Liquidity and Capital Resources
In the first half of 2021, the Groups net cash outflow from operating activities was RMB2,443.4 million, compared with a net cash
outflow of RMB2,938.9 million in the same period last year.
In the first half of 2021, the Groups net cash outflow from
investment activities was RMB3,106.4 million, compared with a net cash outflow of RMB3,120.6 million in the same period last year.
In the first half of 2021, the Group generated a net cash inflow of RMB2.8 million from financing activities, compared with a net cash
inflow of RMB1,469.2 million in the same period last year. This is mainly due to the decrease of net cash flow generated by borrows obtained by the Group during the Reporting Period of RMB1,467.5 million compared with the same period last
year.
Borrowings and Debts
The Groups long-term borrowings are mainly used for capital expansion projects. The Group generally arranges long-term borrowings in
accordance with capital expenditure plans. The short-term debt is used to supplement the working capital required by the normal production and operation of the Group. As of 30 June, 2021, the total loan balance of the Group increased by
RMB2.012 billion from the opening balance to RMB3.56 billion. The balance of the Groups short-term bonds decreased by RMB2.017 billion compared with the opening balance to RMB1.001 billion. The Groups total borrows at
fixed interest rates are RMB4.54 billion.
Capital Expenditures
In the first half of 2021, the Groups capital expenditure was RMB1.193 billion. It was mainly used for the preliminary work and
construction of raw silks (24,000 tons/year) and 48K large-tow carbon fiber (12,000 ton/year) project, security risk rectification project of the central control room of the olefin division, and adaptability
revamping project of adsorption tower internals and control system of parax unit 2# of aromatic division.
In the second half of the year,
the Group will continue to promote the raw silks (24,000 tons/year) and 48K large-tow carbon fiber (12,000 tons/year) project, and adaptability revamping project of adsorption tower internals and control
system of parax unit 2# of aromatic division. The projects to be commenced will include hydrogen demonstration project, high-pressure air-cooling material upgrading project for medium pressure hydrocracking
unit of the oil refining department, etc. The planned capital expenditure of the Group can be financed from operating cash and bank credit.
Gearing Ratio
As of
30 June 2021, the Groups gearing ratio was 36.65% (as at 30 June 2020: 35.92%). The gearing ratio was calculated as: total liabilities/total assets.
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