Group 1 - The core viewpoint indicates that the chemical industry is experiencing mixed performance, with some products seeing price increases while others decline, influenced by external factors such as the Federal Reserve's interest rate cuts and geopolitical tensions [1][2] - Key products with significant price increases this week include synthetic ammonia (up 8.58%), lithium battery electrolyte (up 5.71%), and aniline (up 3.90%), while natural gas saw a notable decline of 7.90% [1][2] - The overall chemical industry remains weak, with varying performance across sub-sectors, largely due to past capacity expansions and weak demand, although some sectors like lubricants are performing better than expected [2] Group 2 - Investment opportunities are suggested in areas such as glyphosate, fertilizers, import substitution, domestic demand, and high-dividend assets [2] - Specific recommendations include focusing on the glyphosate sector, which is showing signs of recovery, and selecting companies with strong competitive positions and growth potential, such as Ruifeng New Materials and Baofeng Energy [2] - The report emphasizes the importance of domestic demand in the chemical industry, particularly for nitrogen and phosphate fertilizers, with companies like Hualu Hengsheng and China Heartlink Fertilizer being highlighted for their robust market positions [2]

Core Viewpoint - The successful commissioning of the second phase project at Jiangxi Xinyan Chemical Industrial Group marks a significant milestone in the company's strategic upgrade and aims to enhance its competitive edge in the market [1][2] Group 1: Project Overview - The total investment for the Jiangxi second phase project is 10 billion yuan, with construction officially starting in May 2024 [1] - The project aims to achieve an annual production capacity of 1.5 million tons of synthetic ammonia and 200,000 tons of DMF, targeting green agriculture, new materials, and new energy sectors [1] - The project is expected to generate an additional annual revenue of 4.2 billion yuan upon reaching full production [1] Group 2: Technological Advancements - The project utilizes advanced international technology and incorporates automation tools such as AGV unmanned forklifts, drones for inspections, and rail-mounted robots, alongside nearly 500 proprietary patents [1] - The overall technological level of the project is positioned to be industry-leading [1] Group 3: Construction Challenges and Achievements - The construction faced multiple challenges, including large-scale equipment, complex processes, and adverse weather conditions, yet the team managed to recover a 70-day delay within 50 days [2] - Key milestones include the successful completion of high-standard boiler water pressure tests and the early completion of steam pipeline cleaning by 11 days [2] - All six major units successfully completed their first joint trial runs during the hottest summer on record, showcasing the team's resilience and collaborative efforts [2] Group 4: Strategic Implications - The completion of the Jiangxi second phase project is seen as a crucial step for the company’s high-quality development and will inject new momentum into its operations [2] - The company plans to continue optimizing production operations and accelerate the development of new projects, aiming to achieve the "100 billion base" target [2]

Core Viewpoint - China Heartland Fertilizer (01866) has seen a stock price increase of over 7%, currently trading at 7.81 HKD, with a transaction volume of 33.22 million HKD, following the announcement of the successful production launch of its Jiangxi subsidiary's industrial chain extension project, which has a designed annual capacity of 600,000 tons of synthetic ammonia and 1.2 million tons of controlled-release fertilizers [1] Group 1 - The successful launch of the Jiangxi base's project will leverage existing market and locational advantages, enhancing efficient capacity utilization and reinforcing cost leadership [1] - The company aims to increase market share while generating incremental cash flow, contributing to high-quality and sustainable development, thereby enhancing overall competitiveness and brand influence [1] - Huaxin Securities highlights that the company maintains a leading position in production scale and operational capability domestically while steadily advancing strategic layout [1] Group 2 - The second phase of the Jiangxi base project and the new chemical materials project at the Xinxiang base are expected to commence production in Q3 2025 and Q1 2026, respectively [1] - New bases in Guangxi and Qundong are progressing as planned, with full capacity release expected by 2027, leading to cash flow exceeding capital expenditures [1] - The company is positioned to achieve a positive cycle of investment, output, and development, establishing a stronger scale and cost advantage in the upcoming industry development cycle for sustainable long-term value growth [1]

Core Viewpoint - China Heart and Heart Fertilizer (01866) has seen a stock price increase of over 7%, currently trading at 7.81 HKD, following the announcement of the successful production launch of its Jiangxi subsidiary's industrial chain extension project, which is expected to enhance production capacity and competitive advantage [1] Group 1: Production and Capacity - The Jiangxi subsidiary's project has a designed annual production capacity of 600,000 tons of synthetic ammonia and 1.2 million tons of controlled-release fertilizers [1] - The successful launch of this project is expected to leverage the existing market and geographical advantages of the Jiangxi base, improving efficient capacity utilization and reinforcing cost leadership [1] Group 2: Strategic Development - The company is maintaining its leading production scale and operational capabilities while steadily advancing its strategic layout [1] - Upcoming projects include the second phase of the Jiangxi base and a new chemical materials project in Xinxiang, both set to commence production in Q3 2025 and Q1 2026, respectively [1] - The company anticipates that by 2027, all in-progress capacities will be fully released, leading to cash flow exceeding capital expenditures, thus creating a positive cycle of investment, output, and development [1] Group 3: Competitive Positioning - The company aims to solidify its scale and cost advantages to occupy a more favorable position in the new development cycle of the industry, ensuring long-term sustainable value growth [1]

CHINA XLX FERTILISER LTD. 中國心連心化肥有限公司 * (Incorporated in Singapore with limited liability) （ 在 新 加 坡 註 冊 成 立 之 有 限 公 司 ） (Hong Kong Stock Code╱香港股份代號 : 1866) NOTIFICATION LETTER 通知信函 Dear Non-registered Shareholder (Note 1), 29 September 2025 China XLX Fertiliser Ltd. (the "Company") Notice of Publication of 2025 Interim Report ("Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communication are available on the Company's website at www.chinaxlx.com.hk an ...

CHINA XLX FERTILISER LTD. 中國心連心化肥有限公司 * (Incorporated in Singapore with limited liability) （ 在 新 加 坡 註 冊 成 立 之 有 限 公 司 ） (Hong Kong Stock Code╱香港股份代號 : 1866) NOTIFICATION LETTER 通知信函 Dear Registered Shareholder, 29 September 2025 China XLX Fertiliser Ltd. (the "Company") Notice of Publication of 2025 Interim Report ("Current Corporate Communication") Yours faithfully, For and on behalf of China XLX Fertiliser Ltd. Liu Xingxu Chairman of the Board Note: Corporate Communication refers to any document issued o ...

[China XLX Culture](index=2&type=section&id=China%20XLX%20Culture) The company adheres to an integrity-driven culture and a spirit of self-reliance, aiming to create maximum societal value with minimal resources, focusing on proactivity and results - The company adheres to a culture of **integrity** and the spirit of "striving hard to meet others' needs"[8](index=8&type=chunk) - Committed to creating the **greatest value for society with the fewest resources**[8](index=8&type=chunk) - Corporate culture emphasizes self-accountability, proactivity, and **results over process**[9](index=9&type=chunk) [Company Profile](index=4&type=section&id=Company%20Profile) China XLX Fertiliser aims to be China's most respected fertilizer group, pursuing efficient, high-end, and lean development through "fertilizer-based, high-quality growth" and "low-cost differentiation" strategies, guided by six core principles - Corporate Vision: Committed to becoming **China's most respected fertilizer enterprise group**[14](index=14&type=chunk) - Core Mission: Achieve **efficient, high-end, and lean development** for the group[14](index=14&type=chunk) - Adheres to two major development and operating strategies: "**fertilizer as foundation, high-quality development**" and "**low-cost differentiation**"[15](index=15&type=chunk) - Six development principles include strategic direction, pursuit of excellence, pragmatic and efficient management, key capability enhancement, development risk control, and **customer orientation**[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Corporate Information](index=6&type=section&id=Corporate%20Information) This section details China XLX Fertiliser's key corporate information, including board members, committees, senior management, stock code, and company website - Board members include Executive Directors Liu Xingxu (Chairman), Zhang Qingjin, Yan Yunhua, and Independent Non-executive Directors Wang Jianyuan, Li Shengxiao, Wang Weiren, Li Hongxing[22](index=22&type=chunk) - Established Audit Committee, Remuneration Committee, and Nomination Committee, each chaired by an **Independent Non-executive Director**[22](index=22&type=chunk) - Chief Executive Officer is Song Wanlei, and Chief Financial Officer and Data Protection Officer is Wang Yonghong[24](index=24&type=chunk) - Company stock code is **1866**, and the company website is **www.chinaxlx.com.hk**[27](index=27&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This report covers China XLX Fertiliser's H1 2025 performance, showing 5% revenue growth despite a 19% net profit decline due to lower gross profit, with strategic projects advancing [Business Review](index=9&type=section&id=(I)%20BUSINESS%20REVIEW) H1 2025 saw product prices rebound in Q2, driving a **5% revenue increase to RMB12.666 billion**, but overall gross profit fell **13%** and net profit **13%** (9% ex-non-recurring items), despite strong Q2 performance 2025年上半年简明综合全面收入表关键数据 | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Comprehensive Revenue | 12,666,000 | 12,061,000 | +5% | | Overall Gross Profit | - | - | -13% | | Net Profit Attributable to Owners | 88,000 (Decrease) | - | -13% | | Net Profit Attributable to Owners (Excluding Non-recurring Items) | - | - | -9% | | Q2 Net Profit Quarter-on-Quarter Growth | 259,000 | - | +104% | - **Urea product gross profit decreased by nearly 44%** year-on-year, primarily contributing to the decline in the group's overall gross profit[30](index=30&type=chunk) - Q2 urea and melamine average selling prices increased by **10% and 11%** quarter-on-quarter, respectively[31](index=31&type=chunk) - Q2 compound fertilizer and melamine sales volumes increased by **29% and 20%** quarter-on-quarter, respectively[31](index=31&type=chunk) [Fertiliser Segment](index=10&type=section&id=FERTILISER%20SEGMENT) The fertiliser segment saw mixed H1 2025 results: urea revenue fell **16%** (price down **19%**, volume up **4%**, gross margin down **10pp**), while compound fertilizer revenue grew **5%** (volume up **8%**, gross margin down **2pp**) [Urea](index=10&type=section&id=UREA) H1 2025 urea sales revenue fell **16% to RMB3.225 billion** (price down **19%**, volume up **4%**), with gross margin dropping from **31% to 21%**, partially offset by cost optimization | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 3,225,000 | 3,834,000 | -16% | | Average Selling Price | - | - | -19% | | Sales Volume | - | - | +4% | | Export Volume | - | - | +47,000 tonnes | | Gross Margin | 21% | 31% | -10 percentage points | - Urea prices increased by **10%** quarter-on-quarter in Q2[35](index=35&type=chunk) - Dual-coal blending technology reduced front-end coal gasification production costs by **1%**; coal prices decreased by **20%** year-on-year, leading to a **7% reduction in average production costs**[36](index=36&type=chunk) [Compound Fertilisers](index=10&type=section&id=COMPOUND%20FERTILISERS) H1 2025 compound fertilizer sales revenue grew **5% to RMB3.566 billion** (volume up **8%**), but gross margin fell **2 percentage points** due to rising raw material costs | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 3,566,000 | 3,410,000 | +5% | | Sales Volume | - | - | +8% | | High-efficiency Fertilizer Sales Volume | - | - | +11% | | Gross Margin | 16% | 18% | -2 percentage points | - The Guangxi production base successfully commenced operations, serving market demand in Guangdong, Guangxi, and Hainan[37](index=37&type=chunk) - Prices of key compound fertilizer raw materials, potash and phosphate, continued to rise by **24% and 6%** year-on-year, respectively, leading to a **1% increase in production costs**[40](index=40&type=chunk) [Chemical Segment](index=11&type=section&id=CHEMICAL%20SEGMENT) H1 2025 chemical segment performance varied: methanol revenue up **27%** (volume up **28%**); liquid ammonia revenue down **20%** (gross margin up **2pp**); melamine revenue down **5%** (gross margin up **1pp**); and DMF revenue down **1%** (gross margin up **5pp**) [Methanol](index=11&type=section&id=METHANOL) H1 2025 methanol sales revenue grew **27% to RMB1.642 billion** (volume up **28%**), with gross margin stable at **8%**, supported by strategic supplier agreements and increased exports | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 1,642,000 | 1,291,472 | +27% | | Sales Volume | - | - | +28% | | Gross Margin | 8% | 8% | Flat | - Stabilized selling prices and increased methanol export volumes through **strategic long-term agreements with upstream suppliers**[41](index=41&type=chunk) [Liquid Ammonia](index=11&type=section&id=LIQUID%20AMMONIA) H1 2025 liquid ammonia sales revenue fell **20% to RMB533 million** (volume down **6%**, price down **15%**), but gross margin rose **2 percentage points to 13%** due to a **16% average cost reduction** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 533,000 | 668,000 | -20% | | Sales Volume | - | - | -6% | | Selling Price | - | - | -15% | | Gross Margin | 13% | 11% | +2 percentage points | - The Xinxiang base implemented a flexible "methanol-up, ammonia-down" adjustment strategy, leading to a **6% year-on-year decrease in self-produced liquid ammonia volume**[43](index=43&type=chunk) - Liquid ammonia trade volume increased by **2%** year-on-year, compensating for the reduction in self-produced external sales[43](index=43&type=chunk) - Average costs decreased by **16%** year-on-year, with raw coal procurement costs down **14%** and total ammonia steam consumption down **2%**[47](index=47&type=chunk) [Melamine](index=12&type=section&id=MELAMINE) H1 2025 melamine sales revenue fell **5% to RMB378 million** (price down **9%**, volume up **5%**), with gross margin rising **1 percentage point to 31%** due to overseas market expansion and **10% average cost reduction** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 378,000 | 397,466 | -5% | | Average Selling Price | - | - | -9% | | Sales Volume | - | - | +5% | | Gross Margin | 31% | 30% | +1 percentage point | - Actively adjusted domestic and international trade marketing proportions, vigorously expanded overseas markets, adding new markets such as **Germany, Poland, and Spain**[48](index=48&type=chunk) - The Xinjiang base effectively reduced production costs by **5%** through multi-coal blending technology, leading to a **10% year-on-year decrease in average costs**[49](index=49&type=chunk) [DMF](index=13&type=section&id=DMF) H1 2025 DMF sales revenue slightly fell **1% to RMB587 million** (price down **9%**, volume up **9%**), but gross margin significantly rose **5 percentage points to 18%** due to a **15% average cost reduction** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 587,000 | 595,295 | -1% | | Selling Price | - | - | -9% | | Sales Volume | - | - | +9% | | Gross Margin | 18% | 13% | +5 percentage points | - Achieved strategic cooperation with leading downstream pesticide enterprises and actively built stable export channels and cooperation systems[52](index=52&type=chunk) - Average costs decreased by **15%** year-on-year, with raw coal procurement prices down **15%** and steam consumption per tonne down **25%**[53](index=53&type=chunk) [Other Income and Expenses](index=13&type=section&id=Other%20Income%20and%20Expenses) H1 2025 saw net other income surge **79% to RMB200 million**, selling and distribution expenses up **4%**, G&A expenses down **0.3%** (5% ex-share-based compensation), finance costs down **14%**, and income tax down **13%**, leading to a **19% overall profit decline** [Other Income, Net](index=13&type=section&id=OTHER%20INCOME%2C%20NET) H1 2025 net other income reached **RMB200 million**, up **79%**, driven by **RMB45 million in government grants**, **RMB34 million from byproduct sales**, and **RMB7 million reduced loss from asset disposals** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other Income, Net | 200,000 | 112,000 | +79% | | Government Grants | - | - | +45,000 | | Net Profit from Byproduct Sales | - | - | +34,000 | | Reduced Loss from Fixed Asset Disposal | - | - | +7,000 | [Selling and Distribution Expenses](index=14&type=section&id=SELLING%20AND%20DISTRIBUTION%20EXPENSES) H1 2025 selling and distribution expenses rose **4% to RMB392 million**, driven by new marketing models, expanded channels, increased sales volumes, and greater overseas market development, leading to a **RMB14 million increase in service fees** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 392,000 | 378,000 | +4% | | Increase in Service Fees | - | - | +14,000 | - Promotion of new marketing models, further expansion of terminal channels, and **significant increase in sales volume** across all products[57](index=57&type=chunk) - Continuously increased efforts in overseas market development, leading to **growth in export volumes**[57](index=57&type=chunk) [General and Administrative Expenses](index=14&type=section&id=GENERAL%20AND%20ADMINISTRATIVE%20EXPENSES) H1 2025 G&A expenses slightly fell **0.3% to RMB700 million** (5% ex-share-based compensation), driven by **RMB27 million in salary savings**, **RMB6 million in reduced repair costs**, and **RMB4 million in lower testing fees** from efficiency improvements | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 700,000 | 702,000 | -0.3% | | Share-based Compensation Management Expenses | 35,000 | - | - | | Actual Management Expenses (Excluding Share-based Compensation) | - | - | -5% | | Reduction in Management Personnel Salary Expenses | 27,000 | - | - | | Reduction in Repair Expenses | 6,000 | - | - | | Reduction in Testing and Inspection Expenses | 4,000 | - | - | - Streamlined organizational structure and management personnel allocation, deploying managers to front-line production, sales, and service roles[59](index=59&type=chunk) - Implemented digital monitoring and preventive maintenance for key equipment, reducing the frequency of abnormal shutdowns for inspection and repair[59](index=59&type=chunk) [Finance Costs](index=15&type=section&id=FINANCE%20COSTS) H1 2025 finance costs decreased **14% to RMB230 million**, driven by debt structure optimization, diversified financing, and replacing high-interest loans, reducing the average loan interest rate by **0.8 percentage points** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Finance Costs | 230,000 | 266,000 | -14% | | Average Loan Interest Rate | - | - | -0.8 percentage points | - Continuously optimized debt structure, diversified financing channels, and actively communicated with financial institutions[60](index=60&type=chunk) - Fully capitalized on interest rate reduction opportunities to advance the replacement of high-interest loans[60](index=60&type=chunk) [Income Tax Expenses](index=15&type=section&id=INCOME%20TAX%20EXPENSES) H1 2025 income tax expenses decreased **13% to RMB161 million**, mainly due to lower profitability | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Income Tax Expenses | 161,000 | 184,000 | -13% | | Primary Influencing Factor | Decline in profitability | - | - | [Profit During the Period](index=15&type=section&id=PROFIT%20DURING%20THE%20PERIOD) H1 2025 profit for the period fell **19% to RMB757 million**, mainly due to a **RMB316 million gross profit reduction**, partially offset by **RMB88 million higher other income** and **RMB24 million expense savings** | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 757,000 | 938,000 | -19% | | Gross Profit Reduction | 316,000 | - | - | | Increase in Other Income | 88,000 | - | - | | Savings in Three Major Expenses | 24,000 | - | - | [Prospects](index=16&type=section&id=(II)%20PROSPECTS) H2 outlook: stable urea prices with potential coal-driven fluctuations, positive chemical industry, and rising demand for high-efficiency fertilizers. The group will focus on advanced R&D, low-cost operations, and differentiated products, with key projects in Jiangxi (Q3 2025) and Xinxiang (Q1 2026) set to boost cash flow and long-term value by 2027 - Domestic nitrogen fertilizer market urea prices are expected to remain stable in H2, but a rebound in coal prices may support **periodic upward fluctuations**[66](index=66&type=chunk) - The supply-demand pattern in the chemical industry is expected to improve, with the industry's prosperity likely to show a **stable upward trend**[66](index=66&type=chunk) - Accelerated agricultural modernization and continuous expansion of grain planting areas are driving **increasing rigid demand for high-efficiency fertilizers**[66](index=66&type=chunk) - Focused on R&D and application of technologies such as slow-release, controlled-release, and water-fertilizer integration, promoting planting models that **save water and fertilizer, and increase yield and efficiency**[67](index=67&type=chunk) - Centered on humic acid as a core product, building differentiated product and service competition, providing **full-chain services for large farmers**[69](index=69&type=chunk) - Jiangxi Base Phase II project is scheduled for commissioning in **Q3 2025**, and the Xinxiang Base chemical new materials project in **Q1 2026**[70](index=70&type=chunk) - By **2027**, all the group's under-construction capacities are expected to be fully released, with cash flow significantly exceeding capital expenditure, forming a positive cycle of "investment, output, and development"[70](index=70&type=chunk) [Directors' and Chief Executive's Interests in Shares](index=18&type=section&id=(III)%20DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20IN%20SHARES) As of June 30, 2025, directors and chief executives held long positions in company shares, with Mr. Liu Xingxu holding **34.25%**, Ms. Yan Yunhua **20.12%**, and Mr. Zhang Qingjin **0.24%**, reflecting strong alignment with company interests | Name of Director/Chief Executive | Total Interests (Shares) | Approximate % of the Company's Issued Share Capital | | :--- | :--- | :--- | | Mr. Liu Xingxu | 439,565,999 | 34.25% | | Mr. Zhang Qingjin | 3,045,000 | 0.24% | | Ms. Yan Yunhua | 258,220,000 | 20.12% | | Mr. Wang Jianyuan | 100,000 | 0.01% | - Mr. Liu Xingxu beneficially owns **42% equity in Pioneer Top** and has full discretionary voting rights over Pioneer Top[79](index=79&type=chunk) - Ms. Yan Yunhua holds **100% interest in Rosy Top Limited** and, as trustee of the employee trust, has full discretionary voting rights over Mirth Power's shares in the company[79](index=79&type=chunk) - Equity derivatives represent interests in **restricted shares granted under the company's share award scheme (but not yet vested)**[79](index=79&type=chunk) [Substantial Shareholders' Interests in Shares](index=20&type=section&id=(IV)%20SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20IN%20SHARES) As of June 30, 2025, substantial shareholders include Pioneer Top (controlled by Mr. Liu Xingxu) and Mirth Power (an employee trust controlled by Ms. Yan Yunhua), holding 5% or more of issued shares | Name of Substantial Shareholder | Capacity | Number of Issued Ordinary Shares in which Interests are Held | Approximate % of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Pioneer Top | Beneficial Owner | 435,313,999 | 33.92% | | Teeroy Limited | Trustee | 247,484,848 | 19.28% | | Mirth Power | Beneficial Owner | 211,939,848 | 16.52% | | Clever Sunshine | Beneficial Owner | 35,545,000 | 2.76% | - Pioneer Top is beneficially owned by Mr. Liu Xingxu with **42% equity** and he has full discretionary voting rights[89](index=89&type=chunk) - Mirth Power is a trust holding shares for **1,245 group employees**, with Ms. Yan Yunhua as the trustee, who has full discretionary voting rights over Mirth Power's shares[89](index=89&type=chunk) [Supplementary Information](index=22&type=section&id=(V)%20SUPPLEMENTARY%20INFORMATION) This section provides supplementary details on operational and financial risks, contingent liabilities, litigation, asset charges, investments, future plans, share award scheme, governance, share repurchases, and employee policies [1. Operational and Financial Risks](index=22&type=section&id=1.%20OPERATIONAL%20AND%20FINANCIAL%20RISKS) The group faces market, commodity, interest rate, limited FX, inflation, liquidity (**31.28% debt due within one year**), and debt-to-asset ratio risks (up **2pp to 63.5%**), with Jiangxi Phase II project expected to stabilize H2 cash flow and the ratio - Key market risks include changes in average selling prices of major products, changes in raw material (primarily coal) costs, and **fluctuations in interest and exchange rates**[90](index=90&type=chunk) - Regarding liquidity risk, as of June 30, 2025, approximately **RMB4.859 billion (31.28%) of debt is due within one year**, and the company is adjusting its loan structure and securing sufficient long-term bank credit[96](index=96&type=chunk)[98](index=98&type=chunk) Debt-to-Asset Ratio | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Debt-to-Asset Ratio | 63.5% | 61.5% | +2 percentage points | - The increase in the debt-to-asset ratio was mainly due to **new loans of approximately RMB2.67 billion**, all of which were medium-to-long-term loans, optimizing the overall debt structure[227](index=227&type=chunk) - The Jiangxi Phase II project is progressing as planned and is expected to commence production in **Q3**, providing strong support for H2 cash flow and ensuring the debt-to-asset ratio remains reasonable and stable[228](index=228&type=chunk) [2. Contingent Liabilities](index=24&type=section&id=2.%20CONTINGENT%20LIABILITIES) As of June 30, 2025, the group had no significant contingent liabilities - As of **June 30, 2025**, the group had **no significant contingent liabilities**[100](index=100&type=chunk) [3. Material Litigation and Arbitration](index=24&type=section&id=3.%20MATERIAL%20LITIGATION%20AND%20ARBITRATION) As of June 30, 2025, the group was not involved in any material litigation or arbitration - As of **June 30, 2025**, the group was **not involved in any material litigation or arbitration**[101](index=101&type=chunk) [4. Charge on the Group's Assets](index=24&type=section&id=4.%20CHARGE%20ON%20THE%20GROUP'S%20ASSETS) As of June 30, 2025, the group had no other charges on its assets beyond those disclosed in this report - As of **June 30, 2025**, the group had **no other charges on its assets** beyond those disclosed in this report[102](index=102&type=chunk) [5. Significant Investments](index=24&type=section&id=5.%20SIGNIFICANT%20INVESTMENTS) The group made no significant investments during the six months ended June 30, 2025 - The group made **no significant investments** during the six months ended **June 30, 2025**[103](index=103&type=chunk) [6. Future Plans for Material Investments or Capital Assets](index=24&type=section&id=6.%20FUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20OR%20CAPITAL%20ASSETS) As of June 30, 2025, the group had no other plans for material investments or capital assets - As of **June 30, 2025**, the group had **no other plans for material investments or capital assets**[104](index=104&type=chunk) [7. Share Award Scheme](index=25&type=section&id=7.%20SHARE%20AWARD%20SCHEME) Adopted on May 17, 2024, the share award scheme incentivizes talent with **HK$1.5 per share** awards, vesting based on 2024/2025 performance, with a **10% issued share limit**. **35,245,000 shares** partially vested, and **51,386,300 shares** (approx. **4.01%**) remain available - The Share Award Scheme was adopted on **May 17, 2024**, with a **10-year validity**, aiming to recognize contributions, incentivize retention, and attract talent[106](index=106&type=chunk)[107](index=107&type=chunk)[114](index=114&type=chunk) - The award price was **HK$1.5 per share**, equivalent to **46.43% of the closing price on February 5, 2024**, designed to provide sufficient incentive[112](index=112&type=chunk)[114](index=114&type=chunk) - Vesting conditions include company performance targets (**2024 revenue growth no less than 2% or net profit no less than RMB1.65 billion; 2025 revenue growth no less than 4% or net profit no less than RMB1.8 billion**) and individual performance assessment targets[116](index=116&type=chunk)[117](index=117&type=chunk) Vesting Schedule for Awarded Shares | Performance Period | Vesting Period | Percentage of Awarded Shares Available for Vesting | | :--- | :--- | :--- | | Year Ended December 31, 2024 | First Vesting Period | 50% of Awarded Shares for Relevant Individual Selected Participants | | Year Ended December 31, 2025 | Second Vesting Period | Remaining 50% of Awarded Shares for Relevant Individual Selected Participants | - The scheme's authorized limit is **10% of the total issued shares** on the adoption date (i.e., **121,876,300 shares**)[121](index=121&type=chunk) Summary of Share Awards | Category of Participants | Unvested as at January 1, 2025 (Shares) | Vested during the Reporting Period (Shares) | Unvested as at June 30, 2025 (Shares) | | :--- | :--- | :--- | :--- | | Directors, Chief Executives or Substantial Shareholders and their Associates | 3,750,000 | 1,875,000 | 1,875,000 | | Other Connected Persons | 15,540,000 | 7,770,000 | 7,770,000 | | Other Selected Participants (468 persons) | 51,140,000 | 25,420,000 | 25,420,000 | | **Total** | **70,790,000** | **35,245,000** | **35,245,000** | - As of the reporting date, the total number of shares available for issue under the Share Award Scheme is **51,386,300 shares**, representing approximately **4.01% of the company's issued shares**[126](index=126&type=chunk) [8. Audit Committee](index=33&type=section&id=8.%20AUDIT%20COMMITTEE) The Audit Committee reviewed the group's accounting principles, internal controls, and H1 2025 interim results, which are not yet externally audited - The Audit Committee has reviewed the group's adopted accounting principles and standards, and discussed and reviewed internal controls and reporting matters[134](index=134&type=chunk) - The Audit Committee has reviewed the interim results for the six months ended **June 30, 2025**, but these results have **not yet been reviewed or audited by the company's external auditors**[134](index=134&type=chunk) [9. Compliance with the Corporate Governance Code](index=33&type=section&id=9.%20COMPLIANCE%20WITH%20THE%20CORPORATE%20GOVERNANCE%20CODE) The company is committed to good corporate governance practices and has complied with all code provisions in Appendix C1 Part 2 of the Listing Rules for the six months ended June 30, 2025 - The company has complied with **all code provisions** set out in Appendix C1 Part 2 of the Listing Rules for the six months ended **June 30, 2025**[135](index=135&type=chunk) [10. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=34&type=section&id=10.%20COMPLIANCE%20WITH%20THE%20MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS%20OF%20LISTED%20ISSUERS) The Board has adopted the Model Code in Appendix C3 of the Listing Rules as its standard for directors' securities transactions, and all directors confirmed compliance for the six months ended June 30, 2025 - The Board has adopted the **Model Code** set out in Appendix C3 of the Listing Rules as its standard for directors' securities transactions[139](index=139&type=chunk) - All directors of the company have complied with the standards prescribed by the Model Code for the six months ended **June 30, 2025**[139](index=139&type=chunk) [11. Purchase, Sales or Redemption of the Company's Securities](index=34&type=section&id=11.%20PURCHASE%2C%20SALES%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20SECURITIES) For H1 2025, the company repurchased **1,006,000 shares** for **HK$5.318 million** (0.078% of issued shares), aiming to boost shareholder returns and optimize capital structure, with these shares held as treasury stock for future incentive plans Share Repurchases | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid (HK$) | Lowest Price Paid (HK$) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | :--- | :--- | | June | 1,006,000 | 5.44 | 5.19 | 5,318,363 | - Repurchased shares accounted for approximately **0.078% of the issued shares** as of **June 30, 2025**[140](index=140&type=chunk) - The share repurchases were based on the company's confidence in its long-term business prospects and potential growth, aiming to **optimize capital structure, enhance earnings per share, net asset value per share, and overall shareholder returns**[140](index=140&type=chunk) - As of **June 30, 2025**, the company held **1,006,000 treasury shares**, intended for employee share incentive plans and other corporate purposes[143](index=143&type=chunk)[144](index=144&type=chunk) [13. Employees and Remuneration Policy](index=36&type=section&id=13.%20EMPLOYEES%20AND%20REMUNERATION%20POLICY) As of June 30, 2025, the group had **11,945 employees**; remuneration is market and performance-based, with benefits, training, and incentive plans to enhance skills and reward performance Employee Headcount | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Employees | 11,945 | 11,787 | +158 | - Employee remuneration is determined considering market conditions and individual performance, with benefits such as medical and life insurance, and sales personnel receiving **commissions and bonuses based on sales performance**[145](index=145&type=chunk) - Provides continuous training for all employees (including directors and senior management) to **enhance professional skills and work performance**[145](index=145&type=chunk) - An employee incentive plan has been implemented to **reward outstanding employees**[145](index=145&type=chunk) [14. Significant Events After the Period](index=36&type=section&id=14.%20SIGNIFICANT%20EVENTS%20AFTER%20THE%20PERIOD) No significant events affecting the group occurred from the end of H1 2025 to the date of this report - **No significant events** affecting the group occurred from the end of H1 2025 to the date of this report[146](index=146&type=chunk) [15. Disclosure on the Websites of the SEHK and the Company](index=36&type=section&id=15.%20DISCLOSURE%20ON%20THE%20WEBSITES%20OF%20THE%20SEHK%20AND%20THE%20COMPANY) This report has been published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company (www.chinaxlx.com.hk) - This report is published on the **SEHK website (http://www.hkexnews.hk)** and the **company website (http://www.chinaxlx.com.hk)**[147](index=147&type=chunk) [16. Corporate Communications](index=37&type=section&id=16.%20CORPORATE%20COMMUNICATIONS) The company confirmed shareholder preferences for corporate communication language and receipt method, allowing changes and free printed copies, with this interim report available in both Chinese and English - The company has confirmed shareholders' preferences for the language version (i.e., English and/or Chinese) and method of receipt (i.e., printed copy or via the company website) of corporate communications[149](index=149&type=chunk) - Shareholders have the right to change their choices for the language version and method of receipt of corporate communications at any time, and may request **free printed copies**[149](index=149&type=chunk)[150](index=150&type=chunk) - Both Chinese and English versions of this interim report are printed in the same booklet, and shareholders will receive both versions simultaneously[152](index=152&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=39&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) H1 2025 condensed consolidated comprehensive income shows revenue up **5% to RMB12.666 billion**, but gross profit fell **13.4%**, and profit for the period decreased **19.3% to RMB757 million**, with basic EPS down **8.7%** H1 2025 Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 12,665,749 | 12,060,957 | +604,792 | +5.0% | | Cost of Sales | (10,625,565) | (9,705,237) | (920,328) | +9.5% | | Gross Profit | 2,040,184 | 2,355,720 | (315,536) | -13.4% | | Other Income, Net | 200,104 | 112,462 | +87,642 | +78.0% | | Selling and Distribution Expenses | (391,594) | (377,726) | (13,868) | +3.7% | | General and Administrative Expenses | (700,460) | (701,849) | +1,389 | -0.2% | | Finance Costs | (229,716) | (265,997) | +36,281 | -13.6% | | Profit Before Tax | 918,518 | 1,122,610 | (204,092) | -18.2% | | Income Tax Expense | (161,402) | (184,124) | +22,722 | -12.3% | | Profit for the Period | 757,116 | 938,486 | (181,370) | -19.3% | | Profit Attributable to Owners of the Company | 599,295 | 686,996 | (87,701) | -12.8% | | Basic Earnings Per Share (RMB cents) | 51.50 | 56.4 | (4.9) | -8.7% | | Diluted Earnings Per Share (RMB cents) | 50.93 | 56.3 | (5.37) | -9.5% | [Condensed Consolidated Statement of Financial Position](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets grew to **RMB36.041 billion** and net assets to **RMB13.142 billion**, with significant increases in property, plant, and equipment, cash, receivables, and inventories, while total liabilities rose, notably non-current interest-bearing borrowings by **40.7%** June 30, 2025 Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Property, Plant and Equipment | 25,192,472 | 22,981,051 | +2,211,421 | +9.6% | | Inventories | 1,889,737 | 1,710,320 | +179,417 | +10.5% | | Trade and Bills Receivables | 1,425,684 | 974,669 | +451,015 | +46.3% | | Cash and Cash Equivalents | 2,357,938 | 887,226 | +1,470,712 | +165.8% | | **Liabilities** | | | | | | Interest-bearing Bank and Other Borrowings (Current) | 4,858,594 | 5,267,226 | (408,632) | -7.8% | | Interest-bearing Bank and Other Borrowings (Non-current) | 10,673,109 | 7,588,086 | +3,085,023 | +40.7% | | Trade Payables | 1,883,340 | 1,581,482 | +301,858 | +19.1% | | **Equity** | | | | | | Net Assets | 13,142,126 | 12,521,788 | +620,338 | +5.0% | | Total Assets | 36,041,315 | 32,518,244 | +3,523,071 | +10.8% | | Total Liabilities | 22,899,189 | 19,996,456 | +2,902,733 | +14.5% | [Condensed Consolidated Statement of Changes in Equity](index=43&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) H1 2025 total equity grew **5% to RMB13.142 billion**, with **RMB757 million profit** partially offset by **RMB122 million dividends to non-controlling shareholders** and net share repurchases, reflecting capital structure adjustments H1 2025 Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (RMB'000) | June 30, 2025 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Total Equity | 12,521,788 | 13,142,126 | +620,338 | | Equity Attributable to Owners of the Company | 8,961,167 | 9,554,168 | +593,001 | | Non-controlling Interests | 3,560,621 | 3,587,958 | +27,337 | | Profit for the Period | - | 757,116 | +757,116 | | Dividends Paid to Non-controlling Shareholders | - | (122,078) | (122,078) | | Repurchase of Shares (Net) | (98,433) | (54,266) | +44,167 | | Acquisition of Non-controlling Interests | - | (9,858) | (9,858) | [Condensed Consolidated Statement of Cash Flows](index=44&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) H1 2025 condensed consolidated cash flows show net cash from operations down **39.9% to RMB1.247 billion**, net cash used in investing up **66.3% to RMB2.073 billion**, and net cash from financing up **9873% to RMB2.297 billion**, with period-end cash up **17.1% to RMB2.358 billion** H1 2025 Condensed Consolidated Statement of Cash Flows Key Data | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (RMB'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 1,246,933 | 2,075,084 | (828,151) | -39.9% | | Net Cash Used in Investing Activities | (2,072,769) | (1,246,595) | (826,174) | +66.3% | | Net Cash Generated from Financing Activities | 2,296,549 | 23,029 | +2,273,520 | +9872.9% | | Net Increase in Cash and Cash Equivalents | 1,470,713 | 851,517 | +619,196 | +72.7% | | Cash and Cash Equivalents at End of Period | 2,357,939 | 2,014,075 | +343,864 | +17.1% | - Expenditure for the acquisition of property, plant, and equipment was **RMB2.556 billion**, with proceeds from disposal amounting to **RMB5.686 million**[162](index=162&type=chunk) - Proceeds from loans and borrowings were **RMB7.461 billion**, and repayment of loans and borrowings was **RMB4.782 billion**[162](index=162&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=46&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) These notes explain H1 2025 condensed consolidated interim financial information, covering corporate details, accounting policies, product performance, income/expenses, finance costs, profit, tax, dividends, EPS, investments, cash, prepayments, inventories, receivables/payables, PPE, borrowings, and debt-to-asset ratio [1. Corporate Information](index=46&type=section&id=1.%20CORPORATE%20INFORMATION) China XLX Fertiliser, incorporated in Singapore on July 17, 2006, and listed on the HKEX, primarily engages in investment holding, with subsidiaries focused on R&D, production, and trading of differentiated products like urea, compound fertilizers, methanol, liquid ammonia, melamine, and DMF across China - The company was incorporated in **Singapore on July 17, 2006**, and its shares are listed on the **Main Board of the Hong Kong Stock Exchange**[164](index=164&type=chunk) - The company's principal business is investment holding, with subsidiaries primarily engaged in the R&D, production, and trading of **differentiated products** such as urea, compound fertilizers, methanol, liquid ammonia, melamine, and DMF[164](index=164&type=chunk) - The group's headquarters and main operating locations are in **Xinxiang, Henan; Manas County, Changji Prefecture, Xinjiang; Jiujiang, Jiangxi; and Guigang, Guangxi, China**[164](index=164&type=chunk) [2.1 Basis of Preparation](index=46&type=section&id=2.1%20BASIS%20OF%20PREPARATION) These financial statements are prepared under Singapore FRS (International) and IFRS, using historical cost (except for fair value equity investments), presented in RMB, rounded to the nearest thousand - Financial statements are prepared in accordance with **Singapore Financial Reporting Standards (International) and International Financial Reporting Standards**[165](index=165&type=chunk) - Prepared using the **historical cost convention**, except for equity investments at fair value through profit or loss, which are measured at fair value[166](index=166&type=chunk) - Financial statements are presented in **RMB**, with all amounts rounded to the nearest thousand[166](index=166&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=47&type=section&id=2.2%20CHANGES%20IN%20ACCOUNTING%20POLICIES%20AND%20DISCLOSURES) Accounting policies align with the 2024 consolidated report, with new IFRS amendments (IFRS 9, 7, 11, 18, 19) adopted, which directors expect will not significantly impact initial application period financial statements - Accounting policies are consistent with the 2024 consolidated financial report, but **new International Financial Reporting Standards** have been adopted for the first time[169](index=169&type=chunk) New International Financial Reporting Standards Adopted | Description | Effective Date | | :--- | :--- | | Amendments to IFRS 9 and IFRS 7 Financial Instruments: Classification and Measurement | January 1, 2026 | | Annual Improvements to IFRS 11 | January 1, 2026 | | IFRS 18 Presentation and Disclosure in Financial Statements | January 1, 2027 | | IFRS 19 Subsidiaries without Public Accountability: Disclosures | January 1, 2027 | | Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | - The company's directors expect that the adoption of the above other standards and interpretations will **not have a significant impact on the financial statements** in the period of initial application[170](index=170&type=chunk) [3. Product Performance Contribution](index=47&type=section&id=3.%20PRODUCT%20PERFORMANCE%20CONTRIBUTION) This section analyzes H1 2025 and H1 2024 product contributions to revenue and segment profit, categorized into fertilizer (urea, compound fertilizer) and chemical (methanol, liquid ammonia, melamine, DMF) segments, plus other products - The group is segmented into **Fertiliser, Chemical, Pharmaceutical Intermediates, Gas, and Equipment segments**[173](index=173&type=chunk) H1 2025 Major Product Revenue and Segment Profit (RMB'000) | Product | Revenue | Segment Profit | | :--- | :--- | :--- | | Urea | 3,225,357 | 662,636 | | Compound Fertiliser | 3,566,305 | 563,356 | | Methanol | 1,641,974 | 138,724 | | Liquid Ammonia | 533,249 | 69,437 | | Melamine | 377,812 | 116,775 | | DMF | 587,071 | 108,294 | | Others* | 2,733,981 | 380,962 | | **Total** | **12,665,749** | **2,040,184** | *Others include Organic Amine (RMB285M), Furfural Furfuryl Alcohol (RMB233M), Polyoxymethylene (RMB230M), Humic Acid (RMB217M), Pharmaceutical Intermediates (RMB227M), Equipment Segment (RMB161M) H1 2024 Major Product Revenue and Segment Profit (RMB'000) | Product | Revenue | Segment Profit | | :--- | :--- | :--- | | Urea | 3,834,000 | 1,181,231 | | Automotive Urea Solution | 166,095 | 30,017 | | Compound Fertiliser | 3,410,034 | 604,853 | | Methanol | 1,291,472 | 102,136 | | Melamine | 397,466 | 119,114 | | DMF | 595,295 | 76,639 | | Pharmaceutical Intermediates | 234,089 | (1,441) | | Others* | 2,132,506 | 243,171 | | **Total** | **12,060,957** | **2,355,720** | *Others include Liquid Ammonia (RMB668M), Organic Amine (RMB275M), Humic Acid (RMB201M), Furfuryl Alcohol (RMB163M) [4. Revenue and Other Income/(Expenses), Net](index=50&type=section&id=4.%20REVENUE%20AND%20OTHER%20INCOME%2F%28EXPENSES%29%2C%20NET) This section analyzes H1 2025 and H1 2024 revenue and other income/expenses: sales of goods revenue up **5%**, net other income up **78%** (from grants and byproduct sales), and total other expenses significantly down due to reduced asset disposal losses Revenue (Sales of Goods) (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of Goods | 12,665,749 | 12,060,957 | Other Income (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank Interest Income | 6,913 | 13,714 | | Net Profit from Byproduct Sales | 82,334 | 47,937 | | Service Fee Income | 4,910 | 5,802 | | Penalty Income | 5,147 | 1,325 | | Government Grants | 93,841 | 49,214 | | Investment Income | 1,328 | 1,517 | | Amortization of Deferred Grants | 8,335 | 5,714 | | Others | 4,130 | 14,216 | | **Total Other Income** | **206,938** | **139,439** | Other Expenses (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss on Disposal of Property, Plant and Equipment | (3,397) | (10,287) | | Gain/(Loss) on Fair Value Change of Equity Investments | 1,824 | (163) | | Donations | (5,024) | (2,951) | | Gain/(Loss) on Fair Value Change of Derivative Financial Instruments | 1,449 | (1,089) | | Others | (1,686) | (12,487) | | **Total Other Expenses** | **(6,834)** | **(26,977)** | Other Income, Net (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Other Income, Net | 200,104 | 112,462 | [5. Finance Costs](index=52&type=section&id=5.%20FINANCE%20COSTS) In H1 2025, the group's finance costs were **RMB230 million**, a **13.6% decrease** from **RMB266 million** in H1 2024, reflecting efforts to optimize debt structure and reduce average loan interest rates Finance Costs (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Bank Loans, Bank Overdrafts and Other Borrowings | 229,716 | 265,997 | [6. Profit Before Tax](index=52&type=section&id=6.%20PROFIT%20BEFORE%20TAX) This section lists key expense items deducted in calculating the group's profit before tax, including cost of inventories sold, depreciation of property, plant and equipment, depreciation of right-of-use assets, amortization of intangible assets, and employee benefit expenses (including directors' emoluments) Profit Before Tax Deductions (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 10,625,565 | 9,705,237 | | Depreciation of Property, Plant and Equipment | 882,851 | 787,913 | | Depreciation of Right-of-Use Assets | 24,275 | 21,660 | | Amortization of Intangible Assets | 6,650 | 8,112 | | Employee Benefit Expenses (Including Directors' Emoluments) | 1,266,891 | 1,221,372 | [7. Income Tax Expense](index=53&type=section&id=7.%20INCOME%20TAX%20EXPENSE) The company (Singapore-registered, **17% tax rate**) and its China subsidiaries (**25% rate**, **17 at 15% preferential**) reported H1 2025 income tax expenses of **RMB161 million**, down **13%** due to lower profitability - The company, incorporated in Singapore, is subject to a **17% income tax rate**[190](index=190&type=chunk) - Mainland China subsidiaries are subject to a **25% income tax rate**, with **17 subsidiaries enjoying a preferential 15% rate** due to high-tech enterprise awards[191](index=191&type=chunk) Income Tax Expense (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Expense for the Period | 161,402 | 184,124 | | **Total Tax Expense for the Period** | **161,402** | **184,124** | [8. Dividend](index=54&type=section&id=8.%20DIVIDEND) For the six months ended June 30, 2025, the company proposed and declared a final dividend of **RMB334 million** for the year ended December 31, 2024. No interim dividend was proposed or declared for H1 2025 | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | 2024 Final Dividend | 333,643,000 | - | | 2023 Final Dividend | - | 292,503,000 | | H1 2025 Interim Dividend | None | None | [9. Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=54&type=section&id=9.%20EARNINGS%20PER%20SHARE%20ATTRIBUTABLE%20TO%20ORDINARY%20EQUITY%20HOLDERS%20OF%20THE%20COMPANY) This section details H1 2025 basic and diluted EPS calculations: basic EPS was **RMB51.50 cents**, diluted EPS **RMB50.93 cents**, considering weighted average shares and restricted share plan dilution Earnings Per Share Calculation Data | Indicator | H1 2025 (Shares) | H1 2024 (Shares) | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares in Issue for Basic EPS Calculation | 1,218,233,000 | 1,218,040,000 | | Dilutive Effect – Restricted Share Incentive Plan | 13,589,000 | – | | **Total (for Diluted EPS Calculation)** | **1,231,822,000** | **1,218,040,000** | Number of Issued and Fully Paid Ordinary Shares (Shares) | Date | Number of Shares | | :--- | :--- | | June 30, 2025 | 1,283,241,000 | | December 31, 2024 | 1,283,241,000 | [10. Equity Investments at Fair Value Through Profit or Loss](index=55&type=section&id=10.%20EQUITY%20INVESTMENTS%20AT%20FAIR%20VALUE%20THROUGH%20PROFIT%20OR%20LOSS) As of June 30, 2025, non-current equity investments (unlisted China) remained at **RMB6.708 million**, while current equity investments (listed Singapore/Hong Kong) grew from **RMB7.83 million to RMB9.654 million** Equity Investments at Fair Value Through Profit or Loss (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current** | | | | Unlisted Equity Investments (China) | 6,708 | 6,708 | | **Current** | | | | Listed Equity Investments (Singapore) | 4,129 | 3,408 | | Listed Equity Investments (Hong Kong) | 5,525 | 4,422 | | **Total Current** | **9,654** | **7,830** | - The above investments in equity securities have **no fixed maturity dates or yields**[203](index=203&type=chunk) [11. Cash and Cash Equivalents and Pledged Time Deposits](index=56&type=section&id=11.%20CASH%20AND%20CASH%20EQUIVALENTS%20AND%20PLEDGED%20TIME%20DEPOSITS) As of June 30, 2025, cash and bank balances surged to **RMB2.358 billion**, while pledged time deposits fell to **RMB346 million**; RMB is convertible via authorized banks, and bank deposits bear floating interest rates Cash and Cash Equivalents and Pledged Time Deposits (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Time Deposits | 346,252 | 628,615 | | Less: Pledged Time Deposits | (346,252) | (628,615) | | Cash and Bank Balances | 2,357,938 | 887,226 | | **Cash and Cash Equivalents** | **2,357,938** | **887,226** | - Cash and bank balances denominated in RMB amounted to **RMB2.358 billion**[206](index=206&type=chunk) - RMB is not freely convertible into other currencies but is permitted to be exchanged through banks authorized to conduct foreign exchange business[206](index=206&type=chunk) [12. Prepayments](index=57&type=section&id=12.%20PREPAYMENTS) As of June 30, 2025, non-current prepayments, primarily for property, plant, and equipment, decreased to **RMB678 million**. Current prepayments, mainly deposits to suppliers, slightly increased to **RMB787 million** Prepayments (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current** | | | | Prepayments for Purchase of Property, Plant and Equipment | 677,730 | 880,221 | | **Current** | | | | Deposits Paid to Suppliers | 787,193 | 773,613 | [13. Inventories](index=57&type=section&id=13.%20INVENTORIES) As of June 30, 2025, the group's total inventories increased to **RMB1.89 billion**. Raw materials decreased, while components and spare parts, work-in-progress, and finished goods all increased. Inventory impairment provisions slightly rose Inventory Composition (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 630,566 | 759,279 | | Components and Spare Parts | 398,906 | 152,589 | | Work-in-Progress | 35,531 | 76,401 | | Finished Goods | 843,014 | 738,403 | | Provision for Impairment of Inventories | (18,280) | (16,352) | | **Total** | **1,889,737** | **1,710,320** | [14. Trade and Bills Receivables](index=58&type=section&id=14.%20TRADE%20AND%20BILLS%20RECEIVABLES) As of June 30, 2025, total trade and bills receivables grew to **RMB1.426 billion**, with both categories increasing; trade receivables are interest-free, settled within **30-180 days**, and the group has no significant concentrated credit risk Trade and Bills Receivables (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 908,431 | 531,011 | | Bills Receivables | 517,253 | 443,658 | | **Total** | **1,425,684** | **974,669** | Trade Receivables Ageing Analysis (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 434,595 | 304,676 | | 1 to 3 months | 316,189 | 121,367 | | 3 to 6 months | 93,289 | 52,588 | | 6 to 12 months | 64,358 | 52,380 | - Trade receivables are interest-free and generally settled within **30 to 180 days**, while bills receivables are generally settled within **90 to 180 days**[211](index=211&type=chunk) [15. Trade Payables](index=59&type=section&id=15.%20TRADE%20PAYABLES) As of June 30, 2025, the group's total trade payables increased to **RMB1.883 billion**, with a significant rise in payables due within **1 to 3 months**. Trade payables are interest-free, typically settled within **30 to 90 days**, and denominated in RMB Trade Payables Ageing Analysis (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 591,352 | 1,224,101 | | 1 to 3 months | 1,081,705 | 164,892 | | 3 to 6 months | 66,378 | 72,259 | | 6 to 12 months | 73,800 | 66,046 | | Over 12 months | 70,105 | 54,182 | | **Total** | **1,883,340** | **1,581,482** | - Trade payables are interest-free, generally settled within **30 to 90 days**, and denominated in RMB[218](index=218&type=chunk) [16. Property, Plant, Equipment and Land Use Rights](index=59&type=section&id=16.%20PROPERTY%2C%20PLANT%2C%20EQUIPMENT%20AND%20LAND%20USE%20RIGHTS) In H1 2025, the group paid approximately **RMB2.556 billion** for the acquisition of property, plant, equipment, and land use rights, an increase from the prior year, while proceeds from disposals amounted to approximately **RMB5.686 million** Property, Plant, Equipment and Land Use Rights Transactions (RMB'000) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Payments for Purchase of Property, Plant and Equipment and Land Use Rights | 2,556,108 | 1,894,882 | | Proceeds from Disposal of Property, Plant and Equipment and Land Use Rights | 5,686 | 5,205 | [17. Interest-Bearing Bank and Other Borrowings](index=60&type=section&id=17.%20INTEREST-BEARING%20BANK%20AND%20OTHER%20BORROWINGS) As of June 30, 2025, total interest-bearing borrowings rose to **RMB15.532 billion**, with non-current debt increasing, optimizing the long-to-short-term ratio from 6:4 to 7:3. **RMB4.836 billion** in bank loans are due within one year, with **91% of working capital loans replaceable** to ease short-term pressure Total Interest-Bearing Bank and Other Borrowings (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Borrowings | 4,858,594 | 5,267,226 | | Non-current Borrowings | 10,673,109 | 7,588,086 | | **Total** | **15,531,703** | **12,855,312** | - The group actively adjusted its debt structure, with the long-term to short-term borrowing ratio shifting from **6:4 at the beginning of the period to 7:3 at the end of the reporting period**[224](index=224&type=chunk) - Approximately **RMB4.836 billion** in bank loans are due within one year, of which approximately **RMB2.364 billion** are medium-to-long-term project loans rolling into the one-year period, and approximately **RMB2.472 billion** are one-year working capital loans[224](index=224&type=chunk)[225](index=225&type=chunk) - **91% of working capital loans are eligible for replacement**, which helps reduce financing costs and effectively alleviate short-term liquidity pressure[225](index=225&type=chunk) - Secured bank loans amounted to **RMB2.502 billion**, collateralized by certain of the group's property, plant, and equipment projects[224](index=224&type=chunk) [18. Debt-to-Asset Ratio](index=62&type=section&id=18.%20DEBT-TO-ASSET%20RATIO) As of H1 2025, the debt-to-asset ratio rose **2 percentage points to 63.5%**, mainly due to **RMB2.67 billion in new medium-to-long-term loans** that optimized debt structure, with the Jiangxi Phase II project expected to stabilize the ratio in H2 Debt-to-Asset Ratio | Indicator | H1 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 63.5% | 61.5% | - The increase in the debt-to-asset ratio was due to **new loans increasing by approximately RMB2.67 billion** from the beginning of the period, with all new additions being medium-to-long-term loans[227](index=227&type=chunk) - The medium-to-long-term loan maturities not only match project construction cycles but also effectively **optimize the overall debt structure and reduce short-term repayment pressure**[227](index=227&type=chunk) - The Jiangxi Phase II project is progressing as planned and is expected to commence production in **Q3**, providing strong support for H2 cash flow and ensuring the debt-to-asset ratio remains within a reasonable range and stable[228](index=228&type=chunk)

Core Viewpoint - The executive director of China Heart Heart Fertilizer (01866) has increased his shareholding, indicating confidence in the company's future performance [1] Company Summary - On September 23, the executive director Zhang Qingjin purchased 40,000 shares of China Heart Heart Fertilizer at a price of 7.155 HKD per share, totaling 286,200 HKD [1] - Following this transaction, the total number of shares held by Zhang Qingjin is now 2.793 million, representing a holding percentage of 0.22% [1]

Core Viewpoint - China Heartland Fertilizer (01866) announced the successful production launch of its subsidiary Jiangxi Heartland Chemical Industry Co., Ltd.'s (Jiangxi Base) industrial chain extension project (Phase I) on September 23, 2025, with a designed annual production capacity of 600,000 tons of synthetic ammonia and 1.2 million tons of controlled-release fertilizers [1] Group 1 - The successful launch of the project will leverage the existing market and geographical advantages of the Jiangxi base [1] - The project aims to enhance the efficient capacity utilization rate and further consolidate the cost leadership advantage [1] - It is expected to increase the current market share while continuously contributing incremental cash flow, injecting new momentum for high-quality and sustainable development [1] Group 2 - The project will comprehensively enhance the company's overall competitiveness and brand influence [1]

Core Viewpoint - China Heartland Fertilizer (01866.HK) announced the successful production launch of its subsidiary Jiangxi Heartland Chemical Industry Co., Ltd.'s industrial chain extension project (Phase I) on September 23, 2025, with a designed annual capacity of 600,000 tons of synthetic ammonia and 1,200,000 tons of slow-release fertilizers [1] Group 1 - The successful launch of the project will leverage the existing market and location advantages of the Jiangxi base [1] - The project aims to enhance efficient capacity utilization and further consolidate cost leadership [1] - It is expected to increase market share while continuously contributing incremental cash flow, injecting new momentum for high-quality and sustainable development [1] Group 2 - The project will comprehensively enhance the company's overall competitiveness and brand influence [1]