[Report of Directors](index=3&type=section&id=Report%20of%20Directors) This section covers corporate governance, share option and award schemes, equity-linked agreements, directors' and substantial shareholders' interests, share repurchases, and other significant corporate matters [Share Option Scheme](index=3&type=section&id=Share%20Option%20Scheme) The 2015 Share Option Scheme terminated in May 2025, with no new grants and all outstanding options either exercised or lapsed by June 30, 2025 - The 2015 Share Option Scheme terminated in May 2025, with no new share options granted during the reporting period[3](index=3&type=chunk)[7](index=7&type=chunk) Details of 2015 Share Option Scheme Movements (As of June 30, 2025) | Metric | Number | | :--- | :--- | | Share options held as of December 31, 2024 | 2,953,500 | | Share options granted during the period | – | | Share options exercised during the period | 2,343,500 | | Share options lapsed during the period | 610,000 | | Share options held as of June 30, 2025 | 0 | - The weighted average closing price before exercise by group employees was approximately **HKD 13.58**[10](index=10&type=chunk) [Share Award Schemes](index=5&type=section&id=Share%20Award%20Schemes) The company's 2015 Share Award Scheme terminated in January 2025, while the 2025 scheme, adopted concurrently, granted **12,503,380** award shares during the period to incentivize key employees and directors - The 2015 Share Award Scheme terminated on January 21, 2025, with no new award shares granted thereafter[11](index=11&type=chunk)[16](index=16&type=chunk) - The 2025 Share Award Scheme was adopted on January 21, 2025, with a ten-year validity, aiming to incentivize key employees, directors, and external expert consultants[18](index=18&type=chunk)[22](index=22&type=chunk) - During the reporting period, the company granted **12,503,380** award shares under the 2025 Share Award Scheme[27](index=27&type=chunk)[28](index=28&type=chunk) Share Award Scheme Share Movements (As of June 30, 2025) | Participant Category | Unvested as of December 31, 2024 | Granted during the Period | Vested during the Period | Lapsed during the Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors (Xu Shaochun) | 200,000 | – | 112,500 | – | 87,500 | | Directors (Lin Bo) | 337,500 | 100,000 | 137,500 | – | 300,000 | | Other Employees | 23,988,075 | 12,403,380 | 9,957,636 | 1,656,875 | 24,776,944 | | **Total** | **24,525,575** | **12,503,380** | **10,207,636** | **1,656,875** | **25,164,444** | - The weighted average fair value of award shares granted during the period was **HKD 10.43** per share, with a four-year vesting period[37](index=37&type=chunk) [Equity-linked Agreement](index=10&type=section&id=Equity-linked%20agreement) In December 2023, the company completed a placement of **154,627,000** new shares to Al-Rayyan Holdings LLC, raising approximately **HKD 1.561 billion** in net proceeds, primarily for capital market transactions and general working capital, with most funds utilized - On December 14, 2023, the company completed a placement of **154,627,000** new shares to Al-Rayyan Holdings LLC at a subscription price of **HKD 10.10** per share[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) Utilization of Subscription Proceeds (As of June 30, 2025) | Purpose | Subscription Proceeds (HKD '000) | Utilized during the Period (HKD '000) | Utilized as of June 30, 2025 (HKD '000) | Unutilized as of June 30, 2025 (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Potential Capital Market Transactions (80.0%) | 1,248,786 | 59,902 | 960,220 | 288,566 | | General Operations and Working Capital (20.0%) | 312,197 | 0 | 312,197 | 0 | | **Total** | **1,560,983** | **59,902** | **1,272,417** | **288,566** | [Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares or Debentures](index=11&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20or%20Short%20Positions%20in%20the%20Shares,%20Underlying%20Shares%20or%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with Mr. Xu Shaochun being the largest holder, representing **19.81%** of the issued share capital Directors' Interests in Shares/Underlying Shares (As of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Xu Shaochun | Interest in Controlled Corporation and Beneficial Owner | 703,254,499 (L) | 19.81% | | Lin Bo | Beneficial Owner and Beneficiary of Trust | 2,152,717 (L) | 0.06% | | Gary Clark Biddle | Beneficial Owner | 1,230,000 (L) | 0.03% | | Dong Mingzhu | Beneficial Owner | 280,000 (L) | 0.01% | [Substantial Shareholders' and Other Persons' Interests and Short Positions in the Shares, Underlying Shares and Debentures](index=13&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20the%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Easy Key Holdings Limited and its wholly-owned subsidiaries, Oriental Tao Limited and Billion Tao Limited, were substantial shareholders, in addition to directors, while BlackRock, Inc. held both long and short positions in the company's shares Substantial Shareholders' Long Positions in Shares/Underlying Shares (As of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Easy Key Holdings Limited | Interest in Controlled Corporation | 682,198,624 (L) | 19.22% | | Oriental Tao Limited | Beneficial Owner | 386,312,000 (L) | 10.88% | | Billion Tao Limited | Beneficial Owner | 295,886,624 (L) | 8.34% | | BlackRock, Inc. | Interest in Controlled Corporation | 189,172,437 (L) | 5.33% | - BlackRock, Inc. also held **10,096,000** short positions, along with **225,000** long positions and **8,495,000** short positions in unlisted derivatives (cash settled)[60](index=60&type=chunk)[62](index=62&type=chunk) [Purchase, Sale or Redemption of Shares](index=17&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Shares) During the reporting period, the company repurchased **5,059,000** shares on the Stock Exchange, which were cancelled on February 24, 2025, with no other purchases, sales, or redemptions of listed securities by the company or its subsidiaries Share Repurchase Details (During the Reporting Period) | Transaction Date | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Paid Price (HKD) | | :--- | :--- | :--- | :--- | :--- | | 2025/01/02 | 167,000 | 8.08 | 8.08 | 1,349,360.00 | | 2025/01/03 | 1,192,000 | 8.08 | 7.99 | 9,549,740.00 | | 2025/01/06 | 1,500,000 | 8.00 | 7.89 | 11,909,220.00 | | 2025/01/08 | 1,000,000 | 7.80 | 7.79 | 7,799,730.00 | | 2025/01/10 | 700,000 | 7.91 | 7.80 | 5,496,170.00 | | 2025/01/13 | 500,000 | 7.75 | 7.75 | 3,875,000.00 | | **Total** | **5,059,000** | | | **39,979,220.00** | - The aforementioned **5,059,000** repurchased shares were cancelled on February 24, 2025[67](index=67&type=chunk)[69](index=69&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Significant Investments Held and Future Plans for Material Investments or Capital Assets Acquisitions](index=17&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Significant%20Investments%20Held%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets%20Acquisitions) During the reporting period, the Group made no other material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, and as of June 30, 2025, held no significant investments exceeding **5%** of total assets, nor had any future plans for material investments or capital asset acquisitions - During the reporting period, the Group made no other material investments, nor any material acquisitions or disposals of subsidiaries, associates, or joint ventures[68](index=68&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, the Group held no other significant investments exceeding **5%** of its total assets, and had no future plans for material investments or capital asset acquisitions[68](index=68&type=chunk)[70](index=70&type=chunk) [Change of Information of Directors](index=18&type=section&id=Change%20of%20Information%20of%20Directors) During the reporting period, Non-executive Director Mr. Gary Clark Biddle and Independent Non-executive Director Ms. Katherine Rong Xin resigned from their independent non-executive director positions at other listed companies - Non-executive Director Mr. Gary Clark Biddle ceased to be an independent non-executive director of Shui On Land Limited effective May 16, 2025[72](index=72&type=chunk)[78](index=78&type=chunk) - Independent Non-executive Director Ms. Katherine Rong Xin ceased to be an independent non-executive director of Fosun Tourism Group effective March 20, 2025[73](index=73&type=chunk)[78](index=78&type=chunk) [Corporate Governance](index=18&type=section&id=Corporate%20Governance) The company complied with most Corporate Governance Code provisions, with the Chairman and CEO roles combined under Mr. Xu Shaochun, which the Board deems beneficial for stable development, and is committed to continuous improvement and compliance training - The company complied with all code provisions of the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Xu Shaochun[75](index=75&type=chunk)[79](index=79&type=chunk) - The Board believes Mr. Xu Shaochun's dual role facilitates effective strategy formulation and rapid market response, promoting the company's stable and healthy development[75](index=75&type=chunk)[79](index=79&type=chunk) - The company continuously arranges training for directors, senior management, and relevant employees on director responsibilities, continuous professional development, and compliance to enhance corporate governance standards[76](index=76&type=chunk)[79](index=79&type=chunk) [Code of Conduct Regarding Directors' Securities Transactions](index=19&type=section&id=Code%20of%20Conduct%20Regarding%20Directors'%20Securities%20Transactions) The company adopted a code of conduct for directors' securities transactions no less exacting than the Model Code, and all directors confirmed compliance during the reporting period - The company has adopted a code of conduct for directors' securities transactions, with standards no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers[80](index=80&type=chunk)[83](index=83&type=chunk) - Following specific inquiries to all directors, all confirmed compliance with the code of conduct during the reporting period[80](index=80&type=chunk)[83](index=83&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's accounting principles, internal controls, and financial reporting matters, concluding that the unaudited consolidated results for the reporting period complied with applicable accounting standards and were adequately disclosed - The Audit Committee reviewed the Group's adopted accounting policies and management, discussing review, internal control, and financial reporting matters[81](index=81&type=chunk)[84](index=84&type=chunk) - The Audit Committee believes the Group's unaudited consolidated results for the reporting period were prepared in accordance with applicable accounting standards and requirements, with adequate disclosure[81](index=81&type=chunk)[84](index=84&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - During the reporting period, the Board did not recommend declaring an interim dividend (for the six months ended June 30, 2024: nil)[82](index=82&type=chunk)[85](index=85&type=chunk) [Appreciation](index=19&type=section&id=Appreciation) The Board extends sincere gratitude to all management, staff, and shareholders for their contributions and continued support during the reporting period - The Board thanks all management and staff for their contributions to the Group during the period, and sincerely appreciates shareholders' continuous support[86](index=86&type=chunk) [BUSINESS REVIEW AND OUTLOOK](index=21&type=section&id=BUSINESS%20REVIEW%20AND%20OUTLOOK) This section reviews the company's financial performance, strategic focus on AI, cloud subscriptions, and global expansion, concluding with an outlook on future growth and market positioning [Financial Results](index=21&type=section&id=Financial%20Results) For the six months ended June 30, 2025, the Group's revenue grew by **11.2%** year-on-year, with cloud services revenue up **11.9%**, and loss attributable to equity holders significantly narrowed by **55.1%**, driven by cloud subscription scalability and AI-driven efficiency gains Key Financial Data for H1 2025 | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Growth/Narrowing | | :--- | :--- | :--- | :--- | | Revenue | 3,192,499 | 2,870,025 | +11.2% | | Cloud Services Revenue | 2,672,918 | 2,389,247 | +11.9% | | Loss Attributable to Equity Holders of the Company | (97,738) | (217,851) | Narrowed 55.1% | | Basic Loss Per Share | (2.78) cents | (6.12) cents | Narrowed 54.58% | | Net Cash Outflow from Operating Activities | (18,215) | (166,292) | Improved | - The year-on-year narrowing of losses was primarily due to the scaling effect of cloud subscription business and efficiency improvements driven by AI[92](index=92&type=chunk)[95](index=95&type=chunk) [Strategy Review and Business Highlights](index=21&type=section&id=Strategy%20Review%20and%20Business%20Highlights) Kingdee adheres to an 'AI-first, Subscription-first, Globalization' strategy, aiming to become an enterprise management AI platform, achieving high-quality growth in cloud subscriptions, accelerating AI agent deployment, and expanding overseas markets to build a global ecosystem - Kingdee is committed to becoming the 'most trusted enterprise management AI platform,' with 'AI-first, Subscription-first, Globalization' as its strategic themes[94](index=94&type=chunk)[96](index=96&type=chunk) - Kingdee ranks first in market share in multiple segments, including China's SaaS ERP and financial cloud, and has been ranked first in IDC China's growth-oriented enterprise application software market for **21** consecutive years[97](index=97&type=chunk)[99](index=99&type=chunk) - Kingdee is the first and only Chinese vendor included in Gartner's 'Market Guide for PLM Software in Discrete Manufacturing' and is listed in Gartner's Top 10 Generative AI Models in the China market[97](index=97&type=chunk)[99](index=99&type=chunk) [Cloud Subscriptions Leading the Industry with Continued High-Quality Growth](index=22&type=section&id=Cloud%20Subscriptions%20Leading%20the%20Industry%20with%20Continued%20High-Quality%20Growth) Kingdee continues its 'Subscription-first' strategy, achieving significant growth in both cloud subscription revenue and Annual Recurring Revenue (ARR), with strong performance across large, growth, and small and micro enterprise markets, maintaining healthy Net Dollar Retention (NDR) rates Key Cloud Subscription Business Metrics (As of June 30, 2025) | Metric | Amount/Quantity | Y-o-Y Growth | | :--- | :--- | :--- | | Cloud Subscription Revenue | approximately RMB 1.684 billion | +22.1% | | As % of Group Total Revenue | approximately 52.8% | - | | Cloud Subscription Annual Recurring Revenue (ARR) | approximately RMB 3.73 billion | +18.5% | | Cloud Subscription Business Contract Liabilities Balance | approximately RMB 3.378 billion | +24.7% | Performance of Cloud Product Lines (As of June 30, 2025) | Product Line | Revenue/Customer Count | Cloud Subscription Revenue | Y-o-Y Growth | NDR | | :--- | :--- | :--- | :--- | :--- | | Kingdee Cloud · Cosmic and Kingdee Cloud · Galaxy (Large Enterprises) | Total revenue approximately RMB 845 million | approximately RMB 276 million | +34.3% (Total revenue) / +41.1% (Cloud subscription) | 108% | | Kingdee Cloud · Starlight (Growth Enterprises) | Customer count reached **46,000** | approximately RMB 740 million | +9.5% (Customer count) / +19.0% (Cloud subscription) | 94% | | Kingdee Cloud · Stellar and Kingdee Jingdou Cloud (Small and Micro Enterprises) | Customer counts reached **85,000** and **386,000** respectively | approximately RMB 537 million | +35.1% (Stellar customer count) / +15.0% (Jingdou Cloud customer count) / +23.8% (Total cloud subscription) | 93% (Stellar) / 88% (Jingdou Cloud) | [AI-Driven Technological Innovation Accelerating Scenario-Based Deployment of Intelligent Agents](index=24&type=section&id=AI-Driven%20Technological%20Innovation%20Accelerating%20Scenario-Based%20Deployment%20of%20Intelligent%20Agents) Kingdee, guided by its 'AI-first' strategy, deeply integrates AI into SaaS products and operations, with AI contract value exceeding **RMB 150 million** during the period, launching Cosmic AI Agent Platform 2.0 and AI-native intelligent agents, and collaborating with enterprises and strategic partners to accelerate AI application in enterprise management and financial risk control - During the reporting period, AI contract value exceeded **RMB 150 million**[106](index=106&type=chunk)[108](index=108&type=chunk) - Kingdee launched Cosmic AI Agent Platform 2.0, along with AI-native intelligent agents like Kingkey Financial Report and ChatBI, securing key clients such as Hisense Group and Tongwei Co., Ltd[106](index=106&type=chunk)[108](index=108&type=chunk) - Active AI assistant users reached **170,000**, helping small and micro enterprises improve bookkeeping efficiency by approximately **80%**, invoicing efficiency by approximately **40%**, and tax filing efficiency by approximately **60%**[109](index=109&type=chunk)[110](index=110&type=chunk) - Kingdee Fintech won first prize in the Digital China Innovation Competition for its 'Intelligent Financial Risk Control Large Model' and signed agreements with financial institutions including China Construction Bank and Bank of Communications[109](index=109&type=chunk)[110](index=110&type=chunk) - Kingdee strengthened AI collaborations with strategic partners like Volcengine, Alibaba Cloud, and Huawei Cloud, enhancing R&D efficiency and large model inference performance[109](index=109&type=chunk)[110](index=110&type=chunk) [Accelerating Global Expansion and Building an Overseas Ecosystem of Partners](index=26&type=section&id=Accelerating%20Global%20Expansion%20and%20Building%20an%20Overseas%20Ecosystem%20of%20Partners) Kingdee actively pursues its globalization strategy, expanding into overseas markets like Southeast Asia and the Middle East, signing **259** Chinese outbound and local overseas enterprises, strengthening overseas delivery capabilities, building localized applications and language packs, and deepening cooperation with international banking partners to support Chinese enterprises' global development - Kingdee actively promotes its global strategic layout, vigorously expanding into overseas markets such as Southeast Asia and the Middle East[111](index=111&type=chunk)[113](index=113&type=chunk) - Kingdee Cloud · Starlight signed **259** Chinese outbound and local overseas enterprises, covering various industries including modern services, equipment manufacturing, and electronic high-tech[111](index=111&type=chunk)[113](index=113&type=chunk) - Kingdee built a three-network-in-one overseas delivery resource pool and established partnerships in countries such as Malaysia, the Philippines, Thailand, and Vietnam[112](index=112&type=chunk)[113](index=113&type=chunk) - Kingdee has developed localized applications and language packs for multiple countries or regions, including Singapore, Vietnam, and the Middle East, and deepened cooperation with international business partners such as Standard Chartered Bank, HSBC, and Deutsche Bank[112](index=112&type=chunk)[113](index=113&type=chunk) [Outlook](index=40&type=section&id=Outlook) Kingdee firmly adheres to its core 'AI-first, Subscription-first, Globalization' strategy, aiming to integrate AI technology and management wisdom to empower global enterprises and individuals, promote the rise of Chinese management models worldwide, and strive to become a global leading enterprise management AI company by **2030** - AI+SaaS is reshaping the industry landscape, injecting powerful growth momentum into Kingdee[191](index=191&type=chunk)[192](index=192&type=chunk) - Kingdee will adhere to its core 'AI-first, Subscription-first, Globalization' strategy, integrating AI technology and management wisdom to empower every enterprise and individual globally[191](index=191&type=chunk)[192](index=192&type=chunk) - Kingdee's goal is to grow into a global leading enterprise management AI company by **2030**[191](index=191&type=chunk)[192](index=192&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=27&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides a detailed analysis of the Group's financial performance, including revenue, profitability, and cash flow, alongside discussions on employee remuneration and social responsibility initiatives [Key Financial Information](index=27&type=section&id=Key%20Financial%20Information) This section details the Group's H1 2025 financial performance, covering revenue growth, improved gross margin, expense control, narrowed losses, and key balance sheet and cash flow changes, driven primarily by strong cloud subscription growth, with administrative expenses increasing due to personnel optimization H1 2025 Revenue Composition and Growth | Revenue Source | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Total Turnover | 3,192,499 | 2,870,025 | +11.2% | | Cloud Subscription Business Revenue | 1,684,262 | 1,379,747 | +22.1% | | Products, Implementation and Other Revenue | 1,508,237 | 1,490,278 | +1.2% | H1 2025 Profit and Expense Overview | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross Profit | 2,095,341 | 1,815,187 | +15.4% | | Gross Profit Margin | 65.6% | 63.2% | +2.4 percentage points | | Selling and Distribution Expenses | 1,263,898 | 1,224,514 | +3.2% | | Selling and Distribution Expenses as % of Turnover | 39.6% | 42.7% | -3.1 percentage points | | Administrative Expenses | 346,049 | 249,036 | +39.0% | | Administrative Expenses as % of Turnover | 10.8% | 8.7% | +2.1 percentage points | | Research and Development Expenses (Recognized in Income Statement) | 775,514 | 806,695 | -3.9% | | Research and Development Expenses as % of Turnover | 24.3% | 28.1% | -3.8 percentage points | | Net Loss Margin Attributable to Parent Company | 3.1% | 7.6% | -4.5 percentage points | | Basic Loss Per Share | (2.78) cents | (6.12) cents | Loss narrowed 54.58% | - The increase in administrative expenses was primarily due to personnel structure optimization and increased severance payments[121](index=121&type=chunk)[125](index=125&type=chunk) Financial Assets and Liabilities Overview (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss | 1,572,744 | 1,448,148 | +124,596 | | Investments in Associates | 530,575 | 523,449 | +7,126 | | Contract Assets | 373,880 | 365,707 | +8,173 | | Loans to Third Parties (Net) | 404,725 | 371,117 | +33,608 | | Contract Liabilities | 3,991,174 | 3,723,569 | +267,605 | | Total Cash and Bank Balances | 3,538,160 | 4,175,154 | -636,994 | | Net Current Assets | 32,975 | 152,296 | -119,321 | | Current Ratio | 1.01 | - | - | | Outstanding Bank Borrowings | – | 205,082 | -205,082 | - The increase in contract liabilities was primarily due to the growth of the Group's cloud subscription business[151](index=151&type=chunk)[155](index=155&type=chunk) - The majority of the Group's cash, bank deposits, and wealth management products are denominated in RMB, with approximately **RMB 157,802,000** denominated in foreign currencies[152](index=152&type=chunk)[156](index=156&type=chunk) - The Group's exposure to interest rate risk primarily arises from borrowings; currently, interest rate swaps are not used for hedging, but the Group monitors and adopts hedging strategies when necessary[157](index=157&type=chunk)[158](index=158&type=chunk)[164](index=164&type=chunk) - The Group's exchange rate risk primarily stems from USD to RMB and HKD to RMB exchange rates, with no formal foreign currency hedging policy currently in place[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[165](index=165&type=chunk) - The Group manages credit risk by transacting with state-owned or reputable financial institutions and assessing the credit quality of distributors[162](index=162&type=chunk)[163](index=163&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[172](index=172&type=chunk) - Funds and liquidity are centrally managed by the Treasury Department, utilizing a 'cash pool' strategy to purchase wealth management products for enhanced returns, and establishing stringent fund management principles and budget control systems[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) Total Appraised Value of Major Properties (As of June 30, 2025) | Property Name | Address | Current Use | Lease Term | Total Appraised Value (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Beijing Kingdee Software Park | Shunyi District, Beijing | Office | Long-term | 647,836 | | Shanghai Kingdee Software Park | Pudong, Shanghai | Office | Long-term | 368,940 | | Shenzhen Kingdee Software Park | Nanshan District, Shenzhen | Office | Long-term | 270,105 | | Kingdee Cloud Building | Nanshan District, Shenzhen | Office | Long-term | 828,370 | | Shenzhen W1-B | Nanshan District, Shenzhen | Office | Long-term | 49,440 | | **Total** | | | | **2,164,691** | [Employees and Remuneration Policy](index=38&type=section&id=Employees%20and%20Remuneration%20Policy) As of the reporting period, the Group had **11,043** employees, focusing on customer-centricity and quality, incentivizing innovation, and attracting AI talent, with remuneration based on responsibilities, performance, contributions, and market conditions - During the reporting period, the Group's employee count reached **11,043**[182](index=182&type=chunk)[184](index=184&type=chunk) - The Group adheres to a 'customer-centric, long-term quality-first' approach, incentivizing product innovation and quality development, and attracting leading AI transformation talent and outstanding fresh graduates[182](index=182&type=chunk)[184](index=184&type=chunk) - Remuneration policy is primarily determined based on each employee's job responsibilities, work performance, outstanding contributions, length of service, and prevailing market conditions[183](index=183&type=chunk)[184](index=184&type=chunk) [Social Responsibility](index=39&type=section&id=Social%20Responsibility) Kingdee actively fulfills its corporate social responsibility, being included in the S&P Global Sustainability Yearbook (China Edition) 2024 for three consecutive years, with significant investments in talent development, enterprise management, and public welfare, including university collaborations, digital transformation training, and various charitable activities - Kingdee was included in the S&P Global Sustainability Yearbook (China Edition) 2024 for **three** consecutive years, gaining international recognition for its ESG practices[185](index=185&type=chunk)[189](index=189&type=chunk) - In talent development, Kingdee collaborated with universities to complete **78** industry-academia cooperation projects, established new partnerships with **51** universities, and provided digital learning services to over **20,000** students and more than **500** university faculty members[186](index=186&type=chunk)[189](index=189&type=chunk) - In enterprise management, Kingdee offers digital transformation workshops for entrepreneurs and executives through its Digital Academy and hosts the China Management · Global Forum to promote research on Chinese management models[187](index=187&type=chunk)[189](index=189&type=chunk) - In public welfare, Kingdee continuously participates in charitable initiatives such as poverty alleviation through education, voluntary blood donation, and urban environmental protection[188](index=188&type=chunk)[190](index=190&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=41&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, while non-current assets remained stable; both current assets and liabilities decreased, leading to a slight reduction in net assets and total equity, notably with no outstanding bank borrowings Summary of Condensed Consolidated Interim Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 8,159,791 | 8,148,881 | | Current assets | 5,295,942 | 5,632,114 | | **Total assets** | **13,455,733** | **13,780,995** | | **Liabilities** | | | | Non-current liabilities | 163,523 | 172,396 | | Current liabilities | 5,262,967 | 5,479,818 | | **Total liabilities** | **5,426,490** | **5,652,214** | | **Net assets** | **8,029,243** | **8,128,781** | | **Equity** | | | | Equity attributable to owners of the Company | 7,961,785 | 8,049,956 | | Non-controlling interests | 67,458 | 78,825 | | **Total equity** | **8,029,243** | **8,128,781** | - As of June 30, 2025, the Group had no outstanding bank borrowings, compared to **RMB 205,082,000** as of December 31, 2024[194](index=194&type=chunk) [Condensed Consolidated Interim Income Statement](index=43&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue grew by **11.2%** year-on-year, with gross profit up **15.4%**, while loss before income tax and current period loss significantly narrowed, and basic loss per share attributable to equity holders substantially decreased, reflecting improved operating efficiency Summary of Condensed Consolidated Interim Income Statement (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,192,499 | 2,870,025 | | Cost of sales | (1,097,158) | (1,054,838) | | Gross profit | 2,095,341 | 1,815,187 | | Selling and distribution expenses | (1,263,898) | (1,224,514) | | Administrative expenses | (346,049) | (249,036) | | Research and development costs | (775,514) | (806,695) | | Other income and gains – net | 136,223 | 171,939 | | Finance income – net | 34,000 | 47,722 | | Share of profits of associates – net | 7,126 | 6,053 | | Loss before income tax | (133,563) | (263,285) | | Income tax credit | 24,458 | 24,707 | | Loss for the period | (109,105) | (238,578) | | Loss attributable to equity holders of the Company | (97,738) | (217,851) | | Basic loss per share (RMB cents) | (2.78) | (6.12) | - Loss for the period significantly narrowed by **54.27%** year-on-year, primarily due to revenue growth and expense control[195](index=195&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=44&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive loss for the period was **RMB 104,183,000**, a significant narrowing from **RMB 242,104,000** in the prior period, primarily due to reduced loss for the period and a shift from foreign currency translation differences from loss to gain Summary of Condensed Consolidated Interim Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Loss for the period | (109,105) | (238,578) | | Other comprehensive income/(loss) | 4,922 | (3,526) | | **Total comprehensive loss for the period** | **(104,183)** | **(242,104)** | | Total comprehensive loss attributable to equity holders of the Company | (92,816) | (221,377) | | Total comprehensive loss attributable to non-controlling interests | (11,367) | (20,727) | - Total comprehensive loss narrowed by **56.97%** year-on-year, primarily due to a reduced loss for the period and a shift from foreign currency translation differences from loss to gain[196](index=196&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=45&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity slightly decreased, primarily due to loss for the period and share repurchases, partially offset by employee share option exercises and share award scheme values, while other reserves increased due to share cancellations and share award scheme adjustments Summary of Condensed Consolidated Interim Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Balance at January 1 | 8,128,781 | 8,702,152 | | Loss for the period | (109,105) | (238,578) | | Other comprehensive loss | 4,922 | (3,526) | | Staff share option scheme: Proceeds from issue of shares | 10,100 | 6,299 | | Share award scheme: Value of employee services | 51,169 | 43,205 | | Share award scheme: Transfer of shares to grantees upon vesting | (1,152) | 152 | | Shares purchased for share award scheme | (18,372) | (120,992) | | Repurchase of shares | (37,100) | (359,589) | | Cancellation of shares | – | – | | Transactions with non-controlling interests | – | 18,000 | | **Balance at June 30** | **8,029,243** | **8,047,123** | - Total equity decreased from **RMB 8,128,781,000** as of January 1, 2025, to **RMB 8,029,243,000** as of June 30, 2025, primarily impacted by loss for the period and share repurchases[197](index=197&type=chunk) - Other reserves increased from **RMB 911,387,000** to **RMB 1,161,525,000** due to share cancellations and adjustments to the share award scheme[197](index=197&type=chunk) [Condensed Consolidated Interim Cash Flow Statement](index=47&type=section&id=Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the Group's operating cash outflow significantly improved, investment activities shifted from net outflow to net inflow, and financing cash outflow substantially decreased, collectively leading to a net increase in cash and cash equivalents at period-end, indicating a marked improvement in the company's cash flow position Summary of Condensed Consolidated Interim Cash Flow Statement (For the six months ended June 30, 2025) | Cash Flow Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net cash used in operating activities | (18,215) | (166,292) | | Net cash generated from/(used in) investing activities | 456,075 | (650,806) | | Net cash used in financing activities | (292,745) | (888,701) | | Net increase/(decrease) in cash and cash equivalents | 145,115 | (1,705,799) | | Cash and cash equivalents at end of period | 1,673,106 | 1,258,498 | - Net cash outflow from operating activities significantly decreased by **89.09%** year-on-year, indicating a substantial improvement in operating efficiency[199](index=199&type=chunk) - Cash flow from investing activities shifted from a net outflow in H1 2024 to a net inflow in H1 2025, primarily due to increased proceeds from the disposal of financial assets[199](index=199&type=chunk) - Net cash outflow from financing activities decreased by **67.06%** year-on-year, mainly due to reduced repayments of borrowings and payments for share repurchases[200](index=200&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=49&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides selected notes to the condensed consolidated interim financial information, covering general company details, basis of preparation, significant accounting policies, estimates, segment reporting, asset details, financial instruments, and related party transactions [General information](index=49&type=section&id=General%20information) Kingdee International Software Group Company Limited is an investment holding company primarily engaged in cloud subscription services, software product sales, implementation, consulting, operation and maintenance, and upgrade services, with its shares listed on the Hong Kong Stock Exchange in **2001** - The Company is an investment holding company, primarily engaged in cloud subscription business and products, implementation, and other services[202](index=202&type=chunk)[207](index=207&type=chunk) - The Company's shares were listed on The Stock Exchange of Hong Kong Limited on February 15, 2001[203](index=203&type=chunk)[207](index=207&type=chunk) [Basis of preparation](index=49&type=section&id=Basis%20of%20preparation) This unaudited condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and should be read in conjunction with the annual financial statements for the year ended December 31, 2024 - This unaudited condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[205](index=205&type=chunk)[209](index=209&type=chunk) - This condensed consolidated interim financial information is unaudited[204](index=204&type=chunk)[208](index=208&type=chunk) [Significant accounting policies](index=49&type=section&id=Significant%20accounting%20policies) The accounting policies adopted in this period are consistent with the 2024 annual financial statements, except for the initial adoption of amendments to IAS 21; IFRS 18 (Presentation and Disclosure in Financial Statements) will be effective in **2027**, with its impact still under assessment - The Group first adopted IAS 21 (Amendments) 'Lack of Exchangeability' effective January 1, 2025[215](index=215&type=chunk)[212](index=212&type=chunk) - IFRS 18 'Presentation and Disclosure in Financial Statements' will be effective on January 1, 2027, and is expected to impact the presentation of the income statement, with its effects still under assessment[214](index=214&type=chunk)[216](index=216&type=chunk)[221](index=221&type=chunk) [Estimates](index=51&type=section&id=Estimates) The preparation of interim financial information requires management to make judgments, estimates, and assumptions, with the key sources of uncertainty in these judgments and estimates being the same as those applied in the consolidated financial statements for the year ended December 31, 2024 - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[218](index=218&type=chunk)[222](index=222&type=chunk) - The key sources of significant judgments and estimation uncertainties applied by management in applying the Group's accounting policies are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[219](index=219&type=chunk)[222](index=222&type=chunk) [Segment information](index=51&type=section&id=Segment%20information) Effective **2025**, the Group adjusted its internal reporting structure to separately measure cloud subscriptions and products, implementation, and other services as distinct business segments; during the period, external customer revenue from mainland China constituted the vast majority, with no single customer contributing over **10%** of total revenue - Effective **2025**, the Group adjusted its internal reporting structure to separately measure cloud subscriptions and products, implementation, and other services as distinct business segments[224](index=224&type=chunk)[226](index=226&type=chunk) Segment Revenue and Gross Profit (For the six months ended June 30, 2025) | Segment | Revenue (RMB '000) | Cost of Sales (RMB '000) | Gross Profit (RMB '000) | | :--- | :--- | :--- | :--- | | Cloud Subscription | 1,684,262 | (63,666) | 1,620,596 | | Products, Implementation and Other | 1,508,237 | (1,033,492) | 474,745 | | **Group Total** | **3,192,499** | **(1,097,158)** | **2,095,341** | - As of June 30, 2025, total revenue from external customers in mainland China was **RMB 3,150,889,000**, accounting for **98.69%** of total revenue[231](index=231&type=chunk)[232](index=232&type=chunk) - For the six months ended June 30, 2025, and June 30, 2024, no single customer contributed more than **10%** of the Group's revenue[233](index=233&type=chunk) [Property, plant, equipment and intangible assets](index=54&type=section&id=Property,%20plant,%20equipment%20and%20intangible%20assets) As of June 30, 2025, the Group's net property, plant, and equipment amounted to **RMB 1,730,141,000**, and net intangible assets to **RMB 1,227,297,000**, with additions and depreciation for PPE, and additions and amortization for intangible assets during the period Movements in Property, Plant and Equipment (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | Net book value at January 1 | 1,744,118 | | Additions | 39,464 | | Disposals | (2,693) | | Depreciation | (50,748) | | **Net book value at June 30** | **1,730,141** | Movements in Intangible Assets (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | Net book value at January 1 | 1,231,892 | | Additions | 262,863 | | Amortization | (267,458) | | **Net book value at June 30** | **1,227,297** | [Leases](index=55&type=section&id=Leases) As of June 30, 2025, the Group's right-of-use assets amounted to **RMB 208,178,000** and lease liabilities to **RMB 47,504,000**; during the period, right-of-use assets increased, and lease-related depreciation and interest expenses were incurred, with the Group leasing multiple offices under contracts typically ranging from **1** to **8** years, including renewal options Lease-Related Amounts (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Right-of-use assets | 208,178 | 188,074 | | Lease liabilities | 47,504 | 48,252 | | Depreciation expense of right-of-use assets (six months) | 19,671 | 16,884 | | Interest expense (six months) | 1,315 | 1,826 | | Total cash outflow for leases (six months) | 50,067 | 21,590 | - For the six months ended June 30, 2025, right-of-use assets increased by **RMB 40,791,000**[240](index=240&type=chunk)[241](index=241&type=chunk) - The Group leases multiple offices under fixed-term contracts, typically ranging from **1** to **8** years, which may also include renewal options[248](index=248&type=chunk)[251](index=251&type=chunk) [Investments in associates](index=58&type=section&id=Investments%20in%20associates) As of June 30, 2025, the Group's investments in associates had a carrying value of **RMB 530,575,000**, with a share of profits from associates of **RMB 7,126,000** for the period; all associates are unlisted and operate in mainland China Movements in Carrying Value of Investments in Associates (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | January 1 | 523,449 | | Share of profits of associates – net | 7,126 | | **June 30** | **530,575** | - All of the Group's associates are unlisted companies operating in mainland China[255](index=255&type=chunk) [Financial assets at fair value through profit or loss](index=58&type=section&id=Financial%20assets%20at%20fair%20value%20through%20profit%20or%20loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to **RMB 1,572,744,000**, an increase from year-end 2024, primarily comprising wealth management products, listed equity securities, and unlisted equity investments Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Wealth management products | 602,544 | 480,188 | | Listed equity securities | 107,893 | 95,373 | | Unlisted equity investments | 862,307 | 872,587 | | **Total** | **1,572,744** | **1,448,148** | - Wealth management products have maturities ranging from **1** to **12** months, with expected annual returns between **0.50%** and **2.85%**, and fair value determined using the income approach[267](index=267&type=chunk)[268](index=268&type=chunk) Movements in Level 3 Financial Instruments (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | January 1 | 1,352,775 | | Additions | 2,448,100 | | Disposals | (2,333,230) | | Gains/(losses) recognized in profit or loss | (2,794) | | **June 30** | **1,464,851** | [Trade and other receivables and loans to third parties](index=64&type=section&id=Trade%20and%20other%20receivables%20and%20loans%20to%20third%20parties) As of June 30, 2025, the Group's net trade receivables amounted to **RMB 179,685,000**, and net loans to third parties were **RMB 404,725,000**; third-party loans carry annual interest rates ranging from **8.00%** to **24.00%** and are assessed as low credit risk Trade Receivables and Third-Party Loans Overview (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables – net | 179,685 | 140,952 | | Bills receivable | 61,684 | 40,396 | | Interest receivable | 106,518 | 181,565 | | **Loans to third parties – net** | **404,725** | **371,117** | | Current portion | 266,332 | 240,862 | | Non-current portion | 138,393 | 130,255 | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | Amount (RMB '000) | | :--- | :--- | | 0–90 days | 133,962 | | 91–180 days | 11,139 | | 181–360 days | 28,087 | | Over 360 days | 134,805 | | **Total** | **307,993** | - Loans to third parties carry annual interest rates between **8.00%** and **24.00%**, and are all denominated in RMB[282](index=282&type=chunk)[285](index=285&type=chunk) - The Group's debt instrument investments, including loans to third parties, are assessed as low-risk investments[169](index=169&type=chunk)[172](index=172&type=chunk) [Share capital and share premium](index=67&type=section&id=Share%20capital%20and%20share%20premium) As of June 30, 2025, the company's share capital was **RMB 85,228,000** and share premium was **RMB 5,934,432,000**; during the reporting period, share capital decreased due to share cancellations, and share premium varied due to share award schemes and cancellations Movements in Share Capital and Share Premium (As of June 30, 2025) | Metric | Number of Shares ('000) | Share Book Value (RMB '000) | Share Premium (RMB '000) | Total (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 3,586,015 | 86,068 | 6,174,163 | 6,260,231 | | Employee share option scheme – Proceeds from issue of shares | 2,344 | 56 | 10,044 | 10,100 | | Share award scheme – Value of employee services | – | – | 51,169 | 51,169 | | Share award scheme – Transfer of shares to grantees upon vesting | – | – | (83,659) | (83,659) | | Cancellation of shares | (38,889) | (896) | (217,285) | (218,181) | | **Balance at June 30, 2025** | **3,549,470** | **85,228** | **5,934,432** | **6,019,660** | - Share capital decreased by **RMB 896,000** due to share cancellations, and share premium net decreased by **RMB 239,731,000** due to share award schemes and cancellations[197](index=197&type=chunk)[290](index=290&type=chunk) [Trade and other payables](index=68&type=section&id=Trade%20and%20other%20payables) As of June 30, 2025, the Group's total trade and other payables amounted to **RMB 1,197,220,000**, a decrease from year-end 2024, primarily comprising salaries and employee benefits payable, accrued expenses, and construction payables Trade and Other Payables Overview (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade payables | 75,358 | 82,595 | | Bills payable | 33,445 | 105,893 | | Salaries and employee benefits payable | 176,344 | 301,335 | | Accrued expenses | 355,687 | 391,521 | | Construction payables | 290,030 | 311,275 | | **Total** | **1,197,220** | **1,487,683** | Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | Amount (RMB '000) | | :--- | :--- | | 0-180 days | 67,981 | | 181-360 days | 3,328 | | Over 360 days | 4,049 | | **Total** | **75,358** | - Construction payables primarily represent amounts owed to construction companies by the Group for building expenses related to Kingdee Cloud Building[298](index=298&type=chunk) [Borrowings](index=70&type=section&id=Borrowings) As of June 30, 2025, the Group had no outstanding bank borrowings, compared to **RMB 205,082,000** as of December 31, 2024, indicating that all bank borrowings were repaid during the reporting period Borrowings (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-current bank borrowings – unsecured | – | – | | Current bank borrowings – unsecured | – | 5,082 | | Current portion of long-term bank borrowings | – | 200,000 | | **Total** | **–** | **205,082** | - As of June 30, 2025, the Group had no outstanding bank borrowings[304](index=304&type=chunk) - The Group's bank borrowings had an average annual interest rate of **2.25%** (December 31, 2024)[303](index=303&type=chunk)[304](index=304&type=chunk) [Revenue from contracts with customers](index=71&type=section&id=Revenue%20from%20contracts%20with%20customers) For the six months ended June 30, 2025, the Group's total revenue from contracts with customers was **RMB 3,192,499,000**, with cloud subscription revenue being the largest contributor and showing significant growth Revenue from Contracts with Customers (For the six months ended June 30, 2025) | Revenue Source | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Cloud Subscription | 1,684,262 | 1,379,747 | | Products, Implementation and Other | 1,508,237 | 1,490,278 | | **Total** | **3,192,499** | **2,870,025** | - Cloud subscription revenue grew by **22.1%** year-on-year, serving as the primary driver of the Group's revenue growth[306](index=306&type=chunk) [Expenses by nature](index=72&type=section&id=Expenses%20by%20nature) For the six months ended June 30, 2025, the Group's primary expense items were research and development costs, staff welfare expenses, and outsourcing service fees; R&D costs decreased, while depreciation and amortization expenses increased Expenses by Nature (For the six months ended June 30, 2025) | Expense Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Research and development costs | 775,514 | 806,695 | | Staff welfare expenses (excluding research and development costs) | 1,395,342 | 1,583,044 | | Outsourcing service fees | 261,134 | 249,049 | | Depreciation of property, plant and equipment | 50,748 | 28,784 | | Depreciation of right-of-use assets | 19,671 | 16,884 | | Amortization of trademarks, computer software and copyrights and customer relationships | 9,901 | 6,336 | | Net impairment losses on financial assets and contract assets | 20,792 | 23,941 | - Research and development costs decreased by **3.9%** year-on-year, and staff welfare expenses decreased by **11.86%** year-on-year[309](index=309&type=chunk) - Depreciation of property, plant and equipment increased by **76.38%** year-on-year, and depreciation of right-of-use assets increased by **16.51%** year-on-year[309](index=309&type=chunk) [Other income and gains – net](index=73&type=section&id=Other%20income%20and%20gains%20%E2%80%93%20net) For the six months ended June 30, 2025, the Group's other income and gains – net amounted to **RMB 136,223,000**, a decrease from the prior period, primarily due to reduced VAT refunds and research project income, partially offset by increased rental income Other Income and Gains – Net (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | VAT refunds and research project income | 82,859 | 135,283 | | Rental income | 39,604 | 27,137 | | Realized and unrealized net gains/(losses) on financial assets at fair value through profit or loss | 9,697 | 6,853 | | Foreign currency exchange (losses)/gains | (1,842) | 126 | | Others | 5,905 | 2,540 | | **Total** | **136,223** | **171,939** | - Other income and gains – net decreased by **20.89%** year-on-year, primarily due to reduced VAT refunds and research project income[311](index=311&type=chunk) [Income tax credit](index=74&type=section&id=Income%20tax%20credit) For the six months ended June 30, 2025, the Group recorded an income tax credit of **RMB 24,458,000**; several subsidiaries within the Group benefit from tax incentives, including a **10%** preferential tax rate for key software enterprises, a **15%** preferential tax rate for high-tech enterprises, and corporate income tax exemption Income Tax Credit (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current income tax | 130 | (2,906) | | Deferred income tax | (24,588) | (21,801) | | **Total** | **(24,458)** | **(24,707)** | - Kingdee Software (China) Co., Ltd. is expected to qualify as a key software enterprise, applying a **10%** preferential tax rate[313](index=313&type=chunk)[74](index=74&type=chunk) - Kingdee Diejin Cloud Computing Co., Ltd. and several other subsidiaries are recognized as high-tech enterprises, enjoying a **15%** preferential tax rate[313](index=313&type=chunk)[74](index=74&type=chunk) - Kingdee Cloud Technology Co., Ltd. is expected to qualify as a key software enterprise, enjoying corporate income tax exemption[314](index=314&type=chunk)[316](index=316&type=chunk) [Losses per share](index=75&type=section&id=Losses%20per%20share) For the six months ended June 30, 2025, basic loss per share attributable to equity holders of the Company was **RMB 2.78 cents**, a significant narrowing from **RMB 6.12 cents** in the prior period; due to the Group's loss for the period, potential share options and share award schemes were not included in diluted loss per share calculation, thus diluted loss per share is the same as basic loss per share Losses Per Share (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company (RMB '000) | (97,738) | (217,851) | | Weighted average number of ordinary shares in issue ('000) | 3,512,972 | 3,562,560 | | **Basic loss per share (RMB cents per share)** | **(2.78)** | **(6.12)** | | **Diluted loss per share (RMB cents per share)** | **(2.78)** | **(6.12)** | - As the Group incurred losses for the six months ended June 30, 2025, and June 30, 2024, potential share options and share award schemes were not included in the calculation of diluted loss per share, as their inclusion would be anti-dilutive[320](index=320&type=chunk)[321](index=321&type=chunk) [Dividends](index=77&type=section&id=Dividends) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[325](index=325&type=chunk) [Related party transactions](index=78&type=section&id=Related%20party%20transactions) As of June 30, 2025, the Group engaged in transactions with related parties (including associates and entities controlled by directors) for goods sales, service sales, rental income, and goods and service purchases; balances arising from these transactions are interest-free, unsecured, and repayable on demand Amounts of Related Party Transactions (For the six months ended June 30, 2025) | Transaction Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales of goods | 521 | 1,460 | | Sales of services | 1,646 | 1,095 | | Rental income | 2,154 | 2,587 | | Purchases of goods | 1,165 | 1,136 | | Purchases of services | 26,545 | 23,433 | Current Balances Arising from Related Party Transactions (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Amounts due to related parties recorded in 'Contract liabilities' | 3,635 | 2,605 | | Amounts due to related parties recorded in 'Trade payables' | 5,223 | 1,185 | | Amounts due from related parties | 10,292 | 10,027 | - Balances arising from the aforementioned related party transactions are interest-free, unsecured, and repayable on demand[333](index=333&type=chunk)

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Report's Core View - The total global iron ore shipping volume this period was 3657 (+24) million tons. Specifically, Australia's shipping volume decreased quarter - on - quarter, while Brazil and non - mainstream countries' shipping volume increased quarter - on - quarter. The domestic ore arrival volume was 2526 (+133) million tons, as the ore from the previous shipping peak period arrived successively [2]. 3. Summary According to Relevant Catalog Global Shipping Volume - On August 29, 2025, the global shipping volume was 3556.8 million tons, with a quarter - on - quarter increase of 241 million tons and a year - on - year increase of 107.9 million tons [3]. Shipping Volume by Region - **Australia**: On August 29, 2025, the shipping volume was 1811.5 million tons, with a quarter - on - quarter decrease of 69.5 million tons and a year - on - year decrease of 24.6 million tons. Rio Tinto and non - mainstream mines decreased quarter - on - quarter, FMG's shipping volume slightly decreased, and BHP's shipping volume increased. Overall, Australia's shipping volume decreased [2][3]. - **Brazil**: On August 29, 2025, the shipping volume was 996.6 million tons, with a quarter - on - quarter increase of 184.9 million tons and a year - on - year decrease of 62.4 million tons. Vale's shipping volume increased quarter - on - quarter, while non - mainstream mines decreased [2][3]. - **Non - mainstream countries**: The shipping volume increased quarter - on - quarter [2]. Shipping Volume by Major Mines - **Rio Tinto**: On August 29, 2025, the global shipping volume was 611 million tons, with a quarter - on - quarter decrease of 114.1 million tons and a year - on - year decrease of 4.2 million tons; the shipping volume to China was 472.1 million tons, with a quarter - on - quarter decrease of 124.5 million tons and a year - on - year decrease of 31.8 million tons [3]. - **BHP**: On August 29, 2025, the global shipping volume was 522.7 million tons, with a quarter - on - quarter increase of 61.6 million tons and a year - on - year decrease of 49.5 million tons; the shipping volume to China was 447.4 million tons, with a quarter - on - quarter increase of 62 million tons and a year - on - year decrease of 31.8 million tons [3]. - **FMG**: On August 29, 2025, the global shipping volume was 435 million tons, with a quarter - on - quarter decrease of 0.4 million tons and a year - on - year increase of 60.9 million tons; the shipping volume to China was 388.7 million tons, with a quarter - on - quarter decrease of 28.1 million tons and a year - on - year increase of 70.9 million tons [3]. - **Vale**: On August 29, 2025, the global shipping volume was 803.7 million tons, with a quarter - on - quarter increase of 230.8 million tons and a year - on - year increase of 18.6 million tons [3]. Domestic Ore Arrival Volume - On August 29, 2025, the domestic ore arrival volume was 2526 million tons, with a quarter - on - quarter increase of 132.7 million tons and a year - on - year increase of 316.8 million tons [3]. Shipping Ratio to China from Australia - On August 29, 2025, the ratio of Australia's shipping volume to China was 0.801, with a quarter - on - quarter decrease of 0.081 and a year - on - year increase of 0.01 [3].

Summary of Conference Call Records Industry Overview - The computer industry has shown a strong performance in 2025, with a growth rate of 37.42%, outperforming most sectors despite varying market perceptions [1][2] - The total revenue of 399 companies in the computer sector reached 1.04 trillion yuan, a year-on-year increase of 18.32%, while net profit attributable to shareholders grew by 28.13% to 28.413 billion yuan [1][5] Key Companies and Performance - Major companies like Haiguang and Inspur have significantly outperformed the index, contributing to the sector's overall success [3] - The DFC market trend in the first half of the year has propelled the sector index to new highs [3] AI Integration and Trends - AI technology is increasingly integrated, with 87.69% of computer companies mentioning AI in their half-year reports [1][10] - Companies such as Kingsoft Office, Hikvision, and Yonyou have reported AI-related revenues and orders, indicating a trend of investment in AI in the first half of the year, with expected implementation in the second half and significant growth in 2026 [1][6] Government Policy Impact - The State Council's recent opinions on AI development set clear targets for AI application rates by 2027 and 2030, which will accelerate technological innovation and market application among enterprises [9][13] Notable Financial Metrics - Among the 399 companies, 216 reported positive net profit growth, with an overall growth average of 16.51% [5] - The average revenue for these companies was 6.3 billion yuan, with a median of 3.7 billion yuan [5] Future Outlook - The current state is viewed as a bottom phase for AI applications, with strong potential for growth in the application sector, particularly among leading companies [7] - Investors are advised to focus on leading companies in niche markets, such as Kingsoft Office in office software and Hikvision in video surveillance [12][13] Key Takeaways for Investors - Emphasis on the importance of the State Council's AI action plan and its implications for the industry through 2035 [9][13] - Attention should be given to leading companies in their respective segments, as they possess strong competitive advantages [12][13]

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 呈交日期: 2025年9月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | 是 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00268 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 6,000,000,000 | HKD | | 0.025 | HKD | | 150,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 6,000,000,000 | HKD | | 0.025 | HKD | | 150,000,000 | 本月底法定/註冊股本總額： HKD 150,000,000 FF301 第 ...

Market Performance - The Hong Kong stock market continued to decline in the afternoon, with the Hang Seng Technology Index dropping over 2%, the Hang Seng Index falling by 1.4%, and the National Enterprises Index decreasing by 1.6% [1] - Major stocks in the Hang Seng Technology Index experienced significant declines, including Meituan down over 12%, Xpeng Motors down over 8%, and JD Group, Alibaba, and Li Auto each down over 4% [1] Stock Specifics - Meituan (03690) fell by 12.73% year-to-date, with a total decline of 33.09% [2] - Xpeng Motors (09868) decreased by 8.76%, but has seen an increase of 80.92% year-to-date [2] - JD Group (09618) dropped by 4.78%, with a year-to-date decline of 12.58% [2] - Alibaba (09988) fell by 4.69%, but has increased by 43.94% year-to-date [2] - Li Auto (02015) decreased by 4.21%, with a year-to-date decline of 6.81% [2] - Other notable declines include Kingdee International down 3.92% (year-to-date increase of 86.64%), Bilibili down 3.70% (year-to-date increase of 19.30%), BYD Electronic down 3.62% (year-to-date decline of 10.07%), and BYD Company down 3.48% (year-to-date increase of 27.09%) [2]

Market Overview - The Hong Kong stock market continued to decline in the afternoon, with the Hang Seng Technology Index dropping over 2%, the Hang Seng Index falling by 1.4%, and the National Enterprises Index decreasing by 1.6% [1] Company Performance - Meituan saw a significant drop of 12.73%, with a year-to-date decline of 33.09% [2] - XPeng Motors experienced an 8.76% decrease, but has a year-to-date increase of 80.92% [2] - JD Group's stock fell by 4.78%, resulting in a year-to-date decline of 12.58% [2] - Alibaba's shares dropped by 4.69%, yet it has a year-to-date increase of 43.94% [2] - Li Auto's stock decreased by 4.21%, with a year-to-date decline of 6.81% [2] - Kingdee International fell by 3.92%, but has a year-to-date increase of 86.64% [2] - Bilibili's shares dropped by 3.70%, with a year-to-date increase of 19.30% [2] - BYD Electronics saw a decline of 3.62%, resulting in a year-to-date decrease of 10.07% [2] - BYD's shares fell by 3.48%, with a year-to-date increase of 27.09% [2] - SenseTime's stock decreased by 2.88%, with a year-to-date increase of 35.57% [2] - Kingsoft's shares dropped by 3.36%, with a year-to-date change of -0.36% [2] - Alibaba Health saw a decline of 2.95%, but has a year-to-date increase of 58.43% [2] - JD Health's stock fell by 2.76%, with a year-to-date increase of 119.04% [2] - NIO's shares decreased by 2.71%, with a year-to-date increase of 44.40% [2]

Group 1: Market Overview - The Hang Seng Index (HSI) has experienced a decline, with a significant number of bull certificates being liquidated, leading to a cautious market sentiment [1] - The index closed at 25,201 points, remaining above the 25,200 mark, with short-term support levels identified at 24,855 and 24,507 points [1] - Investors are advised to consider bull certificates with a redemption price below 24,500 for relative safety [1] Group 2: NIO Inc. (09866.HK) - NIO's closing price was HKD 51.65, showing a favorable increase, but the trading signal is currently a "sell," indicating a need for caution [3] - The first resistance level is identified at HKD 57.2, while support levels are at HKD 44.5 and HKD 39.3 [3] Group 3: Kingdee International Software Group (00268.HK) - Kingdee's stock has shown some upward movement, closing at HKD 16.57, but remains below the middle line of the Bollinger Bands [5] - The trading signal is a "sell," with resistance at HKD 18.3, and investors are advised to be cautious due to high volatility in the past three days [5] Group 4: Tencent Holdings (00700.HK) - Tencent's trading signal is currently "neutral," with investors considering entry points at lower levels [8] - Support levels are identified at HKD 574 and HKD 557 [8] Group 5: China Mobile (00941.HK) - China Mobile closed at HKD 89.15, reflecting a significant decline, but the trading signal is a "buy" [11] - Resistance is at HKD 92.3, with support levels at HKD 86 and HKD 82.7 [11] Group 6: Semiconductor Manufacturing International Corporation (00981.HK) - SMIC's trading signal is a "sell," with a technical outlook leaning bearish [14] - The first resistance level is at HKD 62.6, while the exercise price for call options is set at HKD 64.05, indicating a gap to be covered [14]

Group 1 - Nongfu Spring (09633) reported a 22% year-on-year increase in net profit for the six months ending June 30, 2025, with packaged drinking water revenue growing by 10.7% [1] - Gu Ming (01364) saw a more than 120% year-on-year increase in net profit for the same period, with steady expansion in store count and impressive GMV performance [1] - China Longgong (03339) reported a 37.83% year-on-year increase in net profit, with the loader business being the largest contributor to revenue and profit [1] - AI concept stocks generally rose, with SenseTime (00020) up over 11% and Fourth Paradigm (06682) up over 9%, following the State Council's release of opinions on implementing "AI+" actions [1] - Cao Cao Mobility (02643) reported a 53.5% year-on-year increase in net profit, with gross margin improving from 7.0% to 8.4% [1] Group 2 - H&H International Holdings (01112) experienced a nearly 77% year-on-year decrease in net profit and proposed an interim dividend of HKD 0.19 per share [2] - NIO (09866) saw its stock price rise over 6% this month, benefiting from strong orders for the Onvo L90 and ES8 SUV models [2] - Chip stocks continued their upward trend, with SMIC (00981) up over 6% and Huahong Semiconductor (01347) up over 3%, as institutions remain optimistic about the domestic chip market [2] - Beike (02423) reported a 7.2% year-on-year decrease in net profit for the mid-year results, with Nomura indicating that its third-quarter guidance was below expectations [2] Group 3 - Gaotu (GOTU.US) reported a more than 37% year-on-year increase in revenue for Q2, alongside a new stock buyback plan worth up to USD 100 million [3] - NIO (NIO.US) rose 10.02% as Morgan Stanley highlighted strong orders for the ES8 and a shift in market sentiment towards next year's models [3] - XPeng Motors (XPEV.US) increased by 5.46% as it announced the official launch of the new P7 model on August 27 [3] - Boeing (BA.US) rose 3.51% after Korean Air announced a purchase order for aircraft valued at approximately USD 36.5 billion [4]

Group 1 - AI concept stocks saw significant gains in early trading, with SenseTime-W rising 14.14% to HKD 2.18, and Fourth Paradigm increasing by 10.33% to HKD 66.2 [1] - The Chinese government released an opinion on the deep implementation of "Artificial Intelligence +" actions, aiming for widespread integration of AI in six key areas by 2027, with a target application penetration rate of over 70% for new intelligent terminals and agents [1] - By 2030, AI is expected to fully empower high-quality development in China, with application penetration rates exceeding 90%, positioning the intelligent economy as a crucial growth driver for the national economy [1] Group 2 - Huatai Securities views the released opinion as a significant strategic move, marking a new wave of AI application and indicating a shift from technology development to deep integration with the real economy [2] - The opinion is seen as a guiding document for a new round of industrial transformation, with expectations for subsequent detailed policies from various ministries and local governments to facilitate AI application [2] - The focus will be on overcoming barriers to AI application implementation, such as the "last mile" challenges, through special funds, tax incentives, and pilot applications [2]

Group 1 - The State Council released opinions on the implementation of the "Artificial Intelligence +" initiative, aiming for over 70% application penetration of new intelligent terminals and intelligent agents by 2027, and over 90% by 2030 [1] - The initiative includes building national AI application pilot bases, promoting the intelligent transformation of software and information service companies, and developing AI application service providers [1] - The focus is on creating a smart product ecosystem, with significant development in smart connected vehicles, AI smartphones and computers, smart robots, smart homes, and wearable devices [1] Group 2 - Huatai Securities believes that generative AI is entering a new development stage dominated by AI agents, which are seen as "digital employees" capable of understanding, planning, and executing complex tasks [2] - The demand for energy and semiconductors is rapidly increasing as AI agents transition from experimental to large-scale deployment, making these resources strategic and bottleneck factors for AI development [2] - Northeast Securities highlights that edge AI is evolving terminal devices from "single-function" to "scene intelligence," creating a core technology foundation for the Internet of Everything [2] Group 3 - Companies involved in AI applications across various sectors include: - AI + Government: Taiji Co., South威 Software, Newpoint Software, Digital Government, and Tuoer Si [3] - AI + Justice: Jinqiao Information, Huayu Software, and Tongda Hai [3] - AI + Finance and Tax: Tax Friend Co., Zhongke Jiangnan, and Bosi Software [3] - AI + Enterprise Services: Kingsoft Office, Yonyou Network, Kingdee International, Inspur Digital Enterprise, Guangyun Technology, Zhiyuan Interconnection, and Fanwei Network [3] - AI + Programming: Jin Modern and Puyuan Information [3] Group 4 - Companies such as Kute Intelligent and Nanxing Co. are identified as active entities in the AI agent space [4]