Summary of Solid-State Battery Conference Call Industry Overview - The focus is on the solid-state battery industry, particularly addressing the solid-solid interface issues and innovations in materials and equipment systems [1][2][3]. Key Points and Arguments 1. **Manufacturing Techniques**: Solid-state batteries utilize dry forming, isostatic pressing, structured materials, and laser equipment to enhance ionic conductivity and reduce side reactions, thereby improving overall performance and commercialization [1][7]. 2. **International vs. Domestic Strategies**: - International companies like QuantumScape and Solid Power have advanced in high-end equipment and are in pilot to small-scale production stages, employing Atomic Layer Deposition (ALD) technology for interface modification [1][5]. - Domestic companies focus on technological innovation using cost-effective methods such as dry processes and structured materials, currently in small-scale to pilot stages [5][11]. 3. **Key Manufacturing Processes**: - **Solvent-free Dry Forming**: This method has the highest application certainty and is valued at tens of millions, with high technical barriers and a significant degree of localization [11]. - **Isostatic Pressing**: This technology addresses interface contact issues systematically and is also valued at tens of millions, currently in the technical verification or small-scale procurement phase [11]. - **Structured Materials**: These include structured copper foils and supporting membranes, which are in the scale testing or introduction phase, valued in the tens of millions [11]. - **Laser Equipment**: Used for cutting and processing, currently in scale testing or introduction stages, with a high degree of localization [11]. - **Atomic Layer Deposition (AOD)**: Although primarily used in semiconductor or photovoltaic fields, its potential in lithium batteries is significant, with domestic leaders collaborating with top companies [12]. 4. **Interface Modification Techniques**: - Techniques such as coating, doping, controlled reactions, and alloying are crucial for enhancing performance by increasing contact area and blocking adverse reactions [13][14]. - ALD is highlighted as one of the most effective methods for improving interface stability and ionic conductivity [15]. 5. **Challenges in Solid-State Batteries**: - Key challenges include ionic conduction barriers due to the absence of liquid electrolytes, side reactions from active materials, mechanical matching issues, high interface resistance, and dendrite growth risks [9][10]. - Solutions require advanced material selection, precise processing techniques, and innovative design to ensure reliability, safety, and long cycle life [10]. Additional Important Insights - **Market Leaders**: Companies like QuantumScape and Solid Power are leading the global solid-state battery development due to their deep ties with automotive manufacturers and measurable progress [12]. - **Emerging Players**: Domestic companies such as CATL and BYD are beginning sample trials and pilot line setups, indicating a slower but growing presence in the market [12]. - **Key Equipment Suppliers**: Companies like Xian Dai Intelligent and Li Yuan Heng are significant players in the dry and isostatic equipment sectors, contributing to the supply chain [17][18]. - **Potential Growth Companies**: Firms like DeLong Laser and Yanhang Precision are noted for their roles in the solid-state battery supply chain, with potential for growth despite some uncertainties [23][24]. This summary encapsulates the critical aspects of the solid-state battery industry as discussed in the conference call, highlighting the technological advancements, market dynamics, and key players involved.

Investment Rating - The report maintains a "Positive" rating for the chemical industry [6][12]. Core Insights - The macroeconomic judgment indicates that non-OPEC countries are expected to lead an increase in oil production, with a significant overall supply growth anticipated. Global GDP growth is projected to remain at 2.8%, with stable oil demand, although the growth rate may slow due to tariff policies [6][7]. - The expectation of a Federal Reserve interest rate cut is likely to boost demand during the peak season of September and October. Additionally, the leakage incident of GFL R32 in India may enhance China's export opportunities [6][12]. - The report highlights the ongoing investigation into anti-dumping practices against imported semiconductor chips from the U.S., which may benefit domestic semiconductor materials [6][12]. Summary by Sections Macroeconomic Analysis - Oil supply is expected to increase significantly, driven by non-OPEC production, while demand remains stable despite potential slowdowns due to tariffs. Geopolitical factors, including U.S.-China tariff relief and the Russia-Ukraine situation, are influencing oil prices [6][7]. - Coal prices are anticipated to stabilize at a low level, and natural gas export facilities in the U.S. may accelerate, leading to lower import costs [6][7]. Chemical Sector Configuration - The report suggests a strategic focus on four areas: textile and apparel chain, agricultural chemicals, export chain, and sectors benefiting from "de-involution" policies. Specific companies are recommended for investment based on their market positions and growth potential [6][12]. Key Material Focus - Emphasis is placed on the importance of self-sufficiency in key materials, particularly in semiconductor and panel materials, with specific companies highlighted for their potential in these sectors [6][12]. Price Trends - Recent data indicates fluctuations in various chemical prices, with PTA prices down by 0.3% and MEG down by 2.0%. The report notes that the overall industrial product PPI has shown a year-on-year decline of 2.9% [12][13][16]. Company Valuations - A detailed valuation table is provided, showcasing various companies in the agricultural chemicals and chemical sectors, with ratings ranging from "Buy" to "Increase" based on their market performance and projected earnings [20].

12 September 2025 Dear Non-Registered Shareholder (1) , DONGYUE GROUP LIMITED 東岳集團有限公司 (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立的有限公司） (Stock Code: 189) （Stock Code 股份代號：189） （股份代號：189） NOTIFICATION LETTER 通知信函 Dongyue Group Limited (the "Company") — Notification of Publication of 2025 Interim Report ("Current Corporate Communications") The Current Corporate Communication of the Company, in both English and Chinese versions, is available on the websites of The Stock Exchange of ...

DONGYUE GROUP LIMITED 東岳集團有限公司 (Incorporated in the Cayman Islands with limited liability) Dongyue Group Limited (the "Company") — Notification of Publication of 2025 Interim Report ("Current Corporate Communications") The English and Chinese versions of the Company's Current Corporate Communications are available on the Company's website at www.dongyuechem.com and the website of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") at www.hkexnews.hk, or the printed form(s) of Current Corporate Co ...

Company Information [Registered Office and Principal Place of Business](index=3&type=section&id=2.1.1%20Registered%20Office%20and%20Principal%20Place%20of%20Business) The company's registered office is in the Cayman Islands, with its principal place of business in Zibo, Shandong, China, and a main Hong Kong office in Admiralty - The company's registered office is in the Cayman Islands, with its principal place of business in Dongyue Fluorosilicone Material Industrial Park, Zibo, Shandong, China, and its main Hong Kong office at Room 2621, 26/F, Tower 1, Admiralty Centre, 18 Harcourt Road, Admiralty[2](index=2&type=chunk)[3](index=3&type=chunk) - The company's website is www.dongyuechem.com[3](index=3&type=chunk) [Board of Directors and Committees](index=3&type=section&id=2.1.2%20Board%20of%20Directors%20and%20Committees) The Board of Directors comprises executive and independent non-executive directors, supported by audit, remuneration, nomination, corporate governance, and risk management committees to ensure robust governance - Executive Directors include Mr. Zhang Jianhong (Chairman and CEO), Mr. Wang Weidong (President), Mr. Zhang Zefeng (Vice President and CFO), and Ms. Zhong Deli[3](index=3&type=chunk) - Independent Non-Executive Directors include Mr. Ding Lianghui, Mr. Yang Xiaoyong, and Mr. Ma Zhizhong[4](index=4&type=chunk) - Mr. Ding Lianghui chairs the Audit Committee and Risk Management Committee, Mr. Yang Xiaoyong chairs the Remuneration Committee, and Mr. Zhang Jianhong chairs the Nomination Committee and Corporate Governance Committee[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) [Key Service Providers](index=4&type=section&id=2.1.3%20Key%20Service%20Providers) Ms. Zhong Deli serves as Company Secretary and one of the authorized representatives, with the company collaborating with major banks, investor relations consultants, auditors, and external legal counsel, under stock code 189 - Ms. Zhong Deli is the Company Secretary and an authorized representative, with Mr. Zhang Zefeng as the other authorized representative[5](index=5&type=chunk) - Key relationship banks include branches of China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, and Bank of China in Huantai[8](index=8&type=chunk) - Investor relations consultant is Wonderful Sky Financial Group Holdings Limited, auditor is ZH CPA Limited, and external legal counsel is Norton Rose Fulbright Hong Kong[9](index=9&type=chunk) - The company's stock code is **189**[9](index=9&type=chunk) Management Discussion and Analysis [Performance Review](index=6&type=section&id=2.1%20Performance%20Review) In H1 2025, despite complex economic conditions and industry challenges, the Group achieved a **153.28% YoY increase** in profit attributable to owners, driven by refrigerant quota advantages and strong performance in production stability, R&D, and cost control - In H1 2025, the complex domestic and international economic landscape and volatile international trade policies impacted the fluorosilicone chemical industry[10](index=10&type=chunk)[13](index=13&type=chunk) - Profit attributable to owners increased by **153.28% YoY**, primarily due to significant price increases in several refrigerant products influenced by quota factors[11](index=11&type=chunk)[14](index=14&type=chunk) - The Group strictly implemented safety and environmental protection plans, ensuring production stability with no major accidents affecting production and **100% compliance** in emissions during H1[12](index=12&type=chunk)[15](index=15&type=chunk) - R&D investment was approximately **RMB369.226 million**, a **14.87% YoY increase**, accounting for **4.95% of total revenue**; the R&D team comprised **679 individuals**, with doctors and masters accounting for **48.90%**; **25 patents** were obtained during the period, totaling **595 patents**, and **2 national standards** and **1 group standard** were published[16](index=16&type=chunk)[18](index=18&type=chunk) - Distribution and selling expenses decreased by **7.61% YoY**, and administrative expenses decreased by **5.17% YoY**, demonstrating significant cost control effectiveness[17](index=17&type=chunk)[19](index=19&type=chunk) [Future Outlook](index=8&type=section&id=2.2%20Future%20Outlook) Facing an unstable external environment, the Group will adopt a cautious operating strategy in H2, focusing on market-centric growth, internal management for efficiency, market-oriented R&D, and enhanced production efficiency to maintain competitive advantages - The Group will adopt a market-oriented approach, strengthen customer coverage in segmented markets, transform into a "technology + sales" composite team, and balance domestic and international market sales[20](index=20&type=chunk)[22](index=22&type=chunk) - The Group will continue to prioritize cost reduction and efficiency improvement by strengthening strategic cooperation with excellent suppliers and reducing unnecessary outsourcing and resource waste to further control costs and expenses[21](index=21&type=chunk)[23](index=23&type=chunk) - R&D efforts will be market-oriented, concentrating valuable R&D resources on directions closer to the market, and increasing technological transformation investment to achieve technological iteration and enhance the competitiveness of older products[24](index=24&type=chunk)[26](index=26&type=chunk) - The Group will enhance production efficiency across the board through systematic, standardized, and refined management, preventing safety and environmental risks, and leveraging new product development, new technology applications, and energy conservation and emission reduction to maintain its industrial chain competitive advantage[25](index=25&type=chunk)[27](index=27&type=chunk) [Financial Review](index=10&type=section&id=2.3%20Financial%20Review) In H1 2025, the Group's revenue grew by **2.79% YoY** to **RMB7,463.394 million**, with gross profit margin significantly improving to **29.11%**; the refrigerant segment's performance surged by **209.77%**, while fluoropolymer and organosilicon segments faced weak demand and intense competition, yet the Group maintained a robust financial position with improved liquidity and total equity 2025 H1 Key Financial Indicators | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,463,394 | 7,261,012 | 2.79 | | Gross Profit Margin | 29.11% | 19.83% | 9.28pp | | Consolidated Segment Profit Margin | 19.08% | 8.97% | 10.11pp | | Operating Profit Margin | 19.00% | 9.37% | 9.63pp | | Profit Before Tax | 1,422,483 | 672,878 | 111.39 | | Net Profit | 1,056,888 | 395,208 | 167.42 | | Total Comprehensive Income | 1,151,185 | 382,768 | 200.75 | 2025 H1 Revenue and Performance by Segment | Segment | 2025 H1 Revenue (RMB thousand) | 2024 H1 Revenue (RMB thousand) | Revenue YoY Change (%) | 2025 H1 Performance (RMB thousand) | 2024 H1 Performance (RMB thousand) | Performance YoY Change (%) | 2025 H1 Segment Profit Margin (%) | 2024 H1 Segment Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fluoropolymer Materials | 1,939,795 | 2,032,921 | -4.58 | 259,195 | 303,391 | -14.57 | 13.36 | 14.92 | | Organosilicon | 2,319,120 | 2,759,094 | -15.95 | 8,750 | 53,681 | -83.70 | 0.38 | 1.95 | | Refrigerants | 2,292,067 | 1,551,984 | 47.69 | 1,029,831 | 332,455 | 209.77 | 44.93 | 21.42 | | Dichloromethane and Caustic Soda | 636,444 | 515,594 | 23.44 | 213,693 | 132,756 | 60.97 | 33.58 | 25.75 | | Others | 275,968 | 401,419 | -31.25 | (87,219) | (171,232) | 49.07 (Loss narrowed) | (31.60) | (42.66) | | **Total** | **7,463,394** | **7,261,012** | **2.79** | **1,424,250** | **651,051** | **118.76** | **19.08** | **8.97** | - Significant price increases in major products like R32 and R410a in the refrigerant segment, primarily due to quota restrictions, were the main drivers of its performance growth[41](index=41&type=chunk)[44](index=44&type=chunk) - The fluoropolymer materials and organosilicon segments experienced weaker market demand, intense competition, and lower product prices, leading to decreased revenue and performance[34](index=34&type=chunk)[35](index=35&type=chunk)[39](index=39&type=chunk)[46](index=46&type=chunk)[49](index=49&type=chunk) - Distribution and selling expenses decreased by **7.61% YoY** to **RMB212.644 million**, mainly due to lower freight unit prices[53](index=53&type=chunk)[58](index=58&type=chunk) - Administrative expenses decreased by **5.17% YoY** to **RMB326.574 million**, primarily due to a reduced impact from impairment of real estate inventories[59](index=59&type=chunk)[63](index=63&type=chunk) - Finance costs decreased by **27.65% YoY** to **RMB1.562 million**, mainly due to reduced bill discount interest expenses[60](index=60&type=chunk)[64](index=64&type=chunk) - Capital expenditure was approximately **RMB688.779 million**, primarily for new project construction, land, and equipment[61](index=61&type=chunk)[65](index=65&type=chunk) - As of June 30, 2025, the Group's total equity reached **RMB18,617.373 million**, an increase of **6.56%** from December 31, 2024[62](index=62&type=chunk)[66](index=66&type=chunk) - As of June 30, 2025, bank balances and cash amounted to **RMB3,540.515 million**, with net cash inflow from operating activities of **RMB1,505.486 million**[62](index=62&type=chunk)[66](index=66&type=chunk) - The current ratio was **2.69**, and the debt ratio was **-18.82%**, indicating the Group was in a "net cash" positive position[62](index=62&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk)[72](index=72&type=chunk) - As of June 30, 2025, the Group's borrowings amounted to **RMB35.822 million**[68](index=68&type=chunk)[72](index=72&type=chunk) - The Group used bank deposits of **RMB43.320 million** as collateral for bills payable and regulatory deposits from pre-sold properties[70](index=70&type=chunk)[74](index=74&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging Activities](index=18&type=section&id=2.4%20Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging%20Activities) The Group's functional currency is RMB, but overseas transactions involve foreign currencies, primarily USD; to mitigate exchange rate risk, the Group typically converts foreign currency to RMB upon receipt and considers future foreign currency payment arrangements - The Group's functional currency is RMB, and most transactions are settled in RMB[76](index=76&type=chunk)[79](index=79&type=chunk) - The Group receives/pays foreign currencies (primarily USD) when earning revenue from overseas customers and purchasing machinery and equipment from overseas suppliers[76](index=76&type=chunk)[79](index=79&type=chunk) - To reduce foreign currency holding risk, the Group typically converts foreign currency to RMB upon receipt of funds and considers foreign currency payment arrangements for the near future[76](index=76&type=chunk)[80](index=80&type=chunk) [Employees](index=18&type=section&id=2.5%20Employees) As of June 30, 2025, the Group employed 6,050 individuals, implementing performance-based remuneration and bonuses, alongside benefits like medical insurance, employee share option schemes, and pensions to maintain competitiveness - As of June 30, 2025, the Group employed **6,050 employees** (December 31, 2024: 6,922 employees)[77](index=77&type=chunk)[81](index=81&type=chunk) - The Group implements a remuneration policy and bonuses based on performance and employee contributions[77](index=77&type=chunk)[81](index=81&type=chunk) - The Group provides benefits such as medical insurance, employee share option schemes, and pensions to ensure competitiveness[77](index=77&type=chunk)[81](index=81&type=chunk) [Interim Dividend](index=18&type=section&id=2.6%20Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors did not declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[78](index=78&type=chunk)[82](index=82&type=chunk) Other Information [Purchase, Sale or Redemption of the Company's Listed Securities](index=19&type=section&id=3.1%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Except as disclosed under the employee share option scheme, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Except as disclosed under the employee share option scheme, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[83](index=83&type=chunk)[87](index=87&type=chunk) [Standard Code for Securities Transactions by Directors](index=19&type=section&id=3.2%20Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Standard Code as set out in Appendix C3 of the HKEX Listing Rules, with all directors confirming full compliance for the six months ended June 30, 2025 - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[84](index=84&type=chunk)[88](index=88&type=chunk) - All directors confirmed full compliance with the relevant requirements of the Standard Code for the six months ended June 30, 2025[84](index=84&type=chunk)[88](index=88&type=chunk) [Audit Committee](index=19&type=section&id=3.3%20Audit%20Committee) The Audit Committee, established under Listing Rule Appendix C1 and comprising three independent non-executive directors, reviewed the Group's accounting policies, internal controls, and interim results for the six months ended June 30, 2025, on August 20, 2025 - The Audit Committee comprises Mr. Ding Lianghui (Chairman), Mr. Yang Xiaoyong, and Mr. Ma Zhizhong, all of whom are independent non-executive directors[85](index=85&type=chunk)[89](index=89&type=chunk) - On August 20, 2025, the Audit Committee reviewed the Group's accounting policies and practices, and discussed matters related to internal controls and financial reporting, including the interim results for the six months ended June 30, 2025[85](index=85&type=chunk)[90](index=90&type=chunk) [Remuneration Committee](index=19&type=section&id=3.4%20Remuneration%20Committee) The Remuneration Committee, established with written terms of reference, is responsible for reviewing the remuneration of directors and senior management, and includes independent non-executive directors and an executive director - The Remuneration Committee is responsible for considering the remuneration and other related matters of the company's directors and senior management[86](index=86&type=chunk)[91](index=91&type=chunk) - Members of the Remuneration Committee include independent non-executive directors Mr. Yang Xiaoyong (Chairman) and Mr. Ding Lianghui, and executive director Mr. Zhang Jianhong[86](index=86&type=chunk)[91](index=91&type=chunk) [Nomination Committee](index=20&type=section&id=3.5%20Nomination%20Committee) The Nomination Committee, established on March 18, 2012, is responsible for the appointment of new directors and related matters, comprising Chairman Mr. Zhang Jianhong and two independent non-executive directors - The Nomination Committee is responsible for the appointment of new directors of the company and other related matters[92](index=92&type=chunk)[96](index=96&type=chunk) - Mr. Zhang Jianhong was appointed Chairman of the Nomination Committee, and Mr. Ding Lianghui and Mr. Yang Xiaoyong were appointed as members[92](index=92&type=chunk)[96](index=96&type=chunk) [Corporate Governance Committee](index=20&type=section&id=3.6%20Corporate%20Governance%20Committee) The Corporate Governance Committee, effective March 21, 2013, is responsible for the company's corporate governance matters, comprising Chairman Mr. Zhang Jianhong and two executive directors - The Corporate Governance Committee is responsible for the company's corporate governance and other related matters[93](index=93&type=chunk)[97](index=97&type=chunk) - Mr. Zhang Jianhong was appointed Chairman of the Corporate Governance Committee, and Mr. Wang Weidong and Mr. Zhang Zefeng were appointed as members[93](index=93&type=chunk)[97](index=97&type=chunk) [Risk Management Committee](index=20&type=section&id=3.7%20Risk%20Management%20Committee) The Risk Management Committee, effective August 13, 2015, is responsible for the company's risk management matters, comprising Chairman Mr. Ding Lianghui and two independent non-executive directors - The Risk Management Committee is responsible for the company's risk management and other related matters[94](index=94&type=chunk)[98](index=98&type=chunk) - Mr. Ding Lianghui was appointed Chairman of the Risk Management Committee, and Mr. Yang Xiaoyong and Mr. Ma Zhizhong were appointed as members[94](index=94&type=chunk)[98](index=98&type=chunk) [Risk Management and Internal Control](index=20&type=section&id=3.8%20Risk%20Management%20and%20Internal%20Control) The Board is responsible for assessing and determining the Group's risk appetite and ensuring effective risk management and internal control systems are established and maintained; the company has appointed independent consultants for internal review, implemented comprehensive risk management procedures, and established whistleblowing and anti-corruption policies - The Board is responsible for assessing and determining the nature and extent of risks the Group is willing to accept in achieving its strategic objectives, and for ensuring the establishment and maintenance of appropriate and effective risk management and internal control systems[95](index=95&type=chunk)[99](index=99&type=chunk) - The company has appointed an independent consulting firm as internal control consultant to conduct internal reviews and provide recommendations to the Group[100](index=100&type=chunk)[102](index=102&type=chunk) - The company has initiated a risk management process, including identifying risks, prioritizing assessments, formulating management measures, compiling a risk management manual, reporting to committees, and establishing a whistleblowing policy and anti-corruption system[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - The Board, Audit Committee, and Risk Management Committee have reviewed the effectiveness of the risk management and internal control systems and deemed them effective and adequate[103](index=103&type=chunk)[105](index=105&type=chunk) [Compliance with Corporate Governance Code](index=22&type=section&id=3.9%20Compliance%20with%20Corporate%20Governance%20Code) For the six months ended June 30, 2025, the company complied with the Corporate Governance Code provisions in Appendix C1 Part 2 of the Listing Rules, except for Code Provision A.2.1 regarding the separation of Chairman and CEO roles - The company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules, except for code provision A.2.1[106](index=106&type=chunk)[109](index=109&type=chunk) - Mr. Zhang Jianhong currently holds both the Chairman and Chief Executive Officer positions, an arrangement the Board believes provides stronger and more consistent leadership, benefiting the Group's business prospects[107](index=107&type=chunk)[110](index=110&type=chunk) [The Company's Employee Share Option Scheme](index=23&type=section&id=3.10%20The%20Company's%20Employee%20Share%20Option%20Scheme) The company's employee share option scheme was terminated early on September 27, 2024, to restructure remuneration policy; no further options will be granted, existing shares held by the trustee will be gradually sold, and proceeds remitted to the company; as of June 30, 2025, **16.862 million shares** were sold, with **59.845 million shares** remaining unsold - The company's employee share option scheme was terminated early on September 27, 2024, to restructure the remuneration policy and provide effective incentives[112](index=112&type=chunk)[115](index=115&type=chunk) - No further share options will be granted after termination, and all existing shares held by the trustee will be gradually sold on the stock market, with proceeds remitted to the company[112](index=112&type=chunk)[115](index=115&type=chunk) - For the six months ended June 30, 2025, a cumulative total of **16.862 million shares** were sold, amounting to **HKD167.120 million**[113](index=113&type=chunk)[116](index=116&type=chunk) - As of June 30, 2025, **59.845 million shares** remained unsold under the scheme[113](index=113&type=chunk)[116](index=116&type=chunk) [Dongyue Organosilicon Share Award Scheme](index=23&type=section&id=3.11%20Dongyue%20Organosilicon%20Share%20Award%20Scheme) Dongyue Organosilicon, a Group subsidiary, implemented a share award scheme on December 10, 2024, to incentivize 360 eligible participants, with a maximum of **19.12 million shares** awarded, representing approximately **1.6% of its capital**, placed at **RMB5.9 per share**; as of June 30, 2025, **19.12 million awards** remained unexercised - Dongyue Organosilicon implemented a share award scheme on December 10, 2024, to provide incentives and awards to **360 full-time employees**, executives, senior officers, and directors[114](index=114&type=chunk)[117](index=117&type=chunk) - The maximum number of restricted shares awarded is **19.12 million shares**, representing approximately **1.6%** of Dongyue Organosilicon's capital, placed at **RMB5.9 per share**[114](index=114&type=chunk)[118](index=118&type=chunk) - As of January 1, 2025, and June 30, 2025, the unexercised awards remained at **19.12 million units**, with no awards granted during the period[114](index=114&type=chunk)[118](index=118&type=chunk) - The scheme is not subject to Chapter 17 of the Listing Rules as Dongyue Organosilicon is not a major subsidiary of the company[119](index=119&type=chunk) [Use of Proceeds from Placing](index=24&type=section&id=3.12%20Use%20of%20Proceeds%20from%20Placing) As of June 30, 2025, the Group utilized part of the net proceeds from the September 2021 share placing, with **HKD52.564 million** for PVDF capacity enhancement and **HKD510 million** for general working capital; due to market changes and high-end fluoropolymer development, the Board resolved to reallocate the remaining **HKD191.9 million** to enhance PTFE ultra-high purity product capacity, green intelligent transformation of tetrafluoroethylene production lines, and a pilot project for tetrafluoropropylene production Use of Proceeds from September 2021 Placing | Use | Amount (HKD thousand) | Unutilized as of Dec 31, 2024 (HKD thousand) | Utilized as of Jun 30, 2025 (HKD thousand) | Unutilized as of Jun 30, 2025 (HKD thousand) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Increase PVDF and its raw material production capacity | 2,000,000 | 104,240 | 52,564 | 51,676 | Dec 31, 2025 | | Increase PTFE and its raw material production capacity | 800,000 | 144,480 | 0 | 144,480 | Dec 31, 2025 | | Supplement general working capital | 510,000 | 0 | 510,000 | 0 | Not applicable | - As of July 31, 2025, the latest unutilized net proceeds from the placing amounted to approximately **HKD191.9 million**[125](index=125&type=chunk) - The Board resolved to change the use of the unutilized net proceeds due to factors including lower-than-expected investment returns from PVDF and PTFE products caused by market supply-demand imbalance, and the anticipated development of high-end fluoropolymer materials and new refrigerant markets[125](index=125&type=chunk) Proposed Change in Use of Unutilized Net Proceeds | Use | Allocated Unutilized Net Proceeds (HKD thousand) | Proposed Timeline | | :--- | :--- | :--- | | Enhance PTFE ultra-high purity product capacity | 89,558 | Dec 2026 | | Green intelligent transformation of tetrafluoroethylene production line | 68,234 | Dec 2026 | | Pilot project for tetrafluoropropylene production | 34,117 | Dec 2025 | | **Total** | **191,909** | – | [Directors](index=26&type=section&id=3.13%20Directors) The Board of Directors maintained a stable composition for the six months ended June 30, 2025, and up to the date of this report, comprising four executive directors and three independent non-executive directors - Executive Directors include Mr. Zhang Jianhong (Chairman and CEO), Mr. Wang Weidong (President), Mr. Zhang Zefeng (Vice President and CFO), and Ms. Zhong Deli[128](index=128&type=chunk)[129](index=129&type=chunk) - Independent Non-Executive Directors include Mr. Ding Lianghui, Mr. Yang Xiaoyong, and Mr. Ma Zhizhong[128](index=128&type=chunk)[129](index=129&type=chunk) [Directors' Rights to Acquire Shares](index=26&type=section&id=3.14%20Directors'%20Rights%20to%20Acquire%20Shares) Except for disclosures in the "Company's Employee Share Option Scheme" section, neither the company nor its subsidiaries or associated companies participated in any arrangements enabling directors, their spouses, or minor children to benefit from acquiring shares or debentures of the company or any other body corporate during the six months ended June 30, 2025 - Except for disclosures in the "Company's Employee Share Option Scheme" section of this report, neither the company, its holding company, nor any of its subsidiaries or fellow subsidiaries participated in any arrangements that would enable directors, their respective spouses, or minor children to benefit from acquiring shares or debentures of the company or any other body corporate during the six months ended June 30, 2025[128](index=128&type=chunk)[129](index=129&type=chunk) [Disclosure of Interests](index=27&type=section&id=3.15%20Disclosure%20of%20Interests) This section discloses the interests and short positions of the company's directors, chief executives, and substantial shareholders in the company's shares, underlying shares, and debentures, as well as interests in other Group members, as of June 30, 2025 Directors' and Chief Executives' Interests in Shares | Director Name | Nature of Interest | Number of Shares or Underlying Shares (L) | Percentage of Issued Share Capital (L) | | :--- | :--- | :--- | :--- | | Mr. Zhang Jianhong | Beneficial Interest | 7,147,636 | 0.41 | | Mr. Zhang Zefeng | Beneficial Interest | 750,000 | 0.04 | | Ms. Zhong Deli | Beneficial Interest | 188,000 | 0.01 | Substantial Shareholders' and Other Persons' Interests in Shares | Shareholder Name | Nature of Interest | Number of Shares or Underlying Shares (L) | Percentage of Issued Share Capital (L) | | :--- | :--- | :--- | :--- | | Mr. Zhang Ke | Corporate Interest | 258,948,451 | 14.94 | | Dongyue Team Limited | Beneficial Interest | 258,948,451 | 14.94 | - Mr. Zhang Ke holds **100% interest** in Dongyue Team Limited and is therefore deemed to have an interest in the shares held by Dongyue Team Limited; Mr. Zhang Ke is the son of Mr. Zhang Jianhong, the company's Chairman and CEO[135](index=135&type=chunk)[136](index=136&type=chunk) Interests in Other Group Members | Name of Company Subsidiary | Name of Principal Shareholder of Subsidiary | Nature of Interest | Percentage of Issued Share Capital/Registered Capital of Subsidiary (%) | | :--- | :--- | :--- | :--- | | Inner Mongolia Dongyue Jinfeng Fluorochemical Co., Ltd. | Chifeng Zhongxing Information Technology Co., Ltd. | Corporate | 49 | | Chifeng Huasheng Mining Co., Ltd. | Chifeng Zhongxing Information Technology Co., Ltd. | Corporate | 20 | | Shandong Times New Material Technology Co., Ltd. | Jinan Shicheng Organosilicon Technology Co., Ltd. | Corporate | 35 | | Shandong Dongyue Polymer Material Co., Ltd. | Jinshi Manufacturing Transformation and Upgrading New Material Fund (Limited Partnership) | Limited Partnership | 11.45 | | Zibo Xiaoshuo Enterprise Management Co., Ltd. | Zibo Qixin Industrial Investment Co., Ltd. | Corporate | 49 | Review Report on Condensed Consolidated Financial Statements [Introduction](index=30&type=section&id=4.1%20Introduction) This report reviews the condensed consolidated financial statements of Dongyue Group Co., Ltd. and its subsidiaries for the six months ended June 30, 2025, prepared in accordance with HKEX Listing Rules and IAS 34, aiming to provide conclusions to the Board without assuming responsibility to other parties - The review report covers the condensed consolidated financial statements of Dongyue Group Co., Ltd. and its subsidiaries for the six months ended June 30, 2025[141](index=141&type=chunk)[142](index=142&type=chunk) - The financial statements were prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 "Interim Financial Reporting"[141](index=141&type=chunk)[142](index=142&type=chunk) - The purpose of the review report is to provide a conclusion to the Board based on the review results, without assuming responsibility to other parties for the report's content[141](index=141&type=chunk)[142](index=142&type=chunk) [Scope of Review](index=31&type=section&id=4.2%20Scope%20of%20Review) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries with finance and accounting personnel and analytical procedures; the scope is significantly narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[143](index=143&type=chunk)[144](index=144&type=chunk) - The review primarily involved making inquiries of personnel responsible for financial and accounting matters and performing analytical and other review procedures[143](index=143&type=chunk)[144](index=144&type=chunk) - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, no audit opinion is expressed[143](index=143&type=chunk)[144](index=144&type=chunk) [Conclusion](index=31&type=section&id=4.3%20Conclusion) Based on the review, no matters were identified that would lead the reviewer to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 - Based on the review, nothing has come to the reviewer's attention that causes the reviewer to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[145](index=145&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents Dongyue Group's unaudited consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing a **2.79% YoY revenue increase** to **RMB7,463.394 million**, a **50.87% surge in gross profit** to **RMB2,172.421 million**, and a **167.42% YoY profit increase** to **RMB1,056.888 million**, primarily driven by lower cost of sales, higher other income, and gains from subsidiary disposals Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,463,394 | 7,261,012 | 2.79 | | Cost of Sales | (5,290,973) | (5,821,118) | -9.11 | | Gross Profit | 2,172,421 | 1,439,894 | 50.87 | | Other Income and Other Net Gains or Losses | 146,952 | 97,519 | 50.69 | | Distribution and Selling Expenses | (212,644) | (230,157) | -7.61 | | Administrative and Other Expenses | (326,574) | (344,365) | -5.17 | | Research and Development Costs | (369,226) | (321,439) | 14.87 | | Gain on Disposal of Partial Interest in an Associate | – | 139,049 | -100.00 | | Gain/(Loss) on Disposal of Subsidiaries | 7,435 | (100,216) | 107.42 (from loss to gain) | | Finance Costs | (1,562) | (2,159) | -27.65 | | Share of Results of Associates | 5,681 | (5,248) | 208.29 (from loss to gain) | | Profit Before Tax | 1,422,483 | 672,878 | 111.39 | | Income Tax Expense | (365,595) | (277,670) | 31.67 | | Profit for the Period | 1,056,888 | 395,208 | 167.42 | | Total Comprehensive Income for the Period | 1,151,185 | 382,768 | 200.75 | | Profit for the Period Attributable to Owners of the Company | 779,202 | 307,649 | 153.28 | | Profit for the Period Attributable to Non-controlling Interests | 277,686 | 87,559 | 217.15 | | Basic and Diluted Earnings Per Share (RMB) | 0.47 | 0.17 | 176.47 | Condensed Consolidated Statement of Financial Position This statement presents Dongyue Group's unaudited consolidated financial position as of June 30, 2025, showing total assets less current liabilities of **RMB19,209.100 million** and total equity of **RMB18,617.373 million**, with net current assets increasing from year-end 2024 and a significant rise in bank balances and cash, reflecting strong liquidity Summary of Condensed Consolidated Statement of Financial Position | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 14,287,721 | 14,159,694 | 0.91 | | Current Assets | 7,841,943 | 6,777,176 | 15.71 | | **Liabilities** | | | | | Current Liabilities | 2,920,564 | 2,939,678 | -0.65 | | Non-current Liabilities | 591,727 | 525,355 | 12.63 | | **Equity** | | | | | Equity Attributable to Owners of the Company | 12,975,898 | 12,107,060 | 7.18 | | Non-controlling Interests | 5,641,475 | 5,364,777 | 5.16 | | **Key Ratios** | | | | | Net Current Assets | 4,921,379 | 3,837,498 | 28.25 | | Total Assets Less Current Liabilities | 19,209,100 | 17,997,192 | 6.73 | | Total Equity | 18,617,373 | 17,471,837 | 6.56 | | Bank Balances and Cash | 3,540,515 | 2,470,496 | 43.31 | | Pledged Bank Deposits | 43,320 | 88,745 | -51.18 | | Trade and Other Receivables | 2,821,697 | 2,777,363 | 1.60 | | Trade and Other Payables | 2,533,151 | 2,822,668 | -10.26 | Condensed Consolidated Statement of Changes in Equity This statement details Dongyue Group's equity movements for the six months ended June 30, 2025, showing equity attributable to owners of the company increased from **RMB12,107.060 million** on January 1, 2025, to **RMB12,975.898 million**, primarily influenced by profit for the period, fair value changes of equity instruments at fair value through other comprehensive income, and the sale of shares held under the employee share option scheme Summary of Condensed Consolidated Statement of Changes in Equity | Item | Balance as of Jan 1, 2025 (RMB thousand) | Profit for the Period (RMB thousand) | Fair Value Change of Equity Instruments at FVOCI (RMB thousand) | Sale of Shares Held Under Share Option Scheme (RMB thousand) | Dividends Declared (RMB thousand) | Dividends Paid to Non-controlling Interests (RMB thousand) | Share-based Payment Expense (RMB thousand) | Balance as of Jun 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 12,107,060 | 779,202 | 89,946 | 152,505 | (160,456) | – | 7,641 | 12,975,898 | | Non-controlling Interests | 5,364,777 | 277,686 | 4,351 | – | – | (14,908) | 9,569 | 5,641,475 | | **Total Equity** | **17,471,837** | **1,056,888** | **94,297** | **152,505** | **(160,456)** | **(14,908)** | **17,210** | **18,617,373** | - Statutory surplus reserve is part of shareholders' equity; once its balance reaches **50% of registered capital**, no further appropriation is required, and it can be used to offset losses, increase production, or convert into share capital[153](index=153&type=chunk)[155](index=155&type=chunk) - The share premium account is distributable to the owners of the company, provided that the company is able to pay its debts as they fall due in the ordinary course of business after the proposed dividend distribution[155](index=155&type=chunk) Condensed Consolidated Statement of Cash Flows This statement outlines Dongyue Group's cash flow for the six months ended June 30, 2025, showing a significant increase in net cash from operating activities to **RMB1,505.486 million**, net cash used in investing activities of **RMB599.394 million**, and net cash from financing activities of **RMB167.939 million**, resulting in a substantial increase in cash and cash equivalents at period-end to **RMB3,540.515 million** Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 1,505,486 | 409,516 | 267.63 | | Net Cash Used in Investing Activities | (599,394) | (177,243) | 238.18 | | Net Cash from/(Used in) Financing Activities | 167,939 | (455,390) | 136.87 (from used to from) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 1,074,031 | (223,117) | 581.37 (from decrease to increase) | | Effect of Exchange Rate Changes | (4,012) | (2,991) | 34.14 | | Cash and Cash Equivalents at Beginning of Period | 2,470,496 | 2,547,297 | -3.01 | | Cash and Cash Equivalents at End of Period | 3,540,515 | 2,321,189 | 52.53 | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation](index=38&type=section&id=9.1%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosures of the Listing Rules of The Stock Exchange of Hong Kong Limited[157](index=157&type=chunk)[160](index=160&type=chunk) [Significant Accounting Policies](index=38&type=section&id=9.2%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value through other comprehensive income; the accounting policies adopted are consistent with the 2024 annual consolidated financial statements, and newly issued but not yet effective standards are not expected to have a material impact on the financial statements - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value through other comprehensive income[158](index=158&type=chunk)[161](index=161&type=chunk) - The accounting policies for the six months ended June 30, 2025, are consistent with those presented in the annual financial statements for the year ended December 31, 2024, except for the adoption of new standards effective from January 1, 2025[158](index=158&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - The Group has applied all new and revised International Financial Reporting Standards (IFRS) accounting standards, but these applications have no significant impact on the condensed consolidated financial statements[159](index=159&type=chunk)[163](index=163&type=chunk) - The Group has not yet adopted new IFRS accounting standards that have been issued but are not yet effective, and their application is not expected to have a material impact on the financial statements[164](index=164&type=chunk)[166](index=166&type=chunk) [Segment Information](index=39&type=section&id=9.3%20Segment%20Information) The Group's business is divided into five operating and reportable segments by product type: polymer materials, organosilicon, refrigerants, dichloromethane and caustic soda, and other businesses; the refrigerant segment achieved significant revenue and performance growth in H1 2025, while polymer materials and organosilicon segments faced market challenges - The Group's business is classified into five operating and reportable segments by product type: polymer materials, organosilicon, refrigerants, dichloromethane and caustic soda, and other businesses[165](index=165&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) 2025 H1 Segment Revenue and Performance | Segment | External Sales (RMB thousand) | Segment Performance (RMB thousand) | | :--- | :--- | :--- | | Polymer Materials | 1,939,795 | 259,195 | | Organosilicon | 2,319,120 | 8,750 | | Refrigerants | 2,292,067 | 1,029,831 | | Dichloromethane and Caustic Soda | 636,444 | 213,693 | | Other Businesses | 275,968 | (87,219) | | **Total** | **7,463,394** | **1,424,250** | 2024 H1 Segment Revenue and Performance | Segment | External Sales (RMB thousand) | Segment Performance (RMB thousand) | | :--- | :--- | :--- | | Polymer Materials | 2,032,921 | 303,391 | | Organosilicon | 2,759,094 | 53,681 | | Refrigerants | 1,551,984 | 332,455 | | Dichloromethane and Caustic Soda | 515,594 | 132,756 | | Other Businesses | 401,419 | (171,232) | | **Total** | **7,261,012** | **651,051** | - Segment performance refers to the performance of each segment without allocation of unallocated expenses and central administrative costs, directors' salaries, share of results of associates, gain/(loss) on disposal of subsidiaries, gain on disposal of partial interest in an associate, and finance costs[174](index=174&type=chunk)[176](index=176&type=chunk) [Other Income and Other Gains or Losses](index=42&type=section&id=9.4%20Other%20Income%20and%20Other%20Gains%20or%20Losses) For the six months ended June 30, 2025, the Group's other income and other net gains or losses totaled **RMB146.952 million**, a **50.69% YoY increase**, primarily driven by government grants, with **RMB48.483 million** recognized as current expense-related grants and **RMB45.491 million** as asset acquisition-related grants Details of Other Income and Other Gains or Losses | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 93,974 | 36,007 | | Bank Deposit Interest Income | 13,629 | 14,598 | | Interest Income from Associates | 731 | 954 | | Miscellaneous Income | 30,749 | 26,357 | | Net Exchange Differences | 7,869 | 19,603 | | **Total** | **146,952** | **97,519** | - For the six months ended June 30, 2025, the Group recognized government grants of **RMB48.483 million** as current expenses and **RMB45.491 million** as government grants for the acquisition of property, plant and equipment, with the latter classified as deferred income[180](index=180&type=chunk)[181](index=181&type=chunk) [Gain on Disposal of Partial Interest in an Associate](index=43&type=section&id=9.5%20Gain%20on%20Disposal%20of%20Partial%20Interest%20in%20an%20Associate) In March 2024, Dongyue Fluorosilicone Technology Group Co., Ltd. completed the sale of a **2.32% interest** in its associate, Shandong Dongyue Future Hydrogen Energy Materials Co., Ltd., to Xinhua Lian Holdings Co., Ltd., recognizing a gain of **RMB139.049 million** - On October 23, 2023, Dongyue Fluorosilicone Technology Group Co., Ltd. entered into a share transfer agreement with Xinhua Lian Holdings Co., Ltd. to dispose of a **2.32% interest** in its associate, Shandong Dongyue Future Hydrogen Energy Materials Co., Ltd., for a consideration of **RMB165.000 million**[182](index=182&type=chunk)[183](index=183&type=chunk) - Upon completion of the transaction in March 2024, a gain on disposal of partial interest in Dongyue Future Hydrogen Energy of **RMB139.049 million** was recognized[182](index=182&type=chunk)[184](index=184&type=chunk) [Income Tax Expense](index=43&type=section&id=9.6%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was **RMB365.595 million**, a **31.67% YoY increase**, primarily comprising PRC corporate income tax (25%, with some high-tech enterprises enjoying a **15% preferential rate**) and deferred tax, including a withholding tax of **RMB35.000 million** on undistributed profits of PRC subsidiaries Details of Income Tax Expense | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Current Tax - PRC Corporate Income Tax | 313,057 | 131,962 | | Current Tax - Under-provision in Prior Years | 27,938 | 5,808 | | Current Tax - Land Appreciation Tax | 20 | 105,413 | | Deferred Tax - Withholding Tax | 35,000 | 14,000 | | Deferred Tax - Others | (10,420) | 20,487 | | **Total** | **365,595** | **277,670** | - The tax rate for PRC subsidiaries is **25%**, with some high-tech enterprises eligible for a **15% tax reduction**[188](index=188&type=chunk)[190](index=190&type=chunk) - Hong Kong subsidiaries are subject to income tax at a rate of **16.5%**, but no provision was made for the period as there was no estimated assessable profit[191](index=191&type=chunk) - For the six months ended June 30, 2025, deferred tax liability for undistributed profits of PRC subsidiaries was **RMB35.000 million**[193](index=193&type=chunk) [Profit for the Period](index=45&type=section&id=9.7%20Profit%20for%20the%20Period) For the six months ended June 30, 2025, the Group's profit for the period was net of various expenses and gains, including depreciation of property, plant and equipment of **RMB661.228 million**, government grants of **RMB93.974 million**, and impairment of property, plant and equipment of **RMB85.571 million** Profit for the Period Adjustment Items | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 1,890 | 2,766 | | Depreciation of Property, Plant and Equipment | 661,228 | 577,621 | | Depreciation of Right-of-Use Assets | 17,582 | 16,059 | | Government Grants | (93,974) | (36,007) | | Loss on Disposal of Property, Plant and Equipment | 61,284 | 20,544 | | Impairment of Property, Plant and Equipment | 85,571 | – | | Impairment of Intangible Assets | 2,273 | – | | Impairment of Trade and Other Receivables | 12,108 | 52,504 | | Write-down of Inventories | 12,144 | 17,388 | | Equity-settled Share-based Payments | 17,210 | – | | Impairment of Properties Held for Sale | – | 90,976 | [Dividends](index=45&type=section&id=9.8%20Dividends) For the six months ended June 30, 2025, the company declared and paid a final dividend of **HKD0.10 per share** for the year ended December 31, 2024, totaling approximately **RMB160.456 million** - For the six months ended June 30, 2025, a final dividend of **HKD0.10 per share** for the year ended December 31, 2024, was declared and paid, totaling **HKD173.271 million** (approximately **RMB160.456 million**)[197](index=197&type=chunk)[198](index=198&type=chunk) [Earnings Per Share](index=46&type=section&id=9.9%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share attributable to owners of the company were **RMB0.47**, a significant increase from **RMB0.17** in the prior period, with a weighted average of **1,657,350,167 ordinary shares** Basic Earnings Per Share Calculation | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB) | 779,202,000 | 307,649,000 | | Weighted Average Number of Ordinary Shares | 1,657,350,167 | 1,839,206,000 | | **Basic Earnings Per Share (RMB)** | **0.47** | **0.17** | Diluted Earnings Per Share Calculation | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB) | 779,202,000 | 307,649,000 | | Adjustment for Profit Attributable to Share Option Scheme Issued by Subsidiary (RMB) | (67,000) | – | | Profit for the Purpose of Calculating Diluted Earnings Per Share (RMB) | 779,135,000 | 307,649,000 | | Weighted Average Number of Ordinary Shares | 1,657,350,167 | 1,839,206,000 | | **Diluted Earnings Per Share (RMB)** | **0.47** | **0.17** | - For the six months ended June 30, 2025, the company did not repurchase or cancel any shares; for the six months ended June 30, 2024, the company repurchased and canceled **520,978,000 shares**[204](index=204&type=chunk)[205](index=205&type=chunk) - The weighted average number of ordinary shares excludes shares held in trust under the company's employee share option scheme; during the period, the company sold **16,862,000 shares** held in trust[204](index=204&type=chunk)[206](index=206&type=chunk) [Movements in Property, Plant and Equipment](index=48&type=section&id=9.10%20Movements%20in%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's additions to property, plant and equipment amounted to approximately **RMB565.216 million**, primarily for business expansion in the refrigerant, polymer materials, and organosilicon segments; during the period, some property, plant and equipment were disposed of, resulting in a loss of **RMB61.284 million** - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately **RMB565.216 million**, primarily for business expansion in the refrigerant, polymer materials, and organosilicon segments[207](index=207&type=chunk)[208](index=208&type=chunk) - During the period, certain property, plant and equipment with a gross book value of **RMB111.787 million** were disposed of for proceeds of **RMB50.503 million**, resulting in a loss on disposal of **RMB61.284 million**[207](index=207&type=chunk)[209](index=209&type=chunk) [Trade and Other Receivables](index=48&type=section&id=9.11%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables were **RMB2,821.697 million**, a slight increase from year-end 2024; trade receivables (including bills receivable) amounted to **RMB2,279.742 million**, with customer credit terms typically 30 to 90 days; additionally, the Group recovered some pledged deposits and transferred part of Hualian Ceramic's equity to offset deposits Details of Trade and Other Receivables | Item | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (net of impairment allowance) | 2,279,742 | 1,949,945 | | Prepayments for Raw Materials | 75,756 | 28,920 | | Recoverable Taxes | 108,796 | 165,093 | | Receivables for Undrawn Deposit Balances | 123,138 | 309,888 | | Loans | – | 45,100 | | Deposits and Other Receivables | 234,265 | 278,417 | | **Total** | **2,821,697** | **2,777,363** | - Trade receivables include bills receivable of **RMB1,669.632 million**; customer credit terms typically range from **30 to 90 days**, and bills receivable generally mature within **90 or 180 days**[212](index=212&type=chunk)[213](index=213&type=chunk) - In April 2025, the court ruled to transfer a **5.96% equity interest** in Hunan Hualian Ceramic Co., Ltd. to Dongyue Polymer Material to offset part of the deposit of **RMB186.750 million**; as of June 30, 2025, the market value of the remaining pledged equity was approximately **RMB202.500 million**[214](index=214&type=chunk)[215](index=215&type=chunk) [Trade and Other Payables](index=50&type=section&id=9.12%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were **RMB2,533.151 million**, a decrease from year-end 2024; trade payables (including bills payable) amounted to **RMB1,597.971 million**, with bills payable secured by pledged bank deposits Details of Trade and Other Payables | Item | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 1,597,971 | 1,988,169 | | Contract Liabilities — Sales of Chemical Products | 176,824 | 137,585 | | Contract Liabilities — Sales of Properties | 14,223 | 17,334 | | Accrued Staff Costs | 180,547 | 216,294 | | Payables for Property, Plant and Equipment | 382,209 | 292,045 | | Other Taxes Payable | 65,149 | 48,720 | | Construction Costs Payable for Properties Held for Sale | – | 4,729 | | Other Payables and Accruals | 116,228 | 117,792 | | **Total** | **2,533,151** | **2,822,668** | - Trade payables include bills payable of **RMB278.629 million**, secured by the Group's pledged bank deposits[219](index=219&type=chunk) - Contract liabilities for property sales are secured by pledged bank deposits of approximately **RMB471 thousand**[219](index=219&type=chunk) Ageing Analysis of Trade Payables | Ageing | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 751,707 | 671,760 | | 31 to 90 days | 372,275 | 579,692 | | 91 to 180 days | 125,421 | 107,374 | | 181 to 365 days | 191,766 | 475,940 | | 1 to 2 years | 99,842 | 119,004 | | Over 2 years | 56,960 | 34,399 | | **Total** | **1,597,971** | **1,988,169** | [Share Capital](index=51&type=section&id=9.13%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was **4,000,000 thousand shares** with a par value of **HKD0.1 per share**, and its issued and fully paid share capital was **1,732,711 thousand shares**, amounting to **RMB163.506 million**, consistent with year-end 2024 Share Capital Structure | Item | Number of Shares (thousand shares) | Share Capital (RMB thousand) | | :--- | :--- | :--- | | Authorized Share Capital (par value HKD0.1 per share) | 4,000,000 | 382,200 | | Issued and Fully Paid Share Capital (Jun 30, 2025) | 1,732,711 | 163,506 | | Issued and Fully Paid Share Capital (Jan 1, 2024) | 2,253,689 | 212,196 | | Repurchased and Cancelled Shares | (520,978) | (48,690) | [Employee Share Option Scheme](index=52&type=section&id=9.14%20Employee%20Share%20Option%20Scheme) The company's employee share option scheme was terminated early on September 27, 2024, with all existing shares to be gradually sold; concurrently, subsidiary Dongyue Organosilicon implemented a share award scheme on December 10, 2024, granting **19.12 million restricted shares** to 360 eligible participants at **RMB5.9 per share**, subject to vesting periods and performance requirements - The company's employee share option scheme was terminated early on September 27, 2024, to restructure the remuneration policy, with no further share options to be granted after termination[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) - Dongyue Organosilicon implemented a share award scheme on December 10, 2024, to provide incentives to **360 full-time employees**, executives, senior officers, and directors[232](index=232&type=chunk)[235](index=235&type=chunk) - The maximum number of restricted shares awarded is **19.12 million shares**, representing approximately **1.6%** of Dongyue Organosilicon's capital, placed at **RMB5.9 per share**[232](index=232&type=chunk)[236](index=236&type=chunk) Dongyue Organosilicon Share Award Scheme Details | Grant Date | Number of Awarded Shares | Vesting Period | | :--- | :--- | :--- | | Dec 10, 2024 | 7,268,000 | 40% of shares vest from the first working day after 12 months to the last working day after 24 months from the grant date of restricted shares | | Dec 10, 2024 | 5,451,000 | 30% of shares vest from the first working day after 24 months to the last working day after 36 months from the grant date of restricted shares | | Dec 10, 2024 | 5,451,000 | 30% of shares vest from the first working day after 36 months to the last working day after 48 months from the grant date of restricted shares | - The valuation of awarded shares uses a binomial option pricing model, with key inputs including a grant date share price of **RMB8.60**, an exercise price of **RMB5.9**, expected volatility, **0% expected dividend yield**, and a risk-free interest rate[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - Dongyue Organosilicon recognized share-based payment expenses of approximately **RMB17.210 million** for the period ended June 30, 2025[247](index=247&type=chunk)[248](index=248&type=chunk) [Commitments](index=57&type=section&id=9.15%20Commitments) As of June 30, 2025, the Group's total capital commitments amounted to **RMB1,173.322 million**, primarily for the acquisition of property, plant and equipment and equity instruments at fair value through other comprehensive income Capital Commitments and Property Development Expenses | Item | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Capital Expenditure for Acquisition of Property, Plant and Equipment | 586,329 | 389,621 | | Capital Expenditure for Equity Instruments at Fair Value Through Other Comprehensive Income | 586,993 | 586,993 | | **Total** | **1,173,322** | **976,614** | [Disposal of Subsidiaries](index=57&type=section&id=9.16%20Disposal%20of%20Subsidiaries) The Group undertook several subsidiary disposals in 2024 and H1 2025, including Zhangjiajie Xinyie Real Estate Development Co., Ltd., Shandong Boda Real Estate Development Co., Ltd., and Huantai Kehui Environmental New Building Materials Co., Ltd., which resulted in varying gains or losses and impacted the Group's cash flows - On May 31, 2024, the Group disposed of a **52% interest** in Zhangjiajie Xinyie Real Estate Development Co., Ltd., resulting in a loss on disposal of **RMB100.216 million** and a net cash outflow of **RMB11.681 million**[251](index=251&type=chunk)[252](index=252&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - On June 16, 2024, the Group disposed of a **100% interest** in Shandong Boda Real Estate Development Co., Ltd., resulting in no gain or loss on disposal and a net cash outflow of **RMB29.195 million**[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - In January 2025, the Group disposed of its entire interest in Huantai Kehui Environmental New Building Materials Co., Ltd., resulting in a gain on disposal of **RMB7.435 million** and a net cash inflow of **RMB25.793 million**[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) [Fair Value Measurement](index=61&type=section&id=9.17%20Fair%20Value%20Measurement) The Group measures certain financial instruments at fair value, including listed and unlisted equity instruments; listed instruments use Level 1 active market quotes, while unlisted instruments use Level 3 valuation models considering comparable public company multiples and discounts for lack of marketability; the Group's CFO is responsible for fair value measurements and engages external valuation experts for Level 3 valuations - The Group measures certain financial instruments at fair value, including equity instruments at fair value through other comprehensive income[264](index=264&type=chunk)[265](index=265&type=chunk) Equity Instruments at Fair Value Through Other Comprehensive Income | Financial Asset | 2025 Jun 30 Fair Value (RMB thousand) | 2024 Dec 31 Fair Value (RMB thousand) | Fair Value Hierarchy Level | Valuation Techniques and Key Input Data | | :--- | :--- | :--- | :--- | :--- | | Listed Equity Instruments | 202,500 | – | Level 1 | Unadjusted quoted prices in active markets for identical investments | | Unlisted Equity Instruments | 208,176 | 129,629 | Level 3 | Market approach — based on transaction multiples from listed companies similar to the investee company | | **Total** | **410,676** | **129,629** | | | - Level 3 fair value measurements involve investments in unlisted entities, with fair values determined using valuation models that consider discount rates and discounts for lack of marketability (DLOM); the DLOM was **20.4%** (2024: **20.5%**)[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) - The Group's Chief Financial Officer is responsible for fair value measurements for financial reporting purposes and reports directly to the Board; the Group typically engages external valuation experts with recognized professional qualifications and recent experience to perform Level 3 fair value measurements[268](index=268&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) Movements in Equity Instruments at Fair Value Through Other Comprehensive Income | Item | Amount (RMB thousand) | | :--- | :--- | | As of Jan 1, 2024 | 103,174 | | Total Loss: In Other Comprehensive Expenses | (12,440) | | As of Jun 30, 2024 | 90,734 | | As of Jan 1, 2025 | 129,629 | | Additions | 186,750 | | Total Loss: In Other Comprehensive Income | 94,297 | | As of Jun 30, 2025 | 410,676 | [Related Party Transactions](index=64&type=section&id=9.18%20Related%20Party%20Transactions) During the period, the Group engaged in related party transactions with several associates, including purchases of raw materials, sales of chemical products, rent payments, and interest income; additionally, key management personnel compensation totaled **RMB10.829 million** Related Party Transactions with the Group's Associates | Associate Name | Transaction Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | :--- | | Shandong Dongyue Future Hydrogen Energy Materials Co., Ltd. | Purchase of Raw Materials | 53,364 | 54,538 | | | Purchase of Right-of-Use Assets | – | 1,873 | | | Rent Paid as Lessee | 1,051 | 1,051 | | | Sale of Chemical Products | 16,916 | 62,119 | | | Sale of Equipment | – | 876 | | Sichuan Jingyuan Silicon Industry Co., Ltd. | Purchase of Raw Materials | – | 56,427 | | | Interest Income | – | 286 | | Sichuan Leshan Xinhe Power Comprehensive Development Co., Ltd. | Purchase of Raw Materials | – | 80,472 | | | Interest Income | – | 382 | | Sichuan Leshan Chuanhui Furnace Material Co., Ltd. | Purchase of Raw Materials | – | 5,086 | | | Interest Income | – | 286 | | Zhangjiajie Xinyie | Interest Income | 731 | – | Key Management Personnel Compensation | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Short-term Employee Benefits | 10,829 | 28,589 |

Investment Rating - The report maintains a rating of "Overweight" for the basic chemical industry [6] Core Viewpoints - The refrigerant industry is experiencing a sustained upward trend in demand, with leading companies showing significant profit growth in H1 2025. The production quotas for second-generation fluorinated refrigerants will be further reduced, and third-generation refrigerants will be subject to production quotas, tightening supply. This, combined with a steady recovery in downstream demand, is optimizing the supply-demand dynamics in the refrigerant market [1][2] - The price of refrigerants has been rising, leading to substantial increases in profitability for major companies. For instance, in H1 2025, the net profits of major domestic refrigerant companies such as Juhua Co., Sanmei Co., Yonghe Co., and Dongyue Group increased by 146.97%, 159.22%, 140.80%, and 153.28% respectively [1] - The price differences for third-generation refrigerants have significantly increased, with R32 prices rising by 15.24% since early July 2025 and 40.70% since the beginning of the year. The price difference for R32 reached 42,761 yuan/ton, reflecting a 19.68% increase since early July and a 66.79% increase since the beginning of the year [2] - Leading refrigerant companies are accelerating their entry into the liquid cooling sector, driven by tightening environmental regulations and increasing demand for AI computing power. Companies like Juhua Co. and Sanmei Co. are investing in high-value-added liquid cooling technologies, which are expected to benefit from the growing AI computing needs and domestic substitution opportunities [3][4] - The liquid cooling technology market is projected to grow significantly, with global market sizes expected to reach 4.5 billion USD in 2025 and 19.4 billion USD by 2032, representing a CAGR of 23% from 2025 to 2032 [4] Summary by Sections Industry Overview - The refrigerant industry is in a high prosperity cycle, with major companies reporting strong performance due to supply constraints and rising prices [1][5] - The report highlights the ongoing recovery in downstream demand, which is expected to further support price increases in the refrigerant market [2] Price Trends - The report tracks significant price increases for key refrigerants, with R32, R125, and R134a showing notable price growth in 2025 [2][18] - The price of R32 reached 60,500 yuan/ton, marking a 40.70% increase since the beginning of 2025 [2] Company Developments - Major companies are expanding their operations into the liquid cooling market, with Juhua Co. planning to produce 5,000 tons/year of cooling liquid and Sanmei Co. launching a 19,000 tons/year electronic-grade fluorinated liquid project [3][4] - The transition to liquid cooling technologies is seen as a strategic move to capture growth opportunities in the AI sector and to leverage existing technological advantages [3][4]

Core Viewpoint - The fluororubber (FPM) market in China is experiencing steady growth, with a market size reaching 720 million yuan in 2024, reflecting a year-on-year increase of 5.88% due to its excellent properties and wide applications in various industries [6][10]. Industry Overview - Fluororubber (FPM) is a synthetic polymer elastomer characterized by the presence of fluorine atoms, which provide unique properties making it suitable for demanding sealing applications [2][3]. - The main types of fluororubber include general-purpose and special-purpose variants, with products such as conventional binary fluororubber, ternary fluororubber, and low-temperature resistant fluororubber [2]. Industry Chain - The upstream of the fluororubber industry chain includes raw materials like fluorite, hydrofluoric acid, and vinylidene fluoride (VDF), while the downstream applications span high-end industrial sectors such as automotive, aerospace, and petrochemicals [4][5]. Market Size - The fluororubber market is expanding due to its superior electrical insulation properties and excellent resistance to organic solvents and fuels, making it highly sought after in automotive, aerospace, and chemical industries [6][10]. Key Enterprises - Major companies in the Chinese fluororubber industry include Haohua Technology, Juhua Co., and Dongyue Group, each with distinct advantages in technology, product quality, and market share [7][8]. - Haohua Technology reported a revenue of 3.157 billion yuan in Q1 2025, marking a 10.96% increase year-on-year, while Juhua Co. achieved a revenue of 5.8 billion yuan, reflecting a 6.05% growth [8][9]. Industry Development Trends 1. **Technological Innovation and Product Upgrading**: The industry is focusing on high-performance and differentiated products to meet the demands of high-end sectors like aerospace and automotive [10][11]. 2. **Market Application Expansion**: The demand for fluororubber is surging in traditional sectors and emerging fields, particularly in new energy vehicles, where it is essential for battery separators and seals [10][11]. 3. **Accelerated Industry Competition**: Increased competition is leading to consolidation and mergers within the industry, allowing leading companies to enhance their market positions and operational efficiencies [11].

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | | | 致：香港交易及結算所有限公司 公司名稱: 東岳集團有限公司 呈交日期: 2025年9月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00189 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 4,000,000,000 | HKD | | 0.1 | HKD | | 400,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 4,000,000,000 | HKD | | 0.1 | HKD | | 400,000,000 | 本月底法定/註冊股本總額： HKD 400,000,000 F ...

Core Insights - The report emphasizes that the chemical industry is entering a new phase of capital expenditure, with a focus on the rebalancing of supply and demand following the release of production capacity during the 14th Five-Year Plan period [2][6] - The report indicates that the bottom of the cycle is becoming clearer, with potential price increases for chemical products driven by demand recovery and supply stability in the second half of the year [2][6] Industry Overview - The current cycle has reached its tail end, with a total of 12 quarters of decline since Q3 2022, following a 7-quarter expansion from Q4 2020 to Q2 2022 [10][12] - The report outlines that the chemical industry has experienced three significant price fluctuation cycles since 2010, with the latest cycle characterized by a demand-driven recovery followed by a supply-side pressure [8][10] Investment Recommendations - The report suggests focusing on sectors with relatively low valuations, such as sucralose (recommended: Jinhe Industrial), pesticides (recommended: Yangnong Chemical, Runfeng Shares), and MDI (recommended: Wanhua Chemical) [3][4] - It highlights the importance of domestic demand in countering tariff impacts, recommending companies in refrigerants and fertilizers [3][4] - The report identifies investment opportunities in sectors with upcoming capacity releases, such as organic silicon (recommended: Xin'an Chemical) and spandex [3][4] Price and Profitability Trends - The report notes that many sub-industry product prices remain at historical lows, with specific prices for spandex, PA6, and other fibers at 0%, 4%, and 5% of historical levels respectively [28] - It mentions that the chemical industry has seen a slight recovery in profitability in Q1 2025, although the overall performance remains under pressure [27][25] Supply and Demand Dynamics - The report indicates that the global chemical capital expenditure is on a downward trend, with domestic companies experiencing a slowdown in investment while still facing significant pressure to convert projects into fixed assets [22][32] - It also states that both domestic and international markets are entering a replenishment phase in 2025, which may influence inventory levels and pricing strategies [35][36]

Group 1 - Dongyue Group (00189) shares rose over 5%, currently up 5.58% at HKD 13.44, with a trading volume of HKD 178 million [1] - The company reported a mid-year performance for 2025, with revenue of HKD 7.463 billion, an increase of 2.79% year-on-year [1] - The profit attributable to shareholders reached HKD 779 million, reflecting a significant year-on-year growth of 153.28% [1] - Earnings per share stood at HKD 0.47 [1] Group 2 - The overall economic environment has been unstable due to changes in international tariff policies, impacting the fluorosilicone chemical industry [1] - There has been weak market demand for certain products, coupled with intense supply competition and low product prices [1] - However, due to quota factors, the refrigerant business segment saw significant price increases for multiple products, which became a crucial support for the company's performance [1] - The company capitalized on its extensive experience in the refrigerant industry and secured substantial quotas, benefiting from this opportunity and contributing to the substantial growth in mid-year performance [1]