Group 1 - The core viewpoint of the article highlights Dongyue Group's financial performance for the first half of 2025, showing a revenue of 7.463 billion yuan, representing a year-on-year increase of 2.79% [1] - The company's attributable profit for the period reached 779 million yuan, marking a significant year-on-year growth of 153.28% [1] - Earnings per share for the company stood at 0.47 yuan [1] Group 2 - The overall economic environment has been unstable due to changes in international tariff policies, impacting the fluorosilicone chemical industry, with weak market demand for some products and intense supply competition [1] - Despite the challenges, the refrigerant business segment experienced substantial price increases for several products due to quota factors, which served as a crucial support for the company's performance [1] - The company capitalized on its extensive experience in the refrigerant industry and secured a significant number of quotas, allowing it to benefit from the market opportunities and contribute to the substantial growth in its half-year results [1]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company's financial performance for the first half of 2025 shows significant growth in revenue, gross profit, and net profit, alongside an improved net asset value per share Key Financial Data for H1 2025 (RMB Million): | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Revenue | 7,463 | 7,261 | | Gross Profit | 2,172 | 1,440 | | Gross Margin | 29.10% | 19.83% | | Profit Before Tax | 1,422 | 673 | | Profit for the Period | 1,057 | 395 | | Profit for the Period Attributable to Owners of the Company | 779 | 308 | | Earnings Per Share—Basic and Diluted (RMB) | 0.47 | 0.17 | Key Financial Position for H1 2025 (RMB Million): | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Equity | 18,617 | 17,472 | | Net Asset Value Per Share (RMB) | 11.23 | 10.00 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The condensed consolidated statement details the company's revenue, costs, and profits for the six months ended June 30, 2025, showing significant year-on-year growth in profitability Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, RMB Thousand): | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 7,463,394 | 7,261,012 | | Cost of Sales | (5,290,973) | (5,821,118) | | Gross Profit | 2,172,421 | 1,439,894 | | Other Income and Other Net Gains or Losses | 146,952 | 97,519 | | Distribution and Selling Expenses | (212,644) | (230,157) | | Administrative and Other Expenses | (326,574) | (344,365) | | Research and Development Costs | (369,226) | (321,439) | | Gain on Disposal of Partial Interest in an Associate | – | 139,049 | | Gain/(Loss) on Disposal of Subsidiaries | 7,435 | (100,216) | | Finance Costs | (1,562) | (2,159) | | Share of Results of Associates | 5,681 | (5,248) | | Profit Before Tax | 1,422,483 | 672,878 | | Income Tax Expense | (365,595) | (277,670) | | Profit for the Period | 1,056,888 | 395,208 | | Total Comprehensive Income for the Period | 1,151,185 | 382,768 | | Profit for the Period Attributable to Owners of the Company | 779,202 | 307,649 | | Profit for the Period Attributable to Non-controlling Interests | 277,686 | 87,559 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 869,148 | 295,209 | | Total Comprehensive Income for the Period Attributable to Non-controlling Interests | 282,037 | 87,559 | | Earnings Per Share—Basic and Diluted (RMB) | 0.47 | 0.17 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The condensed consolidated statement presents the company's financial position as of June 30, 2025, detailing assets, liabilities, and equity, reflecting a stable and growing financial base Condensed Consolidated Statement of Financial Position (As at June 30, 2025, RMB Thousand): | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | **Non-current Assets** | | | | Property, Plant and Equipment | 11,980,153 | 12,279,823 | | Right-of-use Assets | 973,014 | 889,852 | | Deposits Paid for Acquisition of Property, Plant and Equipment | 236,188 | 217,378 | | Interests in Associates | 150,186 | 97,809 | | Intangible Assets | 15,741 | 18,769 | | Equity Instruments at Fair Value Through Other Comprehensive Income | 410,676 | 129,629 | | Deferred Tax Assets | 81,656 | 85,667 | | Goodwill | 440,107 | 440,767 | | **Total Non-current Assets** | **14,287,721** | **14,159,694** | | **Current Assets** | | | | Inventories | 1,428,350 | 1,429,752 | | Properties Held for Sale | 8,061 | 10,820 | | Trade and Other Receivables | 2,821,697 | 2,777,363 | | Pledged Bank Deposits | 43,320 | 88,745 | | Bank Balances and Cash | 3,540,515 | 2,470,496 | | **Total Current Assets** | **7,841,943** | **6,777,176** | | **Total Assets** | **22,129,664** | **20,936,870** | | **Current Liabilities** | | | | Trade and Other Payables | 2,533,151 | 2,822,668 | | Tax Liabilities | 191,916 | 71,934 | | Lease Liabilities | 7,266 | 5,138 | | Deferred Income | 27,775 | 39,938 | | Dividends Payable | 160,456 | – | | **Total Current Liabilities** | **2,920,564** | **2,939,678** | | **Net Current Assets** | **4,921,379** | **3,837,498** | | **Total Assets Less Current Liabilities** | **19,209,100** | **17,997,192** | | **Equity** | | | | Equity Attributable to Owners of the Company | | | | Share Capital | 163,506 | 163,506 | | Reserves | 12,812,392 | 11,943,554 | | **Equity Attributable to Owners of the Company** | **12,975,898** | **12,107,060** | | Non-controlling Interests | 5,641,475 | 5,364,777 | | **Total Equity** | **18,617,373** | **17,471,837** | | **Non-current Liabilities** | | | | Bank Borrowings | 35,822 | – | | Deferred Tax Liabilities | 219,378 | 198,809 | | Lease Liabilities | 27,468 | 21,304 | | Deferred Income | 309,059 | 305,242 | | **Total Non-current Liabilities** | **591,727** | **525,355** | | **Total Equity and Non-current Liabilities** | **19,209,100** | **17,997,192** | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details and explanations supporting the condensed consolidated financial statements, covering accounting policies, segment information, and other financial disclosures [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and applicable HKEX Listing Rules disclosure requirements - The statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of the Hong Kong Stock Exchange Listing Rules[8](index=8&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value through other comprehensive income, and current accounting policies are consistent with the 2024 annual financial statements - The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value through other comprehensive income[9](index=9&type=chunk) - Current accounting policies are consistent with the 2024 annual financial statements, with no early adoption of un-effective standards[9](index=9&type=chunk)[10](index=10&type=chunk) - The application of new and revised International Financial Reporting Standards has no significant impact on the condensed consolidated financial statements[11](index=11&type=chunk) [Application of Amendments to International Financial Reporting Standards](index=5&type=section&id=Application%20of%20Amendments%20to%20International%20Financial%20Reporting%20Standards) The Group has applied all new and revised IFRS accounting standards effective from January 1, 2025, or thereafter, with no significant impact on the condensed consolidated financial statements - The Group has applied all new and revised International Financial Reporting Standards effective from January 1, 2025, or thereafter, but their application has no significant impact on the condensed consolidated financial statements[11](index=11&type=chunk) [Standards Issued But Not Yet Effective](index=5&type=section&id=Standards%20Issued%20But%20Not%20Yet%20Effective) The Group has not yet adopted new IFRS accounting standards issued but not yet effective and is currently assessing their potential impact, which cannot be determined as significant at this time - The Group has not yet adopted new International Financial Reporting Standards issued but not yet effective and is assessing their potential impact, which cannot be determined as significant at this time[12](index=12&type=chunk) [3. Segment Information](index=6&type=section&id=3.%20Segment%20Information) The Group's business is segmented by product type into fluoropolymer materials, organosilicon, refrigerants, dichloromethane and caustic soda, and other businesses, with segment results forming the basis for resource allocation and performance evaluation - The Group's business is segmented by product type into fluoropolymer materials, organosilicon, refrigerants, dichloromethane and caustic soda, and other businesses[13](index=13&type=chunk)[15](index=15&type=chunk) Segment Revenue and Results (For the six months ended June 30, RMB Thousand): | Segment | 2025 Revenue | 2025 Results | 2024 Revenue | 2024 Results | | :--- | :--- | :--- | :--- | :--- | | Fluoropolymer Materials | 1,939,795 | 259,195 | 2,032,921 | 303,391 | | Organosilicon | 2,319,120 | 8,750 | 2,759,094 | 53,681 | | Refrigerants | 3,499,673 | 1,029,831 | 2,812,654 | 332,455 | | Dichloromethane and Caustic Soda | 649,636 | 213,693 | 527,740 | 132,756 | | Other Businesses | 981,772 | (87,219) | 1,025,643 | (171,232) | | Eliminations | (1,926,602) | – | (1,897,040) | – | | **Total** | **7,463,394** | **1,424,250** | **7,261,012** | **651,051** | - Segment results refer to the performance of each segment before unallocated expenses, central administrative costs, directors' emoluments, share of results of associates, gain/(loss) on disposal of subsidiaries, gain on disposal of partial interest in an associate, and finance costs[16](index=16&type=chunk) [Segment Revenue and Results](index=6&type=section&id=Segment%20Revenue%20and%20Results) The refrigerants segment experienced significant growth in external sales and performance in the first half of 2025, while fluoropolymer materials and organosilicon segments saw a decline Segment External Sales (For the six months ended June 30, RMB Thousand): | Segment | 2025 External Sales | 2024 External Sales | | :--- | :--- | :--- | | Fluoropolymer Materials | 1,939,795 | 2,032,921 | | Organosilicon | 2,319,120 | 2,759,094 | | Refrigerants | 2,292,067 | 1,551,984 | | Dichloromethane and Caustic Soda | 636,444 | 515,594 | | Other Businesses | 275,968 | 401,419 | | **Total** | **7,463,394** | **7,261,012** | - The refrigerants segment's external sales and performance significantly increased in the first half of 2025, while the fluoropolymer materials and organosilicon segments experienced a decrease[14](index=14&type=chunk)[16](index=16&type=chunk) [4. Other Income and Other Gains or Losses](index=8&type=section&id=4.%20Other%20Income%20and%20Other%20Gains%20or%20Losses) Total other income and other gains or losses for the period amounted to RMB 146,952,000, primarily driven by a substantial increase in government grants used for R&D and production equipment acquisition Other Income and Other Gains or Losses (For the six months ended June 30, RMB Thousand): | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Government Grants | 93,974 | 36,007 | | Interest Income from Bank Deposits | 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** | - Government grants significantly increased, with **RMB 48,483,000** recognized as current expenses and **RMB 45,491,000** recognized as deferred income for the acquisition of production equipment[18](index=18&type=chunk) [5. Gain on Disposal of Partial Interest in an Associate](index=9&type=section&id=5.%20Gain%20on%20Disposal%20of%20Partial%20Interest%20in%20an%20Associate) The Group completed the disposal of a 2.32% interest in its associate, Dongyue Future Hydrogen Energy, in March 2024, recognizing a gain of RMB 139,049,000 - Dongyue Fluorosilicon Technology agreed in October 2023 to dispose of a **2.32% interest** in its associate, Dongyue Future Hydrogen Energy, to Xinhua Lian Holdings for a consideration of **RMB 165,000,000**[19](index=19&type=chunk) - The transaction was completed in March 2024, recognizing a disposal gain of **RMB 139,049,000**[19](index=19&type=chunk) [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense for the period was RMB 365,595,000, primarily comprising PRC Enterprise Income Tax and Land Appreciation Tax, with certain high-tech enterprises enjoying a preferential tax rate Income Tax Expense (For the six months ended June 30, RMB Thousand): | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current Tax - PRC Enterprise Income Tax (Current Year) | 313,057 | 131,962 | | Current Tax - PRC Enterprise Income Tax (Under-provision in Prior Years) | 27,938 | 5,808 | | Current Tax - Land Appreciation Tax | 20 | 105,413 | | **Total Current Tax** | **341,015** | **243,183** | | Deferred Tax - Withholding Tax on Distributable Profits of PRC Subsidiaries | 35,000 | 14,000 | | Deferred Tax - Others | (10,420) | 20,487 | | **Total Deferred Tax** | **24,580** | **34,487** | | **Total Income Tax Expense** | **365,595** | **277,670** | - PRC subsidiaries are subject to a **25%** Enterprise Income Tax rate, with certain high-tech enterprises enjoying a preferential tax rate of **15%**[20](index=20&type=chunk) - Deferred tax liabilities of **RMB 35,000,000** (2024: **RMB 14,000,000**) have been recognized in profit or loss, primarily for withholding tax on dividends distributed by PRC entities[22](index=22&type=chunk) [7. Profit for the Period](index=10&type=section&id=7.%20Profit%20for%20the%20Period) Profit for the period reflects the specific impacts of operating activities, including depreciation of property, plant and equipment, right-of-use assets, government grants, and losses on disposal of property, plant and equipment Items Deducted From/(Credited To) Profit for the Period (For the six months ended June 30, RMB Thousand): | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Amortisation 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 | [8. Dividends](index=10&type=section&id=8.%20Dividends) For the six months ended June 30, 2025, a final dividend of HKD 0.10 per share for 2024 was declared and paid, totaling RMB 160,456,029 - For the six months ended June 30, 2025, a final dividend of **HKD 0.10** per share for 2024 was declared and paid, totaling **RMB 160,456,029**[25](index=25&type=chunk) - In the same period last year (H1 2024), a final dividend of **HKD 0.10** per share for 2023 was declared and paid, totaling **RMB 155,608,768**[25](index=25&type=chunk) [9. Earnings Per Share](index=11&type=section&id=9.%20Earnings%20Per%20Share) Basic and diluted earnings per share attributable to owners of the Company significantly increased to RMB 0.47, up from RMB 0.17 in the prior year, primarily due to a reduction in the weighted average number of ordinary shares Basic Earnings Per Share (For the six months ended June 30): | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB) | 779,202,000 | 307,649,000 | | Weighted Average Number of Ordinary Shares for Basic Earnings Per Share | 1,657,350,167 | 1,839,206,000 | | Basic Earnings Per Share (RMB Per Share) | 0.47 | 0.17 | Diluted Earnings Per Share (For the six months ended June 30): | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period for Diluted Earnings Per Share (RMB) | 779,135,000 | 307,649,000 | | Weighted Average Number of Ordinary Shares for Diluted Earnings Per Share | 1,657,350,167 | 1,839,206,000 | | Diluted Earnings Per Share (RMB Per Share) | 0.47 | 0.17 | - In the first half of 2024, the Company repurchased and cancelled **520,978,000** shares, leading to a decrease in the weighted average number of ordinary shares[29](index=29&type=chunk) [Basic Earnings Per Share](index=11&type=section&id=Basic%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the Company significantly increased to RMB 0.47, up from RMB 0.17 in the prior year - Basic earnings per share attributable to owners of the Company was **RMB 0.47**, a significant increase from **RMB 0.17** in the prior year[27](index=27&type=chunk) [Diluted Earnings Per Share](index=11&type=section&id=Diluted%20Earnings%20Per%20Share) Diluted earnings per share attributable to owners of the Company was RMB 0.47, consistent with basic earnings per share, as there were no share options to purchase ordinary shares during the period - Diluted earnings per share attributable to owners of the Company was **RMB 0.47**, consistent with basic earnings per share, as there were no share options to purchase ordinary shares during the period[28](index=28&type=chunk) [10. Trade and Other Receivables](index=12&type=section&id=10.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to RMB 2,821,697,000, with trade receivables of RMB 2,293,320,000, typically having credit terms of 30 to 90 days Trade and Other Receivables (As at June 30, 2025, RMB Thousand): | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Receivables | 2,293,320 | 1,962,821 | | Less: Provision for Doubtful Debts | (13,578) | (12,876) | | Prepayments for Raw Materials | 75,756 | 28,920 | | Recoverable Taxes | 108,796 | 165,093 | | Unwithdrawn Deposit Balances Receivable | 123,138 | 309,888 | | Loans | – | 45,100 | | Deposits and Other Receivables | 234,265 | 278,417 | | **Total** | **2,821,697** | **2,777,363** | Ageing Analysis of Trade Receivables (As at June 30, 2025, RMB Thousand): | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 90 days | 1,053,059 | 769,139 | | 91 to 180 days | 965,767 | 1,062,942 | | 181 to 365 days | 260,916 | 117,864 | | Over 1 year | 13,578 | 12,876 | | **Total** | **2,293,320** | **1,962,821** | - Dongyue Fluoropolymer Materials acquired a **5.96%** equity interest in Hualian Porcelain Industry through legal proceedings to offset part of the unrefunded deposit of **RMB 186,750,000**[32](index=32&type=chunk) [11. Trade and Other Payables](index=13&type=section&id=11.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 2,533,151,000, a decrease from the end of 2024, with the majority of trade payables due within 30 days Trade and Other Payables (As at June 30, 2025, RMB Thousand): | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 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** | Ageing Analysis of Trade Payables (As at June 30, 2025, RMB Thousand): | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 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** | - Trade payables include bills payable of **RMB 278,629,000** (December 31, 2024: **RMB 53,691,000**), secured by pledged bank deposits[33](index=33&type=chunk) [12. Disposal of Subsidiaries](index=14&type=section&id=12.%20Disposal%20of%20Subsidiaries) The Group completed three subsidiary disposals during the reporting period, including Zhangjiajie Xinyie, Shandong Boda Real Estate, and Huantai Kehui, resulting in a loss of RMB 100,216,000 from Zhangjiajie Xinyie and a gain of RMB 7,435,000 from Huantai Kehui - The Group disposed of a **52%** interest in Zhangjiajie Xinyie Real Estate Development Co., Ltd. on May 31, 2024, resulting in a loss of **RMB 100,216,000**[35](index=35&type=chunk)[36](index=36&type=chunk) - The Group disposed of a **100%** interest in Shandong Boda Real Estate Development Co., Ltd. on June 16, 2024, with no gain or loss recognized[37](index=37&type=chunk)[38](index=38&type=chunk) - The Group completed the disposal of its entire interest in Huantai Kehui Environmental New Building Materials Co., Ltd. in January 2025, resulting in a gain of **RMB 7,435,000**[39](index=39&type=chunk)[40](index=40&type=chunk) [Disposal of Zhangjiajie Xinyie Real Estate Development Co., Ltd.](index=14&type=section&id=Disposal%20of%20Zhangjiajie%20Xinyie%20Real%20Estate%20Development%20Co.,%20Ltd.) Federal Real Estate disposed of a 52% interest in Zhangjiajie Xinyie on May 31, 2024, for RMB 26,000,000, resulting in a loss of RMB 100,216,000 - Federal Real Estate disposed of a **52%** interest in Zhangjiajie Xinyie on May 31, 2024, for a total consideration of **RMB 26,000,000**, resulting in a loss of **RMB 100,216,000**[35](index=35&type=chunk)[36](index=36&type=chunk) [Disposal of Shandong Boda Real Estate Development Co., Ltd.](index=15&type=section&id=Disposal%20of%20Shandong%20Boda%20Real%20Estate%20Development%20Co.,%20Ltd.) Federal Real Estate disposed of a 100% interest in Shandong Boda Real Estate Development Co., Ltd. on June 16, 2024, for zero consideration, with no gain or loss recognized - Federal Real Estate disposed of a **100%** interest in Shandong Boda Real Estate Development Co., Ltd. on June 16, 2024, for a total consideration of zero, with no gain or loss recognized[37](index=37&type=chunk)[38](index=38&type=chunk) [Disposal of Huantai Kehui Environmental New Building Materials Co., Ltd.](index=16&type=section&id=Disposal%20of%20Huantai%20Kehui%20Environmental%20New%20Building%20Materials%20Co.,%20Ltd.) Dongyue Fluorosilicon agreed to dispose of its entire interest in Huantai Kehui in December 2024, completing the transaction in January 2025 for RMB 28,000,000, resulting in a gain of RMB 7,435,000 - Dongyue Fluorosilicon agreed in December 2024 to dispose of its entire interest in Huantai Kehui, completing the transaction in January 2025 for a total consideration of **RMB 28,000,000**, resulting in a gain of **RMB 7,435,000**[39](index=39&type=chunk)[40](index=40&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's operational performance, strategic initiatives, and future outlook, highlighting key achievements and challenges in the reporting period [Performance Review](index=17&type=section&id=Performance%20Review) In the first half of 2025, the Group achieved significant operating performance growth, driven by its advantages in the refrigerants industry and quota factors, while maintaining production stability and increasing R&D investment - In the first half of 2025, the Group capitalized on the significant price increase in the refrigerants business segment due to quota factors, achieving substantial growth in operating performance[41](index=41&type=chunk)[42](index=42&type=chunk) - Profit attributable to owners of the Company increased by **153.28%** year-on-year[42](index=42&type=chunk) - The Group strictly implemented safety and environmental protection plans, ensuring production stability with no major accidents affecting production and **100%** compliance with various emissions standards[43](index=43&type=chunk) [I. Significant Growth in Operating Performance](index=17&type=section&id=I.%20Significant%20Growth%20in%20Operating%20Performance) The Group's refrigerants business segment experienced significant price increases due to quota factors, becoming a key driver for the substantial growth in operating performance and profit attributable to owners of the Company - Due to quota factors, prices of several products in the Group's refrigerants business segment significantly increased, becoming a key support for performance[42](index=42&type=chunk) - Profit attributable to owners of the Company increased by **153.28%** year-on-year[42](index=42&type=chunk) [II. Ensuring Production Stability](index=17&type=section&id=II.%20Ensuring%20Production%20Stability) The Group strictly implemented safety and environmental protection plans, ensuring production stability with no major accidents and 100% compliance with emissions standards, while improving production efficiency and reducing resource consumption - The Group strictly implemented safety and environmental protection plans, ensuring production stability with no major accidents affecting production, and **100%** compliance with various emissions standards[43](index=43&type=chunk) - Indicators such as raw material consumption, comprehensive energy consumption, hazardous waste per ton of product, and by-product per ton of product all decreased to varying degrees, improving production plant operating efficiency[43](index=43&type=chunk) [III. Continuous Innovation through Scientific Research and Development](index=18&type=section&id=III.%20Continuous%20Innovation%20through%20Scientific%20Research%20and%20Development) The Group's R&D costs increased by 14.87% to RMB 369,226,000, representing 4.95% of total revenue, with a strong R&D team and significant achievements in patent acquisition and standard setting - The Group's R&D costs were approximately **RMB 369,226,000**, a year-on-year increase of **14.87%**, accounting for **4.95%** of total revenue[44](index=44&type=chunk) - The R&D team comprised **679** people, with doctors and masters accounting for **48.90%**; **25** patents were obtained, bringing the total number of patents to **595** at period-end[44](index=44&type=chunk) - **Two** national standards and **one** group standard were released, promoting industry development[44](index=44&type=chunk) [IV. Significant Results in Cost Reduction and Efficiency Improvement](index=18&type=section&id=IV.%20Significant%20Results%20in%20Cost%20Reduction%20and%20Efficiency%20Improvement) The Group achieved significant cost reduction and efficiency improvement, with distribution and selling expenses decreasing by 7.61% and administrative expenses by 5.17% year-on-year, enhancing market competitiveness and driving performance growth - The Group's distribution and selling expenses decreased by **7.61%** year-on-year, and administrative expenses decreased by **5.17%** year-on-year[45](index=45&type=chunk) - Excellent cost and expense control enhanced market competitiveness and drove performance growth[45](index=45&type=chunk) [Outlook](index=19&type=section&id=Outlook) In the second half of the year, the Group will adopt a cautious operating strategy, focusing on market share expansion, internal management for cost reduction, re-evaluating R&D directions, and enhancing production efficiency to maintain competitive advantages - The Group will adopt a market-oriented approach, covering target customers in segmented markets, and enhancing market responsiveness[46](index=46&type=chunk) - The Group will continue to focus on cost reduction and efficiency improvement, strengthening strategic cooperation with excellent suppliers, and reducing unnecessary outsourcing, redundant processes, and material waste[47](index=47&type=chunk) - The R&D department will become a profit growth and re-creation center, allocating R&D resources to market-oriented directions and increasing investment in technological transformation to revitalize older products[48](index=48&type=chunk) - By improving systematic, standardized, and refined management systems, the Group will prevent safety and environmental risks and comprehensively enhance production efficiency through new product development, new technology application, and energy conservation[49](index=49&type=chunk) [1. Market-Centric Approach to Increase Market Share](index=19&type=section&id=1.%20Market-Centric%20Approach%20to%20Increase%20Market%20Share) In the second half, the Group will adopt a market-oriented approach to cover segmented market target customers, enhance market responsiveness, and balance domestic and international sales - In the second half, the Group will be market-oriented, covering target customers in segmented markets, and enhancing market responsiveness[46](index=46&type=chunk) - Market services will transform into a "technology + sales" composite team, building a "technology-sales-customer" triangular closed-loop operating model[46](index=46&type=chunk) - Balancing domestic and international markets, both internal and external sales will drive overall sales[46](index=46&type=chunk) [2. Strengthening Internal Capabilities to Drive Group Performance Growth](index=19&type=section&id=2.%20Strengthening%20Internal%20Capabilities%20to%20Drive%20Group%20Performance%20Growth) The Group will continue to prioritize cost reduction and efficiency improvement, strengthening strategic cooperation with suppliers and minimizing resource waste to drive performance growth - The Group will continue to adhere to cost reduction and efficiency improvement, further controlling costs and expenses[47](index=47&type=chunk) - Strengthening strategic cooperation with excellent suppliers will reduce unnecessary outsourcing, redundant processes, and material waste[47](index=47&type=chunk) [3. Re-evaluating R&D Efforts and Concentrating Resources on Key Research](index=19&type=section&id=3.%20Re-evaluating%20R%26D%20Efforts%20and%20Concentrating%20Resources%20on%20Key%20Research) The R&D department will be re-evaluated to become a profit growth center, with resources concentrated on market-oriented directions and increased investment in technological transformation to revitalize existing products - The R&D department will become a profit growth and re-creation center, with R&D resources allocated to more market-oriented directions[48](index=48&type=chunk) - Investment in R&D resources for technological transformation will increase, revitalizing the competitiveness of older products through technological iteration[48](index=48&type=chunk) [4. Enhancing Production Efficiency to Maintain Supply Chain Competitive Advantage](index=20&type=section&id=4.%20Enhancing%20Production%20Efficiency%20to%20Maintain%20Supply%20Chain%20Competitive%20Advantage) The Group aims to maintain its supply chain and production scale competitive advantages by enhancing production efficiency, refining management systems, and implementing new product development and energy-saving initiatives - The Group will continue to maintain its supply chain and production scale competitive advantages by enhancing production efficiency[49](index=49&type=chunk) - Further improving systematic, standardized, and refined management systems will prevent safety and environmental risks[49](index=49&type=chunk) - Overall production efficiency will be enhanced through new product development, new technology application, energy conservation and emission reduction, improved comprehensive utilization, and quality and efficiency improvements[49](index=49&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance and position, including revenue, profitability, segment results, and liquidity, for the reporting period [Performance Summary](index=20&type=section&id=Performance%20Summary) For the six months ended June 30, 2025, the Group's revenue increased by 2.79% to RMB 7,463,394,000, with a significant improvement in gross margin to 29.11%, and substantial growth in profit before tax and net profit - Revenue was approximately **RMB 7,463,394,000**, a year-on-year increase of **2.79%** (H1 2024: **RMB 7,261,012,000**)[51](index=51&type=chunk) - Gross margin increased to **29.11%** (H1 2024: **19.83%**)[51](index=51&type=chunk) - Profit before tax was approximately **RMB 1,422,483,000** (H1 2024: **RMB 672,878,000**), and net profit was approximately **RMB 1,056,888,000** (H1 2024: **RMB 395,208,000**)[51](index=51&type=chunk) [Segment Revenue and Operating Results](index=21&type=section&id=Segment%20Revenue%20and%20Operating%20Results) The Group's segment revenue and performance varied, with the refrigerants segment experiencing significant growth due to quota factors, while fluoropolymer materials and organosilicon segments faced market demand weakness and competitive pressures Segment Revenue and Performance Comparison (For the six months ended June 30, RMB Thousand): | Reporting and Operating Segment | 2025 Revenue | 2025 Results | 2025 Segment Profit Margin | 2024 Revenue | 2024 Results | 2024 Segment Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fluoropolymer Materials | 1,939,795 | 259,195 | 13.36% | 2,032,921 | 303,391 | 14.92% | | Organosilicon | 2,319,120 | 8,750 | 0.38% | 2,759,094 | 53,681 | 1.95% | | Refrigerants | 2,292,067 | 1,029,831 | 44.93% | 1,551,984 | 332,455 | 21.42% | | Dichloromethane and Caustic Soda | 636,444 | 213,693 | 33.58% | 515,594 | 132,756 | 25.75% | | Others | 275,968 | (87,219) | (31.60%) | 401,419 | (171,232) | (42.66%) | | **Total** | **7,463,394** | **1,424,250** | **19.08%** | **7,261,012** | **651,051** | **8.97%** | - The refrigerants segment's revenue increased by **47.69%** year-on-year, and its performance increased by **209.77%** year-on-year, primarily due to price increases in products like R32 and R410a[53](index=53&type=chunk)[58](index=58&type=chunk) - The fluoropolymer materials and organosilicon segments experienced declines in both revenue and performance, mainly due to weak market demand and intense competition[53](index=53&type=chunk)[55](index=55&type=chunk)[60](index=60&type=chunk) [Revenue and Operating Results Analysis](index=21&type=section&id=Revenue%20and%20Operating%20Results%20Analysis) This period saw diversified performance across business segments, with strong growth in refrigerants due to quota restrictions, while fluoropolymer materials and organosilicon experienced declines from supply-demand imbalance, and dichloromethane and caustic soda saw a recovery - The fluoropolymer materials segment faced weak market demand, intense supply competition, and lower product prices, yet maintained a certain profit level[56](index=56&type=chunk) - Significant price increases in key refrigerants products like R32 and R410a, linked to quota restrictions, were the primary drivers of performance growth for the refrigerants segment[58](index=58&type=chunk) - The organosilicon segment's external sales revenue and segment performance decreased due to severe market supply-demand imbalance and product price declines, influenced by concentrated new capacity releases, weak downstream demand, and the international trade environment[60](index=60&type=chunk) - The dichloromethane and caustic soda segment's product prices slightly recovered, leading to an increase in its segment performance[62](index=62&type=chunk) [Fluoropolymer Materials](index=21&type=section&id=Fluoropolymer%20Materials) External sales of fluoropolymer materials decreased by 4.58% to RMB 1,939,795,000, with segment profit declining by 14.57% to RMB 259,195,000, due to weak market demand and intense competition - External sales were approximately **RMB 1,939,795,000**, a year-on-year decrease of **4.58%**; segment profit was **RMB 259,195,000**, a year-on-year decrease of **14.57%**[55](index=55&type=chunk) - Market demand was weak, supply competition was intense, and product prices were low, but the Group maintained a competitive advantage through product quality, customer recognition, and lower costs[56](index=56&type=chunk) - The Group utilizes R22 to produce TFE, which is then used to produce fluoropolymer materials such as PTFE and HFP[57](index=57&type=chunk) [Refrigerants](index=22&type=section&id=Refrigerants) External sales of refrigerants increased by 47.69% to RMB 2,292,067,000, with segment profit surging by 209.77% to RMB 1,029,831,000, primarily driven by significant price increases in key products due to quota restrictions - External sales were **RMB 2,292,067,000**, a year-on-year increase of **47.69%**; segment profit was **RMB 1,029,831,000**, a year-on-year increase of **209.77%**[58](index=58&type=chunk) - Prices of major products such as R32 and R410a significantly increased, primarily related to quota restrictions[58](index=58&type=chunk) - The Group has the highest R22 production capacity globally, and R22 is a key refrigerant and primary raw material for fluoropolymer materials (e.g., PTFE, HFP) and R125[59](index=59&type=chunk) [Organosilicon](index=23&type=section&id=Organosilicon) External sales of organosilicon decreased by 15.95% to RMB 2,319,120,000, with segment profit declining by 83.70% to RMB 8,750,000, due to severe market supply-demand imbalance and product price declines - External sales were **RMB 2,319,120,000**, a year-on-year decrease of **15.95%**; segment profit was **RMB 8,750,000**, a year-on-year decrease of **83.70%**[60](index=60&type=chunk) - The market experienced severe supply-demand imbalance and product price declines due to concentrated new capacity releases, weak downstream demand, and the international trade environment[60](index=60&type=chunk) - Major products include DMC, 107 silicone rubber, raw rubber, and compounded rubber, widely used in military, aerospace, automotive, electronics, and construction industries[61](index=61&type=chunk) [Dichloromethane and Caustic Soda](index=24&type=section&id=Dichloromethane%20and%20Caustic%20Soda) External sales of dichloromethane and caustic soda increased by 23.44% to RMB 636,444,000, with segment profit growing by 60.97% to RMB 213,693,000, driven by a slight recovery in product prices - External sales were **RMB 636,444,000**, a year-on-year increase of **23.44%**; segment profit was **RMB 213,693,000**, a year-on-year increase of **60.97%**[62](index=62&type=chunk) - Product prices slightly recovered, leading to an increase in this segment's performance[62](index=62&type=chunk) - Major products are dichloromethane and caustic soda, essential chemicals for the production of refrigerants and organosilicon products[63](index=63&type=chunk) [Others](index=24&type=section&id=Others) External sales in the "Others" segment decreased by 31.25% to RMB 275,968,000, with the segment loss narrowing to RMB 87,219,000 - External sales were **RMB 275,968,000**, a year-on-year decrease of **31.25%**; segment loss was **RMB 87,219,000**, a year-on-year narrowing of loss[64](index=64&type=chunk) - This segment includes the production and sale of other by-products from the Group's operating segments, such as ammonium bifluoride, hydrofluoric acid, and bromine[64](index=64&type=chunk) [Distribution and Selling Expenses](index=24&type=section&id=Distribution%20and%20Selling%20Expenses) Distribution and selling expenses decreased by 7.61% year-on-year to RMB 212,644,000, primarily due to lower freight unit prices and reduced transportation and miscellaneous expenses - Distribution and selling expenses decreased by **7.61%** from **RMB 230,157,000** in the prior year to **RMB 212,644,000**[65](index=65&type=chunk) - The decrease was primarily due to lower freight unit prices and reduced transportation and miscellaneous expenses during the period[65](index=65&type=chunk) [Administrative and Other Expenses](index=25&type=section&id=Administrative%20and%20Other%20Expenses) Administrative expenses decreased by 5.17% year-on-year to RMB 326,574,000, mainly attributable to a reduced impact from inventory impairment in the real estate business - Administrative expenses decreased by **5.17%** from **RMB 344,365,000** in the prior year to **RMB 326,574,000**[66](index=66&type=chunk) - The decrease was primarily due to a reduced impact from inventory impairment in the real estate business compared to the prior year[66](index=66&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs decreased by 27.65% year-on-year to RMB 1,562,000, primarily due to a reduction in bill discount interest expenses - Finance costs decreased by **27.65%** from **RMB 2,159,000** in the prior year to **RMB 1,562,000**[67](index=67&type=chunk) - The decrease was primarily due to reduced bill discount interest expenses[67](index=67&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure was approximately RMB 688,779,000, a significant increase from the prior year, primarily for new project construction, land, and equipment - Capital expenditure was approximately **RMB 688,779,000** (H1 2024: **RMB 443,503,000**)[68](index=68&type=chunk) - It was primarily used for new project construction, land, and equipment expenditures[68](index=68&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position with increased total equity and bank balances, significantly improved net cash inflow from operating activities, and a healthy current ratio, indicating ample resources for debt repayment and operations - Total equity reached **RMB 18,617,373,000**, an increase of **6.56%** compared to December 31, 2024[69](index=69&type=chunk) - Bank balances and cash amounted to **RMB 3,540,515,000** (December 31, 2024: **RMB 2,470,496,000**)[69](index=69&type=chunk) - Net cash inflow from operating activities totaled **RMB 1,505,486,000** (H1 2024: **RMB 409,516,000**)[69](index=69&type=chunk) - The current ratio was **2.69** (December 31, 2024: **2.31**), indicating good liquidity[69](index=69&type=chunk) [Share Capital Structure](index=26&type=section&id=Share%20Capital%20Structure) As of June 30, 2025, the Company had 1,732,711,637 shares in issue, with total borrowings of RMB 35,822,000 and a negative gearing ratio, indicating a net cash position - The number of shares in issue was **1,732,711,637**[71](index=71&type=chunk) - Total borrowings amounted to **RMB 35,822,000** (December 31, 2024: nil)[71](index=71&type=chunk) - The gearing ratio was **–18.82%** (2024: **–14.14%**), indicating the Group was in a net cash positive position[71](index=71&type=chunk) [Pledged Assets](index=26&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged bank deposits of RMB 43,320,000 as security for bills payable and regulatory deposits for pre-sold properties - As of June 30, 2025, the Group pledged bank deposits of **RMB 43,320,000** (December 31, 2024: **RMB 88,745,000**) as security for bills payable and regulatory deposits for pre-sold properties[73](index=73&type=chunk) - Bank deposits related to regulatory deposits for pre-sold properties amounted to **RMB 471,000**[73](index=73&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging Activities](index=27&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging%20Activities) The Group's functional currency is RMB, but it engages in foreign currency transactions, primarily in USD, and typically converts foreign currency to RMB upon receipt to mitigate exchange rate risk - The Group's functional currency is RMB, but overseas transactions involve foreign currencies, primarily USD[75](index=75&type=chunk) - To mitigate foreign currency risk, the Group typically converts foreign currency to RMB upon receipt of payments[75](index=75&type=chunk) [Employees](index=27&type=section&id=Employees) As of June 30, 2025, the Group employed 6,050 staff, implementing performance-based remuneration and providing competitive benefits such as medical insurance and pension schemes - As of June 30, 2025, the Group employed **6,050** staff (December 31, 2024: **6,922** staff)[76](index=76&type=chunk) - The Group implements a remuneration policy and bonuses based on performance and employee contributions, and provides benefits such as medical insurance and pension schemes to remain competitive[76](index=76&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board of Directors did not declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors did not declare an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Except for disclosures related to 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 for disclosures related to 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[78](index=78&type=chunk) [Standard Code for Securities Transactions by Directors](index=27&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix 10 of the HKEX Listing Rules, and all directors confirmed full compliance during the period - The Company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix 10 of the Hong Kong Stock Exchange Listing Rules[79](index=79&type=chunk) - All directors confirmed full compliance with the relevant provisions of the Standard Code during the period[79](index=79&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising Mr. Ding Lianghui (Chairman), Mr. Yang Xiaoyong, and Mr. Ma Zhizhong, all independent non-executive directors, reviewed the Group's interim results for the six months ended June 30, 2025 - The Audit Committee comprises Mr. Ding Lianghui (Chairman), Mr. Yang Xiaoyong, and Mr. Ma Zhizhong, all independent non-executive directors[80](index=80&type=chunk) - The Committee reviewed the Group's interim results for the six months ended June 30, 2025, on August 20, 2025[80](index=80&type=chunk) [Remuneration Committee](index=28&type=section&id=Remuneration%20Committee) The Company's Remuneration Committee is responsible for considering the remuneration and related matters of directors and senior management, with members including independent non-executive directors Mr. Yang Xiaoyong (Chairman) and Mr. Ding Lianghui, and executive director Mr. Zhang Jianhong - The Remuneration Committee is responsible for considering the remuneration and other related matters of the Company's directors and senior management[81](index=81&type=chunk) - Members include independent non-executive directors Mr. Yang Xiaoyong (Chairman) and Mr. Ding Lianghui, and executive director Mr. Zhang Jianhong[81](index=81&type=chunk) [Nomination Committee](index=28&type=section&id=Nomination%20Committee) The Company's Nomination Committee is responsible for the appointment of new directors and related matters, chaired by Mr. Zhang Jianhong, with Mr. Ding Lianghui and Mr. Yang Xiaoyong as members - The Nomination Committee is responsible for the appointment of new directors and other related matters of the Company[82](index=82&type=chunk) - Mr. Zhang Jianhong was appointed as Chairman of the Nomination Committee, with Mr. Ding Lianghui and Mr. Yang Xiaoyong appointed as members[82](index=82&type=chunk) [Corporate Governance Committee](index=28&type=section&id=Corporate%20Governance%20Committee) The Company's Corporate Governance Committee is responsible for corporate governance and related matters, chaired by Mr. Zhang Jianhong, with Mr. Wang Weidong and Mr. Zhang Zefeng as members - The Corporate Governance Committee is responsible for the Company's corporate governance and other related matters[83](index=83&type=chunk) - Mr. Zhang Jianhong was appointed as Chairman of the Corporate Governance Committee, with Mr. Wang Weidong and Mr. Zhang Zefeng appointed as members[83](index=83&type=chunk) [Risk Management Committee](index=29&type=section&id=Risk%20Management%20Committee) The Company's Risk Management Committee is responsible for risk management and related matters, chaired by Mr. Ding Lianghui, with Mr. Yang Xiaoyong and Mr. Ma Zhizhong as members - The Risk Management Committee is responsible for the Company's risk management and other related matters[84](index=84&type=chunk) - Mr. Ding Lianghui was appointed as Chairman of the Risk Management Committee, with Mr. Yang Xiaoyong and Mr. Ma Zhizhong appointed as members[84](index=84&type=chunk) [Risk Management and Internal Control](index=29&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for assessing and determining the Group's risk appetite and ensuring the establishment and maintenance of appropriate risk management and internal control systems, reviewed at least annually - 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[85](index=85&type=chunk) - The Board ensures the Group establishes and maintains appropriate and effective risk management and internal control systems, reviewing their effectiveness at least annually[85](index=85&type=chunk) [Compliance with Corporate Governance Code](index=29&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules for the six months ended June 30, 2025, except for code provision A.2.1 - The Company complied with the code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules for the six months ended June 30, 2025, except for code provision A.2.1[86](index=86&type=chunk) [Code Provision A.2.1](index=29&type=section&id=Code%20Provision%20A.2.1) The Company deviates from Code Provision A.2.1, with Mr. Zhang Jianhong serving as both Chairman and Chief Executive Officer, an arrangement the Board believes provides strong leadership and efficient business planning - The Company deviates from Code Provision A.2.1, as the roles of Chairman and Chief Executive Officer are combined and held by Mr. Zhang Jianhong[87](index=87&type=chunk) - The Board believes this arrangement provides strong and consistent leadership, more efficient business planning, and does not undermine the balance of power under close Board supervision[87](index=87&type=chunk) [Employee Share Option Scheme](index=30&type=section&id=Employee%20Share%20Option%20Scheme) The Company terminated its employee share option scheme on September 27, 2024, to restructure its remuneration policy; as of June 30, 2025, 16,862,000 shares had been sold for HKD 167,120,000, with 59,845,000 shares remaining unsold - The Company resolved to early terminate the employee share option scheme on September 27, 2024, to restructure its remuneration policy and provide effective incentives[88](index=88&type=chunk) - For the six months ended June 30, 2025, a cumulative total of **16,862,000** shares were sold, amounting to **HKD 167,120,000**[88](index=88&type=chunk) - As of June 30, 2025, **59,845,000** shares under the scheme remained unsold[89](index=89&type=chunk) [Announcement of Interim Results and Publication of Interim Report](index=30&type=section&id=Announcement%20of%20Interim%20Results%20and%20Publication%20of%20Interim%20Report) This interim results announcement has been published on the Company's and HKEX websites, and the interim report will be dispatched to shareholders by the end of September 2025 - This interim results announcement is published on the Company's website www.dongyuechem.com and the Hong Kong Stock Exchange website www.hkexnews.hk[91](index=91&type=chunk) - The interim report will be dispatched to the Company's shareholders by the end of September 2025[91](index=91&type=chunk)

Core Viewpoint - The China Securities Hong Kong 300 Raw Materials Index has shown significant growth, with a 66.50% increase year-to-date, indicating strong performance in the raw materials sector [1]. Group 1: Index Performance - The China Securities Hong Kong 300 Raw Materials Index reported a value of 2721.61 points [1]. - The index has increased by 16.75% over the past month and 41.99% over the last three months [1]. Group 2: Index Composition - The top ten holdings in the index include Zijin Mining (25.69%), China Hongqiao (11.83%), and Luoyang Molybdenum (7.66%) [1]. - The index is composed entirely of stocks listed on the Hong Kong Stock Exchange, with a 100% representation [1]. Group 3: Sector Breakdown - The index's sample composition shows that non-ferrous metals account for 79.48%, non-metallic materials for 14.17%, chemicals for 4.69%, and paper and packaging for 1.66% [2]. - The index samples are adjusted biannually, with changes implemented on the next trading day following the second Friday of June and December [2].

Investment Rating - The report indicates a positive investment outlook for the basic chemical industry, particularly for refrigerants and glyphosate, which are experiencing high demand and price increases [1][5]. Core Insights - The glyphosate market is showing strong demand, with prices rising to 26,699 CNY/ton, an increase of 300 CNY/ton from the previous week, while the profit margin has also improved [3][17]. - Refrigerant prices, particularly for R134a and R32, have increased due to steady demand driven by high summer temperatures and supply constraints from quota policies [4][27]. - The polyester filament and viscose staple fiber markets are witnessing slight price rebounds as manufacturers reduce production to restore profitability [4][29]. Summary by Sections (1) Key Chemical Product Price Tracking - Glyphosate prices have risen to 26,699 CNY/ton, with a weekly increase of 300 CNY/ton, while production has decreased by 16.24% to 0.7 million tons [3][17]. - Prices for polyester filament (POY, FDY, DTY) have increased slightly, with POY averaging 6,775 CNY/ton, up 125 CNY/ton [4][29]. (2) Polyurethane: MDI and TDI Price Trends - MDI prices have decreased due to weak demand from end-users, with the average price for polymer MDI in South China at 15,700 CNY/ton, down 1.88% [15]. - TDI prices have also dropped, with the average price in East China at 16,250 CNY/ton, down 2.99% [15]. (3) Agricultural Chemicals: Glyphosate Price Increase - Glyphosate prices continue to rise, supported by good downstream demand and tight supply, with a current price of 26,699 CNY/ton [17]. - The profit margin for glyphosate has increased to 3,725.1 CNY/ton, reflecting a rise of 317.9 CNY/ton from the previous week [17]. (4) Fluorochemicals: Refrigerant Price Increases - Prices for R134a and R32 have increased due to strong seasonal demand, with R134a at 51,000 CNY/ton and R32 at 57,500 CNY/ton [27]. - The supply of refrigerants is constrained by quota policies, leading to a tight market situation [27]. (5) Tire Industry: Raw Material Price Trends - Prices for natural rubber and synthetic rubber have shown slight increases, with natural rubber at 15,017 CNY/ton, up 1.24% [29]. - The prices of accelerators and anti-aging agents have also increased, indicating a positive trend in the tire industry [29].

Group 1 - The core viewpoint of the article highlights that Dongyue Group's stock has risen over 6%, reflecting strong market sentiment in the refrigerant sector driven by supply-demand balance and pricing power [1] - The refrigerant market is currently characterized by a strong demand-supply balance under quota policies, leading to increased industry concentration and a strong willingness among companies to raise prices [1] - The outlook for the market remains positive, with expectations of continued price increases due to the upcoming traditional stocking season and the anticipated opening of maritime export windows [1] Group 2 - Dongyue Group has previously issued a profit warning, projecting a significant year-on-year increase of approximately 150% in net profit attributable to shareholders for the fiscal year ending June 30, 2025 [1] - Huatai Securities noted that the company's net profit for the first half of 2025 is in line with their expectations, amounting to 750 million yuan [1] - The company's performance is expected to enter an upward cycle, benefiting from the favorable conditions in the refrigerant market [1]

Group 1 - Dongyue Group (00189) shares rose over 6%, currently up 6.43% at HKD 12.92, with a trading volume of HKD 229 million [1] - The refrigerant market is currently characterized by a supply-demand balance driven by quota policies, leading to a strong market environment and increased pricing power among companies [1] - The outlook for the market remains positive, with expectations of price increases for most products due to the upcoming traditional stocking season and anticipated opening of shipping export windows [1] Group 2 - Dongyue Group previously issued a profit warning, expecting a significant year-on-year increase of approximately 150% in net profit attributable to shareholders for the fiscal year ending June 30, 2025 [1] - Huatai Securities noted that the company's net profit for the first half of 2025 is in line with their expectations, estimated at HKD 750 million [1] - The company's performance is expected to enter an upward cycle, benefiting from the favorable conditions in the refrigerant market [1]

Group 1 - The core viewpoint of the article highlights that Dongyue Group's stock has risen over 6%, currently at 12.92 HKD, with a trading volume of 229 million HKD, indicating strong market interest [1] - The refrigerant market is currently characterized by a supply-demand balance driven by quota policies, leading to a strong market position and increased pricing power among companies [1] - The outlook for the market remains positive, with expectations of price increases due to the upcoming traditional stocking season and anticipated opening of maritime export windows [1] Group 2 - Dongyue Group has previously issued a profit warning, projecting a significant year-on-year increase of approximately 150% in net profit attributable to shareholders for the fiscal year ending June 30, 2025 [1] - Huatai Securities noted that the company's net profit for the first half of 2025 is in line with their expectations, amounting to 750 million CNY [1] - The company is expected to benefit from the upward trend in the refrigerant market, positioning its performance for a growth cycle [1]

Group 1 - The core viewpoint is that the demand for air conditioners and fans has surged in Europe due to high temperatures exceeding 40°C since June, leading to significant export growth from China [1] - In the first seven months of the year, Zhongshan City exported air conditioners worth 2.48 billion yuan to Europe, marking a year-on-year increase of 36.8% [1] - A Guangdong company has successfully secured an order for 70,000 air conditioners for Dubai while also expanding its market presence in Africa and the Middle East, exporting a total of 300,000 units to these regions [1] Group 2 - According to a report by CITIC Securities, the home appliance industry remains in a high prosperity phase, driven by summer heat boosting air conditioner demand and structural upgrades in black electrical products [2] - The report indicates that the air conditioning sector is expected to maintain high production levels entering the new cooling year, with refrigerant demand likely to increase [2] - The market outlook for leading companies in the industry is positive, with expectations of stable performance in the second and third quarters [2] Group 3 - Related companies in the air conditioning sector include Midea Group (00300), Haier Smart Home (06690), Hisense Home Appliances (00921), and Xiaomi Group-W (01810) [3] - Companies involved in refrigerants include Dongyue Group (00189) [3]

Investment Rating - The report maintains a positive outlook on the chemical industry, particularly focusing on heat dissipation materials and helium gas from Russia, as well as incidents affecting Zhongkun Chemical [3][4]. 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 at 2.8%, with stable oil demand despite some slowdown due to tariffs [3][4]. - The trend towards liquid cooling in AI servers is highlighted, with significant power requirements leading to increased demand for specialized cooling materials. The report suggests monitoring companies like Bayi Shikong, New Era, Dongyangguang, Yonghe Co., and Juhua Co. [3][4]. - Recent incidents affecting helium supply in Russia and a fire at Zhongkun Biotech are expected to positively impact the helium supply-demand balance, with recommendations to focus on companies like Guanggang Gas, Huate Gas, and Jinhong Gas [3][4]. Summary by Sections Industry Dynamics - Oil supply is expected to increase significantly, with non-OPEC countries leading the way. Global oil demand remains stable, but growth may slow due to tariff impacts. Coal prices are expected to stabilize at low levels, while natural gas export facilities in the U.S. may reduce import costs [4][5]. Chemical Sector Configuration - The report notes a decrease in oil prices and an increase in coal prices, with industrial product PPI showing a year-on-year decline of 3.6%. Manufacturing PMI recorded at 49.3%, indicating a slight contraction in manufacturing activity [3][5]. Investment Analysis - Traditional cyclical investments should focus on leading companies in their respective sectors, including Wanhu Chemical, Hualu Hengsheng, and Baofeng Energy. Growth sectors include semiconductor materials and OLED panel materials, with specific companies highlighted for their potential [3][4][17].

Core Viewpoint - The China Securities Hong Kong 300 Materials Index has shown significant growth, with a 63.80% increase year-to-date, reflecting strong performance in the materials sector [1][2]. Group 1: Index Performance - The China Securities Hong Kong 300 Materials Index reported a value of 2677.51 points, with a monthly increase of 18.28% and a three-month increase of 38.94% [1]. - The index is designed to reflect the overall performance of different industries in the Hong Kong market, classified according to the China Securities industry classification standards [1]. Group 2: Index Composition - The top ten holdings in the China Securities Hong Kong 300 Materials Index include Zijin Mining (26.36%), China Hongqiao (11.82%), and Luoyang Molybdenum (7.75%) among others [1]. - The index is fully composed of stocks listed on the Hong Kong Stock Exchange, with a 100% representation [1]. Group 3: Industry Breakdown - The industry composition of the index shows that non-ferrous metals account for 80.02%, non-metallic materials for 13.88%, chemicals for 4.39%, and paper and packaging for 1.71% [2]. - The index samples are adjusted biannually, with changes implemented on the next trading day following the second Friday of June and December [2].