[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) The Group formulates long-term corporate strategies, allocating capital and personnel to high-opportunity areas to generate long-term returns exceeding the cost of capital, and invests in existing and new businesses to continuously evolve into a diversified and sustainably developing conglomerate - The Group implements a long-term corporate strategy, investing capital and personnel in high-growth areas to generate long-term returns exceeding the cost of capital, aiming to become a diversified and sustainably developing conglomerate[4](index=4&type=chunk) - For the six months ended June 30, 2025, the Group's total revenue decreased by **26.3%** year-on-year to **HK$523,692 thousand**, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) significantly declined by **83.0%**, resulting in a net loss after tax of **HK$51,649 thousand**[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - The Group's main businesses include watch and accessories manufacturing and distribution, property investment, and banking and financial services, with watch business profitability declining while banking business achieved slight growth[7](index=7&type=chunk)[8](index=8&type=chunk) [Our Strategy](index=3&type=section&id=Our%20Strategy) The Group formulates long-term corporate strategies, allocating capital and personnel to high-opportunity areas to generate long-term returns exceeding the cost of capital, and invests in existing and new businesses to continuously evolve into a diversified and sustainably developing conglomerate - The Group adopts a long-term corporate strategy, investing in high-growth areas to achieve excess returns[4](index=4&type=chunk) - The goal is to become a diversified conglomerate with sustainable long-term development capabilities[4](index=4&type=chunk) [Financial Highlights](index=3&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, the Group recorded total revenue of **HK$523,692 thousand**, a year-on-year decrease of **26.3%**, with operating expenses down **14.9%**, gross profit from non-banking and financial businesses declining **44.1%**, and gross profit from banking and financial businesses growing **2.0%**, leading to an **83.0%** drop in EBITDA and a net loss after tax of **HK$51,649 thousand**, while total assets and liabilities increased and total equity slightly rose Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 523,692 | 710,313 | -26.3 | | Operating Expenses | 411,705 | 484,046 | -14.9 | | Gross Profit from Non-Banking & Financial Businesses | 125,263 | 224,068 | -44.1 | | Gross Profit from Banking & Financial Businesses | 243,220 | 238,499 | 2.0 | | EBITDA | 14,216 | 83,843 | -83.0 | | (Loss)/Profit Before Tax | (42,847) | 13,192 | N/A | | Net (Loss)/Profit After Tax | (51,649) | 3,708 | N/A | | Basic (Loss)/Earnings Per Share | (0.97 HK cents) | 0.16 HK cents | N/A | Balance Sheet Highlights as of June 30, 2025 | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 20,088,793 | 17,963,825 | 11.8 | | Total Liabilities | 16,064,427 | 14,181,780 | 13.3 | | Total Equity | 4,024,366 | 3,782,045 | 6.4 | [Operating Results](index=4&type=section&id=Operating%20Results) The Group's total revenue for the first half decreased by **26.3%** year-on-year, primarily due to declining profitability in the watch business, while banking operations saw slight growth, leading to a **44.1%** drop in gross profit from non-banking and financial businesses, an **83.0%** decline in EBITDA, and a net loss after tax, with the Group implementing strategic measures such as inventory optimization, cost reduction, new product development, and market expansion to address challenges - The Group's total revenue decreased by **26.3%** year-on-year to **HK$523,692 thousand**, primarily due to declining profitability in the watch business[6](index=6&type=chunk)[8](index=8&type=chunk) - Operating expenses decreased by **14.9%** year-on-year to **HK$411,705 thousand**[6](index=6&type=chunk) - Net loss after tax was **HK$51,649 thousand**, compared to a profit of **HK$3,708 thousand** in the same period last year[7](index=7&type=chunk) [Watches, Clocks, and Watch Accessories Business](index=5&type=section&id=Watches%2C%20Clocks%2C%20and%20Watch%20Accessories%20Business) The watch business experienced a decline in profitability and overall revenue in the first half, primarily due to the macroeconomic environment, conservative consumer spending, intensified market competition, and reduced e-commerce platform traffic, prompting the Group to actively implement measures such as inventory optimization, cost reduction, enhanced centralized control, and new product R&D to address market challenges - Watch business profitability declined, primarily impacted by the macroeconomic environment, conservative consumer spending, intensified market competition, and reduced e-commerce platform traffic[8](index=8&type=chunk) Segment Performance of Watches, Clocks, and Watch Accessories Business (For the Six Months Ended June 30, 2025) | Company Name | Revenue (HK$) | Net Profit/(Loss) After Tax (HK$) | Revenue Growth/(Decline) (%) (YoY) | | :--- | :--- | :--- | :--- | | Zhuhai Rossini Watch Industry Co., Ltd. | 100,326,000 | 2,497,000 | (32.4) | | Ebohr Fine Group | 54,990,000 | (23,271,000) | (40.8) | | Ernest Borel Group | 37,420,000 | (12,427,000) | (6.6) | | Corum, Eterna and Delma Group | 20,413,000 | (27,177,000) | (80.1) | | Other Companies | 58,380,000 | (4,555,000) | (22.9) | [Local Own Brands – Zhuhai Rossini Watch Industry Co., Ltd. ("Rossini") and Ebohr Fine Group](index=6&type=section&id=Local%20Own%20Brands%20%E2%80%93%20Zhuhai%20Rossini%20Watch%20Industry%20Co.%2C%20Ltd.%20%28%22Rossini%22%29%20and%20Ebohr%20Fine%20Group) Rossini and Ebohr Fine Group enhance market competitiveness by optimizing inventory and accounts receivable management, implementing cost reduction and efficiency improvement measures (e.g., cross-brand integration, refined store management, optimized organizational structure), and strengthening centralized control (three-color early warning mechanism), while actively investing in smart watch R&D, expanding cultural and creative product lines, and launching wedding and business jewelry watch series to meet market demands with innovative products - Optimized inventory and accounts receivable management, achieving the year-beginning inventory reduction target and lowering bad debt risk[11](index=11&type=chunk) - Implemented cost reduction and efficiency improvement measures, including cross-brand integration, refined direct-operated store management, and optimized organizational structure[11](index=11&type=chunk) - Strengthened centralized control by establishing a red, yellow, and blue three-color early warning mechanism to monitor performance changes in real-time[12](index=12&type=chunk) - Actively invested in smart watch R&D, expanded cultural and creative product lines, and launched wedding and business jewelry watch series[13](index=13&type=chunk) [Foreign Own Brand – Ernest Borel Group](index=8&type=section&id=Foreign%20Own%20Brand%20%E2%80%93%20Ernest%20Borel%20Group) Ernest Borel Group optimizes inventory structure through precise, timely inventory assessment, cross-departmental approval processes, and three key strategies (stable sales supply, promotion of slow-moving items, and procurement-sales collaboration), while strengthening social media promotion and offline campaigns, and planning to expand into Southeast Asian and North American markets, deepening cooperation with e-commerce platforms and authorized retailers to enhance brand awareness and sales - Optimized inventory structure by reducing inventory pressure through real-time inventory assessment, strict approval processes, and three key strategies: stable sales, promotion of slow-moving items, and procurement-sales collaboration[15](index=15&type=chunk) - Strengthened promotional activities, actively managed official media platforms, and enhanced brand exposure and sales through in-store promotions and holiday campaigns[16](index=16&type=chunk) - Looking ahead to 2025, the focus will be on expanding into Southeast Asian and North American markets, increasing duty-free store sales, optimizing distribution channels, and exploring collaborations with live-streaming platforms[17](index=17&type=chunk) [Non-Own Brands](index=9&type=section&id=Non-Own%20Brands) For the six months ended June 30, 2025, four distribution companies recorded revenue of **HK$38,942 thousand**, a year-on-year decrease of **28.9%**, and a net loss after tax of **HK$1,927 thousand**, with the loss expanding year-on-year Performance of Non-Own Brand Distribution Companies (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,942 | 54,669 | -28.9 | | Net Loss After Tax | (1,927) | (1,717) | 12.2 (Loss expanded) | [Others](index=9&type=section&id=Others) Other non-core watch, clock, and watch accessories businesses recorded revenue of **HK$19,438 thousand** during the reporting period, a year-on-year decrease of **7.7%**, and a net loss after tax of **HK$2,628 thousand**, with the loss significantly expanding year-on-year Performance of Other Non-Core Watch Businesses (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 19,438 | 21,064 | -7.7 | | Net Loss After Tax | (2,628) | (715) | 267.6 (Loss expanded) | [Banking and Financial Business](index=10&type=section&id=Banking%20and%20Financial%20Business) Wealthy Land Bank's revenue grew by **2.0%** year-on-year, with net profit after tax attributable to owners increasing by **0.7%**, while net interest and dividend income decreased by **7.2%** due to interest rate cut expectations and Swiss Franc appreciation; net commission and service fee income rose **4%** driven by expanded assets under management, and trading income surged **59%** from increased foreign exchange volumes, with operating expenses down **1.6%**, net asset inflows of **Swiss Francs 573.4 million**, and total assets up **15.3%**, maintaining strong capital ratios (capital ratio **20.3%**, leverage ratio **6.6%**, LCR **487%**) well above regulatory standards, as the bank implements its HORIZON strategy to accelerate digital transformation of client onboarding, strengthen risk management, and expand into the Asian high-net-worth market through Wealthy Land Wealth Management (Hong Kong) Limited Wealthy Land Bank Limited Key Financial Data (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 243,220 | 238,499 | 2.0 | | Net Profit After Tax Attributable to Owners | 45,713 | 45,393 | 0.7 | | Net Interest and Dividend Income | 128,789 | 138,713 | -7.2 | | Trading Income | 20,941 | 13,147 | 59.0 | | Operating Expenses | 168,460 | 171,198 | -1.6 | - Assets under management were approximately **Swiss Francs 3,900 million** at the end of June 2025, a net increase of **Swiss Francs 400 million**[19](index=19&type=chunk) - Total assets increased by **HK$2,053,245 thousand** to **HK$15,485,785 thousand**, a **15.3%** increase[20](index=20&type=chunk) - Total capital ratio was approximately **20.3%**, leverage ratio **6.6%**, and liquidity coverage ratio reached **487%**, significantly exceeding regulatory standards[20](index=20&type=chunk) - Actively implementing the HORIZON strategy, formulating specific strategies for Asia, and accelerating the digital transformation of internal client onboarding processes[20](index=20&type=chunk)[21](index=21&type=chunk) - Established Wealthy Land Wealth Management (Hong Kong) Limited to provide wealth management solutions for high-net-worth individuals in Asia[22](index=22&type=chunk) [Investment Businesses](index=13&type=section&id=Investment%20Businesses) The Group's investment businesses include listed equity investments and property investments, with listed equity investments in Crown City Grandway generating fair value change gains, while investments in Minxin Holdings incurred fair value change losses, and both rental income and net profit after tax from property investment business declined - Listed equity investments include shares in Crown City Grandway and Minxin Holdings[24](index=24&type=chunk)[25](index=25&type=chunk) - Both rental income and net profit after tax from property investment business decreased year-on-year[26](index=26&type=chunk) [Listed Equity Investments](index=13&type=section&id=Listed%20Equity%20Investments) The Group holds listed equity investments in Crown City Grandway New Materials Co., Ltd. and Minxin Holdings Limited, with the investment in Crown City Grandway generating a net fair value change gain of **HK$4,066 thousand** due to rising share prices, while the investment in Minxin Holdings resulted in a net fair value change loss of **HK$17,630 thousand** due to declining share prices Listed Equity Investment Performance (For the Six Months Ended June 30, 2025) | Investee | Fair Value as of June 30, 2025 (HK$ thousand) | Net Fair Value Change Gain/(Loss) (HK$ thousand) | Share Price as of December 31, 2024 | Share Price as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Crown City Grandway New Materials Co., Ltd. | 29,879 | 4,066 (Gain) | RMB 2.65 | RMB 2.98 | | Minxin Holdings Limited | 185,115 | (17,630) (Loss) | HK$2.30 | HK$2.10 | - The Group intends to hold its investment in Minxin Holdings Limited for the long term[25](index=25&type=chunk) [Property Investments](index=14&type=section&id=Property%20Investments) The Group's investment properties in Mainland China and Hong Kong are fully leased, providing stable rental returns, with rental income for the six months ended June 30, 2025, at **HK$8,943 thousand**, a **25.5%** year-on-year decrease, and net profit after tax at **HK$7,692 thousand**, a **34.5%** year-on-year decrease Property Investment Business Performance (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Rental Income | 8,943 | 11,992 | -25.5 | | Net Profit After Tax | 7,692 | 11,729 | -34.5 | - All investment properties are fully leased, providing stable rental returns[26](index=26&type=chunk) [Financial Position](index=14&type=section&id=Financial%20Position) As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, total liabilities were **HK$16,064,427 thousand**, and total equity was **HK$4,024,366 thousand**, with the debt-to-asset ratio decreasing from **22.0%** on December 31, 2024, to **19.1%**, and Group borrowings primarily secured by subsidiary guarantees, equity interests, and legal charges over land and buildings of non-banking and financial businesses Financial Position Summary (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 20,088,793 | 17,963,825 | 11.8 | | Total Liabilities | 16,064,427 | 14,181,780 | 13.3 | | Total Equity | 4,024,366 | 3,782,045 | 6.4 | | Debt-to-Asset Ratio | 19.1% | 22.0% | -2.9 percentage points | - Group borrowings are primarily secured by subsidiary guarantees, equity interests, and legal charges over land and buildings of non-banking and financial businesses[28](index=28&type=chunk) - Capital commitments primarily consist of **HK$270,000 thousand** for investment in associate Crown City United International Limited[29](index=29&type=chunk) [Financial Review](index=15&type=section&id=Financial%20Review) The Group's total assets increased by **11.8%**, primarily driven by a significant rise in amounts due from banks, while cash and deposits, trading portfolio investments, and financial assets at fair value through other comprehensive income all decreased; total liabilities increased by **13.3%**, mainly due to higher amounts due to customers, and gross profit from non-banking and financial businesses, EBITDA, selling and distribution expenses, and administrative expenses all declined year-on-year, with both share of profits from associates and net loss attributable to owners of the Company deteriorating - Total assets increased by **11.8%** to **HK$20,088,793 thousand**, primarily driven by a significant **115.9%** increase in amounts due from banks[31](index=31&type=chunk)[32](index=32&type=chunk) - Total liabilities increased by **13.3%** to **HK$16,064,427 thousand**, primarily attributable to an increase in amounts due to customers[47](index=47&type=chunk) Changes in Key Financial Metrics (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit from Non-Banking & Financial Businesses | 125,263 | 224,068 | -44.1 | | EBITDA | 14,216 | 83,843 | -83.0 | | Selling and Distribution Expenses | 109,386 | 153,846 | -28.9 | | Administrative Expenses | 302,319 | 330,200 | -8.4 | | Share of Profits from Associates | 4,147 | 5,655 | -26.7 | | Net Loss Attributable to Owners of the Company | (42,045) | 7,024 (Profit) | N/A (Turned to loss) | [Outlook](index=24&type=section&id=Outlook) Looking ahead to 2025, China's economy outperformed expectations in the first half, with GDP growth forecasts revised upwards, primarily driven by exports and government fiscal measures; however, downside risks persist, including geopolitical conflicts potentially disrupting supply chains and raising energy prices, and fiscal deficits in developed economies possibly triggering financial market volatility, while the Group anticipates a gradual recovery in China's consumer market and Wealthy Land Bank will actively advance its Asia strategy, implementing diversified asset management approaches to mitigate the impact of declining USD interest rates - The International Monetary Fund raised China's 2025 GDP growth forecast to **4.8%**, primarily supported by export momentum and government fiscal measures[55](index=55&type=chunk) - Downside risks include geopolitical conflicts potentially disrupting global supply chains and fiscal deficits in developed economies possibly triggering international financial market volatility[55](index=55&type=chunk) - China's consumer market is expected to gradually recover, and Wealthy Land Bank will actively advance its Asia strategy, implementing diversified asset management approaches to mitigate the impact of declining USD interest rates[56](index=56&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately **2,000** full-time staff globally, with remuneration determined fairly based on market conditions and individual performance, offering year-end double pay, medical insurance, retirement benefits, and bonuses; Hong Kong employees participate in the Mandatory Provident Fund Scheme, while employees of Mainland China subsidiaries participate in social security schemes - As of June 30, 2025, the Group employed approximately **2,000** full-time staff globally (approximately **1,800** in Hong Kong and Mainland China, and approximately **200** in Europe)[57](index=57&type=chunk) - Remuneration is determined fairly based on market conditions and individual performance, offering year-end double pay, medical insurance, retirement benefits, and bonuses[57](index=57&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[58](index=58&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in Shares and Underlying Shares](index=25&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, several directors and chief executives held long positions in the Company's shares, with Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying jointly holding **63.45%** of the Company's shares, Mr. Han Hiu-Fong holding **4.64%**, and Mr. Teguh Halim holding **0.14%** Directors' and Chief Executives' Long Positions in the Company's Shares (As of June 30, 2025) | Director Name | Total Interest (shares) | Shareholding Percentage | | :--- | :--- | :--- | | Han Koung-Yung | 2,761,137,515 | 63.45% | | Shi Tao | 100,000 | 0.00% | | Han Hiu-Fong | 201,750,000 | 4.64% | | Teguh Halim | 6,000,000 | 0.14% | - Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying are deemed to have interests in the same block of **2,761,137,515 shares**[60](index=60&type=chunk)[67](index=67&type=chunk) [Major Shareholders' Interests in Shares and Underlying Shares](index=27&type=section&id=Major%20Shareholders'%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Sureview International Limited and Morning Rich Limited were major shareholders, holding **31.96%** and **31.37%** of shares respectively; Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying were jointly deemed to own **63.45%** of shares, and Barclays PLC held a **8.83%** long position and a **0.23%** short position Major Shareholders' Interests in the Company's Shares (As of June 30, 2025) | Major Shareholder Name/Person | Nature of Interest | Number of Shares Held | Approximate Shareholding Percentage | | :--- | :--- | :--- | :--- | | Sureview International Limited | Beneficial owner | 1,391,037,515 | 31.96% | | Morning Rich Limited | Beneficial owner | 1,365,226,000 | 31.37% | | Han Koung-Yung | Corporate interest, beneficial owner and family interest | 2,761,137,515 | 63.45% | | Lam Suk Ying | Beneficial owner and family interest | 2,761,137,515 | 63.45% | | Barclays PLC | Corporate interest | 384,166,000 (L) | 8.83% (L) | | | | 9,862,000 (S) | 0.23% (S) | - Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying are deemed to have interests in the same block of **2,761,137,515 shares**[67](index=67&type=chunk) [Corporate Governance Code](index=29&type=section&id=Corporate%20Governance%20Code) For the six months ended June 30, 2025, the Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except that the Chairman of the Board did not attend the Annual General Meeting due to other commitments, thus not fully complying with code provision F.2.2 - The Company complied with the Corporate Governance Code, but the Chairman of the Board did not attend the Annual General Meeting, thus not fully complying with code provision F.2.2[68](index=68&type=chunk) [Standard Securities Dealing Code for Directors](index=29&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors) For the six months ended June 30, 2025, the Company's directors consistently complied with the required standards set out in the Standard Code - Directors consistently complied with the Company's adopted Standard Securities Dealing Code during the reporting period[69](index=69&type=chunk) [Disclosure of Directors' Information under Rule 13.51B(1) of the Listing Rules](index=29&type=section&id=Disclosure%20of%20Directors'%20Information%20under%20Rule%2013.51B%281%29%20of%20the%20Listing%20Rules) Since the publication of the 2024 Annual Report, Mr. Kam Shing-Chor was appointed as an independent director of Happy City Holdings Limited, a NASDAQ-listed company - Mr. Kam Shing-Chor was appointed as an independent director of Happy City Holdings Limited, a NASDAQ-listed company[70](index=70&type=chunk) [Board Committees](index=30&type=section&id=Board%20Committees) The Group has an Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee, each fulfilling its responsibilities during the reporting period, including reviewing financial reports, determining remuneration policies, recommending director candidates, and reviewing risks - The Group has an Audit, Remuneration, Nomination, and Risk Management Committee to ensure effective corporate governance[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Audit Committee](index=30&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited financial statements and internal audit work during the reporting period, and discussed internal controls and financial reporting matters with external auditors, the Board, and senior management - The Audit Committee reviewed the unaudited financial statements and internal audit work, and discussed internal controls and financial reporting matters[71](index=71&type=chunk) [Remuneration Committee](index=30&type=section&id=Remuneration%20Committee) The Remuneration Committee, composed of three independent non-executive directors and two executive directors, determined the remuneration policy for executive directors, assessed their performance, and approved service contract terms during the reporting period, ensuring directors do not participate in determining their own remuneration - The Remuneration Committee determined executive directors' remuneration policy, assessed performance, approved service contracts, and ensured directors did not participate in determining their own remuneration[72](index=72&type=chunk) [Nomination Committee](index=31&type=section&id=Nomination%20Committee) The Nomination Committee, comprising two executive directors and three independent non-executive directors, considered factors such as diversity and industry experience, recommended Ms. Chan Lai Wah as an independent non-executive director, and assessed the independence of existing independent non-executive directors during the reporting period - The Nomination Committee considered factors such as diversity and industry experience, recommended Ms. Chan Lai Wah as an independent non-executive director, and assessed the independence of existing independent non-executive directors[73](index=73&type=chunk) [Risk Management Committee](index=31&type=section&id=Risk%20Management%20Committee) The Risk Management Committee, comprising three executive directors, reviewed liquidity risk, operational risk, interest rate risk, exchange rate risk, inventory risk, and other risks during the reporting period, and discussed measures to mitigate them - The Risk Management Committee reviewed liquidity, operational, interest rate, exchange rate, inventory, and other risks, and discussed mitigation measures[74](index=74&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[75](index=75&type=chunk) [Review of Financial Statements](index=32&type=section&id=Review%20of%20Financial%20Statements) The Audit Committee reviewed the Group's unaudited financial statements for the six months ended June 30, 2025, and confirmed their preparation in accordance with applicable accounting standards, fairly presenting the Group's financial position and performance - The Audit Committee confirmed that the unaudited financial statements fairly present the Group's financial position and performance and comply with applicable accounting standards[76](index=76&type=chunk) [Acknowledgement](index=32&type=section&id=Acknowledgement) Chairman Han Koung-Yung expressed sincere gratitude for the support from the Board of Directors, management team, employees, customers, suppliers, banks, professional advisors, business partners, and shareholders - Chairman Han Koung-Yung expressed gratitude for the support of all stakeholders[77](index=77&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=33&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total revenue was **HK$523,692 thousand**, a **26.3%** year-on-year decrease, recording a loss of **HK$51,649 thousand**, with basic loss per share attributable to owners of the Company at **0.97 HK cents**, while other comprehensive income was **HK$291,685 thousand**, primarily impacted by exchange differences - For the six months ended June 30, 2025, the Group's total revenue was **HK$523,692 thousand**, a **26.3%** year-on-year decrease[79](index=79&type=chunk) - A loss of **HK$51,649 thousand** was recorded for the period, compared to a profit of **HK$3,708 thousand** in the same period last year, with basic loss per share attributable to owners of the Company at **0.97 HK cents**[79](index=79&type=chunk)[81](index=81&type=chunk) - Other comprehensive income for the period was **HK$291,685 thousand**, compared to a loss of **HK$346,821 thousand** in the same period last year, primarily impacted by exchange differences on translation of presentation currency[81](index=81&type=chunk) Condensed Consolidated Statement of Comprehensive Income Summary (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Interest Income from Banking Business | 127,667 | 138,236 | | Net Fee and Commission Income from Banking Business | 93,466 | 86,937 | | Trading Income from Banking Business | 20,941 | 13,147 | | Sales of Goods from Non-Banking & Financial Businesses | 271,529 | 459,822 | | Rental Income from Non-Banking & Financial Businesses | 8,943 | 11,992 | | **Total Revenue** | **523,692** | **710,313** | | (Loss)/Profit Before Income Tax | (42,847) | 13,192 | | (Loss)/Profit for the Period | (51,649) | 3,708 | | (Loss)/Profit Attributable to Owners of the Company | (42,045) | 7,024 | | Basic (Loss)/Earnings Per Share Attributable to Owners of the Company | (0.97 HK cents) | 0.16 HK cents | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, an **11.8%** increase from December 31, 2024, total liabilities were **HK$16,064,427 thousand**, a **13.3%** increase primarily due to higher amounts due to customers, and total equity was **HK$4,024,366 thousand**, a **6.4%** increase - As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, an **11.8%** increase compared to December 31, 2024[82](index=82&type=chunk) - Total liabilities were **HK$16,064,427 thousand**, a **13.3%** increase, primarily due to higher amounts due to customers[84](index=84&type=chunk) - Total equity was **HK$4,024,366 thousand**, a **6.4%** increase[84](index=84&type=chunk) Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and Deposits | 1,140,529 | 3,782,130 | -69.8 | | Amounts Due from Customers | 2,942,445 | 2,659,182 | 10.7 | | Amounts Due from Banks | 6,145,570 | 2,945,270 | 108.7 | | Trading Portfolio Investments | 35,426 | 39,564 | -10.4 | | Other Financial Assets at Amortised Cost | 4,670,112 | 3,511,829 | 33.0 | | **Total Assets** | **20,088,793** | **17,963,825** | **11.8** | | **Liabilities** | | | | | Amounts Due to Customers | 14,274,136 | 12,333,170 | 15.7 | | Borrowings | 534,350 | 595,082 | -10.2 | | **Total Liabilities** | **16,064,427** | **14,181,780** | **13.3** | | **Total Equity** | **4,024,366** | **3,782,045** | **6.4** | [Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased from **HK$3,614,423 thousand** at the beginning of the period to **HK$3,859,779 thousand**, primarily influenced by other comprehensive income from exchange differences on translation of presentation currency, while the loss attributable to owners of the Company for the period was **HK$42,045 thousand**, and non-controlling interests decreased - For the six months ended June 30, 2025, total equity attributable to owners of the Company increased from **HK$3,614,423 thousand** at the beginning of the period to **HK$3,859,779 thousand**[89](index=89&type=chunk) - The increase in equity was primarily influenced by other comprehensive income arising from exchange differences on translation of presentation currency[89](index=89&type=chunk) - Loss attributable to owners of the Company for the period was **HK$42,045 thousand**, and non-controlling interests decreased[89](index=89&type=chunk) Condensed Consolidated Statement of Changes in Equity Summary (For the Six Months Ended June 30, 2025) | Metric | January 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 3,614,423 | 3,859,779 | | Non-Controlling Interests | 167,622 | 164,586 | | **Total Equity** | **3,782,045** | **4,024,366** | | Loss for the Period (Attributable to Owners of the Company) | - | (42,045) | | Exchange Differences on Translation of Presentation Currency (Attributable to Owners of the Company) | - | 296,942 | | Fair Value Changes of Financial Assets at Fair Value Through Other Comprehensive Income (Attributable to Owners of the Company) | - | (13,564) | [Condensed Consolidated Statement of Cash Flows](index=41&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **HK$2,321,974 thousand**, net cash used in investing activities was **HK$971,340 thousand**, and net cash used in financing activities was **HK$107,226 thousand**, resulting in a net decrease in cash and cash equivalents of **HK$3,400,540 thousand**, with cash and cash equivalents at period-end totaling **HK$1,068,604 thousand** - For the six months ended June 30, 2025, net cash used in operating activities was **HK$2,321,974 thousand**, net cash used in investing activities was **HK$971,340 thousand**, and net cash used in financing activities was **HK$107,226 thousand**[96](index=96&type=chunk) - Net decrease in cash and cash equivalents was **HK$3,400,540 thousand**, with cash and cash equivalents at period-end totaling **HK$1,068,604 thousand**[96](index=96&type=chunk) Condensed Consolidated Statement of Cash Flows Summary (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (2,321,974) | (684,330) | | Net Cash Used in Investing Activities | (971,340) | (1,284,184) | | Net Cash Used in Financing Activities | (107,226) | (68,260) | | Net Decrease in Cash and Cash Equivalents | (3,400,540) | (2,036,774) | | Effect of Exchange Rate Changes | 774,450 | (361,155) | | Cash and Cash Equivalents at End of Period | 1,068,604 | 1,309,969 | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=42&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering the Group's general information, basis of preparation, significant accounting policies, critical accounting judgments and key sources of estimation uncertainty, segment information, revenue breakdown, other gains, finance costs, income tax, dividends, earnings per share, trade and other receivables/payables, various investments, derivative instruments, inventories, property, plant and equipment, investment properties, intangible assets, goodwill, borrowings, capital commitments, related party transactions, and fair value measurement of financial instruments - This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering the Group's general information, basis of preparation, significant accounting policies, critical accounting judgments and key sources of estimation uncertainty, segment information, revenue breakdown, other gains, finance costs, income tax, dividends, earnings per share, trade and other receivables/payables, various investments, derivative instruments, inventories, property, plant and equipment, investment properties, intangible assets, goodwill, borrowings, capital commitments, related party transactions, and fair value measurement of financial instruments[97](index=97&type=chunk)[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) [General Information](index=42&type=section&id=General%20Information) Citychamp Watch & Jewellery Group Limited is a limited company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange; the Group's principal businesses include manufacturing and distribution of watches and accessories, property investment, and banking and financial services, with main operating locations in Hong Kong, Switzerland, the United Kingdom, Liechtenstein, and China - The Company is a limited company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange[97](index=97&type=chunk) - The Group's principal businesses include manufacturing and distribution of watches and accessories, property investment, and banking and financial services[98](index=98&type=chunk) - Main operating locations are in Hong Kong, Switzerland, the United Kingdom, Liechtenstein, and China[100](index=100&type=chunk) [Basis of Preparation](index=43&type=section&id=Basis%20of%20Preparation) The unaudited condensed interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and is presented in Hong Kong dollars - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and Appendix D2 of the Listing Rules[101](index=101&type=chunk) - The financial information is presented in Hong Kong dollars, the Company's functional currency[101](index=101&type=chunk) [Summary of Significant Accounting Policies](index=43&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) Except for the adoption of new or revised Hong Kong Financial Reporting Standards, the unaudited interim financial information is prepared in accordance with the accounting policies and methods of calculation used in the 2024 annual financial statements - The financial information is prepared in accordance with the accounting policies and methods of calculation used in the 2024 annual financial statements, without early adoption of newly issued but not yet effective Hong Kong Financial Reporting Standards[102](index=102&type=chunk) [Critical Accounting Judgements and Key Sources of Estimation Uncertainty](index=44&type=section&id=Critical%20Accounting%20Judgements%20and%20Key%20Sources%20of%20Estimation%20Uncertainty) The Group makes critical accounting judgments and estimates when preparing financial statements, primarily involving goodwill impairment, inventory provisions, depreciation and amortization, impairment of trade and other receivables, impairment assessment of non-financial assets, income tax, and valuation of defined benefit obligations; these judgments and estimates are based on past experience and relevant factors, and actual results may differ from estimates - Critical judgments and estimates involve goodwill impairment, inventory provisions, depreciation and amortization, impairment of trade receivables, impairment assessment of non-financial assets, income tax, and valuation of defined benefit obligations[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The valuation process requires management to make assumptions and judgments regarding future cash flows, discount rates, market risks, and asset-specific risks[103](index=103&type=chunk)[107](index=107&type=chunk) [Segment Information](index=49&type=section&id=Segment%20Information) The Group's chief operating decision maker has segmented its businesses into three operating categories: watches and accessories business, property investment, and banking and financial business; for the six months ended June 30, 2025, the watches and accessories business recorded a segment loss, property investment recorded a segment profit, and banking and financial business recorded a segment profit - The Group's businesses are divided into three operating segments: watches and accessories business, property investment, and banking and financial business[115](index=115&type=chunk) Segment Performance Summary (For the Six Months Ended June 30, 2025) | Business Segment | Total Revenue (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Watches and Accessories Business | 271,529 | (53,479) (Loss) | | Property Investment | 8,943 | 7,692 (Profit) | | Banking and Financial Business | 243,220 | 53,609 (Profit) | | Unallocated Corporate Income and Expenses, Net | - | (33,034) | | Share of Profits from Associates | - | 4,147 | | Finance Costs for Non-Banking & Financial Businesses | - | (21,782) | | **(Loss)/Profit Before Income Tax** | **523,692** | **(42,847)** | [Revenue](index=52&type=section&id=Revenue) The Group's revenue primarily derives from banking and financial businesses (net interest income, net fee and commission income, net trading income) and non-banking and financial businesses (sales of goods, rental income); for the six months ended June 30, 2025, sales of goods from non-banking and financial businesses significantly decreased, while trading income from banking business notably increased - Net interest income from banking business was **HK$127,667 thousand**, a **7.6%** year-on-year decrease[119](index=119&type=chunk) - Net fee and commission income from banking business was **HK$93,466 thousand**, a **7.5%** year-on-year increase[120](index=120&type=chunk) - Trading income from banking business was **HK$20,941 thousand**, a **59.3%** year-on-year increase[120](index=120&type=chunk) - Sales of goods from non-banking and financial businesses were **HK$271,529 thousand**, a **41.0%** year-on-year decrease[122](index=122&type=chunk) - Rental income from non-banking and financial businesses was **HK$8,943 thousand**, a **25.5%** year-on-year decrease[122](index=122&type=chunk) [Other Recurring Income and Other Gains or Losses, Net](index=55&type=section&id=Other%20Recurring%20Income%20and%20Other%20Gains%20or%20Losses%2C%20Net) For the six months ended June 30, 2025, other recurring income and other gains or losses, net, amounted to **HK$18,010 thousand**, a significant **64.7%** year-on-year decrease, primarily comprising net exchange gains, net fair value change gains from trading portfolio investments, and fair value change gains from financial liabilities at fair value through profit or loss Other Recurring Income and Other Gains or Losses, Net (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange Gains | 3,124 | 16,059 | -80.5 | | Net Fair Value Change Gains from Trading Portfolio Investments | 62 | 72 | -13.9 | | Fair Value Change Gains from Financial Liabilities at Fair Value Through Profit or Loss | 12,495 | 12,162 | 2.7 | | Dividend Income from Financial Assets at Fair Value Through Other Comprehensive Income | – | 7,934 | -100.0 | | **Total** | **18,010** | **51,061** | **-64.7** | [Finance Costs for Non-Banking and Financial Businesses](index=55&type=section&id=Finance%20Costs%20for%20Non-Banking%20and%20Financial%20Businesses) For the six months ended June 30, 2025, finance costs for non-banking and financial businesses were **HK$21,782 thousand**, a slight year-on-year decrease of **1.2%**, primarily comprising interest on lease liabilities and interest expenses on bank borrowings, bank overdrafts, and other borrowings Finance Costs for Non-Banking and Financial Businesses (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Lease Liabilities | 2,657 | 1,645 | 61.5 | | Interest Expenses on Bank Borrowings, Bank Overdrafts, and Other Borrowings | 19,125 | 20,400 | -6.3 | | **Total** | **21,782** | **22,045** | **-1.2** | [(Loss)/Profit Before Income Tax](index=56&type=section&id=%28Loss%29%2FProfit%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Group recorded a loss before income tax of **HK$42,847 thousand**, compared to a profit of **HK$13,192 thousand** in the same period last year, primarily impacted by depreciation of property, plant and equipment and amortization of intangible assets (Loss)/Profit Before Income Tax Related Deductions (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 30,167 | 48,627 | -37.9 | | Amortization of Intangible Assets | 5,114 | 6,043 | -15.4 | [Income Tax Expense](index=56&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **HK$8,802 thousand**, a **7.2%** year-on-year decrease, primarily from current tax in China and Liechtenstein, with no Hong Kong profits tax provision made as no assessable profits arose in Hong Kong Income Tax Expense (For the Six Months Ended June 30, 2025) | Tax Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current Tax - China | 1,571 | 1,447 | 8.6 | | Current Tax - Liechtenstein | 7,722 | 7,457 | 3.6 | | Current Tax - Switzerland | – | 332 | -100.0 | | Deferred Tax | (491) | 248 | N/A | | **Total** | **8,802** | **9,484** | **-7.2** | - No profits tax provision was made for Hong Kong, and Chinese subsidiaries are subject to income tax rates ranging from **15% to 25%**[126](index=126&type=chunk) [Dividends](index=57&type=section&id=Dividends) The Directors do not recommend the payment of an interim dividend for the period ended June 30, 2025, consistent with the same period last year - The Directors do not recommend the payment of an interim dividend for the period ended June 30, 2025[128](index=128&type=chunk) [(Loss)/Earnings Per Share](index=57&type=section&id=%28Loss%29%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was **0.97 HK cents**, compared to earnings per share of **0.16 HK cents** in the same period last year (Loss)/Earnings Per Share (For the Six Months Ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (HK$ thousand) | (42,045) | 7,024 | | Weighted Average Number of Shares (thousand shares) | 4,351,889 | 4,351,889 | | Basic and Diluted (Loss)/Earnings Per Share | (0.97 HK cents) | 0.16 HK cents | [Amounts Due from Banks and Customers](index=58&type=section&id=Amounts%20Due%20from%20Banks%20and%20Customers) As of June 30, 2025, total amounts due from customers were **HK$2,942,445 thousand**, a **10.7%** year-on-year increase; total amounts due from banks were **HK$6,145,570 thousand**, a significant **108.7%** year-on-year increase, primarily driven by an increase in amounts due from banks in the ordinary course of business Amounts Due from Banks and Customers (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Amounts Due from Customers | 2,942,445 | 2,659,182 | 10.7 | | Amounts Due from Banks in Ordinary Course of Business | 5,820,401 | 2,696,501 | 115.9 | | Total Amounts Due from Banks | 6,145,570 | 2,945,270 | 108.7 | [Trading Portfolio Investments](index=58&type=section&id=Trading%20Portfolio%20Investments) As of June 30, 2025, total trading portfolio investments were **HK$35,426 thousand**, a **10.4%** year-on-year decrease, primarily comprising listed equity instruments in Hong Kong and outside Hong Kong, unlisted debt instruments of financial institutions, and unlisted fund units; the Group aims to maintain a certain level of liquidity to meet capital expenditures Trading Portfolio Investments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity Instruments | 15,343 | 15,639 | -1.9 | | Unlisted Debt Instruments of Financial Institutions | 250 | 4,439 | -94.4 | | Unlisted Fund Units | 19,833 | 19,486 | 1.8 | | **Total Trading Portfolio Investments** | **35,426** | **39,564** | **-10.4** | - Trading portfolio investments aim to maintain liquidity to meet unforeseen capital expenditures and are used for listed equities to generate short-term returns[34](index=34&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=59&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, total financial assets at fair value through other comprehensive income amounted to **HK$220,486 thousand**, a **5.7%** year-on-year decrease, primarily comprising listed equity instruments in Hong Kong (Minxin Holdings) and listed equity instruments outside Hong Kong (Crown City Grandway); during the reporting period, fair value decreased by **HK$13,564 thousand** Financial Assets at Fair Value Through Other Comprehensive Income (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Listed Equity Instruments in Hong Kong | 185,115 | 202,745 | -8.7 | | Listed Equity Instruments Outside Hong Kong | 29,879 | 25,812 | 15.8 | | Unlisted Equity Investments | 5,492 | 5,336 | 2.9 | | **Total** | **220,486** | **233,893** | **-5.7** | - During the reporting period, fair value decreased by **HK$13,564 thousand**, which was recognized in other comprehensive income and the fair value through other comprehensive income reserve[134](index=134&type=chunk) [Derivative Financial Instruments](index=60&type=section&id=Derivative%20Financial%20Instruments) As of June 30, 2025, derivative financial assets were **HK$923 thousand**, a significant **97.2%** year-on-year decrease, while derivative financial liabilities were **HK$5,019 thousand**, a **101.0%** year-on-year increase, primarily comprising forward and option contracts for banking business, with risks managed through back-to-back transactions Derivative Financial Instruments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Derivative Financial Assets (Forward and Option Contracts) | 923 | 33,061 | -97.2 | | Derivative Financial Liabilities (Forward and Option Contracts) | 5,019 | 2,497 | 101.0 | - Derivative positions in banking business are managed through back-to-back transactions with external parties to ensure risks are at acceptable levels[136](index=136&type=chunk) [Trade Receivables](index=61&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables were **HK$368,224 thousand**, a slight year-on-year decrease of **1.0%**, with trade receivables from the watches, clocks, and watch accessories business amounting to **HK$358,135 thousand**, a **3.3%** year-on-year decrease Trade Receivables (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables from Watches, Clocks, and Watch Accessories Business | 358,135 | 370,311 | -3.3 | | Trade Receivables from Financial Business – Cash Customers | 10,089 | 1,800 | 460.5 | | **Total** | **368,224** | **372,111** | **-1.0** | - Credit terms for watch business customers are generally one to six months, with credit limits in place[138](index=138&type=chunk) [Other Financial Assets at Amortised Cost](index=62&type=section&id=Other%20Financial%20Assets%20at%20Amortised%20Cost) As of June 30, 2025, total other financial assets at amortised cost amounted to **HK$4,670,112 thousand**, a significant **33.0%** year-on-year increase, primarily invested in listed debt instruments issued by governments and public sectors, financial institutions, and corporations, with a diversified portfolio and low credit risk Other Financial Assets at Amortised Cost (As of June 30, 2025) | Issuer | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Governments and Public Sectors | 3,715,433 | 2,519,712 | 47.5 | | Financial Institutions | 528,323 | 542,825 | -2.6 | | Corporations | 426,356 | 449,292 | -5.1 | | **Total** | **4,670,112** | **3,511,829** | **33.0** | - The investment portfolio comprises **60** listed debt instruments with varying maturities, geographical locations, segments, and currencies, ensuring diversification[39](index=39&type=chunk) [Inventories](index=62&type=section&id=Inventories) As of June 30, 2025, total inventories amounted to **HK$1,542,781 thousand**, a slight year-on-year increase of **1.9%**, with work-in-progress significantly increasing by **99.0%**, while raw materials and finished goods and merchandise decreased Inventories Composition (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Raw Materials | 187,656 | 274,076 | -31.5 | | Work-in-Progress | 618,323 | 310,614 | 99.0 | | Finished Goods and Merchandise | 736,802 | 929,143 | -20.8 | | **Total** | **1,542,781** | **1,513,833** | **1.9** | [Property, Plant and Equipment](index=62&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group purchased property, plant and equipment of **HK$16,067 thousand** and disposed of **HK$1,028 thousand**; at period-end, property, plant and equipment with a total carrying amount of **HK$236,129 thousand** were pledged to secure bank facilities - During the reporting period, property, plant and equipment of **HK$16,067 thousand** were purchased, and **HK$1,028 thousand** were disposed of[141](index=141&type=chunk) - Property, plant and equipment with a total carrying amount of **HK$236,129 thousand** were pledged to secure bank facilities[141](index=141&type=chunk) [Investment Properties](index=63&type=section&id=Investment%20Properties) As of June 30, 2025, investment properties with a total carrying amount of **HK$43,335 thousand** had not yet obtained relevant title certificates, but legal counsel confirmed the Group as the legal beneficial owner, and efforts are underway to obtain certificates from government authorities - Investment properties with a total carrying amount of **HK$43,335 thousand** had not yet obtained relevant title certificates, but the Group was confirmed as the legal beneficial owner[142](index=142&type=chunk) [Intangible Assets](index=63&type=section&id=Intangible%20Assets) As of June 30, 2025, the carrying amount of intangible assets was **HK$81,862 thousand**, primarily comprising brand names, computer software, technical know-how, and customer relationships; during the reporting period, amortization of intangible assets was **HK$5,114 thousand** Intangible Assets Carrying Amount (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Brand Names | 49,190 | 42,819 | 14.9 | | Computer Software | 1,143 | 1,181 | -3.2 | | Technical Know-how | 26,011 | 26,899 | -3.3 | | Customer Relationships | 5,518 | 8,721 | -36.8 | | **Total** | **81,862** | **79,620** | **2.8** | - All intangible assets are attributable to the watches, clocks, and watch accessories business[143](index=143&type=chunk) [Goodwill](index=64&type=section&id=Goodwill) As of June 30, 2025, total goodwill amounted to **HK$1,061,886 thousand**, a **9.1%** year-on-year increase, with **HK$759,447 thousand** attributable to the watches, clocks, and watch accessories business, and **HK$302,439 thousand** attributable to the banking and financial business Goodwill (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Balance at Period/Year-End | 1,061,886 | 973,406 | 9.1 | | Watches, Clocks, and Watch Accessories Business | 759,447 | 710,120 | 6.9 | | Banking and Financial Business | 302,439 | 263,286 | 14.9 | [Trade Payables](index=64&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to **HK$171,435 thousand**, a **9.8%** year-on-year decrease, with trade payables from the watches, clocks, and watch accessories business amounting to **HK$169,089 thousand**, a **10.0%** year-on-year decrease Trade Payables (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables from Watches, Clocks, and Watch Accessories Business | 169,089 | 187,775 | -10.0 | | Trade Payables from Financial Business – Cash Customers | 2,346 | 2,346 | 0.0 | | **Total** | **171,435** | **190,121** | **-9.8** | - Among trade payables for the watches, clocks, and watch accessories business, amounts overdue for more than **6 months** constituted the largest proportion[146](index=146&type=chunk) [Borrowings](index=65&type=section&id=Borrowings) As of June 30, 2025, total borrowings amounted to **HK$534,350 thousand**, a **10.2%** year-on-year decrease, primarily comprising bank overdrafts, bank borrowings, and other loans; borrowings are secured by various assets, including corporate guarantees, equity interests, directors' subordinated deeds, government guarantees, personal guarantees, and legal charges over property, plant and equipment Borrowings Composition (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Overdrafts | 25,512 | 29,519 | -13.6 | | Bank Borrowings | 413,573 | 470,628 | -12.1 | | Other Loans | 95,265 | 94,935 | 0.3 | | **Total** | **534,350** | **595,082** | **-10.2** | - Borrowings are secured by various assets, including corporate guarantees, equity interests, directors' subordinated deeds, government guarantees, personal guarantees, and legal charges over property, plant and equipment[148](index=148&type=chunk)[149](index=149&type=chunk) - As of the reporting date, the Directors are not aware of any breaches of covenants[150](index=150&type=chunk) [Capital Commitments](index=68&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments amounted to **HK$270,000 thousand**, primarily for investment in associate Crown City United International Limited Capital Commitments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Commitment for Investment in an Associate | 270,000 | 270,000 | 0.0 | - Capital commitments are primarily for investment in joint venture Crown City United International Limited, which is engaged in potential overseas equity investment business[153](index=153&type=chunk) [Related Party Transactions](index=69&type=section&id=Related%20Party%20Transactions) The Group engaged in various related party transactions, including purchases of goods from associate Jun Guang Industrial Limited, and outstanding balances with associates, related companies, a shareholder, and directors; the Group also provided financial guarantees to Jun Guang Related Party Transactions Summary (For the Six Months Ended June 30, 2025) | Transaction Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Purchases of Goods (from Associate Jun Guang) | 536 | 2,314 | -76.8 | Outstanding Balances with Related Parties (As of June 30, 2025) | Balance Type | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amounts Due from an Associate | 40,016 | 43,380 | | Amounts Due to a Shareholder | 800 | – | | Amounts Due to Directors | 75,155 | 73,731 | | Amounts Due to a Related Company | 119,213 | 125,413 | - The Group provided a corporate guarantee for bank facilities up to **HK$55,000 thousand** to associate Jun Guang Industrial Limited[158](index=158&type=chunk) [Transactions with Non-Controlling Interests](index=71&type=section&id=Transactions%20with%20Non-Controlling%20Interests) During the reporting period, the Group engaged in several transactions with non-controlling interests, including a deemed disposal of Wealthy Land Group equity restructuring, resulting in an increase of **HK$3,096 thousand** in equity attributable to owners of the Company; and a deemed acquisition of additional Wealthy Land Group equity restructuring, resulting in a total decrease of **HK$1,574 thousand** in equity attributable to owners of the Company - A deemed disposal of Wealthy Land Group equity restructuring resulted in a **0.48%** decrease in the Company's effective equity interest in Wealthy Land Group and an increase of **HK$3,096 thousand** in equity attributable to owners of the Company[162](index=162&type=chunk) - A deemed acquisition of additional Wealthy Land Group equity restructuring resulted in a total **0.28%** increase in the Company's effective equity interest in Wealthy Land Group and a total decrease of **HK$1,574 thousand** in equity attributable to owners of the Company[163](index=163&type=chunk)[164](index=164&type=chunk) [Fair Value Measurement of Financial Instruments](index=72&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The fair values of the Group's financial assets and liabilities are categorized into three levels (Level 1: quoted prices in active markets; Level 2: observable inputs; Level 3: unobservable inputs) according to Hong Kong Financial Reporting Standard 13; at the end of the reporting period, the Group held a significant amount of Level 2 financial assets and liabilities, as well as some Level 3 financial assets, with fair value measurement methods and valuation approaches consistent with previous reporting periods - Fair value measurement of financial instruments is categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[168](index=168&type=chunk) Fair Value Hierarchy Classification of Financial Instruments (As of June 30, 2025) | Metric | Level 1 (HK$ thousand) | Level 2 (HK$ thousand) | Level 3 (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--

Core Insights - The article highlights the changes in the Hong Kong Stock Connect holdings, with notable increases and decreases in ownership percentages for various companies [1][2]. Group 1: Increased Holdings - Heng Rui Medicine (01276) saw the largest increase in ownership percentage, rising by 1.49% to a total of 13.84% [2]. - Kanglong Chemical (03759) experienced a 1.35% increase, bringing its ownership to 60.51% [2]. - Zhaoyan New Drug (06127) increased by 1.27%, reaching a holding of 43.70% [2]. - Other companies with significant increases include Junshi Biosciences (01877) at +1.24% (59.08%) and China Pacific Insurance (02601) at +1.20% (44.16%) [2]. Group 2: Decreased Holdings - Shandong Molong (00568) had the largest decrease, with a drop of 1.99% to 57.67% [2]. - Yisou Technology (02550) decreased by 0.99%, now holding 37.95% [2]. - Nanjing Panda Electronics (00553) saw a reduction of 0.98%, bringing its ownership to 42.65% [2]. - Other notable decreases include Kailai Ying (06821) at -0.95% (43.35%) and Meizhong Jiahe (02453) at -0.95% (32.06%) [2]. Group 3: Five-Day Changes - In the last five trading days, China Merchants Energy (01138) had the highest increase in ownership, up by 6.19% to 65.63% [3]. - Shandong Molong (00568) also saw a significant increase of 3.74% [3]. - Other companies with notable increases include Zhongchu Innovation (03931) at +3.62% (10.35%) and Youbao Online (02429) at +3.33% (17.38%) [3]. Group 4: Twenty-Day Changes - Over the past twenty days, Anjiren Food (02648) experienced the largest increase, up by 12.29% to 20.54% [4]. - China Merchants Energy (01138) also saw a significant increase of 9.07% [4]. - Other companies with notable increases include Yimai Sunshine (02522) at +7.70% (43.02%) and Lens Technology (06613) at +7.56% (13.64%) [4].

Core Viewpoint - The removal of certain stocks from the Hong Kong Stock Connect list has led to significant declines in their share prices, indicating a negative market reaction to the index adjustments [1] Group 1: Stock Performance - Yisou Technology (02550) experienced a drop of 31.53%, trading at HKD 3.17 [1] - Meizhong Jiahe (02453) fell by 25.32%, with a price of HKD 3.54 [1] - Guancheng Watch and Jewelry (00256) decreased by 22.71%, now at HKD 0.228 [1] - Sipai Health (00314) saw a decline of 13.6%, trading at HKD 4.7 [1] Group 2: Market Announcement - The Shanghai Stock Exchange and Shenzhen Stock Exchange announced adjustments to the constituent stocks of the Hang Seng Composite Large, Mid, and Small Cap Indices, effective from September 8 [1] - A total of 20 stocks, including Yisou Technology, Meizhong Jiahe, Guancheng Watch and Jewelry, and Sipai Health, were removed from the Hong Kong Stock Connect eligible securities list [1]

Core Viewpoint - The removal of certain stocks from the Hong Kong Stock Connect list has led to significant declines in their share prices, indicating a negative market reaction to the index composition changes [1] Group 1: Stock Performance - Yisou Technology (02550) experienced a drop of 31.53%, trading at HKD 3.17 [1] - Meizhong Jiahe (02453) fell by 25.32%, with a price of HKD 3.54 [1] - Guancheng Watch and Jewelry (00256) decreased by 22.71%, now at HKD 0.228 [1] - Sipai Health (00314) saw a decline of 13.6%, trading at HKD 4.7 [1] Group 2: Market Announcement - The Shanghai Stock Exchange and Shenzhen Stock Exchange announced adjustments to the Hong Kong Stock Connect eligible securities list, effective from September 8 [1] - A total of 20 stocks, including Yisou Technology, Meizhong Jiahe, Guancheng Watch and Jewelry, and Sipai Health, were removed from the list due to changes in the Hang Seng Composite Large, Mid, and Small Cap Indexes [1]

Core Viewpoint - The Shenzhen Stock Exchange announced adjustments to the Hong Kong Stock Connect eligible securities list, effective from September 8, 2025, due to periodic changes in the Hang Seng Composite Large, Medium, and Small Cap Indices [1]. Group 1: Adjustments to the Eligible Securities List - The following companies are added to the Hong Kong Stock Connect eligible securities list: China Foods (00506), Boleton (01333), and Huiju Technology (01729) [1]. - Additional companies included in the adjustments are: Jin Jing New Energy (01783), Bi Gui Wang (02007), Kangnait Optical (02276), and others, totaling 20 companies added [2]. - Companies removed from the eligible securities list include: Crown City Watch and Jewelry (00256), Sipai Health (00314), and Café de Coral Group (00341), among others, totaling 15 companies removed [2][3].

Core Points - The Shenzhen Stock Exchange announced adjustments to the Hong Kong Stock Connect eligible securities list due to periodic changes in the Hang Seng Composite Large/Mid/Small Cap Indexes, effective from September 8, 2025 [1] Group 1: Adjustments to the Eligible Securities List - The following stocks are added to the list: China Foods (00506), Boleton (01333), and Huiju Technology (01729) [1] - The following stocks are removed from the list: Crown City Watch & Jewelry (00256), Sipai Health (00314), and Cafe de Coral Group (00341) [1] Group 2: Additional Adjustments - Other stocks added include: Jin Jing New Energy (01783), Country Garden (02007), and Conant Optical (02276) among others [2] - Other stocks removed include: BOE Technology Group (00710), ZhiXing Technology (01274), and Zhou Hei Ya (01458) among others [3]

聚焦二 *ST步森（002569）：筹划出售陕西步森35%股权预计构成重大资产重组；罗博特科等公司拟赴港上 市；旷达科技：实控人拟变更为株洲市国资委 8日起复牌；向日葵：筹划重大资产重组 8日起停牌；亿 华通：终止重大资产重组事项；多家公司高层人事变动；贵州茅台：控股股东取得增持股份贷款承诺 函；ST帕瓦：因涉嫌信披违法违规公司及共同实控人之一张宝被证监会立案；ST岭南：公司及原控股 股东因涉嫌信披违法违规被证监会立案…… 今日看点 聚焦一 *ST步森：筹划出售陕西步森35%股权预计构成重大资产重组 公司筹划以现金方式向南通二纺机有限公司出售陕西步森服饰智造有限公司（以下简称"陕西步森"） 35%的股权。本次交易完成后，公司将不再持有陕西步森任何股权。经初步测算，本次交易预计构成重 大资产重组。本次交易不涉及公司发行股份，不构成重组上市，亦不会导致公司控制权的变更。本次交 易尚处于初步筹划阶段，交易方案、交易价格等核心要素仍需进一步论证和协商，且需按照相关法律、 法规及公司章程的规定履行必要的内外部决策和审批程序。 旷达科技：实控人拟变更为株洲市国资委 8日起复牌 公司控股股东、实际控制人沈介良于2025年9 ...

Group 1 - The company *ST Bosen (002569.SZ)* plans to sell 35% of its stake in Shaanxi Bosen Apparel Intelligent Manufacturing Co., Ltd. to Nantong Erfangji Co., Ltd. [1] - The transaction will be conducted in cash, and after completion, the company will no longer hold any equity in Shaanxi Bosen [1] - The transaction is currently in the preliminary planning stage, with core elements such as the transaction plan and price still needing further verification and negotiation [1]

Group 1 - The company *ST Bosen (002569.SZ) announced plans to optimize its asset structure and improve cash flow by selling a 35% stake in Shaanxi Bosen Apparel Intelligent Manufacturing Co., Ltd. to Nantong Erfangji Co., Ltd. [1] - After the completion of this transaction, the company will no longer hold any equity in Shaanxi Bosen [1]

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 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 冠城鐘錶珠寶集團有限公司 呈交日期: 2025年9月1日 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 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) | 00256 | 說明 | | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | | 4,351,888,206 | | 0 | | 4,351,888,206 | | 增加 / 減少 (-) | | | | | | | | | | 本月底結存 | | | | 4,351,888,206 | | 0 | | 4,351,888,206 | 第 ...