HUAZHANG TECHNOLOGY HOLDING LIMITED 華章科技控股有限公司 (Incorporated in the Cayman Islands with limited liability) （在開曼群島註冊成立之有限公司） Huazhang Technology Holding Limited (the "Company") – Notice of publication of 2025 Interim Report (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are now available on the Company's website at www.hzeg.com and the website of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") at www.hkexnews.hk respec ...

Financial Performance - The company's revenue for the six months ended December 31, 2024, increased by 17.2% to RMB 195.6 million compared to RMB 166.97 million in the same period of 2023[3]. - Gross profit rose by 45.9% to RMB 40.6 million, with a gross margin of 20.8%, up from 16.7% in the previous year[3]. - The net loss for the period was approximately RMB 6.8 million, a significant reduction of 63.5% from a loss of RMB 18.66 million in the same period last year[3]. - Revenue increased by approximately 17.2% from RMB 167.0 million for the six months ended December 31, 2023, to RMB 195.6 million for the six months ended December 31, 2024[28]. - Gross margin improved from approximately 16.7% to 20.8% during the same period, primarily due to effective cost control efforts by the management team[28]. - The total comprehensive loss for the period was RMB 7,843,132, compared to RMB 18,682,512 in the previous year, indicating a reduction in overall losses[104]. - The company reported a net loss of RMB (6,944,670) for the period, compared to a net loss of RMB (18,341,933) in the previous year[109]. - The basic and diluted loss per share for the six months ended December 31, 2024, was RMB 0.44, compared to RMB 1.58 for the same period in 2023, indicating a reduction in loss per share[148]. Contractual and Market Developments - New contract amounts decreased by 10.1% to approximately RMB 160.1 million, with an uncompleted contract amount of about RMB 385.9 million[11]. - The company successfully signed significant contracts, including a project with Jintianhe Paper Industry for a special food cardboard machine and a contract with Fengsheng Paper Industry for a 150,000-ton refined kraft paper project[11]. - The overall market for the paper industry is expected to improve, supported by government policies and increasing market demand[8]. Research and Development - The company invested approximately RMB 210 million in research and development for the six months ended December 31, 2024, and filed 15 new patent applications[19]. - Cumulatively, the company holds 354 registered patents, including 128 invention patents, 171 utility model patents, and 55 software copyrights as of December 31, 2024[19]. - Research and development expenses increased by approximately 96.7% from RMB 10.7 million to RMB 21.0 million, representing 10.7% of revenue for the six months ending December 31, 2024[36]. Operational Efficiency and Innovations - The company achieved a significant milestone by successfully commissioning the Hunan Jinye project within the same year, showcasing its operational excellence[12]. - The company continues to enhance its competitiveness in the energy-saving sector through the application of permanent magnet motors and high-efficiency energy-saving equipment[12]. - The company has implemented a new project management software to enhance efficiency and accuracy across the entire project management process[20]. Employee and Financial Management - The group maintained a healthy liquidity position with cash and cash equivalents of approximately RMB 85.0 million as of December 31, 2024[44]. - The group had a total employee cost of approximately RMB 29.0 million for the six months ended December 31, 2024, compared to RMB 24.6 million for the same period in 2023, reflecting an increase of about 17.6%[57]. - The group maintains a strong cash balance and bank financing to seize future growth opportunities, adhering to a prudent cash management policy[54]. Shareholder and Capital Structure - Major shareholder Dao He Investment Limited holds 650,331,027 shares, representing approximately 40.74% of the total issued shares as of December 31, 2024[62]. - The total number of issued shares as of December 31, 2024, is 1,596,134,067[60]. - The company successfully raised approximately HKD 106.0 million through a public offering, with a net amount of about HKD 104.5 million after expenses[70]. - The company plans to fully utilize the remaining unallocated proceeds by the end of 2026 for expanding industrial automation and related services[73]. Risk Management - The group is exposed to foreign exchange risks primarily in RMB, USD, and HKD, with measures in place to manage these risks, including the potential use of foreign currency forward contracts[55]. - Financial risks include market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since the last reporting period[123][124]. Environmental and Sustainability Initiatives - The company plans to further allocate resources to environmental protection-related businesses, leveraging its team's extensive industry experience in recycling[23]. - The company aims to embrace market changes with innovative thinking and focus on green low-carbon technology advancements for future development[25].

Financial Performance - Revenue for the six months ended December 31, 2024, was RMB 195,645,329, representing a 17.2% increase from RMB 166,969,868 in the same period of 2023[3] - Gross profit for the same period was RMB 40,613,427, up 45.9% from RMB 27,845,454 year-on-year, with a gross margin of 20.8% compared to 16.7% in 2023[3] - The net loss for the period was RMB (6,814,392), a significant improvement of 63.5% from RMB (18,659,745) in the previous year[3] - The loss attributable to shareholders was RMB (6,944,676), down 62.1% from RMB (18,341,933) in the same period last year[3] - Basic and diluted loss per share for the period was RMB (0.44), compared to RMB (1.58) in the same period of 2023[3] - The total comprehensive loss for the period was RMB (7,843,132), compared to RMB (18,682,512) in the same period of 2023[8] - The group reported a loss before tax of RMB 6,016,653 for the period, with a net loss of RMB 6,814,392[24] - The group recorded a loss of approximately RMB 6.8 million for the six months ended December 31, 2024, a significant decrease of approximately RMB 11.9 million compared to a loss of RMB 18.7 million in the same period last year[68] Revenue Breakdown - Total revenue for the six months ended December 31, 2024, was RMB 195,645,329, with industrial products contributing RMB 108,812,365, project contracting services RMB 54,352,034, environmental products RMB 1,504,042, and support services RMB 30,976,888[24] - Total revenue for the six months ended December 31, 2023, was RMB 166,969,868, with industrial products contributing RMB 91,453,220 and contracting services contributing RMB 54,049,362[27] - Industrial product sales revenue rose by about 19.0% from RMB 91.5 million to RMB 108.8 million, driven by a stable recovery in the supply chain[91] - Project contracting service revenue remained stable, increasing by approximately 0.6% from RMB 54.0 million to RMB 54.4 million, with gross margin rising from 16.4% to 20.3%[92] - Environmental business sales revenue decreased by approximately 67.3% from RMB 4.6 million to RMB 1.5 million due to intense market competition[93] - Support service revenue surged by approximately 83.6% from RMB 16.9 million to RMB 31.0 million, with gross margin increasing from 8.3% to 13.4%[95] Expenses and Costs - Research and development expenses increased to RMB (21,029,293) from RMB (10,688,619), indicating a focus on innovation and product development[5] - The company's total cost of sales for the six months ended December 31, 2024, was RMB 123,905,584, slightly up from RMB 121,641,973 in the same period of 2023[34] - The total employee cost for the six months ended December 31, 2024, was approximately RMB 29.0 million, compared to RMB 24.6 million for the same period in 2023[118] Assets and Liabilities - Total assets decreased from RMB 982.95 billion to RMB 943.87 billion, a decline of approximately 4%[11] - Current assets increased from RMB 176.05 billion to RMB 181.70 billion, an increase of about 3.7%[11] - Non-current assets decreased from RMB 806.89 billion to RMB 762.17 billion, a decrease of around 5.5%[11] - Total liabilities decreased from RMB 558.07 billion to RMB 524.83 billion, a reduction of approximately 5.94%[12] - Net assets decreased slightly from RMB 424.88 billion to RMB 419.03 billion, a decline of about 1.12%[12] - The company's total borrowings increased from RMB 73.37 billion to RMB 87.39 billion, an increase of approximately 19.16%[12] Cash Flow and Financing - The company reported a net finance income of RMB 61,825, a recovery from a net finance cost of RMB (1,815,593) in the previous year[5] - The company's cash and cash equivalents decreased from RMB 96.45 billion to RMB 85.05 billion, a decline of approximately 11.5%[11] - The group's borrowings amounted to approximately RMB 87.4 million as of December 31, 2024, an increase from RMB 73.4 million as of June 30, 2024, with an average annual interest rate of 3.51%[107] Research and Development - Research and development expenditures amounted to approximately RMB 210 million for the six months ending December 31, 2024, with 15 new patent applications filed, bringing the total to 354 patents registered[80] - The company has been recognized as a high-tech enterprise in Hangzhou and a technology-based small and medium-sized enterprise in Zhejiang Province, enhancing its market credibility[49] Market and Industry Trends - In 2024, China's GDP grew by 5.0%, reflecting a stable economic environment that supports the paper industry[62] - The total production of paper and paperboard in China reached 12,105 million tons in 2024, marking a year-on-year increase of 7.5%[63] - The paper industry is expected to experience a recovery and moderate growth by 2025, driven by national policies aimed at boosting consumer markets[87] Corporate Governance and Compliance - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited interim consolidated financial statements for the six months ended December 31, 2024[156] - The company has adhered to the corporate governance code, with the exception of the separation of roles between the Chairman and the Chief Executive Officer, which has not been appointed since December 1, 2022[151] Legal Matters - The legal proceedings involving Zhejiang Huazhang Technology Co., Ltd. resulted in a first-instance judgment requiring the company to pay a breach of contract compensation of approximately RMB 32,994,295[145] - As of November 1, 2024, the final judgment determined that the company must pay an additional breach of contract compensation of RMB 28,516,975, which was settled on November 11, 2024[148] - The company has confirmed an excess provision of RMB 4,477,320 as of December 31, 2024, related to the legal proceedings[148]

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 的 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的任何損失承擔任何責任。 HUAZHANG TECHNOLOGY HOLDING LIMITED 承董事會命 華章科技控股有限公司 主席兼執行董事 方暉 香港，2025年2月14日 於本公告日期，執行董事為方暉先生（ 主席 ）、陳宏衛先生及蔡海峰先生；及獨立 非執行董事為邢凱能先生、姚楊洋先生及張東方女士。 華 章 科 技 控 股 有 限 公 司 （在開曼群島註冊成立的有限公司） （股份代號：1673） 董事會會議通告 華 章 科 技 控 股 有 限 公 司（「 本 公 司 」）董 事 會（「 董 事 會 」）宣 布 ， 本 公 司 將 於 2025 年 2月27日（ 星期四 ）舉行董事會會議，藉以（ 其中包括 ）審議及批准本公司及其附屬 公司截至2024年12月31日止六個月的未經審核中期業績，以及考慮派付中期股息 （ 如有）。 ...

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 的 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的任何損失承擔任何責任。 HUAZHANG TECHNOLOGY HOLDING LIMITED 華 章 科 技 控 股 有 限 公 司 （在開曼群島註冊成立的有限公司） （股份代號：1673） 於2024年11月29日舉行之 股東週年大會之投票表決結果 謹此提述華章科技控股有限公司（「本公司」）日期為2024年10月29日的股東週年大 會通告（「股東週年大會通告」）及本公司日期為2024年10月29日的通函（「通函」）。 承董事會命 本公司董事（「董事」）會（「董事會」）欣然宣佈，股東週年大會通告上所載的提呈之 決議案，已獲本公司股東（「股東」）於2024年11月29日舉行之股東週年大會（「股東 週年大會」）上以投票表決方式正式通過。 執行董事方暉先生、陳宏衛先生及蔡海峰先生以及獨立非執行董事邢凱能先生、 姚楊洋先生及張東方女士已親身或以電子方式出席股東週年大會。 ...

Dear Non-registered Holder(s) (Note 1) , HUAZHANG TECHNOLOGY HOLDING LIMITED 華章科技控股有限公司 (Incorporated in the Cayman Islands with limited liability) （在開曼群島註冊成立之有限公司） （Stock Code 股份代號：1673） NOTIFICATION LETTER 通知信函 Huazhang Technology Holding Limited (the "Company") - Notification of publication of (i) Annual Report 2024, and (ii) Circular in relation to general mandates to issue and repurchase Shares, re-election of retiring Directors, re-appointment of auditor and notice of annual general meeting (collectiv ...

（在開曼群島註冊成立之有限公司） （Stock Code 股份代號：1673） NOTIFICATION LETTER 通知信函 HUAZHANG TECHNOLOGY HOLDING LIMITED 華章科技控股有限公司 (Incorporated in the Cayman Islands with limited liability) Dear Registered Shareholders, Huazhang Technology Holding Limited (the "Company") – Notice of publication of (i) Annual Report 2024 and (ii) Circular in relation to general mandates to issue and repurchase Shares, re-election of retiring Directors, re-appointment of auditor and notice of annual general meeting, and (iii) Proxy Form of the ...

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 通 告 的 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 通 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 HUAZHANG TECHNOLOGY HOLDING LIMITED 華章科技控股有限公司 （在開曼群島註冊成立的有限公司） （股份代號：1673） 股 東 週 年 大 會 通 告 茲 通 告 華 章 科 技 控 股 有 限 公 司（「本 公 司」）謹 訂 於2024年11月29日 上 午10時 正 假 座 香 港 尖 沙 咀 廣 東 道5號 海 洋 中 心9樓901室 舉 行 股 東 週 年 大 會，藉 以 處 理 下 列 事 項： 作 為 特 別 事 項，考 慮 並 酌 情 通 過 下 列 決 議 案（不 論 有 否 修 訂）為 普 通 決 議 案： 普 通 決 議 案 – 1 – 1. 省 覽 及 批 准 本 公 ...

此 乃 要 件 請 即 處 理 閣 下 對 本 通 函 任 何 方 面 或 應 採 取 的 行 動 如 有 任 何 疑 問，應 諮 詢 股 票 經 紀 或 其 他 註 冊 證 券 買 賣 商、銀 行 經 理、律 師、專 業 會 計 師 或 其 他 專 業 顧 問。 閣 下 如 已 將 名 下 的 華 章 科 技 控 股 有 限 公 司（「本 公 司」）股 份 全 部 售 出 或 轉 讓，應 立 即 將 本 通 函 及 隨 附 的 代 表 委 任 表 格 送 交 買 主 或 承 讓 人，或 送 交 經 手 買 賣 或 轉 讓 的 銀 行、股 票 經 紀 或 其 他 代 理 商，以 便 轉 交 買 主 或 承 讓 人。 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 通 函 的 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 通 函 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 HUA ...

Financial Performance - For the fiscal year ending June 30, 2024, the company reported revenue of approximately RMB 448.0 million, a decrease of about 15.3% compared to RMB 528.9 million in the previous year[6]. - Gross profit for the same period was approximately RMB 79.7 million, down approximately 4.1% from RMB 83.2 million year-over-year[6]. - The company recorded a net loss attributable to shareholders of RMB 18.7 million, an improvement from a loss of RMB 51.2 million in the prior year[6]. - The company's revenue for the year ended June 30, 2024, decreased by approximately 15.3% to RMB 448.0 million, while gross profit fell by about 4.1% to RMB 79.7 million[26]. - The company recorded a loss of approximately RMB 18.6 million, a decrease in loss of about RMB 34.2 million compared to the same period last year[26]. - New contract amounts decreased by approximately 14.5% to about RMB 391.3 million, with an uncompleted contract amount of approximately RMB 401.3 million[27]. - Project contracting service revenue decreased by approximately 42.5% from RMB 178.5 million for the year ended June 30, 2023, to RMB 102.6 million for the year ended June 30, 2024[38]. - Environmental product sales revenue decreased by approximately 44.6% from RMB 10.1 million for the year ended June 30, 2023, to RMB 5.6 million for the year ended June 30, 2024[39]. Asset Management - Non-current assets decreased to RMB 245.5 million from RMB 267.0 million year-over-year, reflecting ongoing asset management efforts[6]. - Current assets increased to RMB 737.4 million from RMB 705.3 million, indicating a stable liquidity position[6]. - Cash and cash equivalents increased to approximately RMB 96.5 million as of June 30, 2024, compared to RMB 44.0 million as of June 30, 2023[53]. - The debt-to-asset ratio decreased from approximately 16.4% as of June 30, 2023, to 14.7% as of June 30, 2024, due to an increase in equity following a public offering[56]. Operational Efficiency - The gross margin improved to 17.8% from 15.7% in the previous year, indicating better cost management despite lower revenue[6]. - Lean management practices have been effectively implemented across departments, yielding significant improvements in operational efficiency[9]. - The gross profit margin for project contracting services increased from approximately 5.0% to 15.0% due to improved cost control measures[38]. - The gross profit margin for environmental products increased significantly from approximately 27.4% to 54.6%[39]. Strategic Partnerships and Projects - The company achieved significant project milestones, including the successful implementation of a domestically produced dilution hydraulic headbox, enhancing its competitive edge[8]. - The company has established partnerships with over 20 leading domestic and international brands, strengthening its market position[8]. - The company successfully signed contracts for advanced paper production systems, including a contract for a 6800/1000 long net paper machine control system with Yadu Paper[27]. - The company aims to enhance automation, digitalization, and intelligence in the paper industry, collaborating with leading suppliers to provide cost-effective solutions[29]. Research and Development - R&D expenses amounted to approximately RMB 25.7 million for the year ended June 30, 2024, a decrease of about 10.1% from RMB 28.6 million for the year ended June 30, 2023[44]. - The group registered a total of 339 patents as of June 30, 2024, including 113 invention patents, 117 utility model patents, and 55 software copyrights[31]. Environmental and Sustainability Initiatives - The company emphasizes the importance of sustainable development and is actively exploring new business opportunities in the environmental sector[67]. - The company has outlined its commitment to environmental, social, and governance (ESG) measures, aligning with national trends towards sustainability[74]. - The company aims to reduce emission intensity by 5% for electricity consumption, water usage, non-hazardous waste, and greenhouse gas emissions by 2030, using 2021/2022 as the baseline year[89]. - The environmental management system is established based on the international standard ISO 14001, integrating sustainability into daily operations[88]. - The company has established sustainable waste management practices to mitigate environmental impacts from waste disposal[101]. Employee and Labor Relations - The total employee cost for the year ending June 30, 2024, was approximately RMB 62.5 million, down from RMB 72.6 million for the year ended June 30, 2023, with a reduction in the number of employees from 245 to 228[65]. - Employee turnover rate increased to 10.15% in 2024, compared to 7.95% for women and 17.39% for men[126]. - Average training hours per employee were 39.25 in 2024, with 68.90% of employees receiving training[134]. - The company has maintained a zero incident record for work-related fatalities over the past three years[129]. Governance and Compliance - The board of directors is responsible for overseeing environmental, social, and governance (ESG) issues, ensuring effective risk control and internal monitoring mechanisms[80]. - The company has implemented a whistleblowing policy to encourage reporting of potential misconduct related to financial reporting and compliance[150]. - The company has a zero-tolerance policy towards corruption and has not encountered any significant violations of anti-corruption laws during the reporting period[149]. Market Outlook - The domestic paper products market is expected to transition from off-peak to peak season, with demand anticipated to strengthen due to policies promoting consumption and economic recovery[67]. - The Chinese paper industry is expected to see structural recovery in demand, particularly during traditional peak seasons in the second half of the year[24].