Core Viewpoint - The article discusses the emerging market for D-Allulose, a new sugar substitute approved for use in China, highlighting its potential applications and the industry's response to its commercialization [3][5][10]. Group 1: Market Potential and Demand - D-Allulose is recognized as a "new generation sugar substitute" with a sweetness level of 70% compared to sucrose and low caloric content, making it a promising alternative for the food industry [5][12]. - The global market for D-Allulose is projected to reach $14.77 million in 2024, with a compound annual growth rate (CAGR) exceeding 14% from 2025 to 2034 [6]. - The "Healthy China Action (2019-2030)" initiative aims to limit daily added sugar intake to 25 grams per person, increasing the demand for safer and higher-quality sugar substitutes [3][5]. Group 2: Production and Supply Chain - D-Allulose can be produced through two main methods: biological fermentation using E. coli and enzyme-catalyzed conversion, with the latter being more commonly adopted due to lower initial investment requirements [8][9]. - Major companies like COFCO and Baolingbao are ramping up production capabilities, with Baolingbao planning to reach an annual production capacity of approximately 30,000 tons by 2026 [9][12]. - The production process is currently limited by the availability of enzyme preparations, which are crucial for D-Allulose production [9][10]. Group 3: Industry Response and Challenges - Downstream companies, including Wahaha and Mengniu, are interested in testing D-Allulose in their products, but large-scale application is still in the research and testing phase [11][12]. - The cost of D-Allulose remains a significant barrier, with current prices ranging from 20,000 to 24,000 yuan per ton, compared to around 10,000 yuan per ton for erythritol [13][14]. - Concerns about potential overcapacity in the market exist, as seen with erythritol, which experienced a price drop due to oversupply [14][15]. Group 4: Future Outlook - The industry outlook for D-Allulose remains optimistic, with expectations that production costs will decrease as capacity increases [15]. - Key factors for market success include continuous technological innovation, cost control, and the establishment of a complete industrial ecosystem [15].

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | | | 致：香港交易及結算所有限公司 公司名稱: 中國食品有限公司 呈交日期: 2025年10月2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) | 00506 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 4,000,000,000 | HKD | | 0.1 | HKD | | 400,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 4,000,000,000 | HKD | | 0.1 | HKD | | 400,000,000 | 本月底法定/註冊股本總額： HKD 400,000,000 ...

Core Viewpoint - The launch of D-allulose by COFCO Group marks a significant advancement in China's high-end functional sugar market and breaks international technological monopolies in the field of biological manufacturing [1][2]. Group 1: Product Launch and Market Impact - COFCO Group, through its subsidiaries, has introduced the first domestically produced D-allulose product, filling a gap in the high-end functional sugar market in China [1]. - D-allulose is recognized as a promising sugar substitute, with a sweetness level approximately 70% that of sucrose but only 10% of its calories, making it suitable for various food applications [1]. - The global D-allulose market is projected to reach $14.77 million in 2024, with a compound annual growth rate (CAGR) exceeding 14% from 2025 to 2034 [1]. Group 2: Industry and Health Implications - The introduction of D-allulose aligns with national public health initiatives, such as the "Weight Management Year," providing essential support for the Healthy China strategy [2]. - The product opens new innovation opportunities in low-sugar tea and baking industries, allowing consumers to enjoy healthier sweetness without compromising taste [2]. Group 3: Technological Advancements and Research - COFCO Group has invested significantly in research and development, successfully developing high-performance D-allulose-3-epimerase after extensive trials and genetic modifications [2]. - The company has established a comprehensive patent portfolio related to the biological synthesis of D-allulose, covering production strains, enzyme preparations, and separation processes, with 10 core patents already authorized [2][3]. - COFCO Group's commitment to technological innovation is reflected in its strategic initiatives, including policies that incentivize research and development as a core part of its business strategy [3].

Market Overview - The Hang Seng Index rose by 0.91%, gaining 238 points to reach 26,397 points, while the Hang Seng Tech Index increased by 2.19% [1] - The trading volume in Hong Kong's stock market reached 150.9 billion HKD in the morning session [1] Key Company Performances - Alibaba-W (09988) surged over 6% as CEO Wu Yongming announced active progress on a 380 billion HKD AI infrastructure project [1] - Kingdee International (00268) increased nearly 6% following the re-integration of Yunzhijia, aligning with the company's strategic direction [2] - China Foods (00506) rose over 4%, accumulating a total increase of over 20% since its inclusion in the stock index, being well-positioned within COFCO Group for food business [3] - Jinfo Pharmaceutical-B (02595) saw a rise of 6.77% as the company presented research data at the AACR annual meeting, establishing a RAS-targeted therapy matrix [4] - Hong Kong Broadband (01310) increased by over 5% as China Mobile sold shares to comply with regulatory requirements, which is expected to improve the company's financial situation [5] - Zhongchu Innovation (03931) rose over 7% due to the strong domestic energy storage market, benefiting from a trend towards centralized orders [6] - Hisense Home Appliances (00921) surged by 9.69% after forming a strategic partnership with Dow, with management expressing optimism about overseas appliance business [7] - ASMPT (00522) increased by over 8% as the direction for semiconductor equipment localization became clear, with a 50% increase in TCB equipment orders in the first half of the year [8] - Xixiang Group (02473) saw a peak increase of over 9%, with a morning rise of 5.86% after reaching a strategic cooperation intention with Smart Donkey to accelerate smart logistics deployment [9]

Core Viewpoint - China Foods (00506) has seen a significant stock price increase of over 20% since September 8, with a current price of 5.03 HKD and a trading volume of 78.07 million HKD, following its inclusion in the Hong Kong Stock Connect list [1] Group 1: Stock Performance - The stock price of China Foods rose by more than 8% recently, with a cumulative increase of over 20% since September 8 [1] - As of the latest report, the stock is trading at 5.03 HKD, with a trading volume of 78.07 million HKD [1] Group 2: Strategic Developments - The company is currently formulating its 14th Five-Year Plan, expected to be completed by the end of this year, with business layout initiatives anticipated to start next year [1] - China Foods plans to accelerate its entry into the nutritional health food sector through a combination of organic growth and external acquisitions, aiming to establish a core platform within its food segment [1] Group 3: Business Expansion - The company has expanded beyond its single beverage business, with channels like vending machines and "Yuexianghui" now contributing nearly 200 million RMB to non-beverage business in the first half of 2025 [1] - Long-term strategies include consolidating advantages in core categories such as carbonated drinks and juices while strategically entering the nutritional health food market to enhance operational efficiency [1] - As the most suitable entity within COFCO Group to undertake food business, China Foods is actively advancing its related plans, with specific measures expected to be implemented next year [1]

Core Viewpoint - China Foods (00506) has seen a significant stock price increase of over 20% since September 8, with a current price of 5.03 HKD and a trading volume of 78.07 million HKD [1] Group 1: Stock Performance - The stock price rose by more than 8% recently, with a cumulative increase of over 20% since September 8 [1] - As of the latest update, the stock is trading at 5.03 HKD, reflecting a 4.79% increase [1] Group 2: Strategic Developments - The Shenzhen Stock Exchange announced that China Foods has been included in the Hong Kong Stock Connect list, effective from September 8 [1] - The company is currently formulating its 14th Five-Year Plan, expected to be completed by the end of this year, with business initiatives likely to launch next year [1] - China Foods plans to accelerate its entry into the nutritional health food sector through a combination of organic growth and external acquisitions [1] Group 3: Business Expansion - The company is expanding beyond its core beverage business, with channels like vending machines and "Yuexianghui" already generating nearly 200 million RMB in non-beverage sales in the first half of 2025 [1] - Long-term strategies include consolidating advantages in core categories like carbonated drinks and juices while strategically entering the nutritional health food market [1] - The company aims to achieve operational efficiency through strategic collaboration between its beverage and food segments, with specific initiatives expected to be implemented next year [1]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **China Consumer Sector**, focusing on the **Staples Food** industry, particularly **condiments, frozen food, instant noodles, beverages, meat, and snacks** [2][3]. Core Insights and Arguments 1. **Condiments and Frozen Food**: - Q2 2025 was challenging due to slowing consumption, especially in the 2B channel, leading to sluggish sales for major companies. - Favorable raw material prices resulted in gross profit margin (GPM) expansion for most companies, offset by significantly higher sales and marketing expenses. - Only Haitian's results exceeded expectations in Q2 2025, while others were in line or missed [2][2]. 2. **Instant Noodles & Beverages**: - Tingyi and UPC reported strong profit growth in Q2 2025 due to favorable raw material costs supporting GPM expansion for beverages. - However, intensified competition is expected to challenge beverage sales in Q3 2025. - Sales checks for July-August indicated a year-over-year decline for Tingyi's beverage sales and flat sales for UPC [2][2]. 3. **Meat & Snacks**: - WH Group's Q2 2025 results beat expectations with strong performances in the US, China, and Europe. - Sustained strength in the US business and a recovery in China are anticipated to lead to another resilient quarter in Q3 2025. - Weilong's results showed robust growth in vegetable products, with expectations of maintaining 15-20% topline growth in Q3 2025. - Chacha's Q2 margin was disappointing due to raw material cost pressures, with expectations of flat year-over-year revenue growth in Q3 [2][2]. 4. **Restaurant Sales**: - Restaurant sales in China rose by 2.1% year-over-year in August, with above-scale restaurant sales increasing by 1.0% [3][3]. 5. **Cost Trends**: - Continued pressure from milk powder and palm oil price hikes was noted, with milk powder prices rising by 19% year-over-year and palm oil prices also increasing by 19%. - Declining prices were observed for soybeans (-13%) and sugar (-6%), while packaging materials saw a price downtrend [4][4]. Additional Important Insights - **Valuation Summary**: - The report includes a valuation summary for various companies in the staples food sector, with ratings ranging from Buy to Neutral. - Notable companies include Haitian, Anjoy, Jonjee, and WH Group, with respective price targets and market caps provided [6][6]. - **Key Risks**: - Risks for the China Consumer Staples sector include demand recovery variability, cost inflation or deflation, and changes in the competitive landscape. - Specific risks for WH Group include integration challenges post-acquisition and international operational risks [48][49]. - **Investment Recommendations**: - The sector's top picks are WH Group and Weilong, with detailed price targets and expected growth rates outlined for various companies [2][6]. This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and outlook of the China Consumer Sector, particularly in the staples food industry.

(Incorporated in Bermuda with limited liability) （於百慕達註冊成立之有限公司） NOTIFICATION LETTER 通知信函 19 September 2025 Dear Non-Registered Holder(s) (Note 1) , Notification of publication of corporate communication(s) on the Company's website We hereby notify you that the English and Chinese versions of the following corporate communication(s) (the "Current Corporate Communication(s)") of China Foods Limited (the "Company") is/are available on, and may be accessed under Investor Relations section of the Company's webs ...

– Notice of publication of 2025 Interim Report (the "Current Corporate Communication") （於百慕達註冊成立之有限公司） (Stock Code 股份代號 : 506) The English and Chinese versions of the Company's Current Corporate Communication is now available on the Company's website at www.chinafoodsltd.com and the website of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk respectively (the "Website Version"). The Company strongly recommends you to access the Website Version of the Current Corporate Communication and all future ...

[Corporate Profile](index=2&type=section&id=CORPORATE%20PROFILE) COFCO Group's exclusive Hong Kong-listed beverage platform operates Coca-Cola products across 19 provinces, offering 10 major product categories - The company is COFCO Group's sole professional beverage business platform, listed on the Hong Kong Stock Exchange[3](index=3&type=chunk)[5](index=5&type=chunk) - Primarily operates Coca-Cola series products in **19 provincial administrative regions** in China through COFCO Coca-Cola, a joint venture with The Coca-Cola Company[4](index=4&type=chunk)[5](index=5&type=chunk) - Products cover **10 major categories** and **25 brands**, including sparkling drinks, juices, water, dairy beverages, energy drinks, tea, coffee, functional nutrient drinks, sports drinks, and plant-based protein drinks[4](index=4&type=chunk)[5](index=5&type=chunk) [Corporate Information](index=4&type=section&id=CORPORATE%20INFORMATION) The company's board comprises key directors and committees, with specified secretaries, auditors, and major banking relationships - Board members include Mr. Qing Lijun (Chairman and Non-executive Director, re-designated on **January 6, 2025**), Mr. Zhan Zaizhong (Executive Director and Managing Director, appointed on **January 6, 2025**), and other directors[8](index=8&type=chunk)[10](index=10&type=chunk) - The company has an Audit Committee, Remuneration Committee, Nomination Committee, Environmental, Social and Governance Committee, and Executive Committee, with specified chairmen and members for each[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) - The Company Secretary is Mr. Lo Wing Hay, the auditor is BDO Limited, and major banks include Bank of China (Hong Kong) Limited and China CITIC Bank Corporation Limited[12](index=12&type=chunk)[13](index=13&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section outlines China Foods Limited's H1 2025 operations, strategies, industry environment, performance, financial review, and future outlook [Current Business Status](index=7&type=section&id=CURRENT%20STATUS) In H1 2025, Coca-Cola product sales grew, revenue accelerated, and smart retail expanded rapidly, reinforcing market leadership - In the first half, Coca-Cola series product sales maintained growth, revenue significantly accelerated, and market leadership was further consolidated[17](index=17&type=chunk)[19](index=19&type=chunk) - Smart retail business equipment scale rapidly expanded, firmly ranking **first in the industry**[17](index=17&type=chunk)[19](index=19&type=chunk) - COFCO Yuexiang Club focused on product price increases and non-Coca-Cola product business development, with year-on-year revenue growth[17](index=17&type=chunk)[19](index=19&type=chunk) [Development Strategy](index=7&type=section&id=DEVELOPMENT%20STRATEGY) The company's 2025 'Reshaping' strategy aims to optimize customer experience, operational efficiency, and profitability through comprehensive transformation - The core strategy for 2025 is **'Reshaping,'** encompassing product brands, marketing networks, value chain, supply system, organizational structure, and execution culture to optimize customer experience, enhance efficiency, and profitability[18](index=18&type=chunk)[20](index=20&type=chunk) - Firmly implements the business philosophy of 'Quality Improvement, Efficiency Enhancement, Innovation, Systematization, Openness, and Green Development,' promoting synergistic development of all-category beverage and innovative businesses[18](index=18&type=chunk)[20](index=20&type=chunk) - 'Quality Improvement' strategy includes promoting sales of core and high-margin products, optimizing channel structure (new retail, catering, tourism), and enhancing supply chain management efficiency; 'Efficiency Enhancement' deepens supply chain integration and expands centralized procurement; 'Innovation' focuses on digital upgrades[18](index=18&type=chunk)[20](index=20&type=chunk)[25](index=25&type=chunk) - 'Systematization' adheres to legal governance, improves compliance, optimizes organizational structure and compensation incentives; 'Openness' promotes ecosystem building, sharing resources with upstream and downstream partners; 'Green Development' insists on sustainable development, reducing energy consumption and emissions[25](index=25&type=chunk) [Industry Environment](index=8&type=section&id=INDUSTRY%20ENVIRONMENT) In H1 2025, China's economy grew stably (GDP +5.3%, per capita consumption +5.3%), supporting stable sales in the non-alcoholic ready-to-drink sector - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, with the secondary industry value-added increasing by **5.3%**[23](index=23&type=chunk)[24](index=24&type=chunk) - National per capita consumption expenditure, after adjusting for price factors, increased by **5.3%** year-on-year, supporting overall stable sales in the non-alcoholic ready-to-drink industry[23](index=23&type=chunk)[24](index=24&type=chunk) [Review of Results](index=9&type=section&id=REVIEW%20OF%20RESULTS) China Foods achieved synergistic sales and revenue growth in H1 2025 by optimizing pricing, product structure, and channels, improving gross margin from lower raw material costs [Overall Performance](index=9&type=section&id=Overall%20Performance) In H1 2025, sales and revenue grew by 5.5% and 8.3% respectively, with gross margin up 3.5 percentage points, driven by economic growth and lower raw material prices 2025 First Half Performance Summary | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 12,278.1 | 11,335.1 | +8.3% | | Sales Volume | - | - | +5.5% | | Gross Profit Margin | - | - | +3.5 percentage points | - Sales volume and revenue increased by **5.5%** and **8.3%** year-on-year, respectively, with revenue growth primarily driven by increases in both sales volume and average product price[27](index=27&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) - Gross profit margin improved year-on-year, mainly benefiting from lower procurement prices for most raw materials, partially offsetting cost pressure from high aluminum prices[28](index=28&type=chunk)[30](index=30&type=chunk)[73](index=73&type=chunk)[78](index=78&type=chunk) - The company strengthened capital expenditure control and refined management of operating cash flow, optimizing resource allocation efficiency to ensure financial resilience[28](index=28&type=chunk)[30](index=30&type=chunk) [Steadily Optimizing Product Structure](index=9&type=section&id=Steadily%20optimising%20product%20structure) The company optimizes product structure, with strong category performance including double-digit growth in sugar-free sparkling drinks, revenue growth in juices, and over 20% sales growth in water [Sparkling Drinks Category](index=9&type=section&id=Sparkling%20drinks) Sparkling drinks achieved above-market growth, driven by double-digit sugar-free beverage growth, securing over 50% market share with 9% revenue growth - Sugar-free category drove sparkling drinks to surpass market growth with **double-digit high growth** in both volume and revenue, achieving over **50% market share**[29](index=29&type=chunk)[31](index=31&type=chunk) - Sparkling drinks category sales volume saw considerable year-on-year growth, revenue increased by **9%** year-on-year, and gross profit margin improved concurrently[29](index=29&type=chunk)[31](index=31&type=chunk) - New product 'Sprite Zero Sugar Ice Lemon Cool Berry' launched, and Coca-Cola sharing bottles returned with upgraded features, closely aligning with young consumer demands[32](index=32&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Juice Category](index=10&type=section&id=Juices) Despite low-concentration juice market challenges, the juice category achieved 1% revenue growth through price adjustments, with 'Qoo' relaunching as a new growth driver - Affected by consumption upgrades, the low-concentration juice market faced challenges, but the overall juice category revenue grew against the trend by **1%**, thanks to product price increase strategies[34](index=34&type=chunk)[38](index=38&type=chunk) - Core orange-flavored products maintained stable growth, and 'Qoo' relaunched, gaining favor with its unique packaging design and becoming a new revenue growth engine for the category[35](index=35&type=chunk)[38](index=38&type=chunk) - Non-orange flavors underwent specification upgrades (420ml converted to 450ml with increased volume at no extra cost) and introduced four new small flavors like 'Zhizhi Taotao' to enrich the flavor matrix[39](index=39&type=chunk)[40](index=40&type=chunk) - Focused on developing profitable packaging, with a key promotion of **1.25L large-size family packs** to increase market share and strongly support the improvement of category profitability[42](index=42&type=chunk)[43](index=43&type=chunk) [Water Category](index=12&type=section&id=Water) Water category strategy adjustments led to significant growth for 'Ice Dew' (sales +20%, high single-digit revenue), while 'Yuehuo' natural soda water differentiated itself with 'no additives' and brand upgrades - 'Ice Dew' distribution network expanded rapidly, with water category sales volume increasing by over **20%** year-on-year, driving high single-digit revenue growth[44](index=44&type=chunk)[48](index=48&type=chunk) - 'Yuehuo' natural soda water differentiated itself with 'no additives,' upgraded its brand logo and bottle design, launched exclusive products with JD.com, and deepened category education through sports marketing and social media[45](index=45&type=chunk)[48](index=48&type=chunk) - Future focus will remain on high-quality development of the water category, actively exploring high-end water products, leveraging 'Ice Dew' channel advantages, seizing the healthy trend of soda water, expanding product portfolio, and improving profitability[46](index=46&type=chunk)[49](index=49&type=chunk) [Ready-to-Drink Coffee](index=13&type=section&id=Ready-to-drink%20coffee) The company launched 'COSTA Light & Refreshing Black Coffee' targeting health-conscious consumers, planning to boost sales through convenience store penetration and summer promotions - Launched new product 'COSTA Light & Refreshing Black Coffee,' attracting health-conscious and weight-loss consumers with the same coffee beans as COSTA stores, **0 fat**, and a balanced fruit flavor[51](index=51&type=chunk)[56](index=56&type=chunk) - Future plans include deep cultivation of convenience stores and traditional channels, seizing the summer window, and rapidly increasing coffee sales through freezing and promotional activities[52](index=52&type=chunk)[57](index=57&type=chunk) [Functional Drinks](index=13&type=section&id=Functional%20drink) Core brand 'Monster' achieved nearly 50% sales growth, leading its segment in mainland China, while 'Hunter Beast' targets a broader audience with its vitamin energy drink positioning - Core brand 'Monster' sales recorded nearly **50% growth** year-on-year, continuously leading its brand agents in mainland China[54](index=54&type=chunk)[58](index=58&type=chunk) - 'Hunter Beast' is positioned as a vitamin energy drink, emphasizing functionality, targeting a broader consumer base including migrant workers and blue-collar individuals, and focusing on highway service areas and industrial/mining channels[54](index=54&type=chunk)[58](index=58&type=chunk) [New Retail Business – COFCO Yuexiang Club](index=14&type=section&id=New%20Retail%20Business%20%E2%80%93%20COFCO%20Yuexiang%20Club) COFCO Yuexiang Club achieved double-digit revenue growth in online beverage and food sales nationwide by optimizing channels, increasing core product prices, and expanding non-Coca-Cola offerings - COFCO Yuexiang Club engages in online sales of beverages and food, with business covering the entire country, avoiding price competition through channel optimization and core product price increases[59](index=59&type=chunk)[63](index=63&type=chunk) - Vigorously developed non-Coca-Cola product business, collaborating with **18 new brands** to effectively increase market share of non-Coca-Cola products[59](index=59&type=chunk)[63](index=63&type=chunk) - Established a member database through the 'Happy Club' mini-program and D2C platform, achieving precise marketing and **double-digit year-on-year sales revenue growth**[60](index=60&type=chunk)[64](index=64&type=chunk) [Smart Retail Business – COFCO Zhishang](index=14&type=section&id=Smart%20Retail%20Business%20%E2%80%93%20COFCO%20Zhishang) COFCO Zhishang's smart retail business rapidly expanded its equipment scale, leading the industry and driving significant revenue growth across 31 provinces and over 350 cities - COFCO Zhishang's smart retail business equipment scale rapidly expanded, firmly ranking **first in the industry**, covering **31 provinces** and over **350 cities** nationwide, driving significant revenue growth[61](index=61&type=chunk)[65](index=65&type=chunk) - In addition to physical products, vending machines opened new revenue streams by optimizing post-payment advertisements, integrating monetization channels like 'WeChat Reading,' and launching virtual product sales models[62](index=62&type=chunk)[65](index=65&type=chunk) - Future plans include leveraging the 'Lan Jing Ling' core system to expand smart devices beyond vending machines, creating an integrated smart suite platform solution to enhance profitability[66](index=66&type=chunk)[70](index=70&type=chunk) [Outlook](index=15&type=section&id=Outlook) The company anticipates stable economic growth and an active consumer market in China for H2 2025, with stable raw material prices (potential trade war risks), and will optimize product structure and business portfolio to improve profitability - China's economy is expected to maintain stable growth in the second half of 2025, with the consumer market continuing its positive development trend driven by policies[67](index=67&type=chunk)[71](index=71&type=chunk) - Major raw material prices are expected to remain stable, but trade wars may adversely affect raw material supply, leading to increased main material costs[68](index=68&type=chunk)[71](index=71&type=chunk) - Management will continue to implement strategies such as product structure upgrades and business portfolio optimization to improve gross profit margin, and enhance profitability and adaptability to future market conditions through 'Reshaping' efforts[68](index=68&type=chunk)[71](index=71&type=chunk) [Financial Review](index=15&type=section&id=FINANCIAL%20REVIEW) This section reviews the company's key financial indicators for H1 2025, showing revenue and gross profit margin growth while maintaining a sound financial position [Revenue](index=15&type=section&id=REVENUE) In H1 2025, the company's revenue increased by 8.3% year-on-year, primarily driven by higher sales volume and average product prices Year-on-Year Revenue Change | Metric | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 12,278.1 | 11,335.1 | +8.3% | | Sales Volume | - | - | +5.5% | - The increase in revenue was primarily due to increases in both sales volume and average product price[69](index=69&type=chunk)[72](index=72&type=chunk) [Gross Profit Margin](index=16&type=section&id=GROSS%20PROFIT%20MARGIN) Gross profit margin improved year-on-year, mainly due to favorable raw material procurement prices, partially offsetting cost pressure from high aluminum prices - Gross profit margin improved year-on-year, benefiting from a year-on-year decrease in procurement prices for most raw materials, partially offsetting cost pressure from persistently high aluminum prices[73](index=73&type=chunk)[78](index=78&type=chunk) [Other Income and Gains](index=16&type=section&id=OTHER%20INCOME%20AND%20GAINS) Other income and gains, primarily comprising interest income and government subsidies, showed no significant year-on-year change - Other income and gains primarily include interest income and government subsidies, with no significant year-on-year change[74](index=74&type=chunk)[79](index=79&type=chunk) [Distribution and Selling Expenses Ratio / Administrative Expenses Ratio](index=16&type=section&id=DISTRIBUTION%20AND%20SELLING%20EXPENSES%20RATIO%2FADMINISTRATIVE%20EXPENSES%20RATIO) Distribution and selling expenses ratio increased due to intense market competition and higher marketing spending, while administrative expenses ratio remained stable year-on-year - Due to intense market competition and increased marketing spending, the distribution and selling expenses ratio increased[75](index=75&type=chunk)[80](index=80&type=chunk) - The administrative expenses ratio showed no significant year-on-year change[75](index=75&type=chunk)[80](index=80&type=chunk) [Finance Costs](index=16&type=section&id=FINANCE%20COSTS) Finance costs, primarily interest on lease liabilities, showed no significant year-on-year change - Finance costs primarily consist of interest on lease liabilities, with no significant year-on-year change[76](index=76&type=chunk)[81](index=81&type=chunk) [Income Tax Expense](index=16&type=section&id=INCOME%20TAX%20EXPENSE) Income tax expense increased by 24.9% to **RMB 379 million**, with certain subsidiaries having repaid income tax from 2021 to 2023 Income Tax Expense Change | Metric | 2025 First Half (RMB thousand) | 2024 First Half (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Income Tax Expense | 379,261 | 303,757 | +24.9% | - Certain subsidiaries repaid a total of approximately **RMB 23,481,000** in income tax for the period from 2021 to 2023[77](index=77&type=chunk)[82](index=82&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) The company's treasury department centrally manages financial resources, reporting approximately **RMB 5.047 billion** in unpledged cash and cash equivalents and **RMB 36 million** in net current assets as of June 30, 2025 - The treasury department centrally manages financial resources, including reallocation, fundraising, managing financial risks (interest rates and exchange rates), and enhancing income opportunities[83](index=83&type=chunk)[90](index=90&type=chunk) - A cash pool is used in mainland China to more effectively utilize cash, and financial risk management processes are established[84](index=84&type=chunk)[90](index=90&type=chunk) Liquidity Status | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Unpledged cash and cash equivalents | 5,047 | 4,014 | | Net current assets | 36 | 236 | [Capital Structure](index=17&type=section&id=CAPITAL%20STRUCTURE) As of June 30, 2025, issued shares remained unchanged at **2,797,223,396**, with no interest-bearing bank borrowings, net cash of approximately **RMB 5.047 billion**, and zero gearing ratio - As of June 30, 2025, the total number of issued shares remained unchanged at **2,797,223,396 shares**[86](index=86&type=chunk)[91](index=91&type=chunk) - The Group had no interest-bearing bank borrowings, with net cash of approximately **RMB 5.047 billion** (December 31, 2024: approximately **RMB 4.014 billion**), and a gearing ratio of zero[86](index=86&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) - Net assets attributable to owners of the parent company were approximately **RMB 6.612 billion** (December 31, 2024: approximately **RMB 6.462 billion**)[87](index=87&type=chunk)[91](index=91&type=chunk) [Contingent Liabilities and Pledged Assets](index=17&type=section&id=CONTINGENT%20LIABILITIES%20AND%20ASSETS%20PLEDGED) As of June 30, 2025, the Group had no significant contingent liabilities or pledged assets, except for certain bills payable - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities or pledged assets (except for certain bills payable)[88](index=88&type=chunk)[92](index=92&type=chunk) [Foreign Exchange Management](index=17&type=section&id=FOREIGN%20EXCHANGE%20MANAGEMENT) The Group's monetary assets, liabilities, and transactions are primarily RMB-denominated, resulting in insignificant foreign exchange risk, actively monitored but not hedged - The Group's monetary assets, liabilities, and transactions are primarily denominated in RMB, and foreign exchange risk is not significant[89](index=89&type=chunk)[93](index=93&type=chunk) - The treasury department actively monitors exchange rate risks but does not use financial instruments for hedging[89](index=89&type=chunk)[93](index=93&type=chunk) [Human Resources](index=18&type=section&id=HUMAN%20RESOURCES) As of June 30, 2025, the Group employed **17,675 staff** in mainland China and Hong Kong, with total staff costs increasing by approximately **6.5%**, adhering to a contributor-focused talent development philosophy Human Resources Overview | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 17,675 | 17,533 | +142 | | Total Staff Costs (RMB million) | 1,094 | 1,027 | +6.5% | - The Group adheres to a 'contributor-oriented' talent development philosophy, providing a good career development platform and a comprehensive training system, ensuring basic employee rights, and strictly prohibiting child labor and forced labor[96](index=96&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) [Corporate Governance Highlights and Other Information](index=19&type=section&id=CORPORATE%20GOVERNANCE%20HIGHLIGHTS%20AND%20OTHER%20INFORMATION) This section summarizes China Foods Limited's H1 2025 corporate governance, covering director and major shareholder interests, share option schemes, securities transactions, governance compliance, director updates, interim results review, dividend policy, and significant investments [Directors' Interests and Short Positions in Shares and Underlying Shares](index=19&type=section&id=DIRECTORS%27%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES) As of June 30, 2025, no directors or chief executives held any disclosable interests or short positions in the company's shares, underlying shares, or debentures under the SFO - As of June 30, 2025, none of the Company's directors or chief executives held any disclosable interests or short positions in the shares, underlying shares, and debentures of the Company or any of its associated corporations[101](index=101&type=chunk)[102](index=102&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=19&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%27%20AND%20OTHER%20PERSONS%27%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES) As of June 30, 2025, China Foods (Holdings) Limited, COFCO Group (Hong Kong) Limited, and COFCO Group were substantial shareholders, each holding **2,072,688,331 shares**, representing **74.10%** of issued shares Substantial Shareholders' Shareholdings (As of June 30, 2025) | Name of Substantial Shareholder | Number of Shares Held (Long Position) | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | | China Foods (Holdings) Limited | 2,072,688,331 | 74.10% | | COFCO Group (Hong Kong) Limited | 2,072,688,331 | 74.10% | | COFCO | 2,072,688,331 | 74.10% | - COFCO Group (Hong Kong) Limited is deemed to have an interest in the shares held by China Foods (Holdings) Limited, and COFCO is deemed to have an interest in the shares held by China Foods (Holdings) Limited and COFCO Hong Kong[105](index=105&type=chunk) [Share Option Scheme](index=21&type=section&id=SHARE%20OPTION%20SCHEME) The company and its subsidiaries do not have any share option schemes or share award schemes - The Company and its subsidiaries do not have any share option schemes or share award schemes[108](index=108&type=chunk)[113](index=113&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY%27S%20LISTED%20SECURITIES) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - 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[109](index=109&type=chunk)[114](index=114&type=chunk) [Corporate Governance Practices](index=21&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The company complied with the Corporate Governance Code for H1 2025, except for code provision C.2.1, which was fully complied with after January 6, 2025, when Chairman and CEO roles were separated - For the six months ended June 30, 2025, the company complied with the Corporate Governance Code, except for code provision C.2.1 (the roles of Chairman and Chief Executive should not be performed by the same individual)[110](index=110&type=chunk)[115](index=115&type=chunk) - Prior to **January 6, 2025**, Mr. Qing Lijun served concurrently as Chairman and Managing Director; since Mr. Zhan Zaizhong's appointment as Executive Director and Managing Director on **January 6, 2025**, the roles of Chairman and Chief Executive have been separated, and the company has complied with code provision C.2.1[112](index=112&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[121](index=121&type=chunk) [Securities Transactions by Directors](index=22&type=section&id=SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) All directors confirmed compliance with the required standards for securities transactions by directors of listed issuers throughout H1 2025 - All directors of the Company confirmed that they have complied with the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers throughout the six months ended June 30, 2025[117](index=117&type=chunk)[122](index=122&type=chunk) [Updates on Directors' Information](index=22&type=section&id=UPDATES%20ON%20DIRECTORS%27%20INFORMATION) The board experienced several changes, including Mr. Qing Lijun's re-designation, Mr. Zhan Zaizhong's appointment as Executive Director and Managing Director, Mr. Shen Xinwen's resignation, and Mr. Song Liang and Mr. Tang Qiang's appointments to various roles - Mr. Qing Lijun resigned as Managing Director and was re-designated from Executive Director to Non-executive Director on **January 6, 2025**[118](index=118&type=chunk)[123](index=123&type=chunk) - Mr. Zhan Zaizhong was appointed as Executive Director and Managing Director and Chairman of the Executive Committee on **January 6, 2025**[118](index=118&type=chunk)[123](index=123&type=chunk) - Mr. Shen Xinwen resigned as Executive Director, member and Chairman of the Environmental, Social and Governance Committee, and member of the Executive Committee on **August 26, 2025**[120](index=120&type=chunk)[123](index=123&type=chunk) - Mr. Song Liang was appointed as Non-executive Director on **August 26, 2025**, and Mr. Tang Qiang was appointed as Executive Director, member and Chairman of the Environmental, Social and Governance Committee, and member of the Executive Committee on **August 30, 2025**[120](index=120&type=chunk)[123](index=123&type=chunk) [Review of Interim Results](index=23&type=section&id=REVIEW%20OF%20INTERIM%20RESULTS) The Group's unaudited condensed consolidated interim financial information for H1 2025 has been reviewed by the Board's Audit Committee - The Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, has been reviewed by the Audit Committee under the Board[124](index=124&type=chunk)[129](index=129&type=chunk) [Interim Dividend](index=23&type=section&id=INTERIM%20DIVIDEND) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (June 30, 2024: nil)[125](index=125&type=chunk)[130](index=130&type=chunk) [Significant Investments, Material Acquisitions and Disposals](index=23&type=section&id=SIGNIFICANT%20INVESTMENTS%2C%20MATERIAL%20ACQUISITIONS%20AND%20DISPOSALS) As of June 30, 2025, the Group held no significant investments and had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - As of June 30, 2025, the Group held no significant investments and had no material acquisitions or disposals concerning subsidiaries, associates, or joint ventures[126](index=126&type=chunk)[131](index=131&type=chunk) [Future Plans for Material Investments or Capital Assets](index=23&type=section&id=FUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20OR%20CAPITAL%20ASSETS) As of the report date, the Group currently has no other future plans for material investments or capital assets - As of the date of this report, the Group currently has no other future plans for material investments or capital assets[127](index=127&type=chunk)[132](index=132&type=chunk) [Continuing Disclosure Obligations Pursuant to the Listing Rules](index=23&type=section&id=CONTINUING%20DISCLOSURE%20OBLIGATIONS%20PURSUANT%20TO%20THE%20LISTING%20RULES) From the company's listing date to the end of this interim period, there were no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22 - From the Company's listing date to the end of this interim period, the Company had no other disclosure obligations to fulfill pursuant to Listing Rules 13.20, 13.21, and 13.22[128](index=128&type=chunk)[133](index=133&type=chunk) [Report on Review of Condensed Consolidated Financial Statements](index=24&type=section&id=REPORT%20ON%20REVIEW%20OF%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the independent auditor's review report by BDO Limited on China Foods Limited's condensed consolidated financial statements for H1 2025, confirming compliance with HKAS 34 [Introduction](index=24&type=section&id=INTRODUCTION) This report by BDO Limited reviews China Foods Limited's H1 2025 condensed consolidated financial statements, prepared according to HKAS 34 and Listing Rules - BDO Limited reviewed the condensed consolidated financial statements of China Foods Limited and its subsidiaries for the six months ended June 30, 2025[135](index=135&type=chunk)[136](index=136&type=chunk) - The financial statements were prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and relevant requirements of the Listing Rules[135](index=135&type=chunk)[136](index=136&type=chunk) [Scope of Review](index=25&type=section&id=SCOPE%20OF%20REVIEW) The review was conducted under HK Standard on Review Engagements 2410, involving inquiries and analytical procedures, less extensive than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'[138](index=138&type=chunk)[140](index=140&type=chunk) - The scope of the review primarily involved making inquiries of persons responsible for financial and accounting matters and applying analytical and other review procedures, which is substantially less in scope than an audit, and therefore no audit opinion is expressed[138](index=138&type=chunk)[140](index=140&type=chunk) [Conclusion](index=25&type=section&id=CONCLUSION) Based on the review, the auditor found no matters suggesting the condensed consolidated financial statements were not prepared in all material respects in accordance with HKAS 34 - Based on the review, the auditor found no matters that caused them to believe that the condensed consolidated financial statements were not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[139](index=139&type=chunk)[141](index=141&type=chunk) [Condensed Consolidated Financial Statements](index=26&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section contains China Foods Limited's H1 2025 condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, cash flows, and notes [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, the company reported revenue of **RMB 12,278,061 thousand**, gross profit of **RMB 4,675,673 thousand**, operating profit of **RMB 1,356,442 thousand**, and total profit and comprehensive income of **RMB 978,090 thousand** Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 12,278,061 | 11,335,111 | | Cost of sales | (7,602,388) | (7,417,286) | | Gross profit | 4,675,673 | 3,917,825 | | Operating profit | 1,356,442 | 1,268,945 | | Profit before tax | 1,357,351 | 1,269,297 | | Income tax expense | (379,261) | (303,757) | | Profit and total comprehensive income for the period | 978,090 | 965,540 | | Profit attributable to owners of the Company | 577,845 | 565,232 | | Profit attributable to non-controlling interests | 400,245 | 400,308 | | Basic and diluted earnings per share (RMB cents) | 20.66 | 20.21 | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets were **RMB 10,489,701 thousand**, total current assets **RMB 8,259,505 thousand**, total current liabilities **RMB 8,223,245 thousand**, and net assets **RMB 10,149,928 thousand** Summary of Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Total non-current assets | 10,489,701 | 10,325,141 | | Total current assets | 8,259,505 | 7,273,226 | | **LIABILITIES** | | | | Total current liabilities | 8,223,245 | 7,036,960 | | Total non-current liabilities | 376,033 | 363,191 | | **EQUITY** | | | | Net assets | 10,149,928 | 10,198,216 | | Equity attributable to owners of the Company | 6,611,848 | 6,461,978 | | Non-controlling interests | 3,538,080 | 3,736,238 | [Condensed Consolidated Statement of Changes in Equity](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For H1 2025, profit and total comprehensive income attributable to owners of the company was **RMB 577,845 thousand**, with dividends recognized as distribution totaling **RMB 427,975 thousand** Summary of Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Balance at January 1 | 10,198,216 | 9,686,956 | | Profit and total comprehensive income for the period | 978,090 | 965,540 | | Dividends recognized as distribution | (427,975) | (413,989) | | Dividends paid to non-controlling interests | (598,403) | (35,482) | | Balance at June 30 | 10,149,928 | 10,203,025 | [Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, net cash from operating activities was **RMB 1,881,448 thousand**, net cash used in investing activities **RMB 273,642 thousand**, and net cash used in financing activities **RMB 575,335 thousand** Summary of Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 1,881,448 | 1,639,722 | | Net cash used in investing activities | (273,642) | (211,619) | | Net cash used in financing activities | (575,335) | (59,536) | | Net increase in cash and cash equivalents | 1,032,471 | 1,368,567 | | Cash and cash equivalents at end of period | 5,046,875 | 3,661,582 | [Notes to the Condensed Consolidated Financial Statements](index=32&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and supplementary information for the condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, revenue, expenses, taxes, dividends, earnings per share, asset changes, payables, share capital, capital commitments, related party transactions, and fair value measurements of financial instruments [General Information](index=32&type=section&id=GENERAL%20INFORMATION) China Foods Limited, a Bermuda-incorporated company and COFCO Group subsidiary, primarily processes, bottles, and distributes sparkling and non-carbonated beverages, with financial statements presented in RMB - China Foods Limited is a limited liability company incorporated in Bermuda, with COFCO Group Limited as its ultimate holding company[159](index=159&type=chunk)[160](index=160&type=chunk)[165](index=165&type=chunk) - The Group is principally engaged in the processing, bottling, and distribution of sparkling and non-carbonated beverage products[161](index=161&type=chunk)[165](index=165&type=chunk) - The condensed consolidated financial statements are presented in RMB, which is also the Company's functional currency[161](index=161&type=chunk)[165](index=165&type=chunk) [Basis of Preparation](index=32&type=section&id=BASIS%20OF%20PREPARATION) The condensed consolidated financial statements were prepared in accordance with HKAS 34 'Interim Financial Reporting' and applicable HKEX Listing Rules disclosure requirements - The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Listing Rules[162](index=162&type=chunk)[166](index=166&type=chunk) [Material Accounting Policy Information](index=32&type=section&id=MATERIAL%20ACCOUNTING%20POLICY%20INFORMATION) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and new HKFRS amendments had no material impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[163](index=163&type=chunk)[167](index=167&type=chunk) - The Hong Kong Financial Reporting Standards (Amendments) issued by the Hong Kong Institute of Certified Public Accountants were first applied in this interim period, but had no material impact on the Group's financial position and performance[164](index=164&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) [Revenue and Segment Information](index=33&type=section&id=REVENUE%20AND%20SEGMENT%20INFORMATION) The Group's revenue and comprehensive results are primarily from processing, bottling, and distributing sparkling and non-carbonated beverages, considered a single reportable segment, with all revenue from mainland China customers Revenue from Contracts with Customers by Type (For the six months ended June 30) | Type of Goods | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sparkling drinks | 9,384,629 | 8,577,161 | | Juices | 1,674,604 | 1,661,095 | | Water category | 576,189 | 532,392 | | Others | 642,639 | 564,463 | | Total | 12,278,061 | 11,335,111 | - The Group's revenue and comprehensive results are primarily derived from the processing, bottling, and distribution of sparkling and non-carbonated beverages, which is considered a single reportable segment[174](index=174&type=chunk)[177](index=177&type=chunk) - All revenue is derived from customers in mainland China, and non-current assets are primarily located in mainland China, thus no geographical information is presented; no single customer's revenue reached **10% or more** of the Group's revenue during the period[175](index=175&type=chunk)[176](index=176&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Other Income, Gains and Losses, Net](index=35&type=section&id=OTHER%20INCOME%2C%20GAINS%20AND%20LOSSES%2C%20NET) For H1 2025, net other income, gains, and losses totaled **RMB 127,007 thousand**, primarily including government grants, net income from by-product sales, interest income, and losses on asset disposal Other Income, Gains and Losses, Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Other income | 146,757 | 134,846 | | Other gains and losses | (19,750) | (9,347) | | **Total** | **127,007** | **125,499** | - Government grants amounted to **RMB 62,720 thousand** (2024: **RMB 73,993 thousand**), and interest income was **RMB 16,402 thousand** (2024: **RMB 17,281 thousand**)[181](index=181&type=chunk) - Loss on disposal of property, plant and equipment was **RMB 24,559 thousand** (2024: **RMB 3,760 thousand**)[181](index=181&type=chunk) [Finance Costs](index=36&type=section&id=FINANCE%20COSTS) For H1 2025, finance costs primarily consisted of interest on lease liabilities, amounting to **RMB 1,822 thousand** Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 1,822 | 2,572 | [Profit Before Tax](index=36&type=section&id=PROFIT%20BEFORE%20TAX) For H1 2025, profit before tax was **RMB 1,357,351 thousand**, after deducting or including various expenses such as depreciation, amortization, and staff costs Key Adjustments to Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Amortization of intangible assets | 10,641 | 8,136 | | Cost of inventories recognized as expense | 7,606,431 | 7,423,252 | | Depreciation of property, plant and equipment | 386,106 | 368,539 | | Depreciation of right-of-use assets | 31,484 | 33,932 | | Wages, salaries and benefits | 1,094,248 | 1,027,389 | - Impairment loss (reversal) / recognized on trade and other receivables was **RMB (170) thousand** (2024: **RMB 960 thousand**)[184](index=184&type=chunk) [Income Tax Expense](index=37&type=section&id=INCOME%20TAX%20EXPENSE) For H1 2025, income tax expense was **RMB 379,261 thousand**, an increase of **24.9%** year-on-year, primarily comprising China corporate income tax and deferred tax, with certain Chinese entities enjoying preferential tax rates Composition of Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China corporate income tax (current tax) | 323,585 | 357,167 | | China corporate income tax (under-provision in prior years) | 23,481 | – | | Deferred tax | 32,195 | (53,410) | | **Total income tax expense** | **379,261** | **303,757** | - China corporate income tax provision is based on the statutory tax rate of **25%**, except for certain Chinese entities that pay tax at preferential rates of **15%** and **9%**[187](index=187&type=chunk)[190](index=190&type=chunk) - No Hong Kong tax provision was made as no income was generated or derived in Hong Kong[187](index=187&type=chunk)[190](index=190&type=chunk) [Dividends](index=37&type=section&id=DIVIDENDS) During this interim period, a final dividend of **HKD 16.6 cents per share**, totaling **RMB 427,975,000**, was declared for FY2024, but directors resolved not to declare any dividend for this interim period - During this interim period, a final dividend of **HKD 16.6 cents per share**, totaling **RMB 427,975,000**, was declared for the year ended December 31, 2024[188](index=188&type=chunk)[191](index=191&type=chunk) - The directors resolved not to declare any dividend for this interim period[189](index=189&type=chunk)[191](index=191&type=chunk) [Earnings Per Share](index=38&type=section&id=EARNINGS%20PER%20SHARE) For H1 2025, basic earnings per share was **RMB 20.66 cents**, with diluted earnings per share being the same due to the absence of dilutive instruments Earnings Per Share (For the six months ended June 30) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 20.66 | 20.21 | - Basic earnings per share is calculated based on profit attributable to owners of the Company of **RMB 577,845,000** and the weighted average number of ordinary shares in issue of **2,797,223,396 shares**[192](index=192&type=chunk)[196](index=196&type=chunk) - Diluted earnings per share is the same as basic earnings per share as the Group has no dilutive instruments[193](index=193&type=chunk)[197](index=197&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=38&type=section&id=PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%20AND%20RIGHT-OF-USE%20ASSETS) For H1 2025, the Group acquired property, plant, and equipment totaling **RMB 625,995 thousand**, recognized **RMB 9,039 thousand** in right-of-use assets, and incurred a loss of **RMB 24,559 thousand** from disposals Changes in Property, Plant and Equipment (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total cost of additions to property, plant and equipment | 625,995 | 309,124 | | Loss on disposal of property, plant and equipment | 24,559 | 3,760 | | Right-of-use assets recognized | 9,039 | 88,606 | [Trade Receivables](index=39&type=section&id=TRADE%20RECEIVABLES) As of June 30, 2025, total trade receivables were **RMB 649,713 thousand**, with credit terms of **7 to 90 days** for key customers and most receivables aged within 6 months Trade Receivables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 671,821 | 361,976 | | Less: Provision for credit losses | (22,108) | (22,566) | | **Total** | **649,713** | **339,410** | - The Group's sales to key customers are based on credit terms of **7 to 90 days** after delivery, and receivables are strictly controlled to minimize credit risk[201](index=201&type=chunk) Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 6 months | 649,700 | 338,566 | | 6 to 12 months | 13 | 844 | | Over 1 year | – | – | [Trade and Bills Payables](index=40&type=section&id=TRADE%20AND%20BILLS%20PAYABLES) As of June 30, 2025, total trade and bills payables were **RMB 1,312,778 thousand**, with most aged within 3 months, and certain bills payable secured by bank deposits Trade and Bills Payables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 1,311,257 | 802,896 | | Bills payable | 1,521 | 1,351 | | **Total** | **1,312,778** | **804,247** | Ageing Analysis of Trade and Bills Payables (As of June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 1,248,657 | 774,157 | | 3 to 12 months | 59,715 | 27,096 | | Over 1 year | 4,406 | 2,994 | - Certain bills payable are secured by bank deposits amounting to **RMB 4,184,000** (December 31, 2024: **RMB 4,133,000**)[207](index=207&type=chunk) [Other Payables and Accruals](index=41&type=section&id=OTHER%20PAYABLES%20AND%20ACCRUALS) As of June 30, 2025, total other payables and accruals were **RMB 5,725,337 thousand**, primarily including accrued marketing and promotion expenses, sales discounts, accrued wages, refrigerator deposits, and dividends payable Key Components of Other Payables and Accruals (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accrued marketing and promotion expenses | 1,887,692 | 1,519,188 | | Sales discounts | 143,989 | 267,311 | | Accrued wages | 672,131 | 660,595 | | Refrigerator deposits | 615,099 | 588,227 | | Dividends payable to owners of the Company | 427,975 | – | | Dividends payable to non-controlling interests | 561,222 | 511,980 | [Share Capital](index=42&type=section&id=SHARE%20CAPITAL) As of June 30, 2025, the company's authorized share capital was **4,000,000,000 ordinary shares** of **HKD 0.10 each**, with issued and fully paid share capital remaining unchanged at **2,797,223,396 ordinary shares** Share Capital Structure (As of June 30) | Item | Number of Shares | Share Capital (RMB thousand) | | :--- | :--- | :--- | | Authorized share capital (ordinary shares of HKD 0.10 each) | 4,000,000,000 | 400,000 (HKD) | | Issued and fully paid share capital (ordinary shares of HKD 0.10 each) | 2,797,223,396 | 293,201 | - Issued and fully paid share capital has remained unchanged since January 1, 2024[212](index=212&type=chunk) [Capital Commitments](index=42&type=section&id=CAPITAL%20COMMITMENTS) As of June 30, 2025, capital commitments contracted for but not yet provided for the purchase of property, plant, and equipment amounted to **RMB 168,928 thousand** Capital Commitments (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital commitments contracted for but not yet provided for the purchase of property, plant and equipment | 168,928 | 64,735 | [Related Party Transactions](index=43&type=section&id=RELATED%20PARTY%20TRANSACTIONS) The Group engaged in various related party transactions with companies under common control and non-controlling shareholders of subsidiaries, including sales, purchases, rent, service fees, and interest income, with total key management personnel compensation of **RMB 8,153 thousand** Key Related Party Transactions (For the six months ended June 30) | Type of Transaction | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Transactions with companies under common control: | | | | Sales of goods | 490 | 556 | | Purchases of goods | 849,381 | 855,400 | | Rental expenses | 7,321 | 7,912 | | Service fees expenses | 19,478 | 13,883 | | Interest income | 4,412 | 5,909 | | Transactions with non-controlling shareholders of subsidiaries: | | | | Purchases of goods | 2,482,900 | 2,295,980 | - All related party transactions constitute continuing connected transactions under the Listing Rules and are conducted on terms and conditions mutually agreed upon by the parties involved[216](index=216&type=chunk) Total Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 4,282 | 4,043 | | Contributions to retirement plans | 477 | 535 | | Discretionary bonuses | 3,394 | 3,845 | | **Total compensation** | **8,153** | **8,423** | - Transactions between the Group and other state-owned enterprises are conducted in the ordinary course of business, on terms similar to those with non-state-owned enterprises, and without significant or undue influence[220](index=220&type=chunk) [Fair Value Measurements of Financial Instruments](index=45&type=section&id=FAIR%20VALUE%20MEASUREMENTS%20OF%20FINANCIAL%20INSTRUMENTS) Certain financial assets are measured at fair value using discounted cash flow methods, with all fair value measurements classified as Level 2, and no Level 1 or Level 3 instruments - Certain financial assets of the Group are measured at fair value at each reporting period end, primarily using the discounted cash flow method, with market interest rates as key inputs[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) Financial Assets Measured at Fair Value Through Other Comprehensive Income (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Fair Value Level | | :--- | :--- | :--- | :--- | | Financial assets measured at fair value through other comprehensive income | 18,058 | 6,581 | Level 2 | - The Group has no Level 1 and Level 3 financial instruments, and there were no transfers between Level 1, 2, and 3 for the six months ended June 30, 2025[228](index=228&type=chunk)