[Financial Summary](index=1&type=section&id=Financial%20Summary) This section provides an unaudited financial overview for the six months ended June 30, 2025, highlighting key performance indicators Unaudited Financial Summary for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 105,200 | 111,700 | (6,500) | -5.8% | | Gross Profit | 80,000 | 82,700 | (2,700) | -3.3% | | Profit | 50,600 | 49,900 | 700 | 1.4% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue decreased by **5.8%** to **HK$105.2 million**, yet profit for the period increased by **1.4%** to **HK$50.6 million** due to lower finance costs and income tax expense, with basic and diluted earnings per share remaining at **HK$0.05** Key Data from Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 105,236 | 111,671 | (6,435) | -5.8% | | Cost of sales | (25,264) | (28,964) | 3,700 | -12.8% | | Gross profit | 79,972 | 82,707 | (2,735) | -3.3% | | Other income | 1,193 | 915 | 278 | 30.4% | | Net other losses | (1,742) | (259) | (1,483) | 466.7% | | General and administrative expenses | (5,953) | (6,404) | 451 | -7.0% | | Operating profit | 73,470 | 76,959 | (3,489) | -4.5% | | Finance costs | (11,543) | (14,643) | 3,100 | -21.2% | | Profit before income tax | 61,927 | 62,316 | (389) | -0.6% | | Income tax expense | (11,369) | (12,397) | 1,028 | -8.3% | | Profit for the period | 50,558 | 49,919 | 639 | 1.3% | | Basic and diluted earnings per share (HK$) | 0.05 | 0.05 | 0.00 | 0.0% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was **HK$50.6 million**, and total comprehensive income for the period significantly increased to **HK$92.7 million** from **HK$17.4 million** in the prior year, driven by a favorable shift in currency translation differences Key Data from Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Profit for the period | 50,558 | 49,919 | 639 | | Exchange differences on translation | 42,098 | (32,479) | 74,577 | | Total comprehensive income for the period | 92,656 | 17,440 | 75,216 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased by approximately **3.6%** to **HK$2,227.7 million** compared to December 31, 2024, with total equity growing by approximately **6.7%** to **HK$1,472.2 million** while total liabilities slightly decreased, leading to increases in both net current assets and net assets Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | | Non-current assets | 1,232,641 | 1,232,065 | 576 | 0.05% | | Current assets | 995,085 | 917,529 | 77,556 | 8.45% | | **TOTAL ASSETS** | **2,227,726** | **2,149,594** | **78,132** | **3.63%** | | **EQUITY** | | | | | | Total equity | 1,472,174 | 1,379,518 | 92,656 | 6.72% | | **LIABILITIES** | | | | | | Non-current liabilities | 489,311 | 500,874 | (11,563) | -2.31% | | Current liabilities | 266,241 | 269,202 | (2,961) | -1.10% | | **TOTAL LIABILITIES** | **755,552** | **770,076** | **(14,524)** | **-1.89%** | | Net current assets | 728,844 | 648,327 | 80,517 | 12.42% | | Total assets less current liabilities | 1,961,485 | 1,880,392 | 81,093 | 4.31% | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering accounting policies, segment reporting, and specific financial statement items [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The Group's condensed consolidated interim financial information is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34 'Interim Financial Reporting' issued by the HKICPA, adopting a going concern basis with sufficient working capital for the next 12 months - The interim financial information is prepared in accordance with the Hong Kong Listing Rules and HKAS 34, and should be read in conjunction with the 2024 financial statements[9](index=9&type=chunk) - The Board confirms the Group has sufficient working capital to meet its financial obligations for the next 12 months, and the financial information is prepared on a going concern basis[10](index=10&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted HKAS 21 and HKFRS 1 (Amendments) 'Lack of Exchangeability' during the period, with no significant impact on performance or financial position, while several new standards and amendments effective in 2026 and 2027 are currently being assessed for their potential impact - Amendments to standards adopted in the current period, such as HKAS 21 and HKFRS 1 'Lack of Exchangeability', have no significant impact on the Group's performance or financial position[11](index=11&type=chunk) New and Revised Standards Not Yet Effective | Standard Name | Content | Effective Date | | :--- | :--- | :--- | | HKFRS 9 and HKFRS 7 (Amendments) | Classification and Measurement of Financial Instruments | January 1, 2026 | | Annual Improvements to HKFRSs — Volume 11 | Various standard improvements | January 1, 2026 | | HKFRS 9 and HKFRS 7 (Amendments) | Contracts that Rely on Natural Energy Production for Electricity | January 1, 2026 | | HKFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | HKFRS 19 | Disclosure for Non-Publicly Accountable Subsidiaries | January 1, 2027 | | HK Interpretation 5 | Classification by a Borrower of a Term Loan that Contains a Repayment on Demand Clause | January 1, 2027 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group operates as a single segment, providing wastewater treatment services in China, with all revenue and non-current assets located within the country, generating **HK$49.1 million** from wastewater treatment operations and **HK$56.1 million** from service concession finance income as of June 30, 2025 - The Group is considered a single operating segment, primarily providing wastewater treatment services in China[14](index=14&type=chunk)[15](index=15&type=chunk) Revenue Sources (Six Months Ended June 30) | Revenue Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Wastewater treatment operation services | 49,100 | 53,495 | | Service concession arrangement finance income | 56,136 | 58,176 | | **TOTAL REVENUE** | **105,236** | **111,671** | - All revenue is derived from customers in China, and all non-current assets are located in China[19](index=19&type=chunk) - Customer A accounts for **100%** of the Group's total revenue[18](index=18&type=chunk) [Other Income](index=8&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income increased to **HK$1.2 million**, primarily due to higher interest income Other Income Details (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest income | 781 | 616 | | Others | 412 | 299 | | **TOTAL** | **1,193** | **915** | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **HK$11.4 million**, an **8.1%** decrease from the prior year, primarily comprising current and deferred income tax Income Tax Expense Details (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax | 6,245 | 8,777 | | Deferred income tax | 5,124 | 3,620 | | **TOTAL** | **11,369** | **12,397** | [Earnings Per Share](index=9&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share remained at **HK$0.05**, consistent with the prior year, as there were no potential dilutive ordinary shares issued Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company (HK$ thousand) | 50,558 | 49,919 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,000,000 | 1,000,000 | | Basic earnings per share (HK$) | 0.05 | 0.05 | | Diluted earnings per share (HK$) | 0.05 | 0.05 | [Dividends](index=9&type=section&id=Dividends) For the six months ended June 30, 2025, the Company neither paid nor declared any dividends - The Company neither paid nor declared dividends during the reporting period[25](index=25&type=chunk) [Receivables under Service Concession Arrangements](index=9&type=section&id=Receivables%20under%20Service%20Concession%20Arrangements) As of June 30, 2025, total receivables under service concession arrangements increased to **HK$1,711.9 million**, an approximate **3.1%** increase from December 31, 2024, primarily due to the appreciation of RMB against HKD Receivables under Service Concession Arrangements (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current | 489,360 | 439,135 | | Non-current | 1,222,497 | 1,221,653 | | **TOTAL** | **1,711,857** | **1,660,788** | - The total amount of receivables increased by approximately **HK$48.1 million** or **2.9%**, primarily attributable to the appreciation of RMB against HKD[50](index=50&type=chunk) [Trade and Other Receivables](index=10&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables increased to **HK$411.6 million**, a **19.8%** rise from December 31, 2024, primarily due to an increase in trade receivables, with those over **365 days** increasing due to delayed settlement by the Yinchuan Municipal Urban Management Bureau Trade and Other Receivables (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 394,221 | 326,658 | | Other receivables | 16,889 | 16,209 | | Prepayments | 440 | 607 | | **TOTAL** | **411,550** | **343,474** | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 days | 19,417 | 16,240 | | 31–60 days | 21,136 | 17,302 | | 61–90 days | 19,759 | 17,999 | | 91–180 days | 48,247 | 57,780 | | 181–365 days | 112,567 | 102,373 | | Over 365 days | 173,095 | 114,964 | | **TOTAL** | **394,221** | **326,658** | - Trade receivables over **365 days** increased, primarily due to delayed settlement procedures by the Yinchuan Municipal Urban Management Bureau[27](index=27&type=chunk) [Borrowings](index=11&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings decreased by **3.4%** to **HK$601.1 million** from December 31, 2024, primarily due to repayment of long-term loans, with all borrowings secured by contractual rights to Group revenue and land use rights Borrowings Details (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current portion of long-term borrowings | 364,667 | 384,742 | | Current portion of long-term borrowings | 218,253 | 218,950 | | Short-term borrowings | 18,190 | 18,411 | | **TOTAL** | **601,110** | **622,103** | - Borrowings decreased by approximately **HK$21.0 million** or **3.4%**, primarily due to the repayment of long-term loans of approximately **HK$38.7 million**[53](index=53&type=chunk)[54](index=54&type=chunk) - Borrowings are secured by contractual rights to revenue generated by the Group and land use rights where the wastewater treatment plants are located[28](index=28&type=chunk) [Trade and Other Payables](index=11&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables slightly decreased to **HK$27.6 million** from December 31, 2024, with a significant portion of trade payables aged over **90 days** Trade and Other Payables (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 16,278 | 17,933 | | Retention payables | 469 | 489 | | Other payables and accrued expenses | 10,861 | 9,732 | | **TOTAL** | **27,608** | **28,154** | Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 days | 723 | 915 | | 31–60 days | 574 | 679 | | 61–90 days | 657 | 737 | | Over 90 days | 15,979 | 13,947 | | **TOTAL** | **17,933** | **16,278** | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive overview of the Group's business operations, strategic outlook, and detailed financial performance review for the reporting period [Business Review](index=12&type=section&id=Business%20Review) The Group operates and manages three wastewater treatment facilities in Yinchuan, Ningxia, China, providing services under a **30-year** Transfer-Operate-Transfer (TOT) model, with a total daily treatment capacity of **375,000 cubic meters** as of June 30, 2025, and processed approximately **37.8 million cubic meters** during the period, a **0.5%** decrease due to lower inflow, while strictly adhering to discharge standards without significant quality issues - The Group operates and manages three wastewater treatment facilities in Yinchuan, Ningxia, China, providing services under a **30-year** Transfer-Operate-Transfer (TOT) model[30](index=30&type=chunk) - As of June 30, 2025, the total daily wastewater treatment capacity is **375,000 cubic meters**, with discharge standards meeting Class I-A and quasi-Class IV water standards[30](index=30&type=chunk) - During the reporting period, the total volume of wastewater treated was approximately **37.8 million cubic meters**, a decrease of approximately **0.5%** compared to the same period last year, primarily due to generally lower wastewater inflow[31](index=31&type=chunk) - The Group strictly adheres to national policy discharge standards and has not encountered any significant quality issues or interruptions[31](index=31&type=chunk) - Revenue for the reporting period was approximately **HK$105.2 million**, with profit after tax of approximately **HK$50.6 million**, showing an increase in profit despite a decrease in revenue[31](index=31&type=chunk) [Development Strategies and Prospects](index=13&type=section&id=Development%20Strategies%20and%20Prospects) China's economy showed resilient growth in H1 2025 but is projected to slow to **4.5%** for the full year, impacted by US tariffs, a weak labor market, and a sluggish property sector, with the Group focusing on new water tariff finalization, expansion and upgrade projects, compensation agreements, operational excellence, and exploring M&A opportunities - China's economy showed resilience in H1 2025, but full-year growth is projected to slow to approximately **4.5%**, impacted by US tariffs, a weak labor market, and a sluggish property sector, with the central government expected to provide additional fiscal support[34](index=34&type=chunk) - In the second half of the year, the Group will focus on finalizing new water tariffs and the finalization of Phase I of the Second Treatment Plant, Phase I (upgrade project) of the Fourth Treatment Plant, and Phase II (expansion project) of the Fourth Treatment Plant[34](index=34&type=chunk) - The Group will continue to finalize the compensation agreement with the Yinchuan Municipal Government regarding the closure of the First Treatment Plant[35](index=35&type=chunk) - Operationally, the Group will continue to ensure robust operations, stable compliance with discharge standards, cost optimization, and enhanced management efficiency[35](index=35&type=chunk) - The Group will explore potential merger and acquisition opportunities for wastewater treatment assets in Yinchuan, Ningxia, and other regions in China to expand its footprint[35](index=35&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides a detailed review of the reporting period's financial performance, highlighting a **5.8%** revenue decrease, a **1.4%** profit increase, and improved liquidity and capital resources, alongside changes in key income statement and balance sheet items [Revenue](index=14&type=section&id=Revenue) Total revenue decreased by **5.8%** from **HK$111.7 million** to **HK$105.2 million**, with wastewater treatment operation services revenue declining by **8.2%** due to reduced operating costs, and service concession arrangement finance income decreasing by **3.6%** primarily from a lower opening balance of receivables Revenue Composition and Changes (Six Months Ended June 30) | Revenue Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Wastewater treatment operation services | 49,100 | 53,500 | (4,400) | -8.2% | | Service concession arrangement finance income | 56,100 | 58,200 | (2,100) | -3.6% | | **TOTAL REVENUE** | **105,200** | **111,700** | **(6,500)** | **-5.8%** | - The decrease in wastewater treatment operation services revenue is primarily attributable to reduced wastewater treatment operating costs, particularly chemical costs, leading to lower revenue recognized based on actual costs and a reasonable profit margin[37](index=37&type=chunk) - The decrease in service concession arrangement finance income is primarily due to a lower opening balance of receivables under service concession arrangements[37](index=37&type=chunk) [Cost of Sales](index=14&type=section&id=Cost%20of%20Sales) Cost of sales decreased by **12.8%** from **HK$29.0 million** to **HK$25.3 million**, with wastewater treatment operating costs falling by **18.0%** due to lower chemical costs, and other cost of sales decreasing by **1.1%** primarily from reduced repair and maintenance expenses Cost of Sales Composition and Changes (Six Months Ended June 30) | Cost of Sales Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Wastewater treatment operating costs | 16,400 | 20,000 | (3,600) | -18.0% | | Other cost of sales | 8,900 | 9,000 | (100) | -1.1% | | **TOTAL COST OF SALES** | **25,300** | **29,000** | **(3,700)** | **-12.8%** | - Wastewater treatment operating costs decreased primarily due to a reduction in chemical costs of approximately **HK$2.0 million**[39](index=39&type=chunk) - Other cost of sales decreased primarily due to a reduction in repair and maintenance costs of approximately **HK$0.5 million**[40](index=40&type=chunk) [Gross Profit and Gross Profit Margin](index=15&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit decreased by **3.3%** from **HK$82.7 million** to **HK$80.0 million**, primarily due to reduced revenue from wastewater treatment operation services, while the gross profit margin increased from **74.1%** to **76.0%** Gross Profit and Gross Profit Margin Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 80,000 | 82,700 | (2,700) | -3.3% | | Gross Profit Margin | 76.0% | 74.1% | 1.9% | - | - The decrease in gross profit is primarily due to reduced revenue generated from wastewater treatment operation services[41](index=41&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) Other income increased by **33.3%** from **HK$0.9 million** to **HK$1.2 million**, primarily due to higher interest income resulting from increased cash and bank balances Other Income Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income | 1,200 | 900 | 300 | 33.3% | - The increase in other income is primarily due to higher interest income of approximately **HK$0.2 million** resulting from increased cash and bank balances[42](index=42&type=chunk) [Net Other Losses](index=15&type=section&id=Net%20Other%20Losses) Net other losses significantly increased by **466.7%** from **HK$0.3 million** to **HK$1.7 million**, primarily due to a court-ordered payment of approximately **HK$1.6 million** to a contractor Net Other Losses Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Other Losses | 1,700 | 300 | 1,400 | 466.7% | - The increase in net other losses is primarily due to a court-ordered payment of approximately **HK$1.6 million** to a contractor[43](index=43&type=chunk) [General and Administrative Expenses](index=15&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased by **6.3%** from **HK$6.4 million** to **HK$6.0 million**, primarily due to reduced staff welfare expenses General and Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 6,000 | 6,400 | (400) | -6.3% | - The decrease in general and administrative expenses is primarily due to a reduction in staff welfare expenses of approximately **HK$0.3 million**[44](index=44&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) Finance costs decreased by **21.2%** from **HK$14.6 million** to **HK$11.5 million**, primarily due to a reduction in the People's Bank of China's 5-year Loan Prime Rate and the repayment of approximately **HK$48.4 million** in bank borrowings Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | 11,500 | 14,600 | (3,100) | -21.2% | - The decrease in finance costs is primarily due to a reduction in the People's Bank of China's 5-year Loan Prime Rate and the repayment of approximately **HK$48.4 million** in bank borrowings[45](index=45&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by **8.1%** from **HK$12.4 million** to **HK$11.4 million**, with the effective tax rate falling from **19.9%** to **18.4%**, primarily benefiting from the extension of China's environmental industry tax incentive policy, reducing the corporate income tax rate from **25.0%** to **15.0%** until 2027 Income Tax Expense and Effective Tax Rate Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income Tax Expense | 11,400 | 12,400 | (1,000) | -8.1% | | Effective Tax Rate | 18.4% | 19.9% | -1.5% | - | - The decrease in the effective tax rate is primarily due to the extension of China's environmental industry tax incentive policy by the Chinese tax authorities, reducing the corporate income tax rate from **25.0%** to **15.0%** until 2027[46](index=46&type=chunk) [Profit for the Period and Total Comprehensive Income](index=16&type=section&id=Profit%20for%20the%20Period%20and%20Total%20Comprehensive%20Income) Profit for the period increased by **1.4%** from **HK$49.9 million** to **HK$50.6 million**, while total comprehensive income significantly rose from **HK$17.4 million** to **HK$92.7 million**, primarily due to currency translation differences arising from the appreciation of RMB against HKD Profit for the Period and Total Comprehensive Income Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 50,600 | 49,900 | 700 | 1.4% | | Total Comprehensive Income | 92,700 | 17,400 | 75,300 | 432.8% | - The significant increase in total comprehensive income is primarily due to currency translation differences arising from the appreciation of RMB (functional currency) against HKD (reporting currency)[47](index=47&type=chunk) [Earnings Per Share](index=17&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share attributable to owners of the Company remained at **HK$0.05** per share - Basic and diluted earnings per share remained at **HK$0.05** per share, consistent with the prior year[48](index=48&type=chunk) [Receivables under Service Concession Arrangements](index=17&type=section&id=Receivables%20under%20Service%20Concession%20Arrangements) Total receivables under service concession arrangements increased by **2.9%** from **HK$1,660.8 million** to **HK$1,708.9 million**, primarily due to the appreciation of RMB against HKD Changes in Receivables under Service Concession Arrangements | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current portion | 486,400 | 439,100 | 47,300 | 10.8% | | Non-current portion | 1,222,500 | 1,221,700 | 800 | 0.1% | | **TOTAL** | **1,708,900** | **1,660,800** | **48,100** | **2.9%** | - The increase in total receivables is primarily due to the appreciation of RMB against HKD[50](index=50&type=chunk) [Trade and Other Receivables](index=17&type=section&id=Trade%20and%20Other%20Receivables) Trade and other receivables increased by **19.8%** from **HK$343.5 million** to **HK$411.6 million**, primarily due to an increase in trade receivables Changes in Trade and Other Receivables | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 411,600 | 343,500 | 68,100 | 19.8% | - The increase is primarily due to a rise in trade receivables of approximately **HK$67.6 million**[51](index=51&type=chunk) [Cash and Bank Balances](index=17&type=section&id=Cash%20and%20Bank%20Balances) Cash and bank balances decreased by **28.2%** from **HK$133.6 million** to **HK$95.9 million**, primarily due to the repayment of approximately **HK$48.4 million** in bank borrowings Changes in Cash and Bank Balances | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 95,900 | 133,600 | (37,700) | -28.2% | - The decrease in cash and bank balances is primarily due to the repayment of approximately **HK$48.4 million** in bank borrowings[52](index=52&type=chunk) [Borrowings](index=18&type=section&id=Borrowings) Total borrowings decreased by **3.4%** from **HK$622.1 million** to **HK$601.1 million**, primarily due to the repayment of approximately **HK$38.7 million** in long-term loans Changes in Total Borrowings | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Borrowings | 601,100 | 622,100 | (21,000) | -3.4% | - The decrease in borrowings is primarily due to the repayment of approximately **HK$38.7 million** in long-term loans[54](index=54&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, net current assets increased to **HK$728.8 million** and net assets increased to **HK$1,472.2 million**, indicating an improvement in liquidity and capital resources Changes in Liquidity and Capital Resources | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Current Assets | 728,800 | 648,300 | | Net Assets | 1,472,200 | 1,379,500 | [Gearing Ratio](index=18&type=section&id=Gearing%20Ratio) The gearing ratio (net debt divided by total equity) decreased from **35.4%** as of December 31, 2024, to **34.3%** as of June 30, 2025, indicating a reduction in financial leverage Changes in Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 34.3% | 35.4% | [Contingent Liabilities](index=18&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities or outstanding litigations - The Group had no significant contingent liabilities or outstanding litigations at the end of the reporting period[57](index=57&type=chunk) [Interim Dividends](index=18&type=section&id=Interim%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend[58](index=58&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) This section covers additional information including corporate governance compliance, audit committee review, post-reporting period events, and securities transactions by directors [Compliance with Corporate Governance Code](index=18&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has consistently applied and complied with all applicable provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules during the reporting period - The Company has consistently applied and complied with all applicable provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules[59](index=59&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's unaudited interim results, discussed accounting policies with senior management and external auditors, and comprises two independent non-executive directors, one of whom possesses professional accounting qualifications, and one non-executive director - The Audit Committee has reviewed the Group's unaudited interim results and discussed the accounting policies adopted[60](index=60&type=chunk) - The Audit Committee comprises two independent non-executive directors, one of whom possesses professional accounting qualifications, and one non-executive director[60](index=60&type=chunk) [Review of Condensed Consolidated Interim Financial Information](index=19&type=section&id=Review%20of%20Condensed%20Consolidated%20Interim%20Financial%20Information) The Company's unaudited condensed consolidated interim financial information has been reviewed by independent auditor PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410 - The unaudited condensed consolidated interim financial information has been reviewed by independent auditor PricewaterhouseCoopers[61](index=61&type=chunk) [Events After the Reporting Period](index=19&type=section&id=Events%20After%20the%20Reporting%20Period) There have been no significant subsequent events for the Group after the reporting period and up to the date of this announcement - No significant events occurred after the reporting period[62](index=62&type=chunk) [Standard Code for Securities Transactions by Directors](index=19&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors have confirmed full compliance with the code during the reporting period - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors have confirmed full compliance[63](index=63&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the reporting period, neither the Company nor its subsidiaries engaged in the purchase, sale, or redemption of listed securities[64](index=64&type=chunk) - As of June 30, 2025, the Company held no treasury shares[64](index=64&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=20&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement has been published on the HKEX website and the Company's website, with the interim report to be made available on the aforementioned websites in due course - The interim results announcement has been published on the HKEX and Company websites, and the interim report will be published in due course[65](index=65&type=chunk) [Acknowledgement](index=20&type=section&id=Acknowledgement) The Board extends its sincere gratitude to shareholders for their support and to the Group's staff for their hard work and contributions - The Board expresses its gratitude to shareholders and staff[66](index=66&type=chunk)

Core Viewpoint - Dali Environmental (01790.HK) announced that it will hold a board meeting on August 28, 2025, to approve the interim results for the six months ending June 30, 2025, and to consider the payment of an interim dividend, if any [1] Group 1 - The board meeting is scheduled for August 28, 2025 [1] - The meeting will focus on approving the interim results for the six months ending June 30, 2025 [1] - The company will also consider the payment of an interim dividend during the meeting [1]

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，概不對因本公告全部 或任何部份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。 TIL ENVIRO LIMITED 達 力 環 保 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：1790） 董事會會議日期 承董事會命 達力環保有限公司 主席 Lim Chin Sean 香港，2025年8月18日 於本公告日期，非執行董事為Lim Chin Sean先生及Lim Siew Ling女士；執行董事 為Wong Kok Sun先生；及獨立非執行董事為陳于文先生、Hew Lee Lam Sang先生 及譚家熙先生。 達力環保有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈，本公司將於 2025年8月28日（ 星期四 ）舉行董事會會議，以（ 其中包括 ）批准本公司及其附屬公 司截至2025年6月30日止六個月之中期業績及其發佈，以及考慮派付中期股息（ 如 有 ）。 ...

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 致：香港交易及結算所有限公司 公司名稱: 達力環保有限公司 (於開曼群島註冊成立的有限公司) 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01790 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 1,000,000,000 | | 0 | | 1,000,000,000 | | 增加 / 減少 (-) | | | 0 | | 0 | | | | 本月底結存 | | | 1,000,000,000 | | 0 | | 1,000,000,000 | 第 2 頁 共 10 頁 v 1.1.1 III.已發行股份 ...

Financial Performance - The group recorded revenue of approximately HKD 230.6 million, an increase of approximately HKD 50.2 million or about 27.8% from HKD 180.4 million in the previous year[9]. - The after-tax profit was approximately HKD 66.2 million, a decrease of about HKD 7.1 million or approximately 9.7% compared to HKD 73.3 million in the previous year[9]. - Revenue for the reporting period was approximately HKD 230.6 million, an increase from approximately HKD 180.4 million in the same period last year[22]. - The annual profit decreased from approximately HKD 73.3 million for the year ended December 31, 2023, to about HKD 66.2 million, a reduction of approximately HKD 7.1 million or about 9.7%[45]. - The total comprehensive income for the reporting period was approximately HKD 20.3 million, down from about HKD 37.2 million for the year ended December 31, 2023[45]. - Revenue from wastewater treatment operations rose from approximately HKD 64.6 million to approximately HKD 113.5 million, an increase of about HKD 48.9 million or approximately 75.7%[33]. - The gross profit increased from approximately HKD 114.1 million to approximately HKD 176.1 million, an increase of about HKD 62.0 million or approximately 54.3%[37]. - The gross profit margin improved from approximately 63.2% to approximately 76.4%[38]. Operational Performance - The total sewage treatment volume during the reporting period was approximately 78.7 million cubic meters, a decrease of about 1.7 million cubic meters or approximately 2.1% compared to the previous year[8]. - The total daily wastewater treatment capacity is 375,000 cubic meters following the cessation of operations at the first treatment plant[22]. - All wastewater treatment plants achieved Class A discharge standards (275,000 cubic meters per day) and Class IV water standards (100,000 cubic meters per day)[22]. - The company actively complied with all national policy discharge standards and parameters during the reporting period[22]. - The company has not encountered any significant quality issues or interruptions in its wastewater treatment services during the reporting period[22]. - The company is focused on upgrading and expanding wastewater treatment facilities to meet higher discharge standards and increase design treatment capacity[22]. - The company aims to enhance operational efficiency and cost optimization in managing sewage treatment plants[13]. Future Outlook - The company anticipates challenges in the upcoming year due to the ongoing slowdown in the Chinese economy and geopolitical tensions, but maintains a positive long-term outlook as a long-term concessionaire[10]. - The group expects the sewage treatment industry outlook to remain optimistic, leading to a cautiously optimistic financial performance for the fiscal year ending December 31, 2025[14]. - The company plans to focus on finalizing new water pricing and basic water volume agreements with local authorities, which are expected to positively contribute to revenue[12]. - The company is actively seeking potential acquisitions of sewage treatment assets in Yinchuan, Ningxia, and other regions in China to strengthen its business presence[14]. Financial Position - Trade and other receivables decreased from approximately HKD 383.1 million as of December 31, 2023, to about HKD 343.5 million, a decline of approximately HKD 39.6 million or about 10.3%[48]. - Cash and bank balances increased by approximately HKD 43.6 million or about 48.4%, from about HKD 90.0 million to approximately HKD 133.6 million[50]. - Total borrowings decreased by approximately HKD 91.1 million or about 12.8%, from HKD 713.2 million to about HKD 622.1 million[52]. - The debt-to-equity ratio improved to approximately 35.4% as of December 31, 2024, compared to about 45.8% as of December 31, 2023[54]. - As of December 31, 2024, the company's distributable reserves amount to approximately HKD 593,460,000, a decrease from HKD 601,263,000 in 2023[82]. Corporate Governance - The company aims to maintain high levels of corporate governance to protect shareholder interests and enhance corporate value and accountability[123]. - The board has adopted a statement regarding the company's purpose, values, and strategies, emphasizing a strong culture for long-term business success and sustainable growth[125]. - The board consists of six directors, ensuring a balanced composition with rich corporate and strategic planning experience[140]. - The company has established a whistleblowing policy to encourage stakeholders to report misconduct confidentially and anonymously[194]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, with defined responsibilities[168]. - The company has implemented monitoring procedures to ensure compliance with laws and regulations and to safeguard assets from unauthorized use[186]. Risk Management - The board has established a comprehensive risk management policy to identify, assess, and manage operational risks[138]. - The company has a robust internal control and risk management system to provide reasonable assurance against significant misstatements, losses, or fraud[128]. - The company has no internal audit function and currently believes there is no urgent need to establish one given the scale, nature, and complexity of its operations[186]. - The risk management policies and internal control procedures will be revised in response to any significant changes[189]. Shareholder Information - Over 90% of the company's revenue comes from its largest customer, Yinchuan Construction Bureau, posing a significant risk if the concession agreement is terminated[71]. - The company has a 30-year fixed-term concession agreement with Yinchuan Construction Bureau, ensuring stable cash flow as long as it meets the required wastewater treatment standards[78]. - The company did not recommend the payment of a final dividend for the year ending December 31, 2024[68]. - Major shareholders hold 750,000,000 shares each, representing 75% of the company's shares, including Lim Chee Meng and related entities[103]. Compliance and Quality Control - The company has implemented various quality control measures to ensure compliance with environmental laws and regulations in its operations[74]. - The quality control team is responsible for laboratory analysis of influent and effluent wastewater to ensure compliance with standards[132]. - The company has not faced any sanctions or penalties for non-compliance with health and safety laws during the reporting period[73]. - The company has a zero-tolerance approach towards bribery and corruption, ensuring high standards of business integrity[190].

Financial Performance - Revenue for the year ended December 31, 2024, was approximately HKD 230.6 million, an increase of about HKD 50.2 million or approximately 27.8% compared to the previous year[3] - Gross profit for the year was approximately HKD 176.1 million, representing an increase of about HKD 62.0 million or approximately 54.3% year-over-year[3] - Net profit for the year was approximately HKD 66.2 million, a decrease of about HKD 7.1 million or approximately 9.7% compared to the previous year[3] - The company reported a gross margin of approximately 76.4% for the year, up from 63.3% in the previous year[4] - Operating profit before tax was approximately HKD 82.1 million, down from HKD 90.9 million in the previous year[4] - Total comprehensive income for the year was approximately HKD 20.3 million, compared to HKD 37.2 million in the previous year[5] - Basic and diluted earnings per share for the year were HKD 0.07, unchanged from the previous year[4] Revenue Breakdown - The group reported revenue from wastewater treatment services of HKD 113,538 thousand for 2024, compared to HKD 64,554 thousand in 2023, representing an increase of 76%[15] - The revenue from special service arrangements was HKD 117,016 thousand in 2024, up from HKD 115,799 thousand in 2023, indicating a growth of 1%[15] - Total revenue for the group reached HKD 230,554 thousand in 2024, compared to HKD 180,353 thousand in 2023, reflecting an overall increase of 28%[15] Assets and Liabilities - Total assets as of December 31, 2024, amounted to HKD 2,149,594,000, compared to HKD 2,241,275,000 in 2023, reflecting a decrease of approximately 4.1%[6] - Total liabilities increased from HKD 770,076,000 in 2023 to HKD 882,024,000 in 2024, representing an increase of about 14.5%[7] - The company's total equity increased from HKD 1,359,251,000 in 2023 to HKD 1,379,518,000 in 2024, marking a growth of about 1.5%[6] - The company's total liabilities to equity ratio increased from 0.57 in 2023 to 0.64 in 2024, indicating a rise in financial leverage[7] Cash Flow and Financial Health - Cash and cash equivalents were reported at HKD 133,557,000 in 2024, compared to HKD 89,971,000 in 2023, representing an increase of about 48.5%[6] - The company expects sufficient operating cash flow to meet its financial obligations over the next 12 months, ensuring continued operations[9] - The company recorded a total of HKD 28,154,000 in trade payables as of December 31, 2024, compared to HKD 39,571,000 in the previous year[30] Operational Strategy - The company plans to expand its wastewater treatment services and special service arrangements in the upcoming fiscal year[3] - The company is focusing on enhancing its operational efficiency and exploring new market opportunities to drive future growth[3] - The company plans to continue focusing on the expansion and upgrading of wastewater treatment facilities in cooperation with local authorities[35] - The company is exploring potential acquisition opportunities for wastewater treatment assets in Yinchuan, Ningxia, and other regions in China[36] Accounting and Compliance - The group has begun evaluating the impact of new accounting standards and interpretations on its operations, which may lead to changes in accounting policies and disclosures[12] - The group has adopted new and revised Hong Kong Financial Reporting Standards effective from 2024, with no significant impact on its performance and financial position[10] - The company has established an audit committee to oversee the financial reporting process, risk management, and internal controls[62] - The company has confirmed that the financial figures for the year ending December 31, 2024, have been audited and are consistent with the consolidated financial statements[63] Market Conditions - The company anticipates a slowdown in economic growth in China due to weak consumer confidence and a sluggish labor market[34] Shareholder Information - The company did not declare or pay any dividends for both fiscal years 2024 and 2023[26] - The company did not recommend the payment of a final dividend for the years ended December 31, 2024, and December 31, 2023[60] - The annual performance announcement has been published on the Hong Kong Stock Exchange website and the company's website[67] - The company expresses gratitude to shareholders for their support and to employees for their hard work and contributions[68]

[Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=8&type=section&id=Business%20Review) The Group operates three wastewater treatment plants in Yinchuan, Ningxia, processing approximately **38.0 million cubic meters** in the reporting period, a **5.2% year-on-year decrease**, yet revenue grew **10.8% to HKD 111.7 million** and profit after tax increased **29.9% to HKD 49.9 million** due to accounting model adjustments, with future focuses on new water tariffs, expansion, compensation for the closed first plant, and potential M&A opportunities in China Key Performance Indicators for H1 2024 | Indicator | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 111.7 million HKD | 100.8 million HKD | +10.8% | | Profit After Tax | 49.9 million HKD | 38.4 million HKD | +29.9% | | Total Wastewater Treated | 38.0 million cubic meters | 40.1 million cubic meters | -5.2% | - Future Development Strategic Priorities: - Finalizing new water tariffs and new basic water volumes with local authorities[15](index=15&type=chunk) - Securing compensation agreements for the closed first treatment plant[15](index=15&type=chunk) - Continuously optimizing costs and enhancing operational efficiency[15](index=15&type=chunk) - Exploring potential merger and acquisition opportunities for wastewater treatment assets in China[15](index=15&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) The Group demonstrated strong financial performance with **10.8% revenue growth**, driven by a **27.1% increase** in wastewater treatment operation services due to accounting model adjustments, alongside a **6.5% reduction in cost of sales** and a **14.6% decrease in finance costs**, leading to a **29.9% surge in period profit** while maintaining a stable debt-to-asset ratio at **44.3%** [Operating Results](index=10&type=section&id=Operating%20Results) The Group's operating results significantly improved during the reporting period, with gross profit increasing **18.5% to HKD 82.7 million** and profit before tax rising **33.3% to HKD 62.3 million**, primarily attributable to increased revenue and effective cost control Summary of Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Item (thousand HKD) | 2024 (Unaudited) | 2023 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Revenue | 111,671 | 100,835 | +10.8% | | Gross Profit | 82,707 | 69,838 | +18.5% | | Profit Before Tax | 62,316 | 46,751 | +33.3% | | Profit for the Period | 49,919 | 38,413 | +29.9% | [Revenue Analysis](index=11&type=section&id=Revenue%20Analysis) Total revenue increased **10.8% year-on-year to HKD 111.7 million**, primarily driven by a **27.1% increase** in wastewater treatment operation services revenue due to favorable changes in projected cash flows under IFRIC 12, while financial income from concession service arrangements slightly decreased **0.9%** due to RMB depreciation - Revenue from wastewater treatment operation services increased by **27.1% (HKD 11.4 million)** year-on-year, primarily due to favorable changes in projected cash flows within the accounting model[18](index=18&type=chunk) - Financial income from concession service arrangements slightly decreased by **0.9% (HKD 0.5 million)** year-on-year, mainly impacted by the depreciation of RMB against HKD[18](index=18&type=chunk) [Cost and Gross Profit Analysis](index=12&type=section&id=Cost%20and%20Gross%20Profit%20Analysis) Cost of sales decreased **6.5% to HKD 29.0 million** year-on-year, mainly due to reduced chemical costs and depreciation and amortization expenses, leading to an **18.5% increase in gross profit to HKD 82.7 million** and an improved gross margin from **69.3% to 74.1%** - Key reasons for the decrease in cost of sales include a reduction of approximately **HKD 1.6 million** in chemical costs and approximately **HKD 1.8 million** in depreciation and amortization expenses[19](index=19&type=chunk) Changes in Gross Profit and Gross Margin | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Gross Profit | 82.7 million HKD | 69.8 million HKD | | Gross Margin | 74.1% | 69.3% | [Finance Costs and Taxation](index=13&type=section&id=Finance%20Costs%20and%20Taxation) Finance costs decreased **14.6% to HKD 14.6 million** year-on-year, driven by lower China Loan Prime Rates and repayment of bank borrowings, while income tax expense increased **49.4% to HKD 12.4 million** due to higher pre-tax profit, with the company continuing to benefit from a **15% preferential corporate income tax rate** - Finance costs decreased by **HKD 2.5 million**, primarily due to (i) a reduction in the People's Bank of China's 5-year Loan Prime Rate; and (ii) repayment of approximately **HKD 45.6 million** in bank borrowings during the reporting period[24](index=24&type=chunk) - The company continues to benefit from preferential tax policies for the environmental protection industry, with a corporate income tax rate of **15%**, extended until **2027**[24](index=24&type=chunk) [Profit and Earnings Per Share](index=14&type=section&id=Profit%20and%20Earnings%20Per%20Share) As a combined result, profit for the period increased **29.9% to HKD 49.9 million** year-on-year, with basic and diluted earnings per share rising from **HKD 0.04 to HKD 0.05** compared to the prior year Earnings Per Share | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Earnings Per Share (Basic and Diluted) | 0.05 HKD | 0.04 HKD | [Financial Position and Liquidity](index=14&type=section&id=Financial%20Position%20and%20Liquidity) At the end of the reporting period, the Group's net current assets increased to **HKD 647.6 million** and net assets to **HKD 1,376.7 million**, while the debt-to-asset ratio slightly decreased from **45.8% to 44.3%**, though cash and bank balances declined **44.4% to HKD 50.0 million** due to bank loan repayments Key Financial Position Indicators (June 30, 2024) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Bank Balances | 50.0 million HKD | 90.0 million HKD | | Total Borrowings | 660.4 million HKD | 713.2 million HKD | | Net Current Assets | 647.6 million HKD | 609.8 million HKD | | Debt-to-Asset Ratio | 44.3% | 45.8% | [Corporate Governance and Other Information](index=18&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Shareholding and Director Information](index=18&type=section&id=Shareholding%20and%20Director%20Information) This section discloses the shareholdings of directors and major shareholders, identifying Mr. Lim Chin Sean and Mr. Lim Chee Meng as controlling shareholders with a **75% interest** in Sparkle Century Group Limited's **750 million shares**, and reports on changes in independent non-executive director appointments - Controlling shareholder Sparkle Century Group Limited holds **750,000,000 shares**, representing **75%** of the company's total share capital, with Director Mr. Lim Chin Sean deemed to have an interest in these shares due to a concert party deed[44](index=44&type=chunk)[48](index=48&type=chunk) [Compliance and Internal Control](index=22&type=section&id=Compliance%20and%20Internal%20Control) The company complied with all applicable corporate governance code provisions during the reporting period, with the audit committee reviewing the unaudited interim results, and no purchases, sales, redemptions of listed securities, or share options granted by the company or its subsidiaries - The company has established an audit committee, comprising two independent non-executive directors and one non-executive director, which has reviewed the unaudited interim results for the current reporting period[54](index=54&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[52](index=52&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[41](index=41&type=chunk) [Interim Financial Information](index=24&type=section&id=Interim%20Financial%20Information) [Review Report](index=24&type=section&id=Review%20Report) PricewaterhouseCoopers, the independent auditor, conducted a review of the interim financial information in accordance with Hong Kong Standard on Review Engagements, concluding that nothing has come to their attention to suggest the information is not prepared in all material respects in accordance with HKAS 34 'Interim Financial Reporting' - Auditor PricewaterhouseCoopers issued an unmodified review conclusion on the interim financial information[62](index=62&type=chunk) [Condensed Consolidated Financial Statements](index=26&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated statement of profit or loss, statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows for the six months ended June 30, 2024, comprehensively reflecting the Group's financial performance and position Summary of Cash Flow Statement (For the six months ended June 30) | Item (thousand HKD) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 15,740 | 129,957 | | Net Cash (Used in)/From Investing Activities | (1,936) | 752 | | Net Cash Used in Financing Activities | (51,162) | (63,311) | | Net Decrease in Cash and Cash Equivalents | (37,358) | 67,398 | [Notes to Financial Information](index=32&type=section&id=Notes%20to%20Financial%20Information) The notes detail the basis of preparation, accounting policies, and key accounting estimates for the financial statements, highlighting receivables under concession service arrangements, particularly regarding compensation for the closed first treatment plant where management is finalizing the amount with authorities, and providing an aging analysis of trade receivables showing long-outstanding amounts due to pandemic-related settlement delays - Regarding the closed first treatment plant, the Group is entitled to compensation, and management is finalizing the specific compensation amount with Yinchuan Municipal authorities, having updated expected future revenue based on the estimated compensation under the concession agreement[101](index=101&type=chunk) - As of June 30, 2024, total trade receivables amounted to **HKD 380.2 million**, with **HKD 176.3 million** being long-outstanding (over 365 days), primarily due to settlement procedure delays during the pandemic[103](index=103&type=chunk) [Financial Summary](index=45&type=section&id=Financial%20Summary) [Historical Financial Data](index=45&type=section&id=Historical%20Financial%20Data) This section provides a summary of the Group's annual and interim results, assets, and liabilities since 2019, showing stable growth in total assets and equity over recent years, while total liabilities have trended downwards, reflecting continuous optimization of the company's financial structure Summary of Historical Performance (thousand HKD) | Period | Revenue | Profit for the Year/Period | | :--- | :--- | :--- | | H1 2024 | 111,671 | 49,919 | | H1 2023 | 100,835 | 38,413 | | FY 2023 | 180,353 | 73,260 | | FY 2022 | 213,351 | 68,127 | | FY 2021 | 248,536 | 115,269 | Summary of Historical Assets and Liabilities (thousand HKD) | Year-end | Total Assets | Total Liabilities | Total Equity | | :--- | :--- | :--- | :--- | | June 30, 2024 | 2,202,275 | 825,584 | 1,376,691 | | December 31, 2023 | 2,241,275 | 882,024 | 1,359,251 | | December 31, 2022 | 2,311,423 | 989,392 | 1,322,031 |

Financial Performance - For the six months ended June 30, 2024, revenue was approximately HKD 111.7 million, an increase of about HKD 10.9 million or approximately 10.8% compared to HKD 100.8 million in the same period last year[1] - Gross profit for the same period was approximately HKD 82.7 million, an increase of about HKD 12.9 million or approximately 18.5% from HKD 69.8 million year-on-year[1] - Profit for the period was approximately HKD 49.9 million, up by about HKD 11.5 million or approximately 29.9% compared to HKD 38.4 million in the previous year[1] - The company reported a gross margin of approximately 74.1% for the six months ended June 30, 2024, compared to 69.2% in the same period last year[2] - The company’s earnings per share for the period was HKD 0.05, compared to HKD 0.04 in the same period last year[2] - The company reported a basic earnings per share of HKD 0.05 for the six months ended June 30, 2024, compared to HKD 0.04 for the same period in 2023, an increase of 25%[14] - Net profit for the period increased by approximately HKD 11.5 million or about 29.9% to approximately HKD 49.9 million[35] - Earnings per share increased to HKD 0.05 from HKD 0.04, primarily due to an increase in net profit attributable to shareholders[36] Revenue Sources - The wastewater treatment service revenue was HKD 53,495,000 for the six months ending June 30, 2024, compared to HKD 42,124,000 for the same period in 2023, indicating a growth of approximately 26.9%[9] - The financial income from the special service arrangement was HKD 58,176,000 for the six months ending June 30, 2024, slightly down from HKD 58,711,000 in the same period of 2023, reflecting a decrease of about 0.9%[9] - The increase in revenue was primarily due to an increase of approximately HKD 11.4 million in revenue from wastewater treatment operations, representing a growth of approximately 27.1%[27] - All revenue during the period came from customers in China[11] Assets and Liabilities - The total assets as of June 30, 2024, were HKD 2,202.3 million, a decrease from HKD 2,241.3 million as of December 31, 2023[4] - Total liabilities as of June 30, 2024, were HKD 825.6 million, down from HKD 882.0 million as of December 31, 2023[5] - The company’s cash and cash equivalents decreased to HKD 49.96 million from HKD 89.97 million year-on-year[4] - The total liabilities, including long-term and short-term borrowings, were HKD 660,368 as of June 30, 2024, down from HKD 713,157 in the previous year, a decrease of approximately 7.4%[20] - As of June 30, 2024, the group's cash and bank balance decreased by approximately HKD 40.0 million or about 44.4% to approximately HKD 50.0 million from HKD 90.0 million on December 31, 2023[39] - The group's bank borrowings as of June 30, 2024, amounted to approximately HKD 660.4 million, a decrease of about HKD 52.8 million or approximately 7.4% from HKD 713.2 million on December 31, 2023[40] - The debt-to-asset ratio as of June 30, 2024, was approximately 44.3%, down from approximately 45.8% on December 31, 2023[42] Operational Insights - The company aims to expand its market presence and enhance its service offerings in the upcoming quarters[1] - The company is focusing on new product development and technological advancements to drive future growth[1] - The company plans to focus on expansion and upgrades of wastewater treatment facilities in the second half of 2024, including new basic water volume agreements with local authorities[25] - The company is exploring potential acquisition opportunities for wastewater treatment assets in Ningxia and other regions in China to strengthen its market presence[26] - The company is committed to optimizing costs and enhancing the efficiency of wastewater treatment plants in accordance with the standards set in the concession agreements with the local government[25] Financial Management - The board believes that the group has sufficient operating funds to meet its financial obligations due within the next twelve months[6] - The group continues to adopt a going concern basis in preparing its interim financial information[6] - The board has assessed that the adoption of new accounting standards and interpretations will not have a significant impact on the group's performance and financial position[7] - The group is currently evaluating the impact of new accounting standards that will be mandatory from January 1, 2025, and beyond[8] - The group expects to generate positive cash flows from its business operations, including the collection of trade receivables and other receivables[6] Cost Management - Financing costs decreased by approximately HKD 2.5 million during the reporting period, contributing to the increase in after-tax profit[24] - Sales cost decreased by approximately HKD 2.0 million or about 6.5% to approximately HKD 29.0 million for the six months ended June 30, 2023[28] - General and administrative expenses decreased by approximately HKD 0.4 million or about 5.9% to approximately HKD 6.4 million, mainly due to reduced employee benefits expenses[32] - Financing costs decreased by approximately HKD 2.5 million or about 14.6% to approximately HKD 14.6 million, primarily due to lower borrowing interest expenses[33] Taxation and Other Income - Immediate income tax expense increased to HKD 8,777 from HKD 5,132 year-over-year, a rise of approximately 71.5%[12] - Income tax expenses increased by approximately HKD 4.1 million or about 49.4% to approximately HKD 12.4 million, with an effective tax rate rising from 17.7% to 19.9%[34] - Other income decreased by approximately HKD 0.2 million or about 18.2% to approximately HKD 0.9 million, mainly due to a reduction in interest income[30] - Net other losses increased by approximately HKD 0.05 million or about 23.8% to approximately HKD 0.26 million, primarily due to unfavorable currency fluctuations[31] Corporate Governance - The group has adhered to the corporate governance code as per the listing rules during the reporting period[45] - The audit committee has reviewed the group's unaudited interim results for the reporting period[47] - The group has no significant contingent liabilities or unresolved litigation as of June 30, 2024[44] - The board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[44] - There are no significant subsequent events reported after the reporting period[49] - The company has not engaged in any purchase, sale, or redemption of its listed securities during the reporting period[50]

Financial Performance - The profit after tax for the reporting period was approximately HKD 73.3 million, an increase of about HKD 5.2 million or approximately 7.6% compared to HKD 68.1 million in 2022[26]. - The company recorded revenue of approximately HKD 180.4 million, a decrease of about HKD 33.0 million or 15.5% compared to HKD 213.4 million in 2022[38]. - Revenue from wastewater treatment operations decreased from approximately HKD 91.1 million for the year ended December 31, 2022, to approximately HKD 64.6 million during the reporting period, a decrease of about HKD 26.5 million or approximately 29.1%[61]. - The group recorded revenue and profit after tax of approximately HKD 180.4 million and HKD 73.3 million, respectively, with revenue decreasing by approximately HKD 33.0 million or about 15.5% compared to HKD 213.4 million in the same period last year[77][85]. - The gross profit margin decreased from approximately 67.7% for the year ended December 31, 2022, to approximately 63.2% during the reporting period[87]. - Other income decreased by approximately HKD 0.8 million or about 24.2% to approximately HKD 2.5 million, mainly due to a reduction in interest income[88]. - The company's revenue from wastewater treatment operations decreased, resulting in a gross profit reduction from approximately HKD 144.4 million to about HKD 114.1 million, a decline of approximately 21.0%[110]. - The total comprehensive income for the reporting period was approximately HKD 37.2 million, compared to a total comprehensive loss of approximately HKD 42.0 million for the year ended December 31, 2022[91]. - The net profit for the year increased by approximately HKD 5.2 million or 7.7% to about HKD 73.3 million from approximately HKD 68.1 million[115]. Operational Highlights - The total sewage treatment volume during the reporting period was approximately 80.4 million cubic meters, an increase of about 1.8 million cubic meters or approximately 2.3% compared to 78.6 million cubic meters for the year ended December 31, 2022[25]. - The total daily wastewater treatment capacity is 375,000 cubic meters, with all treatment plants meeting Class A discharge standards (275,000 cubic meters daily) and Class IV water standards (100,000 cubic meters daily)[52]. - There were no significant quality issues or interruptions in wastewater treatment services during the reporting period[53]. - The company aims to enhance operational stability and efficiency in wastewater treatment plants while optimizing costs[42]. - The company plans to continue upgrading and expanding wastewater treatment facilities to meet higher discharge standards[75]. Strategic Initiatives - The company is focusing on expanding/upgrading new water pricing and treatment plants, which is expected to positively contribute to revenue[30]. - The company is actively seeking potential acquisitions of wastewater treatment assets in Yinchuan, Ningxia, and other regions in China to strengthen its business[31]. - The group is exploring potential acquisition opportunities for wastewater treatment assets in Yinchuan, Ningxia, and other regions in China to strengthen its presence in the region[81]. - The group plans to focus on expanding and upgrading new water pricing and treatment facilities in collaboration with local authorities in 2024[80]. Economic Outlook - The anticipated economic growth in China for 2024 is approximately 4.6%, marking the slowest expansion rate in over thirty years, excluding pandemic-affected years[41]. - The Chinese economy is expected to grow by approximately 4.6% in 2024, with further monetary policy easing anticipated to partially offset economic slowdown[57]. - The company maintains a cautiously optimistic outlook for its financial performance for the fiscal year ending December 31, 2024[65]. Financial Position - Cash and bank balances increased by approximately HKD 8.1 million or about 9.9% to approximately HKD 90.0 million, primarily due to the collection of wastewater treatment service fees amounting to approximately HKD 216.6 million during the reporting period[95]. - Financing costs decreased by approximately HKD 6.2 million or about 15.9% to approximately HKD 32.9 million, mainly due to a reduction in interest expenses from repaying bank loans[89]. - The total amount of receivables under the franchise service arrangement increased from approximately HKD 1,750.6 million to HKD 1,757.4 million, an increase of about HKD 6.8 million or 0.4%[116]. - The company's cash and bank balances decreased from approximately HKD 799.7 million to HKD 713.2 million, representing a reduction of about HKD 86.5 million or 10.8%[117]. - As of December 31, 2023, the company's debt-to-equity ratio was approximately 45.8%, down from 54.3% as of December 31, 2022[141]. - As of December 31, 2023, the company's distributable reserves amount to approximately HKD 601,263,000, a slight decrease from HKD 605,361,000 in 2022[177]. Employee and Governance - The company has 129 full-time employees, an increase from 127 in the previous year, with compensation based on various factors[124]. - Employee benefits expenses for the year ended December 31, 2023, were approximately HKD 20.8 million, a decrease from HKD 22.0 million in 2022[145]. - The company has implemented a stock option plan for its directors and employees, promoting retention and performance[145]. - The company has a policy to review employee performance annually to determine bonus levels, salary adjustments, and promotions[173]. - The company's board of directors includes Lim Chin Sean as chairman and other members with various roles[184]. Compliance and Risk Management - The company has established comprehensive workplace safety policies to comply with national and local health and safety laws[153]. - The company has no major issues regarding compliance with health and safety regulations[168]. - The company has received annual confirmations regarding compliance with non-competition commitments from the relevant parties as of December 31, 2023[199]. - The independent non-executive directors have reviewed the compliance status of the non-competition commitments by the relevant parties[199]. - The company has a risk of not renewing its franchise agreement, which could significantly impact its business and financial condition[152]. Shareholder Information - The company has issued 250,000,000 shares at a price of HKD 0.58 per share, raising approximately HKD 104.7 million after expenses[142]. - The company has not proposed any final dividends for the year ending December 31, 2023[129]. - There were no significant acquisitions or investments during the year ended December 31, 2023[146][147]. - The company has not entered into any significant transactions or arrangements that may compete with its business as of December 31, 2023[198]. - There are no outstanding stock options granted under the stock option plan during the reporting period[191]. - The company has a stock option plan that allows for a maximum of 100,000,000 shares to be issued, representing 10% of the total shares issued at the time of listing[189].

Financial Performance - Total revenue for the year was approximately HKD 180.4 million, a decrease of about HKD 33.0 million or approximately 15.5% compared to the previous year of HKD 213.4 million[36] - Gross profit for the year was approximately HKD 114.1 million, down by about HKD 30.3 million or approximately 21.0% from HKD 144.4 million in the previous year[36] - Net profit for the year was approximately HKD 73.3 million, an increase of about HKD 5.2 million or approximately 7.6% compared to HKD 68.1 million in the previous year[36] - The company reported a net comprehensive income of HKD 37.2 million, compared to a loss of HKD 42.0 million in the previous year[38] - The annual profit increased by approximately HKD 5.2 million or about 7.6% to approximately HKD 73.3 million during the reporting period, compared to approximately HKD 68.1 million as of December 31, 2022[85] Revenue Sources - Revenue from wastewater treatment services was HKD 64.5 million, down from HKD 91.1 million in the previous year[46] - Revenue from special service arrangement was HKD 115.8 million, a decrease from HKD 122.3 million in the previous year[46] - All revenue in 2023 was derived from customers in China, with all non-current assets primarily located in China[16] Expenses and Costs - Interest income decreased to HKD 1,870,000 in 2023 from HKD 2,285,000 in 2022, a decline of 18.14%[2] - Total other income decreased to HKD 2,519,000 in 2023 from HKD 3,274,000 in 2022, a decrease of 23.06%[2] - Operating costs for wastewater treatment decreased from approximately HKD 48.6 million to about HKD 45.0 million, a reduction of approximately HKD 3.6 million or 7.4%[80] - The company's sales cost decreased from approximately HKD 69.0 million to about HKD 66.2 million, a reduction of approximately HKD 2.8 million or 4.1% due to lower wastewater treatment operating costs[62] - Financing costs decreased from approximately HKD 39.1 million to about HKD 32.9 million, a reduction of approximately HKD 6.2 million or 15.9%, mainly due to lower market interest rates and repayment of bank loans[67] Assets and Liabilities - The total assets of the company as of the end of the reporting period were HKD 2,241,275,000, down from HKD 2,311,423,000 in the previous year[49] - Total liabilities decreased from HKD 989,392,000 to HKD 882,024,000, reflecting a reduction of approximately 10.9%[49] - The company's retained earnings increased from HKD 689,807,000 to HKD 763,067,000, an increase of approximately 10.6%[48] - Long-term borrowings decreased from HKD 510,981,000 to HKD 451,271,000, a reduction of approximately 11.7%[49] - The asset-to-liability ratio was approximately 45.8% as of December 31, 2023, down from approximately 54.3% as of December 31, 2022[119] Taxation - The company recorded a current income tax expense of HKD 15,769,000, an increase of 74.5% compared to HKD 9,054,000 in the previous year[21] - The actual tax rate decreased to approximately 19.5% during the reporting period, down from 21.4% due to a reduction in non-deductible expenses[84] Dividends - The group did not declare any dividends for the year ending December 31, 2023, compared to a mid-term dividend of HKD 0.05 per share totaling HKD 50,000,000 in 2022[4] - The company did not recommend the payment of a final dividend for the years ended December 31, 2023, and December 31, 2022[94] Government Support - Government subsidies increased to HKD 46,000 in 2023 from HKD 12,000 in 2022, representing a 283.33% increase[2] Future Outlook - The company anticipates that consumer spending will weaken due to increased economic uncertainty, impacting future growth prospects[54] - The company forecasts China's economy to grow by approximately 4.6% in 2024, the slowest expansion in over thirty years excluding pandemic-affected years[75] - The company's strategy for 2024 focuses on expanding and upgrading new water pricing and treatment facilities in collaboration with local authorities[75] Operational Highlights - The total volume of wastewater processed during the reporting period was approximately 80.4 million cubic meters, an increase of about 1.8 million cubic meters or approximately 2.3% from 78.6 million cubic meters in the previous year[43] - The daily total wastewater treatment capacity was 375,000 cubic meters, with all treatment plants meeting Class A discharge standards (275,000 cubic meters per day) and Class IV water standards (100,000 cubic meters per day)[34] - The company has been operating and managing wastewater treatment facilities in Ningxia since September 2011 under a 30-year TOT model[34] - The company plans to upgrade and expand wastewater treatment facilities to meet higher discharge standards and increase design capacity[34] Compliance and Governance - The company has complied with all applicable corporate governance codes as per the listing rules during the reporting period[100] - The audit committee reviewed the consolidated annual performance of the group for the financial year ended December 31, 2023[126] - The company confirmed that all directors have fully complied with the standards set out in the securities trading guidelines during the reporting period[104] Shareholder Relations - The company expressed heartfelt gratitude to shareholders for their support and to employees for their hard work and contributions during the year 2023[106]