FF301 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01702 | 說明 | 東光化工 | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 500,000,000,000 | USD | 0.0001 | USD | | 50,000,000 | | 增加 / 減少 (-) | | | | | | USD | | | | 本月底結存 | | | 500,000,000,000 | USD | | 0.0001 USD | | 50,000,000 | 本月底法定/註冊股本總額： USD 50,000,000 第 1 頁 共 10 頁 v 1.1.1 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: ...

Group 1 - The company's net profit for the six months ending June 30, 2025, decreased by approximately RMB 16.9 million or 18.8% to about RMB 72.9 million [1] - The decline in net profit was primarily due to a decrease in overall gross profit and gross profit margin [1] - The company's revenue decreased by approximately RMB 156.4 million or 11.7% to about RMB 1,180.8 million compared to the six months ending June 30, 2024 [1] Group 2 - The average selling price of the company's main product, urea, was approximately RMB 1,632 per ton, a decrease of about 19.2% from approximately RMB 2,019 per ton for the six months ending June 30, 2024 [1] - The reduction in revenue from urea sales was a significant factor contributing to the overall decline in gross profit [1]

Group 1 - The core viewpoint of the article highlights Dongguang Chemical's (01702) financial performance for the first half of 2025, showing a revenue of 1.181 billion RMB, which represents a year-on-year decline of 11.7% [1] - The profit attributable to the company's owners was 72.318 million RMB, reflecting a year-on-year decrease of 19.8% [1] - The basic earnings per share stood at 11.7 cents [1] Group 2 - The overall profit margin in the urea industry has compressed, leading to a decline in the group's profits compared to the previous year [1] - Despite the challenges, the group has maintained relatively stable operating conditions through production structure optimization and cost control [1]

Core Viewpoint - Dongguang Chemical (01702) reported a decline in revenue and profit for the first half of 2025, reflecting challenges in the urea industry [1] Financial Performance - The company's revenue for the period was 1.181 billion RMB, representing a year-on-year decrease of 11.7% [1] - Profit attributable to the company's owners was 72.318 million RMB, down 19.8% year-on-year [1] - Basic earnings per share were 11.7 cents [1] Industry Context - The overall profit margin in the urea industry has compressed, contributing to the decline in the company's profits [1] - Despite the challenges, the company managed to maintain relatively stable operational conditions through production structure optimization and cost control [1]

[Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company's revenue decreased by 11.7% to RMB1,180,762 thousand, and profit for the period fell by 18.8% to RMB72,931 thousand, driven by lower gross profit and higher administrative expenses, partially offset by net other gains and reduced tax | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,180,762 | 1,337,234 | -11.7% | | Cost of sales | (1,078,954) | (1,193,807) | -9.6% | | Gross profit | 101,808 | 143,427 | -29.0% | | Other income | 10,409 | 14,492 | -28.3% | | Net other gains/(losses) | 14,479 | (7,837) | Swung to profit | | Administrative expenses | (28,945) | (21,474) | +34.8% | | Distribution expenses | (2,095) | (2,190) | -4.3% | | Finance costs | (941) | (979) | -3.9% | | Profit before income tax | 94,715 | 125,439 | -24.5% | | Income tax expense | (21,784) | (35,644) | -38.8% | | Profit for the period | 72,931 | 89,795 | -18.8% | | Profit for the period attributable to owners of the Company | 72,318 | 90,126 | -19.7% | | Basic and diluted earnings per share (RMB cents) | 11.7 | 14.5 | -19.4% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, net assets grew to RMB1,861,028 thousand, with stable net current assets and significant increases in property, plant and equipment, cash, contract liabilities, and trade payables | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 1,081,708 | 1,035,733 | +4.4% | | Total current assets | 1,073,241 | 987,279 | +8.7% | | Total current liabilities | 256,633 | 174,646 | +46.9% | | Total non-current liabilities | 37,288 | 37,335 | -0.1% | | Net assets | 1,861,028 | 1,811,031 | +2.8% | | Equity attributable to owners of the Company | 1,853,857 | 1,804,473 | +2.7% | | Cash and bank balances | 752,792 | 702,097 | +7.2% | | Trade payables | 55,800 | 32,738 | +70.4% | | Contract liabilities | 100,630 | 55,911 | +80.0% | [Notes to the Condensed Consolidated Interim Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. General Information](index=5&type=section&id=1.%20General%20Information) Dongguang Chemical Co., Ltd., incorporated in the Cayman Islands and listed on HKEX, primarily manufactures and sells urea and by-products in China - The company was incorporated in the Cayman Islands on July 26, 2013, with shares listed on the Hong Kong Stock Exchange[7](index=7&type=chunk) - The Group is principally engaged in the manufacturing and sale of urea and by-products in China[7](index=7&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) Interim financial statements, prepared under IAS 34 and HKEX Listing Rules, were authorized on August 27, 2025, maintaining consistent accounting policies with no significant impact from new standards - The condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules of the Hong Kong Stock Exchange[8](index=8&type=chunk) - These statements were authorized for issue on August 27, 2025[8](index=8&type=chunk) - The adoption of the revised International Financial Reporting Standards had no significant impact on these condensed consolidated interim financial statements[8](index=8&type=chunk) [3. Changes in International Financial Reporting Standards](index=6&type=section&id=3.%20Changes%20in%20International%20Financial%20Reporting%20Standards) Revised IFRS standards, including amendments to IAS 21 and IFRS 1, effective this period, had no significant impact on the Group's accounting policies - Amendments to IAS 21 and IFRS 1 became effective for the first time in the current accounting period[11](index=11&type=chunk) - These amendments had no significant impact on the Group's accounting policies[11](index=11&type=chunk) [4. Application of Judgements and Estimates](index=6&type=section&id=4.%20Application%20of%20Judgements%20and%20Estimates) Significant judgments and key sources of estimation uncertainty in these interim financial statements are consistent with those applied in the 2024 annual financial statements - The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the 2024 annual financial statements[12](index=12&type=chunk) [5. Revenue and Other Income](index=6&type=section&id=5.%20Revenue%20and%20Other%20Income) Total revenue for the six months ended June 30, 2025, was RMB1,180,762 thousand, primarily from China urea sales, with other income at RMB10,409 thousand and contract liabilities significantly rising to RMB100,630 thousand | Revenue Source | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | **Major Geographical Markets** | | | | | – China | 1,164,333 | 1,337,234 | -12.9% | | – Others | 16,429 | – | N/A | | **Major Products** | | | | | – Sales of urea | 1,007,671 | 1,159,211 | -13.1% | | – Sales of methanol | 66,684 | 66,498 | +0.3% | | – Sales of liquid ammonia | – | 3,165 | -100% | | – Sales of carbon dioxide | 8,981 | 11,975 | -25.0% | | – Sales of liquefied natural gas | 15,357 | 13,820 | +11.1% | | – Sales of compound fertilizer | 3,759 | 28,094 | -86.6% | | – Sales of automotive urea solution | 78,310 | 54,471 | +43.8% | | **Other Income** | | | | | Government grants | 973 | 976 | -0.3% | | Bank interest income | 3,610 | 9,488 | -61.9% | | Sales of scrap materials | 5,470 | 4,028 | +35.8% | | Others | 356 | – | N/A | | **Contract Liabilities** | 100,630 | 55,911 | +80.0% | - Contract liabilities primarily relate to advance consideration received from customers, with the period-end balance significantly increasing to **RMB100,630 thousand** from RMB55,911 thousand at the end of 2024[17](index=17&type=chunk) [6. Net Other Gains/(Losses)](index=7&type=section&id=6.%20Net%20Other%20Gains%2F%28Losses%29) For the six months ended June 30, 2025, the company reported net other gains of RMB14,479 thousand, a swing from prior year's loss, driven by fair value investment gains and exchange gains | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Investment gains/(losses) recognized at fair value through profit or loss | 8,545 | (1,435) | | Fair value gains on investments recognized at fair value through profit or loss | 89 | 189 | | Exchange gains/(losses) | 5,845 | (6,591) | | **Total** | **14,479** | **(7,837)** | - Net other gains swung from a loss in the prior period to a gain, primarily due to investment gains and exchange gains[18](index=18&type=chunk) [7. Segment Information](index=7&type=section&id=7.%20Segment%20Information) The Group operates a single segment, producing and selling urea and by-products, to which all assets and capital expenditures are primarily attributed - The Group has only one operating segment: the production and sale of urea and by-products[19](index=19&type=chunk) [8. Finance Costs](index=8&type=section&id=8.%20Finance%20Costs) Finance costs for the six months ended June 30, 2025, were RMB941 thousand, mainly interest on lease liabilities, consistent with the prior period | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Interest expense on lease liabilities | 941 | 979 | [9. Profit Before Income Tax](index=8&type=section&id=9.%20Profit%20Before%20Income%20Tax) Profit before income tax for the six months ended June 30, 2025, was RMB94,715 thousand, after deducting costs, depreciation, and slightly reduced employee benefit expenses | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Auditor's remuneration | 368 | 368 | | Cost of inventories sold recognized as expense | 1,078,954 | 1,193,807 | | Depreciation of property, plant and equipment | 67,779 | 65,312 | | Depreciation of right-of-use assets | 1,969 | 1,813 | | Depreciation of investment properties | 293 | 292 | | Total employee benefit expenses | 63,219 | 63,958 | [10. Income Tax Expense](index=9&type=section&id=10.%20Income%20Tax%20Expense) Income tax expense for the six months ended June 30, 2025, decreased by 38.8% to RMB21,784 thousand due to lower profit before tax, with Chinese subsidiaries subject to a 25% rate, and some small enterprises receiving preferential rates | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Current tax – China | 22,924 | 36,314 | | Withholding tax on dividends | 990 | 5,800 | | Deferred tax | (2,130) | (6,470) | | **Total** | **21,784** | **35,644** | - Current income tax in mainland China is calculated at the statutory rate of **25%**, with some small and micro enterprises eligible for a **10%** preferential tax rate[23](index=23&type=chunk) - Subsidiaries incorporated in the Cayman Islands, Samoa, and the British Virgin Islands are exempt from income tax, and the Hong Kong subsidiary had no assessable income[22](index=22&type=chunk) [11. Dividends and Distributions](index=9&type=section&id=11.%20Dividends%20and%20Distributions) Directors did not recommend an interim dividend for the six months ended June 30, 2025, while the 2024 final dividend of HK3.6 cents per share was paid in May 2025 - The directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024[24](index=24&type=chunk) - The final dividend for the year ended December 31, 2024, of **HK3.6 cents** per ordinary share (approximately **RMB20,564 thousand**) was paid in May 2025[24](index=24&type=chunk) [12. Earnings Per Share](index=10&type=section&id=12.%20Earnings%20Per%20Share) Basic and diluted earnings per share for the six months ended June 30, 2025, decreased to RMB11.7 cents from RMB14.5 cents, with both being identical due to no potential dilutive ordinary shares | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share | 72,318 | 90,126 | | Weighted average number of ordinary shares for calculating basic and diluted earnings per share | 620,944,000 | 620,944,000 | | **Basic and diluted earnings per share (RMB cents)** | **11.7** | **14.5** | - There were no potential dilutive ordinary shares outstanding for the periods ended June 30, 2025, and 2024, thus basic and diluted earnings per share are identical[25](index=25&type=chunk) [13. Property, Plant and Equipment](index=10&type=section&id=13.%20Property%2C%20Plant%20and%20Equipment) Additions to property, plant and equipment for the six months ended June 30, 2025, significantly increased to RMB143,840 thousand, with no impairment losses recognized - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately **RMB143,840 thousand**, a significant increase compared to approximately RMB44,320 thousand in the prior period of 2024[26](index=26&type=chunk) - No impairment losses were recognized for property, plant and equipment during both periods[26](index=26&type=chunk) [14. Inventories](index=10&type=section&id=14.%20Inventories) Total inventories as of June 30, 2025, slightly increased to RMB86,544 thousand, with a decrease in raw materials and an increase in finished goods | Inventory Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Raw materials | 35,075 | 47,365 | | Finished goods | 48,224 | 35,908 | | Components and parts | 3,245 | 2,596 | | **Total** | **86,544** | **85,869** | [15. Trade Receivables](index=11&type=section&id=15.%20Trade%20Receivables) Trade receivables as of June 30, 2025, significantly decreased to RMB2,357 thousand, with all amounts current and not overdue | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 2,357 | 5,636 | | Within 3 months | 2,357 | 5,636 | - The balances of trade receivables as of June 30, 2025, and December 31, 2024, were not overdue[30](index=30&type=chunk) [16. Prepayments, Deposits and Other Receivables](index=11&type=section&id=16.%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) Total prepayments, deposits, and other receivables decreased to RMB178,116 thousand as of June 30, 2025, mainly due to reductions in other recoverable taxes and equipment prepayments | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Other recoverable taxes | 119,015 | 150,945 | | Prepayments for equipment | 219 | 35,043 | | Prepayments to coal suppliers | 41,966 | 16,032 | | Prepayments to employees | 2,228 | 2,457 | | Deposits | 10,630 | 6,637 | | Other prepayments and other receivables | 34,058 | 33,865 | | Less: Impairment loss on other receivables | (30,000) | (30,000) | | **Total** | **178,116** | **214,979** | [17. Restricted Cash](index=12&type=section&id=17.%20Restricted%20Cash) Restricted cash totaled RMB46,190 thousand as of June 30, 2025, mainly for collateralizing futures contracts, with no such cash reported at the end of 2024 - As of June 30, 2025, restricted cash amounted to **RMB46,190 thousand**, primarily used for letters of guarantee and bank bills collateralizing futures contracts[33](index=33&type=chunk) - There was no restricted cash for the year ended December 31, 2024[33](index=33&type=chunk) [18. Trade Payables](index=12&type=section&id=18.%20Trade%20Payables) Total trade payables significantly increased to RMB55,800 thousand as of June 30, 2025, with a typical credit period of 0 to 90 days | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 to 90 days | 48,060 | 28,307 | | 91 to 180 days | 1,441 | 185 | | 181 to 365 days | 2,973 | 1,233 | | Over 365 days | 3,326 | 3,013 | | **Total** | **55,800** | **32,738** | - Trade payables are interest-free, and the credit period generally ranges from **0 to 90 days**[34](index=34&type=chunk) [19. Other Payables and Accruals](index=13&type=section&id=19.%20Other%20Payables%20and%20Accruals) Total other payables and accruals decreased to RMB74,619 thousand as of June 30, 2025, primarily comprising amounts due for plant improvements, equipment replacement, and maintenance | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Accrued expenses | 17,853 | 26,553 | | Other payables | 56,766 | 56,292 | | **Total** | **74,619** | **82,845** | - Other payables primarily represent amounts due to construction and manufacturing equipment companies for plant improvements, equipment replacement, and maintenance and repair[36](index=36&type=chunk) [20. Share Capital](index=13&type=section&id=20.%20Share%20Capital) As of June 30, 2025, authorized share capital was 500,000,000 ordinary shares of US$0.0001 par value, with 620,944 thousand issued shares totaling RMB392 thousand, unchanged from 2024 year-end | Item | Number of Shares (thousand shares) | Amount (US$) | Amount (RMB'000) | | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of US$0.0001 par value each) | 500,000,000 | 50,000,000 | 340,499 | | Issued share capital | 620,944 | 62,094 | 392 | - The authorized and issued share capital remained unchanged since January 1, 2024[37](index=37&type=chunk) [21. Bank Facilities](index=14&type=section&id=21.%20Bank%20Facilities) As of June 30, 2025, the Group had RMB650,000 thousand in bank credit facilities, collateralized by two land parcels, with no funds drawn - The Group was granted bank credit facilities of **RMB650,000 thousand** by a bank[38](index=38&type=chunk) - Two parcels of land located in Hebei Province (with a total carrying value of approximately **RMB66,675 thousand**) were pledged as collateral[38](index=38&type=chunk) - As of June 30, 2025, the Group had not drawn down any funds from these credit facilities[38](index=38&type=chunk) [22. Related Party Transactions and Balances](index=14&type=section&id=22.%20Related%20Party%20Transactions%20and%20Balances) As of June 30, 2025, RMB40 thousand was due to a non-controlling shareholder, unsecured and interest-free, while total key management personnel compensation was RMB704 thousand, consistent with the prior period - Amounts due to a non-controlling shareholder of a subsidiary were **RMB40 thousand**, unsecured, interest-free, and repayable on demand[39](index=39&type=chunk) | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Short-term employee benefits | 696 | 703 | | Contributions to retirement benefit schemes | 8 | 8 | | **Total key management personnel compensation paid** | **704** | **711** | [23. Capital Commitments](index=14&type=section&id=23.%20Capital%20Commitments) Contracted but unprovided capital commitments for property, plant and equipment acquisitions decreased to RMB73,989 thousand as of June 30, 2025 | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Commitments for the acquisition of property, plant and equipment: contracted but not provided for | 73,989 | 94,217 | [24. Contingent Liabilities](index=14&type=section&id=24.%20Contingent%20Liabilities) Neither the Group nor the Company had any significant contingent liabilities as of June 30, 2025, or December 31, 2024 - As of June 30, 2025, and December 31, 2024, neither the Group nor the Company had any significant contingent liabilities[42](index=42&type=chunk) [25. Events After the Reporting Period](index=14&type=section&id=25.%20Events%20After%20the%20Reporting%20Period) No significant events occurred after June 30, 2025, beyond those already disclosed in the condensed consolidated interim financial statements - No significant events occurred after June 30, 2025[43](index=43&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=15&type=section&id=Business%20Review) In H1 2025, China's urea market saw complex price fluctuations and increased competition, leading to a 18.8% drop in net profit to RMB72.9 million and an 11.7% revenue decrease to RMB1,180.8 million, primarily due to lower urea prices, while the company advanced diversification and green initiatives - In the first half of 2025, China's urea industry faced a complex market landscape, with urea prices showing a trend of initial increase followed by a decline, and intensified competition due to increased new production capacity nationwide[44](index=44&type=chunk) - The Group's net profit decreased by **18.8%** from approximately RMB89.8 million to approximately **RMB72.9 million**, and revenue decreased by **11.7%** from approximately RMB1,337.2 million to approximately **RMB1,180.8 million**[45](index=45&type=chunk) - The average selling price of urea products was approximately **RMB1,632 per tonne**, a decrease of approximately **19.2%** compared to approximately RMB2,019 per tonne in the prior period[45](index=45&type=chunk) - The Group continued to implement its "urea-based and diversified development" strategy, initiating a gasification transformation project and a 540,000 tonnes/year urea energy-saving and carbon reduction upgrade project, currently in the civil engineering and equipment delivery stages[46](index=46&type=chunk) [Operating and Financial Review](index=16&type=section&id=Operating%20and%20Financial%20Review) The Group's total revenue decreased by 11.7% due to lower urea sales, despite significant growth in automotive urea solution revenue, leading to reduced gross profit and margin, while net other gains turned positive, administrative expenses rose, and overall profit for the period declined [Revenue by Product](index=16&type=section&id=Revenue%20by%20Product) Total revenue decreased by 11.7%, with urea sales down 13.1% due to lower prices, while automotive urea solution revenue grew 43.8% from increased volume, methanol revenue slightly rose, and other product revenue fell 50.8% | Product | 2025 (RMB'000) | 2024 (RMB'000) | Percentage Change (%) | | :--- | :--- | :--- | :--- | | Urea | 1,007,671 | 1,159,211 | (13.1) | | Automotive urea solution | 78,310 | 54,471 | 43.8 | | Methanol | 66,684 | 66,498 | 0.3 | | Other products | 28,097 | 57,054 | (50.8) | | **Total** | **1,180,762** | **1,337,234** | **(11.7)** | - The average selling price of urea decreased by **19.2%** from approximately RMB2,019 per tonne to approximately **RMB1,632 per tonne**, leading to a reduction in urea revenue[48](index=48&type=chunk) - Sales volume of automotive urea solution increased by **116.0%** to approximately **120,192 tonnes**, but the average selling price decreased by **33.4%** to approximately **RMB652 per tonne**[49](index=49&type=chunk) [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) Cost of sales decreased by 9.6% to RMB1,079.0 million, mainly due to lower raw material costs from reduced coal prices and decreased equipment maintenance expenses - Cost of sales decreased by **9.6%** from approximately RMB1,193.8 million to approximately **RMB1,079.0 million**[52](index=52&type=chunk) - This was primarily due to a reduction in raw material costs (lower coal prices) and manufacturing overhead costs (reduced equipment maintenance costs)[52](index=52&type=chunk) [Gross Profit and Gross Margin](index=18&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit decreased by 29.0% to RMB101.8 million, with gross margin falling from 10.7% to 8.6%, mainly due to reduced urea sales revenue from lower average selling prices | Product | 2025 Gross Profit (RMB'000) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB'000) | 2024 Gross Margin (%) | Change (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Urea | 87,938 | 8.7 | 148,038 | 12.8 | (60,100) | (40.6) | | Automotive urea solution | 5,782 | 7.4 | 983 | 1.8 | 4,799 | 488.2 | | Methanol | (3,471) | (5.2) | (14,291) | (21.5) | 10,820 | (75.7) | | Other products | 11,559 | 41.1 | 8,697 | 15.2 | 2,862 | 32.9 | | **Total** | **101,808** | **8.6** | **143,427** | **10.7** | **(41,619)** | **(29.0)** | - The decrease in gross profit was mainly due to a reduction in revenue from urea sales, resulting from lower average selling prices of urea[54](index=54&type=chunk) - Gross margin decreased from **10.7%** to **8.6%** as the decrease in revenue was greater than the decrease in cost of sales[54](index=54&type=chunk) [Other Income](index=19&type=section&id=Other%20Income) Other income decreased by 28.3% to RMB10.4 million, primarily due to a reduction in bank interest income - Other income decreased by **28.3%** from approximately RMB14.5 million to approximately **RMB10.4 million**[55](index=55&type=chunk) - This was mainly due to a decrease in bank interest income during the reporting period[55](index=55&type=chunk) [Net Other Gains/(Losses)](index=19&type=section&id=Net%20Other%20Gains%2F%28Losses%29) The reporting period recorded net other gains of RMB14.5 million, primarily from urea futures investment gains and exchange gains, contrasting with a prior period loss of RMB7.8 million - The reporting period recorded other gains of approximately **RMB14.5 million**, primarily due to gains on investments in urea futures contracts recognized at fair value through profit or loss and exchange gains[56](index=56&type=chunk) - In contrast, the prior period recorded other losses of **RMB7.8 million**[56](index=56&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) Administrative expenses increased by 34.4% to RMB28.9 million, primarily driven by higher legal and professional fees - Administrative expenses increased by **34.4%** from approximately RMB21.5 million to approximately **RMB28.9 million**[57](index=57&type=chunk) - This was mainly due to an increase in legal and professional fees during the reporting period[57](index=57&type=chunk) [Distribution Expenses](index=19&type=section&id=Distribution%20Expenses) Distribution expenses showed no significant fluctuations between the current and prior reporting periods - There were no significant fluctuations in distribution expenses[58](index=58&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) Finance costs showed no significant fluctuations between the current and prior reporting periods - There were no significant fluctuations in finance costs[59](index=59&type=chunk) [Taxation](index=20&type=section&id=Taxation) Income tax expense decreased by 38.8% to RMB21.8 million, primarily attributable to a reduction in profit before income tax - Income tax expense decreased by **38.8%** from approximately RMB35.6 million to approximately **RMB21.8 million**[60](index=60&type=chunk) - This was mainly due to a decrease in profit before income tax[60](index=60&type=chunk) [Profit for the Period](index=20&type=section&id=Profit%20for%20the%20Period) Profit for the period decreased by 18.8% to RMB72.9 million, primarily due to lower gross profit, reduced other income, and increased administrative expenses, partially offset by a swing to other gains and decreased income tax - Profit for the period decreased by **18.8%** from approximately RMB89.8 million to approximately **RMB72.9 million**[61](index=61&type=chunk) - This was mainly due to a decrease in gross profit of approximately **RMB41.6 million**, a decrease in other income of approximately **RMB4.1 million**, and an increase in administrative expenses of approximately **RMB7.4 million**[61](index=61&type=chunk) - The decrease in profit was partially offset by a swing from other losses (net) to other gains (net) of approximately **RMB22.3 million** and a decrease in income tax expense of approximately **RMB13.8 million**[61](index=61&type=chunk) [Capital Structure](index=20&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's net assets were RMB1,861.0 million, with net current assets at RMB816.6 million, comprising cash, inventories, and prepayments as assets, and trade payables, other payables, and contract liabilities as liabilities - As of June 30, 2025, the Group had net assets of approximately **RMB1,861.0 million** (December 31, 2024: approximately RMB1,811.0 million)[62](index=62&type=chunk) - The net current assets position was approximately **RMB816.6 million** (December 31, 2024: approximately RMB812.6 million)[62](index=62&type=chunk) - Major current assets included cash and bank balances of approximately **RMB752.8 million**, inventories of approximately **RMB86.5 million**, and prepayments, deposits, and other receivables of approximately **RMB177.9 million**[62](index=62&type=chunk) - Major current liabilities were trade payables and bills payable of approximately **RMB68.5 million**, other payables and accruals of approximately **RMB74.6 million**, and contract liabilities of approximately **RMB100.6 million**[62](index=62&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group held RMB752.8 million in cash and bank balances, with no interest-bearing bank borrowings and a 0% gearing ratio, and management is confident in future financial resources - As of June 30, 2025, the Group had cash and bank balances of approximately **RMB752.8 million** and no interest-bearing bank borrowings[63](index=63&type=chunk) - The Group's gearing ratio was **0%** (December 31, 2024: 0%)[63](index=63&type=chunk) - Management is confident that the Group has sufficient financial resources to meet its future debt obligations, working capital requirements, and future business expansion[63](index=63&type=chunk) [Outlook](index=21&type=section&id=Outlook) The Group will pursue capacity expansion, technological upgrades, and product diversification, with new projects enhancing energy efficiency and environmental performance, while strengthening core competitiveness despite an uncertain urea market - The Group will continue to pursue a growth strategy focused on capacity expansion, technological upgrades, and product diversification[64](index=64&type=chunk) - New projects will improve the energy efficiency and environmental performance of basic urea production[64](index=64&type=chunk) - The outlook for the urea market remains uncertain, with domestic supply and demand, adjustments to export policies, and fluctuations in international market conditions continuing to be major influencing factors[64](index=64&type=chunk) - The Group will continue to consolidate the stability and core competitiveness of its production and operations through measures such as expanding production capacity, optimizing processes, and promoting product innovation[64](index=64&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) The Group's primary foreign exchange risk stems from HKD-denominated bank balances, with no formal hedging policy, though management monitors and considers hedging as needed - The Group is primarily exposed to foreign exchange risk arising from bank balances denominated in Hong Kong Dollars[65](index=65&type=chunk) - The Group currently has no formal foreign exchange hedging policy and does not engage in hedging activities to mitigate foreign exchange risk[65](index=65&type=chunk) - Management monitors foreign exchange risk and will consider hedging significant foreign exchange exposures when necessary[65](index=65&type=chunk) [Capital Commitments](index=22&type=section&id=Capital%20Commitments) Contracted but unprovided capital commitments decreased to RMB74.0 million as of June 30, 2025 - As of June 30, 2025, the Group's contracted but unprovided capital commitments amounted to approximately **RMB74.0 million** (December 31, 2024: approximately RMB94.2 million)[66](index=66&type=chunk) [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, two land parcels in Hebei Province were pledged for RMB650 million in credit facilities, a change from no pledges at 2024 year-end - As of June 30, 2025, two parcels of land held by Dongguang Chemical Co., Ltd in Hebei Province were pledged as collateral for certain credit facilities totaling **RMB650 million**[67](index=67&type=chunk) - As of December 31, 2024, there were no such pledges[67](index=67&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[68](index=68&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 1,241 staff with total costs of RMB63.2 million, guided by a remuneration policy based on industry practice, individual performance, and a share option scheme - As of June 30, 2025, the Group employed **1,241 staff** (December 31, 2024: 1,252 staff)[69](index=69&type=chunk) - Total employee costs (including directors' remuneration) for the reporting period were approximately **RMB63.2 million** (for the six months ended June 30, 2024: approximately RMB64.0 million)[69](index=69&type=chunk) - The remuneration policy is formulated based on industry practice and individual employee performance, and a share option scheme has been adopted to provide incentives and rewards[69](index=69&type=chunk) [Events After Reporting Period](index=23&type=section&id=Events%20After%20Reporting%20Period) No material events affecting the Group occurred from the reporting period end to the announcement date - No events that could materially affect the Group occurred from the end of the reporting period up to the date of this announcement[70](index=70&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=23&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) No significant acquisitions or disposals of the Company's subsidiaries, associates, or joint ventures occurred during the reporting period - During the reporting period, there were no significant acquisitions or disposals of the Company's subsidiaries, associates, or joint ventures[71](index=71&type=chunk) [Material Investments](index=23&type=section&id=Material%20Investments) The Company held no material investments during the reporting period - During the reporting period, the Company held no material investments[72](index=72&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[73](index=73&type=chunk) [Interim Dividend](index=23&type=section&id=Interim%20Dividend) The Board of Directors decided not to declare an interim dividend for the reporting period - The Board of Directors decided not to declare an interim dividend for the reporting period[74](index=74&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) [Audit Committee and Review of Interim Results](index=23&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, composed of independent non-executive directors, reviewed the Group's interim results without disagreement, and the auditor conducted a review per ISRE 2410 - The Audit Committee comprises independent non-executive directors Mr Wu Shiliang (Chairman), Mr Liu Jincheng, and Ms Lin Xiuxiang[75](index=75&type=chunk) - The Audit Committee has reviewed and discussed the interim results with management, with no disagreements[75](index=75&type=chunk) - The interim results have been reviewed by BDO Limited, the Company's auditor, in accordance with International Standard on Review Engagements 2410[75](index=75&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) The Board adopted the Corporate Governance Code from Listing Rules Appendix C1 Part 2 and confirmed the company's compliance throughout the reporting period - The Board has adopted the Corporate Governance Code set out in Part 2 of Appendix C1 to the Listing Rules[76](index=76&type=chunk) - The Company has complied with the code provisions set out in Part 2 of the Corporate Governance Code throughout the reporting period[76](index=76&type=chunk) [Standard Code for Securities Transactions by Directors](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted a code of conduct for directors' securities transactions, no less stringent than the Listing Rules' Standard Code, with all directors confirming compliance during the reporting period - The Company has adopted a code of conduct regarding directors' securities transactions, the terms of which are no less stringent than the Standard Code set out in Appendix C3 to the Listing Rules[77](index=77&type=chunk) - All directors confirmed that throughout the reporting period, they have complied with the required standards set out in the Standard Code and the Company's code of conduct governing directors' securities transactions[77](index=77&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=24&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is available on the HKEX and company websites, with the interim report to be dispatched to shareholders and published on these sites in due course - This interim results announcement is published on the HKEX website www.hkex.com.hk and the Company's website www.dg-chemical.com[78](index=78&type=chunk) - In accordance with the Listing Rules, the interim report for the reporting period will be dispatched to the Company's shareholders and published on the aforementioned HKEX and Company websites in due course[78](index=78&type=chunk) [Acknowledgement](index=24&type=section&id=Acknowledgement) Chairman Wang Chunmeng, on behalf of the Board, extended sincere gratitude to management, employees, shareholders, and customers for their hard work, dedication, and support - Chairman Wang Chunmeng, on behalf of the Board, expressed sincere gratitude to the management and all staff for their hard work and dedication, and to the Company's shareholders and the Group's customers for their support[79](index=79&type=chunk)

Core Viewpoint - Dongguang Chemical (01702.HK) will hold a board meeting on August 27, 2025, to review and approve the interim results for the six months ending June 30, 2025, and to consider the proposal for an interim dividend distribution, if any [1] Summary by Relevant Categories - **Company Announcement** - Dongguang Chemical has scheduled a board meeting for August 27, 2025 [1] - The meeting will focus on the interim results for the six months ending June 30, 2025 [1] - The board will also consider the proposal for an interim dividend distribution [1]

（股份代號：1702） 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依賴該等內容而引致的任何損失承擔任何責任。 DONGGUANG CHEMICAL LIMITED 東光化工有限公司 （於開曼群島註冊成立的有限公司） 董事會會議日期 本公告乃根據香港聯合交易所有限公司證券上市規則第13.43條作出。 東 光 化 工 有 限 公 司（「本公司」）董 事 會（「董事會」）宣 佈，董 事 會 會 議 將 於2025年8月 27日（星 期 三）舉 行，以（其 中 包 括）考 慮 及 批 准 公 佈 本 公 司 及 其 附 屬 公 司 截 至2025 年6月30日 止 六 個 月 的 未 經 審 核 綜 合 財 務 報 表 以 及 考 慮 派 付 中 期 股 息（如 有）。 主 席 王春萌 中國，2025年8月15日 於本公告日期，董事會包括王春萌先生、王治河先生、孫祖善先生及 徐希江先生 為執行董事；及林秀香女士、劉金成先生及吳世良先生為獨立非執行董事。 承董事會命 東光化工有限公司 ...

致：香港交易及結算所有限公司 公司名稱: 東光化工有限公司(於開曼群島註冊成立的有限公司) 呈交日期: 2025年8月4日 I. 法定/註冊股本變動 FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | 是 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01702 | 說明 | 東光化工 | | | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 500,000,000,000 | USD | | 0.0001 | USD | | 50,000,000 | | 增加 / 減少 (-) | | | | | | | USD | | | | 本月底結存 | | | 500,000,000,000 | USD | | 0.0001 ...

Financial Performance - The company's revenue for the fiscal year 2024 was RMB 2,575.4 million, a decrease of 11.8% compared to RMB 2,920.7 million in 2023[9][10] - Gross profit fell to RMB 172.0 million, representing a decline of 48.3% from RMB 333.0 million in the previous year[9][12] - Net profit for the year decreased by 55.5% to RMB 86.4 million, down from RMB 194.1 million in 2023[9][14][22] - The basic earnings per share dropped to RMB 13.6, compared to RMB 30.6 in the previous fiscal year[9] - Revenue fell by approximately RMB 345.3 million or 11.8% to about RMB 2,575.4 million, down from approximately RMB 2,920.7 million, primarily due to a decline in the average selling price of urea[28] - The average selling price of urea decreased by approximately RMB 347 per ton or 15.9% to about RMB 1,842 per ton, compared to approximately RMB 2,189 per ton for the previous year[29] - Urea revenue decreased by approximately RMB 263.2 million or 10.5% to about RMB 2,247.8 million, attributed to the drop in average selling price[29] - The gross margin fell from approximately 11.4% for the year ended December 31, 2023, to about 6.7% for the reporting period[34] - The net profit for the year decreased by approximately RMB 107.7 million or 55.5% from about RMB 194.1 million for the year ended December 31, 2023, to about RMB 86.4 million for the reporting period[41] Sales and Market Dynamics - Urea sales volume increased compared to last year, partially offsetting the impact of declining average selling prices[22] - The company faced significant challenges due to a sharp decline in urea prices and weak domestic demand, exacerbated by export restrictions[21][22] - The sales volume of urea increased by approximately 6.4% during the reporting period, despite the decline in revenue[29] - The company expects a gradual recovery in the Chinese urea market, driven by adjustments in production surplus and a rebound in product demand[25] - The company expects the Chinese urea market to gradually recover by 2025, despite ongoing challenges from global economic conditions and local policy changes[44] Operational Efficiency and Innovation - The company implemented several technical upgrades to existing production facilities, enhancing operational efficiency and reducing carbon emissions[22] - The company is actively upgrading its product lines to meet stricter market standards and customer demands, focusing on technological innovation and quality improvement[23] - The company plans to enhance operational efficiency and increase technological innovation to navigate future uncertainties and create long-term value for stakeholders[25] - The company is investing $50 million in research and development for new technologies aimed at enhancing product efficiency[62] - The company is investing $30 million in research and development for new technologies aimed at enhancing user experience[71] Governance and Compliance - The board proposed a final dividend of HKD 0.036 per ordinary share for the year ended December 31, 2024, totaling approximately HKD 22.4 million, down from HKD 49.7 million in 2023[55] - The company has adopted a share option scheme to incentivize eligible participants, including employees, based on their contributions[50] - The board has established effective communication policies with shareholders, encouraging participation in annual meetings[89] - The company has established governance practices to ensure compliance with applicable laws, rules, and regulations[104] - The board is committed to providing balanced and clear assessments in all statutory and regulatory communications[108] Employee and Organizational Structure - As of December 31, 2024, the group employed 1,252 employees, a decrease from 1,292 employees as of December 31, 2023[50] - Total employee costs, including director remuneration, amounted to RMB 159.3 million for the reporting period, up from RMB 134.9 million for the year ended December 31, 2023[50] - The gender ratio of employees as of December 31, 2024, is 77% male and 23% female, reflecting the industrial nature of the business[174] - The company has maintained good relationships with employees, suppliers, and customers, with an acceptable employee turnover rate[184][185][186] Strategic Planning and Future Outlook - The company aims to enhance its market position and shareholder value through capacity expansion, improving product quality, and exploring acquisition opportunities[45] - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies[61] - Market expansion plans include entering three new international markets by the end of the fiscal year, targeting a 10% increase in market share[63] - New product launches are expected to contribute an additional $50 million in revenue in the upcoming year[70] Risk Management and Internal Controls - The company has established risk management procedures to address and manage all significant risks related to its business[169] - The company maintains a reasonable and effective internal control system, as confirmed by the board through the audit committee[109] - The audit committee regularly reviews the effectiveness of the internal control system[109] - An external professional firm was engaged to review the internal control system for effectiveness and efficiency, with no significant deficiencies identified[169] Corporate Social Responsibility - The company made charitable donations of approximately RMB 120,000 during the year ended December 31, 2024[195] - The company continues to update internal policies and plans to prevent environmental risks and ensure compliance with applicable standards and regulations[182]

Core Viewpoint - Dongguang Chemical is a key player in ensuring agricultural production and food security in China, particularly during the critical spring plowing season, by maintaining stable fertilizer supply and enhancing production capabilities [1][4][12]. Group 1: Production and Supply - Dongguang Chemical has achieved a daily fertilizer dispatch volume exceeding 5,000 tons since the beginning of spring plowing in 2025, reinforcing its role in safeguarding the nation's food supply [1][4]. - The company has invested 230 million yuan in 2024 to upgrade various production technologies, including ammonia synthesis and energy-saving modifications, which have significantly improved operational efficiency and product quality [5][9]. - Two urea production units are operating at full capacity to meet the high demand for fertilizers during the spring plowing peak [4][5]. Group 2: Logistics and Distribution - Dongguang Chemical has implemented a rapid logistics model, ensuring that fertilizer vehicles are loaded and dispatched immediately upon arrival, thus optimizing delivery efficiency [6][10]. - The company has established retail points at its facilities to facilitate convenient purchasing for farmers, ensuring timely access to fertilizers [6][10]. Group 3: Research and Development - The company has established a research center and collaborates with universities and research institutions to develop environmentally friendly and efficient fertilizers [9][10]. - New functional fertilizers have been introduced, including long-lasting fertilizers that reduce nutrient loss and improve soil conditions, enhancing crop resilience and fertilizer utilization [9][10]. Group 4: Quality Control and Compliance - Dongguang Chemical maintains a strict quality management system, ensuring traceability and compliance with production standards, with a 100% product qualification rate [12][13]. - The company has proactively secured 80,000 tons of raw material reserves to stabilize urea prices during the spring plowing season, while also combating counterfeit products [12][13]. Group 5: Commitment to Agricultural Support - The company has formed a professional agricultural technology service team to provide farmers with tailored fertilization advice and training, enhancing fertilizer application efficiency and reducing costs [10][11]. - Dongguang Chemical aims to continue its commitment to stable production and supply, focusing on technological innovation and high-quality service to support rural revitalization and modern agricultural development [13].