South Manganese Investment Limited 南方錳業投資有限公司 (incorporated in Bermuda with limited liability) Stock Code: 1091 Dear non-registered shareholder(s), South Manganese Investment Limited (the "Company") - 2025 Interim Report (the "Current Corporate Communication") We are pleased to inform you that the English and Chinese versions of the Current Corporate Communication are now available on the Company's website at www.southmn.com and HKEXnews website at www.hkexnews.hk. You may access the Current Corporate Commu ...

South Manganese Investment Limited 南方錳業投資有限公司 (incorporated in Bermuda with limited liability) Stock Code: 1091 5 September 2025 Dear registered shareholder(s), South Manganese Investment Limited (the "Company") - 2025 Interim Report (the "Current Corporate Communication") We are pleased to inform you that the English and Chinese versions of the Current Corporate Communication are now available on the Company's website at www.southmn.com and HKEXnews website at www.hkexnews.hk. You may access the Current Co ...

中期報告 2025 中期報告 2025 綠水青山就是金山銀山 SOUTH MANGANESE INVESTMENT LIMITED 南 方 錳 業 財務業績 投 資 有 限 公 司 目錄 頁 次 2-3 公司資料 | 4 | 中期簡明綜合損益及其他全面收益表 | | --- | --- | | 5-6 | 中期簡明綜合財務狀況表 | | 7-8 | 中期簡明綜合權益變動表 | | 9 | 中期簡明綜合現金流量表 | | 10-36 | 中期簡明綜合財務報表附註 | | | 其他資料 | | 37-48 | 管理層討論及分析 | | --- | --- | | 49-62 | 環境、社會及管治報告 | | 63-70 | 我們的錳礦資源摘要及我們的錳礦石儲量摘要 | | 71 | 企業管治常規守則 | | 71 | 董事進行證券交易的標準守則 | | 71 | 董事及最高行政人員在股份及相關股份的權益 | | 72 | 主要股東及其他人士在股份及相關股份的權益 | | 73 | 購買、贖回或出售本公司的上市證券 | | 73 | 審閱帳目 | | 73 | 前瞻聲明 | | 74-76 | 詞匯表 | 2 南方 ...

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: 南方錳業投資有限公司 呈交日期: 2025年9月2日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 不適用 | | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01091 | 說明 | | | | | | | | | 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 | | 0.1 HKD | | 1,000,000,000 | | 增加 / 減少 (-) | | | 0 | | HKD | | 0 | | 本月底結存 | | 10,000,000,000 | HKD | | 0.1 HKD | | 1,000,000,000 | 本月底法定/註冊股本總額： HKD 1,000,000,000 第 1 ...

Core Viewpoint - Southern Manganese (01091) reported a significant decline in revenue for the six months ending June 30, 2025, with earnings of HKD 2.912 billion, a decrease of 49.2% year-on-year [1] Financial Performance - The company recorded a profit attributable to owners of HKD 173 million, compared to a loss of HKD 163 million in the same period last year [1] - Basic earnings per share were HKD 0.0473 [1] Revenue Breakdown - The decrease in revenue was primarily due to a decline in sales from trading operations [1] - The company recognized an impairment loss of HKD 109 million on receivables from Dushan Jinmeng in the first half of 2024, impacting the profit for the first half of 2025 [1]

Core Viewpoint - Southern Manganese (01091) reported a significant decline in revenue for the six months ending June 30, 2025, with earnings of HKD 2.912 billion, a decrease of 49.2% year-on-year [1] Financial Performance - The company recorded a profit attributable to owners of HKD 173 million, compared to a loss of HKD 163 million in the same period last year [1] - Basic earnings per share were HKD 0.0473 [1] Revenue Decline - The decrease in revenue was primarily due to a drop in sales from trading operations [1] - The company recognized an impairment loss of HKD 109 million on receivables from Dushan Jinmeng in the first half of 2024, impacting the profit for the first half of 2025 [1]

Core Viewpoint - Southern Manganese (01091.HK) reported a significant decline in revenue for the first half of 2025, with a year-on-year decrease of 49.2% to HKD 2,912.4 million [1] Financial Performance - The operating profit for the company was HKD 207.0 million, a recovery from a loss of HKD 10.4 million in the first half of 2024 [1] - Profit attributable to the owners of the company was HKD 172.7 million, compared to a loss of HKD 162.8 million in the same period last year [1] Dividend Policy - The board of directors has decided not to recommend any interim dividend for the first half of 2025, consistent with the decision made for the first half of 2024 [1]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company achieved a significant turnaround from loss to profit in the first half of 2025, driven by a substantial increase in gross margin and a significant reduction in net impairment loss on financial assets Financial Highlights (HKD thousands) | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,912,400 | 5,733,300 | -49.2% | | Gross Profit | 553,100 | 282,100 | +96.1% | | Gross Margin | 19.0% | 4.9% | +14.1 percentage points | | Operating Profit/(Loss) | 207,000 | (10,400) | Turned from Loss to Profit | | Net Impairment Loss on Financial Assets | (500) | (100,800) | Significant Decrease | | Profit/(Loss) Attributable to Owners of the Company | 172,700 | (162,800) | Turned from Loss to Profit | - The Board does not recommend the payment of any interim dividend for the first half of 2025 (first half of 2024: nil)[2](index=2&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's financial performance and position for the first half of 2025, including detailed statements of profit or loss, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company achieved a significant turnaround from loss to profit in the first half of 2025, primarily due to a substantial increase in gross margin and a significant reduction in net impairment loss on financial assets, improving operating efficiency despite a revenue decline Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD thousands) | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 2,912,419 | 5,733,287 | | Cost of Sales | (2,359,303) | (5,451,219) | | Gross Profit | 553,116 | 282,068 | | Other Income and Gains | 42,948 | 67,391 | | Selling and Distribution Expenses | (35,117) | (66,651) | | Administrative Expenses | (242,475) | (239,822) | | Net Impairment Loss on Financial Assets | (486) | (100,810) | | Finance Costs | (79,435) | (47,691) | | Other Expenses | (32,004) | (5,655) | | Share of Profits and Losses of Associates | 10,290 | (24,505) | | Profit/(Loss) Before Tax | 216,837 | (135,675) | | Income Tax Expense | (35,588) | (41,859) | | Profit/(Loss) for the Period | 181,249 | (177,534) | | Profit/(Loss) Attributable to Owners of the Company | 172,696 | (162,783) | | Basic Earnings/(Loss) Per Share | HKD 0.0473 | (HKD 0.0475) | - Total comprehensive income for the period turned from a **loss of HKD 196,146 thousands** in the first half of 2024 to a **profit of HKD 208,891 thousands** in the first half of 2025[3](index=3&type=chunk)[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly decreased, but net current liabilities significantly reduced, and net assets and equity attributable to owners of the company increased, indicating an improved financial position Interim Condensed Consolidated Statement of Financial Position (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Non-Current Assets | 4,956,741 | 5,063,574 | | Total Current Assets | 3,493,390 | 3,723,029 | | Total Current Liabilities | 4,882,628 | 5,382,420 | | Net Current Liabilities | (1,389,238) | (1,659,391) | | Net Assets | 2,327,081 | 1,977,187 | | Equity Attributable to Owners of the Company | 2,713,820 | 2,361,610 | - Net current liabilities decreased by **HKD 270.16 million**, indicating an improvement in liquidity position[5](index=5&type=chunk) - Equity attributable to owners of the company increased by **HKD 352.21 million**, primarily due to an increase in issued share capital and reserves[6](index=6&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the interim condensed consolidated financial statements, covering accounting policies, segment information, and key financial items [1. Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=1.%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim financial statements are prepared in accordance with HKAS 34 and on a going concern basis, with the company securing sufficient working capital for the next 12 months through bank loan renewals and equity financing despite net current liabilities - As of June 30, 2025, the Group's current liabilities exceeded current assets by **HKD 1,389.2 million**[8](index=8&type=chunk) - Subsequent to the reporting period, the Group successfully renewed or obtained new bank loans of **HKD 131.6 million** and completed a placing of new shares, raising net proceeds of approximately **HKD 180.44 million** for bank loan repayment[8](index=8&type=chunk) - Newly issued and revised Hong Kong Financial Reporting Standards had no significant impact on the Group's condensed consolidated interim financial statements[9](index=9&type=chunk) [2. Operating Segment Information](index=7&type=section&id=2.%20Operating%20Segment%20Information) The Group's business is divided into four segments: manganese mining, electrolytic manganese metal and alloy materials production, battery materials production, and other businesses, with management allocating resources and assessing performance based on segment results and inter-segment sales at market prices - The Group's main operating segments include manganese mining (China and Gabon), electrolytic manganese metal and alloy materials production (China), battery materials production (China), and other businesses (China and Hong Kong)[10](index=10&type=chunk) H1 2025 Segment Revenue and Results (HKD thousands) | Segment | Sales to External Customers | Segment Results | | :--- | :--- | :--- | | Manganese Mining (China) | 86,994 | (5,873) | | Manganese Mining (Gabon) | 633,419 | 37,505 | | Electrolytic Manganese Metal and Alloy Materials Production (China) | 1,028,107 | 38,897 | | Battery Materials Production (China) | 753,657 | 206,153 | | Other Businesses (China and Hong Kong) | 410,242 | 78,967 | | **Total** | **2,912,419** | **355,649** | H1 2024 Segment Revenue and Results (HKD thousands) | Segment | Sales to External Customers | Segment Results | | :--- | :--- | :--- | | Manganese Mining (China) | 62,852 | (54) | | Manganese Mining (Gabon) | 591,426 | 80,305 | | Electrolytic Manganese Metal and Alloy Materials Production (China) | 1,160,859 | (50,664) | | Battery Materials Production (China) | 797,934 | 193,992 | | Other Businesses (China and Hong Kong) | 3,120,216 | (267,733) | | **Total** | **5,733,287** | **(44,154)** | [3. Revenue, Other Income and Gains](index=10&type=section&id=3.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue for the first half of 2025 decreased by **49.2%** year-on-year, primarily due to a significant reduction in sales from the other businesses segment (trading business), while manganese mining revenue increased, and other income and gains decreased by **36.3%** due to lower grant income Revenue from Contracts with Customers (HKD thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Manganese Mining | 720,413 | 654,278 | | Electrolytic Manganese Metal and Alloy Materials Production | 1,028,107 | 1,160,859 | | Battery Materials Production | 753,657 | 797,934 | | Other Businesses | 410,242 | 3,120,216 | | **Total** | **2,912,419** | **5,733,287** | - The Mainland China market contributed **HKD 2,660,732 thousands** to total revenue in the first half of 2025, accounting for **91.36%** of the total[17](index=17&type=chunk) Other Income and Gains (HKD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Income | 2,032 | 4,886 | | Net Foreign Exchange Gains | – | 3,325 | | Grant Income | 13,472 | 34,713 | | Sales of Waste and Other Materials | 6,665 | 9,065 | | Rental Income | 5,976 | 9,279 | | Others | 14,803 | 6,123 | | **Total** | **42,948** | **67,391** | [4. Finance Costs](index=12&type=section&id=4.%20Finance%20Costs) Finance costs for the first half of 2025 significantly increased by **66.6%** year-on-year, primarily due to higher interest on loans and other payables, and finance costs for discounted bills receivable Finance Costs (HKD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Loans and Other Payables | 65,195 | 23,322 | | Finance Costs on Discounted Bills Receivable | 5,404 | 17,617 | | Interest Expense on Lease Liabilities | 8,836 | 5,736 | | Other Finance Costs | – | 1,016 | | **Total** | **79,435** | **47,691** | [5. Profit/(Loss) Before Tax](index=12&type=section&id=5.%20Profit%2F(Loss)%20Before%20Tax) The company's profit before tax turned from a loss in the prior period to a profit, mainly due to a net reversal of inventory provisions and a significant reduction in net impairment loss on financial assets Profit/(Loss) Before Tax - Key Deductions/(Additions) (HKD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 2,399,597 | 5,407,822 | | Net (Reversal)/Provision for Inventories | (40,294) | 43,397 | | Depreciation of Property, Plant and Equipment | 188,315 | 184,940 | | Depreciation of Right-of-Use Assets | 10,091 | 35,521 | | Net Impairment Loss on Financial Assets | 486 | 100,810 | | Research and Development Costs | 24,315 | 37,869 | | Employee Benefit Expenses | 282,111 | 290,948 | - Net impairment loss on financial assets significantly decreased from **HKD 100,810 thousands** in the first half of 2024 to **HKD 486 thousands** in the first half of 2025, a key factor in the turnaround to profit[20](index=20&type=chunk) [6. Income Tax Expense](index=13&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense for the first half of 2025 slightly decreased year-on-year, with the effective tax rate largely consistent with statutory preferential corporate income tax rates, as the Group benefits from different preferential rates in Mainland China and Gabon Income Tax Expense (HKD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current China | 40,688 | 27,707 | | Current Hong Kong | 1,881 | 3,281 | | Current Gabon | 528 | 17,387 | | Deferred | (7,509) | (6,516) | | **Total Tax Expense for the Period** | **35,588** | **41,859** | - Certain subsidiaries in Mainland China (South Manganese Group, Qinzhou Dameng New Materials Co., Ltd., and Huiyuan Manganese Industry) enjoy a **preferential corporate income tax rate of 15%** as high-tech enterprises[26](index=26&type=chunk) - Mining companies operating in Gabon are subject to corporate income tax at the higher of **35% of their taxable income or 1% of their revenue**[28](index=28&type=chunk) [7. Earnings/(Loss) Per Share Attributable to Owners of the Company](index=14&type=section&id=7.%20Earnings%2F(Loss)%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) In the first half of 2025, basic and diluted earnings per share attributable to owners of the company were **HKD 0.0473**, successfully reversing the loss from the prior period Earnings/(Loss) Per Share Data | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Company (HKD thousands) | 172,696 | (162,783) | | Weighted Average Number of Ordinary Shares in Issue | 3,653,213,534 | 3,428,459,000 | | Basic and Diluted Earnings/(Loss) Per Share | HKD 0.0473 | (HKD 0.0475) | [8. Dividends](index=15&type=section&id=8.%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of any interim dividend for the first half of 2025 (first half of 2024: nil)[32](index=32&type=chunk) [9. Trade and Bills Receivables](index=15&type=section&id=9.%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables decreased by **HKD 303.7 million** year-on-year, consistent with the revenue decline, with the company typically offering credit terms of 1 to 3 months Trade and Bills Receivables (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables (net of impairment provision) | 537,312 | 578,160 | | Bills Receivables | 106,199 | 369,006 | | **Total** | **643,511** | **947,166** | - An aging analysis of trade receivables by invoice date shows an increase in amounts overdue for more than three months[33](index=33&type=chunk) - Bills receivable refer to bank acceptance bills issued by banks in Mainland China, maturing within six months from the end of the reporting period[34](index=34&type=chunk) [10. Trade and Bills Payables](index=16&type=section&id=10.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables decreased by **HKD 250.93 million** year-on-year, with trade payables typically interest-free and settled within 60 days Trade and Bills Payables (HKD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 209,862 | 501,529 | | 1 to 2 months | 117,277 | 118,681 | | 2 to 3 months | 110,258 | 1,288 | | Over 3 months | 519,564 | 586,402 | | **Total** | **956,961** | **1,207,900** | - Total trade payables decreased, with a significant drop in amounts due within one month, but amounts overdue for more than three months still represent a substantial proportion[35](index=35&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's financial performance, liquidity, and future outlook, discussing key drivers and strategic initiatives [Financial Review](index=17&type=section&id=Financial%20Review) In the first half of 2025, against a backdrop of moderate global economic growth and uneven recovery in China, the company successfully turned operating profit and profit attributable to owners of the company from loss to profit, with a significant increase in gross margin, through optimizing its trading product portfolio and strengthening cost control [Overview](index=18&type=section&id=Overview) Amid moderate and uneven global economic growth and an unbalanced recovery in China, the company achieved stable average selling prices for electrolytic manganese metal products, satisfactory battery materials production performance, and a successful turnaround in the trading business, leading to significant growth in overall operating profit and EBITDA - In the first half of 2025, the average selling price of electrolytic manganese metal products remained stable at **HKD 12,722 per tonne**, with a gross margin maintained at **12.9%**[38](index=38&type=chunk) - Sales volume of battery materials production (including electrolytic manganese dioxide) increased, with electrolytic manganese dioxide gross profit contribution growing by **8.3% to HKD 267.9 million**, and gross margin maintained at **43.1%**[39](index=39&type=chunk) - The trading business successfully turned from loss to profit, with gross margin turning to **16.7%** (first half of 2024: -6.8%), contributing **HKD 68.3 million** in gross profit[40](index=40&type=chunk) - Operating profit for the first half of 2025 was **HKD 207.0 million** (first half of 2024: loss of HKD 10.4 million), and EBITDA increased by **281.8% to HKD 494.6 million**[41](index=41&type=chunk) [Segment Revenue](index=19&type=section&id=Segment%20Revenue) Total revenue for the first half of 2025 decreased by **49.2% to HKD 2,912.4 million** year-on-year, primarily due to a decline in trading business sales revenue, with varied segment performance including increased manganese mining revenue, decreased electrolytic manganese metal and alloy materials production revenue, slightly decreased but gross profit-growing battery materials production revenue, and significantly decreased but profitable other businesses revenue - In the first half of 2025, revenue from the manganese mining segment increased by **10.1% to HKD 720.4 million**, primarily driven by higher average selling prices for Gabon ore and increased sales volume of manganese concentrate[46](index=46&type=chunk) - Revenue from the electrolytic manganese metal and alloy materials production segment decreased by **11.4% to HKD 1,028.1 million**, mainly due to a **6.3% reduction** in electrolytic manganese metal product sales volume and the cessation of alloy product production[50](index=50&type=chunk)[52](index=52&type=chunk) - Revenue from the battery materials production segment decreased by **5.5% to HKD 753.7 million**, but overall gross profit increased by **7.7% to HKD 262.1 million**, with gross margin rising to **34.8%**, primarily benefiting from increased sales volume of electrolytic manganese dioxide and cost control[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Revenue from the other businesses segment significantly decreased by **86.9% to HKD 410.2 million**, but gross margin turned profitable at **16.7%**, with a gross profit of **HKD 68.3 million**, mainly due to active optimization of the trading product portfolio and adjustment of sales strategies[57](index=57&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Total cost of sales for the first half of 2025 decreased by **56.7% to HKD 2,359.3 million**, consistent with the revenue decline trend - Total cost of sales decreased by **56.7% to HKD 2,359.3 million**, consistent with the revenue decline[58](index=58&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) Gross profit for the first half of 2025 significantly increased by **96.1% to HKD 553.1 million**, with the overall gross margin improving by **14.1 percentage points to 19.0%**, primarily due to the trading business turning from a gross loss to a gross profit - Gross profit increased by **96.1% to HKD 553.1 million**, with the overall gross margin improving to **19.0%** (first half of 2024: 4.9%)[59](index=59&type=chunk) - The improvement in gross margin was primarily due to the trading business turning from a gross loss in the first half of 2024 to a gross profit in the first half of 2025[59](index=59&type=chunk) [Other Income and Gains](index=23&type=section&id=Other%20Income%20and%20Gains) Other income and gains for the first half of 2025 decreased by **36.3% to HKD 42.9 million**, primarily due to a reduction in grant income - Other income and gains decreased by **36.3% to HKD 42.9 million**, primarily due to a reduction in grant income[60](index=60&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the first half of 2025 decreased by **47.3% to HKD 35.1 million**, consistent with the revenue decline trend - Selling and distribution expenses decreased by **47.3% to HKD 35.1 million**, consistent with the revenue decline[62](index=62&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses remained stable at **HKD 242.5 million** in the first half of 2025 - Administrative expenses remained stable at **HKD 242.5 million** (first half of 2024: HKD 239.8 million)[63](index=63&type=chunk) [Net Impairment Loss on Financial Assets](index=24&type=section&id=Net%20Impairment%20Loss%20on%20Financial%20Assets) Net impairment loss on financial assets significantly decreased in the first half of 2025, with the prior period primarily impacted by impairment provisions for amounts due from Dushan Jinmeng - The net impairment loss on financial assets in the first half of 2024 primarily referred to an impairment provision of **HKD 108.7 million** for amounts due from Dushan Jinmeng, arising from the settlement of guarantee liabilities for bank financing provided to Dushan Jinmeng[64](index=64&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) Finance costs increased by **66.6% to HKD 79.4 million** in the first half of 2025, primarily due to the recognition of accrued interest on social insurance contributions payable - Finance costs increased by **66.6% to HKD 79.4 million**, primarily due to the recognition of accrued interest of **HKD 60.3 million** for social insurance contributions payable in the first half of 2024[65](index=65&type=chunk) [Other Expenses](index=24&type=section&id=Other%20Expenses) Other expenses increased to **HKD 32.0 million** in the first half of 2025, primarily due to net exchange differences - Other expenses amounted to **HKD 32.0 million** (first half of 2024: HKD 5.7 million), primarily due to net exchange differences[66](index=66&type=chunk) [Share of Profits and Losses of Associates](index=24&type=section&id=Share%20of%20Profits%20and%20Losses%20of%20Associates) Share of profits of associates was **HKD 10.3 million** in the first half of 2025, turning from a loss in the prior period, primarily due to the share of profit from Qingdao Manganese System - Share of profits of associates was **HKD 10.3 million** (first half of 2024: loss of HKD 24.5 million), primarily due to the share of profit from Qingdao Manganese System[67](index=67&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense) The effective tax rate for the first half of 2025 was **16.4%**, largely consistent with the relevant statutory preferential corporate income tax rates - The effective tax rate for the first half of 2025 was **16.4%** (first half of 2024: –30.9%), largely consistent with the relevant statutory preferential corporate income tax rates[68](index=68&type=chunk) [Profit Attributable to Owners of the Company](index=25&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the company for the first half of 2025 was **HKD 172.7 million**, successfully reversing the loss from the prior period - Profit attributable to owners of the company was **HKD 172.7 million** (first half of 2024: loss of HKD 162.8 million)[69](index=69&type=chunk) [Earnings Per Share](index=25&type=section&id=Earnings%20Per%20Share) Earnings per share for the first half of 2025 were **HKD 0.0473**, compared to a loss in the prior period - Earnings per share were **HKD 0.0473** (first half of 2024: –HKD 0.0475)[70](index=70&type=chunk) [Interim Dividends](index=25&type=section&id=Interim%20Dividends) The Board does not recommend the payment of any interim dividend for the first half of 2025 - The Board does not recommend the payment of any interim dividend for the first half of 2025 (first half of 2024: nil)[71](index=71&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) The company's liquidity significantly improved, with increased cash and bank balances, reduced total borrowings, and a lower net gearing ratio, ensuring its going concern capability through bank loan renewals and equity financing [Cash and Bank Balances](index=25&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, cash and bank balances (including restricted and pledged deposits) increased to **HKD 953.5 million**, primarily denominated in RMB Cash and Bank Balances (HKD million) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB | 819.8 | 655.9 | | HKD | 1.7 | 3.3 | | USD | 129.8 | 48.9 | | Central African CFA franc | 1.8 | 4.4 | | Euro | 0.4 | 0.1 | | **Total** | **953.5** | **712.6** | - The Group's borrowings net of cash and bank balances decreased to **HKD 2,640.7 million** from **HKD 3,233.0 million** as of December 31, 2024[72](index=72&type=chunk) [Other Major Changes in Working Capital](index=26&type=section&id=Other%20Major%20Changes%20in%20Working%20Capital) Trade and bills receivables decreased by **HKD 303.7 million to HKD 643.5 million**, consistent with the revenue decline - Trade and bills receivables decreased by **HKD 303.7 million to HKD 643.5 million**, consistent with the revenue decline[74](index=74&type=chunk) [Net Current Liabilities](index=26&type=section&id=Net%20Current%20Liabilities) As of June 30, 2025, net current liabilities decreased to **HKD 1,389.2 million**, indicating an improvement in liquidity position - Net current liabilities decreased to **HKD 1,389.2 million** (December 31, 2024: HKD 1,659.4 million)[75](index=75&type=chunk) [Bank and Other Borrowings](index=26&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, total borrowings decreased to **HKD 3,594.2 million**, with both secured and unsecured borrowings declining, and the company plans to improve its borrowing structure through various means Borrowing Structure (HKD million) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Secured Borrowings | 998.3 | 1,300.7 | | Unsecured Borrowings | 2,595.9 | 2,644.9 | | **Total** | **3,594.2** | **3,945.6** | - Total borrowings decreased to **HKD 3,594.2 million**, and the company will continue to explore ways to improve its borrowing structure, including short/medium-term notes and long-term bank loans[78](index=78&type=chunk) - Fixed-rate borrowings constitute the vast majority of total borrowings, with interest rates ranging from **2.20% to 8.25%**[77](index=77&type=chunk) [Pledged Group Assets](index=27&type=section&id=Pledged%20Group%20Assets) Portions of the Group's assets, including right-of-use assets, bank balances, property, plant and equipment, leasehold land, and trade receivables, are pledged to secure bank borrowings and acceptance bills - As of June 30, 2025, bank balances of **HKD 174.9 million** were pledged to secure bank acceptance bills and bank borrowings[79](index=79&type=chunk) - Property, plant and equipment and leasehold land of **HKD 800.1 million**, and trade receivables of **HKD 44.8 million**, were pledged to secure bank and other borrowings[79](index=79&type=chunk) [Key Financial Ratios of the Group](index=28&type=section&id=Key%20Financial%20Ratios%20of%20the%20Group) As of June 30, 2025, the current ratio, quick ratio, and net gearing ratio all improved, primarily due to better operating performance, increased cash, and equity financing used for debt reduction Key Financial Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 0.72 | 0.69 | | Quick Ratio | 0.56 | 0.51 | | Net Gearing Ratio | 97.3% | 136.9% | - The improvement in financial ratios was primarily due to better operating performance, increased cash and cash equivalents, and the use of proceeds from the first placing to reduce debt[80](index=80&type=chunk) [Liquidity Risk and Going Concern Basis](index=28&type=section&id=Liquidity%20Risk%20and%20Going%20Concern%20Basis) Despite net current liabilities, the Board believes the Group has sufficient working capital to support its going concern for the next twelve months, through internal funds, bank loan renewals, and equity financing - As of June 30, 2025, the Group's current liabilities exceeded current assets by **HKD 1,389.2 million**[82](index=82&type=chunk) - The company successfully renewed or obtained new bank loans of **HKD 131.6 million** and completed a placing of new shares, raising net proceeds of approximately **HKD 180.44 million** for bank loan repayment[82](index=82&type=chunk) - The Board believes the Group has sufficient working capital to meet its needs for the next twelve months from the end of the reporting period, and thus the interim condensed consolidated financial statements have been prepared on a going concern basis[82](index=82&type=chunk) [Credit Risk](index=29&type=section&id=Credit%20Risk) The Group aims to strictly control outstanding receivables to mitigate credit risk and regularly reviews overdue balances, acknowledging concentrated credit risk with specific customers (Customer A and Dushan Jinmeng) despite a diversified customer base - The Group typically offers credit terms of **1 to 3 months** to established customers and holds no collateral for trade and bills receivables balances[83](index=83&type=chunk) - As of June 30, 2025, trade receivables from Customer A amounted to **HKD 232.0 million**, representing **28.6%** of total trade receivables, which are fully overdue and fully provided for[84](index=84&type=chunk) - Fully impaired amounts due from Dushan Jinmeng totaled **HKD 321.1 million**, with its leasehold land and certain property, plant and equipment pledged to the Group as collateral for repayment[85](index=85&type=chunk) [Interest Rate Risk](index=30&type=section&id=Interest%20Rate%20Risk) The Group faces the risk of fluctuating interest rates on floating-rate debt, where an increase in China's Loan Prime Rate would raise finance costs and potentially increase future debt financing costs - The Group faces the risk of fluctuating interest rates on floating-rate debt, which are affected by changes in China's Loan Prime Rate[86](index=86&type=chunk) - An increase in China's Loan Prime Rate would raise finance costs and potentially increase the cost of new debt commitments[86](index=86&type=chunk) [Foreign Exchange Risk](index=30&type=section&id=Foreign%20Exchange%20Risk) The Group's operations in Hong Kong, China, and Gabon face varying foreign exchange risks: Hong Kong operations have minimal risk, China operations are primarily RMB-denominated, and Gabon operations have revenues in RMB and USD, with expenses in RMB and Central African CFA franc - Hong Kong trading business sales and purchases are denominated in USD, resulting in minimal foreign exchange risk due to the HKD's peg to the USD[89](index=89&type=chunk) - China's mining and downstream business products are primarily sold to local customers (RMB-denominated) and partly to overseas customers (USD-denominated), with major expenses in RMB, facing slight foreign exchange risk[89](index=89&type=chunk) - Gabon operations' revenue is primarily denominated in RMB and USD, local operating expenses in RMB and Central African CFA franc, and ore freight in USD[88](index=88&type=chunk) [Use of Proceeds](index=31&type=section&id=Use%20of%20Proceeds) The company has utilized most of its IPO proceeds for designated projects, with the remainder primarily for acquiring mines and mining rights, while proceeds from the first placing were fully used for debt repayment and general working capital [Use of Proceeds from Initial Public Offering](index=31&type=section&id=Use%20of%20Proceeds%20from%20Initial%20Public%20Offering) As of June 30, 2025, **96.9%** of the IPO proceeds have been utilized, with **HKD 61 million** designated for acquiring mines and mining rights remaining unutilized, expected to be fully used by the end of 2032 Use of Proceeds from Initial Public Offering (HKD million) | Description | Amount Designated in Prospectus | Amount Utilized as of June 30, 2025 | Percentage Utilized | | :--- | :--- | :--- | :--- | | Expansion Project of Daxin Electrolytic Manganese Dioxide Plant | 79 | 79 | 100.0% | | Expansion Project of Daxin Manganese Mine Underground Mining and Ore Processing | 278 | 278 | 100.0% | | Expansion and Construction Project of Electrolytic Manganese Metal Production Facilities | 516 | 516 | 100.0% | | Construction Project of Chongzuo Base | 59 | 59 | 100.0% | | Development of Bembélé Manganese Mine and Related Facilities | 119 | 119 | 100.0% | | Technical Improvement and Renovation Projects of Production Facilities | 40 | 40 | 100.0% | | Acquisition of Mines and Mining Rights | 397 | 336 | 84.6% | | Repayment of Part of Bank Borrowings | 297 | 297 | 100.0% | | Working Capital and Other Corporate Purposes | 198 | 198 | 100.0% | | **Total** | **1,983** | **1,922** | **96.9%** | - IPO proceeds of **HKD 61 million** designated for acquiring mines and mining rights remain unutilized and are expected to be fully utilized on or before December 31, 2032[90](index=90&type=chunk) [Use of Proceeds from First Placing](index=32&type=section&id=Use%20of%20Proceeds%20from%20First%20Placing) The first placing raised net proceeds of **HKD 140.97 million**, with **97.5%** utilized, primarily for repaying the Group's outstanding liabilities and general working capital - The first placing involved the issuance of **685,691,800 new shares**, raising net proceeds of approximately **HKD 140.97 million**[91](index=91&type=chunk) Use of Proceeds from First Placing (HKD million) | Description | Designated Proposed Use Amount | Amount Utilized as of June 30, 2025 | Percentage Utilized | | :--- | :--- | :--- | :--- | | Repayment of the Group's Outstanding Liabilities | 133.92 | 133.92 | 100.0% | | General Working Capital of the Company | 7.05 | 3.52 | 49.9% | | **Total** | **140.97** | **137.44** | **97.5%** | [Post Balance Sheet Events](index=33&type=section&id=Post%20Balance%20Sheet%20Events) Subsequent to the reporting period, the company completed a second placing in July 2025, raising net proceeds of approximately **HKD 180.44 million** - On July 8, 2025, the company entered into a placing agreement with the placing agent for the placing of **822,830,160 shares** at **HKD 0.224 per share** (Second Placing)[93](index=93&type=chunk) - The Second Placing was completed on July 28, 2025, raising net proceeds of approximately **HKD 180.44 million**[93](index=93&type=chunk) [Business Model and Strategies](index=33&type=section&id=Business%20Model%20and%20Strategies) The Group aims to be a global leading integrated manganese producer with a full upstream and downstream value chain, achieving long-term profitability and asset growth through exploration, operational efficiency improvements, and strengthening customer relationships - The Group's goal is to become a global leading integrated manganese producer with a full upstream and downstream value chain[94](index=94&type=chunk) - Strategies include: expanding and enhancing manganese resources and reserves through exploration and strengthening strategic control via mergers and acquisitions; improving operational efficiency and profitability; and establishing and solidifying strategic business relationships with key customers and industry-leading partners[95](index=95&type=chunk) [Future Development and Outlook](index=33&type=section&id=Future%20Development%20and%20Outlook) Looking ahead, despite global uncertainties, China's economic stimulus policies are expected to accelerate demand for high-purity manganese products like electrolytic manganese metal and electrolytic manganese dioxide, with the company focusing on refined management and strong customer relationships for sustainable long-term value creation - China has introduced various economic stimulus policies, which are expected to accelerate demand for high-purity manganese products such as electrolytic manganese metal and electrolytic manganese dioxide[94](index=94&type=chunk) - The company will seize opportunities through refined management, rigorous production methods, and solid customer and supplier relationships to achieve sustainable long-term value creation[94](index=94&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section covers corporate governance, directors' securities transactions, review of accounts, and forward-looking statements, ensuring transparency and compliance [Corporate Governance Code](index=34&type=section&id=Corporate%20Governance%20Code) The company has adopted and complied with the principles and applicable code provisions of 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 principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[96](index=96&type=chunk) [Standard Code for Securities Transactions by Directors](index=34&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted a code of conduct for directors' dealings in company securities and confirmed that all directors complied with the required standards during the reporting period - The company has adopted a code of conduct for directors' dealings in company securities and confirmed that all directors have complied with the required standards throughout the reporting period[97](index=97&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the six months ended June 30, 2025 - Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the six months ended June 30, 2025[98](index=98&type=chunk) [Review of Accounts](index=35&type=section&id=Review%20of%20Accounts) The Audit Committee and company management have reviewed the unaudited interim results for the six months ended June 30, 2025 - The Audit Committee and company management have reviewed the unaudited interim results for the six months ended June 30, 2025[99](index=99&type=chunk) [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) This interim results announcement contains forward-looking statements regarding the Group's financial condition, performance, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This interim results announcement contains certain forward-looking statements regarding the Group's financial condition, performance, and business, which involve known and unknown risks and uncertainties[100](index=100&type=chunk) [Glossary](index=35&type=section&id=Glossary) This glossary provides definitions for key terms and company entities used throughout the report to ensure clear understanding - The glossary provides definitions for key terms and company entities used in the report, such as 'Audit Committee', 'Bembélé Manganese Mine', and 'Dushan Jinmeng'[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) [Board Information](index=38&type=section&id=Board%20Information) This section lists the current composition of the company's Board of Directors, including executive, non-executive, and independent non-executive directors - As of the date of this announcement, the executive directors are Mr. Zhang Yi, Mr. Zhang He, Mr. Xu Xiang, Mr. Liu Yang, Mr. Pan Shenghai, and Ms. Cui Ling; the non-executive director is Mr. Huang Chuangxin; and the independent non-executive directors are Mr. Yuan Mingliang, Mr. Lu Sihong, Mr. Zhou Jie, Mr. Luo Guihua, and Mr. Wu Qi[105](index=105&type=chunk)

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Core Viewpoint - Southern Manganese (01091) is expected to turn a profit in the first half of 2025, projecting a profit of no less than 150 million HKD, compared to a loss of approximately 162.8 million HKD in the first half of 2024 [1] Group 1: Financial Performance - The company anticipates a significant turnaround from a loss of 162.8 million HKD in the first half of 2024 to a profit of at least 150 million HKD in the first half of 2025 [1] - The expected profit is attributed to the optimization of the trade product structure and the improvement of trade business performance [1] Group 2: Management Strategies - Management has implemented comprehensive cost control measures across key areas such as production, procurement, bidding, and operations, leading to significant results [1] - The reduction in financial asset impairment losses has also contributed to the expected profitability [1]