The Group’s principal financial liabilities comprise loans and borrowings, trade and other payables and other financial liability arising from a put option to a

non-controlling

interest. The main purpose of these financial liabilities is to finance the Group’s operations. The Group has trade and other receivables, and cash and bank deposits that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant at December 31, 2023.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates to the Group’s interest-bearing loans and borrowings from banks. The interest-bearing loans and borrowings of the Group are disclosed in Note 26.

The sensitivity analyses below have been determined based on the exposure to interest rates for interest-bearing loans and borrowings at the end of the reporting period and the stipulated change taking place at the beginning of the year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis points increase or decrease is used and represents management’s assessment of the possible change in interest rates.

If interest rate had been 50 (2022: 50) basis points higher or lower and all other variables were held constant, the profit before tax for the year ended December 31, 2023 of the Group would increase/decrease by RMB 12.7 million (US$ 1.8 million) (2022: increase/decrease by RMB 11.7 million).

Foreign currency exchange rate risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency exchange rates. The Group’s exposure to this risk relates primarily to the cash and bank balances, purchases and sales that are denominated in currencies other than the respective functional currencies of the entities within the Group. The currencies giving rise to this risk are primarily the Singapore Dollar, US Dollar and Euro.

Foreign currency translation exposure is managed by incurring debt in the operating currency so that where possible operating cash flows can be primarily used to repay obligations in the local currency. This also has the effect of minimizing the exchange differences recorded against income, as the exchange differences on the net investment are recorded directly against equity.


	31.12.2022
	Singapore Dollar			Euro			US Dollar			Others
	RMB’000			RMB’000			RMB’000			RMB’000
Trade and other receivables		1,504			7,328			4,484			218
Cash and bank balances		166,517			1,282			26,521			15,340
Financial liabilities		(202	)		—			—			—
Trade and other receivables		(5,064	)		(11,586	)		(7,258	)		(2,579	)

Net assets/(liabilities)		162,755			(2,976	)		23,747			12,979


	31.12.2023
	Singapore Dollar			Euro			US Dollar			Others
	RMB’000			RMB’000			RMB’000			RMB’000
Trade and other receivables		1,700			13,686			7,221			377
Cash and bank balances		157,073			5,337			18,162			24,114
Financial liabilities		(1,565	)		—			—			—
Trade and other payables		(7,568	)		(13,689	)		(20,453	)		(12,795	)

Net assets/(liabilities)		149,640			5,334			4,930			11,696

US$’000		21,065			751			694			1,646

A 10% strengthening of the following major currencies against the functional currency of each of the Group’s entities at the reporting date would increase/(decrease) profit before tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.


	Profit before tax
	31.12.2022			31.12.2023		31.12.2023
	RMB’000			RMB’000		US$’000
Singapore Dollar		16,276			14,964		2,107
Euro		(298	)		533		75
US Dollar		2,375			493		69

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on internal rating criteria.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed for all customers requiring credit.

An impairment analysis is performed at each reporting date using a provision matrix. The provision rates are determined based on days past due for groupings of various customer segments with similar loss patterns (i.e. by profiles of the customers). The calculation reflects the reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, trade receivables are

written-off

at management’s discretion after assessment and are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 15. The Group’s share of bills receivables of a joint venture which was used as collateral as security is disclosed in Note 5.


				Trade receivables
						Days past due
As of December 31, 2022	Total			Current		0 – 90 days			91-180 days			181-365 days			>365 days
	RMB’000			RMB’000		RMB’000			RMB’000			RMB’000			RMB’000
Expected credit loss rate		2.1	%		—		0.2	%		0.2	%		0.6	%		63.1	%
Estimated total gross carrying amount at default		1,549,462			1,138,365		216,355			80,132			63,477			51,133
Expected credit loss		33,247			—		500			124			372			32,251



				Trade receivables
						Days past due
As of December 31, 2023	Total			Current		0 – 90 days			91-180 days			181-365 days			>365 days
	RMB’000			RMB’000		RMB’000			RMB’000			RMB’000			RMB’000
Expected credit loss rate		4.8	%		—		0.1	%		0.8	%		2.2	%		59.7	%
Estimated total gross carrying amount at default		1,148,682			521,234		350,376			97,382			93,015			86,675
Expected credit loss		54,894			—		294			753			2,067			51,780

At December 31, 2023, the Group had top 5 customers (2022: top 5 customers) that owed the Group more than RMB 597.7 million (US$ 84.1 million) (2022: RMB 993.1 million) and accounted for approximately 40.0% (2022: 53.5%) of trade receivables (including trade amounts due from related

parties

but excluding bills receivables) respectively. These customers are located in the PRC. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets mentioned in Note 15. The Group’s share of bills receivables of a joint venture which was used as collateral as security is disclosed in Note 5.

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows, and having adequate amounts of committed credit facilities.

The table below summarizes the maturity profile of the Group’s financial assets and liabilities, as well as lease liabilities, based on contractual undiscounted payments.


	1 year or less		2 to 5 years		After 5 years		Total
As of December 31, 2022	RMB’000		RMB’000		RMB’000		RMB’000
Financial assets
Trade and bills receivables		6,487,095		—		—		6,487,095
Other receivables, excluding tax recoverable		434,750		—		—		434,750
Cash and bank balances		4,830,743		20,000		—		4,850,743

		11,752,588		20,000		—		11,772,588

Financial liabilities
Loans and borrowings		2,158,839		209,400		—		2,368,239
Trade and other payables (Note 22)		8,080,782		189,366		—		8,270,148
Lease liabilities		33,102		26,928		216		60,246
Other financial liability		—		—		58,212		58,212

		10,272,723		425,694		58,428		10,756,845