Financial Performance - Revenue for the year ended December 31, 2024, was RMB 68,814,000, a decrease of 28.9% compared to RMB 96,802,000 in 2023[2] - Gross profit for the same period was RMB 55,451,000, down 13.0% from RMB 63,747,000, with a gross margin of 80.6%, up from 65.9%[3] - Net profit for the year was RMB 15,070,000, representing a decline of 44.6% from RMB 27,210,000 in 2023, with a net profit margin of 21.9%[3] - Basic and diluted earnings per share decreased to RMB 0.19 from RMB 0.34, a drop of 44.1%[3] - Pre-tax profit for 2024 was RMB 20,970,000, down 39% from RMB 34,493,000 in 2023[20] - Total revenue decreased by approximately 28.9% from about RMB 96.8 million for the year ended December 31, 2023, to about RMB 68.8 million for the year ended December 31, 2024, primarily due to no property sales from the Sci-Tech Innovation Park in 2024[48] - Gross profit decreased by approximately 13.0% from about RMB 63.7 million for the year ended December 31, 2023, to about RMB 55.5 million for the year ending December 31, 2024, primarily due to no property sales profit in 2024[50] - Net profit for the year decreased by approximately 44.6% from about RMB 27.2 million for the year ended December 31, 2023, to about RMB 15.1 million for the year ending December 31, 2024[55] Dividends - The board proposed a final dividend of RMB 0.23 per share for the year ended December 31, 2024, unchanged from 2023[2] - The company proposed a final dividend of RMB 0.23 per share for both 2024 and 2023, totaling RMB 18,400,000[22] - The company plans to distribute a final dividend of RMB 18.4 million per share, based on the audited distributable profits of approximately RMB 81.0 million for the fiscal year 2024[75] - The expected payment date for the final dividend to domestic shareholders is May 16, 2025, and for H-share holders, it is May 30, 2025[75] Assets and Liabilities - Total assets less current liabilities amounted to RMB 1,028,504,000, down from RMB 1,045,835,000 in 2023[4] - Non-current liabilities decreased to RMB 226,695,000 from RMB 240,696,000 in the previous year[5] - Cash and cash equivalents increased to RMB 86,386,000 from RMB 74,437,000 in 2023[4] - Contingent liabilities decreased from approximately RMB 103.4 million as of December 31, 2023, to approximately RMB 91.5 million as of December 31, 2024[62] Revenue Sources - Property management service revenue increased to RMB 4,055,000 in 2024 from RMB 3,632,000 in 2023, representing an increase of 11.7%[13] - The company did not have any customer revenue exceeding 10% of total revenue for 2024[14] - Interest income from bank deposits decreased to RMB 120,000 in 2024 from RMB 234,000 in 2023[16] - Total other net income for 2024 was RMB 35,000, significantly down from RMB 2,818,000 in 2023[16] - Other net income decreased by approximately 98.8% from about RMB 2.8 million for the year ended December 31, 2023, to about RMB 0.04 million for the year ending December 31, 2024, primarily due to a reduction in government subsidies[52] Operational Metrics - The average monthly rental for the first floor was RMB 373.2 per square meter in 2024, slightly up from RMB 372.9 in 2023, while the average for the second floor was RMB 193.8, up from RMB 193.6[36] - The average monthly rental for the third floor decreased to RMB 62.8 in 2024 from RMB 65.0 in 2023, indicating a decline in rental income for that area[36] - The average monthly rental income per square meter for the parking area remained stable at RMB 17.1 for both 2024 and 2023[36] - As of December 31, 2024, the rental area of the trading center was 24,092.68 square meters, with an occupancy rate of 94.3%, down from 25,390.6 square meters and 98.11% in 2023[37] - The number of tenants in the trading center decreased slightly to 615 as of December 31, 2024, from 617 in the previous year[34] - The Sci-Tech Innovation Park had a total rental area of 56,365.90 square meters as of December 31, 2024, with an occupancy rate of 68.6%, compared to 37,877.82 square meters and 64.8% in 2023[42] Investment and Financing - The company has secured bank financing of RMB 233,000,000, with the entire amount available for withdrawal[9] - The company has committed capital obligations of RMB 1,007 thousand for the year 2024, compared to RMB 824 thousand in 2023, reflecting an increase in contractual commitments[27] - The net proceeds from the fundraising as of December 31, 2024, amounted to approximately RMB 52.058 million, with RMB 43.106 million already utilized[67] - The allocation of funds includes 70% for the establishment and construction of the Sci-Tech Innovation Park, 20% for further development of the third floor, and 10% for general working capital[67] - As of December 31, 2024, the unutilized balance of the net proceeds is approximately RMB 9.0 million, which is expected to be used for the further development of the third floor by December 2025[67] Corporate Governance - The board of directors has adopted the corporate governance code but has not separated the roles of Chairman and CEO, which is currently held by the same individual[71] - The company confirms compliance with the standard code for securities trading by all directors and supervisors for the fiscal year ending December 31, 2024[73] - The audit committee has reviewed the accounting principles and policies adopted by the group and discussed internal controls and financial reporting matters[82] Future Plans and Market Outlook - The group plans to expand its rental area and develop the second phase of the Sci-Tech Innovation Park while integrating logistics, property, and e-commerce services[47] - The group aims to enhance digital capabilities and explore AI and blockchain applications to improve transaction efficiency and transparency[47] - The industrial added value in China is projected to grow by 5.8% year-on-year in 2024, with the equipment manufacturing and high-tech manufacturing sectors showing significant growth rates of 7.7% and 8.9% respectively[28] - The company aims to leverage its "market + industry" advantages to support the transformation and rise of the tooling industry, amidst a competitive landscape of leading enterprises and differentiated competition from SMEs[30] Events and Announcements - The annual general meeting is scheduled for April 30, 2025[77] - The company will suspend share transfer registration from April 23, 2025, to April 30, 2025, to determine eligibility for attending the annual general meeting and voting[78] - The company will also suspend share transfer registration from May 8, 2025, to May 14, 2025, to determine eligibility for the final dividend distribution[79] - There are no significant events post-December 31, 2024, that would materially impact the company's operations and financial performance[74] - The audit firm KPMG has confirmed that the financial figures in the preliminary announcement for the year ending December 31, 2024, are consistent with the amounts in the consolidated financial statements[80] - The annual performance announcement will be published on the Hong Kong Stock Exchange and the company's website, with the annual report to be sent to shareholders upon request[81]

[Company Information](index=2&type=section&id=Company%20Information) This section provides basic information about Wenling Zhejiang Cutting Tools and Measuring Instruments Trading Center Co., Ltd., including board members, committee compositions, company secretary, authorized representatives, legal advisors, auditor, principal bankers, registered office, and principal place of business in Hong Kong [Company Basic Information](index=2&type=section&id=Company%20Basic%20Information) This chapter provides basic information about Wenling Zhejiang Cutting Tools and Measuring Instruments Trading Center Co., Ltd., including board members, committee compositions, company secretary, authorized representatives, legal advisors, auditor, principal bankers, registered office, and principal place of business in Hong Kong - The Board of Directors comprises **2 executive directors**, **3 non-executive directors**, and **3 independent non-executive directors**[3](index=3&type=chunk) - Mr. Xu Yi serves as the Company Secretary, with Mr. Pan Haihong and Mr. Xu Yi as Authorized Representatives[3](index=3&type=chunk) - KPMG is the auditor[5](index=5&type=chunk) - The stock code is **1379**[5](index=5&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) For the six months ended June 30, 2024, the company experienced significant declines in revenue and profit for the period, alongside a notable increase in gross profit margin and a decrease in basic and diluted earnings per share [Key Financial Indicators](index=5&type=section&id=Key%20Financial%20Indicators) For the six months ended June 30, 2024, the company experienced significant declines in revenue and profit for the period, alongside a notable increase in gross profit margin and a decrease in basic and diluted earnings per share Key Financial Indicators for the Six Months Ended June 30 (RMB thousands) | Indicator | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 33,887 | 62,074 | | Gross Profit | 27,393 | 35,073 | | Gross Profit Margin | 80.8% | 56.5% | | Profit for the Period | 3,307 | 15,703 | | Net Profit Margin | 9.8% | 25.3% | | Basic and Diluted Earnings Per Share (RMB) | 0.04 | 0.20 | [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational and financial performance, covering industry trends, business segments, and financial results for the period [Industry Overview](index=6&type=section&id=Industry%20Overview) In the first half of 2024, China's economy generally recovered, with stable operation in the machinery industry, but the cutting tools and measuring instruments sector continued to decline due to raw material price fluctuations and weak overall demand - China's economic growth (GDP) reached **5.0%** in the first half of 2024, with value added of industrial enterprises above designated size increasing by **6.0%** year-on-year[10](index=10&type=chunk) - The cutting tools and measuring instruments industry continued to decline due to raw material price fluctuations and weak overall demand[10](index=10&type=chunk) - CNC cutting tools have significant growth potential, favoring enterprises with brand influence, capital strength, and technological advantages[10](index=10&type=chunk) [Business Review](index=6&type=section&id=Business%20Review) The Group's primary business involves property leasing and sales of Sci-Tech Innovation Park units, with revenue and profit for the period decreasing significantly due to the absence of property sales income and increased loss from fair value adjustment of investment properties - The Group's main business activities and revenue sources are from property leasing of the Trading Center and Sci-Tech Innovation Park, and the sale of certain Sci-Tech Innovation Park units[11](index=11&type=chunk) - For the six months ended June 30, 2024, revenue decreased by approximately **45.4%**, and profit for the period decreased by approximately **78.9%**[11](index=11&type=chunk) - The decrease in revenue was primarily due to no property sales income during the period, compared to approximately **RMB 28.2 million** in the same period last year[11](index=11&type=chunk) - Loss from fair value adjustment of investment properties increased from approximately **RMB 10.4 million** in the same period last year to approximately **RMB 20.5 million**[11](index=11&type=chunk) [Trading Center](index=7&type=section&id=Trading%20Center) The Trading Center, a platform for cutting tools and measuring instruments, had 626 tenants and an occupancy rate of 98.64% as of June 30, 2024, with average monthly actual rent slightly increasing on the first and second floors - The Trading Center has a total gross floor area of approximately **74,204.7 square meters**, with approximately **71,817.5 square meters** held for leasing[12](index=12&type=chunk) - As of June 30, 2024, the value of the Trading Center was **RMB 829.2 million** (December 31, 2023: RMB 845.7 million)[12](index=12&type=chunk) - As of June 30, 2024, the Trading Center had **626 tenants** (December 31, 2023: 617 tenants)[13](index=13&type=chunk) - The percentage of leasable area occupied was **98.64%** (December 31, 2023: 98.11%)[15](index=15&type=chunk) Average Monthly Actual Rent of Trading Center (RMB per square meter) | Floor | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | First Floor | 373.4 | 372.2 | | Second Floor | 193.6 | 193.4 | | Third Floor | 65.0 | 72.3 | | Basement | 17.1 | 17.1 | [Sci-Tech Innovation Park](index=9&type=section&id=Sci-Tech%20Innovation%20Park) The Sci-Tech Innovation Park, operational since October 2022, attracted 13 enterprises and achieved an occupancy rate of 68.3% as of June 30, 2024, with a fair value of approximately RMB 182.0 million - The Sci-Tech Innovation Park commenced operations in **October 2022**, primarily providing workshops and dormitory units for manufacturing purposes[16](index=16&type=chunk) - As of June 30, 2024, the Sci-Tech Innovation Park had attracted **13 enterprises** (December 31, 2023: 14 enterprises)[17](index=17&type=chunk) - As of June 30, 2024, the fair value of the Sci-Tech Innovation Park was approximately **RMB 182.0 million** (December 31, 2023: RMB 185.9 million)[16](index=16&type=chunk) - The percentage of leasable area occupied was **68.3%** (December 31, 2023: 64.8%)[19](index=19&type=chunk) Average Monthly Actual Rent of Sci-Tech Innovation Park (RMB per square meter) | Type | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Workshops | 15.5 | 15.5 | | Dormitories | 21.5 | 23.6 | | Basement | 20.9 | 20.9 | [Cutting Tools and Measuring Instruments Industry Innovation Service Complex](index=10&type=section&id=Cutting%20Tools%20and%20Measuring%20Instruments%20Industry%20Innovation%20Service%20Complex) The Group established an R&D-centric innovation service complex for the cutting tools and measuring instruments industry, offering one-stop services including new coating material R&D, achievement transformation, and startup incubation - The complex is a one-stop service platform integrating R&D of new coating materials, achievement transformation, startup incubation, talent cultivation, and technological transformation[20](index=20&type=chunk) - A cutting tool quality inspection center, comprising a material inspection center, a cutting tool testing center, and a cutting test center, has been successfully established[20](index=20&type=chunk) - It has gathered **16 scientific and technological innovation service organizations**, providing intellectual property, brand building, financial services, and legal consulting functions[20](index=20&type=chunk) - Strategic cooperation has been established with **9 renowned domestic universities** (including Taizhou University, Tsinghua University, Sichuan University, Tianjin University, Zhejiang University of Technology) and **16 research institutes**[21](index=21&type=chunk) [E-commerce Platform](index=11&type=section&id=E-commerce%20Platform) The Group launched a cross-border e-commerce brand global expansion project in June 2023, achieving 16.51 million impressions and 133,300 clicks through independent websites, Alibaba International, Google Ads, and SEO optimization - The cross-border e-commerce brand global expansion project for the cutting tools and measuring instruments industry cluster officially launched in **June 2023**[22](index=22&type=chunk) - The independent website achieved **16.51 million impressions**, **133,300 clicks**, nearly **15,000 overseas social media followers**, and over **300 inquiries**[22](index=22&type=chunk) - **Six specialized cross-border training sessions** were conducted, cultivating **50 cross-border e-commerce professionals**[22](index=22&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) This chapter reviews the financial performance for the six months ended June 30, 2024, detailing revenue, costs, profit, liquidity, capital expenditure, and contingent liabilities, along with explanations for key changes [Revenue](index=11&type=section&id=Revenue) Total revenue significantly decreased by 45.4% year-on-year, primarily due to the absence of completed property sales income, while property leasing revenue remained stable - Total revenue decreased by approximately **45.4%** from approximately **RMB 62.1 million** in the same period of 2023 to approximately **RMB 33.9 million** in the same period of 2024[23](index=23&type=chunk) - The main reason was zero income from sales of completed properties in the first half of 2024, compared to approximately **RMB 28.2 million** in the same period of 2023[23](index=23&type=chunk) - Property leasing revenue remained stable at approximately **RMB 32.5 million** (2023) and approximately **RMB 32.2 million** (2024)[23](index=23&type=chunk) [Cost of Sales](index=12&type=section&id=Cost%20of%20Sales) Cost of sales significantly decreased by 75.9% year-on-year, primarily due to the absence of completed property sales costs during the period - Cost of sales decreased by approximately **75.9%** from approximately **RMB 27.0 million** in the same period of 2023 to approximately **RMB 6.5 million** in the same period of 2024[25](index=25&type=chunk) - The main reason was no cost of sales for completed properties recorded in the first half of 2024, compared to approximately **RMB 21.0 million** in the same period of 2023[25](index=25&type=chunk) [Gross Profit and Gross Profit Margin](index=12&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit decreased by 21.9% year-on-year, but the gross profit margin significantly increased from 56.5% to 80.8%, mainly because the leasing business has a higher gross profit margin than completed property sales - Gross profit decreased by approximately **21.9%** from approximately **RMB 35.1 million** in the same period of 2023 to approximately **RMB 27.4 million** in the same period of 2024[26](index=26&type=chunk) - Gross profit margin increased from approximately **56.5%** in the same period of 2023 to approximately **80.8%** in the same period of 2024[26](index=26&type=chunk) - The increase in gross profit margin was primarily due to the gross profit margin of completed property sales being lower than that of the Group's leasing business[26](index=26&type=chunk) [Loss from Fair Value Adjustment of Investment Properties](index=12&type=section&id=Loss%20from%20Fair%20Value%20Adjustment%20of%20Investment%20Properties) Loss from fair value adjustment of investment properties increased by approximately RMB 10.1 million year-on-year, mainly due to reduced comparable market rents and remaining land use rights - Loss from fair value adjustment of investment properties increased from approximately **RMB 10.4 million** in the same period of 2023 to approximately **RMB 20.5 million** in the same period of 2024[27](index=27&type=chunk) - The increase of approximately **RMB 10.1 million** was mainly due to reduced comparable market rents and remaining land use rights[27](index=27&type=chunk) [Administrative Expenses](index=12&type=section&id=Administrative%20Expenses) Administrative expenses remained stable during the reporting period - Administrative expenses remained stable at approximately **RMB 3.7 million** in the first half of 2023 and approximately **RMB 3.8 million** in the first half of 2024[28](index=28&type=chunk) [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) Income tax expense shifted from an expense last year to a credit this year, with a decreased effective tax rate, primarily due to reduced taxable profit - Income tax expense shifted from an expense of approximately **RMB 4.6 million** in the same period of 2023 to a credit of approximately **RMB 0.5 million** in the same period of 2024[29](index=29&type=chunk) - The effective tax rate changed from approximately **22.6%** in the same period of 2023 to approximately **17.1%** in the same period of 2024[29](index=29&type=chunk) - The change was primarily due to the taxable profit in the first half of 2024 being fully offset by an over-provision for income tax in prior years[29](index=29&type=chunk) [Profit for the Period and Net Profit Margin](index=13&type=section&id=Profit%20for%20the%20Period%20and%20Net%20Profit%20Margin) Profit for the period significantly decreased by 78.9% year-on-year, and net profit margin declined, primarily impacted by increased loss from fair value adjustment of investment properties, partially offset by an increased gross profit margin - Profit for the period decreased by approximately **78.9%** from approximately **RMB 15.7 million** in the same period of 2023 to approximately **RMB 3.3 million** in the same period of 2024[30](index=30&type=chunk) - Net profit margin decreased from approximately **25.3%** in the same period of 2023 to approximately **9.8%** in the same period of 2024[30](index=30&type=chunk) - This was primarily due to an increased loss from fair value adjustment of investment properties, partially offset by an increased gross profit margin[30](index=30&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=13&type=section&id=Liquidity,%20Financial%20Resources,%20and%20Capital%20Structure) The Group's liquidity primarily stems from cash generated from operating activities, shareholder contributions, and proceeds from the global offering, with cash and cash equivalents decreasing mainly due to income tax and dividend payments - The Group's business is primarily funded by cash generated from operating activities, shareholder contributions, and net proceeds from the global offering[31](index=31&type=chunk) - Cash and cash equivalents decreased from approximately **RMB 74.4 million** as of December 31, 2023, to approximately **RMB 44.0 million** as of June 30, 2024[31](index=31&type=chunk) - The decrease in cash was mainly due to income tax and dividend payments of approximately **RMB 8.1 million** and approximately **RMB 18.5 million**, respectively[31](index=31&type=chunk) [Financing and Treasury Policy](index=13&type=section&id=Financing%20and%20Treasury%20Policy) The Group regularly reviews cash flows and balances to maintain optimal liquidity and will continue to rely on operating cash flows and other financing methods to fund working capital and business expansion - The Group regularly reviews cash flows and cash balances to seek optimal liquidity levels while maintaining business robustness and supporting growth strategies[32](index=32&type=chunk) - In the future, the Group will continue to rely on cash flows from operations and other debt and equity financing to fund working capital requirements and business expansion[32](index=32&type=chunk) [Foreign Exchange Risk](index=13&type=section&id=Foreign%20Exchange%20Risk) The Group's foreign exchange risk is low, as most transactions, assets, and liabilities are denominated in RMB, and no financial instruments were used to hedge foreign exchange risk during the period - The Group's foreign exchange risk is low, as transactions, most assets, and all liabilities are denominated in RMB[33](index=33&type=chunk) - For the six months ended June 30, 2024, the Group did not use any financial instruments to hedge foreign exchange risk[33](index=33&type=chunk) [Bank Loans and Asset Pledges](index=13&type=section&id=Bank%20Loans%20and%20Asset%20Pledges) As of June 30, 2024, the Group had no bank loans but had investment properties valued at approximately RMB 829.2 million pledged to secure general banking facilities of RMB 233 million - As of June 30, 2024, the Group had no bank loans (December 31, 2023: nil)[34](index=34&type=chunk) - Investment properties of approximately **RMB 829.2 million** were pledged to secure general banking facilities of **RMB 233 million**[34](index=34&type=chunk) [Capital Expenditure](index=14&type=section&id=Capital%20Expenditure) The Group's capital expenditure significantly decreased, primarily because the construction and renovation of the Sci-Tech Innovation Park were completed in 2023 - For the six months ended June 30, 2024, the Group's capital expenditure was approximately **RMB 0.6 million** (same period of 2023: approximately RMB 20.8 million)[36](index=36&type=chunk) - The decrease in capital expenditure was primarily due to the completion of construction and renovation works for the Sci-Tech Innovation Park in 2023[36](index=36&type=chunk) [Capital Commitments](index=14&type=section&id=Capital%20Commitments) As of June 30, 2024, the Group's capital commitments for investment properties remained stable - As of June 30, 2024, the Group's capital commitments for investment properties were approximately **RMB 0.8 million** (December 31, 2023: approximately RMB 0.8 million)[37](index=37&type=chunk) [Contingent Liabilities](index=14&type=section&id=Contingent%20Liabilities) The Group's contingent liabilities primarily consist of mortgage loan guarantees provided to customers, with a slight decrease in amount, and the directors believe the likelihood of default is remote - As of June 30, 2024, the Group's contingent liabilities related to mortgage loan guarantees provided to banks for its customers were approximately **RMB 97.5 million** (December 31, 2023: RMB 103.4 million)[38](index=38&type=chunk) - The directors believe that the fair value of these financial guarantee contracts at initial recognition is not significant, and the likelihood of default by the Group's property buyers is remote[38](index=38&type=chunk) [Material Investments, Acquisitions, and Disposals Held](index=14&type=section&id=Material%20Investments,%20Acquisitions,%20and%20Disposals%20Held) For the six months ended June 30, 2024, the Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, and joint ventures - For the six months ended June 30, 2024, the Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, and joint ventures[39](index=39&type=chunk) [Future Plans for Material Investments and Capital Assets](index=14&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2024, the Group had no immediate plans for material investments and capital assets other than those disclosed in this report - As of June 30, 2024, the Group had no immediate plans for material investments and capital assets other than those disclosed in this report[40](index=40&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2024, the Group's number of employees slightly decreased, but total staff costs increased, with the company emphasizing employee training and remuneration based on qualifications and performance - As of June 30, 2024, the Group had a total of **38 employees** (December 31, 2023: 39 employees)[41](index=41&type=chunk) - For the six months ended June 30, 2024, total staff costs were approximately **RMB 2.2 million** (same period of 2023: RMB 2.1 million), an increase of approximately **6.5%**[41](index=41&type=chunk) - The Group provides training to employees and determines remuneration based on qualifications and performance, with total compensation including salaries, performance bonuses, and special incentives[41](index=41&type=chunk) [Use of Proceeds from Global Offering](index=15&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The Group's net proceeds from the 2020 global offering were approximately RMB 52.1 million, with approximately RMB 42.3 million utilized as of June 30, 2024, and the remaining RMB 9.7 million expected to be used for further development of the third floor by December 2024 - The Company's net proceeds from the global offering on December 30, 2020, were approximately **HK$61.9 million** (approximately **RMB 52.1 million**)[42](index=42&type=chunk) - From the listing date to June 30, 2024, the Company had utilized approximately **RMB 42.3 million** of the net proceeds from the global offering[42](index=42&type=chunk) - As of June 30, 2024, the unutilized balance of net proceeds from the global offering was approximately **RMB 9.7 million**[43](index=43&type=chunk) - The remaining balance is expected to be utilized by **December 2024** to fund further development of the third floor (including refurbishment and renovation)[43](index=43&type=chunk) Use of Net Proceeds from Global Offering (RMB thousands) | Purpose | Budgeted Amount in Prospectus | Actual Usage as of June 30, 2024 | Remaining Balance as of June 30, 2024 | | :--- | :--- | :--- | :--- | | Establishment and construction of Sci-Tech Innovation Park | 36,441 | 36,441 | – | | Funding further development of the third floor | 10,412 | 700 | 9,712 | | General working capital and other corporate purposes | 5,205 | 5,205 | – | | **Total** | **52,058** | **42,346** | **9,712** | [Share Capital](index=17&type=section&id=Share%20Capital) As of June 30, 2024, the Company's share capital consisted of 60,000,000 domestic shares and 20,000,000 H shares, totaling 80,000,000 shares Share Capital Structure (As of June 30, 2024) | Share Class | Number of Shares | Percentage of Equity (%) | | :--- | :--- | :--- | | Domestic Shares | 60,000,000 | 75.00 | | H Shares | 20,000,000 | 25.00 | | **Total** | **80,000,000** | **100.00** | [Future Outlook](index=17&type=section&id=Future%20Outlook) The Group plans to transform into a comprehensive service provider for the cutting tools and measuring instruments industry by expanding leasing scale, building a supporting service system, continuously developing phases two and three of the Sci-Tech Innovation Park, and achieving incremental growth through M&A - Chinese cutting tool manufacturers will shift from pure production and supply to developing new cutting processes and their supporting technologies and products, becoming partners in solving customer processing problems[46](index=46&type=chunk) - The Group will focus on its core business, expand its leasing area, and build a supporting service system including logistics, property management, e-commerce, value-added services, and investment management[46](index=46&type=chunk) - Plans include continuous investment in developing Phase Two of the Sci-Tech Innovation Park and initiating Phase Three[46](index=46&type=chunk) - The Group plans to achieve incremental growth through mergers and acquisitions of relevant companies or teams in the cutting tools and measuring instruments industry, transforming into a comprehensive service provider focused on manufacturing and scientific research[46](index=46&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) This section covers various corporate governance and shareholder-related matters, including interim dividends, competing interests, compliance with the corporate governance code, and major shareholder interests [Interim Dividend](index=18&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[48](index=48&type=chunk) [Directors' and Supervisors' Competing Interests](index=18&type=section&id=Directors'%20and%20Supervisors'%20Competing%20Interests) The controlling shareholder, directors, and supervisors, along with their respective close associates, have no interests in any business that directly or indirectly competes or may compete with the Group's business - The controlling shareholder, directors, and supervisors of the Company and their respective close associates have no interests in any business that directly or indirectly competes or may compete with the Group's business[48](index=48&type=chunk) [Compliance with Corporate Governance Code](index=18&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company is committed to maintaining high standards of corporate governance and strictly complied with the Corporate Governance Code during the reporting period, with one deviation where Mr. Pan Haihong concurrently holds the roles of Chairman and Chief Executive Officer, which the Board believes ensures leadership consistency and efficiency - The Company is committed to maintaining high standards of corporate governance and has complied with the Code Provisions for the six months ended June 30, 2024, and up to the date of this report[48](index=48&type=chunk) - There is a deviation from Code Provision C.2.1, where Mr. Pan Haihong concurrently holds the roles of Chairman and Chief Executive Officer[49](index=49&type=chunk) - The Board believes the advantages of this concurrent role are ensuring consistent leadership within the Group and enhancing the efficiency and effectiveness of overall strategic planning[49](index=49&type=chunk) [Interests and Short Positions of Directors, Supervisors, and Chief Executive in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations](index=19&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors,%20Supervisors,%20and%20Chief%20Executive%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2024, no director, supervisor, or chief executive of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations - As of June 30, 2024, no director, supervisor, or chief executive of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[49](index=49&type=chunk) [Major Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=20&type=section&id=Major%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) This section lists the interests and short positions of major shareholders in the Company's shares and underlying shares as of June 30, 2024, with several Wenling-related entities holding significant domestic shares through controlled corporations, forming a controlling shareholder group Major Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company (As of June 30, 2024) | Shareholder Name / Name | Capacity / Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding in Relevant Class | Approximate Percentage of Total Share Capital of the Company | | :--- | :--- | :--- | :--- | :--- | | Wenling City Market Group Co., Ltd. | Beneficial Owner | 58,200,000 Domestic Shares (L) | 97.00% | 72.75% | | Wenling City Qiaoling Investment Development Co., Ltd. | Beneficial Owner | 58,200,000 Domestic Shares (L) | 97.00% | 72.75% | | Wenling City Wenqiao Town People's Government | Interest in Controlled Corporation | 58,200,000 Domestic Shares (L) | 97.00% | 72.75% | | Jiaxing Yuantai Equity Investment Partnership (Limited Partnership) | Interest in Controlled Corporation | 5,980,000 H Shares (L) | 29.90% | 7.48% | | Hong Kong Reagan Investment Center Co., Ltd. | Beneficial Owner | 5,980,000 H Shares (L) | 29.90% | 7.48% | | Zhejiang Qianjiang Motorcycle Co., Ltd. | Beneficial Owner | 3,275,813 H Shares (L) | 16.38% | 4.09% | | Wanbangde (Hangzhou) Investment Management Co., Ltd. | Beneficial Owner | 1,605,151 H Shares (L) | 8.03% | 2.01% | | Wenling Longxi Enterprise Management Center (Limited Partnership) | Interest in Controlled Corporation | 1,266,000 H Shares (L) | 6.33% | 1.58% | | New Territories Pump Industry (Zhejiang) Co., Ltd. | Interest in Controlled Corporation | 1,266,000 H Shares (L) | 6.33% | 1.58% | | New Territories Pump Industry (Hong Kong) Co., Ltd. | Beneficial Owner | 1,266,000 H Shares (L) | 6.33% | 1.58% | | Zhejiang Zhongma Transmission Co., Ltd. | Beneficial Owner | 1,097,395 H Shares (L) | 5.49% | 1.37% | | Han Yi | Beneficial Owner | 1,024,500 H Shares (L) | 5.12% | 1.28% | - Wenling City Market Group Co., Ltd., Wenqiao Town People's Government, and other parties acting in concert are deemed to exercise or control the exercise of **72.75%** of the voting rights at the Company's general meetings[58](index=58&type=chunk) [Purchase, Sale, or Redemption of Listed Securities](index=26&type=section&id=Purchase,%20Sale,%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2024, and up to the date of this report, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - For the six months ended June 30, 2024, and up to the date of this report, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[60](index=60&type=chunk) - As of June 30, 2024, the Company held no treasury shares[60](index=60&type=chunk) [Standard Code for Securities Transactions](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code as the code of conduct for directors and supervisors in securities transactions, and all directors and supervisors confirmed compliance with the relevant provisions - The Company has adopted the Standard Code as the code of conduct for directors and supervisors in securities transactions[61](index=61&type=chunk) - All directors and supervisors confirmed their compliance with the relevant provisions of the Standard Code for the six months ended June 30, 2024, and up to the date of this report[61](index=61&type=chunk) [Events After Reporting Period](index=26&type=section&id=Events%20After%20Reporting%20Period) No major events occurred after June 30, 2024, that would significantly impact the Group's operations and financial performance as of the date of this report - No major events occurred after June 30, 2024, that would significantly impact the Group's operations and financial performance as of the date of this report[62](index=62&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Company's Audit Committee reviewed the accounting principles and policies adopted by the Group with management, discussed internal control and financial reporting matters, including the interim results for the six months ended June 30, 2024 - The Audit Committee reviewed the accounting principles and policies adopted by the Group with the Company's management, and discussed the Group's internal control and financial reporting matters[64](index=64&type=chunk) - The Audit Committee reviewed the Group's interim results for the six months ended June 30, 2024[64](index=64&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group's consolidated statement of profit or loss and other comprehensive income shows a significant decrease in revenue and profit for the period compared to the prior year, mainly due to reduced income from sales of completed properties and increased loss from fair value adjustment of investment properties [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group's consolidated statement of profit or loss and other comprehensive income shows a significant decrease in revenue and profit for the period compared to the prior year, mainly due to reduced income from sales of completed properties and increased loss from fair value adjustment of investment properties Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenue | 33,887 | 62,074 | | Cost of Services | (6,494) | (27,001) | | Gross Profit | 27,393 | 35,073 | | Loss from Fair Value Adjustment of Investment Properties | (20,465) | (10,387) | | Other Net Income | 38 | 111 | | Selling and Marketing Expenses | (236) | (397) | | Administrative Expenses | (3,839) | (3,724) | | Operating Profit | 2,891 | 20,676 | | Share of Loss of Associates | (67) | (397) | | Profit Before Tax | 2,824 | 20,279 | | Income Tax | 483 | (4,576) | | Profit for the Period | 3,307 | 15,703 | | Total Comprehensive Income for the Period | 3,307 | 15,703 | | Basic and Diluted Earnings Per Share (RMB) | 0.04 | 0.20 | [Consolidated Statement of Financial Position](index=29&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's consolidated statement of financial position shows a slight decrease in total non-current assets, a reduction in total current assets, leading to an increase in net current liabilities, and a decrease in both net assets and total equity [Consolidated Statement of Financial Position](index=29&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's consolidated statement of financial position shows a slight decrease in total non-current assets, a reduction in total current assets, leading to an increase in net current liabilities, and a decrease in both net assets and total equity Consolidated Statement of Financial Position (RMB thousands) | Indicator | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | **Non-current Assets** | | | | Investment Properties | 1,011,200 | 1,031,600 | | Property, Plant and Equipment | 7,363 | 7,320 | | Prepaid Lease Payments | 502 | 513 | | Interests in Associates | 7,176 | 7,243 | | Other Non-current Assets | 5,604 | 5,746 | | **Total Non-current Assets** | **1,031,845** | **1,052,422** | | **Current Assets** | | | | Amounts Due from Associates | 895 | 201 | | Trade Receivables | 598 | 495 | | Other Receivables and Prepayments | 1,062 | 1,495 | | Land Appreciation Tax and Prepaid Income Tax | 751 | 1,134 | | Cash and Cash Equivalents | 44,024 | 74,437 | | **Total Current Assets** | **47,330** | **77,762** | | **Current Liabilities** | | | | Other Payables and Accrued Expenses | 16,233 | 18,970 | | Contract Liabilities | 611 | 1,472 | | Receipts in Advance, Current | 31,518 | 52,400 | | Current Tax | 6,800 | 11,507 | | **Total Current Liabilities** | **55,162** | **84,349** | | **Net Current Liabilities** | **(7,832)** | **(6,587)** | | **Total Assets Less Current Liabilities** | **1,024,013** | **1,045,835** | | **Non-current Liabilities** | | | | Receipts in Advance, Non-current | 61,497 | 63,939 | | Deferred Tax Liabilities | 172,470 | 176,757 | | **Total Non-current Liabilities** | **233,967** | **240,696** | | **Net Assets** | **790,046** | **801,367** | | **Capital and Reserves** | | | | Share Capital | 80,000 | 80,000 | | Reserves | 710,046 | 725,139 | | **Total Equity** | **790,046** | **805,139** | [Consolidated Statement of Changes in Equity](index=31&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, the Group's total consolidated equity decreased from RMB 805,139 thousand at the beginning of the period to RMB 790,046 thousand at the end of the period, primarily reflecting the impact of profit for the period and approved dividends [Consolidated Statement of Changes in Equity](index=31&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, the Group's total consolidated equity decreased from RMB 805,139 thousand at the beginning of the period to RMB 790,046 thousand at the end of the period, primarily reflecting the impact of profit for the period and approved dividends Consolidated Statement of Changes in Equity (RMB thousands) | Indicator | Share Capital | Capital Reserve | PRC Statutory Reserve | Retained Earnings | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2023 | 80,000 | 67,565 | 13,842 | 632,522 | 793,929 | | Profit for the Period | – | – | – | 15,703 | 15,703 | | Total Comprehensive Income | – | – | – | 15,703 | 15,703 | | Dividends Approved for Prior Year | – | – | – | (16,000) | (16,000) | | Appropriation to PRC Statutory Reserve | – | – | 3,626 | (3,626) | – | | Balance at December 31, 2023 | 80,000 | 67,565 | 17,468 | 640,106 | 805,139 | | Balance at January 1, 2024 | 80,000 | 67,565 | 17,468 | 640,106 | 805,139 | | Changes in Equity for the Six Months Ended June 30, 2024: | | | | | | | Profit for the Period | – | – | – | 3,307 | 3,307 | | Total Comprehensive Income | – | – | – | 3,307 | 3,307 | | Dividends Approved for Prior Year | – | – | – | (18,400) | (18,400) | | Balance at June 30, 2024 | 80,000 | 67,565 | 17,468 | 625,013 | 790,046 | [Condensed Consolidated Cash Flow Statement](index=32&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2024, the Group experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease in cash and cash equivalents, with an ending cash balance of RMB 44,024 thousand [Condensed Consolidated Cash Flow Statement](index=32&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2024, the Group experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease in cash and cash equivalents, with an ending cash balance of RMB 44,024 thousand Condensed Consolidated Cash Flow Statement (RMB thousands) | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net Cash (Used in) / Generated from Operating Activities | (11,436) | 1,897 | | Net Cash Used in Investing Activities | (490) | (20,675) | | Net Cash Used in Financing Activities | (18,487) | (16,104) | | Net Decrease in Cash and Cash Equivalents | (30,413) | (34,882) | | Cash and Cash Equivalents at January 1 | 74,437 | 72,826 | | Cash and Cash Equivalents at June 30 | 44,024 | 37,944 | [Notes to the Unaudited Interim Financial Report](index=33&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed notes to the unaudited interim financial report, covering company information, basis of preparation, accounting policy changes, and specific financial statement line items [1 Company Information](index=33&type=section&id=1%20Company%20Information) This note provides information on the incorporation date, registered location, and listing details of Wenling Zhejiang Cutting Tools and Measuring Instruments Trading Center Co., Ltd - The Company was incorporated as a limited company in Wenling City, Zhejiang Province, PRC, on **May 14, 2003**[71](index=71&type=chunk) - The Company completed its initial public offering and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **December 30, 2020**[71](index=71&type=chunk) [2 Basis of Preparation](index=33&type=section&id=2%20Basis%20of%20Preparation) This interim financial report is prepared in accordance with HKAS 34, assuming the Group can continue as a going concern, supported by sufficient bank financing despite net current liabilities - This interim financial report has been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants[72](index=72&type=chunk) - Despite the Group's net current liabilities of **RMB 7,832 thousand** as of June 30, 2024, the interim financial report is prepared on a going concern basis[72](index=72&type=chunk) - The Group obtained bank financing of **RMB 233 million** from a third-party bank, with an unutilized amount of **RMB 233 million**, supporting its going concern[72](index=72&type=chunk) [3 Changes in Accounting Policies](index=34&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group applied several new and revised HKFRSs during the current accounting period, including amendments to HKAS 1, HKFRS 16, and HKAS 7, but these changes had no significant impact on the financial statements - The Group applied HKAS 1 (Amendments) regarding the classification of current or non-current liabilities[74](index=74&type=chunk) - The Group applied HKFRS 16 (Amendments) regarding lease liabilities in a sale and leaseback transaction[74](index=74&type=chunk) - The Group applied HKAS 7 and HKFRS 7 (Amendments) regarding disclosure of supplier finance arrangements[74](index=74&type=chunk) - The adoption of the revised HKFRSs had no significant impact on these financial statements[75](index=75&type=chunk)[77](index=77&type=chunk) [4 Revenue](index=36&type=section&id=4%20Revenue) This note details the Group's revenue sources and recognition timing, showing a significant decrease in total revenue due to zero completed property sales income, while property leasing revenue remained stable Revenue Classification (RMB thousands) | Source | 2024 | 2023 | | :--- | :--- | :--- | | Sales of Completed Properties | – | 28,195 | | Others (Property Management Services) | 1,644 | 1,414 | | Property Leasing | 32,243 | 32,465 | | **Total** | **33,887** | **62,074** | Revenue Recognition Timing Classification (RMB thousands) | Recognition Timing | 2024 | 2023 | | :--- | :--- | :--- | | At a point in time (Sales of Completed Properties) | – | 28,195 | | Over time (Others) | 1,644 | 1,414 | | **Total** | **1,644** | **29,609** | - For the six months ended June 30, 2024, no single customer accounted for **10% or more** of the Group's revenue[80](index=80&type=chunk) - The transaction price allocated to the remaining performance obligations for customer contracts (property management services) is **RMB 611 thousand**, expected to be recognized as revenue within one year[83](index=83&type=chunk) [5 Other Net Income](index=38&type=section&id=5%20Other%20Net%20Income) This note presents the components of the Group's other net income, primarily including interest income from bank deposits, government grants, and net exchange losses Other Net Income (RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Interest income from bank deposits | 69 | 115 | | Government grants | – | 100 | | Net exchange losses | (87) | (104) | | Others | 56 | – | | **Total** | **38** | **111** | [6 Profit Before Tax](index=39&type=section&id=6%20Profit%20Before%20Tax) This note discloses items deducted from profit before tax, mainly depreciation and amortization expenses Items Deducted from Profit Before Tax (RMB thousands) | Item | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Depreciation and Amortization | 274 | 168 | [7 Income Tax in Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=39&type=section&id=7%20Income%20Tax%20in%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This note details the components of income tax in the consolidated statement of profit or loss and other comprehensive income, including current and deferred tax, and provides a reconciliation of tax expense to accounting profit, showing a shift from tax expense to credit Income Tax in Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Item | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Current Tax: | | | | – PRC Enterprise Income Tax | 4,899 | 7,341 | | – Over-provision in Prior Years | (1,478) | (1,248) | | – PRC Land Appreciation Tax | 383 | 1,006 | | Deferred Tax: | | | | – PRC Enterprise Income Tax | (4,191) | (2,412) | | – PRC Land Appreciation Tax | (96) | (111) | | **Total** | **(483)** | **4,576** | Reconciliation of Tax Expense and Accounting Profit at Applicable Tax Rate (RMB thousands) | Item | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Profit Before Tax | 2,824 | 20,279 | | Nominal Tax on Profit Before Tax (at 25% tax rate) | 706 | 5,069 | | Over-provision in Prior Years | (1,478) | (1,248) | | Tax Effect of Non-deductible Expenses | 2 | – | | Land Appreciation Tax | 383 | 1,006 | | Tax Effect of Land Appreciation Tax | (96) | (251) | | **Actual Tax (Credit) / Expense** | **(483)** | **4,576** | [8 Earnings Per Share](index=41&type=section&id=8%20Earnings%20Per%20Share) This note calculates the Group's basic and diluted earnings per share for the six months ended June 30, 2024, noting that diluted earnings per share equals basic earnings per share due to the absence of unissued potential ordinary shares - Basic earnings per share is calculated based on the profit attributable to ordinary equity holders of the parent of **RMB 3,307 thousand** and the weighted average of **80,000,000** ordinary shares outstanding for the six months ended June 30, 2024, resulting in **RMB 0.04**[87](index=87&type=chunk) - The Company had no unissued potential ordinary shares for the six months ended June 30, 2024, thus diluted earnings per share is equal to basic earnings per share[88](index=88&type=chunk) [9 Investment Properties](index=41&type=section&id=9%20Investment%20Properties) This note explains the updated valuation of investment properties and the resulting net fair value loss and deferred tax recognition - The valuation of investment properties was updated by an independent valuer as of **June 30, 2024**[89](index=89&type=chunk) - A net fair value loss of **RMB 20,465 thousand** (same period of 2023: RMB 10,387 thousand) and deferred tax of **RMB 5,116 thousand** (same period of 2023: RMB 2,597 thousand) were recognized in profit or loss for the period[89](index=89&type=chunk) [10 Interests in Associates](index=41&type=section&id=10%20Interests%20in%20Associates) This note discloses the Group's share of loss from associates for the six months ended June 30, 2024 - For the six months ended June 30, 2024, the share of loss from associates was **RMB 67 thousand** (same period of 2023: RMB 397 thousand)[90](index=90&type=chunk) [11 Other Receivables and Prepayments](index=42&type=section&id=11%20Other%20Receivables%20and%20Prepayments) This note provides a detailed classification of other receivables and prepayments, indicating that all amounts are expected to be recovered or recognized as expenses within one year Other Receivables and Prepayments (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Prepaid Services | 665 | 670 | | Prepaid Business Tax | 282 | 282 | | Payments on Behalf of Third Parties | 84 | 527 | | Others | 31 | 16 | | **Total** | **1,062** | **1,495** | - All other receivables and prepayments are expected to be recovered or recognized as expenses within one year[91](index=91&type=chunk) [12 Land Appreciation Tax and Prepaid Income Tax](index=42&type=section&id=12%20Land%20Appreciation%20Tax%20and%20Prepaid%20Income%20Tax) This note presents the balance of land appreciation tax and its collection method, with tax rates ranging from 30% to 60% Land Appreciation Tax (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Land Appreciation Tax | 751 | 1,134 | - Land appreciation tax is levied on the appreciation of land value at progressive rates ranging from **30% to 60%**[92](index=92&type=chunk) [13 Cash and Cash Equivalents](index=43&type=section&id=13%20Cash%20and%20Cash%20Equivalents) This note provides a breakdown of the components of cash and cash equivalents, including cash on hand and bank balances Cash and Cash Equivalents (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Cash on Hand | 65 | 50 | | Bank Balances | 43,959 | 74,387 | | **Total** | **44,024** | **74,437** | [14 Other Payables and Accrued Expenses](index=43&type=section&id=14%20Other%20Payables%20and%20Accrued%20Expenses) This note details the various components of other payables and accrued expenses, including payables for property purchases, accrued salaries, and other taxes payable Other Payables and Accrued Expenses (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Payables for Purchase of Property, Plant and Equipment and Investment Properties | 6,709 | 6,897 | | Accrued Salaries | 412 | 822 | | Other Taxes Payable | 6,019 | 7,400 | | Deposits | 1,133 | 1,192 | | Professional Fees Payable | 192 | 1,068 | | Property Management Fees and Utilities Payable | 1,097 | 961 | | Others | 671 | 630 | | **Total** | **16,233** | **18,970** | [15 Contract Liabilities](index=44&type=section&id=15%20Contract%20Liabilities) This note explains that contract liabilities primarily relate to property management services and provides details on the changes in contract liabilities during the period Contract Liabilities (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Property Services | 611 | 1,472 | Changes in Contract Liabilities During the Period (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | At Beginning of Period / Year | 1,472 | 10,331 | | Decrease in Contract Liabilities Due to Revenue Recognized from Opening Balance | (1,472) | (10,331) | | Increase in Contract Liabilities Due to Receipts in Advance for Property Management Services | 611 | 1,472 | | **At End of Period / Year** | **611** | **1,472** | [16 Receipts in Advance](index=45&type=section&id=16%20Receipts%20in%20Advance) This note clarifies that receipts in advance primarily refer to property leasing fees prepaid by tenants, classified as current and non-current liabilities based on expected revenue recognition timing - Receipts in advance primarily refer to property leasing fees prepaid by tenants[97](index=97&type=chunk) Changes in Receipts in Advance (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | At Beginning of Period / Year | 116,339 | 121,494 | | Transferred to Revenue During Period / Year | (31,402) | (65,076) | | Cash Received During Period / Year | 8,078 | 59,921 | | **At End of Period / Year** | **93,015** | **116,339** | Classification of Receipts in Advance (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Receipts in Advance, Current | 31,518 | 52,400 | | Receipts in Advance, Non-current | 61,497 | 63,939 | | **Total** | **93,015** | **116,339** | [17 Dividends](index=46&type=section&id=17%20Dividends) This note confirms that the Board does not recommend an interim dividend for the first half of 2024 and discloses final dividends approved and paid for previous financial years - The directors do not recommend the payment of any interim dividend for the six months ended June 30, 2024 (same period of 2023: nil)[99](index=99&type=chunk) - Final dividends of **RMB 0.23** per share (same period of 2023: RMB 0.20 per share), totaling **RMB 18,400 thousand** (same period of 2023: RMB 16,000 thousand), were approved and paid during the interim period for the prior financial year[99](index=99&type=chunk) [18 Commitments](index=46&type=section&id=18%20Commitments) This note lists outstanding capital commitments not provided for in the interim financial report as of June 30, 2024 Outstanding Capital Commitments Not Provided for in the Interim Financial Report (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Contracted | 752 | – | | Authorized but Not Contracted | – | 824 | | **Total** | **752** | **824** | [19 Contingent Liabilities](index=47&type=section&id=19%20Contingent%20Liabilities) This note discloses contingent liabilities arising from mortgage loan guarantees provided to customers, which the directors deem insignificant in fair value with a remote likelihood of default Contingent Liabilities (RMB thousands) | Item | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Mortgage loan guarantees provided by the Group to banks for its customers | 97,474 | 103,369 | - The directors believe that the fair value of these financial guarantee contracts at initial recognition is not significant, and the likelihood of default by the Group's property buyers is remote[103](index=103&type=chunk) [20 Significant Related Party Transactions](index=47&type=section&id=20%20Significant%20Related%20Party%20Transactions) This note discloses significant transactions between the Group and related parties, primarily involving leasing agreements with Wenling City Qiaoling Investment Development Co., Ltd. and Wenling Gonglian Cutting Tools and Measuring Instruments Technology Services Co., Ltd - The Group entered into a workshop and dormitory leasing agreement with Wenling City Qiaoling Investment Development Co., Ltd. (holding approximately **14.48%** of the Company's issued share capital), with an annual rent of **RMB 6.42 million**[104](index=104&type=chunk) - As of June 30, 2024, the amount received in advance from related parties for leasing arrangements with Wenling City Qiaoling Investment Development Co., Ltd. was **RMB 3.136 million**[104](index=104&type=chunk) - The Group entered into a workshop and dormitory leasing agreement with its associate, Wenling Gonglian Cutting Tools and Measuring Instruments Technology Services Co., Ltd., with an annual rent of **RMB 1.115 million**[104](index=104&type=chunk) - As of June 30, 2024, the amount due from related parties for leasing arrangements with Wenling Gonglian Cutting Tools and Measuring Instruments Technology Services Co., Ltd. was **RMB 895 thousand**[104](index=104&type=chunk)

[Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) The company experienced a significant decline in revenue and net profit for the period, despite a notable improvement in gross margin, with no interim dividend recommended [Key Financial Indicators](index=1&type=section&id=1.1%20%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) During the reporting period, the company's revenue and net profit significantly declined year-on-year, while gross margin notably improved 2024 Half-Year Key Financial Data Comparison | Indicator | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 33,887 | 62,074 | -45.4% | | Gross Profit | 27,393 | 35,073 | -21.9% | | Gross Margin | 80.8% | 56.5% | +24.3pp | | Profit for the Period | 3,307 | 15,703 | -78.9% | | Net Profit Margin | 9.8% | 25.3% | -15.5pp | | Basic and Diluted Earnings Per Share | 0.04 | 0.20 | -80.0% | [Dividend Policy](index=1&type=section&id=1.2%20%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the first half of 2024[1](index=1&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9) This section presents the company's consolidated financial performance and position, detailing revenue, profit, assets, and liabilities [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%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) In the first half of 2024, the company's revenue decreased by 45.4% year-on-year to RMB 33,887 thousand, with profit for the period significantly down by 78.9% to RMB 3,307 thousand, primarily due to increased fair value loss on investment properties and reduced sales of completed properties Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Indicator | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 33,887 | 62,074 | | Cost of Services | (6,494) | (27,001) | | Gross Profit | 27,393 | 35,073 | | Fair Value Loss on Investment Properties | (20,465) | (10,387) | | Other Net Income | 38 | 111 | | Selling and Marketing Expenses | (236) | (397) | | Administrative Expenses | (3,839) | (3,724) | | Operating Profit | 2,891 | 20,676 | | Share of Loss of an Associate | (67) | (397) | | Profit Before Tax | 2,824 | 20,279 | | Income Tax | 483 | (4,576) | | Profit for the Period | 3,307 | 15,703 | | Basic and Diluted Earnings Per Share (RMB yuan) | 0.04 | 0.20 | [Consolidated Statement of Financial Position](index=3&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2024, the company's total non-current assets slightly decreased, net current liabilities expanded, and both net assets and total equity reduced Consolidated Statement of Financial Position (Summary) | Indicator | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Investment Properties | 1,011,200 | 1,031,600 | | Total Non-current Assets | 1,031,845 | 1,052,422 | | **Current Assets** | | | | Cash and Cash Equivalents | 44,024 | 74,437 | | Total Current Assets | 47,330 | 77,762 | | **Current Liabilities** | | | | Total Current Liabilities | 55,162 | 84,349 | | Net Current Liabilities | (7,832) | (6,587) | | **Non-current Liabilities** | | | | Total Non-current Liabilities | 233,967 | 240,696 | | **Equity** | | | | Net Assets | 790,046 | 801,367 | | Total Equity | 790,046 | 805,139 | [Notes to the Unaudited Interim Financial Results](index=5&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%B8%BE%E9%99%84%E8%A8%BB) This section provides detailed explanations and disclosures regarding the interim financial performance and position [General Information and Basis of Preparation](index=5&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The company was incorporated in Wenling City, China in 2003 and listed on the Hong Kong Stock Exchange in 2020, with interim financial reports prepared under HKAS 34 assuming going concern despite net current liabilities - The company was incorporated on May 14, 2003, in Wenling City, Zhejiang Province, China, and completed its initial public offering and listing on the Main Board of the Hong Kong Stock Exchange on December 30, 2020[6](index=6&type=chunk) - Despite **net current liabilities of RMB 7,832,000** as of June 30, 2024, the interim financial report is prepared on a going concern basis, supported by **RMB 233,000,000** in unutilized bank facilities from third-party banks[7](index=7&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=3%20%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8) New and revised HKFRSs, including amendments to HKAS 1 and HKFRS 16, were adopted during the period but had no significant impact on the financial statements - The Group has adopted several new and revised Hong Kong Financial Reporting Standards, including amendments related to liability classification, sale and leaseback, and supplier financing arrangements[8](index=8&type=chunk) - No significant reclassifications or material impacts on the financial statements were recognized following the adoption of these amendments[8](index=8&type=chunk) [Revenue Analysis](index=7&type=section&id=4%20%E6%94%B6%20%E7%9B%8A) Total revenue for the first half of 2024 significantly decreased by 45.4% year-on-year, primarily due to zero revenue from sales of completed properties, while property leasing revenue remained stable Revenue Classification | Revenue Source | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Sales of Completed Properties | – | 28,195 | | Others (Property Management Services) | 1,644 | 1,414 | | Property Leasing | 32,243 | 32,465 | | **Total** | **33,887** | **62,074** | - In the first half of 2024, the company had **no revenue from sales of completed properties**, compared to **RMB 28,195 thousand** in the prior year, which is the primary reason for the decrease in total revenue[10](index=10&type=chunk) - Property leasing revenue remained stable, at **RMB 32,243 thousand** in the first half of 2024 and **RMB 32,465 thousand** in the first half of 2023[10](index=10&type=chunk) [Other Net Income and Profit Before Tax](index=8&type=section&id=5%20%E5%85%B6%E4%BB%96%E5%87%80%E6%94%B6%E5%85%A5) Other net income decreased year-on-year in the first half of 2024, and profit before tax significantly declined, mainly due to an increased fair value loss on investment properties Other Net Income and Depreciation & Amortization | Indicator | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 69 | 115 | | Government grants | – | 100 | | Net exchange loss | (87) | (104) | | Total Other Net Income | 38 | 111 | | Depreciation and Amortization | 274 | 168 | - **Profit before tax** decreased from **RMB 20,279 thousand** in the first half of 2023 to **RMB 2,824 thousand** in the first half of 2024[2](index=2&type=chunk) [Income Tax](index=9&type=section&id=7%20%E7%BB%BC%E5%90%88%E6%8D%9F%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%E4%B8%AD%E7%9A%84%E6%89%80%E5%BE%97%E7%A8%8E) Income tax shifted from an expense to a credit in the first half of 2024, primarily due to reduced current income tax, increased deferred tax, and taxable profit offset by over-provision from prior years Income Tax Components | Tax Type | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 4,899 | 7,341 | | Current tax - Over-provision in prior years | (1,478) | (1,248) | | Current tax - PRC Land Appreciation Tax | 383 | 1,006 | | Deferred tax - PRC Enterprise Income Tax | (4,191) | (2,412) | | Deferred tax - PRC Land Appreciation Tax | (96) | (111) | | **Actual Tax (Credit)/Expense** | **(483)** | **4,576** | - The effective tax rate shifted from an expense of approximately **22.6%** in the first half of 2023 to a credit of approximately **17.1%** in the first half of 2024[43](index=43&type=chunk) [Earnings Per Share](index=10&type=section&id=8%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic and diluted earnings per share significantly decreased year-on-year in the first half of 2024, consistent with the change in profit for the period Earnings Per Share | Indicator | As of June 30, 2024 (RMB yuan) | As of June 30, 2023 (RMB yuan) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 0.04 | 0.20 | - Profit attributable to ordinary equity holders of the parent decreased from **RMB 15,703 thousand** in the first half of 2023 to **RMB 3,307 thousand** in the first half of 2024[18](index=18&type=chunk) [Investment Properties and Interests in an Associate](index=10&type=section&id=9%20%E6%8A%95%E8%B5%84%E7%89%A9%E4%B8%9A) Fair value loss on investment properties nearly doubled year-on-year, while loss from an associate decreased - Fair value loss on investment properties increased from **RMB 10,387 thousand** in the first half of 2023 to **RMB 20,465 thousand** in the first half of 2024[20](index=20&type=chunk) - Share of loss of an associate decreased from **RMB 397 thousand** in the first half of 2023 to **RMB 67 thousand** in the first half of 2024[21](index=21&type=chunk) [Dividends](index=10&type=section&id=11%20%E8%82%A1%20%E6%81%AF) The Board does not recommend an interim dividend for the first half of 2024, but final dividends for prior financial years have been approved and paid - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2024[22](index=22&type=chunk) Approved and Paid Dividends for Prior Financial Years | Dividend Type | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Final dividend for prior financial year (per share) | RMB 0.23 (18,400) | RMB 0.20 (16,000) | [Receivables, Payables and Contract Liabilities](index=11&type=section&id=12%20%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9%E5%8F%8A%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9) Other receivables and prepayments, other payables and accrued expenses, and contract liabilities all decreased Receivables, Payables and Contract Liabilities | Indicator | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Other Receivables and Prepayments | 1,062 | 1,495 | | Other Payables and Accrued Expenses | 16,233 | 18,970 | | Contract Liabilities (Property Services) | 611 | 1,472 | - The decrease in contract liabilities during the period was primarily due to revenue recognized from contract liabilities at the beginning of the period[26](index=26&type=chunk) [Capital Commitments](index=12&type=section&id=15%20%E6%89%BF%20%E6%93%94) As of June 30, 2024, the Group's capital commitments primarily relate to contracted investment properties Capital Commitments | Capital Commitment Type | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Contracted | 752 | – | | Authorized but not Contracted | – | 824 | | **Total** | **752** | **824** | [Management Discussion and Analysis](index=13&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section provides an overview of the industry, business operations, and financial performance, along with future outlook and strategies [Industry Overview](index=13&type=section&id=%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) In the first half of 2024, China's economy generally recovered, and the machinery industry operated stably, but the tools and cutting tools industry continued to decline due to rising raw material prices and weak overall demand, with significant potential in the high-end CNC cutting tools market and expected industry consolidation - In the first half of 2024, China's GDP grew by **5.0%**, industrial value added above designated size increased by **6.0%** year-on-year, and the machinery industry's value added increased by **6.1%** year-on-year[27](index=27&type=chunk) - The tools and cutting tools industry continued its downturn due to rising raw material prices and weak overall demand, with merchants holding pessimistic expectations for future revenue[27](index=27&type=chunk) - The high-end CNC cutting tools market has immense future growth potential, and enterprises with brand, capital, and technological advantages are expected to gain more market share[27](index=27&type=chunk) [Business Review](index=14&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) As a prominent operator of a tools and cutting tools trading center in China, the Group's revenue and profit for the period significantly decreased in the first half of the year, mainly due to the absence of property sales income and increased fair value loss on investment properties, while continuing to operate the trading center and Sci-Tech Innovation Park, and expanding industrial innovation services and cross-border e-commerce platforms - The Group's primary business activities and revenue sources are derived from property leasing operations of the trading center and Sci-Tech Innovation Park, and the sale of certain Sci-Tech Innovation Park units[28](index=28&type=chunk) - Revenue and profit for the period in the first half of 2024 decreased by approximately **45.4%** and **78.9%** respectively, mainly due to the absence of property sales income and an increased fair value loss on investment properties[28](index=28&type=chunk) [Trading Center](index=14&type=section&id=%E4%BA%A4%E6%98%93%E4%B8%AD%E5%BF%83) The trading center maintained a high occupancy rate and stable average monthly actual rent in the first half of the year, also receiving several industry honors - The trading center has a total gross floor area of approximately **74,204.7 square meters**, with land use rights extending to November 15, 2046[29](index=29&type=chunk) - In the first half of 2024, the trading center received honors such as "National Intellectual Property Protection Standardization Market Cultivation Object"[30](index=30&type=chunk) - As of June 30, 2024, the trading center had **626 tenants**, with an occupancy rate of **98.64%** for leasable area[30](index=30&type=chunk)[31](index=31&type=chunk) Trading Center Average Monthly Actual Rent | Floor | As of June 30, 2024 Average Monthly Actual Rent (RMB yuan/sqm) | As of June 30, 2023 Average Monthly Actual Rent (RMB yuan/sqm) | | :--- | :--- | :--- | | First Floor | 373.4 | 372.2 | | Second Floor | 193.6 | 193.4 | | Third Floor | 65.0 | 72.3 | | Basement | 17.1 | 17.1 | [Sci-Tech Innovation Park](index=16&type=section&id=%E7%A7%91%E5%88%9B%E5%9B%AD) The Sci-Tech Innovation Park, operational since October 2022, aims to provide factory premises for tools and cutting tools manufacturing and production, showing an improved occupancy rate in the first half of the year despite a slight decrease in the number of resident enterprises - The Sci-Tech Innovation Park has a gross floor area of approximately **116,000 square meters**, with land use rights extending to January 27, 2069, primarily for tools and cutting tools manufacturing[32](index=32&type=chunk) - As of June 30, 2024, the Sci-Tech Innovation Park attracted **13 enterprises**, with an occupancy rate of **68.3%** for leasable area, an increase from **64.8%** at the end of 2023[32](index=32&type=chunk)[34](index=34&type=chunk) Sci-Tech Innovation Park Average Monthly Actual Rent | Area | As of June 30, 2024 Average Monthly Actual Rent (RMB yuan/sqm) | As of June 30, 2023 Average Monthly Actual Rent (RMB yuan/sqm) | | :--- | :--- | :--- | | Factory | 15.5 | 15.5 | | Dormitory | 21.5 | 23.6 | | Basement | 20.9 | 20.9 | [Industrial Innovation Service Complex](index=17&type=section&id=%E5%B7%A5%E9%87%8F%E5%88%83%E5%85%B7%E4%BA%A7%E4%B8%9A%E5%88%9B%E6%96%B0%E6%9C%8D%E5%8A%A1%E7%BB%BC%E5%90%88%E4%BD%93) The Group established an R&D-centric Industrial Innovation Service Complex, offering a one-stop service platform and actively engaging in scientific research collaborations - The complex provides one-stop services including coating new material R&D, achievement commercialization, startup incubation, talent cultivation, and technological transformation[35](index=35&type=chunk) - A cutting tool quality inspection center has been established, gathering **16 scientific and technological innovation service institutions** to offer intellectual property, brand building, and financial services[35](index=35&type=chunk) - Active collaborations with domestic and international universities and research institutes aim to jointly establish advanced coating technology joint laboratories to overcome key common technical challenges[35](index=35&type=chunk) [E-commerce Platform](index=17&type=section&id=%E7%94%B5%E5%95%86%E5%B9%B3%E5%8F%B0) The Group launched a cross-border e-commerce export project for the tools and cutting tools industrial cluster, promoting through independent websites and Alibaba International Station, achieving initial results - The cross-border e-commerce export project was launched in June 2023, establishing independent websites and Alibaba International Station, conducting Google ad campaigns and SEO optimization[36](index=36&type=chunk) - The independent website achieved **16.5061 million impressions**, **133,300 clicks**, generated **over 300 inquiries**, and conducted **6 cross-border training sessions**, cultivating **50 talents**[37](index=37&type=chunk) [Financial Review](index=18&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) The company's financial performance significantly declined in the first half of 2024, with substantial reductions in revenue and profit for the period, primarily due to the absence of property sales revenue and increased fair value loss on investment properties [Revenue](index=18&type=section&id=%E6%94%B6%E7%9B%8A) Total revenue decreased by 45.4% year-on-year to RMB 33.9 million, mainly due to no sales revenue from completed properties in the current period - Total revenue decreased from **RMB 62.1 million** in the first half of 2023 to **RMB 33.9 million** in the first half of 2024, a **45.4%** decline[38](index=38&type=chunk) - Sales of completed properties revenue was **zero** in the first half of 2024, compared to **RMB 28.2 million** in the first half of 2023[38](index=38&type=chunk) - Property leasing revenue remained stable, at **RMB 32.5 million** (2023) and **RMB 32.2 million** (2024) respectively[38](index=38&type=chunk) [Cost of Sales](index=18&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales significantly decreased by 75.9% year-on-year, primarily due to the absence of cost of sales for completed properties in the current period - Cost of sales decreased from **RMB 27.0 million** in the first half of 2023 to **RMB 6.5 million** in the first half of 2024, a **75.9%** decline[39](index=39&type=chunk) - There was **no cost of sales for completed properties** in the first half of 2024, compared to **RMB 21.0 million** in the first half of 2023[39](index=39&type=chunk) [Gross Profit and Gross Margin](index=18&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 21.9% year-on-year, but gross margin significantly improved to 80.8% due to the absence of property sales revenue - Gross profit decreased from **RMB 35.1 million** in the first half of 2023 to **RMB 27.4 million** in the first half of 2024, a **21.9%** decline[40](index=40&type=chunk) - Gross margin increased from **56.5%** in the first half of 2023 to **80.8%** in the first half of 2024, primarily because the gross margin from sales of completed properties is lower than that of the leasing business[40](index=40&type=chunk) [Fair Value Loss on Investment Properties](index=18&type=section&id=%E6%8A%95%E8%B5%84%E7%89%A9%E4%B8%9A%E4%BC%B0%E5%80%BC%E4%BA%8F%E6%8D%9F) Fair value loss on investment properties nearly doubled year-on-year, mainly due to reduced market rents and a shorter land use right term - Fair value loss on investment properties increased from **RMB 10.4 million** in the first half of 2023 to **RMB 20.5 million** in the first half of 2024, an increase of approximately **RMB 10.1 million**[41](index=41&type=chunk) - The increased loss was primarily due to reduced comparable market rents and a shorter land use right term[41](index=41&type=chunk) [Administrative Expenses](index=19&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses remained stable - Administrative expenses remained stable at approximately **RMB 3.7 million** in the first half of 2023 and **RMB 3.8 million** in the first half of 2024[42](index=42&type=chunk) [Income Tax Expense](index=19&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax shifted from an expense to a credit, with a significant decrease in the effective tax rate - Income tax expense shifted from an expense of **RMB 4.6 million** in the first half of 2023 to a credit of **RMB 0.5 million** in the first half of 2024[43](index=43&type=chunk) - The effective tax rate shifted from **22.6%** to a **17.1%** credit, mainly because taxable profit was offset by over-provision from prior years[43](index=43&type=chunk) [Profit for the Period and Net Profit Margin](index=19&type=section&id=%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9%E5%8F%8A%E7%BA%AF%E5%88%A9%E7%8E%87) Profit for the period significantly decreased by 78.9% year-on-year, and net profit margin declined, primarily due to an increased fair value loss on investment properties - Profit for the period decreased from **RMB 15.7 million** in the first half of 2023 to **RMB 3.3 million** in the first half of 2024, a **78.9%** decline[44](index=44&type=chunk) - Net profit margin decreased from **25.3%** to **9.8%**, primarily due to an increased fair value loss on investment properties, partially offset by an increased gross margin[44](index=44&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=19&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) Cash and cash equivalents decreased, primarily due to income tax and dividend payments - Cash and cash equivalents decreased from **RMB 74.4 million** at the end of 2023 to **RMB 44.0 million** as of June 30, 2024[45](index=45&type=chunk) - The decrease in cash was mainly due to income tax and dividend payments, amounting to **RMB 8.1 million** and **RMB 18.5 million** respectively[45](index=45&type=chunk) [Financing and Treasury Policies](index=19&type=section&id=%E8%9E%8D%E8%B3%87%E5%8F%8A%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group will continue to rely on operating cash flow and other financing methods to meet working capital needs and support business expansion - The Group will continue to rely on cash flows generated from operations and other debt and equity financing to fund working capital requirements and business expansion[46](index=46&type=chunk) [Foreign Exchange Risk](index=20&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group has low foreign exchange risk and does not use financial instruments for hedging - The Group's transactions and most assets and liabilities are denominated in RMB, resulting in low foreign exchange risk, and no hedging instruments are used[47](index=47&type=chunk) [Bank Loans and Pledged Assets](index=20&type=section&id=%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the end of the reporting period, the Group had no bank loans, but RMB 233 million in bank facilities were secured by investment properties - As of June 30, 2024, the Group had **no bank loans**[48](index=48&type=chunk) - **RMB 233 million** in bank facilities are secured by investment properties valued at approximately **RMB 829.2 million**[48](index=48&type=chunk) [Capital Expenditure](index=20&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) Capital expenditure significantly decreased, primarily due to the completion of construction and renovation works for the Sci-Tech Innovation Park - Capital expenditure decreased from **RMB 20.8 million** in the first half of 2023 to **RMB 0.6 million** in the first half of 2024[49](index=49&type=chunk) - The decrease was mainly due to the completion of construction and renovation works for the Sci-Tech Innovation Park in 2023[49](index=49&type=chunk) [Contingent Liabilities](index=20&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group's contingent liabilities for mortgage loan guarantees provided to customers decreased, with directors deeming the likelihood of default to be remote - Contingent liabilities for mortgage loan guarantees provided to customers decreased from **RMB 103.4 million** at the end of 2023 to **RMB 97.5 million** as of June 30, 2024[51](index=51&type=chunk) - The directors consider the likelihood of default under these financial guarantee contracts to be remote[51](index=51&type=chunk) [Significant Investments, Acquisitions and Disposals](index=21&type=section&id=%E6%8C%81%E6%9C%89%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) There were no significant investment, acquisition, or disposal activities during the reporting period - For the six months ended June 30, 2024, the Group held **no significant investments** and undertook **no significant acquisitions or disposals** of subsidiaries, associates, and joint ventures[52](index=52&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The number of employees slightly decreased, while total staff costs increased year-on-year, with the company emphasizing employee training and incentives - As of June 30, 2024, the Group had **38 employees**, a slight decrease from **39 employees** at the end of 2023[54](index=54&type=chunk) - Total staff costs increased from **RMB 2.1 million** in the first half of 2023 to **RMB 2.2 million** in the first half of 2024, an increase of approximately **6.5%**[54](index=54&type=chunk) - The company incentivizes employees through training, annual reviews, salaries, performance bonuses, and special awards[54](index=54&type=chunk) [Use of Proceeds from Global Offering](index=21&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%9A%84%E7%94%A8%E9%80%94) The net proceeds from the global offering have largely been utilized for the construction of the Sci-Tech Innovation Park and general working capital, with the remaining funds allocated for further development of the third floor - The net proceeds from the global offering were approximately **RMB 52.1 million**, with approximately **RMB 42.3 million** utilized as of June 30, 2024[55](index=55&type=chunk) Use of Proceeds from Global Offering and Remaining Balance | Purpose | Budgeted Amount in Prospectus (RMB thousands) | Actual Use as of June 30, 2024 (RMB thousands) | Remaining Balance as of June 30, 2024 (RMB thousands) | Expected Timeline for Remaining Balance | | :--- | :--- | :--- | :--- | :--- | | Establishment and construction of Sci-Tech Innovation Park | 36,441 | 36,441 | – | – | | Funding further development of the third floor | 10,412 | 700 | 9,712 | December 2024 | | General working capital and other general corporate purposes | 5,205 | 5,205 | – | – | | **Total** | **52,058** | **42,346** | **9,712** | | - The remaining approximately **RMB 9.7 million** will be used for the renovation and refurbishment of the third floor, expected to be utilized by December 2024[56](index=56&type=chunk) [Other Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers additional disclosures including interim dividends, securities transactions, competing interests, corporate governance, and post-reporting period events [Interim Dividend](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[57](index=57&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor its subsidiaries engaged in any purchase, sale, or redemption of listed securities - For the six months ended June 30, 2024, and up to the date of this announcement, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[58](index=58&type=chunk) [Competing Interests of Directors and Supervisors](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E7%9A%84%E7%AB%B6%E4%BA%89%E6%AC%8A%E7%9B%8A) None of the controlling shareholders, directors, supervisors, or their close associates have any interests that compete with the Group's business - None of the controlling shareholders, directors, supervisors, or their close associates have any interests in any business that directly or indirectly competes or may compete with the Group's business[59](index=59&type=chunk) [Compliance with Corporate Governance Code](index=23&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E4%B8%9A%E7%AE%A1%E7%90%86%E5%AE%88%E5%89%87) The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code, although the roles of Chairman and Chief Executive Officer are combined, which the Board deems effective for now - The company has adopted and strictly complied with the code provisions of the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are combined and held by Mr. Pan Haihong[60](index=60&type=chunk)[61](index=61&type=chunk) - The Board believes that combining these roles contributes to leadership consistency and strategic planning efficiency, and currently does not impair the balance of power[60](index=60&type=chunk) [Events After Reporting Period](index=24&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No major events after the reporting period have significantly impacted the operations and financial performance - As of the date of this announcement, there have been no major events after June 30, 2024, that have significantly impacted the Group's operations and financial performance[63](index=63&type=chunk) [Review and Publication](index=24&type=section&id=%E5%88%8A%E7%99%BC2024%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The interim results announcement has been reviewed by the Audit Committee and will be published on the HKEX and company websites - The company's Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2024[65](index=65&type=chunk) - The interim results announcement will be published on the HKEX website (www.hkexnews.hk) and the company's website (http://www.cnglj.com)[64](index=64&type=chunk)

Financial Performance - For the year ended December 31, 2023, the company reported revenue of RMB 96.802 million, a decrease of approximately 58.0% compared to RMB 230.860 million in 2022[6]. - The gross profit for 2023 was RMB 63.747 million, resulting in a gross margin of 65.9%, up from 38.7% in 2022[6]. - The net profit for the year was RMB 27.210 million, with a net profit margin of 28.1%, compared to 24.9% in the previous year[6]. - Total revenue decreased by approximately 58.1% from about RMB 230.9 million in the year ended December 31, 2022, to about RMB 96.8 million in the year ended December 31, 2023, primarily due to a significant drop in property sales[64]. - Gross profit decreased by approximately 28.6% from about RMB 89.2 million in 2022 to about RMB 63.7 million in 2023, while gross margin improved from approximately 38.7% to 65.9%[66]. - The group's profit for the year decreased by approximately 52.7% from about RMB 57.5 million for the year ended December 31, 2022, to about RMB 27.2 million for the year ended December 31, 2023, while the net profit margin increased from approximately 24.9% to about 28.1%[72]. Rental and Property Management - The rental income and other income for the company reached RMB 65.0 million and RMB 3.6 million respectively, representing year-on-year growth of approximately 14.6% and 23.7%[10]. - As of December 31, 2023, the rental rate of the Zhejiang Wenzhou Tool Trading Center was approximately 98.1%, slightly up from 97.5% in the previous year[10]. - The average monthly rental income per square meter for the first floor was RMB 372.9, slightly up from RMB 372.2 in 2022, while the second floor saw a minor increase from RMB 193.4 to RMB 193.6[51]. - As of December 31, 2023, the total area of the trading center was approximately 74,204.7 square meters, with a rental occupancy rate of 98.11%, up from 97.51% in the previous year[51]. - Property rental income increased by approximately RMB 8.3 million to about RMB 65.0 million in the year ended December 31, 2023, offsetting some of the revenue decline[64]. - The average monthly actual rent for factories increased from RMB 12.2 per square meter in 2022 to RMB 15.5 per square meter in 2023, while the average monthly actual rent for dormitories rose from RMB 28.2 to RMB 34.9[55]. - The rental area of the Science and Technology Innovation Park increased significantly, with the leased area reaching 37,877.82 square meters and a leasing percentage of 64.8% as of December 31, 2023, compared to 8,108.5 square meters and 13.9% in 2022[55]. Market and Industry Outlook - The manufacturing sector in China showed signs of recovery, with the PMI rising to 50.1 in January 2023, indicating improved economic conditions[11]. - The company anticipates continued growth in demand and prices for cutting tools driven by the recovery in manufacturing and consumption levels in 2024[11]. - The Chinese manufacturing industry is facing challenges due to global market fluctuations, but the digital market is expected to maintain rapid growth[14]. - The company plans to develop high-end manufacturing and enhance its overall capabilities, supported by national policies[14]. - The main business focuses on the tool and die market and industrial park operations, with plans to expand leasing services and integrated professional services[14]. - The first phase of the Science and Technology Innovation Park has reached scale, and the second phase is planned due to the booming tool and die industry[14]. Corporate Governance and Shareholder Information - The company has adopted a dividend policy aimed at allowing shareholders to share in profits while retaining sufficient reserves for future development[101]. - The final dividend payment is expected to be made to domestic shareholders on May 27, 2024, and to H-share holders on June 11, 2024[100]. - The company does not have a fixed dividend payout ratio, and the declaration and payment of dividends will be decided at the board's discretion based on various factors[102]. - The company has established a non-competition agreement with various parties, confirming compliance with the terms of the agreement[161]. - The company has three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee various aspects of the company's affairs[172]. - The company has appointed three independent non-executive directors, representing one-third of the board, ensuring compliance with listing rules[182]. - The board is responsible for reviewing and monitoring the company's corporate governance and compliance policies, as well as the training and professional development of directors[177]. - The company is committed to maintaining high standards of corporate governance and protecting shareholder interests[171]. Risks and Challenges - The group faces various risks, including those related to property leasing, industry-specific risks, and operational risks in China, which could impact profitability and market competitiveness[91]. - The company's operations and performance are significantly influenced by the cyclical nature of the real estate industry in China, which may adversely affect business results[92]. - The ability to expand operations in Zhejiang Province is contingent upon various uncontrollable factors, including macroeconomic conditions and credit supply from lending institutions[95]. - The group reported contingent liabilities of approximately RMB 103.4 million related to bank guarantees as of December 31, 2023, up from RMB 101.3 million in 2022[80]. Capital and Financial Position - The company maintained a net asset value of RMB 805.139 million, with a capital debt ratio of 0.0%[6][7]. - As of December 31, 2023, the group's cash and cash equivalents were approximately RMB 74.4 million, an increase from RMB 72.8 million as of December 31, 2022, primarily due to property sales[73]. - Capital expenditures for the year ended December 31, 2023, were approximately RMB 24.3 million, down from RMB 29.4 million in 2022, mainly related to the renovation of the Sci-Tech Park[78]. - The group had no bank loans or available bank financing as of December 31, 2023[76][77]. - The group received bank financing of RMB 233,000,000, effective from January 18, 2024, with a term until January 18, 2034, secured against completed investment properties valued at RMB 845,700,000 as of December 31, 2023[163]. Employee and Management Information - Employee costs totaled approximately RMB 4.5 million for the year ended December 31, 2023, an increase of about 29.3% from RMB 3.5 million in 2022, primarily due to hiring new staff for the Sci-Tech Park[82]. - The total remuneration for directors and supervisors in 2023 was approximately RMB 235,000, which includes salaries, bonuses, and other benefits[120]. - Each director has entered into service contracts with an initial term of three years, automatically renewing unless terminated with three months' notice[173]. Audit and Compliance - The company’s auditor, KPMG, has reviewed the consolidated financial statements for the year ending December 31, 2023[164]. - The Audit Committee has reviewed the consolidated financial statements for the year ending December 31, 2023, and the interim results for the six months ending June 30, 2023[189]. - The company has complied with applicable laws and regulations without any significant violations affecting its business operations as of December 31, 2023[106].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 96,802,000, a decrease of 58.1% compared to RMB 230,860,000 in 2022[2] - Gross profit for the same period was RMB 63,747,000, down 28.6% from RMB 88,234,000, with a gross margin of 65.9%, up from 38.7%[2] - Net profit for the year was RMB 27,210,000, a decline of 52.7% from RMB 57,509,000, resulting in a net profit margin of 28.1%, compared to 24.9% in the previous year[2] - Basic and diluted earnings per share were RMB 0.34, down 52.8% from RMB 0.72 in 2022[2] - Total revenue for 2023 was RMB 96,802,000, a significant decrease of 58.0% compared to RMB 230,860,000 in 2022[21] - Revenue from sales of completed properties was RMB 28,195,000, down 83.5% from RMB 171,239,000 in the previous year[21] - The company's profit before tax for 2023 was RMB 34,493,000, a decrease of 56.2% compared to RMB 78,980,000 in 2022[32] - Net profit for the year decreased by approximately 52.7% from about RMB 57.5 million in the year ended December 31, 2022, to about RMB 27.2 million in the year ended December 31, 2023, while net profit margin increased from approximately 24.9% to 28.1%[75] Dividends and Shareholder Returns - The board proposed a final dividend of RMB 0.23 per share for the year ended December 31, 2023, compared to RMB 0.20 per share in 2022[2] - The proposed final dividend per ordinary share increased to RMB 0.23 in 2023 from RMB 0.20 in 2022, representing a growth of 15%[33] - The board proposed a final dividend of RMB 18.4 million per share (before tax) to shareholders[98] - The company will distribute the final dividend to domestic shareholders in RMB and to overseas shareholders in HKD, with the payment expected on May 27, 2024, for domestic shareholders and June 11, 2024, for H-share holders[98] Assets and Liabilities - Total assets less current liabilities as of December 31, 2023, were RMB 1,045,835,000, slightly up from RMB 1,042,524,000 in 2022[5] - Non-current liabilities decreased to RMB 240,696,000 in 2023 from RMB 248,595,000 in 2022[6] - Cash and cash equivalents increased to RMB 74,437,000 in 2023 from RMB 72,826,000 in 2022[5] - The group had no bank loans as of December 31, 2023, and no available bank financing[79][80] - The group has a contingent liability of approximately RMB 103.4 million related to bank guarantees as of December 31, 2023, compared to RMB 101.3 million in 2022[83] Operational Highlights - The company reported a loss from investment properties of RMB 20,867,000 in 2023, compared to a gain of RMB 1,706,000 in 2022[4] - One property development client accounted for approximately 29.13% of total revenue, with the group having only one major client compared to three in 2022[22] - Rental income increased to RMB 64,975,000, up 14.0% from RMB 56,686,000 in 2022[21] - The trading center had an occupancy rate of 98.11% as of December 31, 2023, compared to 97.51% in the previous year[53] - The average monthly rent per square meter for the first floor was RMB 372.9 in 2023, slightly up from RMB 372.2 in 2022[51] - The average monthly rent per square meter for factory space in the Sci-Tech Park increased to RMB 15.5 in 2023 from RMB 12.2 in 2022[58] Future Plans and Strategies - The group plans to build the second phase of the Sci-Tech Park to enhance its position as a comprehensive service provider in the tool industry, aiming for rental income and increased service revenue over the next two to three years[61] - The group intends to expand its service offerings by integrating existing resources and providing systematic value-added services to enterprises in the park[62] - The group plans to engage in mergers and acquisitions within the tool industry to diversify its profit structure and transform into a comprehensive service provider for manufacturing and research[64] - The group launched a cross-border e-commerce project in June 2023, aiming to establish a brand for the tool industry and enhance its market presence[59] Accounting and Compliance - The group did not apply any new accounting standards or interpretations that were not yet effective during the reporting period[14] - The impact of new accounting standards on the financial statements was assessed, with no significant effects identified[16] - The audit committee reviewed the accounting principles and policies adopted by the group, discussing internal controls and financial reporting matters[108] - The company’s financial statements for the year ended December 31, 2023, were consistent with the preliminary announcement figures[105] - The company confirmed compliance with the securities trading code for directors and supervisors as of the announcement date[95] Economic Context - The gross domestic product (GDP) of China grew by 5.2% in 2023, accelerating by 2.2 percentage points compared to 2022[41] - The manufacturing value added in China increased by 4.4% year-on-year in 2023, indicating a positive trend in the manufacturing sector[41] - In 2023, China's tool exports reached RMB 23.365 billion, showing a growth trend, while imports decreased, leading to a significant trade surplus[44]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 62,074,000, an increase of 114.2% compared to RMB 28,973,000 in the same period of 2022[6] - Gross profit for the same period was RMB 35,073,000, with a gross margin of 56.5%, down from 84.2% in 2022[6] - Net profit for the six months was RMB 15,703,000, representing a net profit margin of 25.3%, compared to 45.5% in the previous year[6] - Operating profit increased to RMB 20,676,000, up 27.5% from RMB 16,246,000 in the previous year[86] - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.20, compared to RMB 0.16 for the same period in 2022[86] - The company reported a profit of RMB 15,703,000 for the six months ended June 30, 2023, compared to a profit of RMB 13,179,000 for the same period in 2022, indicating an increase of approximately 19.0%[92] - The company's profit before tax for the six months ended June 30, 2023, was RMB 20,279,000, an increase of 24.9% compared to RMB 16,230,000 for the same period in 2022[120] Revenue Sources - The company confirmed property sales from the Science and Innovation Park, contributing to the increase in revenue and profit[12] - Revenue from sales of completed properties amounted to RMB 28,195,000, while property leasing revenue was RMB 32,465,000, up from RMB 27,986,000 in 2022[108] - Rental income from the Sci-Tech Park increased to RMB 4.2 million for the six months ended June 30, 2023, compared to zero in the same period of 2022[26] - One property development client contributed approximately 45% of the total revenue for the group, a significant increase compared to no contribution in the same period of 2022[110] Expenses and Liabilities - Administrative expenses decreased by approximately 50.1% to about RMB 3.7 million for the six months ended June 30, 2023[33] - The total liabilities decreased from RMB 127,414,000 to RMB 61,772,000, indicating improved financial stability[87] - The actual tax expense for the six months ended June 30, 2023, was RMB 4,576,000, up from RMB 3,051,000 in the same period of 2022, reflecting a year-on-year increase of 50.0%[120] - The company paid dividends of RMB 16,104,000 during the first half of 2023, compared to RMB 25,708,000 in the same period of 2022, indicating a reduction of approximately 37.3%[94] Assets and Cash Flow - Cash and cash equivalents decreased from approximately RMB 72.8 million as of December 31, 2022, to RMB 37.9 million as of June 30, 2023[37] - Current assets decreased to RMB 40,004,000 from RMB 102,097,000 at the end of 2022, primarily due to a reduction in cash and cash equivalents[87] - The company's cash and cash equivalents as of June 30, 2023, totaled RMB 37,944,000, a decrease of 48.0% from RMB 72,826,000 as of December 31, 2022[132] - The cash generated from operating activities for the six months ended June 30, 2023, was RMB 1,897,000, a significant decrease from RMB 56,906,000 in the same period of 2022, reflecting a decline of about 96.67%[94] Corporate Governance - The company adheres strictly to corporate governance codes and has implemented effective accountability measures[60] - The board consists of two executive directors, four non-executive directors, and three independent non-executive directors, ensuring a diverse governance structure[60] - The company will review its corporate governance policies and compliance with governance codes annually[60] - The group is committed to maintaining high standards of corporate governance to protect shareholder interests[60] Market and Future Plans - The industrial value-added in China grew by 3.8% year-on-year in the first half of 2023, supporting demand for measuring and cutting tools[8] - The group plans to continue expanding its upstream and downstream services, including the development of a smart area property management system[55] - The group aims to seek investment cooperation opportunities to expand its business scope in the future[55] - The group is focused on leveraging opportunities in the overseas market through its digital trade initiatives[56] Shareholder Information - As of June 30, 2023, major shareholders hold approximately 58,200,000 shares, representing 97.00% of the relevant class of shares and 72.75% of the total share capital[64] - 温嶺市博濤投資有限公司持有公司97.00%的股份，代表72.75%的总股本[71] - 嘉興元泰股權投資合夥企業持有29.90%的股份，代表7.48%的总股本[74] - 浙江錢江摩托股份有限公司持有16.38%的股份，代表4.09%的总股本[74]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部 或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 温嶺浙江工量刃具交易中心股份有限公司 Wenling Zhejiang Measuring and Cutting Tools Trading Centre Company Limited* （於中華人民共和國註冊成立的股份有限公司） （股份代號：1379） 截至2023年6月30日止六個月之中期業績公告 財務摘要 截至6月30日止六個月 2023年 2022年 （未經審核） （未經審核） 收益（人民幣千元） 62,074 28,973 毛利（人民幣千元） 35,073 24,407 毛利率 56.5% 84.2% 期內溢利（人民幣千元） 15,703 13,179 純利率 25.3% 45.5% 每股基本及攤薄盈利（人民幣元） 0.20 0.16 ...

Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 230.86 million, a significant increase of approximately 303.6% compared to the previous year[9]. - Gross profit for the same period was RMB 88.23 million, with a gross margin of 38.7%, down from 82.6% in 2021[6]. - The net profit for 2022 was RMB 57.51 million, resulting in a net profit margin of 24.9%[6]. - The company's revenue and profit for the year ended December 31, 2022, increased by approximately 303.6% and 21.5% respectively, primarily due to the official operation of the first phase of the Science and Innovation Park and the recognition of income from sold units in Q4 2022[44]. - The gross profit rose by approximately 88.8% from about RMB 47.3 million for the year ended December 31, 2021, to about RMB 89.2 million for the year ended December 31, 2022, although the gross profit margin decreased from approximately 82.6% to 38.7%[63]. - The net profit for the year increased by approximately 21.5% from about RMB 47.3 million for the year ended December 31, 2021, to about RMB 57.5 million for the year ended December 31, 2022, while the net profit margin decreased from approximately 82.7% to about 24.9% due to a decline in gross margin and reduced investment property valuation gains[69]. Asset and Capital Structure - The total non-current assets as of December 31, 2022, were RMB 1,067.84 million, while current assets were RMB 102.10 million[6]. - The company's capital-to-debt ratio was 0.0% as of December 31, 2022, indicating no debt[6]. - As of December 31, 2022, the group's cash and cash equivalents were approximately RMB 72.8 million, down from approximately RMB 78.7 million as of December 31, 2021, primarily due to repayment of bank loans and dividend payments[70]. - The group had no bank loans as of December 31, 2022, compared to RMB 15.0 million in bank loans as of December 31, 2021, resulting in a capital debt ratio decrease from approximately 2.0% to zero[74][75]. - As of December 31, 2022, the company's distributable reserves amounted to RMB 880 million, an increase from RMB 710 million as of December 31, 2021[112]. Operational Highlights - As of December 31, 2022, the rental occupancy rate of the Zhejiang Wenzhou Tool Trading Center was approximately 97.51%, slightly down from 98.18% in the previous year[9]. - The company has 631 tenants in the trading center as of December 31, 2022, an increase from 595 tenants in 2021[46]. - The average monthly rental income per square meter for the first floor decreased from RMB 383.6 in 2021 to RMB 372.2 in 2022, while the second floor increased from RMB 158.4 to RMB 193.4, and the third floor rose significantly from RMB 39.6 to RMB 72.3[49]. - The company is focusing on expanding its property leasing business in the tooling industry and providing more value-added services to strengthen its market position[43]. - The Science and Innovation Park was officially put into service in October 2022, enhancing the company's operational capabilities in the tooling industry[43]. Strategic Development - The company plans to continue the construction of the Tool Innovation Park, with Phase I already operational since October 2022, and plans for Phase II to follow[13]. - The company aims to diversify its profit structure by acquiring vertical e-commerce and upstream/downstream companies in the tool industry[13]. - The company intends to acquire vertical e-commerce businesses in the tool industry to integrate market tenant resources and create a large-scale e-commerce platform for tools[58]. - The company is actively investing in production and R&D to improve product quality and enhance competitiveness in the domestic market[42]. - The company is collaborating with local government to operate a supply-demand platform aimed at fostering an advanced manufacturing industry cluster[47]. Management and Governance - The company reported a strategic development and business planning oversight by the CEO, Mr. Pan Haihong, who has over 23 years of management experience[16]. - The COO, Mr. Zhou Guilin, oversees financial management and daily operations, bringing over 10 years of experience in the trading center operation industry[18]. - The Chairman, Mr. Huang Qun, focuses on growth strategies and overall management, with approximately 19 years of management experience[19]. - The company has a strong emphasis on corporate governance and strategic recommendations from independent non-executive directors, including Mr. Xu Wei and Mr. Jin Hongqing[25][26]. - The management team has extensive backgrounds in administrative and operational roles, contributing to the company's strategic decision-making processes[22][23][24]. Market Conditions - The manufacturing sector in China showed signs of recovery, with a PMI of 50.1% in January 2023, which is expected to positively impact the company's operations[10]. - In 2022, China's GDP grew by 3.0%, a significant slowdown compared to 8.4% in 2021, primarily due to the impact of the pandemic and related control measures[39]. - The industrial added value in China increased by 3.6% year-on-year in 2022, with the manufacturing sector growing by 3%[39]. - The GDP of the Wenzhou area is estimated to be approximately RMB 130.8 billion in 2022, reflecting a growth of about 2.1%[39]. - The local government has implemented a series of measures to stabilize and promote economic recovery amid significant growth pressures[39]. Risks and Challenges - The company faces significant risks related to the cyclical nature of the real estate industry, which may adversely affect its operational performance[91]. - The company’s operations and performance are heavily influenced by the political, economic, and social policies in Zhejiang Province, China, where all its revenue is generated[93]. - The company’s ability to expand its business is subject to various uncontrollable factors, including macroeconomic conditions and credit supply from lending institutions[93]. Shareholder Information - The company has established a dividend policy that allows for the payment of annual dividends based on profitability, market conditions, and operational needs, without a fixed dividend payout ratio[101]. - The company anticipates paying dividends to shareholders on June 9, 2023, based on the shareholder register as of May 23, 2023[99]. - Major shareholders hold 58,200,000 shares, representing 97.00% of the total share capital, with a 72.75% equity percentage in the company[125]. - The company has a significant concentration of ownership, with the top shareholders controlling 72.75% of voting rights[134]. Corporate Governance - The company complies with corporate governance codes, as detailed in the annual report's corporate governance section[122]. - The independent non-executive directors have been appointed for an initial term of three years, with automatic renewal provisions[161]. - The audit committee has reviewed the consolidated financial statements for the year ending December 31, 2022, and the interim results for the six months ending June 30, 2022, ensuring adherence to accounting principles and risk management[174]. - The company has established a training program for directors to enhance their understanding of responsibilities and compliance with regulations prior to listing[164]. - The board of directors consists of three independent non-executive directors, ensuring compliance with listing rules and providing independent opinions to safeguard shareholder interests[167].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部 或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 温嶺浙江工量刃具交易中心股份有限公司 Wenling Zhejiang Measuring and Cutting Tools Trading Centre Company Limited* （於中華人民共和國註冊成立的股份有限公司） （股份代號：1379） 截至2022年12月31日止年度的年度業績公告 財務摘要 截至12月31日止年度 2022年 2021年 變動 收益（人民幣千元） 230,860 57,205 303.6% 毛利（人民幣千元） 89,234 47,267 88.8% 毛利率 38.7% 82.6% -43.9 年內溢利（人民幣千元） 57,509 47,317 21.5% 純利率 24.9% 82.7% -57.8 每股基本及攤薄盈利（人民幣元） 0.72 0.59 22.0% 董事會已提議派發截至2022年12月31日止年度的末期股息每股人民幣0.2元（含 稅）（2021年：每股 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 28,973,000, a decrease of 0.6% compared to RMB 29,150,000 for the same period in 2021[11]. - Gross profit for the same period was RMB 24,407,000, with a gross margin of 84.2%, up from 83.5% in 2021[11]. - Net profit for the six months ended June 30, 2022, was RMB 13,179,000, resulting in a net profit margin of 45.5%, down from 83.2% in the previous year[11]. - The company's basic and diluted earnings per share for the period were RMB 0.16, compared to RMB 0.30 in 2021[11]. - For the six months ended June 30, 2022, the group's revenue and profit decreased by approximately 0.6% and 45.6% respectively compared to the same period last year[19]. - Operating profit decreased significantly to RMB 16,246,000 from RMB 32,675,000, reflecting a decline of 50.3% year-over-year[112]. - Profit before tax was RMB 16,230,000, down from RMB 32,330,000, representing a 49.7% decrease compared to the previous year[112]. - Net profit for the period decreased by approximately 45.6% to about RMB 13.2 million, with a net profit margin decline from approximately 83.2% to 45.5%[44]. - Basic earnings per share decreased to RMB 0.16 from RMB 0.30, reflecting a 46.7% drop year-over-year[112]. Economic Environment - The economic environment in China showed a GDP growth of 2.5% year-on-year in the first half of 2022, indicating a stabilization and recovery in the economy[13]. - The industrial added value for large-scale industries in China increased by 3.4% year-on-year in the same period, supporting stable industrial economic growth[13]. - The machine tool industry in China saw a production increase of 34.98% in 2021, with a total output of 602,000 metal cutting machine tools[14]. Company Developments - The company is constructing a Science and Innovation Park on a land area of approximately 55,425 square meters, with an estimated investment of RMB 330.0 million[30]. - The Science and Innovation Park is expected to have a total construction area of about 116,000 square meters, including approximately 78,000 square meters for factory buildings[30]. - The company aims to leverage its market position in the tooling industry to expand its business through the development of the Science and Innovation Park[29]. - The group plans to construct the second phase of the Sci-Tech Park to promote high-quality development in the tool industry, creating a regional economic cluster with integrated sales, R&D, production, and services[68]. Rental and Property Management - The trading center had a total lettable area of 74,204.7 square meters, with 98.57% of the lettable area rented out as of June 30, 2022[25]. - Rental income from property leasing was RMB 27,986,000, while other income from property management services was RMB 987,000[136]. - The average monthly rent per square meter for the first floor decreased from RMB 423.9 in 2021 to RMB 383.6 in 2022, while the third floor increased from RMB 26.2 to RMB 57.2[24]. - The trading center's average monthly rent per square meter for the second floor decreased from RMB 193.7 in 2021 to RMB 158.5 in 2022[24]. - The rental area available for tenants decreased from 99.94% as of June 30, 2021, to 98.57% as of June 30, 2022[34]. Financial Position - As of June 30, 2022, total revenue decreased by approximately 0.6% to about RMB 29.0 million from RMB 29.2 million for the six months ended June 30, 2021, primarily due to a slight decrease in rental occupancy rate[34]. - As of June 30, 2022, cash and cash equivalents decreased to approximately RMB 69.1 million from RMB 78.7 million as of December 31, 2021, primarily due to payments for investment properties and dividend payments[45]. - Total non-current assets as of June 30, 2022, amounted to RMB 1,049,908,000, an increase from RMB 1,025,227,000 at the end of 2021[114]. - Current assets totaled RMB 222,693,000, up from RMB 213,884,000 at the end of 2021, indicating a growth of 4.0%[114]. - Total liabilities increased to RMB 272,712,000 from RMB 225,056,000, marking a rise of 21.2%[114]. - The company's total equity as of June 30, 2022, was RMB 749,599,000, down from RMB 762,020,000 at the end of 2021, reflecting a decrease of 1.6%[116]. Corporate Governance - The company adheres to high standards of corporate governance, ensuring effective accountability and protecting shareholder interests[73]. - The board consists of two executive directors, four non-executive directors, and three independent non-executive directors, complying with the corporate governance code[73]. - The company has maintained compliance with the corporate governance code since June 30, 2022, and will review its policies annually[73]. - The company is committed to maintaining transparency and high standards in its corporate governance practices[73]. Cash Flow and Financing - Operating cash flow for the six months ended June 30, 2022, was RMB 56,906,000, compared to a negative RMB 14,748,000 in the same period of 2021, indicating a significant improvement[122]. - The company secured bank financing of RMB 333,000,000 as of June 30, 2022, with the entire amount remaining undrawn, indicating strong liquidity[126]. - The company reported a significant increase in operating income, with a net cash inflow from operating activities of RMB 65,246,000, compared to outflows in the previous year[122]. - Net cash used in financing activities increased to RMB 40,740,000 in the first half of 2022, compared to RMB 5,031,000 in the same period of 2021, reflecting higher debt repayments[122]. Shareholder Information - As of June 30, 2022, the major shareholder, 温嶺市市場集團有限公司, holds 58,200,000 shares, representing approximately 72.75% of the total share capital[77]. - The major shareholder, 温嶺市國有資產投資集團有限公司, also holds 58,200,000 shares, indicating a significant concentration of ownership[77]. - The total issued shares amount to 80,000,000, consisting of 60,000,000 domestic shares and 20,000,000 H shares as of June 30, 2022[102].