Group 1 - Dongwu Cement (00695) saw a stock price increase of over 5%, reaching a high of 6.38 HKD, the highest since September 2021 [1] - As of the report, the stock was up 7.01%, trading at 6.11 HKD with a transaction volume of 15.8141 million HKD [1] Group 2 - For the interim report of 2025, Dongwu Cement reported revenues of approximately 126 million HKD, with the cement segment contributing about 119 million HKD, reflecting a year-on-year growth of 28.0% [1] - The revenue increase was primarily due to the cement industry actively promoting staggered production, which alleviated supply-demand conflicts, despite overall market demand remaining weak [1] - The company noted that the decline in market demand has narrowed compared to the same period last year, contributing to the recovery in revenue [1] Group 3 - The company plans to closely monitor the dynamics of the cement sector and explore related business opportunities, given the narrowing decline in demand and the industry's anti-involution policy direction [1] - Guotai Junan pointed out that once the cement industry enters a recovery phase in profitability, the potential for profit release is significant [1] - The focus on limiting overproduction remains a key concern for improving supply-demand dynamics in the industry [1]

Core Viewpoint - Dongwu Cement (00695) experienced a significant stock price increase, reaching a high of 6.38 HKD, the highest since September 2021, with a current increase of 7.01% to 6.11 HKD and a trading volume of 15.81 million HKD [1] Financial Performance - For the interim report of 2025, Dongwu Cement reported revenues of approximately 126 million HKD, with the cement segment contributing about 119 million HKD, reflecting a year-on-year growth of 28.0% [1] - The revenue increase is attributed to the cement industry actively promoting staggered production, which alleviated supply-demand conflicts, despite the market demand remaining weak [1] Market Dynamics - Although traditional peak season demand did not meet expectations, the decline in market demand has narrowed compared to the same period last year, contributing to the recovery in the company's revenue [1] - The company indicated that it will continue to closely monitor the dynamics of the cement sector and explore related business opportunities due to the narrowing trend of demand decline and the industry's anti-involution policy direction [1] Industry Outlook - Guotai Junan pointed out that once the cement industry enters a recovery phase in profitability, the release of industry profitability will be quite significant [1] - The focus on limiting overproduction remains a key concern for improving supply-demand dynamics in the industry under the anti-involution strategy [1]

[Definitions](index=3&type=section&id=Definitions) [Definition of Terms](index=3&type=section&id=2.1%20Definition%20of%20Terms) This section defines key terms and abbreviations used in the report, ensuring clarity for readers, covering the Company, Corporation, Board, Shareholders, currency, and regulatory rules - The reporting period is defined as the six months ended June 30, 2025[3](index=3&type=chunk) - Goldview Development Limited is the Company's controlling shareholder and an associated corporation, wholly owned by Mr. Jiang Xueming, a non-executive director[2](index=2&type=chunk) - The Group refers to Dongwu Cement International Limited and its subsidiaries[2](index=2&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) [Board of Directors](index=4&type=section&id=3.1%20Board%20of%20Directors) This section lists the composition of the company's board, including executive, non-executive, and independent non-executive directors, noting the resignation of independent non-executive director Cao Kuangyu and the appointment of Yuan Yuan on June 4, 2025 - Independent Non-Executive Director Cao Kuangyu resigned on June 4, 2025, and Yuan Yuan was appointed on the same day[4](index=4&type=chunk) [Key Positions and Committees](index=4&type=section&id=3.2%20Key%20Positions%20and%20Committees) This section details the composition of the company secretary, auditor, authorized representatives, and the audit, remuneration, and nomination committees, updating changes to reflect board adjustments - The chairpersons of the Audit Committee, Remuneration Committee, and Nomination Committee are all Suo Suo, and following Cao Kuangyu's resignation, Yuan Yuan was appointed to all three committees[4](index=4&type=chunk) [Company Basic Information](index=4&type=section&id=3.3%20Company%20Basic%20Information) This section provides the company's basic registration and listing information, including stock code, registered office, principal places of business, share registrar, legal advisors, and contact details, ensuring transparency - The company's stock code is **695**, listed on the Main Board of the Stock Exchange[4](index=4&type=chunk) - The company's principal places of business in China are located in Ganxian District, Ganzhou City, Jiangxi Province, and Lili Town, Wujiang District, Suzhou City, Jiangsu Province[4](index=4&type=chunk) - The company's website is http://www.dongwucement.com[6](index=6&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=7&type=section&id=4.1%20Industry%20Overview) This section analyzes the industry characteristics, market performance, and policy impacts across four business segments—cement, rare earth, biomedicine, and international trade—in H1 2025, noting weak cement demand but improved efficiency, policy-affected rare earth, terminated biomedicine investment, and diversified international trade [Cement Segment](index=7&type=section&id=4.1.1%20Cement%20Segment) In H1 2025, the cement industry saw weak demand, fluctuating prices, and improved year-on-year efficiency, with a strong Q1 driven by infrastructure, but a weaker Q2 due to real estate adjustments and slower infrastructure investment - In H1 2025, China's GDP grew by **5.3%** year-on-year, fixed asset investment by **2.8%** year-on-year, and real estate development investment decreased by **11.2%** year-on-year[8](index=8&type=chunk) - In H1 2025, national cement output was **815 million tons**, a year-on-year decrease of **4.3%**, the lowest level for the same period since 2010[8](index=8&type=chunk) Major Sales Regions PO42.5 Bulk Cement Average Price (June 2025 vs. Prior Year) | City | 2025 June (RMB/ton) | Prior Year (RMB/ton) | YoY Change | | :--- | :--- | :--- | :--- | | Nanjing | 296 | 319 | -7.1% | | Hangzhou | 345 | 360 | -4.3% | | Shanghai | 346 | 363 | -4.8% | [Rare Earth Segment](index=10&type=section&id=4.1.2%20Rare%20Earth%20Segment) Rare earth, a strategic resource, saw increased government control and export restrictions in H1 2025, impacting the Group's segment revenue due to high unit fixed costs and rising raw material prices, leading to exploration of strategic partnerships or divestment - In 2024, China's rare earth reserves were approximately **44 million tons**, accounting for **40%** globally; production was **270,000 tons**, accounting for **70%** globally[11](index=11&type=chunk) - The Ministry of Industry and Information Technology issued draft regulations to include monazite and imported rare earth minerals in total volume control[13](index=13&type=chunk) - The Ministry of Commerce and General Administration of Customs implemented export controls on seven categories of medium and heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium[13](index=13&type=chunk) - From January to May 2025, China's cumulative imports of rare earth oxides were **22,245.1 tons**, a year-on-year decrease of **6.86%**[13](index=13&type=chunk) - The Group's rare earth segment revenue fell short of expectations, primarily due to insufficient production and sales scale, resulting in high unit fixed costs and rising raw material prices, which prevented a turnaround from losses, leading to a proactive reduction in output[14](index=14&type=chunk) - The Group plans to lead with technological innovation to enhance the motor segment's capacity, efficiency, and quality, and actively seek strategic cooperation opportunities for divesting the rare earth segment or exploring other rare and precious metal businesses[14](index=14&type=chunk) [Biomedical Segment](index=12&type=section&id=4.1.3%20Biomedical%20Segment) The Group terminated its investment in the biomedical sector in H1 2024 due to higher-than-expected CAR-T drug R&D difficulties, completing related asset disposal on June 26, 2025 - The Group terminated its investment in the biomedical sector in H1 2024 and completed the disposal of related assets on June 26, 2025[15](index=15&type=chunk) [International Trade Segment](index=12&type=section&id=4.1.4%20International%20Trade%20Segment) In H1 2025, commodity prices fluctuated significantly due to geopolitical factors and uncertainties, prompting the Group to diversify its international trade operations and seek synergistic strategic partners and commercial opportunities - The Group is actively seeking and expanding diversified international trade operations, and exploring strategic partners and potential business opportunities with synergistic effects[16](index=16&type=chunk) [Revenue](index=13&type=section&id=4.2%20Revenue) During the reporting period, the Group's total revenue was approximately **HKD 125.811 million**, a year-on-year increase of **17.9%**, with the cement segment revenue growing significantly by **28.0%** due to staggered production and narrowing demand decline. The rare earth segment revenue was **HKD 7.170 million** Group Revenue Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 125,811 | 106,613 | 17.9% | | Cement Segment Revenue | 118,641 | 92,689 | 28.0% | | Rare Earth Segment Revenue | 7,170 | 13,866 | -48.3% | Cement Product Sales Analysis (Six Months Ended June 30) | Product Category | 2025 Sales (thousand tons) | 2025 Average Selling Price (HKD/ton) | 2025 Revenue (HKD thousands) | 2024 Sales (thousand tons) | 2024 Average Selling Price (HKD/ton) | 2024 Revenue (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PO 42.5 Cement | 394 | 218 | 85,809 | 293 | 225 | 66,003 | | PC 42.5 Cement | 120 | 242 | 28,947 | 91 | 241 | 21,897 | | PSS 32.5 | 23 | 169 | 3,885 | – | – | – | | PC 32.5 | – | – | – | 19 | 251 | 4,761 | | **Total** | **537** | **-** | **118,641** | **403** | **-** | **92,661** | - Cement product sales volume increased by approximately **33.3%** year-on-year, with sales revenue increasing by approximately **28.0%** year-on-year[18](index=18&type=chunk) - The Group's sales in Zhejiang Province achieved significant year-on-year growth, demonstrating the effectiveness of multi-regional sales channel expansion[19](index=19&type=chunk) [Gross Profit and Gross Margin](index=15&type=section&id=4.3%20Gross%20Profit%20and%20Gross%20Margin) During the reporting period, the cement segment's gross loss narrowed by **25.4%**, and its gross margin improved by **2.3 percentage points** to **-3.3%**, driven by cost reduction and price recovery, while the rare earth segment recorded a gross loss of **HKD 1.883 million** and a gross margin of **-26.3%** due to insufficient production scale Gross Profit and Gross Margin (Six Months Ended June 30) | Segment | 2025 Gross Loss (HKD thousands) | 2024 Gross Loss (HKD thousands) | Gross Loss Change (%) | 2025 Gross Margin (%) | 2024 Gross Margin (%) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement Segment | (3,873) | (5,192) | -25.4% | -3.3% | -5.6% | 2.3% | | Rare Earth Segment | (1,883) | - | - | -26.3% | - | - | - The narrowing of the cement segment's gross loss was primarily due to the Company's efforts in optimizing management for cost reduction and efficiency improvement, alongside initiatives to restore prices and optimize costs[21](index=21&type=chunk) - The rare earth segment recorded a gross loss primarily because production and sales had not yet achieved scale, leading to higher unit fixed costs[21](index=21&type=chunk) [Other Income](index=16&type=section&id=4.4%20Other%20Income) During the reporting period, the Group's other income significantly increased by **889.5%** to **HKD 26.401 million**, primarily due to gains from the transfer of cement clinker production capacity quotas Other Income (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Other Income | 26,401 | 2,668 | 889.5% | | Gain from transfer of cement clinker production capacity quotas | 22,052 | – | - | - The significant increase in other income was primarily due to the Company's transfer of **750,000 tons/year** of cement clinker production capacity quotas during the reporting period, and it will continue to ensure supply through external clinker procurement[22](index=22&type=chunk)[101](index=101&type=chunk) [Distribution Expenses](index=16&type=section&id=4.5%20Distribution%20Expenses) The Group's distribution expenses decreased by **39.7%** year-on-year to **HKD 1.022 million**, primarily attributed to refined management reforms, improved management efficiency, and enhanced resource allocation efficiency Distribution Expenses (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Distribution Expenses | 1,022 | 1,695 | -39.7% | - The decrease in distribution expenses was primarily due to the Company's continuous promotion of refined management reforms, improved management efficiency driving cost optimization, and enhanced resource allocation efficiency[23](index=23&type=chunk) [Administrative Expenses](index=16&type=section&id=4.6%20Administrative%20Expenses) During the reporting period, the Group's general and administrative expenses decreased by **13.8%** to **HKD 19.017 million**, primarily benefiting from efficient allocation of administrative resources and cost savings achieved through management optimization Administrative Expenses (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 19,017 | 22,063 | -13.8% | - The decrease in administrative expenses was due to efficient allocation of administrative resources and cost savings achieved through management optimization[24](index=24&type=chunk) [Income Tax Credit](index=16&type=section&id=4.7%20Income%20Tax%20Credit) The Group's income tax credit significantly increased during the reporting period, primarily due to the release of deferred tax liabilities related to withholding tax on distributable profits Income Tax Credit (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Income Tax Credit | 4,250 | 1,299 | - The significant increase in income tax credit was primarily due to the release of deferred tax liabilities related to withholding tax on distributable profits[25](index=25&type=chunk) [Net Profit Margin](index=17&type=section&id=4.8%20Net%20Profit%20Margin) During the reporting period, the Group's net profit margin improved by **27.2 percentage points** to **-10.3%**, primarily driven by domestic cement industry policies leading to performance recovery, slowing market demand, and gains from transferring cement clinker production capacity quotas Net Profit Margin (Six Months Ended June 30) | Metric | 2025 (%) | 2024 (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Net Profit Margin | -10.3% | -37.5% | 27.2% | - The increase in net profit margin was primarily due to the recovery in performance driven by domestic cement industry policies, slowing overall market demand in China, and gains from transferring cement clinker production capacity quotas[27](index=27&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=4.9%20Liquidity%20and%20Capital%20Resources) The Group primarily meets its working capital needs through operating cash flows, bank loans, trade and other payables, and IPO proceeds; during the reporting period, cash and cash equivalents significantly increased, and the gearing ratio decreased, indicating improved liquidity [Cash and Cash Equivalents](index=17&type=section&id=4.9.1%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and cash equivalents were **HKD 268.647 million**, a significant increase of **98.3%** from December 31, 2024, mainly due to the withdrawal of short-term deposits during the reporting period Cash and Cash Equivalents (Period End) | Metric | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 268,647 | 135,495 | 98.3% | - The increase in cash and cash equivalents was primarily due to the withdrawal of short-term deposits during the reporting period[30](index=30&type=chunk) [Borrowings](index=18&type=section&id=4.9.2%20Borrowings) As of June 30, 2025, the Group's bank borrowings were approximately **HKD 284.440 million**, a slight decrease of **1.6%** from December 31, 2024, remaining stable, with some borrowings secured by property, plant and equipment, land use rights, and subsidiary equity Borrowings Composition (Period End) | Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Current Borrowings | 295,140 | 299,755 | | - Cement Segment | 89,018 | 96,829 | | - Rare Earth Segment | 195,422 | 192,226 | | - Unallocated | 10,700 | 10,700 | | Total Bank Borrowings | 284,440 | 289,055 | | Other Loans | 10,700 | 10,700 | - Approximately **HKD 157.110 million** of borrowings were secured by the Group's property, plant and equipment, land use rights, and equity interests in subsidiaries[31](index=31&type=chunk) - As of June 30, 2025, the Group had no unutilized bank facilities[33](index=33&type=chunk) [Gearing Ratio](index=18&type=section&id=4.9.3%20Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was **96.0%**, a decrease from **118.6%** as of December 31, 2024, indicating an improvement in financial leverage Gearing Ratio (Period End) | Metric | 2025 June 30 (%) | 2024 December 31 (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gearing Ratio | 96.0% | 118.6% | -22.6% | - The decrease in the gearing ratio indicates an improvement in the Group's financial leverage[34](index=34&type=chunk) [Capital Expenditure and Capital Commitments](index=19&type=section&id=4.9.4%20Capital%20Expenditure%20and%20Capital%20Commitments) As of June 30, 2025, the Group's capital expenditure was approximately **HKD 4.375 million**, primarily from the cement segment, a significant increase from the prior year, with no capital commitments during the same period Capital Expenditure (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Capital Expenditure | 4,375 | 966 | | - Cement Segment | 4,012 | 966 | - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: **HKD 4.521 million**)[37](index=37&type=chunk) [Pledged Assets](index=19&type=section&id=4.9.5%20Pledged%20Assets) As of June 30, 2025, certain property, plant and equipment, land use rights, and equity interests in subsidiaries within the Group's rare earth segment were pledged as collateral for bank borrowings Carrying Value of Pledged Assets (Rare Earth Segment, Period End) | Asset Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 18,781 | 22,153 | | Land Use Rights | 2,286 | 2,290 | - Equity interests in subsidiaries were also pledged as collateral for certain bank borrowings of the Group[38](index=38&type=chunk) [Contingent Liabilities](index=19&type=section&id=4.9.6%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[39](index=39&type=chunk) [Foreign Exchange Risk](index=19&type=section&id=4.9.7%20Foreign%20Exchange%20Risk) The Group's operations are primarily in mainland China, mainly denominated in RMB, with minor HKD receipts and payments; it was not significantly affected by exchange rate fluctuations during the reporting period and did not implement hedging measures, but management will monitor and consider necessary actions - The Group's operations are primarily in mainland China, with operating expenses and capital receipts and payments mainly denominated in RMB, and a small portion in HKD[40](index=40&type=chunk) - During the reporting period, the Group was not significantly affected by exchange rate fluctuations in its business operations and operating funds, nor did it implement any hedging measures[40](index=40&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=20&type=section&id=4.10%20Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) During the reporting period, the Group did not undertake any significant acquisitions or disposals of its subsidiaries or associates - During the reporting period, the Group did not undertake any significant acquisitions or disposals of its subsidiaries or associates[41](index=41&type=chunk) [Interim Dividend](index=20&type=section&id=4.11%20Interim%20Dividend) The Board resolved on December 5, 2024, to declare a special dividend of **HKD 0.136 per share**, which was paid on March 31, 2025, due to delayed tax payment; no interim dividend is recommended for this reporting period - The Board resolved on December 5, 2024, to declare a special dividend of **HKD 0.136 per share**, and due to delayed tax payment, the payment date was postponed to March 31, 2025[42](index=42&type=chunk) - Save as disclosed above, the Board did not recommend the payment of any interim dividend for the six months ended June 30, 2025[42](index=42&type=chunk) [Employees and Remuneration Policy](index=20&type=section&id=4.12%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **275 employees**, with total remuneration of approximately **HKD 13.999 million** during the reporting period, and remuneration levels are determined based on responsibilities, performance, contributions, merits, qualifications, and abilities Employee and Remuneration Overview (Six Months Ended June 30) | Metric | 2025 | | :--- | :--- | | Number of Employees | 275 people | | Total Employee Remuneration | HKD 13,999,000 | - Employee remuneration levels are commensurate with their responsibilities, performance, and contributions, and are determined with reference to their merits, qualifications, and abilities, as well as the recommendations of the Remuneration Committee[43](index=43&type=chunk) [Future Outlook](index=21&type=section&id=4.13%20Future%20Outlook) In H2 2025, the Group aims to maximize shareholder value by optimizing operations, focusing on market and talent development, exploring diverse investment opportunities, and optimizing asset structure to enhance overall competitiveness, while continuing to monitor the cement segment and actively explore rare earth divestment or other precious metal ventures - The Group will focus on "enhancing overall shareholder equity and maximizing shareholder value"[45](index=45&type=chunk) - Operationally, it will leverage process improvements and technological upgrades to enhance operational efficiency, reduce costs, and increase efficiency[45](index=45&type=chunk) - In business development, it will actively explore diverse investment opportunities, promote the development of the international trade segment, and focus on core businesses, improving profitability and operational efficiency through asset structure optimization and capital operations[45](index=45&type=chunk) - Regarding the rare earth segment, due to lower-than-expected revenue, the company is seeking diversified business opportunities and actively exploring potential strategic collaborations, including but not limited to developing other rare and precious metal businesses and seeking opportunities for rare earth segment divestment[45](index=45&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) [Share Capital](index=22&type=section&id=5.1%20Share%20Capital) As of June 30, 2025, the Company's issued share capital was **HKD 5.520 million**, divided into **552 million shares** with a par value of **HKD 0.01 per share** Share Capital Overview (As of June 30, 2025) | Metric | Value | | :--- | :--- | | Issued Share Capital | HKD 5,520,000 | | Number of Issued Shares | 552,000,000 shares | | Par Value per Share | HKD 0.01 | [Supplementary Information on Share Option Scheme](index=22&type=section&id=5.2%20Supplementary%20Information%20on%20Share%20Option%20Scheme) The company's share option scheme adopted on May 28, 2015, expired on May 28, 2025; no options were granted or exercised in the year ended December 31, 2024, with **55.2 million** options available for grant - The share option scheme expired at the close of business on May 28, 2025, being the tenth anniversary of its adoption date[49](index=49&type=chunk) - For the year ended December 31, 2024, no share options were granted under the share option scheme, and no share options remained outstanding or unexercised[47](index=47&type=chunk) - The total number of shares available for issue under the share option scheme was **55.2 million shares**, representing **10%** of the total issued shares as of the annual report date[47](index=47&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=23&type=section&id=5.3%20Directors'%2C%20Supervisors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Non-Executive Director Mr. Jiang Xueming held **53.89%** of the company's shares through his wholly-owned Goldview Development Limited, with Executive Director Mr. Liu Dong and Company Secretary Ms. Lu Rulan also holding minor shares; no other disclosable interests or short positions were held by directors and chief executives Directors' and Chief Executive's Shareholding Profile (As of June 30, 2025) | Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Jiang Xueming | Interest in controlled corporation | 297,500,000 | 53.89% | | Mr. Liu Dong | Beneficial owner | 1,484,000 | 0.27% | | Ms. Lu Rulan | Beneficial owner | 834,000 | 0.15% | - Mr. Jiang Xueming is deemed to be interested in the same shares of the Company as Goldview, which is wholly owned by Mr. Jiang Xueming[50](index=50&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares of the Company](index=24&type=section&id=5.4%20Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, Goldview Development Limited, as the controlling shareholder, held **53.89%** of the company's shares, and Mr. Huang Yingbiao held **12.07%** of the shares, both being substantial shareholders Substantial Shareholders' Shareholding Profile (As of June 30, 2025) | Name/Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Goldview | Beneficial owner | 297,500,000 | 53.89% | | Mr. Huang Yingbiao | Beneficial owner | 66,650,000 | 12.07% | - Goldview is wholly owned by Mr. Jiang Xueming, a Non-Executive Director, who is deemed to be interested in the same shares of the Company as Goldview[52](index=52&type=chunk) [Share Option Scheme](index=24&type=section&id=5.5%20Share%20Option%20Scheme) The Company's share option scheme adopted on May 28, 2015, expired on May 28, 2025; **55.2 million** options were available for grant at the beginning of the reporting period, with zero at the end, and no options were granted, exercised, cancelled, or lapsed during the period - The share option scheme expired on May 28, 2025[53](index=53&type=chunk) - The number of share options available for grant at the beginning of the reporting period was **55.2 million**, and zero at the end of the period[53](index=53&type=chunk) - During the reporting period, no share options were granted by the Company, and no share options were exercised, cancelled, or lapsed[53](index=53&type=chunk) [Changes in Directors' Information](index=25&type=section&id=5.6%20Changes%20in%20Directors'%20Information) The Directors confirmed that as of June 30, 2025, no information was required to be disclosed under Rule 13.51B(1) of the Listing Rules - The Directors confirmed that as of June 30, 2025, no information was required to be disclosed under Rule 13.51B(1) of the Listing Rules[54](index=54&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=5.7%20Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[55](index=55&type=chunk) [Material Litigation and Arbitration](index=25&type=section&id=5.8%20Material%20Litigation%20and%20Arbitration) To the best knowledge of the Directors, the Group was not involved in any material litigation, arbitration, or claims during the reporting period, nor was it involved in any significant outstanding or threatened litigation or claims against the Company - To the best knowledge of the Directors, the Group was not involved in any material litigation, arbitration, or claims during the reporting period[56](index=56&type=chunk) [Compliance with Corporate Governance Code](index=25&type=section&id=5.9%20Compliance%20with%20Corporate%20Governance%20Code) The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the reporting period - The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the reporting period[57](index=57&type=chunk)[58](index=58&type=chunk) [Compliance with Model Code](index=26&type=section&id=5.10%20Compliance%20with%20Model%20Code) The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors confirmed compliance during the reporting period after specific enquiry - The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions[59](index=59&type=chunk) - Following specific enquiry with all Directors, they confirmed compliance with the required standards set out in the Model Code during the reporting period[59](index=59&type=chunk) [Audit Committee](index=26&type=section&id=5.11%20Audit%20Committee) The Audit Committee reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and discussed financial reporting, risk management, and internal control matters with management, concluding that the financial statements were prepared in compliance with applicable accounting standards and properly disclosed - The Audit Committee reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and discussed financial reporting, risk management, and internal control matters with management[60](index=60&type=chunk) - The Audit Committee believes that the preparation of these financial statements complies with applicable accounting standards and requirements, and appropriate disclosures have been made[60](index=60&type=chunk) [Events After Reporting Period](index=26&type=section&id=5.12%20Events%20After%20Reporting%20Period) As of the date of this report, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period - As of the date of this report, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period[61](index=61&type=chunk) [Review Report on Condensed Consolidated Interim Financial Statements](index=27&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Scope of Review and Conclusion](index=27&type=section&id=6.1%20Scope%20of%20Review%20and%20Conclusion) The auditor reviewed the condensed consolidated interim financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410; while the scope is less than an audit, no matters were found to suggest the financial statements were not prepared in all material respects in accordance with HKAS 34 - The auditor reviewed the condensed consolidated interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[64](index=64&type=chunk) - The scope of review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[64](index=64&type=chunk) - The auditor found no matters that lead them to believe that the condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[65](index=65&type=chunk) [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=29&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Profit or Loss Overview](index=29&type=section&id=7.1%20Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the Group's revenue increased to **HKD 125.811 million**, gross loss narrowed, operating loss significantly reduced, income tax credit increased, and loss for the period substantially narrowed to **HKD 12.966 million** Condensed Consolidated Interim Profit or Loss Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 125,811 | 106,613 | 17.9% | | Cost of sales | (131,567) | (114,426) | 15.0% | | Gross loss | (5,756) | (7,813) | -26.3% | | Operating loss | (7,948) | (28,903) | -72.5% | | Loss before income tax | (17,203) | (27,841) | -38.2% | | Income tax credit | 4,250 | 1,299 | 227.2% | | Loss for the period | (12,966) | (39,981) | -67.6% | [Other Comprehensive Income and Attributable Loss](index=30&type=section&id=7.2%20Other%20Comprehensive%20Income%20and%20Attributable%20Loss) During the reporting period, the Group recorded a total comprehensive income of **HKD 2.977 million**, a significant improvement from the prior year, with loss for the period attributable to owners of the Company at **HKD 9.155 million** and to non-controlling interests at **HKD 3.811 million** Other Comprehensive Income and Attributable Loss (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Exchange differences arising from translation of financial statements of overseas operations | 17,059 | (16,573) | | Total comprehensive income for the period | 2,977 | (56,554) | | Loss for the period attributable to owners of the Company | (9,155) | (35,874) | | Loss for the period attributable to non-controlling interests | (3,811) | (4,107) | - Basic and diluted loss per share from continuing operations narrowed to **HKD 0.016 per share**, compared to **HKD 0.041 per share** in the prior year[71](index=71&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=32&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) [Assets Overview](index=32&type=section&id=8.1%20Assets%20Overview) As of June 30, 2025, the Group's total non-current assets were **HKD 424.875 million**, and total current assets were **HKD 534.623 million**, with cash and cash equivalents significantly increasing, and all short-term bank deposits withdrawn Condensed Consolidated Interim Assets Overview (Period End) | Asset Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 424,875 | 430,227 | | Total Current Assets | 534,623 | 612,008 | | - Inventories | 200,535 | 196,531 | | - Trade and other receivables | 57,833 | 55,119 | | - Short-term bank deposits | – | 206,866 | | - Cash and cash equivalents | 268,647 | 135,495 | - Assets classified as held for sale were fully disposed of during the reporting period, resulting in zero at period end[72](index=72&type=chunk) [Liabilities and Equity Overview](index=33&type=section&id=8.2%20Liabilities%20and%20Equity%20Overview) As of June 30, 2025, the Group's total current liabilities were **HKD 309.990 million**, and total non-current liabilities were **HKD 159.920 million**, with dividends payable paid, leading to a reduction in current liabilities; net assets increased to **HKD 489.588 million**, and equity attributable to owners of the Company was **HKD 391.239 million** Condensed Consolidated Interim Liabilities and Equity Overview (Period End) | Metric | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Total Current Liabilities | 309,990 | 383,353 | | - Trade and other payables | 106,573 | 123,688 | | - Contract liabilities | 22,707 | 11,109 | | - Borrowings | 180,321 | 171,604 | | - Dividends payable | – | 75,072 | | Total Non-current Liabilities | 159,920 | 182,037 | | Net Assets | 489,588 | 476,845 | | Equity attributable to owners of the Company | 391,239 | 387,315 | | Non-controlling interests | 98,349 | 89,530 | - Net current liabilities were **HKD 224.633 million**, a slight decrease from the end of last year[73](index=73&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=34&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) [Equity Changes Overview](index=34&type=section&id=9.1%20Equity%20Changes%20Overview) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased to **HKD 391.239 million**, primarily due to reduced loss for the period and positive exchange differences, with non-controlling interests also increasing Condensed Consolidated Interim Equity Changes Overview (Six Months Ended June 30) | Metric | 2025 June 30 (HKD thousands) | 2024 January 1 (HKD thousands) | | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 391,239 | 534,855 | | Non-controlling interests | 98,349 | 101,884 | | Total equity | 489,588 | 636,739 | | Loss for the period (attributable to owners of the Company) | (9,155) | (35,874) | | Exchange differences arising from translation of financial statements of overseas operations (attributable to owners of the Company) | 14,195 | (13,916) | | Exchange reserve released on disposal of a subsidiary | (1,116) | – | - Total comprehensive income for the period was **HKD 2.977 million**, a significant improvement from **(HKD 56.554 million)** in the prior year[74](index=74&type=chunk)[75](index=75&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=36&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) [Cash Flows Overview](index=36&type=section&id=10.1%20Cash%20Flows%20Overview) For the six months ended June 30, 2025, the Group's net cash used in operating activities was **HKD 766,000**, net cash generated from investing activities was **HKD 222.747 million**, and net cash used in financing activities was **HKD 95.631 million**; cash and cash equivalents significantly increased to **HKD 268.647 million** at period end Condensed Consolidated Interim Cash Flows Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (766) | (57,479) | | Net cash generated from investing activities | 222,747 | 23,635 | | Net cash (used in) / generated from financing activities | (95,631) | 37,715 | | Net increase in cash and cash equivalents | 126,350 | 3,871 | | Cash and cash equivalents at end of period | 268,647 | 25,676 | - Investing activities' net cash inflow primarily benefited from the withdrawal of short-term deposits of **HKD 209.573 million**[77](index=77&type=chunk) - Financing activities' net cash outflow was primarily due to dividends paid of **HKD 75.072 million**[79](index=79&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=38&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [General Information](index=38&type=section&id=11.1%20General%20Information) Dongwu Cement International Limited, incorporated in the Cayman Islands, is an investment holding company primarily engaged in cement production and sales, magnetic materials and other application products production and sales, and trading businesses, with its shares listed on the Main Board of the Hong Kong Stock Exchange since June 13, 2012 - The Company is an investment holding company primarily engaged in cement production and sales, production and sales of magnetic materials and other application products, and trading businesses[80](index=80&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 13, 2012[81](index=81&type=chunk) [Basis of Preparation](index=38&type=section&id=11.2%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and applicable disclosure provisions of the Listing Rules, approved for publication by the Board on August 22, 2025, and, while unaudited, has been reviewed by an independent auditor - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure provisions of the Listing Rules[82](index=82&type=chunk) - The financial information is unaudited but has been reviewed by BDO Limited in accordance with Hong Kong Standard on Review Engagements 2410[83](index=83&type=chunk) [Significant Accounting Policies](index=39&type=section&id=11.3%20Significant%20Accounting%20Policies) This section outlines the Group's significant accounting policies, including amendments to HKFRS effective January 1, 2025, and the treatment of current income tax, noting that the amendments applied during the period had no significant impact on financial performance or position - The application of amendments to HKFRS accounting standards during the period had no significant impact on the Group's financial performance and position for the current and prior periods, and/or the disclosures presented in these condensed consolidated interim financial statements[85](index=85&type=chunk) - Interim income tax is accrued using the tax rate applicable to the expected total annual earnings[86](index=86&type=chunk) [Application of Judgements and Estimates](index=40&type=section&id=11.4%20Application%20of%20Judgements%20and%20Estimates) In preparing the financial information, management makes judgments, estimates, and assumptions affecting the application of accounting policies, reported amounts of assets and liabilities, and income and expenses; actual results may differ, and key judgments and sources of estimation uncertainty are consistent with the 2024 consolidated financial statements - In preparing the financial information, management is required to make judgments, estimates, and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities, and income and expenses[88](index=88&type=chunk) - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing the financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[88](index=88&type=chunk) [Financial Risk Management](index=40&type=section&id=11.5%20Financial%20Risk%20Management) The Group's operations involve foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk; it aims to maintain sufficient cash and credit lines for liquidity and funds needs through operating cash, bank borrowings, and shareholder support, with no significant changes in risk management since year-end - The Group's operations involve various types of financial risks: foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk[89](index=89&type=chunk) - The Group funds its working capital requirements through a combination of funds generated from operations, bank borrowings, and financial support provided by equity holders[90](index=90&type=chunk) - There have been no changes in the Group's risk management department or any risk management policies since year-end[89](index=89&type=chunk) [Segment Reporting](index=41&type=section&id=11.6%20Segment%20Reporting) The Group segments its business into continuing operations—cement production and sales, magnetic materials and other application products production and sales, and trading businesses—and the discontinued biotechnology research and development segment, based on reports reviewed by the chief operating decision maker, with most revenue and non-current assets derived from China operations - The Group's continuing reportable segments include: cement production and sales, production and sales of magnetic materials and other application products, and trading businesses[94](index=94&type=chunk) - The discontinued reportable segment is biotechnology research and development[92](index=92&type=chunk) Segment Revenue and Results (Six Months Ended June 30, 2025) | Segment | Segment Revenue (HKD thousands) | Segment Results (HKD thousands) | | :--- | :--- | :--- | | Cement production and sales | 118,641 | 15,572 | | Production and sales of magnetic materials and other application products | 7,170 | (20,520) | | Trading businesses | – | (871) | | Biotechnology research and development (discontinued operations) | – | (13) | | **Total** | **125,811** | **(5,832)** | - During the period, revenue from the Group's single largest external independent customer accounted for **26.22%** of the Group's revenue (June 30, 2024: **8.54%**)[97](index=97&type=chunk) [Revenue](index=44&type=section&id=11.7%20Revenue) The Group's revenue from continuing operations primarily stems from the cement production and sales segment and the magnetic materials and other application products segment, with significant growth in cement sales revenue and a decrease in magnetic materials sales revenue, and most revenue recognized at a point in time Revenue Analysis from Continuing Operations (Six Months Ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cement production and sales segment | 118,641 | 92,689 | | Production and sales of magnetic materials and other application products segment | 7,170 | 13,866 | | Trading businesses segment | – | 58 | | **Total** | **125,811** | **106,613** | Revenue Recognition Timing (Six Months Ended June 30) | Recognition Timing | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Goods transferred at a point in time | 122,572 | 102,895 | | Services transferred over time | 3,239 | 3,660 | - Contract liabilities of **HKD 11.109 million** as of January 1, 2025, were recognized as revenue for the six months ended June 30, 2025, upon satisfaction of current performance obligations[100](index=100&type=chunk) [Other Income and Net Other Gains](index=46&type=section&id=11.8%20Other%20Income%20and%20Net%20Other%20Gains) The Group's other income and net other gains significantly increased to **HKD 26.401 million**, primarily due to a gain of **HKD 22.052 million** from the transfer of cement clinker production capacity quotas and fair value changes of financial assets at fair value through profit or loss Other Income and Net Other Gains (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Government grants | 951 | 1,950 | | Rental income | 741 | – | | Fair value changes of financial assets at fair value through profit or loss | 2,479 | – | | Gain from transfer of cement clinker production capacity quotas | 22,052 | – | | **Total** | **26,401** | **2,668** | - The gain from the transfer of cement clinker production capacity quotas was the main reason for the significant increase in other income this period, and the company will continue to ensure supply through external clinker procurement[101](index=101&type=chunk) [Income Tax Credit](index=47&type=section&id=11.9%20Income%20Tax%20Credit) The Group's income tax credit for the reporting period was **HKD 4.250 million**, primarily from deferred tax credits; Chinese subsidiaries are taxed at **15%** or **25%** corporate income tax rates, with no provision recognized for Hong Kong and other overseas regions due to no estimated taxable profits Income Tax Credit (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current tax | 4,125 | 38 | | Deferred tax | (8,375) | (1,337) | | **Income tax credit relating to continuing operations** | **(4,250)** | **(1,299)** | - The income tax credit primarily arose from deferred tax credits[102](index=102&type=chunk) - Chinese high-tech enterprise subsidiaries pay corporate income tax at a reduced rate of **15%**, while others pay at **25%**[102](index=102&type=chunk) [Loss Before Income Tax](index=48&type=section&id=11.10%20Loss%20Before%20Income%20Tax) The Group's loss before income tax from continuing operations was **HKD 17.203 million**, a significant narrowing from the prior year; the biomedical business was terminated during the period, with the disposal of related subsidiaries completed on June 26, 2025, resulting in a disposal loss of **HKD 7.073 million** Loss Before Income Tax Composition (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 125,635 | 107,426 | | Impairment provision for inventories | 2,756 | – | | Depreciation of property, plant and equipment | 9,557 | 12,574 | | Employee benefit expenses (including directors' emoluments) | 13,999 | 15,906 | - The Group completed the disposal of a subsidiary primarily engaged in biotechnology research and development on June 26, 2025, recording a disposal loss of **HKD 7.073 million**[106](index=106&type=chunk)[110](index=110&type=chunk) Loss for the Period from Discontinued Operations (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Administrative expenses | (13) | (1,056) | | Impairment provision for goodwill | – | (12,411) | | **Loss for the period from discontinued operations** | **(13)** | **(13,439)** | [Property, Plant and Equipment](index=52&type=section&id=11.11%20Property%20Plant%20and%20Equipment) As of June 30, 2025, the carrying value of property, plant and equipment was **HKD 223.503 million**, with additions of **HKD 4.375 million** during the period; certain land use rights and property, plant and equipment were pledged as collateral for bank borrowings Changes in Carrying Value of Property, Plant and Equipment (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 222,022 | 220,625 | | Additions | 4,375 | 32,713 | | Depreciation | (10,030) | (13,065) | | Exchange differences | 7,136 | (6,033) | | **Closing carrying value** | **223,503** | **234,110** | - As of June 30, 2025, certain land use rights and property, plant and equipment were pledged to secure bank borrowings of **HKD 157.110 million** for the Group[113](index=113&type=chunk) [Goodwill](index=53&type=section&id=11.12%20Goodwill) As of June 30, 2025, the carrying value of goodwill was **HKD 40.008 million**, with an impairment loss of **HKD 8.554 million** recognized during the period, primarily due to underperforming cash-generating units and competitive environment; goodwill is mainly allocated to the production and sales of magnetic materials and other application products segment Changes in Carrying Value of Goodwill (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 47,183 | 61,589 | | Impairment loss | (8,554) | (12,411) | | Exchange differences | 1,379 | (1,512) | | **Closing carrying value** | **40,008** | **47,563** | - The impairment loss of **HKD 8.554 million** was primarily due to underperforming cash-generating units and the competitive environment[116](index=116&type=chunk) - Goodwill is allocated to Cheng Zheng Group and its subsidiaries, for the production and sales of magnetic materials and other application products segment[115](index=115&type=chunk) [Intangible Assets](index=55&type=section&id=11.13%20Intangible%20Assets) As of June 30, 2025, the carrying value of intangible assets (technical know-how) was **HKD 11.758 million**, with amortization of **HKD 1.479 million** during the period; technical know-how has an estimated useful life of **10 years** and is amortized on a straight-line basis Changes in Carrying Value of Intangible Assets (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 12,845 | 22,046 | | Amortization | (1,479) | (1,842) | | Exchange differences | 392 | (565) | | **Closing carrying value** | **11,758** | **14,420** | - Technical know-how refers to intellectual property with a finite useful life and is amortized on a straight-line basis over its estimated useful life of **10 years**[117](index=117&type=chunk) [Investments in Associates](index=55&type=section&id=11.14%20Investments%20in%20Associates) As of June 30, 2025, the Group's investments in associates had a carrying value of **HKD 33.264 million**, primarily including investments in Suzhou Dongtong Environmental Protection Technology Co., Ltd. (**43.2%** interest) and Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd. (**30%** interest); the share of associates' results for the period was a loss of **HKD 211,000** Changes in Carrying Value of Investments in Associates (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 32,417 | 34,798 | | Share of results of associates | (211) | (1,212) | | Exchange differences | 1,058 | (1,169) | | **Closing carrying value** | **33,264** | **32,417** | - The Group holds a **43.2%** interest in Dongtong Environmental Protection Technology, whose principal business is R&D of environmental protection technologies and provision of related services[118](index=118&type=chunk) - The Group holds a **30%** interest in Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd., whose principal business is financial investment management[119](index=119&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=58&type=section&id=11.15%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss were **HKD 109.576 million**, primarily investments in trust agreements managed by Guomin Trust to generate investment returns for the Group, classified as non-current assets Financial Assets at Fair Value Through Profit or Loss (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Investment in trust agreements | 109,576 | 108,027 | - The trust funds are managed by Guomin Trust, which is responsible for managing the trust assets to generate investment returns for the Group[129](index=129&type=chunk) - The Group has classified investments in trust agreements as non-current assets, expected to be realized within twelve months after the reporting period[129](index=129&type=chunk) [Inventories](index=58&type=section&id=11.16%20Inventories) As of June 30, 2025, the Group's total inventories were **HKD 200.535 million**, primarily comprising raw materials, work-in-progress, and finished goods, a slight increase from December 31, 2024 Inventories Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Raw materials | 129,653 | 125,105 | | Work-in-progress | 13,447 | 13,564 | | Finished goods | 57,435 | 57,862 | | **Total** | **200,535** | **196,531** | [Trade and Other Receivables](index=59&type=section&id=11.17%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables were **HKD 57.833 million**, including trade receivables and bills receivable net, prepayments and deposits, and other receivables; impairment provisions for trade receivables increased during the period Trade and Other Receivables Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables and bills receivable, net | 25,221 | 24,850 | | Prepayments and deposits | 11,190 | 17,550 | | Other receivables | 21,667 | 13,219 | | **Total trade and other receivables** | **57,833** | **55,460** | Ageing Analysis of Trade Receivables and Bills Receivable (Period End) | Ageing | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Within 90 days | 15,459 | 15,601 | | 91 to 180 days | 5,977 | 6,186 | | 181 days to 1 year | 3,681 | 2,482 | | Over 1 year | 104 | 581 | - Other receivables include consideration receivable from the disposal of a subsidiary and transfer of cement clinker production capacity quotas of approximately **HKD 2.191 million** and **HKD 2.575 million**, respectively, and advances to non-controlling shareholders of the Group's subsidiaries of **HKD 8.020 million**[134](index=134&type=chunk) [Trade and Other Payables](index=62&type=section&id=11.18%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were **HKD 106.573 million**, a decrease from December 31, 2024; credit terms from major suppliers range from **30 to 90 days**, with most amounts denominated in RMB Trade and Other Payables Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 31,511 | 27,298 | | Bills payable | 10,616 | 29,426 | | Other payables | 34,015 | 36,395 | | Consideration payable | 21,912 | 21,217 | | **Total** | **106,573** | **123,688** | - Credit terms granted by the Group's major suppliers range from **30 to 90 days**[137](index=137&type=chunk) [Borrowings](index=63&type=section&id=11.19%20Borrowings) As of June 30, 2025, the Group's total bank and other loans were **HKD 295.140 million**, mostly bank borrowings, with some secured by the Company's guarantee, and others by subsidiary equity, land use rights, and property, plant and equipment Borrowings Composition and Repayment Terms (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Bank borrowings (unsecured) | 127,330 | 133,959 | | Bank borrowings (secured) | 157,110 | 155,096 | | Other loans (unsecured) | 10,700 | 10,700 | | **Total bank and other loans** | **295,140** | **299,755** | | Current portion | 180,321 | 171,604 | | Non-current portion | 114,819 | 128,151 | - Approximately **HKD 127.330 million** of bank borrowings are guaranteed by the Company, bearing fixed annual interest rates ranging from **2.90% to 4.45%**[140](index=140&type=chunk) - Approximately **HKD 157.110 million** of bank borrowings are secured by equity interests in the Company's subsidiaries, land use rights, and the Group's property, plant and equipment[142](index=142&type=chunk) [Deferred Income](index=64&type=section&id=11.20%20Deferred%20Income) As of June 30, 2025, the Group's deferred income was **HKD 19.962 million**, primarily government grants received from Chinese local government authorities to support subsidiaries' R&D activities Changes in Deferred Income (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening balance | 20,232 | 23,278 | | Credited to profit or loss | (915) | (1,115) | | Exchange differences | 645 | (604) | | **Closing balance** | **19,962** | **21,305** | - Deferred income refers to government grants received from Chinese local government authorities to support subsidiaries' R&D activities[141](index=141&type=chunk) [Deferred Tax](index=65&type=section&id=11.21%20Deferred%20Tax) As of June 30, 2025, the Group's net deferred tax liability was **HKD 18.106 million**, comprising deferred tax assets of **HKD 6.766 million** and deferred tax liabilities of **HKD 24.872 million**; unused tax losses were approximately **HKD 87.897 million**, of which **HKD 27.066 million** were recognized as deferred tax assets Deferred Tax Overview (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Deferred tax assets | 6,766 | 7,392 | | Deferred tax liabilities | (24,872) | (33,191) | | **Net deferred tax** | **(18,106)** | **(25,799)** | - As of June 30, 2025, the Group had unused tax losses of approximately **HKD 87.897 million** available to offset future profits[146](index=146&type=chunk) - Approximately **HKD 27.066 million** of unused tax losses were recognized as deferred tax assets, while approximately **HKD 60.831 million** remained unrecognized[146](index=146&type=chunk) [Share Capital](index=66&type=section&id=11.22%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was **HKD 100 million**, divided into **10 billion ordinary shares** with a par value of **HKD 0.01 per share;** issued and fully paid share capital was **HKD 5.520 million**, comprising **552 million shares** Share Capital Overview (Period End) | Item | Number of Ordinary Shares (thousands) | Par Value of Ordinary Shares (HKD thousands) | | :--- | :--- | :--- | | Authorized share capital | 10,000,000 | 100,000 | | Issued and fully paid share capital | 552,000 | 5,520 | [Loss Per Share](index=67&type=section&id=11.23%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share from continuing and discontinued operations was **HKD 0.017**, a significant narrowing from **HKD 0.065** in the prior year; loss per share from continuing operations was **HKD 0.016** Loss Per Share (Six Months Ended June 30) | Item | 2025 (HKD/share) | 2024 (HKD/share) | | :--- | :--- | :--- | | Loss per share from continuing and discontinued operations | (0.017) | (0.065) | | Loss per share from continuing operations | (0.016) | (0.041) | | Loss per share from discontinued operations | (0.000) | (0.024) | - Diluted loss per share is the same as basic loss per share as there were no dilutive potential ordinary shares outstanding during the six months ended June 30, 2025 and 2024[147](index=147&type=chunk) [Dividends](index=67&type=section&id=11.24%20Dividends) No dividends were declared for the six months ended June 30, 2025; the special dividend of **HKD 0.136 per share** declared on December 5, 2024, was paid during this interim period - No dividends were declared for the six months ended June 30, 2025[150](index=150&type=chunk) - The special dividend of **HKD 0.136 per share** declared on December 5, 2024, was paid during this interim period[150](index=150&type=chunk) [Lease Liabilities](index=68&type=section&id=11.25%20Lease%20Liabilities) As of June 30, 2025, the Group's total lease liabilities were **HKD 656,000**, primarily for leased land and buildings, with most future lease payments due within one year Changes in Lease Liabilities (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening balance | 845 | 83 | | Interest expense | 13 | 13 | | Lease payments | (202) | (218) | | **Closing balance** | **656** | **1,031** | Lease Liabilities Liquidity Analysis (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Current portion | 389 | 382 | | Non-current portion | 267 | 463 | | **Total** | **656** | **845** | [Related Party Transactions](index=69&type=section&id=11.26%20Related%20Party%20Transactions) This section discloses key management personnel compensation of **HKD 1.544 million** and significant related party transactions; other payables include **HKD 3.839 million** owed to companies controlled by Mr. Jiang, which are unsecured, interest-free, and repayable on demand, with no significant non-exempt related party transactions under Listing Rules during the period Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Basic salaries and benefits in kind | 1,544 | 2,419 | - Other payables include amounts due to companies controlled by Mr. Jiang of **HKD 3.839 million**, which are unsecured, interest-free, and repayable on demand[157](index=157&type=chunk) - During the period, there were no significant related party transactions that constituted non-exempt connected transactions or non-exempt continuing connected transactions under the Listing Rules[160](index=160&type=chunk) [Capital Commitments](index=70&type=section&id=11.27%20Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments for the acquisition of property, plant and equipment Capital Commitments (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Commitments for acquisition of property, plant and equipment | – | 151 | [Financial Instruments](index=71&type=section&id=11.28%20Financial%20Instruments) This section presents the carrying amounts and fair values of financial assets and liabilities; as of June 30, 2025, total financial assets were **HKD 432.474 million** and total financial liabilities were **HKD 401.707 million**, with financial assets at fair value through profit or loss (trust agreement investments) classified as Level 3, valued based on fund manager estimates Carrying Amounts and Fair Values of Financial Assets and Liabilitie

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 東吳水泥國際有限公司 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) | 00695 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | 本月 ...

Core Insights - The company reported a revenue of approximately HKD 125.81 million for the first half of 2025, representing an increase of about HKD 19.2 million or 18.0% compared to approximately HKD 106.61 million for the same period ending June 30, 2024 [1] - The gross profit margin improved from approximately -7.3% for the six months ending June 30, 2024, to approximately -4.6% during the reporting period [1] - The loss attributable to the company's owners decreased from approximately HKD 35.87 million for the six months ending June 30, 2024, to approximately HKD 9.16 million in the reporting period [1]

Group 1 - The company reported a revenue of approximately 125,811,000 HKD for the six months ending June 30, 2025, representing an increase of about 19,198,000 HKD or 18.0% compared to approximately 106,613,000 HKD for the same period in 2024 [1] - The gross profit margin improved from approximately -7.3% for the six months ending June 30, 2024, to approximately -4.6% for the reporting period [1] - The loss attributable to the company's owners decreased from approximately (35,874,000) HKD for the six months ending June 30, 2024, to approximately (9,155,000) HKD for the reporting period [1]

Core Points - Dongwu Cement (00695) reported a revenue of HKD 126 million for the six months ending June 30, 2025, representing an 18% year-on-year increase [1] - The loss attributable to the company's owners narrowed to HKD 9.155 million, a 74.5% improvement compared to the previous year [1] - The basic loss per share was HKD 0.017 [1] Financial Performance - The net profit margin for the reporting period was approximately -10.3%, an improvement from -37.5% in the same period last year, reflecting a 27.2% increase [1] - The improvement in net profit margin was primarily driven by domestic cement industry policies that boosted performance, alongside a slowdown in overall market demand in China [1] - The company also benefited from gains related to the transfer of cement clinker production capacity indicators, which will continue to be supplemented by externally purchased clinker supply [1]

Core Viewpoint - Dongwu Cement (00695) reported a revenue of HKD 126 million for the six months ending June 30, 2025, representing an 18% year-on-year increase. The company recorded a loss attributable to shareholders of HKD 9.155 million, narrowing by 74.5% compared to the previous year. The basic loss per share was HKD 0.017 [1] Financial Performance - Revenue for the reporting period was HKD 126 million, up 18% year-on-year [1] - Loss attributable to shareholders was HKD 9.155 million, a reduction of 74.5% year-on-year [1] - Basic loss per share was HKD 0.017 [1] - Net profit margin for the group was approximately -10.3%, an improvement from -37.5% in the same period last year, reflecting a 27.2% increase [1] Industry Context - The improvement in performance was primarily driven by domestic cement industry policies that boosted results, alongside a slowdown in overall market demand in China [1] - The company benefited from gains related to the transfer of cement clinker production capacity indicators, which will continue to be supplemented by externally purchased clinker supply [1]

Group 1 - The core viewpoint of the article is that Dongwu Cement (00695.HK) reported a revenue increase of approximately 18.0% for the six months ending June 30, 2025, amounting to about HKD 126 million [1] - The gross loss for the reporting period was HKD 5.756 million, an improvement from a gross loss of HKD 7.813 million in the same period last year [1] - The loss attributable to the company's owners decreased from approximately HKD 35.874 million in the previous year to about HKD 9.155 million in the reporting period [1]

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Overview of Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81_%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the Group's revenue significantly increased by **18.0%**, gross margin improved, and loss attributable to owners of the Company substantially narrowed, indicating improved operating conditions | Indicator | Six Months Ended June 30, 2025 (HKD Thousand) | Six Months Ended June 30, 2024 (HKD Thousand) | Change (HKD Thousand) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 125,811 | 106,613 | 19,198 | 18.0% | | Gross Margin | -4.6% | -7.3% | 2.7% | - | | Loss Attributable to Owners of the Company | (9,155) | (35,874) | 26,719 | -74.5% | [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue grew, gross loss narrowed, operating loss significantly decreased, with substantial improvements in loss for the period and total comprehensive income, and a significant reduction in loss per share | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 125,811 | 106,613 | | Gross Loss | (5,756) | (7,813) | | Operating Loss | (7,948) | (28,903) | | Loss for the Period | (12,966) | (39,981) | | Total Comprehensive Income for the Period | 2,977 | (56,554) | | Loss Attributable to Owners of the Company for the Period | (9,155) | (35,874) | | Loss Per Share from Continuing and Discontinued Operations (Basic and Diluted) | (0.017) | (0.065) | [Condensed Consolidated Interim Statement of Financial Position](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets slightly decreased, but net current assets remained stable, net assets grew, and total equity increased, indicating a sound financial structure | Indicator | June 30, 2025 (HKD Thousand) | December 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 424,875 | 430,227 | | Total Current Assets | 534,623 | 612,008 | | Total Current Liabilities | 309,990 | 383,353 | | Net Current Assets | 224,633 | 228,655 | | Net Assets | 489,588 | 476,845 | | Total Equity | 489,588 | 476,845 | [Condensed Consolidated Interim Statement of Changes in Equity](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased, mainly due to reduced loss for the period and changes in exchange reserves, with non-controlling interests also growing | Indicator | June 30, 2025 (HKD Thousand) | January 1, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 391,239 | 534,855 | | Non-controlling Interests | 98,349 | 101,884 | | Total Equity | 489,588 | 636,739 | | Loss for the Period (Attributable to Owners of the Company) | (9,155) | (35,874) | | Exchange Differences Arising from Translation of Financial Statements of Overseas Operations (Attributable to Owners of the Company) | 14,195 | (13,916) | [Condensed Consolidated Interim Statement of Cash Flows](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the Group's net cash used in operating activities decreased, net cash from investing activities significantly increased, and net cash used in financing activities increased, resulting in a net increase in cash and cash equivalents | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (766) | (57,479) | | Net Cash From Investing Activities | 222,747 | 23,635 | | Net Cash (Used in) / From Financing Activities | (95,631) | 37,715 | | Net Increase in Cash and Cash Equivalents | 126,350 | 3,871 | | Cash and Cash Equivalents at End of Period | 268,647 | 25,676 | [Notes to the Condensed Consolidated Interim Financial Statements](index=10&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=10&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) East Wu Cement International Limited was incorporated in the Cayman Islands, primarily engaged in cement production and sales, magnetic materials and other application products production and sales, and trading business, with its principal place of business in Jiangsu Province, China - The Company was incorporated in the Cayman Islands on November 29, 2011, and listed on the Main Board of the Hong Kong Stock Exchange since June 13, 2012[14](index=14&type=chunk)[15](index=15&type=chunk) - The Group is primarily engaged in cement production and sales, magnetic materials and other application products production and sales, and trading business, with its principal place of business in Fenhu Economic Development Zone, Wujiang City, Jiangsu Province, China[14](index=14&type=chunk) [Basis of Preparation](index=10&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These condensed consolidated interim financial information are prepared in accordance with HKAS 34 and the Listing Rules, adopting the same accounting policies as the 2024 annual financial statements, and were approved for issue by the Board on August 22, 2025 - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Listing Rules of the Hong Kong Stock Exchange[16](index=16&type=chunk) - The financial information has been prepared on the historical cost basis, except for certain financial instruments measured at fair value where applicable[19](index=19&type=chunk) [Significant Accounting Policies](index=11&type=section&id=%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) Revisions to HKFRS accounting standards adopted during the period had no significant impact on the Group's financial performance and position, and no new standards or amendments not yet effective have been adopted - Revisions to HKFRS accounting standards applied during the period had no significant impact on the Group's financial performance and position for the current and prior periods and/or the disclosures contained in these condensed consolidated interim financial statements[20](index=20&type=chunk) [Application of Judgments and Estimates](index=12&type=section&id=%E9%81%8B%E7%94%A8%E5%88%A4%E6%96%B7%E5%8F%8A%E4%BC%B0%E8%A8%88) In preparing the financial information, management made judgments, estimates, and assumptions affecting the application of accounting policies and the reported amounts of assets and liabilities, and actual results may differ from these estimates - In preparing the financial information, management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenue, and expenses[23](index=23&type=chunk) [Financial Risk Management](index=12&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group's operations involve various financial risks including foreign exchange, cash flow interest rate, credit, and liquidity risks, and it strives to maintain sufficient cash and credit lines to meet liquidity needs, with no significant changes in risk management policies since year-end - The Group's operations involve various types of financial risks: foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk[24](index=24&type=chunk) - The Group strives to maintain sufficient cash and credit lines to meet its liquidity requirements, funding working capital needs through working capital, bank borrowings, and equity holder support[26](index=26&type=chunk) [Segment Reporting](index=13&type=section&id=%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group segments its business into reportable segments based on reports reviewed by the chief operating decision-maker, including cement production and sales, magnetic materials and other application products production and sales, trading business (continuing operations), and biotechnology research and development (discontinued operations) - The Group's reportable operating segments include: cement production and sales, production and sales of magnetic materials and other application products, trading business (continuing operations), and biotechnology research and development (discontinued operations)[28](index=28&type=chunk)[30](index=30&type=chunk) Segment Results for the Six Months Ended June 30, 2025 (HKD Thousand): | Segment | Revenue | Results | | :--- | :--- | :--- | | Cement Production and Sales | 118,641 | 15,572 | | Magnetic Materials and Other Application Products | 7,170 | (20,520) | | Trading Business | – | (871) | | Biotechnology Research and Development (Discontinued Operations) | – | (13) | | **Total** | **125,811** | **(5,832)** | Segment Results for the Six Months Ended June 30, 2024 (HKD Thousand): | Segment | Revenue | Results | | :--- | :--- | :--- | | Cement Production and Sales | 92,689 | (12,353) | | Magnetic Materials and Other Application Products | 13,866 | (11,784) | | Trading Business | 58 | (287) | | Biotechnology Research and Development (Discontinued Operations) | – | (13,439) | | **Total** | **106,613** | **(37,863)** | [Revenue](index=16&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue from continuing operations significantly increased during the reporting period, primarily contributed by the cement production and sales segment, with a substantial increase in ordinary Portland cement sales Revenue from Contracts with Customers (HKD Thousand): | Product Category | 2025 | 2024 | | :--- | :--- | :--- | | Cement Production and Sales Segment | 118,641 | 92,689 | | Sales of Ordinary Portland Cement (Strength Grade 42.5) | 85,809 | 66,003 | | Production and Sales of Magnetic Materials and Other Application Products Segment | 7,170 | 13,866 | | Trading Business Segment | – | 58 | | **Total** | **125,811** | **106,613** | - Contract liabilities of **HKD 11,109,000** as of January 1, 2025, were recognized as revenue for the six months ended June 30, 2025, upon satisfaction of performance obligations[35](index=35&type=chunk) [Other Income and Net Other Gains](index=17&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) The Group's other income and net other gains significantly increased, primarily due to gains from the transfer of cement clinker production capacity quotas and fair value changes of financial assets at fair value through profit or loss Other Income and Net Other Gains (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Government Grants | 951 | 1,950 | | Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss | 2,479 | – | | Gains from Transfer of Cement Clinker Production Capacity Quotas | 22,052 | – | | **Total** | **26,401** | **2,668** | - The Company transferred cement clinker production capacity quotas in the first quarter of 2025 to replace self-produced clinker, as self-production costs were higher than external procurement[36](index=36&type=chunk) [Income Tax Credit](index=18&type=section&id=Income%20Tax%20Credit_Notes) The Group's income tax credit significantly increased during the reporting period, mainly due to changes in deferred tax, with no taxable profits in Hong Kong, and Chinese subsidiaries subject to corporate income tax rates of **15%** or **25%** Income Tax Credit (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax - Corporate Income Tax | 14 | 20 | | Current Tax - China Withholding Tax | 4,111 | – | | Deferred Tax | (8,375) | (1,337) | | **Income Tax Credit Related to Continuing Operations** | **(4,250)** | **(1,299)** | - Certain subsidiaries incorporated in China and recognized as high-tech enterprises are subject to a reduced corporate income tax rate of **15%**, while others are subject to **25%**[37](index=37&type=chunk) [Discontinued Operations / Disposal of Subsidiaries](index=19&type=section&id=%E7%B5%82%E6%AD%A2%E7%B6%93%E7%87%9F%E6%A5%AD%E5%8B%99%2F%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8) The Group completed the disposal of its biotechnology research and development business subsidiary on June 26, 2025; this discontinued operation incurred a slight loss during the reporting period, but significantly reduced compared to the same period last year - The Group completed the disposal of Oriental Health Science Limited and its subsidiaries, primarily engaged in biotechnology research and development in China, on June 26, 2025[40](index=40&type=chunk) Results of Disposed Group (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period from Discontinued Operations | (13) | (13,439) | | Loss for the Period from Discontinued Operations Attributable to Owners of the Company | (115) | (13,080) | | Loss on Disposal of Subsidiaries | (7,073) | – | - The net assets of the disposed group at the disposal date were **HKD 573,000**, with a total cash consideration of **HKD 2,150,000**[42](index=42&type=chunk) [Property, Plant and Equipment](index=22&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the Group's carrying amount of property, plant and equipment slightly increased, mainly due to additions and exchange differences, with some assets pledged as collateral for bank borrowings Carrying Amount of Property, Plant and Equipment (HKD Thousand): | Period | Carrying Amount | | :--- | :--- | | As of January 1, 2025 | 222,022 | | Additions | 4,375 | | Depreciation | (10,030) | | Exchange Differences | 7,136 | | As of June 30, 2025 | 223,503 | | As of January 1, 2024 | 220,625 | | As of June 30, 2024 | 234,110 | - As of June 30, 2025, certain land use rights and property, plant and equipment were pledged as collateral for the Group's bank borrowings of **HKD 157,110,000**[44](index=44&type=chunk) [Goodwill](index=24&type=section&id=%E5%95%86%E8%AD%BD) As of June 30, 2025, the Group's carrying amount of goodwill decreased due to impairment losses and exchange differences, primarily allocated to the Cheng Zheng cash-generating unit in the magnetic materials and other application products segment Carrying Amount of Goodwill (HKD Thousand): | Period | Carrying Amount | | :--- | :--- | | As of January 1, 2025 | 47,183 | | Impairment Loss | (8,554) | | Exchange Differences | 1,379 | | As of June 30, 2025 | 40,008 | | As of January 1, 2024 | 61,589 | | As of June 30, 2024 | 47,563 | - Goodwill is primarily allocated to the Cheng Zheng cash-generating unit, for the production and sales of magnetic materials and other application products segment[45](index=45&type=chunk) - For the six months ended June 30, 2025, an impairment loss of **HKD 8,554,000** was recognized, mainly due to underperformance of the cash-generating unit and the competitive environment[47](index=47&type=chunk) [Intangible Assets](index=25&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's carrying amount of intangible assets (technical know-how) decreased due to amortization and exchange differences, amortized on a straight-line basis over an estimated useful life of **10 years** Carrying Amount of Intangible Assets (Technical Know-how) (HKD Thousand): | Period | Carrying Amount | | :--- | :--- | | As of January 1, 2025 | 12,845 | | Amortization | (1,479) | | Exchange Differences | 392 | | As of June 30, 2025 | 11,758 | | As of January 1, 2024 | 22,046 | | As of June 30, 2024 | 14,420 | - Technical know-how refers to intellectual property with a finite useful life, and is amortized on a straight-line basis over its estimated useful life of **10 years**[48](index=48&type=chunk) [Investments in Associates](index=26&type=section&id=%E6%96%BC%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E4%B9%8B%E6%8A%95%E8%B3%87) The Group's investments in associates primarily include Suzhou Dongtong Environmental Protection Technology Co., Ltd. and Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd., both accounted for using the equity method, with a share of loss from associates during the period Carrying Amount of Investments in Associates (HKD Thousand): | Period | Carrying Amount | | :--- | :--- | | As of Beginning of Period and Beginning of Year | 32,417 | | Share of Results of Associates | (211) | | Exchange Differences | 1,058 | | As of End of Period and End of Year | 33,264 | - The Group holds a **43.2%** interest in Suzhou Dongtong Environmental Protection Technology Co., Ltd., primarily engaged in R&D of environmental protection technologies and related services[49](index=49&type=chunk) - The Group holds a **30%** interest in Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd., primarily engaged in financial investment management[49](index=49&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=29&type=section&id=%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) The Group's financial assets at fair value through profit or loss primarily consist of trust funds under a trust agreement with Guomin Trust Co., Ltd., with a carrying amount of **HKD 109,576,000** at period-end Financial Assets at Fair Value Through Profit or Loss (HKD Thousand): | Period | Carrying Amount | | :--- | :--- | | As of June 30, 2025 | 109,576 | | As of December 31, 2024 | 108,027 | - These trust funds are managed by Guomin Trust, aiming to generate investment returns for the Group, and are classified as non-current assets[56](index=56&type=chunk) [Inventories](index=29&type=section&id=%E5%AD%98%E8%B2%A8) As of June 30, 2025, the Group's total inventories slightly increased, mainly composed of raw materials, with work in progress and finished goods remaining relatively stable Inventories (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 129,653 | 125,105 | | Work in Progress | 13,447 | 13,564 | | Finished Goods | 57,435 | 57,862 | | **Total** | **200,535** | **196,531** | [Trade and Other Receivables](index=30&type=section&id=%E8%B2%B7%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's total trade and other receivables increased, primarily including trade receivables from third parties, prepayments, and other receivables, with corresponding impairment provisions recognized Trade and Other Receivables (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable, Net | 25,221 | 24,850 | | Prepayments and Deposits | 11,190 | 17,550 | | Other Receivables | 21,667 | 13,219 | | **Total Trade and Other Receivables** | **57,833** | **55,460** | - The Group generally grants credit terms of **30 to 90 days** to customers, with major customers granted revolving credit limits not exceeding **365 days**[59](index=59&type=chunk) - Other receivables include consideration receivable from the disposal of subsidiaries and transfer of cement clinker production capacity quotas of approximately **HKD 2,191,000** and **HKD 2,575,000** respectively[63](index=63&type=chunk) [Trade and Other Payables](index=33&type=section&id=%E8%B2%B7%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's total trade and other payables decreased, mainly comprising trade payables, bills payable, and other payables, with most denominated in RMB Trade and Other Payables (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 31,511 | 27,298 | | Bills Payable | 10,616 | 29,426 | | Other Payables | 34,015 | 36,395 | | Consideration Payable | 21,912 | 21,217 | | **Total** | **106,573** | **123,688** | - The Group's main suppliers grant credit terms of **30 to 90 days**, and most trade and other payables are denominated in RMB[65](index=65&type=chunk) [Borrowings](index=34&type=section&id=Borrowings_Notes) As of June 30, 2025, the Group's total borrowings slightly decreased, mainly including bank borrowings and other unsecured loans, with some bank borrowings secured by equity interests in subsidiaries, land use rights, and property, plant and equipment Borrowings (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank Borrowings (Unsecured) | 127,330 | 133,959 | | Bank Borrowings (Secured) | 157,110 | 155,096 | | Other Loans (Unsecured) | 10,700 | 10,700 | | **Total Bank and Other Loans** | **295,140** | **299,755** | - Approximately **HKD 157,110,000** of bank borrowings are secured by equity interests in the Company's subsidiaries, land use rights, and the Group's property, plant and equipment[72](index=72&type=chunk) [Deferred Income](index=35&type=section&id=%E9%81%9E%E5%BB%B6%E6%94%B6%E5%85%A5) The Group's deferred income primarily consists of government grants from local Chinese government authorities to support R&D activities of subsidiaries, with a portion recognized in profit or loss during the period Deferred Income (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | As of January 1 | 20,232 | 23,278 | | Credited to Profit or Loss | (915) | (1,115) | | Exchange Differences | 645 | (604) | | **As of June 30** | **19,962** | **21,305** | - Deferred income refers to government grants received from local Chinese government authorities to support R&D activities of subsidiaries[70](index=70&type=chunk) [Deferred Tax](index=35&type=section&id=%E9%81%9E%E5%BB%B6%E7%A8%85%E9%A0%85) The Group's net deferred tax liabilities decreased, mainly affected by withholding tax on profits attributable to equity holders and tax losses, with some tax losses not yet recognized as deferred tax assets Deferred Tax (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred Tax Assets | 6,766 | 7,392 | | Deferred Tax Liabilities | (24,872) | (33,191) | | **Total** | **(18,106)** | **(25,799)** | - The Group has unused tax losses of approximately **HKD 87,897,000** available to offset future profits, of which approximately **HKD 60,831,000** has not been recognized as deferred tax assets[73](index=73&type=chunk) [Share Capital](index=37&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued share capital was **HKD 5,520,000**, divided into **552,000,000** shares with a par value of **HKD 0.01** each, remaining unchanged from the same period last year Share Capital (HKD Thousand): | Period | Number of Ordinary Shares (Thousand Shares) | Par Value of Ordinary Shares (HKD Thousand) | | :--- | :--- | :--- | | As of June 30, 2025 | 552,000 | 5,520 | | As of December 31, 2024 | 552,000 | 5,520 | [Loss Per Share](index=37&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, the Group's basic and diluted loss per share significantly narrowed, loss per share from continuing operations also substantially decreased, and there were no dilutive potential ordinary shares Loss Per Share (HKD Per Share): | Item | 2025 | 2024 | | :--- | :--- | :--- | | From Continuing and Discontinued Operations (Basic and Diluted) | (0.017) | (0.065) | | From Continuing Operations (Basic and Diluted) | (0.016) | (0.041) | | From Discontinued Operations (Basic and Diluted) | (0.000) | (0.024) | - Basic loss per share is calculated by dividing the loss for the period attributable to owners of the Company of **HKD 9,155,000** by the weighted average number of ordinary shares outstanding of **552,000,000** shares[75](index=75&type=chunk) [Dividends](index=38&type=section&id=%E8%82%A1%E6%81%AF) For the six months ended June 30, 2025, the Company did not declare an interim dividend, but a special dividend of **HKD 0.136** per share declared in December 2024 was paid - No dividends were declared for the six months ended June 30, 2025[78](index=78&type=chunk) - A special dividend of **HKD 0.136** per share declared on December 5, 2024, was paid on or about March 31, 2025[78](index=78&type=chunk)[135](index=135&type=chunk) [Lease Liabilities](index=38&type=section&id=%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group's total lease liabilities decreased, mainly including leased land and buildings, presented as current and non-current portions Lease Liabilities (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Portion | 389 | 382 | | Non-current Portion | 267 | 463 | | **Total** | **656** | **845** | Future Lease Payments Maturity Profile (June 30, 2025, HKD Thousand): | Period | Minimum Lease Payments | Interest | Present Value | | :--- | :--- | :--- | :--- | | Not Later Than One Year | 405 | (16) | 389 | | Later Than One Year But Not Later Than Two Years | 270 | (3) | 267 | | **Total** | **675** | **(19)** | **656** | [Related Party Transactions](index=39&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The Group's key management compensation decreased, and other payables include amounts due to companies controlled by a director, with no significant non-exempt related party transactions under the Listing Rules during the period Key Management Compensation (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Basic Salaries and Benefits in Kind | 1,544 | 2,419 | - Other payables include amounts due to companies controlled by Mr. Jiang of **HKD 3,839,000**, which are unsecured, interest-free, and repayable on demand[83](index=83&type=chunk) - There were no non-exempt related party transactions or non-exempt continuing related party transactions under the Listing Rules during the period[86](index=86&type=chunk) [Capital Commitments](index=40&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group had no capital commitments, a significant decrease compared to commitments for the acquisition of property, plant and equipment as of December 31, 2024 Commitments for Acquisition of (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | – | 151 | [Fair Value Measurement of Financial Assets and Liabilities](index=41&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5%E4%B9%8B%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) The Group's fair value measurement of financial assets and liabilities uses market observable inputs, categorized into different levels based on observability, with financial assets at fair value through profit or loss primarily being unlisted private equity funds, classified as Level 3 Carrying Amounts and Fair Values of Financial Assets and Liabilities (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Financial Assets | 432,474 | 504,236 | | Total Financial Liabilities | 401,707 | 498,583 | - The Group's unlisted private equity funds are classified as Level 3, with their fair value recognized based on valuations provided by fund managers, measured by the ownership proportion of the private equity fund's net assets[93](index=93&type=chunk) Reconciliation of Financial Assets at Fair Value Through Profit or Loss (Level 3) (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | As of January 1 | 108,027 | – | | Total Gains or Losses - Fair Value Changes of Financial Assets | 2,479 | – | | Distributions | (4,431) | – | | Exchange Differences | 3,501 | (521) | | **As of June 30** | **109,576** | **53,470** | [Management Discussion and Analysis](index=44&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Industry Overview](index=44&type=section&id=%E8%A1%8C%E6%A5%AD%E6%A6%82%E6%93%A1) The Group analyzed industry dynamics across four segments: cement, rare earth, biopharmaceutical, and international trading. The cement industry faces weak demand and falling prices, the rare earth industry is affected by policy regulation and export controls, the biopharmaceutical segment has ceased investment, and the international trading segment is seeking diversified business models [Cement Segment](index=44&type=section&id=%E6%B0%B4%E6%B3%A5%E6%9D%BF%E5%A1%8A) In the first half of 2025, the cement industry was characterized by "unchanged weak demand, prices high first then low, and improved efficiency year-on-year," with a stable first quarter but weaker-than-expected demand and accelerating price declines in the second quarter, leading to increased operating pressure as prices fell below cost in many regions - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, national fixed asset investment grew by **2.8%** year-on-year, and national real estate development investment decreased by **11.2%** year-on-year[98](index=98&type=chunk) - In the first half of 2025, national cement output was **815 million tons**, a year-on-year decrease of **4.3%**, the lowest level for the same period since 2010[98](index=98&type=chunk) - The average price of PO42.5 bulk cement in Nanjing, Hangzhou, and Shanghai decreased by **7.1%**, **4.3%**, and **4.8%** respectively compared to the same period last year[100](index=100&type=chunk) [Rare Earth Segment](index=46&type=section&id=%E7%A8%80%E5%9C%9F%E6%9D%BF%E5%A1%8A) China's rare earth industry has seen increased concentration and strengthened national control, with export restrictions on some heavy rare earths. The Group's rare earth segment revenue fell short of expectations due to insufficient production scale leading to high unit fixed costs and rising raw material prices, and is actively seeking technological innovation and strategic cooperation opportunities - China is the world's largest producer, consumer, and exporter of rare earth materials, with rare earth reserves of approximately **44 million tons** (40% of global total) and production of **270,000 tons** (70% of global total) in 2024[101](index=101&type=chunk) - The Ministry of Industry and Information Technology issued the "Interim Measures for the Administration of Total Volume Control of Rare Earth Mining and Rare Earth Smelting and Separation (Draft for Public Comment)," including monazite and imported rare earth mineral products in the control scope[102](index=102&type=chunk) - The Ministry of Commerce and the General Administration of Customs implemented export controls on 7 categories of medium and heavy rare earth related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium[102](index=102&type=chunk) [Biopharmaceutical Segment](index=48&type=section&id=%E7%94%9F%E7%89%A9%E9%86%AB%E8%97%A5%E6%9D%BF%E5%A1%8A) The Group ceased investment in the biopharmaceutical sector in the first half of 2024 and completed the disposal of related assets on June 26, 2025, as CAR-T drug R&D proved far more challenging than anticipated - The Group ceased investment in the biopharmaceutical sector in the first half of 2024 and completed the disposal of related assets on June 26, 2025, as CAR-T drug R&D proved far more challenging than anticipated[104](index=104&type=chunk) [International Trading Segment](index=48&type=section&id=%E5%9C%8B%E9%9A%9B%E8%B2%B7%E6%98%93%E6%9D%BF%E5%A1%8A) In the first half of 2025, the international trading segment was affected by geopolitical factors and market uncertainties, leading to sharp fluctuations in commodity prices, and the Group is actively seeking diversified business models and strategic cooperation partners - The Group is continuously striving to seek and expand diversified business models in international trading, focusing on finding strategic partners with synergistic effects, and actively exploring potential business opportunities[105](index=105&type=chunk) [Revenue](index=49&type=section&id=%E6%94%B6%E7%9B%8A) During the reporting period, the Group's revenue was approximately **HKD 125,811,000**, a year-on-year increase of **18.0%**, primarily contributed by the cement segment, which saw revenue grow by **28.0%** and sales volume increase by **33.3%** Revenue Analysis by Product Category (Six Months Ended June 30): | Product Category | 2025 Sales Volume (Thousand Tons) | 2025 Revenue (HKD Thousand) | 2024 Sales Volume (Thousand Tons) | 2024 Revenue (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | PO 42.5 Cement | 394 | 85,809 | 293 | 66,003 | | PC 42.5 Cement | 120 | 28,947 | 91 | 21,897 | | PSS 32.5 | 23 | 3,885 | – | – | | PC 32.5 | – | – | 19 | 4,761 | | **Total Cement Product Sales Volume** | **537** | **118,641** | **403** | **92,661** | - The increase in cement segment revenue was mainly due to active promotion of staggered production, which eased supply-demand imbalances and narrowed the decline in market demand[106](index=106&type=chunk) - The Company achieved significant sales growth in Zhejiang Province compared to the same period last year, demonstrating the effectiveness of multi-regional sales channel expansion[111](index=111&type=chunk) [Gross Profit and Gross Margin](index=51&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) During the reporting period, the cement segment's gross loss narrowed and gross margin improved, primarily benefiting from cost reduction and efficiency enhancement, and price recovery. The rare earth segment still recorded a gross loss due to insufficient production scale and high costs Gross Profit and Gross Margin (Six Months Ended June 30): | Segment | 2025 Gross Loss (HKD Thousand) | 2025 Gross Margin | 2024 Gross Loss (HKD Thousand) | 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Cement Segment | (3,873) | -3.3% | (5,192) | -5.6% | | Rare Earth Segment | (1,883) | -26.3% | - | - | - The narrowing of gross loss in the cement segment was mainly due to the Company's cost reduction and efficiency enhancement through optimized management, while also actively promoting dual initiatives of price recovery and cost optimization[113](index=113&type=chunk) - The rare earth segment's production and sales have not yet achieved scale, resulting in higher unit fixed costs and a gross loss; the Group is actively exploring diversified business opportunities and potential strategic collaborations[113](index=113&type=chunk) [Other Income](index=52&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income significantly increased by **889.5%** during the reporting period, primarily due to the transfer of **750,000 tons/year** cement clinker production capacity quotas Other Income (HKD Thousand): | Period | Amount | | :--- | :--- | | 2025 | 26,401 | | 2024 | 2,668 | | **Percentage Change** | **889.5%** | - This increase was mainly due to the Company's transfer of **750,000 tons/year** cement clinker production capacity quotas during the reporting period, and it will continue to ensure supply through external procurement of clinker to replace self-production[115](index=115&type=chunk) [Distribution Costs](index=52&type=section&id=%E5%88%86%E9%8A%B7%E8%B2%BB%E7%94%A8) The Group's distribution costs decreased by **39.7%**, primarily benefiting from refined management reforms, improved management efficiency, and enhanced resource allocation efficiency Distribution Costs (HKD Thousand): | Period | Amount | | :--- | :--- | | 2025 | 1,022 | | 2024 | 1,695 | | **Percentage Change** | **-39.7%** | - Distribution costs accounted for approximately **0.8%** of the Group's revenue, largely consistent with approximately **1.4%** in the same period last year[116](index=116&type=chunk) [Administrative Expenses](index=52&type=section&id=%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) The Group's administrative expenses decreased by **13.8%**, primarily due to efficient allocation of administrative resources and cost savings achieved through management optimization Administrative Expenses (HKD Thousand): | Period | Amount | | :--- | :--- | | 2025 | 19,017 | | 2024 | 22,063 | | **Percentage Change** | **-13.8%** | [Income Tax Credit](index=52&type=section&id=Income%20Tax%20Credit_MDA) The Group's income tax credit significantly increased during the reporting period, primarily due to the release of deferred tax liabilities related to withholding tax on distributable profits Income Tax Credit (HKD Thousand): | Period | Amount | | :--- | :--- | | 2025 | 4,250 | | 2024 | 1,299 | | **Percentage Change** | **227.2%** | [Net Profit Margin](index=53&type=section&id=%E6%B7%A8%E5%88%A9%E6%BD%A4%E7%8E%87) The Group's net profit margin significantly improved during the reporting period, primarily benefiting from domestic cement industry policies driving performance recovery, slowing market demand, and gains from the transfer of cement clinker production capacity quotas Net Profit Margin: | Period | Net Profit Margin | | :--- | :--- | | 2025 | -10.3% | | 2024 | -37.5% | | **Change** | **27.2%** | - The increase in net profit margin was mainly due to domestic cement industry policies driving performance recovery, slowing overall market demand in China, and gains from the transfer of cement clinker production capacity quotas[120](index=120&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90) The Group's liquidity primarily stems from operating cash flows, bank loans, and trade payables. During the reporting period, cash and cash equivalents significantly increased, and the gearing ratio decreased, indicating improved liquidity [Cash Flow](index=53&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) As of June 30, 2025, the Group's cash and cash equivalents significantly increased by **98.3%**, primarily due to withdrawals from short-term deposits during the reporting period Cash and Cash Equivalents (HKD Thousand): | Period | Amount | | :--- | :--- | | June 30, 2025 | 268,647 | | December 31, 2024 | 135,495 | | **Percentage Change** | **98.3%** | [Borrowings](index=54&type=section&id=Borrowings_MDA) As of June 30, 2025, the Group's total bank borrowings slightly decreased by **1.6%**, remaining stable, with some borrowings secured by property, plant and equipment, land use rights, and equity interests in subsidiaries Borrowings (HKD Thousand): | Period | Amount | | :--- | :--- | | June 30, 2025 | 295,140 | | December 31, 2024 | 299,755 | | **Percentage Change** | **-1.6%** | - As of June 30, 2025, borrowings of approximately **HKD 157,110,000** were secured by the Group's property, plant and equipment, land use rights, and equity interests in subsidiaries[124](index=124&type=chunk) [Gearing Ratio](index=54&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio decreased to **96.0%**, an improvement from **118.6%** as of December 31, 2024 Gearing Ratio: | Period | Ratio | | :--- | :--- | | June 30, 2025 | 96.0% | | December 31, 2024 | 118.6% | | **Change** | **-22.6%** | [Capital Expenditure and Capital Commitments](index=55&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) The Group's capital expenditure significantly increased, primarily from the cement segment, and there were no capital commitments at the end of the reporting period Capital Expenditure (HKD Thousand): | Period | Amount | | :--- | :--- | | June 30, 2025 | 4,375 | | Same Period in 2024 | 966 | | **Change** | **3,409** | - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: **HKD 4,521,000**)[130](index=130&type=chunk) [Pledged Assets](index=55&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, property, plant and equipment, land use rights, and equity interests in subsidiaries of the rare earth segment were pledged as collateral for the Group's bank borrowings - As of June 30, 2025, property, plant and equipment with a carrying amount of approximately **HKD 18,781,000**, land use rights of approximately **HKD 2,286,000**, and equity interests in subsidiaries of the rare earth segment were pledged as collateral for certain bank borrowings of the Group[131](index=131&type=chunk) [Contingent Liabilities](index=55&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[132](index=132&type=chunk) [Foreign Exchange Risk](index=55&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's operating activities are primarily in mainland China, mainly denominated in RMB, and were not significantly affected by exchange rate fluctuations during the reporting period, with no hedging measures implemented, but future RMB exchange rate fluctuations may impact financial position - The Group's operating activities are primarily in mainland China, with operating expenses and capital expenditures mainly denominated in RMB, and a small portion in HKD[133](index=133&type=chunk) - During the reporting period, the Group was not significantly affected by exchange rate fluctuations in its operating business and working capital, nor did it implement any hedging measures[133](index=133&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=56&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E4%B9%8B%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) During the reporting period, the Group did not make any significant acquisitions or disposals of its subsidiaries or associates - During the reporting period, the Group did not make any significant acquisitions or disposals of its subsidiaries or associates[134](index=134&type=chunk) [Interim Dividends](index=56&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board decided not to pay any dividends for this interim period, but a special dividend of **HKD 0.136** per share declared in December 2024 was paid - The Board did not recommend the payment of any interim dividend for the six months ended June 30, 2025[135](index=135&type=chunk) - A special dividend of **HKD 0.136** per share declared on December 5, 2024, was paid on or about March 31, 2025[135](index=135&type=chunk) [Employees and Remuneration Policy](index=56&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **275** employees, with total remuneration of approximately **HKD 13,999,000** during the reporting period, and remuneration levels are determined based on responsibilities, performance, contributions, and market conditions Employees and Remuneration (Six Months Ended June 30): | Indicator | 2025 | | :--- | :--- | | Number of Employees | 275 | | Total Employee Remuneration (HKD Thousand) | 13,999 | - Employee remuneration levels are commensurate with their responsibilities, performance, and contributions, and are determined with reference to their merits, qualifications, and abilities, as well as the advice of the Company's Remuneration Committee[136](index=136&type=chunk) [Other Information](index=57&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Future Outlook](index=57&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group will focus on "enhancing overall shareholder value" as its core objective, comprehensively strengthening its integrated competitiveness through optimizing operations, focusing on markets and products, solidifying its talent base, exploring diversified investment opportunities, and optimizing its asset structure - The Group will take "enhancing overall shareholder value and maximizing shareholder value" as its core objective, optimizing the company's development strategy from multiple dimensions[137](index=137&type=chunk) - For the rare earth segment, the Company is seeking diversified business opportunities and actively exploring potential strategic collaborations, including but not limited to expanding into other rare and precious metal businesses and seeking opportunities to dispose of the rare earth segment[137](index=137&type=chunk) [Share Capital](index=57&type=section&id=%E8%82%A1%E6%9C%AC_%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) As of June 30, 2025, the Company's issued share capital was **HKD 5,520,000**, divided into **552,000,000** shares with a par value of **HKD 0.01** each - As of June 30, 2025, the Company's issued share capital was **HKD 5,520,000**, divided into **552,000,000** shares with a par value of **HKD 0.01** each[138](index=138&type=chunk) [Supplementary Information on Share Option Scheme](index=57&type=section&id=%E6%9C%89%E9%97%9C%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83%E4%B9%8B%E8%A3%9C%E5%85%85%E8%B3%87%E6%96%99) The Company's share option scheme adopted on May 28, 2015, expired on May 28, 2025, with no share options granted since its adoption, and the scheme limit was **55,200,000** shares - Since the adoption of the share option scheme, the Company has not granted any share options under the scheme[140](index=140&type=chunk) - The total number of shares available for issue under the share option scheme was **55,200,000** shares, representing **10%** of the total issued shares as of the date of this interim report[140](index=140&type=chunk) - The share option scheme expired at the close of business on May 28, 2025, being the tenth anniversary of its adoption date[142](index=142&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=58&type=section&id=%E8%B3%BC%E5%9B%9E%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[143](index=143&type=chunk) [Material Litigation and Arbitration](index=58&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F%E5%8F%8A%E4%BB%B2%E8%A3%81) To the best of the Directors' knowledge, the Group was not involved in any material litigation, arbitration, or claims during the reporting period - To the best of the Directors' knowledge, the Group was not involved in any material litigation, arbitration, or claims during the reporting period, nor was it involved in any significant outstanding or threatened litigation or claims against the Company[144](index=144&type=chunk) [Compliance with Corporate Governance Code](index=58&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Company has adopted the Corporate Governance Code set out in Appendix C1 to the Listing Rules and complied with it during the reporting period - The Company has adopted the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules as its own corporate governance code[145](index=145&type=chunk) - During the reporting period, the Company complied with the Corporate Governance Code[146](index=146&type=chunk) [Compliance with Model Code](index=59&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for Directors' securities transactions, and all Directors confirmed compliance with it during the reporting period - The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for Directors' securities transactions[147](index=147&type=chunk) - Following specific enquiries made to all Directors, they have confirmed their compliance with the required standards set out in the Model Code during the reporting period[147](index=147&type=chunk) [Audit Committee](index=59&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Company's Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and believes it was prepared in compliance with applicable accounting standards and requirements - The Company's Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and discussed financial reporting, risk management, and internal control matters with management[148](index=148&type=chunk) - The Audit Committee believes that these financial statements were prepared in compliance with applicable accounting standards and requirements, and appropriate disclosures have been made[148](index=148&type=chunk) [Events After Reporting Period](index=59&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the date of this announcement, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period - As of the date of this announcement, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period[149](index=149&type=chunk) [Board of Directors](index=59&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) As of the date of this announcement, the Board of Directors includes Executive Directors Mr. Liu Dong and Mr. Wu Junxian; Non-executive Directors Mr. Jiang Xueming and Ms. Xie Yingxia; and Independent Non-executive Directors Mr. Yuan Yuan, Mr. Yu Liwen, and Mr. Suo Suo - The Board of Directors includes Executive Directors Mr. Liu Dong and Mr. Wu Junxian; Non-executive Directors Mr. Jiang Xueming and Ms. Xie Yingxia; and Independent Non-executive Directors Mr. Yuan Yuan, Mr. Yu Liwen, and Mr. Suo Suo[151](index=151&type=chunk)