Metric | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------- | :-------------- | :-------------- | | Non-current Assets | | | | Property, Plant and Equipment | 1,892,095 | 2,004,318 | | Right-of-use Assets | 436,292 | 447,167 | | Deferred Tax Assets | 61,999 | 50,907 | | Total Non-current Assets | 2,439,327 | 2,521,511 | | Current Assets | | | | Inventories | 866,404 | 602,314 | | Trade and Other Receivables | 589,550 | 594,357 | | Pledged Bank Deposits | 207,582 | – | | Cash and Cash Equivalents | 1,002,985 | 1,000,977 | | Total Current Assets | 2,666,521 | 2,197,648 | | Total Assets | 5,105,848 | 4,719,159 | Consolidated Statement of Financial Position Summary (Liabilities and Equity) | Metric | 2022 (RMB '000) | 2021 (RMB '000) | | :------------------------------- | :-------------- | :-------------- | | Equity | | | | Equity Attributable to Owners of the Company | 3,595,090 | 3,277,963 | | Non-controlling Interests | 226,693 | 214,059 | | Total Equity | 3,821,783 | 3,492,022 | | Non-current Liabilities | | | | Deferred Income | 244,722 | 259,411 | | Deferred Tax Liabilities | 73,410 | 70,554 | | Borrowings | – | 3,000 | | Total Non-current Liabilities | 318,132 | 332,965 | | Current Liabilities | | | | Trade and Other Payables | 369,149 | 416,302 | | Customer Advances | 205,166 | 269,909 | | Borrowings | 285,925 | 108,176 | | Dividends Payable | 27,307 | – | | Total Current Liabilities | 965,933 | 894,172 | | Total Liabilities | 1,284,065 | 1,227,137 | | Total Equity and Liabilities | 5,105,848 | 4,719,159 | - Pledged bank deposits amounted to RMB 207,582 thousand in 2022, compared to zero in 2021[47] - Current liabilities borrowings significantly increased from RMB 108,176 thousand in 2021 to RMB 285,925 thousand in 2022[48] Notes to the Financial Statements This section provides detailed notes on the consolidated financial statements, covering accounting policies, segment information, other net income, expenses, income tax, earnings per share, dividends, receivables, payables, and post-reporting period events Basis of Preparation and Accounting Policies The consolidated financial statements are prepared in accordance with applicable Hong Kong Financial Reporting Standards, adopting new standard amendments effective from January 1, 2022, which had no significant impact on performance or financial position - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[51] - New standard amendments effective for accounting periods beginning on or after January 1, 2022, have been adopted, including amendments to HKFRS 3, HKAS 16, HKAS 37, and HKFRS 16[50][52][64][67][80] - The adoption of these amendments had no impact on the Group's performance or financial position[67] Revenue and Segment Information Company revenue primarily originates from China, with all revenue recognized at a single point in time; 2022 saw increased sales to external customers for both upstream products (RMB 8,705,998 thousand) and fermentation and downstream products (RMB 3,242,854 thousand) - All revenue streams are recognized at a single point in time[55] - The Group's assets, liabilities, and capital expenditures are predominantly from China, thus no geographical analysis is presented[56] 2022 Revenue and Profit by Segment | Segment | Sales to External Customers (RMB '000) | Inter-segment Sales (RMB '000) | Reportable Segment Profit (RMB '000) | | :--------------------------- | :----------------------------------- | :----------------------------- | :----------------------------------- | | Upstream Products | 8,705,998 | 1,485,860 | 230,169 | | Fermentation and Downstream Products | 3,242,854 | – | 396,677 | | Total | 11,948,852 | 1,485,860 | 626,846 | 2021 Revenue and Profit by Segment | Segment | Sales to External Customers (RMB '000) | Inter-segment Sales (RMB '000) | Reportable Segment Performance (RMB '000) | | :--------------------------- | :----------------------------------- | :----------------------------- | :---------------------------------------- | | Upstream Products | 8,576,482 | 220,091 | 442,997 | | Fermentation and Downstream Products | 3,062,833 | – | 333,072 | | Total | 11,639,315 | 220,091 | 776,069 | Other Net Income Other net income increased to RMB 119,838 thousand in 2022, primarily due to higher amortization of government grants, gains from scrap sales, and disposal of property, plant, and equipment, despite a significant reduction in one-off government grants Other Net Income Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :------------------------------------- | :-------------- | :-------------- | | Amortization of Government Grants | 81,766 | 62,925 | | Gain on Sales of Scrap Materials | 21,841 | 17,317 | | Gain on Disposal of Property, Plant and Equipment | 9,403 | 1,075 | | Write-off of Property, Plant and Equipment | (208) | (3,091) | | Sewage Treatment | 2,875 | 1,224 | | Net Exchange Gain/(Loss) | 1,538 | (1,958) | | Government Grants (One-off) | 1,185 | 36,496 | | Futures Income | 601 | 333 | | Others | 837 | 602 | | Total | 119,838 | 114,923 | - One-off government grants significantly decreased to RMB 1,185 thousand in 2022, from RMB 36,496 thousand in 2021[70][82] Profit Before Income Tax The company's main expenses include cost of inventories, salaries, depreciation, and research expenses; research expenses significantly increased in 2022, while cost of inventories slightly decreased Key Expense Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------------- | :-------------- | :-------------- | | Cost of Inventories | 10,555,375 | 10,747,155 | | Salaries, Wages and Other Benefits | 251,116 | 215,122 | | Pension Scheme Contributions | 15,063 | 14,348 | | Depreciation of Property, Plant and Equipment | 273,929 | 248,296 | | Depreciation of Right-of-use Assets | 10,875 | 10,954 | | Research Expenses | 324,108 | 199,648 | | Auditor's Remuneration - Audit Services | 1,054 | 785 | | Auditor's Remuneration - Non-audit Services | 195 | 245 | - Research expenses significantly increased, primarily comprising inventory costs, staff costs, and depreciation for the R&D department[72][83] Income Tax Expense Income tax expense increased to RMB 125,684 thousand in 2022, mainly due to higher PRC corporate income tax, partially offset by over-provision from prior years; key PRC entities are subject to a 25% tax rate, with high-tech enterprises enjoying a preferential 15% rate Income Tax Expense Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------- | :-------------- | :-------------- | | Current Income Tax | | | | －PRC Corporate Income Tax | 139,076 | 90,720 | | －Over-provision in Prior Years | (5,156) | (7,763) | | －Other PRC Withholding Tax | – | 135 | | Deferred Tax | (8,236) | 25,566 | | Total | 125,684 | 108,658 | - PRC subsidiaries are subject to a 25% corporate income tax rate, with recognized high-tech enterprises enjoying a preferential rate of 15%[74] - Dividends paid by PRC enterprises to non-PRC resident enterprises are subject to a withholding tax rate of 10%[85] Earnings Per Share Basic earnings per share attributable to owners increased slightly to RMB 0.0587 in 2022 from RMB 0.0577 in 2021, with basic and diluted earnings per share being identical due to the absence of dilutive potential ordinary shares Earnings Per Share Calculation | Item | 2022 | 2021 | | :--------------------------------------- | :---------- | :---------- | | Profit Attributable to Owners of the Company (RMB '000) | 352,009 | 345,597 | | Weighted Average Number of Ordinary Shares in Issue ('000 shares) | 5,994,132 | 5,994,132 | | Basic Earnings Per Share (RMB) | 0.0587 | 0.0577 | - Basic and diluted earnings per share are identical for both years due to the absence of dilutive potential ordinary shares[87] Dividends The Board proposed a final dividend of HK 0.69 cents per share for 2022, consistent with 2021, totaling HKD 41,360,000, subject to shareholder approval at the AGM - The Board proposed a final dividend of HK 0.69 cents per share for 2022, amounting to HKD 41,360,000, consistent with 2021[58][89] - The proposed dividend is subject to approval by the company's shareholders at the 2023 Annual General Meeting[22][89] Dividends Payable for Prior Financial Years | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------------- | :-------------- | :-------------- | | 2021 Final Dividend of HK 0.69 cents per share | 34,882 | 44,941 | Trade and Other Receivables Total trade receivables in 2022 were RMB 145,594 thousand, slightly lower than 2021, with customer credit terms ranging from zero to 150 days; bank acceptance bills increased to RMB 239,531 thousand, with some pledged as collateral for bills payable and bank borrowings Trade and Other Receivables Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :---------------------------- | :-------------- | :-------------- | | Trade Receivables | 145,594 | 147,249 | | Bank Acceptance Bills | 239,531 | 204,407 | | Prepayments and Other Tax Receivables | 195,490 | 235,078 | | Others | 8,935 | 7,623 | | Total | 589,550 | 594,357 | - The Group generally grants credit terms to customers ranging from zero to 150 days[76] Trade Receivables Ageing Analysis | Ageing | 2022 (RMB '000) | 2021 (RMB '000) | | :------------ | :-------------- | :-------------- | | 0-30 Days | 134,162 | 136,162 | | 31-60 Days | 5,391 | 6,361 | | 61-90 Days | 1,022 | 2,927 | | Over 90 Days | 5,019 | 1,799 | | Total | 145,594 | 147,249 | Bank Acceptance Bills Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :-------------- | :-------------- | :-------------- | | Bills on Hand | 131,039 | 124,599 | | Endorsed Bills | 48,792 | 79,808 | | Discounted Bills | 59,700 | – | | Total | 239,531 | 204,407 | - As of December 31, 2022, bank acceptance bills of RMB 7,530 thousand and discounted bills of RMB 59,700 thousand were pledged to banks[78] Trade and Other Payables Total trade and other payables decreased to RMB 369,149 thousand in 2022; the average credit period for purchases remained at 80 days, with the company implementing risk management policies to ensure timely payments Trade and Other Payables Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :--------------------------------- | :-------------- | :-------------- | | Trade Payables | 188,973 | 187,347 | | Bills Payable | 7,530 | 8,428 | | Payables for Construction and Equipment | 64,653 | 91,715 | | Accrued Salaries and Benefits | 33,843 | 25,652 | | Accrued Expenses | 31,949 | 53,300 | | Other Tax Payables | 12,464 | 18,072 | | Total | 369,149 | 416,302 | - The average credit period for purchases was 80 days, consistent with 2021[5] Trade Payables and Bills Payable Ageing Analysis | Ageing | 2022 (RMB '000) | 2021 (RMB '000) | | :------------ | :-------------- | :-------------- | | 0-60 Days | 163,355 | 117,635 | | 61-90 Days | 2,558 | 28,764 | | Over 90 Days | 30,590 | 49,376 | | Total | 196,503 | 195,775 | Events After the Reporting Period Subsequent to the reporting period, the company acquired a 2% equity stake in Shandong Juneng Thermal Power Development Co., Ltd. for RMB 11,280 thousand in December 2022, completed in January 2023, to secure power and steam supply for its Shouguang production facilities - The company signed an agreement in December 2022 to acquire a 2% equity stake in Shandong Juneng Thermal Power Development Co., Ltd. for RMB 11,280 thousand[95] - Juneng Thermal Power is the Group's power and steam supplier for its Shouguang production facilities, and this acquisition aims to secure supply[95] - The equity transfer and payment of consideration were completed on January 9, 2023[95] Management Discussion and Analysis This section offers management's perspective on the company's 2022 performance, business developments, financial results, liquidity, and capital structure, including strategic plans for capacity expansion and product diversification Overview 2022 was a turbulent year with COVID-19 lockdowns impacting industries and logistics, yet the company's value chain operated continuously; China's lifting of the dynamic zero-COVID policy in December 2022 is expected to unleash market demand and supply, though the company remains cautious about 2023 business performance - COVID-19 lockdown measures in 2022 affected various industries and logistics, but the company's value chain operated continuously[6][96] - China lifted its dynamic zero-COVID policy in December 2022, expecting a release of both market demand and supply[7] - The company holds a cautious view on its 2023 business performance, anticipating intensified market competition[7] - The company benefited from strong demand driven by the recovery of the animal feed and aquaculture markets, with excellent sales performance in corn protein powder, corn fiber, and lysine[149] Business Development The company is committed to developing corn-derived products, planning to increase lysine annual production capacity from 300,000 tons to 500,000 tons by end-2023 to reduce costs and refine product categories, and will establish a 20,000-ton lactic acid ester facility by end-2024 with a joint venture partner, alongside a 5,000-ton pilot line for lactide and polylactic acid - The company plans to increase the annual production capacity of lysine products from 300,000 tons to 500,000 tons by the end of 2023, aiming to reduce production costs and refine product categories[9] - A joint venture with Musashino Chemical Laboratory, Ltd. aims to establish a lactic acid ester production facility with an annual capacity of 20,000 tons by the end of 2024[10] - The company will establish pilot production lines for lactide and polylactic acid, each with an annual capacity of 5,000 tons, expected to be completed by the end of 2023[98] - The company intends to fund these three initiatives using internal resources[99] - The lactic acid pilot production line was completed in May 2022 and transitioned to normal production in December 2022 as planned, with an annual capacity of 20,000 tons[112] Business Review In 2022, upstream product revenue slightly increased but gross margin declined due to stagnant corn starch demand and higher utility costs; fermentation and downstream product revenue rose, with satisfactory lysine sales, but modified starch sales significantly dropped, while starch sugar achieved sales growth through product mix adjustments Upstream Products Upstream product revenue slightly increased by 1.5% to RMB 8,705,998 thousand in 2022, but gross margin decreased by 0.7 percentage points to 5.1%, primarily due to stagnant corn starch demand and higher utility expenses, with average selling price of corn starch decreasing while sales volume increased - Upstream product revenue slightly increased by 1.5% to RMB 8,705,998 thousand[27] - The gross margin for this business segment decreased by 0.7 percentage points to 5.1%[27] - Primarily impacted by stagnant corn starch demand and increased utility expenses in the second half of 2022[27] Upstream Products Key Data | Metric | 2022 (RMB '000/RMB/ton) | 2021 (RMB '000/RMB/ton) | | :-------------------------- | :---------------------- | :---------------------- | | Revenue | 8,705,998 | 8,576,482 | | Gross Profit | 441,715 | 496,351 | | Gross Margin | 5.1% | 5.8% | | Average Selling Price of Corn Starch | 2,872 | 2,988 | | Sales Volume of Corn Starch (tons) | 1,953,563 | 1,915,794 | - Rising international soybean prices drove up prices for soybean by-products and corn derivatives, partially offsetting the negative impact of reduced corn starch demand[11] Fermentation and Downstream Products Fermentation and downstream product revenue increased to RMB 3,242,854 thousand; lysine sales performed satisfactorily with revenue growth and higher average selling prices despite slightly lower volumes; starch sugar achieved sales growth by increasing volume to offset lower average selling prices; modified starch revenue declined due to reduced production and sales from wastewater treatment measures; other fermentation products saw significant revenue growth from increased bio-based material production - Fermentation and downstream product revenue increased to RMB 3,242,854 thousand[102] Fermentation and Downstream Products Revenue Details | Product | 2022 (RMB '000) | 2021 (RMB '000) | | :------------- | :-------------- | :-------------- | | Lysine | 2,424,684 | 2,224,230 | | Starch Sugar | 541,364 | 519,544 | | Modified Starch | 196,006 | 267,463 | | Others | 80,800 | 51,596 | | Total | 3,242,854 | 3,062,833 | - Lysine revenue grew, with average selling price rising to RMB 7,718 per ton, but total sales volume slightly decreased to 314,179 tons due to logistics issues[115][136] - Starch sugar revenue increased, with average selling price decreasing to RMB 2,277 per ton, but sales volume increased to 237,718 tons, driven by a higher proportion of liquid starch sugar[121] - Modified starch revenue decreased, primarily due to reduced production and sales volumes resulting from wastewater treatment measures[28][116] - Other fermentation product revenue significantly increased by 56.6% to RMB 80,800 thousand, mainly benefiting from the gradual increase in bio-based material production[137] Financial Performance In 2022, the company achieved significant growth in total revenue and gross profit, with an improved gross margin, maintaining profitability through cost control, product mix adjustments, and optimized production plans; distribution and administrative expenses increased, while research expenses rose substantially, reflecting investments in new product development and production process transformation - Total revenue was approximately RMB 11,948,852 thousand, with gross profit significantly increasing by 25.0% to approximately RMB 1,190,475 thousand[151] Gross Profit and Gross Margin | Metric | 2022 (RMB '000) | 2021 (RMB '000) | | :--------- | :-------------- | :-------------- | | Gross Profit | 748,760 | 455,860 | | Gross Margin | 23.1% | 14.9% | - The company strengthened cost control, promoted the use of liquid starch sugar, and adjusted its product portfolio and production plans to achieve economies of scale[123] Cost of Sales and Gross Profit Total cost of sales slightly increased in 2022, with average corn kernel cost remaining stable; electricity and steam costs rose significantly due to unit price adjustments, increasing their proportion of total cost of sales; the company achieved significant gross profit growth through cost control and product mix optimization - Total cost of sales increased to RMB 10,758,377 thousand[29] - Average corn kernel cost remained stable at RMB 2,550 per ton[29] - Electricity and steam costs significantly increased, rising to 7.9% of total cost of sales (2021: 5.5%)[29] - Gross profit increased to RMB 1,190,475 thousand[123] Distribution and Administrative Expenses Distribution expenses increased to RMB 171,044 thousand in 2022, with the company controlling delivery costs by promoting bulk transportation and encouraging customer self-pickup; administrative expenses rose to RMB 207,835 thousand, mainly due to higher staff costs, government levies, and additional maintenance for staff accommodation insulation Distribution Expenses Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :-------------------- | :-------------- | :-------------- | | Delivery and Logistics | 141,651 | 138,173 | | Marketing Expenses | 14,989 | 14,450 | | Staff Costs | 8,335 | 7,173 | | Others | 6,069 | 5,138 | | Total | 171,044 | 164,934 | - The company controlled delivery costs by promoting bulk transportation and encouraging customers to pick up goods directly from warehouses[30] Administrative Expenses Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :---------------------------- | :-------------- | :-------------- | | Staff Costs | 108,655 | 101,312 | | Depreciation and Amortization Expenses | 32,147 | 37,371 | | Government Levies | 31,094 | 22,657 | | Others | 35,939 | 30,673 | | Total | 207,835 | 192,013 | - The increase in administrative expenses was mainly due to higher staff costs and government levies, as well as additional maintenance costs for the insulation of staff accommodation exterior walls[141] Research Expenses Research expenses significantly increased to RMB 324,108 thousand in 2022, primarily allocated to feasibility studies and development of new products, as well as transformation of production methods or processes - Research expenses significantly increased from RMB 199,648 thousand to RMB 324,108 thousand[125] - Research projects include feasibility studies and development of new products, as well as transformation of production methods or development of new production processes[125] Other Net Income Other net income increased to RMB 119,838 thousand in 2022, primarily contributed by amortization of government grants, gains from scrap sales, and disposal of property, plant, and equipment Other Net Income Details | Item | 2022 (RMB '000) | 2021 (RMB '000) | | :------------------------------------- | :-------------- | :-------------- | | Amortization of Government Grants | 81,766 | 62,925 | | Gain on Sales of Scrap Materials | 21,841 | 17,317 | | Gain on Disposal of Property, Plant and Equipment | 9,403 | 1,075 | | Write-off of Property, Plant and Equipment | (208) | (3,091) | | Sewage Treatment | 2,875 | 1,224 | | Net Exchange Gain/(Loss) | 1,538 | (1,958) | | Government Grants (One-off) | 1,185 | 36,496 | | Futures Income | 601 | 333 | | Others | 837 | 602 | | Total | 119,838 | 114,923 | - Other net income increased to RMB 119,838 thousand[142] Liquidity, Financial Resources and Capital Structure In 2022, the company's current and quick ratios improved, but the gearing ratio significantly rose to 5.6% due to increased borrowings for working capital needs, while total shareholder return substantially decreased; the company has sufficient working capital, with all borrowings being short-term Key Financial Performance Indicators | Metric | Unit | 2022 | 2021 | | :------------------------- | :--- | :--- | :--- | | Trade Receivables Turnover | Days | 11 | 14 | | Trade Payables Turnover | Days | 7 | 7 | | Inventory Turnover | Days | 25 | 24 | | Current Ratio | Times | 2.8 | 2.5 | | Quick Ratio | Times | 1.9 | 1.8 | | Gearing Ratio | % | 5.6 | 2.4 | | Total Shareholder Return | % | 9.4 | 41.7 | - The gearing ratio, calculated as borrowings divided by total assets, significantly increased to 5.6% in 2022[20][127] - Total shareholder return, including share price appreciation and dividends paid, significantly decreased to 9.4% in 2022[33][127] - The Group has sufficient working capital to meet its current needs, with all borrowings being short-term[143] - As of December 31, 2022, the company provided deposits of RMB 207,582 thousand and bank acceptance bills of RMB 67,230 thousand as collateral for bank credit and bills payable[128] Distributable Reserves and Dividends As of December 31, 2022, the company's distributable reserves to shareholders were approximately RMB 128,331 thousand; the Board proposed a final dividend of HK 0.69 cents per share, subject to shareholder approval at the AGM - As of December 31, 2022, the company's distributable reserves to shareholders were approximately RMB 128,331 thousand[130] - The Board proposed a final dividend of HK 0.69 cents per share for the year ended December 31, 2022[22] - The proposed dividend is subject to approval by the company's shareholders at the 2023 Annual General Meeting[22] Contingent Liabilities As of December 31, 2022, the company had no significant contingent liabilities - As of December 31, 2022, the Group had no significant contingent liabilities[145] Corporate Governance and Other Information This section outlines the company's adherence to corporate governance standards, policies for directors' securities transactions, auditor's scope, board composition, upcoming AGM details, and annual report publication Corporate Governance The company complied with the Corporate Governance Code in Appendix 14 of the Listing Rules, applying its principles for high governance standards, except for the Chairman Mr. Tian Qixiang's absence from the 2022 AGM due to other business matters - The company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[24] - Mr. Tian Qixiang, the Chairman of the Board, did not attend the 2022 Annual General Meeting due to other business matters[24] Standard Code for Securities Transactions by Directors The company adopted its own code for securities dealings, no less stringent than the Model Code in Appendix 10 of the Listing Rules, applicable to all directors and notified employees, with all directors confirming compliance during the review year - The company adopted its own code for securities dealings, with terms no less stringent than the Model Code set out in Appendix 10 of the Listing Rules[153] - The dealing code applies to all directors and all employees notified to comply with its provisions[153] - All directors confirmed their compliance with the required standards set out in the dealing code throughout the review year[153] Auditor's Scope of Work The consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes in this announcement align with the audited consolidated financial statements, as agreed by the Group's auditor, Shinewing (HK) CPA Limited, who provided no assurance opinion on this announcement - The figures in the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes in this announcement are consistent with the amounts in the Group's audited consolidated financial statements for the year[133] - The work performed by Shinewing (HK) CPA Limited on the aforementioned scope does not constitute an assurance engagement, and thus no assurance opinion is expressed on this announcement[133] Review of Annual Results and Board of Directors The Board Audit Committee reviewed the Group's audited consolidated results for the year ended December 31, 2022; the announcement lists the company's Board members, including executive and independent non-executive directors - The Board Audit Committee reviewed the Group's audited consolidated results for the year ended December 31, 2022[37] - Board members include Executive Directors Mr. Tian Qixiang (Chairman), Mr. Gao Shijun (Chief Executive Officer), Mr. Yu Yingquan, Mr. Liu Xianggang, and Independent Non-executive Directors Professor Hua Qiang and Mr. Sun Mingdao[26][40][134][147] Annual General Meeting and Closure of Register of Members The company's Annual General Meeting will be held on May 23, 2023; to determine eligibility for attending and voting, the share transfer registration will be suspended from May 18 to May 23, 2023 - The company's Annual General Meeting will be held on May 23, 2023[130] - To determine eligibility for attending and voting at the Annual General Meeting, the company will suspend share transfer registration from May 18, 2023, to May 23, 2023[130] Publication of Annual Report The 2022 Annual Report, containing all information required by the Listing Rules, will be published on the Stock Exchange and company websites on or about April 14, 2023 - The 2022 Annual Report, containing all information required by the Listing Rules, will be published on the Stock Exchange and company websites on or about April 14, 2023[42]