Core Viewpoint - Zhongmu International (01822.HK) reported a decline in revenue and gross profit for the six months ending June 30, 2025, indicating ongoing challenges in its operations [1] Financial Performance - Revenue from continuing operations was HKD 144 million, a decrease of 15.6% year-on-year [1] - Gross profit amounted to HKD 12.36 million, reflecting a year-on-year decline of 17.7% [1] - The loss attributable to the company's owners was HKD 929,000, compared to a loss of HKD 2.361 million in the same period last year, showing an improvement in loss figures [1]

Group 1 - The core viewpoint of the article is that Zhongmu International (01822) reported a decline in revenue and a loss for the six months ending June 30, 2025, indicating challenges in its timber-related business [1] - The company achieved revenue of HKD 144 million, a decrease of 15.56% year-on-year [1] - The loss attributable to shareholders was HKD 929,000, which represents a reduction of 60.65% compared to the previous year [1] - The basic loss per share was HKD 0.13 [1] Group 2 - The decrease in revenue was primarily due to a decline in the turnover of the timber-related business, which fell from approximately HKD 170 million for the six months ending June 30, 2024, to about HKD 133 million during the reporting period [1]

Core Viewpoint - Zhongmu International (01822) reported a revenue of HKD 144 million for the six months ending June 30, 2025, representing a year-on-year decrease of 15.56% [1] - The company recorded a loss attributable to shareholders of HKD 929,000, which is a reduction of 60.65% compared to the previous year [1] - Basic loss per share was HKD 0.13 [1] Revenue Analysis - The decline in revenue is primarily attributed to the timber-related business, which saw a drop in turnover from approximately HKD 170 million for the six months ending June 30, 2024, to about HKD 133 million during the reporting period [1]

[Corporate Information](index=4&type=section&id=Corporate%20Information) This section provides an overview of the company's governance structure, including board members, committee compositions, and other essential corporate details [Directors](index=4&type=section&id=Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Lu Ningjiang serving as Chairman and CEO - Executive Directors: Mr. Lu Ningjiang (Chairman and Chief Executive Officer), Ms. Wu Lixia[11](index=11&type=chunk)[13](index=13&type=chunk) - Non-Executive Director: Mr. Hu Yonggang[11](index=11&type=chunk)[13](index=13&type=chunk) - Independent Non-Executive Directors: Mr. Chan Lik Shan, Mr. So Yin Wai, Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[11](index=11&type=chunk)[13](index=13&type=chunk) [Committees](index=4&type=section&id=Committees) The company has an Audit Committee, Nomination Committee, and Remuneration Committee, with membership adjustments during the reporting period due to changes in independent non-executive directors - Audit Committee Chairman: Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[11](index=11&type=chunk)[13](index=13&type=chunk) - Nomination Committee Chairman: Mr. Lu Ningjiang[12](index=12&type=chunk)[13](index=13&type=chunk) - Remuneration Committee Chairman: Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[12](index=12&type=chunk)[13](index=13&type=chunk) [Other Key Information](index=4&type=section&id=Other%20Key%20Information) This section lists the company's corporate secretary, authorized representatives, share registrar, website, stock code, legal advisors, principal bankers, auditor, registered office, and principal place of business in Hong Kong - Company Secretary: Mr. Li Pak Chung[11](index=11&type=chunk)[13](index=13&type=chunk) - Stock Code: **01822**[14](index=14&type=chunk)[15](index=15&type=chunk) - Auditor: Evergreen (Hong Kong) CPA Limited[14](index=14&type=chunk)[15](index=15&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's operational performance, financial position, and strategic outlook, highlighting key business developments and financial metrics [BUSINESS REVIEW](index=6&type=section&id=BUSINESS%20REVIEW) The Group faced challenges in H1 2025 due to a sluggish China property market, leading to a significant decline in timber-related business revenue, while actively expanding into functional food and beverage business with initial success - The China property sector continued to struggle in H1 2025, with new housing starts declining, posing severe challenges to timber consumption and the Group's operating environment[17](index=17&type=chunk)[22](index=22&type=chunk) Timber-Related Business Revenue Changes | Business Type | H1 2025 (HK$) | H1 2024 (HK$) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Timber-Related Business Revenue | 133,000,000 | 170,300,000 | -21.9% | | Processing and Distribution of Furniture Timber | 120,200,000 | 152,500,000 | -21.2% | | Manufacturing and Sales of Antique Wooden Furniture and Other Timber Products | 12,800,000 | 17,800,000 | -28.1% | - The Group established Shenzhen Weijianbao Food Technology Co., Ltd. in Q4 2024 to commence functional food and beverage business, recording revenue of approximately **HK$10,800,000** during the reporting period[28](index=28&type=chunk)[30](index=30&type=chunk) - The China functional food market is projected to grow from approximately **US$36.77 billion in 2023** to approximately **US$67.69 billion in 2030**, with a **CAGR of approximately 9.1%**[27](index=27&type=chunk)[30](index=30&type=chunk) [Discontinued Operations](index=8&type=section&id=Discontinued%20Operations) The Group disposed of its car rental services business for HK$50,000 in October 2024, which was classified as a discontinued operation in the 2024 annual report - China's car rental services business was one of the Group's core businesses from 2014 to 2024[32](index=32&type=chunk)[37](index=37&type=chunk) - The Group disposed of Hongzhi Limited and its subsidiaries, engaged in car rental business, for **HK$50,000** on October 28, 2024[33](index=33&type=chunk)[37](index=37&type=chunk) - The car rental business segment was accounted for as a discontinued operation in the 2024 annual report, with comparative figures reclassified[34](index=34&type=chunk)[37](index=37&type=chunk) [FUTURE OUTLOOK](index=8&type=section&id=FUTURE%20OUTLOOK) Given the positive performance of the food and beverage business, the Group plans to further develop its functional food and beverage business in China and consider acquiring production facilities to support its own-brand products - The Group will further develop its functional food and beverage business in China through cooperation with key industry players and intellectual property development[35](index=35&type=chunk)[38](index=38&type=chunk) - The Group is considering acquiring production facilities for its own-brand food and beverage products, but no decision or final agreement has been made as of the interim report date[36](index=36&type=chunk)[38](index=38&type=chunk) [FINANCIAL REVIEW](index=9&type=section&id=FINANCIAL%20REVIEW) The Group's revenue decreased by 15.6% during the reporting period, primarily due to the timber-related business, leading to a decline in gross profit and gross margin; while selling and distribution expenses increased due to new business growth, administrative expenses decreased due to cost-saving measures, and liquidity significantly improved with a zero gearing ratio Key Financial Metrics Changes | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143,800 | 170,300 | -15.6% | | Cost of Sales | 131,400 | 155,200 | -15.3% | | Gross Profit | 12,400 | 15,000 | -17.3% | | Gross Margin | 8.6% | 8.8% | -0.2 percentage points | | Selling and Distribution Expenses | 1,600 | 100 | +1500% | | Administrative Expenses | 10,400 | 14,400 | -27.8% | | Finance Costs | 300 | 500 | -40.0% | - The decrease in revenue was primarily due to lower turnover from the timber-related business[39](index=39&type=chunk)[43](index=43&type=chunk) - The increase in selling and distribution expenses was mainly due to marketing efforts for the food and beverage business segment[47](index=47&type=chunk)[52](index=52&type=chunk) - The decrease in administrative expenses was primarily due to the Group's cost-saving measures[48](index=48&type=chunk)[53](index=53&type=chunk) - As of June 30, 2025, cash and cash equivalents were approximately **HK$7,300,000** (December 31, 2024: approximately HK$700,000)[51](index=51&type=chunk)[56](index=56&type=chunk) Gearing Ratio | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Total Bank and Other Borrowings | – | – | | Total Assets | 113,960 | 66,700 | | Gearing Ratio | 0% | 0% | [Share Consolidation](index=11&type=section&id=Share%20Consolidation) The company implemented a share consolidation of 10 shares into 1 share on June 18, 2024 - Pursuant to a resolution passed at the Annual General Meeting on June 14, 2024, the company consolidated every 10 shares of HK$0.01 each into 1 consolidated share of HK$0.10 each[59](index=59&type=chunk)[60](index=60&type=chunk) - The share consolidation became effective on **June 18, 2024**[59](index=59&type=chunk)[60](index=60&type=chunk) [Capital structure](index=12&type=section&id=Capital%20structure) As of June 30, 2025, the total number of issued ordinary shares was 822,438,680, with a total par value of approximately HK$82.2 million, a significant increase from the end of 2024 - As of June 30, 2025, the total number of ordinary shares of the company was **822,438,680** shares of HK$0.10 each (December 31, 2024: 411,219,340 shares of HK$0.10 each)[64](index=64&type=chunk)[69](index=69&type=chunk) - The total par value was approximately **HK$82.2 million** (December 31, 2024: approximately HK$41.1 million)[64](index=64&type=chunk)[69](index=69&type=chunk) [Charges on the Group assets](index=12&type=section&id=Charges%20on%20the%20Group%20assets) As of June 30, 2025, the Group had no assets pledged - As of June 30, 2025, the Group had no assets pledged (December 31, 2024: nil)[65](index=65&type=chunk)[70](index=70&type=chunk) [Foreign currency exposure](index=12&type=section&id=Foreign%20currency%20exposure) The Group's foreign exchange risk primarily arises from transactions denominated in currencies other than RMB, but the risk of exchange rate fluctuations is not considered significant, thus no hedging activities are undertaken - Foreign exchange risk primarily arises from revenue, costs, and borrowings denominated in currencies other than the functional currency of the Group's operating units (RMB)[66](index=66&type=chunk)[71](index=71&type=chunk) - The Group does not expect the risk of exchange rate fluctuations to be significant, and therefore has not undertaken any hedging activities[66](index=66&type=chunk)[71](index=71&type=chunk) [DIVIDENDS](index=12&type=section&id=DIVIDENDS) The Board does not recommend the payment of any dividends for the reporting period - The Board does not recommend the payment of any dividends for the reporting period (H1 2024: nil)[67](index=67&type=chunk)[72](index=72&type=chunk) [EMPLOYEES AND REMUNERATION POLICY](index=12&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICY) As of June 30, 2025, the Group employed 32 employees, with total staff costs of approximately HK$4.4 million; the remuneration policy is based on employee performance, qualifications, and market conditions, offering various benefits - As of June 30, 2025, the Group employed a total of **32 employees**[68](index=68&type=chunk)[73](index=73&type=chunk) - Total staff costs (including directors' emoluments) for the reporting period were approximately **HK$4.4 million**[68](index=68&type=chunk)[73](index=73&type=chunk) - Remuneration policy is determined with reference to individual employee's performance, qualifications, and experience, the Group's performance, and market conditions[68](index=68&type=chunk)[73](index=73&type=chunk) - The Group provides employees with discretionary bonuses, medical insurance, provident fund contributions, education allowances, and training[68](index=68&type=chunk)[73](index=73&type=chunk) [Other Information](index=13&type=section&id=Other%20Information) This section details shareholding interests, corporate governance practices, and other statutory disclosures, including director and substantial shareholder holdings [DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS](index=13&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20THE%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY%20OR%20ITS%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, Mr. Lu Ningjiang, Chairman and CEO, held a **54.98% long position** in the company's shares through a controlled corporation Directors' Long Positions in the Company's Shares | Director's Name | Capacity/Nature of Interest | Total Number of Shares and Underlying Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Lu Ningjiang | Interest in controlled corporation | 452,169,170 (L) | 54.98% | - Mr. Lu Ningjiang beneficially owns the entire equity interest in Right Momentum Group Limited and is therefore deemed to be interested in the shares held by it[81](index=81&type=chunk) [SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY](index=15&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20AND%20OTHER%20PERSONS'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY) As of June 30, 2025, substantial shareholders included Right Momentum Group Limited (controlled by Mr. Lu Ningjiang) and Mr. Zhang Zhengwu, holding **54.98%** and **6.59%** long positions in the company's shares, respectively Substantial Shareholders' Long Positions in Shares | Name of Substantial Shareholder/Person | Capacity/Nature of Interest | Total Number of Shares and Underlying Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Right Momentum | Beneficial owner | 452,196,170 (L) | 54.98% | | Zhang Zhengwu | Beneficial owner | 54,221,153 (L) | 6.59% | - The entire issued share capital of Right Momentum is **100% owned by Mr. Lu**[84](index=84&type=chunk) [SHARE OPTION SCHEME](index=16&type=section&id=SHARE%20OPTION%20SCHEME) The company's existing share option scheme, adopted in 2016, aims to reward eligible participants for their contributions to the Group's success and is valid until June 2026; no share options were granted or outstanding during the reporting period - The share option scheme was adopted on **June 3, 2016**, and is valid for **10 years**, until June 2, 2026[86](index=86&type=chunk)[90](index=90&type=chunk) - Eligible participants include employees, executives, suppliers, customers, consultants, and other individuals or entities who have contributed to the Group's development[87](index=87&type=chunk)[90](index=90&type=chunk) - The total number of shares that may be issued under the share option scheme is **3,240,687 shares**, representing **0.39%** of the total issued shares as of June 30, 2025[92](index=92&type=chunk)[95](index=95&type=chunk) - No share options were granted or outstanding under the share option scheme during the reporting period[93](index=93&type=chunk)[96](index=96&type=chunk) [ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES](index=17&type=section&id=ARRANGEMENTS%20TO%20PURCHASE%20SHARES%20OR%20DEBENTURES) During the reporting period, no rights to acquire shares or debentures of the company were granted to or exercised by any director or their associates, nor was the company a party to any such arrangements - During the reporting period, no rights to acquire benefits by way of acquisition of shares or debentures of the company were granted to any director or their respective spouses or minor children, nor were any such rights exercised by them[94](index=94&type=chunk)[97](index=97&type=chunk) - Neither the company nor any of its subsidiaries was a party to any arrangement to enable directors to acquire such rights in any other body corporate[94](index=94&type=chunk)[97](index=97&type=chunk) [MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS](index=18&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The company has adopted the Model Code, and all directors confirmed compliance with it during the reporting period - The company has adopted the Model Code as its code for directors' dealings in the company's securities[98](index=98&type=chunk)[102](index=102&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code throughout the reporting period[98](index=98&type=chunk)[102](index=102&type=chunk) [PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY](index=18&type=section&id=PURCHASE,%20REDEMPTION%20OR%20SALE%20OF%20LISTED%20SECU RITIES%20OF%20THE%20COMPANY) During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[99](index=99&type=chunk)[103](index=103&type=chunk) [CORPORATE GOVERNANCE](index=18&type=section&id=CORPORATE%20GOVERNANCE) The company generally complied with the Corporate Governance Code during the reporting period, with two deviations: a non-executive director's absence from the AGM and the combined roles of Chairman and CEO - The company has complied with the Corporate Governance Code throughout the reporting period, with the following two exceptions[100](index=100&type=chunk)[104](index=104&type=chunk) - Non-executive Director Mr. Hu Yonggang was unable to attend the Annual General Meeting held on May 23, 2025, deviating from Code Provision C.1.5[100](index=100&type=chunk)[104](index=104&type=chunk) - The roles of Chairman and Chief Executive Officer are both held by Mr. Lu Ningjiang, deviating from Code Provision C.2.1, which the Board believes enhances efficiency in business strategy formulation and execution[101](index=101&type=chunk)[104](index=104&type=chunk) [INDEPENDENT NON-EXECUTIVE DIRECTORS](index=19&type=section&id=INDEPENDENT%20NON-EXECUTIVE%20DIRECTORS) Due to the resignation of Independent Non-Executive Director Mr. Zhao Xianming, the company failed to meet Listing Rule requirements regarding the number of INEDs and Audit Committee composition from April 1 to June 15, 2025, but subsequently regained compliance with the appointment of Mr. Pang Mingli - From April 1 to June 15, 2025, the company failed to comply with Listing Rules 3.10(1) (at least three independent non-executive directors) and 3.21 (Audit Committee with at least three non-executive members)[105](index=105&type=chunk)[107](index=107&type=chunk) - This was due to the resignation of Independent Non-Executive Director Mr. Zhao Xianming on April 1, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - On June 16, 2025, Mr. Pang Mingli was appointed as an Independent Non-Executive Director, and the company subsequently complied with the aforementioned Listing Rules[105](index=105&type=chunk)[106](index=106&type=chunk) [AUDIT COMMITTEE REVIEW](index=20&type=section&id=AUDIT%20COMMITTEE%20REVIEW) The Audit Committee has reviewed the accounting principles adopted by the Group and the unaudited condensed consolidated interim financial statements - The Audit Committee comprises three independent non-executive directors: Mr. Pang Mingli (Chairman), Mr. Chan Lik Shan, and Mr. So Yin Wai[108](index=108&type=chunk)[111](index=111&type=chunk) - The Audit Committee has reviewed with management the accounting principles adopted by the Group and the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[108](index=108&type=chunk)[111](index=111&type=chunk) [EVENTS AFTER THE REPORTING PERIOD](index=20&type=section&id=EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[109](index=109&type=chunk)[112](index=112&type=chunk) [COMPARATIVE FIGURES](index=20&type=section&id=COMPARATIVE%20FIGURES) Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations - Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations[110](index=110&type=chunk)[113](index=113&type=chunk) [APPRECIATION](index=20&type=section&id=APPRECIATION) The Board expresses its gratitude for the support and efforts of its customers, shareholders, and employees - The Board takes this opportunity to express its appreciation for the long-term support from customers and shareholders and the dedicated efforts of its employees[114](index=114&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=21&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=21&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a loss for the period of **HK$929 thousand**, a significant narrowing from the prior year (HK$2,361 thousand), primarily due to reduced losses from continuing operations and no longer incurring losses from discontinued operations Overview of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Revenue (continuing operations) | 143,776 | 170,268 | | Cost of Sales | (131,416) | (155,244) | | Gross Profit | 12,360 | 15,024 | | Operating Profit | 596 | 552 | | Profit Before Tax | 269 | 44 | | Income Tax Expense | (1,198) | (1,809) | | Loss for the period from continuing operations | (929) | (1,765) | | Loss for the period from discontinued operations | – | (596) | | Loss for the period | (929) | (2,361) | | Total comprehensive loss for the period | (615) | (2,294) | Loss Per Share | Metric | H1 2025 (HK cents) | H1 2024 (HK cents, restated) | | :--- | :--- | :--- | | Basic loss per share (continuing and discontinued operations) | (0.13) | (0.47) | | Basic loss per share (continuing operations) | (0.13) | (0.35) | | Basic loss per share (discontinued operations) | Not applicable | (0.12) | [Unaudited Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to **HK$113,960 thousand** and net assets increased to **HK$83,523 thousand**, primarily driven by significant increases in prepayments, deposits, and other receivables, as well as cash and bank balances Overview of Financial Position | Metric | June 30, 2025 (HK$ '000, unaudited) | December 31, 2024 (HK$ '000, audited) | | :--- | :--- | :--- | | Non-current Assets | 11,945 | 8,555 | | Current Assets | 102,015 | 58,145 | | Inventories | 1,267 | 1,173 | | Trade Receivables | 123 | 1,653 | | Prepayments, Deposits and Other Receivables | 93,342 | 54,613 | | Cash and Bank Balances | 7,283 | 706 | | Current Liabilities | 29,073 | 23,443 | | Trade Payables | 2,858 | 2,763 | | Other Payables and Accruals | 19,921 | 14,888 | | Net Current Assets | 72,942 | 34,702 | | Net Assets / Total Equity | 83,523 | 39,235 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=24&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the company increased to **HK$83,523 thousand**, mainly due to a net amount of **HK$44,903 thousand** from the issuance of new shares after the rights issue Overview of Changes in Equity | Metric | January 1, 2025 (HK$ '000, audited) | June 30, 2025 (HK$ '000, unaudited) | | :--- | :--- | :--- | | Share Capital | 41,122 | 82,244 | | Share Premium | 136,339 | 140,120 | | Exchange Fluctuation Reserve | (3,947) | (3,633) | | Accumulated Losses | (134,279) | (135,208) | | **Total Equity** | **39,235** | **83,523** | - Net proceeds from the issuance of new shares after the rights issue amounted to **HK$44,903 thousand**[119](index=119&type=chunk) - Loss for the period was **HK$929 thousand**, and exchange fluctuation reserve increased by **HK$314 thousand**[119](index=119&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=26&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group generated net cash outflow from operating activities, but financing activities generated significant net cash inflow due to the rights issue, ultimately leading to a substantial increase in cash and cash equivalents at period-end Overview of Cash Flows | Metric | H1 2025 (HK$ '000, unaudited) | H1 2024 (HK$ '000, unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (27,915) | (3,759) | | Net cash used in investing activities | (5,989) | – | | Net cash generated from financing activities | 42,217 | 882 | | **Net increase in cash and cash equivalents** | **8,313** | **(2,877)** | | Cash and cash equivalents at beginning of period | 706 | 3,522 | | Effect of foreign exchange rate changes | (1,736) | 56 | | **Cash and cash equivalents at end of period** | **7,283** | **701** | - Net cash generated from financing activities primarily resulted from proceeds of **HK$44,903 thousand** from the issuance of new shares after the rights issue[122](index=122&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=27&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated interim financial statements, explaining accounting policies, segment information, and key financial items [1. CORPORATE INFORMATION](index=27&type=section&id=1.%20CORPORATE%20INFORMATION) This note confirms the company's place of incorporation, listing location, and its principal businesses, including timber-related business and functional food and beverage business in China - The company was incorporated in the Cayman Islands, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[123](index=123&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) - The Group is principally engaged in (i) timber-related business (including processing and distribution of furniture timber and manufacturing and sales of antique wooden furniture and other timber products); and (ii) food and beverage business in China[125](index=125&type=chunk)[127](index=127&type=chunk) [2. BASIS OF PREPARATION](index=27&type=section&id=2.%20BASIS%20OF%20PREPARATION) These interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, consistent with prior year accounting policies; despite liquidity pressure, management has taken steps and secured financial support from the ultimate controlling party to maintain going concern - The unaudited condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[126](index=126&type=chunk)[128](index=128&type=chunk) - The Group recorded a loss of approximately **HK$929 thousand** and net cash outflow from operating activities of approximately **HK$27,915 thousand** during the reporting period, with relatively low cash and bank balances (approximately HK$7,283 thousand), significantly lower than current liabilities (approximately HK$29,073 thousand)[131](index=131&type=chunk)[135](index=135&type=chunk) - To mitigate liquidity pressure, management will improve operating cash flow by controlling administrative costs and capital expenditures, and the ultimate controlling party has agreed to provide financial support[132](index=132&type=chunk)[135](index=135&type=chunk) - The Board believes that the Group has sufficient financial resources to meet its debt repayments and financing needs for its operations in the foreseeable future, thus preparing the financial statements on a going concern basis is appropriate[136](index=136&type=chunk)[138](index=138&type=chunk) [3. OPERATING SEGMENT INFORMATION](index=29&type=section&id=3.%20OPERATING%20SEGMENT%20INFORMATION) The Group's operating segments include timber-related business, financing services and investments, and food and beverage business; the car rental business was disposed of in October 2024 and classified as a discontinued operation, with China being the Group's primary source of revenue - The Group's reportable operating segments are: (a) timber-related business segment; (b) financing services and investment segment; and (c) food and beverage segment[140](index=140&type=chunk) - The car rental business was disposed of on October 28, 2024, and has been accounted for as a discontinued operation in the interim financial statements[141](index=141&type=chunk)[142](index=142&type=chunk)[145](index=145&type=chunk) Segment Revenue (Sales of Goods) | Segment | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Timber-related business | 132,984 | 170,268 | | Food and beverage | 10,792 | – | | **Total continuing operations** | **143,776** | **170,268** | Revenue by Geographical Location (Continuing Operations) | Region | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | China | 130,941 | 152,425 | | Hong Kong | 12,835 | 17,843 | | **Total** | **143,776** | **170,268** | - During the reporting period, the Group did not record any customers with revenue amounting to **10% or more** of the Group's total revenue[152](index=152&type=chunk)[154](index=154&type=chunk) [4. REVENUE](index=33&type=section&id=4.%20REVENUE) The Group's revenue from continuing operations is entirely derived from the sale of goods, recognized at a point in time, primarily from the China market Disaggregation of Revenue from Contracts with Customers by Major Product or Service Line | Product or Service Line | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Sale of goods | 143,776 | 170,268 | - All revenue is recognized at a point in time, primarily from the China market[159](index=159&type=chunk) [5. FINANCE COSTS](index=34&type=section&id=5.%20FINANCE%20COSTS) Finance costs for continuing operations primarily include interest on lease liabilities and bank charges, totaling **HK$327 thousand** in H1 2025, down from HK$508 thousand in H1 2024 Breakdown of Finance Costs | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Interest on lease liabilities | 326 | 505 | | Bank charges | 1 | 3 | | **Total** | **327** | **508** | [6. PROFIT BEFORE TAX](index=34&type=section&id=6.%20PROFIT%20BEFORE%20TAX) The Group's profit before tax from continuing operations is derived after deducting cost of sales, depreciation, research and development costs, and other lease expenses; notably, **HK$2,021 thousand** in research and development costs were incurred in H1 2025 Items Deducted from Profit Before Tax | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Cost of sales | 131,446 | 155,244 | | Depreciation of property, plant and equipment | 223 | 33 | | Depreciation of right-of-use assets | 2,389 | 2,637 | | Research and development costs | 2,021 | – | | Other lease expenses | 26 | 70 | - All research and development costs are expensed to profit or loss as incurred[165](index=165&type=chunk) [7. INCOME TAX EXPENSE](index=35&type=section&id=7.%20INCOME%20TAX%20EXPENSE) Income tax expense for continuing operations primarily consists of China corporate income tax, provided at a rate of **25%**, amounting to **HK$1,198 thousand** in H1 2025 Breakdown of Income Tax Expense | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Current - China corporate income tax | 1,198 | 1,809 | - China corporate income tax is provided at a rate of **25%**[169](index=169&type=chunk)[171](index=171&type=chunk) - No provision for Hong Kong profits tax or any other taxes has been made in the unaudited condensed consolidated interim financial statements[168](index=168&type=chunk)[171](index=171&type=chunk) [8. DIVIDEND](index=35&type=section&id=8.%20DIVIDEND) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[170](index=170&type=chunk)[172](index=172&type=chunk) [9. DISCONTINUED OPERATIONS](index=36&type=section&id=9.%20DISCONTINUED%20OPERATIONS) This note details the results and cash flows of the discontinued car rental business for H1 2024, which was disposed of in October 2024 - The Group entered into a sale and purchase agreement on October 28, 2024, to dispose of the disposal group (car rental business) to an independent third party[173](index=173&type=chunk) Overview of Discontinued Operations Results (H1 2024) | Item | Amount (HK$ '000) | | :--- | :--- | | Revenue - other sources | 4,822 | | Cost of services provided | (4,327) | | Selling expenses | (1) | | Administrative expenses | (400) | | Finance costs | (690) | | Loss before tax | (596) | | Income tax expense | – | | **Loss for the period** | **(596)** | Net Cash Flows from Discontinued Operations (H1 2024) | Item | Amount (HK$ '000) | | :--- | :--- | | Net cash inflow from operating activities | 506 | | Net cash flow from investing activities | – | | Net cash outflow from financing activities | (189) | | **Net cash inflow** | **317** | [10. LOSS PER SHARE](index=37&type=section&id=10.%20LOSS%20PER%20SHARE) This note details the calculation of basic loss per share, including losses from both continuing and discontinued operations; diluted loss per share is not presented due to the absence of potential dilutive shares Calculation of Basic Loss Per Share (Attributable to Owners of the Company) | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Loss for the purpose of calculating basic loss per share | (929) | (2,361) | | Loss for the period from discontinued operations | – | (596) | | Loss for the purpose of calculating basic loss per share from continuing operations | (929) | (1,765) | - The weighted average number of ordinary shares outstanding for the purpose of calculating basic loss per share was **721,801,778 shares** (H1 2024: 506,853,249 shares)[181](index=181&type=chunk) - Diluted loss per share is not presented as there were no potential dilutive shares outstanding for the six months ended June 30, 2025 and 2024[185](index=185&type=chunk)[186](index=186&type=chunk) [11. TRADE RECEIVABLES](index=39&type=section&id=11.%20TRADE%20RECEIVABLES) As of June 30, 2025, the Group's net trade receivables (after deducting allowance for expected credit losses) amounted to **HK$123 thousand**, a significant decrease from the end of 2024, with all receivables within 90 days Breakdown of Trade Receivables | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade receivables | 5,013 | 6,543 | | Less: Allowance for expected credit losses | (4,890) | (4,890) | | **Net amount** | **123** | **1,653** | - The Group generally grants credit periods of **0 to 90 days** to its customers[189](index=189&type=chunk) Ageing Analysis of Trade Receivables (Net) | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 90 days | 123 | 1,653 | | Over 90 days and within one year | – | – | [12. TRADE PAYABLES](index=40&type=section&id=12.%20TRADE%20PAYABLES) As of June 30, 2025, the Group's trade payables amounted to **HK$2,858 thousand**, with all amounts overdue by more than 365 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 30 days | – | – | | 31 to 60 days | – | – | | 61 to 180 days | – | – | | 181 to 365 days | – | – | | Over 365 days | 2,858 | 2,763 | | **Total** | **2,858** | **2,763** | - Trade payables are interest-free and generally settled within **30 to 90 days** after month-end[196](index=196&type=chunk) [13. SHARE CAPITAL](index=41&type=section&id=13.%20SHARE%20CAPITAL) The company's issued share capital doubled due to a rights issue on March 27, 2025, issuing **411,219,340 new shares** and raising approximately **HK$44,903 thousand** in net proceeds Changes in Share Capital | Item | Number of Shares | Amount (HK$ '000) | | :--- | :--- | :--- | | Authorised share capital (HK$0.10 per share) | 2,000,000,000 | 200,000 | | Issued and fully paid at December 31, 2024 | 411,219,340 | 41,122 | | Net issuance of new shares after rights issue | 411,219,340 | 41,122 | | Issued and fully paid at June 30, 2025 | 822,438,680 | 82,244 | - On March 27, 2025, the company allotted and issued **411,219,340 shares** at a subscription price of **HK$0.111 per share** by way of a rights issue[199](index=199&type=chunk)[200](index=200&type=chunk) - The net proceeds from the rights issue amounted to approximately **HK$44,903 thousand**[199](index=199&type=chunk)[200](index=200&type=chunk) [14. RESERVES](index=42&type=section&id=14.%20RESERVES) This note explains the composition of the Group's reserves, including share premium, capital reserve, and exchange fluctuation reserve, and clarifies the reasons for their changes - The share premium account includes premiums on new share issues, amounts transferred from share option exercises, and is partly used for dividend payments, issue expenses, and offsetting accumulated losses[202](index=202&type=chunk)[209](index=209&type=chunk) - Capital reserve refers to the contributed capital surplus of companies comprising the Group, transferred to accumulated losses upon deconsolidation of an excluded company in 2023[203](index=203&type=chunk)[209](index=209&type=chunk) - Exchange fluctuation reserve comprises all exchange differences arising from the translation of financial statements of overseas operations[204](index=204&type=chunk)[206](index=206&type=chunk) [15. CAPITAL COMMITMENTS](index=42&type=section&id=15.%20CAPITAL%20COMMITMENTS) As of June 30, 2025, the Group's contracted but not yet incurred and provided capital commitments amounted to **HK$2,029 thousand**, primarily for property, plant, and equipment Breakdown of Capital Commitments | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Property, plant and equipment | 2,029 | – | [16. RELATED PARTY TRANSACTIONS](index=43&type=section&id=16.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses the compensation of the Group's key management personnel, including directors' emoluments, which increased to **HK$1,271 thousand** in H1 2025 Key Management Personnel Compensation | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Short-term employee benefits | 1,253 | 1,080 | | Post-employment benefits | 18 | 9 | | **Total emoluments paid or payable to key management personnel** | **1,271** | **1,089** | [17. CONTINGENT LIABILITIES](index=43&type=section&id=17.%20CONTINGENT%20LIABILITIES) As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025 (December 31, 2024: nil)[213](index=213&type=chunk)[217](index=217&type=chunk) [18. EVENTS AFTER THE REPORTING PERIOD](index=43&type=section&id=18.%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[214](index=214&type=chunk)[218](index=218&type=chunk) [19. COMPARATIVE FIGURES](index=43&type=section&id=19.%20COMPARATIVE%20FIGURES) Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations - Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations[215](index=215&type=chunk)[219](index=219&type=chunk) [20. APPROVAL OF THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS](index=43&type=section&id=20.%20APPROVAL%20OF%20THE%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025 - These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on **August 29, 2025**[216](index=216&type=chunk)[220](index=220&type=chunk)

（股份代號：1822） （於開曼群島註冊成立之有限公司） 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。 CHINA WOOD INTERNATIONAL HOLDING CO., LIMITED 中木國際控股有限公司 董事會召開日期 China Wood International Holding Co., Limited 中木國際控股有限公司（「本公司」）董 事會（「董事會」）謹此公佈，董事會將於二零二五年八月二十九日星期五舉行董事會 會議，以（其中包括）批准本公司及其附屬公司截至二零二五年六月三十日止六個月 之未經審核綜合中期業績，以及考慮建議派發中期股息（如有）及處理其他事項。 承董事會命 China Wood International Holding Co., Limited 中木國際控股有限公司 主席兼執行董事 呂寧江 香港，二零二五年八月十八日 於本公告日期，本公司董事會包括執行董事呂寧江先生（主席兼首席執行官）及吳麗 霞女士；非執行 ...

Company Overview - Zhongmu International Holdings Limited is listed on the Hong Kong Stock Exchange (01822.HK) and was established in 2009, registered in the Cayman Islands, with its headquarters in Hong Kong [3] - The company primarily engages in timber-related businesses, including furniture timber trading and processing, manufacturing and selling antique-style wooden furniture, and other wooden products, as well as car rental services [3] - Since its inception, the company has pursued excellence and innovation, expanding its business types under a diversified strategy, resulting in a solid customer base, diverse business structure, strong innovation capabilities, and market competitiveness [3] Financial Performance - As of December 31, 2024, Zhongmu International achieved total operating revenue of 330 million yuan, representing a year-on-year growth of 14.19% [2] - The company's net profit attributable to shareholders was 59.06 million yuan, showing a significant year-on-year decrease of 94.69% [2] - The gross profit margin stood at 8.2%, and the debt-to-asset ratio was 41.18% [2] Stock Performance - On August 18, the Hang Seng Index fell by 0.37%, closing at 25,176.85 points, while Zhongmu International's stock price rose by 11.11% to 0.16 HKD per share, with a trading volume of 605,900 shares and a turnover of 90,800 HKD, reflecting a volatility of 12.5% [1] - Over the past month, Zhongmu International has seen a cumulative increase of 6.67%, but it has experienced a year-to-date decline of 14.27%, underperforming the Hang Seng Index by 25.97% [2] Industry Valuation - The average price-to-earnings (P/E) ratio for the raw materials industry (TTM) is 21.58 times, with a median of 6.3 times [2] - Zhongmu International's P/E ratio is 1.86 times, ranking third in the industry, compared to other companies such as Jun Dong Holdings (0.94 times), Dachen Biochemical Technology (1.15 times), China Sanjiang Chemical (4.08 times), Wuhan Organic (4.72 times), and Diwang Industrial Holdings (5.24 times) [2]

致：香港交易及結算所有限公司 公司名稱: 中木國際控股有限公司 呈交日期: 2025年8月4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) | 01822 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 2,000,000,000 | HKD | | 0.1 | HKD | | 200,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 2,000,000,000 | HKD | | 0.1 | HKD | | 200,000,000 | 本月底法定/註冊股本總額： HKD 200,000,000 FF301 第 1 頁 共 10 頁 v 1.1.1 股份發行人及根據《上市規則》 ...

Financial Performance - For the fiscal year ending December 31, 2024, the group recorded a revenue of approximately HKD 356.4 million, an increase of 14.2% compared to the restated revenue of HKD 312.1 million for 2023[4]. - The net profit attributable to the company's owners for the fiscal year was approximately HKD 63.8 million, a significant decrease from HKD 1,200.8 million in 2023[4]. - The gross profit for the year was HKD 29.2 million, down 21.0% from HKD 37.0 million in 2023[5]. - The total comprehensive income for the year was HKD 65.7 million, compared to HKD 1,193.5 million in the previous year, reflecting a substantial decline[6]. - The company reported a basic loss per share from continuing operations of HKD (1.34), compared to a profit of HKD 666.54 in the previous year[6]. - The company reported a loss from discontinued operations of approximately HKD 68,625,000, compared to a loss of HKD 7,711,000 in 2023, resulting in a basic loss per share of HKD 0.1896 for 2024, compared to a loss of HKD 0.0425 per share in 2023[59]. - The group reported an annual operating loss of approximately HKD 4,844,000 for the year ending December 31, 2024[141]. Dividends and Share Capital - The board of directors did not recommend any final dividend for the fiscal year ending December 31, 2024, consistent with the previous year[4]. - The company's issued and paid-up capital is now HKD 3,425,728.57, consisting of 342,572,857 shares at a par value of HKD 0.01 per share[19]. - Following the capital restructuring, the company's authorized share capital is HKD 200,000,000, divided into 20,000,000,000 shares at a par value of HKD 0.01 each[18]. - The company plans to issue 2,260,980,856 new shares at an issue price of HKD 0.044 per share as part of the investor subscription agreement[19]. - The company issued a total of up to 823,739,687 new shares to creditors at a rate of one new share for every HKD 1.80 of recognized debt[100]. - The company completed the issuance of 2,260,980,856 new shares at an issue price of HKD 0.044 per share on July 11, 2023[103]. - The company's share capital was reduced from 20 billion shares to 2 billion shares, with a par value adjustment from HKD 0.20 to HKD 0.10 per share[68]. Assets and Liabilities - The company's current assets decreased to HKD 58.1 million from HKD 96.1 million in 2023, indicating a liquidity challenge[8]. - The total liabilities decreased significantly from HKD 160.3 million in 2023 to HKD 23.4 million in 2024, improving the company's financial position[8]. - As of December 31, 2024, non-current liabilities decreased to HKD 4,022,000 from HKD 9,725,000 in 2023, representing a reduction of approximately 58.6%[9]. - The company's net assets improved to HKD 39,235,000 in 2024, compared to a net liability of HKD 41,711,000 in 2023, indicating a significant turnaround[9]. - The group’s total assets decreased to HKD 66,700 thousand in 2024 from HKD 128,298 thousand in 2023, representing a decline of 48.0%[40]. - Current assets decreased to HKD 58,145,000 in 2024 from HKD 96,088,000 in 2023, while current liabilities dropped significantly from HKD 160,284,000 to HKD 23,443,000, resulting in a current ratio increase from 0.60 to 2.48[118]. Financial Restructuring - The company has undergone a financial restructuring process under the supervision of the Cayman Islands court to address its debt obligations[13]. - The restructuring plan has been approved by the required majority of creditors, making it legally binding for the company and its creditors[16]. - The company has successfully withdrawn from provisional liquidation following the completion of its debt restructuring plan, alleviating immediate liquidity risks[23]. - The company announced on June 16, 2023, that it would have the ability to meet its debt obligations following the completion of the capital restructuring and investor subscription[101]. - The capital restructuring became effective on May 17, 2023, after all conditions were met, including court orders and approvals from the stock exchange[96]. Operational Performance - The wood-related business segment generated revenue of HKD 355,317 thousand in 2024, up from HKD 312,085 thousand in 2023, reflecting a growth of 13.9%[40]. - The financing services and investment segment reported a loss of HKD 1,291 thousand in 2024, compared to a profit of HKD 1,213,358 thousand in 2023, indicating a significant decline in performance[40]. - The food and beverage segment achieved revenue of HKD 1,057 thousand in 2024, with no prior year data available for comparison[40]. - The company has completed the sale of its car leasing business segment as of October 2024, which has been classified as discontinued operations[11]. - The company plans to terminate its car rental business by October 2024 to free up financial resources for the functional food and beverage sector[76]. - The group has been continuously developing its core timber-related business since 2020, including processing and distribution of furniture timber, and manufacturing and selling antique-style wooden furniture and other timber products[86]. Cash Flow and Financial Health - As of December 31, 2024, the company reported a net operating cash outflow of approximately HKD 11,321,000 and a cash balance of HKD 706,000, significantly lower than current liabilities of HKD 23,443,000[27]. - The company is actively taking measures to control administrative costs and curb capital expenditures to improve operational cash flow[27]. - The company has prepared cash flow forecasts covering at least twelve months from the date of the annual performance announcement, indicating sufficient operating funds to meet financial obligations[28]. - The net cash outflow from operating activities was approximately HKD 11,321,000, indicating significant cash flow challenges[141]. - As of December 31, 2024, the group's cash and bank balance was approximately HKD 706,000, significantly lower than current liabilities of HKD 23,443,000[141]. Future Plans and Market Strategy - The company plans to conduct a rights issue, proposing to issue 1 new share for every existing share, aiming to raise approximately HKD 44,600,000 to improve liquidity and financial condition[27]. - The company plans to raise up to HKD 45,600,000 through a rights issue of 411,219,340 shares, expected to be completed by the end of March 2025[73]. - The company has allocated up to HKD 2 million for the establishment and operation of Shenzhen Weijianbao Food Technology Co., Ltd., focusing on functional food and beverage business in China[83]. - The company is exploring strategic collaboration opportunities with downstream market participants in the timber supply chain, such as real estate developers and high-end furniture retailers[86]. - The company plans to continue expanding its operations in the timber-related business and functional food and beverage sectors in the foreseeable future[86]. Governance and Compliance - The board believes that having the same individual serve as both Chairman and CEO enhances responsiveness and efficiency in business strategy formulation[135]. - The audit committee consists of three independent non-executive directors, ensuring oversight of internal controls and financial reporting[139]. - The company has adopted a standard code for securities trading by directors, ensuring compliance during the blackout period before earnings announcements[137]. - The annual general meeting for the year ending December 31, 2024, is planned, with a notice to be issued in due course[143]. - The company will publish its annual report containing all required information within the designated period[144]. - The independent auditor's report highlighted significant uncertainties regarding the group's ability to continue as a going concern[141].

Revenue Growth - The revenue from wood-related business increased from approximately HK$96.9 million in the first half of 2023 to approximately HK$170.3 million in the first half of 2024, representing a growth of about 76%[5]. - Revenue from the processing and distribution of furniture wood amounted to approximately HK$152.5 million for the Reporting Period, compared to approximately HK$81.0 million in the same period of 2023, indicating an increase of approximately 88%[8]. - Revenue generated from the manufacturing and sales of antique-style wood furniture and other wooden products was approximately HK$17.8 million for the Reporting Period, up from approximately HK$15.9 million in the first half of 2023, reflecting a growth of about 12%[10]. - The company recorded a revenue of approximately HK$175.1 million for the reporting period, representing a 71% increase compared to HK$102.3 million for the six months ended June 30, 2023[43]. - For the six months ended June 30, 2024, the total revenue from external customers was HK$175,090,000, compared to HK$102,259,000 for the same period in 2023, representing a significant increase of approximately 71.3%[154]. - The wood-related business segment reported revenue of HK$170,268,000 for the first half of 2024, compared to HK$96,938,000 in 2023, reflecting an increase of approximately 75.7%[152]. Car Rental Business - The car rental business segment recorded a revenue of approximately HK$4.8 million for the Reporting Period, a decrease from approximately HK$5.3 million in the first half of 2023, representing a decline of about 9%[12]. - The car rental segment generated revenue of HK$4,822,000 for the six months ended June 30, 2024, down from HK$5,321,000 in 2023, indicating a decrease of about 9.4%[152]. - The Company is actively considering discontinuing the car rental business to allocate resources to more promising sectors[17]. Business Environment and Strategy - The overall business environment remains challenging due to the ongoing credit crisis in China's property sector, with new housing starts continuing to decline in the first half of 2024[3]. - The Group plans to continue developing its core wood-related business and expand operations in the foreseeable future, leveraging accumulated experience and expertise[13]. - The establishment of China Wood Green Resources (Shenzhen) Co., Limited has been pivotal in developing the Group's core wood-related business, focusing on supply chain management and wood processing[8]. - The Group's efforts in diversifying its customer base include designing affordable indoor wood products to attract general consumers[9]. - The Group is actively exploring strategic cooperation opportunities with market players in the wood-related business, including real estate developers and high-end furniture retailers[16]. - The Group is considering business diversification to mitigate risks associated with over-exposure to the wood-related business[17]. - The Group is studying opportunities in the functional food and beverage industry and the health and beauty industry in China[17]. Financial Restructuring - A restructuring agreement was entered into on February 16, 2022, involving capital reorganization and investor subscription[24]. - The Scheme was approved by the requisite statutory majorities of the creditors at the Scheme Meeting held on March 11, 2022[24]. - The Funding Agreement to provide funding for business development was sanctioned by the Cayman Court on October 17, 2022[25]. - The Cayman Court approved the application for withdrawal of the Petition and discharge of the appointment of the Joint Provisional Liquidators on 14 June 2023, allowing the Company to exit provisional liquidation[40]. - The Capital Reorganisation became effective on 17 May 2023 after fulfilling all conditions precedent[28]. - The Scheme has become unconditional following the completion of all necessary approvals and conditions[32]. - The successful completion of the Capital Reorganisation and the Investor's Subscription has eliminated the Company's imminent liquidity risk, allowing it to exit provisional liquidation[142]. - The Company has explored different options to restructure its debts, leading to the current restructuring approach[125]. Financial Performance - The cost of sales and services rendered increased by approximately 99% from HK$80.2 million for the six months ended June 30, 2023, to approximately HK$159.6 million for the reporting period[45]. - The gross profit decreased by approximately 30% to HK$15.5 million, with the gross profit margin dropping from 21.6% to 8.9% due to market slowdown in the wood-related business[45]. - Finance costs significantly decreased from approximately HK$64.7 million for the six months ended June 30, 2023, to approximately HK$1.2 million as a result of the debt restructuring scheme effective in July 2023[48]. - Administrative expenses increased by approximately 45% to HK$14.8 million for the reporting period, compared to HK$10.2 million in the prior interim[47]. - The Group incurred a loss of HK$2,361,000 for the six months ended 30 June 2024[145]. - The loss for the period ended June 30, 2024, was HK$2,361,000, a significant improvement compared to a loss of HK$58,210,000 for the same period in 2023, representing a reduction of approximately 96%[115]. - Total comprehensive income for the period was HK$(2,294,000), compared to HK$(63,786,000) in 2023, indicating a substantial recovery in overall financial performance[115]. Share Capital and Equity - The authorized share capital of the Company is HK$200,000,000 divided into 20,000,000,000 New Shares at HK$0.01 each, with issued capital of HK$3,425,728.57 divided into 342,572,857 New Shares[29]. - The Investor conditionally agreed to subscribe for 2,260,980,856 New Shares at an issue price of HK$0.044 per New Share[31]. - The Company will issue up to a maximum of 823,739,687 New Shares to Creditors at a rate of 1 New Share for every HK$1.80 of Admitted Claims[38]. - The total issued share capital of the Company as of June 30, 2024, is 342,729,340 shares[80]. - The company executed a share consolidation on June 18, 2024, reducing the number of issued shares from 3,427,293,400 to 342,729,340[175]. - The authorized share capital was adjusted from HK$200,000,000 to HK$20,000,000,000 following the share consolidation[175]. Cash Flow and Liquidity - As of June 30, 2024, cash and cash equivalents amounted to approximately HK$0.7 million, down from approximately HK$3.5 million as of December 31, 2023[48]. - The company's cash and bank balances significantly decreased to HK$701,000 from HK$3,522,000, a decline of approximately 80%[116]. - Cash used in operating activities amounted to HK$4,267,000 for the first half of 2024, a significant decrease from cash generated of HK$32,642,000 in the same period of 2023[121]. - The company raised HK$4,247,000 from other borrowings in the first half of 2024, compared to HK$47,387,000 in the same period of 2023[122]. - Net cash generated from financing activities was HK$1,390,000 in the first half of 2024, down from HK$16,496,000 in the same period of 2023[122]. - The Group is taking proactive measures to improve operating cash flow by controlling administrative costs and containing capital expenditure[75]. Governance and Compliance - The audit committee has reviewed the going concern issue and concurs with the Board's view[74]. - The Company resumed trading of its shares on the Stock Exchange on May 17, 2023, after fulfilling all resumption guidance[75]. - The company complied with the Corporate Governance Code throughout the reporting period, with minor exceptions regarding attendance at the annual general meeting[99][100]. - The unaudited condensed consolidated interim financial statements were approved by the Board on August 23, 2024, ensuring timely reporting[190]. - The Group had no related party transactions reported for the current period, maintaining transparency in financial dealings[184].

Wood-Related Business Performance - Revenue from wood-related business increased from approximately HK$96.9 million in H1 2023 to approximately HK$170.3 million in H1 2024[10] - Revenue from processing and distribution of furniture wood reached approximately HK$152.5 million in H1 2024, up from approximately HK$81.0 million in H1 2023[13] - The Group's core wood-related business includes wood management, distribution, processing, and sale of antique-style wood furniture[10] - China Wood Green Resources (Shenzhen) Co., Limited (CWGreen) is the main operating company for the Group's wood-related business, focusing on supply chain management and processing/distribution of furniture woods[13] - Revenue from furniture wood processing and distribution reached approximately HK$152.5 million, up from HK$81 million in the 2023 interim period[14] - Revenue from manufacturing and sales of antique-style wood furniture and other wooden products amounted to approximately HK$17.8 million, compared to HK$15.9 million in the 2023 interim period[15] - The company plans to continue developing and expanding its core wood-related business, including furniture wood processing and distribution, as well as antique-style wood furniture manufacturing[18] - Revenue increased by 71% to approximately HK$175.1 million compared to HK$102.3 million in the previous period, driven by growth in wood-related business turnover from HK$96.9 million to HK$170.3 million[48][49] - Wood-related business segment revenue increased significantly to HKS 170,268 thousand in H1 2024 from HKS 96,938 thousand in H1 2023, a growth of 75.6%[141] Financial Performance and Metrics - Gross profit decreased by 30% to HK$15.5 million, with gross profit margin dropping from 21.6% to 8.9% due to market slowdown in wood-related business[50] - Cost of sales and services rendered increased by 99% to HK$159.6 million, primarily due to higher sales volume of wood products[50] - Administrative expenses rose by 45% to HK$14.8 million, while selling and distribution expenses decreased to HK$0.1 million[52][55] - Finance costs significantly reduced from HK$64.7 million to HK$1.2 million following the debt restructuring scheme effective in July 2023[53][57] - Cash and cash equivalents stood at HK$0.7 million as of 30 June 2024, down from HK$3.5 million at the end of 2023[53] - Bank and other borrowings increased to HK$17.9 million as of 30 June 2024, up from HK$14.1 million at the end of 2023[53] - Revenue for the six months ended 30 June 2024 increased to HK$175.09 million, up from HK$102.26 million in the same period in 2023, representing a growth of 71.2%[109] - Gross profit for the six months ended 30 June 2024 decreased to HK$15.52 million, down from HK$22.11 million in the same period in 2023, a decline of 29.8%[109] - Loss before tax for the six months ended 30 June 2024 was HK$552,000, significantly reduced from HK$53.40 million in the same period in 2023[109] - Loss for the period attributable to owners of the company was HK$2.36 million, compared to HK$58.21 million in the same period in 2023[109] - Total comprehensive income for the period was a loss of HK$2.29 million, compared to a loss of HK$63.79 million in the same period in 2023[110] - Total non-current assets as of 30 June 2024 were HK$24.94 million, down from HK$32.21 million as of 31 December 2023[111] - Total current assets as of 30 June 2024 were HK$66.95 million, down from HK$96.09 million as of 31 December 2023[111] - Total current liabilities as of 30 June 2024 were HK$128.57 million, down from HK$160.28 million as of 31 December 2023[112] - Net liabilities as of 30 June 2024 were HK$44.01 million, compared to HK$41.71 million as of 31 December 2023[112] - Capital deficiency as of 30 June 2024 was HK$44.01 million, compared to HK$41.71 million as of 31 December 2023[112] - The company reported a net cash used in operating activities of HK$4.267 million for the six months ended 30 June 2024, compared to a net cash generated from operating activities of HK$32.642 million in the same period in 2023[117] - The company's net cash generated from financing activities was HK$1.390 million for the six months ended 30 June 2024, a significant decrease from HK$16.496 million in the same period in 2023[118] - The company's cash and cash equivalents at the end of the period were HK$701 thousand, a sharp decline from HK$50.781 million at the end of the same period in 2023[118] - The company's total equity decreased to HK$44.005 million as of 30 June 2024, compared to HK$1.466 billion as of 30 June 2023[113][114] - The company's accumulated losses increased to HK$200.421 million as of 30 June 2024, compared to HK$2.596 billion as of 30 June 2023[113][114] - The company's foreign currency translation reserve decreased to HK$5.801 million as of 30 June 2024, compared to HK$642 thousand as of 30 June 2023[113][114] - The company's non-controlling interests decreased to HK$0 as of 30 June 2024, compared to HK$12.349 million as of 30 June 2023[113][114] - The company's share capital remained unchanged at HK$34.273 million as of 30 June 2024, compared to HK$68.515 million as of 30 June 2023[113][114] - The company's share premium remained unchanged at HK$127.944 million as of 30 June 2024, compared to HK$1.059 billion as of 30 June 2023[113][114] - The company's capital reserve decreased to HK$0 as of 30 June 2024, compared to HK$14.593 million as of 30 June 2023[113][114] - The Group incurred a loss of HK$2,361,000 for the six months ended 30 June 2024[138] - As of 30 June 2024, the Group had net current liabilities of approximately HK$61,621,000 and net liabilities of approximately HK$44,005,000[138] - The Group's bank and other borrowings amounted to approximately HK$17,913,000 as of 30 June 2024[138] - The Group's provision of claims amounted to approximately HK$47,612,000 as of 30 June 2024[138] - The Group's total cash and bank balances were approximately HK$701,000 as of 30 June 2024[138] - Total segment revenue for the group rose to HKS 175,090 thousand in H1 2024 from HKS 102,259 thousand in H1 2023, an increase of 71.2%[141] - Total assets decreased to HKS 91,894 thousand as of 30 June 2024 from HKS 128,298 thousand as of 31 December 2023, a reduction of 28.4%[142] - Total liabilities decreased to HKS 135,899 thousand as of 30 June 2024 from HKS 170,009 thousand as of 31 December 2023, a reduction of 20.1%[142] - Revenue from external customers in the PRC increased to HKS 157,247 thousand in H1 2024 from HKS 102,259 thousand in H1 2023, a growth of 53.7%[146] - Revenue from external customers in Hong Kong was HKS 17,843 thousand in H1 2024, compared to no revenue in H1 2023[146] - Non-current assets as of 30 June 2024 (unaudited) amounted to HK$24,944 million, compared to HK$32,210 million as of 31 December 2023 (audited)[147] - Revenue for the six months ended 30 June 2024 was HK$175,090 thousand, a significant increase from HK$102,259 thousand in the same period in 2023[150] - The Group recorded no customer contributing 10% or more of total revenue during the reporting period, compared to one such customer in the 2023 interim period[148][149] - Cost of inventories sold and services rendered for the six months ended 30 June 2024 was HK$159,488 thousand, more than double the HK$75,033 thousand in the same period in 2023[152] - The Group's loss before tax for the six months ended 30 June 2024 was HK$2,361,000, a significant improvement from the HK$58,210,000 loss in the same period in 2023[156] - Total tax charge for the six months ended 30 June 2024 was HK$1,809 thousand, compared to HK$4,807 thousand in the same period in 2023[153] - The Board did not recommend payment of an interim dividend for the six months ended 30 June 2024, consistent with the 2023 interim period[156] - Trade receivables decreased from HK$7,889,000 in December 2023 to HK$6,063,000 in June 2024, a reduction of 23.1%[157] - Allowance for expected credit losses (ECLs) remained unchanged at HK$2,532,000 from December 2023 to June 2024[157] - Trade receivables within 90 days decreased significantly from HK$3,705,000 in December 2023 to HK$1,173,000 in June 2024, a 68.3% drop[158] - Trade payables over 365 days increased sharply from HK$79,000 in December 2023 to HK$2,224,000 in June 2024, a 2715.2% increase[159] Business Diversification and Strategic Plans - The company is actively assessing the viability of business diversification, including opportunities in the functional food and beverage industry and the health and beauty industry in China[21] - The company is considering discontinuing the car rental business to allocate resources to more promising areas such as functional food and beverage, and health and beauty businesses[22] - The company is contemplating fundraising exercises to finance potential new business opportunities[22] - No definitive decisions or agreements have been reached regarding new business opportunities or potential fundraising exercises[23] - The company is exploring strategic cooperation opportunities with real estate developers, high-end furniture retailers, and logistics management service providers to expand its wood-related business[21] Debt Restructuring and Capital Reorganization - The company has implemented a court-supervised provisional liquidation regime in the Cayman Islands to facilitate financial restructuring[25] - The Company's authorized share capital is HK$200,000,000 divided into 20,000,000,000 New Shares of HK$0.01 each, and the issued and fully paid-up capital is HK$3,425,728.57 divided into 342,572,857 New Shares of HK$0.01 each following the Capital Reorganization[34] - The Investor conditionally agreed to subscribe for 2,260,980,856 New Shares at an issue price of HK$0.044 per share, totaling approximately HK$99.5 million[34][36] - The Scheme involves a Cash Bonus of HK$50,000,000 to be distributed proportionally to creditors with recognized claims[39] - The Capital Reorganization became effective on 17 May 2023 after fulfilling all conditions, including court approvals and stock exchange listing permissions[33] - The Scheme was approved by the requisite statutory majorities of creditors at the Scheme Meeting held on 11 March 2022[29][32] - The Funding Agreement dated 31 December 2020, providing financial support for the Company's business development, was sanctioned by the Cayman Court on 17 October 2022[30][32] - The Whitewash Waiver was granted by the SFC on 22 August 2022, conditional on no acquisition or disposal of voting rights by the Investor and its concert parties during the specified period[31][32] - The Scheme became unconditional after fulfilling all conditions, including the effectiveness of the Capital Reorganization and the unconditional status of the Investor's Subscription[37] - The company issued 823,739,687 new shares to creditors at a rate of 1 share per HK$1.80 of admitted claims, fully discharging all debts[43][47] - The company issued 2,260,980,856 new shares to investors at HK$0.044 per share as part of the restructuring agreement[47] - The company exited provisional liquidation on 14 June 2023 after successful debt restructuring and capital reorganization[45][46] - The Group completed the Capital Reorganisation on 17 May 2023[76] - The Group fulfilled the conditions precedent to the Investor's Subscription, which was completed on 11 July 2023[76] - The Group fulfilled the conditions precedent to the Scheme on 17 May 2023[78] - The Company fulfilled all resumption guidance and resumed trading of its shares on the Stock Exchange on 17 May 2023[79] - The Group will continue to take proactive measures to improve operating cash flow by controlling administrative costs and containing capital expenditure[79] - Management prepared cash flow projections covering at least twelve months from the date of the interim report, indicating sufficient working capital to meet financial obligations[79] - The company implemented a court-supervised provisional liquidation in the Cayman Islands to restructure its debts, appointing joint provisional liquidators (JPLs) on 2 February 2021[121] - A scheme of arrangement (the "Scheme") was approved by creditors on 11 March 2022, with the Hong Kong Court sanctioning the Scheme without modification on 22 March 2022[122] - The company entered into a conditional Restructuring Agreement on 16 February 2022, involving capital reorganisation, investor subscription, and the Scheme[122] - The Funding Agreement dated 31 December 2020, providing funding for business development, was sanctioned by the Cayman Court on 17 October 2022[123] - All resolutions related to the Capital Reorganisation, Investor's Subscription, Scheme, and Whitewash Waiver were passed at the extraordinary general meeting on 30 August 2022[124] - The Capital Reorganisation became effective on 17 May 2023 after fulfilling all conditions, including approval from the Cayman Court and the Stock Exchange Listing Committee[125] - The company's authorized share capital is HK$200,000,000, divided into 20,000,000,000 New Shares of HK$0.01 each, and the issued and fully paid-up capital is HK$3,425,728.57, divided into 342,572,857 New Shares of HK$0.01 each[127] - The investor conditionally agreed to subscribe for 2,260,980,856 New Shares at an issue price of HK$0.044 per New Share[127] - The investor's subscription became unconditional after fulfilling all precedent conditions, including the capital reorganization becoming effective and the listing committee's approval[128] - The scheme involves a cash bonus of HK$50 million to be distributed to creditors on a pro-rata basis[133] - The company allotted and issued up to 823,739,687 New Shares to creditors, with creditors receiving 1 New Share for every HK$1.80 of admitted claims[133] - The company announced it will become solvent upon completion of the capital reorganization, investor's subscription, and the scheme, eliminating imminent liquidity risk[134] - The company exited provisional liquidation on 14 June 2023 after the Cayman Court approved the withdrawal of the petition and discharge of the JPLs[134] - Completion of the investor's subscription took place on 11 July 2023, with 2,260,980,856 New Shares issued to the investor at HK$0.044 per share[135] - 823,739,687 New Shares were allotted and issued to China Wood Scheme Limited for distribution to creditors based on 1 New Share for every HK$1.80 of admitted claims[135] Share Capital and Ownership - Mr. Lyu NingJiang holds 226,098,085 shares, representing approximately 65.97% of the Company's issued share capital[82] - The total issued share capital of the Company as of 30 June 2024 was 342,729,340 shares[83] - Right Momentum holds a long position of 226,098,085 shares, representing 65.97% of the company's total issued share capital[85] - Integrated Capital (Asia) Limited and Yan Tak Cheung each hold a long position of 226,098,085 shares, representing 65.97% of the company's total issued share capital[85] - Sino Merchant Car Rental Limited holds a long position of 17,496,169 shares, representing 5.10% of the company's total issued share capital[85] - The total issued share capital of the company as of 30 June 2024 is 342,729,340 shares[87] - The existing share option scheme was adopted on 3 June 2016 and will remain in force until 2 June 2026[89] - Eligible participants under the Option Scheme include employees, executives, suppliers, customers, and shareholders of the company or its subsidiaries[90] - The subscription price for share options shall not be less than the highest of the closing price, the average closing price for the preceding five business days, or the nominal value of the shares[91] - Grantees must pay HK$1 as nominal consideration for the grant of options and must accept the offer within 21 days from the date of offer[92] - Options can be exercised at any time during a period determined by the Board, not exceeding ten years from the date of grant[92] - There is no minimum holding period or performance target required for the exercise of options under the Option Scheme[92] - The maximum number of shares available for issue under the Option Scheme is 3,240,687, representing 0.95% of the total number of shares in issue as of 30 June 2024[96][97] - No options were granted under the