山高控股(00412) - 2022 - 年度业绩

Financial Performance Comprehensive Statement of Comprehensive Income The company's revenue significantly increased, but fair value changes and higher financing costs led to a loss attributable to owners, despite overall profit growth Comprehensive Statement of Comprehensive Income Key Financial Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 4,193,421 | 1,065,661 | | Gross Profit | 2,261,532 | 738,631 | | Profit for the Year | 170,294 | 11,058 | | Loss Attributable to Owners of the Company for the Year | (458,067) | (314,660) | | Basic and Diluted Loss Per Share | (7.61) HK cents | (5.22) HK cents | - Net fair value loss on financial assets at fair value through profit or loss was HKD 1,188,877 thousand, compared to a gain of HKD 12,643 thousand in the prior year, significantly impacting profit[4] - Finance costs significantly increased to HKD 1,630,572 thousand, from HKD 269,611 thousand in the prior year[4] Consolidated Statement of Financial Position Total assets and liabilities grew substantially by year-end 2022, boosting net assets, yet equity attributable to owners shifted to a deficit Consolidated Statement of Financial Position Key Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 41,202,190 | 7,819,203 | | Total Current Assets | 27,755,419 | 15,131,248 | | Total Assets | 68,957,609 | 22,950,451 | | Total Current Liabilities | 18,301,999 | 10,600,265 | | Total Non-current Liabilities | 35,080,832 | 3,737,683 | | Total Liabilities | 53,382,831 | 14,337,948 | | Net Assets | 15,574,778 | 8,612,503 | | Equity Attributable to Owners of the Company | (36,053) | 1,408,651 | - Non-controlling interests significantly increased to HKD 8,506,390 thousand (2021: HKD 85,769 thousand), reflecting changes in equity structure due to acquisitions[8] Notes to the Consolidated Financial Statements Company Information Shandong Hi-Speed Holdings Group Limited completed its name change in July 2022 and diversified its financial services to include industrial, standardized, non-standardized, and licensed financial investments - The company's English name changed from “China Shandong Hi-Speed Financial Group Limited” to “Shandong Hi-Speed Holdings Group Limited”, and its Chinese name from “中国山东高速金融集团有限公司” to “山高控股集团有限公司”, effective July 15, 2022[9] - The Group primarily engages in industrial investment, standardized investment business, non-standardized investment business, and licensed financial services[9] Application of Revised Hong Kong Financial Reporting Standards The Group adopted several revised HKFRSs this year, with the Board anticipating no material impact on current or prior period financial statements - The Group first applied HKFRS 3 (Revised), HKAS 16 (Revised), HKAS 37 (Revised), and Annual Improvements to HKFRS 2018-2020 in the current year[10][11] - The Directors expect that the application of all new and revised HKFRSs will not have a significant impact on the consolidated financial statements in the foreseeable future[12] Basis of Preparation Consolidated financial statements are prepared under HKFRS, HK GAAP, and Companies Ordinance disclosure requirements, primarily on a historical cost basis, with certain financial instruments measured at fair value - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and disclosure requirements of the Companies Ordinance, and comply with the Listing Rules[13] - The consolidated financial statements have been prepared on a historical cost basis, except for investment properties, certain financial instruments, and financial guarantee contracts which are measured at fair value at the end of each reporting period[13] Operating Segment Information The Group strategically transformed from financial to industrial investment, restructuring its reportable segments to four, including a new "Industrial Investment" segment and discontinuing "Technology Finance" - The Group is steadily advancing its transformation from a financial investment group to an industrial investment group, with reportable operating segments restructured from five to four for the year ended December 31, 2022[14] - A new “Industrial Investment” segment was added, primarily engaged in industrial investment-related businesses, including the acquisition of a 43.45% equity interest in Shandong Hi-Speed New Energy[15] - The “Technology Finance” segment has ceased operations[15] Segment Revenue and Results Industrial Investment was the primary driver of revenue and profit, while standardized and non-standardized investments, along with licensed financial services, recorded losses 2022 Segment Revenue and Results | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Industrial Investment | 3,644,438 | 1,713,054 | | Standardized Investment | 191,281 | (941,582) | | Non-standardized Investment | 212,851 | (133,568) | | Licensed Financial Services | 144,853 | (571,344) | | Technology Finance | - | (5,075) | | Unallocated | 14,391 | 66,560 | | Total | 4,193,420 | (1,556) (Loss before tax) | - The Industrial Investment segment showed significant revenue and results, becoming the Group's primary growth driver[18] Geographical Information Over 90% of the Group's revenue and assets were generated or located in China as of year-end 2022, precluding detailed geographical segment disclosure - For the year ended December 31, 2022, given that over 90% of the Group's revenue was generated in China, no geographical segment information regarding the location of the Group's revenue is presented[20] - As of December 31, 2022, given that over 90% of the Group's assets were located in China, no geographical segment information regarding the location of the Group's assets is presented[21] Classification of Revenue from Contracts with Customers Customer contract revenue surged in 2022, primarily from new businesses like electricity sales, construction, and clean heating services Classification of Revenue from Contracts with Customers (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Electricity sales and entrusted operation services | 3,007,375 | – | | Construction and related services | 295,716 | – | | Provision of clean heating services | 294,659 | – | | Technical consulting services | 46,686 | – | | Consulting service income | 47,931 | 63,427 | | Brokerage business income | 19,777 | 35,798 | | Asset management and performance income | 14,929 | 6,375 | | Commission income | 2,447 | 35,415 | | Internet new media service income | – | 6,301 | | Total | 3,729,520 | 147,316 | - Total revenue from contracts with customers in 2022 was HKD 3,729,520 thousand, a significant increase from HKD 147,316 thousand in 2021[24] Revenue The Group's total revenue grew significantly, driven by a substantial increase in customer contract revenue and interest income from financial assets at fair value through other comprehensive income Revenue Composition (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,729,520 | 147,316 | | Finance lease income | 14,619 | 55,914 | | Interest income from money lending business | 37,017 | 52,146 | | Interest income from debt investments | 87,750 | 233,950 | | Interest income from financial assets at fair value through profit or loss | 53,331 | 186,133 | | Interest income from financial assets at fair value through other comprehensive income | 226,955 | 290,576 | | Dividend and distribution income from financial assets at fair value through profit or loss | 43,508 | 99,626 | | Dividend income from financial assets at fair value through other comprehensive income | 721 | – | | Total Revenue | 4,193,421 | 1,065,661 | Other Income Other income saw a substantial increase, mainly from other interest income, government grants, and management income Other Income Composition (HKD thousands) | Income Source | 2022 | 2021 | | :--- | :--- | :--- | | Bank interest income | 18,115 | 15,363 | | Other interest income | 55,174 | – | | Government grants | 28,462 | – | | Management income | 19,317 | – | | Others | 4,894 | 9,692 | | Total | 125,962 | 25,055 | Other Gains and Losses, Net Net other gains and losses significantly increased in 2022, primarily due to bargain purchase gains from subsidiary acquisitions, despite various asset impairment losses Other Gains and Losses, Net Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Impairment loss recognized on goodwill | (13,227) | – | | Impairment loss recognized on operating rights | (19,881) | – | | Impairment loss recognized on property, plant and equipment | (75,316) | – | | Write-off of intangible assets | (400,279) | – | | Exchange losses, net | (70,023) | (1,309) | | Gain on disposal of subsidiaries | – | 171,135 | | Bargain purchase gain on acquisition of subsidiaries | 1,431,330 | 131,380 | | Total | 918,859 | 246,636 | - A bargain purchase gain of HKD 1,431,330 thousand from the acquisition of subsidiaries was the primary reason for the significant increase in net other gains and losses this period[26] Impairment Losses on Financial Assets Reversed/(Recognized), Net In 2022, net impairment losses on financial assets shifted from recognition to reversal, mainly due to the reversal of impairment losses on trade and other receivables Net Impairment Losses on Financial Assets (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Finance lease receivables | 11,067 | (3,009) | | Loan receivables | (78,347) | (356,875) | | Trade and other receivables | 235,453 | (28,671) | | Total | 168,173 | (388,555) | Finance Costs Finance costs rose sharply, driven by increased interest expenses on bank borrowings, other borrowings, bonds, and lease liabilities Finance Costs Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Interest on bank borrowings | 658,033 | 82,658 | | Interest on other borrowings | 554,288 | 44,754 | | Interest on bonds | 363,125 | 350,100 | | Interest on share option granted to non-controlling interests | 136,587 | – | | Interest on lease liabilities | 178,489 | 2,105 | | Total | 1,630,572 | 269,611 | Loss Before Tax Loss before tax was primarily affected by fair value losses on financial assets, finance costs, and various depreciation and amortization expenses Major Components of Loss Before Tax (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Total employee benefit expenses | 269,610 | 196,140 | | Auditor's remuneration | 7,050 | 3,178 | | Fair value loss/(gain) on financial assets at fair value through profit or loss, net | 1,188,877 | (12,643) | | Depreciation of property, plant and equipment | 791,996 | 6,265 | | Depreciation of right-of-use assets | 165,714 | 14,320 | Income Tax Credit The Group received significant income tax credits, largely from net deferred tax credits and tax exemptions for its new energy operations in mainland China Income Tax Credit (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 196,885 | 2,739 | | Deferred tax credit, net | (368,602) | (14,942) | | Income Tax Credit | (171,850) | (12,203) | - Certain subsidiaries in mainland China engaged in photovoltaic and wind power station operations enjoyed income tax exemptions and reductions[33] Dividends The Board does not recommend any dividend payment for the reporting period - No dividends were paid or proposed for the year ended December 31, 2022[35] Loss Per Share Basic and diluted loss per share for 2022 expanded to 7.61 HK cents, reflecting an increased loss attributable to owners Loss Per Share Calculation Data | Indicator | 2022 | 2021 (Restated) | | :--- | :--- | :--- | | Loss for the year attributable to owners of the company for calculating basic and diluted loss per share (HKD thousands) | (458,067) | (314,660) | | Weighted average number of ordinary shares (thousands) | 6,021,561 | 6,022,346 | | Basic and Diluted Loss Per Share (HK cents) | (7.61) | (5.22) | Financial Assets at Fair Value Through Other Comprehensive Income Total financial assets at fair value through other comprehensive income decreased by year-end 2022, mainly due to reductions in listed equity and bond investments Financial Assets at Fair Value Through Other Comprehensive Income (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 1,270,726 | 2,356,830 | | Total Current Assets | 3,248,546 | 3,081,963 | | Total | 4,519,272 | 5,438,793 | - The Group designated certain listed equity instruments to be measured at fair value through other comprehensive income, as they are intended for long-term holding[38] Financial Assets at Fair Value Through Profit or Loss Total financial assets at fair value through profit or loss significantly decreased by year-end 2022, primarily due to a reduction in the scale of listed equity investments held for trading and investment funds Financial Assets at Fair Value Through Profit or Loss (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 4,188 | 43,195 | | Total Current Assets | 3,370,194 | 6,188,427 | | Total | 3,374,382 | 6,231,622 | Finance Lease Receivables Total finance lease receivables significantly declined by year-end 2022, with decreases in both non-current and current portions Finance Lease Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Non-current assets | 29,912 | 366,996 | | Current assets | 481,834 | 501,751 | | Total | 511,746 | 868,747 | Ageing Analysis of Finance Lease Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within one year | 481,834 | 501,751 | | Later than one year but not later than two years | 29,912 | 302,104 | | Later than two years but not later than three years | – | 64,892 | Loan Receivables Total loan receivables (net of impairment) slightly decreased by year-end 2022, although the non-current portion increased Loan Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Loan receivables | 3,869,964 | 4,089,503 | | Less: Provision for impairment losses | (451,210) | (397,770) | | Net | 3,418,754 | 3,691,733 | Ageing Analysis of Loan Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 1,762,644 | 1,547,463 | | 91 days to 180 days | 646,563 | 621,643 | | 181 days to 1 year | – | 788,764 | | 1 year to 2 years | 1,009,547 | 733,863 | Contract Assets New contract assets emerged in 2022, primarily from electricity price subsidies, construction contracts, and retention money, indicating expansion in new energy businesses Contract Assets Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Receivables for electricity price subsidies | 587,320 | – | | Construction contracts | 448,286 | – | | Retention money | 51,140 | – | | Total | 1,086,746 | – | - Receivables for electricity price subsidies refer to central government renewable energy subsidies that will be invoiced and settled for photovoltaic and wind power station projects after being included in the national renewable energy generation project list[46] Trade and Other Receivables Total trade and other receivables significantly increased, driven by renewable energy trade receivables, electricity price subsidies, prepayments, and other deposits Trade and Other Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Trade receivables (renewable energy) | 2,200,781 | – | | Receivables for electricity price subsidies | 5,938,240 | – | | Prepayments | 754,102 | 91,564 | | Deposits and other receivables | 4,929,951 | 852,788 | | Total (net of impairment) | 14,822,208 | 1,048,184 | - Ageing analysis of trade receivables and bills receivable (excluding electricity price subsidies) shows HKD 903,681 thousand due within 90 days[49] - Ageing analysis of electricity price subsidies shows HKD 2,209,563 thousand due over 2 years[50] Trade and Bills Payables Trade and bills payables substantially increased, with a majority aged over two years, reflecting business expansion Ageing Analysis of Trade and Bills Payables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 152,310 | – | | 91 days to 180 days | 145,828 | – | | 181 days to 1 year | 245,366 | – | | 1 year to 2 years | 285,510 | – | | Over 2 years | 1,112,799 | – | | Total | 1,941,813 | – | Issued Share Capital In 2022, the company executed a share consolidation and repurchased and cancelled some shares - In July 2022, the company implemented a share consolidation, merging every four shares of HKD 0.00025 par value into one consolidated share of HKD 0.001 par value[53] - The Group repurchased and cancelled 2,915,000 shares of the Group's shares from August to October 2022, for a total consideration of approximately HKD 9,701,000[53] Events After the Reporting Period After the reporting period, the company acquired full equity interests in three target companies, further expanding its new energy investments - On December 20, 2022, the company's indirect non-wholly owned subsidiary buyer entered into equity transfer agreements with China Power Construction Henan Electric Power Co., Ltd. and others to acquire all equity interests in Shangqiu Ningdian New Energy Co., Ltd., Lankao Jinfeng Qingdian New Energy Co., Ltd., and Shenqiu Yingdian New Energy Co., Ltd[54] - Upon completion of the acquisitions on January 1, 2023, these target companies became indirect wholly-owned subsidiaries of the company[54] Comparative Amounts Certain comparative amounts have been restated to align with the current period's presentation and disclosure - Certain comparative amounts are presented to conform to the presentation and disclosure for the current period[55] Management Discussion and Analysis Financial Performance Overview The Group achieved significant growth in revenue, gross profit, and profit for the year in 2022, but basic loss per share attributable to owners expanded due to external factors and strategic shifts 2022 Key Financial Indicators Overview | Indicator | 2022 (HKD) | 2021 (HKD) | | :--- | :--- | :--- | | Revenue | 4,193,421,000 | 1,065,661,000 | | Gross Profit | 2,261,532,000 | 738,631,000 | | Profit for the Year | 170,294,000 | 11,058,000 | | Basic Loss Per Share Attributable to Owners of the Company | 7.61 HK cents | 5.22 HK cents | - As of December 31, 2022, the Group's total assets were approximately HKD 68,957,609,000, total liabilities approximately HKD 53,382,831,000, and net assets approximately HKD 15,574,778,000[56] Market Review In 2022, global economic challenges led to market downturns, while China maintained stable growth through supportive policies despite domestic and external demand weaknesses - In 2022, the global economy was affected by the Russia-Ukraine conflict, high inflation, and interest rate hikes by overseas central banks, leading to a significant downturn in equity and bond markets[57] - China's economy experienced weakened domestic and external demand due to recurring epidemics and real estate controls, but the government maintained overall economic and social stability through moderately loose monetary and proactive fiscal policies[57] - In October 2022, the 20th National Congress of the Communist Party of China was held, outlining plans for Chinese modernization, a modern industrial system, and a modern financial system[57] Group Strategy and Operations The Group pursued strategic transformation in 2022, shifting to industrial investment in new energy, technology, and infrastructure through major acquisitions, while adopting defensive risk management - The Group adopted “specialization, focus, marketization, and institutionalization” as its strategic transformation guidelines, focusing on strategic emerging industries such as new energy, new technology, and new infrastructure[58] - The significant acquisition of Shandong Hi-Speed New Energy in May 2022, by subscribing to a 43.45% stake and becoming its controlling shareholder, marked the initial transformation from a financial investment company to an industrial investment company[58] - The Group's total assets as of the end of December 2022 were approximately HKD 68.96 billion, an increase of about two times compared to the same period last year[58] - The Group adopted a defensive operating strategy, significantly reducing non-standard investment business, continuously decreasing the scale of standardized investment business, and strictly controlling investment risks[59] - In June 2022, the Group successfully issued its first USD 500 million green bond, receiving Fitch A and Moody's A3 ratings, and an ESG entity rating of “2” from Fitch Evergreen[59][60] Business Review The Group shifted its focus to industrial investment in green and new energy sectors, while standardized and non-standardized investments incurred losses due to market volatility, and licensed financial services losses expanded Industrial Investment Industrial investment became the core asset allocation, with the Group becoming the controlling shareholder of Shandong Hi-Speed New Energy and a major shareholder in Shandong Hi-Speed Environmental Energy, generating HKD 1.71 billion in profit - Industrial investment has become the company's core asset allocation direction, with industrial assets accounting for approximately HKD 52.2 billion of total assets[61] - Completed an investment of approximately HKD 4.685 billion to subscribe for a 43.45% stake in Shandong Hi-Speed New Energy, becoming its controlling shareholder[61] - Indirectly holds a 23.07% stake in Shandong Hi-Speed Environmental Energy, becoming its largest shareholder, effectively controlling two listed companies in the new energy and green environmental protection sub-sectors[61] - During the reporting period, the industrial investment business segment recorded a profit of approximately HKD 1.71 billion[62] Standardized Investment Standardized investment recorded a HKD 954 million loss due to global interest rate hikes and capital market volatility, prompting the team to adjust strategies - The Chinese and Hong Kong stock markets remained weak due to geopolitical conflicts, soaring energy prices, US Federal Reserve interest rate hikes, and China's economic slowdown, leading to investment losses[63] - During the reporting period, the standardized investment business recorded a fair value loss of approximately HKD 954 million, compared to a loss of approximately HKD 116 million in the prior year[63] Non-standardized Investment Prioritizing risk control, the Group significantly reduced non-standardized investment and credit exposures, resulting in a HKD 134 million loss - The Group prioritized risk prevention, significantly reducing non-standardized investment business, and providing financing services in real economy sectors such as new energy, new infrastructure, and new technology, aligned with the Group's strategic transformation direction[64] - During the reporting period, the non-standardized investment business recorded a loss of approximately HKD 134 million, compared to a profit of approximately HKD 253 million in the prior year, mainly due to a decrease in the fair value of financial assets and a proactive reduction in business scale[64] Licensed Financial Services Licensed financial services recorded a HKD 571 million loss, primarily due to the write-off of licenses related to the Asia Lease Exchange asset trading platform - The licensed financial services business recorded a loss of approximately HKD 571 million, compared to a loss of approximately HKD 306 million in the prior year[65] - The expanded loss was mainly due to the write-off of the book value of licenses related to the Asia Lease Exchange asset trading platform[65] Outlook Global economic growth is expected to slow in 2023, but China's market and green/industrial investments show potential, with the Group deepening its strategic focus on industrial investment - Global economic growth is expected to weaken in 2023, with continued risk aversion in capital markets, but the Chinese market is expected to regain momentum, with steady economic growth[66] - China will increase support for industrial optimization and upgrading, high-tech industries, and fundamental research in key areas, with green investment expected to continue rapid growth[66] - The Group will focus on industrial investment, supplemented by standardized and non-standardized investments, utilizing diversified capital operation models to achieve short, medium, and long-term investment allocation in key industrial quality assets[66] Industrial Investment Outlook The Group will deepen its strategic transformation, focusing on high-growth new energy, new infrastructure, and new technology sectors, combining strategic and controlling equity investments to enhance enterprise value - The Group will focus on growth-oriented, high-prosperity industries aligned with national strategic direction and key policy support, especially emerging industries such as new energy, new infrastructure, and new technology[67] - Will organically combine strategic equity investments and controlling equity investments to expand the scale of industrial investment[67] - For invested targets such as Shandong Hi-Speed New Energy and Shandong Hi-Speed Environmental Energy, post-investment management will be strengthened to promote a comprehensive enhancement of enterprise value[68] Standardized Investment Outlook Standardized investment aims to boost absolute returns and identify quality targets for industrial investment, focusing on new energy, high-end manufacturing, and recovering consumption sectors - The standardized investment business will focus on enhancing absolute returns and identifying quality investment targets for industrial investment, achieving “primary and secondary market” linkage[69] - Key focus areas include the new energy industry, high-end manufacturing, large consumption sectors with strong long-term certainty, and industries where prosperity is bottoming out and recovering[69] - Standardized bond investment business will maintain a prudent investment strategy, actively managing portfolio duration and various risks to achieve stable returns[69] Non-standardized Investment Outlook The Group will maintain a prudent investment strategy, focusing on quality collateralized assets and industrial transformation synergy, while reducing credit exposures and supporting leading enterprises in key sectors - The Group will continue its prudent investment strategy, focusing on “securing quality collateralized assets” and “synergy with the Group's industrial transformation” as two main lines for investment[70] - Closely monitor financing needs in new energy, new consumption, and high-tech industries, providing capital support for quality leading enterprises[70] Licensed Financial Services Outlook The Group will prudently conduct licensed financial services, concentrating on securities brokerage, QFLP, and finance leasing that align with its strategic transformation to enhance comprehensive service capabilities - The Group will prudently conduct licensed financial services in Hong Kong and mainland China, primarily focusing on securities brokerage and QFLP and finance leasing businesses that have synergistic effects with the Group's strategic transformation direction[71] Liquidity and Financial Resources and Capital Structure By year-end 2022, the Group maintained ample liquidity with increased cash, assets, and borrowings, and a slightly higher gearing ratio Liquidity and Capital Structure Overview (HKD thousands) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 4,392,562 | 1,334,300 | | Total Assets | 68,957,609 | 22,950,451 | | Total Borrowings | 43,787,262 | 13,947,223 | - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of assets, liabilities, and other commitments meets funding requirements[72] Bank Loans and Other Borrowings Total outstanding borrowings significantly increased, with a higher proportion of long-term liabilities and a broader range of effective interest rates Outstanding Borrowings Composition (HKD thousands) | Borrowing Type | 2022 | 2021 | | :--- | :--- | :--- | | Bank borrowings | 26,767,180 | 4,375,155 | | Bonds | 8,521,297 | 7,898,646 | | Other borrowings | 8,498,785 | 1,673,422 | | Total | 43,787,262 | 13,947,223 | - Approximately 69.3% of the total outstanding borrowings were long-term liabilities (2021: 25.5%)[73] - The effective interest rate for bank borrowings ranged from 2.60% to 7.05% (2021: 1.02% to 6.11%), and for other borrowings from 0.40% to 8.01% (2021: 0.30% to 3.74%)[73] Gearing Ratio The Group's gearing ratio slightly increased to 63.50% by year-end 2022 Gearing Ratio | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Gearing Ratio | 63.50% | 60.77% | Foreign Exchange Risk Management The Group primarily faces Renminbi foreign exchange risk, which management deems insignificant, thus no hedging instruments were used - The Group's monetary assets, liabilities, and transactions are primarily denominated in Renminbi, Hong Kong Dollars, and US Dollars, mainly facing Renminbi foreign exchange risk[75] - During the reporting period, management considered the foreign exchange risk impact insignificant and therefore did not use any financial instruments for hedging purposes[75] Pledged Assets As of year-end 2022, various assets, including financial assets, receivables, properties, and subsidiary equity, collateralized certain Group borrowings and bills payable - Certain of the Group's borrowings and bills payable were pledged by financial assets at fair value through other comprehensive income, financial assets at fair value through profit or loss, finance lease receivables, trade receivables and contract assets, property, plant and equipment, investment properties, franchise rights, and equity interests in subsidiaries[75] Contingent Liabilities and Capital Commitments The Group had no significant contingent liabilities but committed capital for clean energy project development and joint venture investments during the reporting period - The Group had no significant contingent liabilities during the reporting period[76] Capital Commitments (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Construction, material and equipment costs for developing clean energy projects | 354,361 | – | | Capital injection into joint ventures | 320,883 | – | Major Investments and Acquisitions and Disposals The Group completed a significant acquisition of Shandong Hi-Speed New Energy, becoming its controlling shareholder, aligning with its industrial investment strategy Major Investments As of year-end 2022, the Group held no individual investments with a fair value exceeding 5% of its total assets - As of December 31, 2022, the Group did not hold any individual investments with a fair value representing 5% or more of its total assets[77] Future Plans for Major Investments and Capital Assets As of year-end 2022, the Group had no future plans for major investments or capital assets - As of December 31, 2022, the Group had no future plans for major investments or capital assets[77] Major Acquisitions and Disposals The Group acquired a 43.45% stake in Shandong Hi-Speed New Energy, making it a subsidiary and focusing on the new energy industry - On May 19, 2022, the Group completed the subscription for 48,804,039,247 new allotment ordinary shares of Shandong Hi-Speed New Energy, indirectly owning approximately 43.45% of its enlarged issued share capital and becoming its controlling shareholder[77] - Shandong Hi-Speed New Energy and its subsidiaries primarily engage in the investment, development, construction, operation, and management of photovoltaic power generation, wind power generation, and clean heating businesses in China[77] Issuance of Debt Securities In 2022, the Group successfully issued multiple US Dollar and Renminbi secured bonds, including a USD 500 million green bond, for refinancing and general corporate purposes - On January 26, 2022, Coastal Emerald issued floating rate secured bonds with a total principal amount of USD 220 million due in 2023[79] - On June 15, 2022, Coastal Emerald issued 4.10% secured bonds (green bonds) with a total principal amount of USD 500 million due in 2025[80] - On December 20, 2022, Shandong Hi-Speed New Energy issued corporate bonds with a total principal amount of RMB 465 million, with interest rates ranging from 4.20% to 4.90%[80] Employees and Remuneration Policy Employee count significantly increased to 2,077 by year-end 2022, primarily due to the Shandong Hi-Speed New Energy acquisition, with the Group focusing on competitive compensation and development Employee Count | Year | Employee Count | | :--- | :--- | | December 31, 2022 | 2,077 | | December 31, 2021 | 163 | - The increase in employee count was mainly due to the completion of the acquisition of Shandong Hi-Speed New Energy on May 19, 2022[81] - The Group provides competitive remuneration packages, welfare policies (such as social insurance, housing provident fund, paid annual leave, etc.), and share option schemes, and is committed to providing diversified training and development opportunities[81][82] Events After Reporting Period Other than the acquisition disclosed in Note 22 to the financial statements, there were no other significant events for the Group after the reporting period and up to the date of this announcement - Other than those disclosed in Note 22 to the financial statements in this announcement, there were no other significant events for the Group after the reporting period and up to the date of this announcement[83] Other Information Dividends The Board does not recommend any dividend payment for the reporting period - The Board does not recommend the payment of any dividends for the reporting period[84] Purchase, Sale or Redemption of the Company's Listed Securities The company repurchased and cancelled 2,915,000 shares for approximately HKD 9.7 million, demonstrating confidence in its business outlook - During the reporting period, the company repurchased a total of 2,915,000 shares on the Stock Exchange for a total consideration of approximately HKD 9,701,000, which have been cancelled[84] - The Board believes that the share repurchases demonstrate the company's confidence in its own business outlook and prospects, and will benefit the company and create value for shareholders in the long run[84] Share Repurchase Details (2022) | Month | Number of Shares Repurchased (thousands) | Repurchase Price Per Share (HKD) (Highest) | Repurchase Price Per Share (HKD) (Lowest) | Total Consideration (HKD thousands) (Approx.) | | :--- | :--- | :--- | :--- | :--- | | August | 1,000 | 3.28 | 3.28 | 3,280 | | September | 1,513 | 3.44 | 3.09 | 4,988 | | October | 402 | 3.58 | 3.55 | 1,433 | Corporate Governance The company complied with all Corporate Governance Code provisions during the reporting period, except for the vacant CEO position, with other executive directors managing daily operations - During the reporting period, the company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, except for the vacant position of Chief Executive Officer[86][87] - Mr. Wang Xiaodong serves as the Chairman of the Board, and the company is identifying suitable candidates to fill the vacancy of Chief Executive Officer[87] Audit Committee The Audit Committee, composed of two non-executive and three independent non-executive directors, reviewed the Group's consolidated results for the year ended December 31, 2022 - The Audit Committee comprises two non-executive directors and three independent non-executive directors[88] - The Audit Committee has reviewed the Group's consolidated results for the year ended December 31, 2022[88] Review of Preliminary Announcement The company's auditor reconciled the preliminary announcement figures with the consolidated financial statements but provided no assurance on the announcement itself - The company's auditor, Crowe (HK) CPA Limited, has reconciled the relevant figures in the Group's preliminary announcement for the year ended December 31, 2022, with the amounts contained in the Group's consolidated financial statements for that year[89] - The auditor does not express any assurance on the preliminary announcement[89] Compliance with the Model Code for Securities Transactions by Directors Directors confirmed compliance with the Model Code for Securities Transactions throughout the reporting period - The Directors confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period[90] Publication of Annual Results and Annual Report This announcement and the annual report will be published on the Stock Exchange and company websites, and dispatched to shareholders - This announcement is published on the Stock Exchange website (www.hkexnews.hk) and the company's website (www.sdhg.com.hk)[91](index=91&type=chunk) - The annual report for the year ended December 31, 2022, will be published on the Stock Exchange website and the company's website, and will also be dispatched to the company's shareholders in due course[91]