Interim Results Announcement This announcement presents Xiangzhong International Holdings Limited's unaudited consolidated interim results for the six months ended June 30, 2025, indicating an expanded loss compared to the prior year [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue decreased by 6.0%, while loss attributable to owners significantly expanded by 104.0% Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 17,061 | 18,147 | -6.0% | | Cost of Services Provided | (14,412) | (14,715) | -2.1% | | Gross Profit | 2,649 | 3,432 | -22.8% | | Other Income and Losses, Net | 59 | 398 | -85.2% | | Selling and Marketing Expenses | (939) | (877) | +7.1% | | Administrative Expenses | (6,176) | (6,367) | -3.0% | | Finance Costs | (1,385) | (1,848) | -25.1% | | Loss Before Income Tax | (5,792) | (5,262) | +10.1% | | Income Tax Credit | 1,003 | 2,914 | -65.6% | | Loss and Total Comprehensive Expense for the Period Attributable to Owners of the Company | (4,789) | (2,348) | +104.0% | | Basic and Diluted Loss Per Share (RMB cents) | (1.10) | (0.55) | +100.0% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities were RMB 185,807 thousand, a slight decrease from December 31, 2024, with net assets and total equity at RMB 182,029 thousand Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 94,353 | 94,045 | | Right-of-use Assets | 41,938 | 41,650 | | Prepayments for Property, Plant and Equipment | – | 4,190 | | Prepayments for Acquisition of a Subsidiary | – | 3,900 | | **Current Assets** | | | | Trade and Other Receivables and Prepayments | 1,304 | 1,628 | | Bank Balances and Cash | 120,329 | 120,913 | | **Current Liabilities** | | | | Trade and Other Payables and Accrued Expenses | 16,985 | 15,647 | | Contract Liabilities | 10,314 | 12,691 | | Lease Liabilities (Current) | 1,588 | 1,635 | | Borrowings (Current) | 43,230 | 45,230 | | **Non-current Liabilities** | | | | Lease Liabilities (Non-current) | 2,274 | 1,798 | | Deferred Tax Liabilities | 1,504 | 2,507 | | **Net Assets** | 182,029 | 186,818 | | **Total Equity** | 182,029 | 186,818 | - The company released its unaudited consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) Notes to the Condensed Consolidated Financial Statements This section details company information, basis of financial statement preparation, accounting standard application, revenue and expense breakdowns, balance sheet item changes, and share capital information, providing accounting and background context for understanding the interim results [Company Information](index=5&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Xiangzhong International Holdings Limited, incorporated in the Cayman Islands, primarily provides driving training services in China through its operating subsidiaries, and its shares are listed on the Stock Exchange's Main Board - The company was incorporated in the Cayman Islands on February 22, 2017, as an investment holding company[7](index=7&type=chunk) - Its principal operating subsidiaries provide driving training services in China[8](index=8&type=chunk) - The company's immediate and ultimate holding company is First Leap Holdings Limited, wholly owned by Mr Qi Xiangzhong[7](index=7&type=chunk) [Basis of Preparation](index=5&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and the Listing Rules, on a historical cost basis, and are unaudited - The 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 Listing Rules of the Stock Exchange[9](index=9&type=chunk) - The condensed consolidated financial statements are prepared on a historical cost basis at the end of the reporting period and are unaudited[10](index=10&type=chunk)[11](index=11&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=3.%20%E6%8E%A1%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group has first applied amendments to HKFRS effective January 1, 2025, with no significant impact on financial position or performance, and is evaluating the future impact of new standards issued but not yet effective - During the interim period, the Group first applied HKAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', which had no significant impact on financial position or performance[12](index=12&type=chunk) - New and revised HKFRSs issued but not yet effective include HKFRS 9, 7, 18, 19, etc, with effective dates ranging from January 1, 2026, to be determined[13](index=13&type=chunk) [Revenue](index=7&type=section&id=4.%20%E6%94%B6%E7%9B%8A) The Group's revenue primarily derives from driving training services, with total revenue for the six months ended June 30, 2025, at RMB 17,061 thousand, a 6.0% year-on-year decrease, driven by significant growth in standard course revenue and a sharp decline in advanced course revenue, with large vehicles remaining the main revenue source but with a reduced proportion - Revenue refers to income from driving training services, recognized over time[14](index=14&type=chunk) Revenue Analysis by Course Type (RMB '000) | Course Type | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Standard Courses | 13,428 | 10,263 | +30.8% | | Advanced Courses | 2,899 | 7,713 | -62.4% | | Additional Training Fees | 734 | 171 | +329.2% | | **Total** | **17,061** | **18,147** | **-6.0%** | Revenue Analysis by Vehicle Type (RMB '000) | Vehicle Type | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Large Vehicles | 11,883 | 13,607 | -12.7% | | Small Vehicles | 5,178 | 4,540 | +14.1% | | **Total** | **17,061** | **18,147** | **-6.0%** | [Segment Information](index=8&type=section&id=5.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group primarily engages in providing driving training services, considered a single reportable and operating segment, with all revenue and non-current assets originating from China, and no single customer accounting for over 10% of total revenue - The Group's operations are considered a single reportable and operating segment, namely the provision of driving training services[16](index=16&type=chunk) - All of the Group's revenue is derived from China, and all non-current assets are located in China, thus no geographical segment information is presented[17](index=17&type=chunk) - During both periods, no individual customer accounted for more than 10% of the Group's total revenue[18](index=18&type=chunk) [Other Income and Losses, Net](index=8&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, other income and losses, net, significantly decreased by 85.2% to RMB 59 thousand, primarily due to increased losses from the disposal of property, plant and equipment Other Income and Losses, Net (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 58 | 201 | -71.1% | | Income from Student Cancellation of Driving Courses Due | 188 | 231 | -18.6% | | Others | 116 | 26 | +346.2% | | Loss on Disposal of Property, Plant and Equipment | (300) | (41) | +631.7% | | Exchange Loss, Net | (3) | (19) | -84.2% | | **Total** | **59** | **398** | **-85.2%** | [Finance Costs](index=8&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, finance costs decreased by 25.1% to RMB 1,385 thousand, primarily due to reduced interest on bank loans Finance Costs (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank Loans | 1,325 | 1,776 | -25.4% | | Interest on Lease Liabilities | 60 | 72 | -16.7% | | **Total** | **1,385** | **1,848** | **-25.1%** | [Loss Before Income Tax](index=9&type=section&id=8.%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E虧%E6%90%8D) For the six months ended June 30, 2025, loss before income tax was RMB 5,792 thousand, primarily impacted by staff costs, depreciation, and fuel expenses Key Components of Loss Before Income Tax (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Directors' Remuneration | 614 | 758 | -19.0% | | Other Staff Costs – Salaries and Other Allowances | 5,687 | 6,005 | -5.3% | | Retirement Benefit Scheme Contributions | 649 | 537 | +20.9% | | Auditor's Remuneration | 10 | 10 | 0.0% | | Depreciation of Property, Plant and Equipment | 7,707 | 5,535 | +39.2% | | Depreciation of Right-of-use Assets | 1,009 | 1,426 | -29.2% | | Fuel Expenses | 1,984 | 2,894 | -31.5% | [Income Tax Credit](index=9&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) For the six months ended June 30, 2025, income tax credit significantly decreased by 65.6% to RMB 1,003 thousand, mainly due to prior year's over-provision recognized in the same period of 2024, with no income tax payable in Cayman Islands, BVI, Hong Kong, and zero PRC corporate income tax provision Income Tax Credit (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | PRC Corporate Income Tax – Over-provision in Prior Years | – | (2,874) | -100.0% | | Deferred Tax Credit | (1,003) | (40) | +2407.5% | | **Total** | **(1,003)** | **(2,914)** | **-65.6%** | - For the six months ended June 30, 2025, no PRC corporate income tax provision was recognized in the consolidated financial statements as the Group had no taxable profits during the period[23](index=23&type=chunk) [Dividends](index=10&type=section&id=10.%20%E8%82%A1%E6%81%AF) For the interim period ended June 30, 2025, the company neither paid, declared, nor proposed any dividends - No dividends have been paid/declared or proposed to ordinary shareholders of the company during the interim period and since the end of the reporting period[24](index=24&type=chunk) [Loss Per Share](index=10&type=section&id=11.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic and diluted loss per share expanded to RMB 1.10 cents, up from RMB 0.55 cents in the same period of 2024, primarily due to increased loss for the period Loss Per Share Calculation (RMB '000 and Number of Shares) | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company Used in Basic Loss Per Share Calculation | 4,789 | 2,348 | +104.0% | | Weighted Average Number of Ordinary Shares Used in Basic Loss Per Share Calculation | 435,958,192 | 425,740,532 | +2.4% | | Basic and Diluted (RMB cents) | (1.10) | (0.55) | +100.0% | - As of June 30, 2025 and 2024, there were no outstanding potential ordinary shares[26](index=26&type=chunk) [Property, Plant and Equipment](index=11&type=section&id=12.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 94,353 thousand, a slight increase from December 31, 2024, with additions of RMB 4,611 thousand and depreciation provision of RMB 7,707 thousand during the period Carrying Amount of Property, Plant and Equipment (RMB '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Buildings | 28,870 | 30,125 | | Leasehold Improvements | 51,117 | 47,532 | | Equipment | 811 | 2,019 | | Furniture and Fixtures | 470 | 401 | | Office Equipment | 5,352 | 5,529 | | Motor Vehicles | 7,733 | 8,439 | | **Total** | **94,353** | **94,045** | - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to **RMB 4,611 thousand**[27](index=27&type=chunk) - For the six months ended June 30, 2025, depreciation provision for the period was **RMB 7,707 thousand**[27](index=27&type=chunk) [Right-of-use Assets](index=12&type=section&id=13.%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) As of June 30, 2025, the carrying amount of right-of-use assets was RMB 41,938 thousand, slightly higher than December 31, 2024, with all motor vehicle right-of-use assets under hire purchase arrangements with purchase options Carrying Amount of Right-of-use Assets (RMB '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Leasehold Land | 37,322 | 38,056 | | Buildings | – | – | | Motor Vehicles | 4,616 | 3,594 | | **Total** | **41,938** | **41,650** | - As of June 30, 2025 and December 31, 2024, all motor vehicles within right-of-use assets were under hire purchase arrangements with purchase options[28](index=28&type=chunk) [Trade and Other Receivables and Prepayments](index=13&type=section&id=14.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the current portion of trade and other receivables and prepayments was RMB 1,304 thousand, a decrease from RMB 1,628 thousand on December 31, 2024, with trade receivables primarily aged 0 to 30 days Trade and Other Receivables and Prepayments (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 119 | 67 | | Other Receivables (Net of Expected Credit Losses) | 962 | 201 | | Prepayments | 223 | 9,450 | | **Total Current Portion** | **1,304** | **1,628** | - The Group's payment methods for driving training services to its customers are primarily cash and online payment platforms; generally, course enrollment fees are pre-billed, and no credit period is granted to customers[29](index=29&type=chunk) - As of December 31, 2024, the non-current portion of prepayments primarily consisted of approximately RMB 3,900,000 for the acquisition of a subsidiary for a new driving school and approximately RMB 4,190,000 for renovation expenses for the new driving school's training grounds and interior decoration of the proposed acquired subsidiary, with renovations completed in March 2025[29](index=29&type=chunk) [Trade and Other Payables and Accrued Expenses](index=14&type=section&id=15.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, total trade and other payables and accrued expenses were RMB 16,985 thousand, an increase from RMB 15,647 thousand on December 31, 2024, with trade payables generally settled within 30 days Trade and Other Payables and Accrued Expenses (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 1,415 | 1,158 | | Construction Costs Payable | 2,394 | 3,104 | | Accrued Salaries and Other Staff Costs | 3,699 | 2,675 | | Accrued Directors' Remuneration | 3,176 | 2,756 | | Examination Fees Payable | 1,066 | 1,139 | | Other Taxes Payable | 1,124 | 1,167 | | Other Payables | 4,111 | 3,648 | | **Total** | **16,985** | **15,647** | - No credit period is granted by trade creditors. Trade payables are generally settled within 30 days from the invoice date[30](index=30&type=chunk) [Lease Liabilities](index=15&type=section&id=16.%20%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, the present value of lease liabilities was RMB 3,862 thousand, with RMB 1,588 thousand classified as current liabilities, and the weighted average incremental borrowing rate ranging from 5.4% to 12.8% Present Value of Lease Liabilities (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Present Value of Lease Liabilities | 3,862 | 3,433 | | Less: Amounts Due for Settlement Within 12 Months from the End of the Reporting Period (Presented as Current Liabilities) | (1,588) | (1,635) | | **Amounts Due for Settlement After 12 Months from the End of the Reporting Period** | **2,274** | **1,798** | - The weighted average incremental borrowing rate applicable to lease liabilities ranged from **5.4% to 12.8%**[32](index=32&type=chunk) [Deferred Tax Liabilities / (Assets)](index=15&type=section&id=17.%20%E9%81%9E%E5%BB%B6%E7%A8%85%E9%A0%85%E8%B2%A0%E5%82%B5%E2%88%95%EF%BC%88%E8%B3%87%E7%94%A2%EF%BC%89) As of June 30, 2025, total deferred tax liabilities were RMB 1,504 thousand, a decrease from RMB 2,507 thousand on December 31, 2024, primarily due to amounts deducted from profit or loss Key Components of Deferred Tax Liabilities / (Assets) (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 297 | 332 | | Right-of-use Assets | – | – | | Lease Liabilities | (318) | (348) | | Temporary Differences on Capitalization of Interest | – | 343 | | Deductible Temporary Differences | 1,379 | 1,452 | | Revenue Recognition | 2,883 | 2,649 | | Losses | (2,737) | (1,921) | | **Total** | **1,504** | **2,507** | - For the six months ended June 30, 2025, deferred tax deducted from / (credited to) profit or loss was **RMB 1,003 thousand**[33](index=33&type=chunk) [Share Capital](index=16&type=section&id=18.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital comprised 435,958,192 shares with a par value of HKD 0.01 each, totaling approximately RMB 3,939 thousand, remaining unchanged since the completion of the rights issue on March 20, 2024 Share Capital Composition (RMB '000 and Number of Shares) | Item | Number of Shares | Amount (RMB '000) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary Shares of HKD 0.01 each) | 10,000,000,000 | 90,179 | | Issued and Fully Paid Share Capital (As of June 30, 2025) | 435,958,192 | 3,939 | - On March 20, 2024, a total of 35,958,192 rights shares were issued and allotted at **HKD 0.20** per rights share under the rights issue, raising net proceeds of approximately **HKD 6,062,000**[34](index=34&type=chunk) Business Review This section reviews the company's driving training services in Zhumadian City, Henan Province, China, covering its operating subsidiaries, course types, market competition, student enrollment, revenue composition, and future development strategies, with a focus on market consolidation and expansion into new training areas [Company Profile and Services](index=17&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E6%B3%81%E8%88%87%E6%9C%8D%E5%8B%99) The company is a driving training service provider in Zhumadian City, Henan Province, China, offering standard and advanced courses for small and large vehicles through Shunda Driving School, Tongtai Driving School, Kaiyuan Driving School, and Xincai Driving School - The company is a driving training service provider in Zhumadian City, Henan Province, China, primarily offering driving training services through Shunda Driving School and Tongtai Driving School[35](index=35&type=chunk) - Kaiyuan Driving School and Xincai Driving School were acquired in November 2024 and March 2025, respectively, to mitigate intense competition and capture market share[35](index=35&type=chunk)[37](index=37&type=chunk) - Two types of driving training courses are offered: standard courses (lower fees, fewer training hours) and advanced courses (training hours equivalent to minimum requirements, including holiday and weekend courses, economy courses, and VIP courses)[36](index=36&type=chunk) [Market Environment and Competition Strategy](index=17&type=section&id=%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83%E8%88%87%E7%AB%B6%E7%88%AD%E7%AD%96%E7%95%A5) The driving training services market faces intensified competition due to worsening logistics market conditions from US-China trade tensions and lower entry barriers for small vehicle driving schools into large vehicle training, adversely affecting the company's financial performance, which it addresses by acquiring other driving schools - Ongoing US-China trade tensions continue to worsen market conditions in the logistics industry, intensifying competition in the driving training services market[37](index=37&type=chunk) - The lowered entry barrier for existing small vehicle driving schools into the large vehicle driving training services industry further intensifies market competition[37](index=37&type=chunk) - To mitigate intense competition and capture market share, the company adopted an operating strategy of acquiring other driving schools in Zhumadian City and surrounding areas, purchasing Kaiyuan Driving School and Xincai Driving School in November 2024 and March 2025, respectively[37](index=37&type=chunk) [Course Enrollment and Student Number Analysis](index=18&type=section&id=%E8%AA%B2%E7%A8%8B%E5%A0%B1%E5%90%8D%E8%88%87%E5%AD%B8%E5%93%A1%E4%BA%BA%E6%95%B8%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, total course enrollments increased by 31.6% year-on-year to 6,232, and total students grew by 31.4% to 7,188, with standard course enrollments surging by 92.2% while advanced course enrollments plummeted by 96.1%, reflecting market strategy adjustments and intensified competition - For the six months ended June 30, 2025, total course enrollments increased by **31.6%** from 4,736 to **6,232**[38](index=38&type=chunk) - Total enrollments for large and small vehicle standard courses increased by approximately **92.2%** to **6,173**, primarily due to course redesign, sales and marketing efforts, and the acquisition of new driving schools[39](index=39&type=chunk) - Total enrollments for large and small vehicle advanced courses decreased by approximately **96.1%** to **59**, due to worsening market conditions in the logistics industry and intensified competition[39](index=39&type=chunk) Course Enrollment Details (By Course Type) | Course Type | June 30, 2025 (Number of Persons) | June 30, 2024 (Number of Persons) | Change (%) | | :--- | :--- | :--- | :--- | | Total Standard Courses | 6,173 | 3,211 | +92.2% | | Total Advanced Courses | 59 | 1,525 | -96.1% | | **Total** | **6,232** | **4,736** | **+31.6%** | | Large Vehicles | 1,918 | 1,696 | +13.1% | | Small Vehicles | 4,314 | 3,040 | +41.9% | [Revenue and Training Hours Analysis](index=20&type=section&id=%E6%94%B6%E7%9B%8A%E8%88%87%E5%9F%B9%E8%A8%93%E6%99%82%E6%95%B8%E5%88%86%E6%9E%90) Despite a significant increase in student numbers, total revenue decreased by 6.0% to RMB 17.1 million, primarily due to reduced actual training hours; large vehicles remain the main revenue source, but advanced course revenue share significantly declined, while standard course revenue share increased - Total revenue was approximately **RMB 17.1 million**, a decrease of approximately **6.0%**, despite a significant increase of approximately **31.4%** in enrolled students for driving courses[41](index=41&type=chunk) - The overall decrease in revenue was due to a reduction in actual training hours for students, which offset the positive impact of increased student numbers and higher average course fees per hour for standard courses[42](index=42&type=chunk) - The provision of large vehicle driving training services continued to be the primary source of revenue, accounting for approximately **69.6%** of total revenue (H1 2024: 75.0%)[42](index=42&type=chunk) Revenue Details (By Vehicle Type and Driving Course Type) | Item | June 30, 2025 (RMB '000) | June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Large Vehicles** | | | | | – Standard Courses | 10,173 | 9,897 | +2.8% | | – Advanced Courses | 1,516 | 3,628 | -58.2% | | – Additional Training Services | 194 | 82 | +136.6% | | **Subtotal** | **11,883** | **13,607** | **-12.7%** | | **Small Vehicles** | | | | | – Standard Courses | 3,255 | 366 | +789.3% | | – Advanced Courses | 1,383 | 4,085 | -66.2% | | – Additional Training Services | 540 | 89 | +506.7% | | **Subtotal** | **5,178** | **4,540** | **+14.1%** | | **Total** | **17,061** | **18,147** | **-6.0%** | [Industry Trends and Future Outlook](index=22&type=section&id=%E8%A1%8C%E6%A5%AD%E8%B6%A8%E5%8B%A2%E8%88%87%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The driving training market faces intensifying competition and overall price declines, yet the Group's enrollment has increased; the company plans to seize market consolidation opportunities, explore new areas like drone training for transformation and upgrading - The Chinese government's relaxed regulatory requirements for driving school establishment have intensified competition in the driving training market, leading to a continuous downward trend in overall industry prices[43](index=43&type=chunk) - Despite intensified industry competition, the Group's enrollment numbers for both large and small vehicles increased in H1 2025 compared to H1 2024[43](index=43&type=chunk) - With the gradual rise of the emerging low-altitude economy, several qualified driving schools in the industry are utilizing existing venues to enter the field of drone training, opening a new direction for driving school transformation and upgrading[43](index=43&type=chunk) [Key Initiatives for H2 2025](index=22&type=section&id=2025%E5%B9%B4%E4%B8%8B%E5%8D%8A%E5%B9%B4%E9%87%8D%E9%BB%9E%E5%B7%A5%E4%BD%9C) In H2 2025, the company will focus on internal optimization for cost reduction and efficiency (intelligent teaching, online marketing), seize market consolidation opportunities to build regional leadership, plan to enter drone training, and actively seek multi-regional joint ventures to enhance profitability - Continue internal optimization for cost reduction and efficiency, including intelligent teaching and expanding online marketing, gradually achieving cross-regional and cross-temporal online marketing promotion methods[44](index=44&type=chunk) - Plan to enter the drone training field as a new area of vocational education and training, actively preparing relevant procedures to lay the groundwork for new revenue growth points[46](index=46&type=chunk) - Utilize industry troughs to implement regional joint ventures to maintain healthy market prices, stable enrollment, and increase market share[46](index=46&type=chunk) - Actively seek multi-regional cooperation, especially in northwestern regions like Xinjiang and Gansu, and areas with slightly higher driving school prices like Hunan and Guangxi, to achieve breakthroughs in high-profit regional markets outside the core market[46](index=46&type=chunk) Management Discussion and Analysis This section provides an in-depth analysis of the company's financial performance for the six months ended June 30, 2025, including changes and key reasons for revenue, costs, gross profit, various expenses, net loss, liquidity, gearing ratio, and employee benefits [Financial Performance Overview](index=24&type=section&id=1.%20%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the company's overall financial performance deteriorated, with total revenue down 6.0%, gross profit down 22.8%, loss before income tax up 10.1%, and net loss attributable to owners significantly increasing to RMB 4.8 million, with a net loss margin of 28.1% Financial Performance Overview (RMB million) | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 17.1 | 18.1 | -6.0% | | Gross Profit | 2.6 | 3.4 | -22.8% | | Gross Profit Margin | 15.5% | 18.9% | -3.4pp | | Loss Before Income Tax | (5.8) | (5.3) | +10.1% | | Net Loss Attributable to Owners of the Company | (4.8) | (2.3) | +108.7% | | Net Loss Margin | 28.1% | 12.9% | +15.2pp | - The increase in net loss attributable to owners was primarily due to the income tax credit recognized from over-provision of income tax in prior years during the six months ended June 30, 2024, leading to a reduction in income tax credit for the six months ended June 30, 2025[47](index=47&type=chunk) [Revenue Analysis](index=25&type=section&id=2.%20%E6%94%B6%E7%9B%8A) Total revenue decreased by 6.0% to RMB 17.1 million, primarily due to a 12.7% (RMB 1.7 million) reduction in large vehicle driving training services revenue, despite a 14.1% (RMB 0.6 million) increase in small vehicle driving training services revenue; the revenue decline is attributed to reduced actual training hours, influenced by market competition and rising demand for standard courses - Overall revenue decreased by approximately **6.0%** to approximately **RMB 17.1 million**, primarily due to a reduction of approximately **RMB 1.7 million** in revenue from large vehicle driving training services[48](index=48&type=chunk) - Revenue from large vehicle driving training services decreased by **12.7%**, mainly due to a reduction in actual training hours for large vehicle students, despite an increase in the number of students enrolled in large vehicle standard courses[49](index=49&type=chunk) - Revenue from small vehicle driving training services increased by **14.1%**, primarily due to a significant increase in students enrolled in small vehicle standard courses, leading to higher average course fees per hour[50](index=50&type=chunk) [Cost of Services Provided](index=26&type=section&id=3.%20%E5%B7%B2%E6%8F%90%E4%BE%9B%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of services provided decreased by 2.1% to RMB 14.4 million, primarily due to reduced employee benefits and fuel expenses, benefiting from driving simulator application and new energy vehicle purchases; however, depreciation expenses rose due to increased training venues and vehicles - Cost of services provided decreased by approximately **2.1%** from approximately **RMB 14.7 million** to approximately **RMB 14.4 million**[51](index=51&type=chunk) - Employee benefits expenses decreased by **7.9%** to approximately **RMB 4.0 million**, primarily due to reduced salaries paid to driving instructors and other support staff, consistent with fewer actual training hours resulting from driving simulator application[52](index=52&type=chunk) - Fuel expenses decreased by **31.4%** to approximately **RMB 2.0 million**, attributed to reduced actual training hours for students, the application of driving simulators, and the purchase of new energy small training vehicles[52](index=52&type=chunk) - Depreciation of property, plant and equipment and right-of-use assets increased by **18.5%** to approximately **RMB 7.1 million**, due to increased fixed depreciation expenses for training venues and vehicles, and amortization expenses for right-of-use assets[52](index=52&type=chunk) [Gross Profit Analysis](index=27&type=section&id=4.%20%E6%AF%9B%E5%88%A9) Overall gross profit decreased by 22.8% to RMB 2.6 million, with gross profit margin down 3.4 percentage points to 15.5%, primarily due to reduced actual training hours and increased fixed depreciation; large vehicle gross profit and margin significantly declined, while small vehicle gross profit and margin substantially rose, benefiting from increased standard course students, lower employee benefits, and new energy vehicle adoption - Overall gross profit decreased by **22.8%** to approximately **RMB 2.6 million**, with gross profit margin decreasing by **3.4 percentage points** from 18.9% to **15.5%**[53](index=53&type=chunk) - Gross profit from large vehicle driving training services decreased by **64.6%** to approximately **RMB 0.8 million**, with gross profit margin declining by **10.1 percentage points** to **7.0%**, primarily due to reduced actual training hours and increased fixed depreciation expenses[54](index=54&type=chunk) - Gross profit from small vehicle driving training services increased by **65.9%** to approximately **RMB 1.8 million**, with gross profit margin increasing by **11.0 percentage points** to **35.2%**, primarily due to a significant increase in students for higher-margin standard courses, lower employee benefits, and the application of new energy training vehicles[55](index=55&type=chunk) [Other Income and Losses, Net](index=28&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E虧%E6%90%8D%EF%BC%8C%E6%B7%A8%E9%A1%8D) Other income and losses, net, significantly decreased by 85.2% to RMB 0.1 million, primarily due to a substantial increase in losses from the disposal of training vehicles - Other income and losses, net, decreased by approximately **85.2%** to approximately **RMB 0.1 million**[56](index=56&type=chunk) - The main reason was an increase in losses from the disposal of large and small vehicle training vehicles from approximately **RMB 41,000** to approximately **RMB 0.3 million**[56](index=56&type=chunk) [Selling and Marketing Expenses](index=28&type=section&id=6.%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8A%B7%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, selling and marketing expenses remained stable at approximately RMB 0.9 million - Selling and marketing expenses remained stable at approximately **RMB 0.9 million**[57](index=57&type=chunk) [Administrative Expenses](index=28&type=section&id=7.%20%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) Administrative expenses decreased by 3.0% to RMB 6.2 million, primarily due to reduced employee benefits paid to administrative staff - Administrative expenses decreased by approximately **3.0%** to approximately **RMB 6.2 million**[58](index=58&type=chunk) - Primarily due to a reduction in employee benefits paid to administrative staff[58](index=58&type=chunk) [Finance Costs](index=28&type=section&id=8.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) Finance costs decreased by 25.1% to RMB 1.4 million, primarily due to the repayment of bank borrowings during the period - Finance costs decreased by approximately **25.1%** to approximately **RMB 1.4 million**[59](index=59&type=chunk) - Primarily due to the repayment of bank borrowings during the period[59](index=59&type=chunk) [Income Tax Credit](index=28&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) Income tax credit significantly decreased by 65.6% to RMB 1.0 million, primarily due to a reduction in the over-provision of income tax from prior years recognized in the same period of 2024 - Income tax credit decreased by approximately **65.6%** to approximately **RMB 1.0 million**[60](index=60&type=chunk) - Primarily due to the recognition of an over-provision of income tax from prior years of approximately **RMB 2.9 million** for the six months ended June 30, 2024[60](index=60&type=chunk) [Loss and Total Comprehensive Expense for the Period](index=29&type=section&id=10.%20%E6%9C%9F%E5%85%A7%E虧%E6%90%8D%E5%8F%8A%E5%85%A8%E9%9D%A2%E9%96%8B%E6%94%AF%E7%B8%BD%E9%A1%8D) For the six months ended June 30, 2025, loss before income tax was RMB 5.8 million, and net loss attributable to owners expanded to RMB 4.8 million, with a net loss margin of 28.1%, primarily impacted by reduced income tax credit - For the six months ended June 30, 2025, loss before income tax was approximately **RMB 5.8 million** (H1 2024: approximately RMB 5.3 million)[61](index=61&type=chunk) - Net loss attributable to owners of the company was approximately **RMB 4.8 million** (H1 2024: approximately RMB 2.3 million), with a net loss margin of **28.1%**[61](index=61&type=chunk) - The expanded net loss was primarily due to the income tax credit recognized for the six months ended June 30, 2024[61](index=61&type=chunk) [Liquidity, Capital Resources and Borrowings](index=29&type=section&id=11.%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E5%8F%8A%E5%80%9F%E6%AC%BE) As of June 30, 2025, bank balances and cash slightly decreased to RMB 120.3 million; net current assets were RMB 49.5 million, with a current ratio of 1.69; total interest-bearing borrowings decreased to RMB 43.2 million, mainly due to bank loan repayments - Bank balances and cash decreased from approximately **RMB 120.9 million** as of December 31, 2024, to approximately **RMB 120.3 million** as of June 30, 2025, primarily due to cash inflows from operating activities being offset by cash outflows from investing and financing activities during the period[62](index=62&type=chunk) Liquidity Indicators (RMB million) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | 121.6 | 122.5 | | Current Liabilities | 72.1 | 75.2 | | Current Ratio | 1.69 | 1.63 | | Total Interest-bearing Borrowings (Repayable within one year) | 43.2 | 45.2 | - The decrease in interest-bearing borrowings was primarily due to the repayment of bank loans in June 2025[63](index=63&type=chunk) [Gearing Ratio](index=30&type=section&id=12.%20%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E7%8E%87) As of June 30, 2025, the Group's gearing ratio was approximately 0.26 times, consistent with December 31, 2024 - As of June 30, 2025, the Group's gearing ratio was approximately **0.26 times** (December 31, 2024: 0.26 times)[64](index=64&type=chunk) [Material Investments, Acquisitions and Disposals](index=30&type=section&id=13.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) For the six months ended June 30, 2025, the Group made no material investments, acquisitions, or disposals - For the six months ended June 30, 2025, the Group made no material investments[65](index=65&type=chunk) - For the six months ended June 30, 2025, the Group made no material acquisitions or disposals[66](index=66&type=chunk) [Borrowings and Pledged Assets](index=30&type=section&id=15.%20%E5%80%9F%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's total interest-bearing borrowings were approximately RMB 43.2 million, all repayable within one year and bearing fixed interest rates, secured and pledged by prepaid lease payments for land, right-of-use assets, office buildings, and operating rights of certain subsidiaries - As of June 30, 2025, the Group's total interest-bearing borrowings were approximately **RMB 43.2 million**, repayable within one year and bearing fixed interest rates[67](index=67&type=chunk) - The borrowings are secured and pledged by certain prepaid lease payments for land/right-of-use assets, office buildings, and the operating rights of certain subsidiaries of the Group[67](index=67&type=chunk) [Contingent Liabilities](index=30&type=section&id=16.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no material contingent liabilities or guarantees, nor was it involved in any material claims, litigation, or arbitration - As of June 30, 2025, the Group had no material contingent liabilities or guarantees[68](index=68&type=chunk) - No member of the Group was involved in any material claims, litigation, or arbitration[68](index=68&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=17.%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's foreign currency risk primarily relates to bank balances and other payables denominated in HKD; the company currently has no foreign currency hedging policy, but management monitors and considers hedging when necessary - As of June 30, 2025, the Group's foreign currency risk primarily related to certain bank balances and other payables denominated in HKD[69](index=69&type=chunk) - The Group currently has no foreign currency hedging policy. However, management monitors foreign currency risk and will consider hedging when necessary[69](index=69&type=chunk) [Employee Benefits](index=31&type=section&id=18.%20%E5%83%B1%E5%93%A1%E7%A6%8F%E5%88%A9) As of June 30, 2025, the number of employees increased to 171; employee remuneration is determined based on industry practice, experience, and performance, with participation in local government social security schemes; total employee benefits expense was RMB 7.0 million - As of June 30, 2025, the Group had **171 employees**, an increase from 158 employees as of December 31, 2024[70](index=70&type=chunk) - Employee remuneration is determined based on current industry practice and employees' work experience and performance. The company participates in various employee social security schemes managed by local governments in accordance with PRC laws and regulations[70](index=70&type=chunk) Number of Employees by Function (June 30, 2025) | Function | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Directors | 6 | 3.5 | | Driving Instructors | 85 | 49.7 | | Sales and Marketing | 21 | 12.3 | | Finance and Accounting | 6 | 3.5 | | Academic Affairs Office | 15 | 8.8 | | Administration | 35 | 20.5 | | Vehicle Management | 3 | 1.7 | | **Total** | **171** | **100.0** | - The Group's total employee benefits expense for the six months ended June 30, 2025, was approximately **RMB 7.0 million**[70](index=70&type=chunk) Other Information This section provides non-financial information including significant events after the reporting date, use of IPO proceeds, interim dividend policy, trading of listed securities, corporate governance, and audit committee review [Events After Reporting Period](index=32&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the date of this announcement, no significant events have occurred after June 30, 2025, that would materially affect the Group's operations and financial results - As of the date of this announcement, no significant events have occurred after June 30, 2025, that would materially affect the Group's operations and financial results[73](index=73&type=chunk) [Use of Proceeds](index=32&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Net proceeds from the IPO were approximately HKD 108.4 million, with approximately HKD 45.5 million utilized as of June 30, 2025; the company plans to continue acquiring land and constructing training venues but has been unable to identify suitable plots due to the pandemic, and will closely monitor the business environment to consider alternative uses - Net proceeds from the initial public offering were approximately **HKD 108.4 million**[74](index=74&type=chunk) Use of IPO Proceeds (HKD '000) | Intended Use | Net Proceeds from IPO | Utilized as of June 30, 2025 | Unutilized Amount as of June 30, 2025 | Expected Timeline for Intended Use | | :--- | :--- | :--- | :--- | :--- | | Acquisition of a Land Plot | 49,547 | – | 49,547 | Before December 31, 2025 | | Construction of Training Venues | 13,333 | – | 13,333 | Before December 31, 2025 | | Purchase of Training Vehicles | 10,517 | 10,517 | – | Completed | | Costs for Recruiting and Training 40 New Driving Instructors | 10,408 | 10,408 | – | Completed | | Repayment of Bank Loans | 13,769 | 13,769 | – | Completed | | Working Capital and General Corporate Purposes | 10,844 | 10,844 | – | Completed | | **Total** | **108,418** | **45,538** | **62,880** | | - The company currently plans to increase its training capacity by acquiring a land plot and constructing training venues, but has been unable to identify suitable plots due to the COVID-19 pandemic[76](index=76&type=chunk) [Interim Dividend](index=34&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend paying any interim dividend to shareholders for the six months ended June 30, 2025 - The Board does not recommend paying any interim dividend to shareholders for the six months ended June 30, 2025[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[78](index=78&type=chunk) [Corporate Governance and Other Information](index=34&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) The company is committed to maintaining high corporate governance standards, having complied with all applicable provisions of the Corporate Governance Code; directors confirmed compliance with the Model Code for securities transactions; the Audit Committee reviewed the interim financial statements, deeming them compliant with accounting standards and Listing Rules - For the six months ended June 30, 2025, the company complied with all applicable code provisions set out in the Corporate Governance Code[79](index=79&type=chunk) - Following specific enquiries to all Directors, all Directors confirmed their compliance with the required standards for securities transactions by Directors as set out in the Model Code[80](index=80&type=chunk) - The Audit Committee reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, and considered that these results complied with applicable accounting standards and requirements of the Listing Rules and other applicable laws and regulations[81](index=81&type=chunk) Appendix This section provides detailed definitions of proprietary and technical terms used in the report to ensure readers have a clear understanding of the content [Definitions](index=36&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms used in the report, including company entities, regulatory bodies, financial terminology, and corporate actions - Definitions are provided for terms such as 'Audit Committee', 'Board', 'Company', 'Corporate Governance Code', 'Directors', 'Group', 'HKD', 'Hong Kong', 'IPO', 'Kaiyuan Driving School', 'Ministry of Public Security', 'Listing Rules', 'Main Board', 'Model Code', 'PRC', 'Prospectus', 'Record Date', 'Rights Issue', 'Rights Shares', 'RMB', 'Shareholder(s)', 'Share(s)', 'Shunda Driving School', 'Stock Exchange', 'Xincai Driving School', 'Tongtai Culture', and 'Tongtai Driving School'[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Technical Terms](index=39&type=section&id=%E6%8A%80%E8%A1%93%E8%A9%9E%E5%BD%99) This section explains professional terms related to the driving training business in the report, specifically different vehicle classifications (e.g., Class A2, A3, B1, B2, C1, C2, C6 vehicles) and driving school qualification levels (Qualified Class 1 Driving School, Qualified Class 2 Driving School) - Definitions are provided for technical terms such as 'Class A2 vehicles', 'Class A3 vehicles', 'Class B1 vehicles', 'Class B2 vehicles', 'Class C1 vehicles', 'Class C2 vehicles', 'Class C6 vehicles', 'Large Vehicles', 'Qualified Class 1 Driving School', 'Qualified Class 2 Driving School', and 'Small Vehicles'[89](index=89&type=chunk)[90](index=90&type=chunk)

Group 1 - The company, China International (01871.HK), announced that its board meeting will be held on August 28, 2025 [1] - The meeting will review and approve the interim results for the six months ending June 30, 2025, if deemed appropriate [1] - The board will also decide on the declaration, recommendation, or payment of any interim dividend, if applicable, and address other business matters [1]

董事會會議日期 向中國際控股有限公司 (「本公司」)董 事 (「董事」及各為「董事」)會 (「 董 事會」 )謹此宣佈董事會會議將於 202 5年 8月 2 8日（星期 四 ） 舉行，以 (其 中 包 括 )審議及批准 (倘認為合適 )本公司及其附屬公司截至 202 5年 6月 3 0日 止 六個月 的 中期業 績 以 供 刊 發；決 定 是 否 宣 派、建 議 或 派 付 任 何 中 期 股 息（ 如 有）；及處理其他業務。 承董事會命 向中國際控股有限公司 主席兼執行董事 亓向中 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概 不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本 公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔 任何責任。 China Oriented International Holdings Limited 向中國際控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1871) 香港， 二 零 二 五 年 八 月 二 十 日 於本 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 致：香港交易及結算所有限公司 公司名稱: 向中國際控股有限公司 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) | 01871 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | 本月底法定/註冊股本總額： HKD 100,000,000 F ...

Financial Performance - Total revenue for the year ended December 31, 2024, was approximately RMB 32.3 million, a decrease of about 19.0% from RMB 39.9 million in 2023[42]. - The overall decrease in revenue was attributed to a decline in both the number of trainees and actual training hours[42]. - Gross profit decreased by RMB4.6 million (approximately 54.1%) from RMB8.6 million for the year ended December 31, 2023 to RMB3.9 million for the year ended December 31, 2024, with a gross profit margin decline of 9.3 percentage points from 21.5% to 12.2%[46][48]. - The net loss attributable to the owners of the Company remained stable at approximately RMB8.4 million for both years ended December 31, 2023 and 2024, with net loss margins of 21.2% and 25.9%, respectively[47]. - Revenue from driving training services for Large Vehicles decreased by approximately RMB7.3 million (approximately 24.6%) from RMB29.6 million to RMB22.3 million, primarily due to a decrease in the number of trainees and training hours[50][51]. - The total number of course enrollments decreased by 7.0% from 9,304 in 2023 to 8,646 in 2024[36]. - The number of trainees attending driving courses slightly decreased by approximately 3.5%, from 10,832 in 2023 to 10,450 in 2024[42]. - Revenue from large vehicle training services accounted for approximately 69.1% of total revenue in 2024, down from 74.2% in 2023[42]. Enrollment Trends - The total number of course enrollments decreased by 7.0% from 9,304 in 2023 to 8,646 in 2024[36]. - The number of course enrollments for Large Vehicles dropped significantly by 18.7% from 4,035 in 2023 to 3,279 in 2024, impacting overall revenue[36]. - The overall number of course enrollments for standard courses increased by approximately 130.0% from 3,046 in 2023 to 7,006 in 2024 due to new course designs[37]. - The total number of course enrollments for Shun Da School decreased by approximately 38.2% to 846 in 2024 from 1,368 in 2023[36]. - Tong Tai School's course enrollments slightly decreased by approximately 1.7% from 7,936 in 2023 to 7,800 in 2024[36]. Strategic Initiatives - The company plans to adopt effective methods to stabilize economic income and ensure reasonable market operation amidst competitive pressures[16]. - The company aims to increase capital investment and upgrade teaching facilities, including acquiring new energy vehicles and unique teaching simulators to enhance service quality[18]. - To adapt to market changes, the company plans to cultivate an online sales and marketing team leveraging platforms like TikTok to promote enrollment policies[17]. - The company plans to actively expand its market through potential acquisitions and partnerships in Gansu and Xinjiang provinces[22]. - The company intends to acquire land and construct training fields to enhance its operational capabilities[24]. Competition and Market Conditions - Regulatory changes since Q3 2021 have intensified competition, with an increase in the number of driving schools, leading to a dispersion of course enrollments across provinces[10]. - The company anticipates intensified competition in 2025 due to the survival of numerous non-traditional driving schools and the emergence of internet-based training models[15]. - The driving training industry needs to adjust training curricula to accommodate the characteristics of new energy vehicles, necessitating diversified training courses[15]. - The company will focus on strengthening internal control management and exploring new sources of course enrollments as core tasks for 2025[16]. - The overall strategy for 2025 includes enhancing teaching quality through new technologies to boost competitiveness in a diversified landscape[18]. Cost Management - Cost of services rendered decreased by approximately RMB3.0 million (approximately 9.4%) from RMB31.3 million to RMB28.4 million, mainly due to reduced employee benefit expenses and other costs[55][57]. - Employee benefit expenses decreased by approximately RMB2.4 million, or approximately 22.4%, from approximately RMB10.5 million for the year ended December 31, 2023 to approximately RMB8.2 million for the year ended December 31, 2024[58]. - Fuel expenses decreased by approximately RMB2.5 million, or approximately 34.3%, from approximately RMB7.4 million for the year ended December 31, 2023 to approximately RMB4.9 million for the year ended December 31, 2024[58]. Governance and Compliance - The Company has complied with all code provisions set out in the Corporate Governance Code for the year ended December 31, 2024[109]. - The Board of Directors held four meetings during the year ended December 31, 2024, in compliance with the Corporate Governance Code[117]. - The Company received written confirmations of independence from all independent non-executive directors, affirming their compliance with independence guidelines[124]. - The Board is responsible for strategic decisions and financial performance, meeting at least four times a year to oversee the company's affairs[137][138]. - The Audit Committee reviewed the audited consolidated financial statements for the financial year ended December 31, 2024, including accounting principles and policies, and recommended them for approval at the AGM[157]. Human Resources - The total employee benefit expenses for the year ended December 31, 2024, were approximately RMB 10.7 million, down from approximately RMB 13.3 million for the year ended December 31, 2023[97][98]. - The Group had 158 employees as of December 31, 2024, representing a decrease from 210 employees as of December 31, 2023[95][98]. - The Group's employee composition includes 6 Directors (3.7%), 77 driving instructors (48.7%), and 21 in sales and marketing (13.3%) as of December 31, 2024[100]. Risk Management - The company engaged an external consultant to enhance the effectiveness of its risk management and internal control systems[151]. - The Audit Committee engaged an external consultant to review the financial controls, internal control, and risk management systems of the Company[160].

Financial Performance - For the year ended December 31, 2024, the company's revenue was RMB 32,297,000, a decrease of 19.1% compared to RMB 39,884,000 in 2023[4] - The cost of services provided was RMB 28,367,000, resulting in a gross profit of RMB 3,930,000, down 54.5% from RMB 8,560,000 in the previous year[4] - The company reported a loss before tax of RMB 13,695,000, compared to a loss of RMB 9,756,000 in 2023, indicating a deterioration in financial performance[4] - The net loss attributable to the owners of the company was RMB 8,360,000, slightly improved from RMB 8,443,000 in the previous year[4] - Basic and diluted loss per share was RMB 1.94, compared to RMB 2.05 in 2023, reflecting a minor improvement in per-share loss[4] Assets and Liabilities - Non-current assets increased to RMB 143,785,000 from RMB 128,591,000 in 2023, primarily due to investments in property, plant, and equipment[5] - Current assets decreased to RMB 122,541,000 from RMB 159,761,000, with cash and bank balances dropping to RMB 120,913,000 from RMB 152,359,000[5] - Total equity attributable to owners of the company was RMB 186,818,000, down from RMB 189,569,000 in 2023, indicating a slight decline in shareholder equity[5] - The total liabilities for the company as of December 31, 2024, were RMB 15,647,000, compared to RMB 15,374,000 in 2023, showing a slight increase of 1.8%[28] - The total interest-bearing borrowings amounted to approximately RMB 45.2 million, a decrease from RMB 54.2 million as of December 31, 2023[75] Revenue Breakdown - Revenue from driving training services for 2024 was RMB 32,297,000, a decrease of 19.1% from RMB 39,884,000 in 2023[13] - Standard course revenue increased significantly to RMB 20,300,000 in 2024 from RMB 2,824,000 in 2023, while advanced course revenue decreased to RMB 11,059,000 from RMB 36,659,000[13] - Revenue from large vehicle driving training services accounted for approximately 69.1% of total revenue for the year ended December 31, 2024[39] - Revenue from large vehicle driving training services decreased by RMB 7.3 million (approximately 24.6%) to RMB 22.3 million, primarily due to a reduction in the number of students and training hours[55] - Revenue from small vehicle driving training services slightly decreased by RMB 0.3 million (approximately 3.1%) to RMB 10.0 million, despite an increase in the number of students from 6,490 to 6,691[56] Enrollment and Training - Total course enrollment decreased by 7.0% to 8,646 students for the year ended December 31, 2024, compared to 9,304 students in 2023[39] - The number of students enrolled in large vehicle courses dropped significantly by 18.7% to 3,279 students, while small vehicle course enrollment increased slightly by 1.9% to 5,367 students[39] - The total number of course enrollments for large and small vehicle standard courses increased by approximately 130.0% from 3,046 to 7,006 for the year ending December 31, 2024, due to redesigned courses with lower fees and fewer training hours[40] - The number of course registrations at Shunda Driving School decreased by 38.2% to 846 students, primarily due to a transfer of registrations to Tongtai Driving School[39] - The number of enrollments in standard courses for large vehicles rose to 3,271 (37.8%) in 2024 from 977 (10.5%) in 2023, while advanced course enrollments fell significantly from 3,058 (32.9%) to 8 (0.1%) in the same period[41] Expenses and Cost Management - Total financial expenses decreased to RMB 3,279,000 in 2024 from RMB 4,230,000 in 2023, primarily due to lower interest on bank loans[18] - Employee benefit expenses decreased from RMB 10.5 million to RMB 8.2 million, a decline of about 22.4%[58] - Fuel expenses decreased from RMB 7.4 million to RMB 4.9 million, a reduction of approximately 34.3%[58] - Total cost of services provided decreased from RMB 31.3 million to RMB 28.4 million, a reduction of approximately 9.4%[57] Strategic Initiatives - The company has made prepayments for the acquisition of a subsidiary amounting to RMB 3,900,000, indicating ongoing expansion efforts[5] - The company plans to enhance its marketing team and utilize social media platforms to promote enrollment policies and educational advantages to increase student numbers[47] - Investment in teaching facilities will be increased, including the purchase of unique simulators and plans to acquire new energy training vehicles to reduce training costs and improve service quality[48] - The company aims to adapt to the competitive landscape by embracing new technologies and enhancing teaching quality to maintain market share and profitability[46] - The company plans to actively seek suitable land for building training facilities and will consider other uses of financial resources to improve business performance[51] Shareholder Information - The company did not declare any dividends for the year ended December 31, 2024, consistent with 2023[22] - The board does not recommend any dividend payment for the year ending December 31, 2024, consistent with the previous year[85] - The company completed a rights issue on March 20, 2024, raising approximately HKD 40 million, with net proceeds of about HKD 6.062 million[34] - The net proceeds from the rights issue amount to approximately HKD 6.1 million, which will be used to repay part of the group's outstanding bank loans[84] Compliance and Governance - The audit committee, consisting of three independent non-executive directors, reviewed the consolidated financial statements for the year ending December 31, 2024, and found them compliant with applicable accounting standards[89] - The independent auditor confirmed that the figures in the consolidated financial statements for the year ending December 31, 2024, matched those reported in the audited financial statements[90] - The board of directors includes two executive directors, Qi Xiangzhong and Zhao Yuxia, one non-executive director, Dr. Yang Zhuoguang, and three independent non-executive directors, Mr. Chen Xiaohua, Mr. Wen Xinhui, and Mr. Xu Jianpo[97]

Course Enrollments and Demand - The total number of course enrollments decreased by 12.4% from 5,404 for the six months ended June 30, 2023, to 4,736 for the six months ended June 30, 2024[14]. - Shun Da School's course enrollments amounted to 511, representing a significant decrease of approximately 40.8% compared to 863 in the same period last year[14]. - Tong Tai School's course enrollments totaled 4,225, reflecting a slight decrease of approximately 7.0% from 4,541 in the previous year[14]. - The demand for driving courses for Large Vehicles, which accounted for approximately 75.0% of total revenue, significantly declined due to adverse market conditions in the logistics industry[14]. - The overall number of course enrollments for standard courses increased by approximately 184.7% from 1,128 to 3,211 due to newly designed driving courses with lower fees[15]. - The decline in course enrollments was attributed to increased competition from existing Small Vehicles driving schools entering the Large Vehicles training sector[12]. - The overall negative growth in trainees was primarily due to a decrease in actual training hours provided during the six months ended June 30, 2024[12]. - The restructuring of training locations contributed to the significant decrease in Shun Da School's enrollments[14]. - The company faced intensified competition in the driving training services market due to ongoing US-China trade tensions[12]. - The overall deterioration in business performance was linked to a decrease in demand for driving courses, particularly for Large Vehicles[12]. Financial Performance - The total revenue for the Group amounted to approximately RMB 18.1 million, representing a decrease of 22.5% from approximately RMB 23.4 million for the six months ended June 30, 2023[18]. - The number of trainees attending driving courses decreased by approximately 12.0% to 5,469 for the six months ended June 30, 2024, down from 6,213 in the same period in 2023[19]. - Revenue from large vehicle driving training services accounted for approximately 75.0% of total revenue, down from 80.2% for the same period in 2023[18]. - Revenue generated from premium courses of large vehicles contributed approximately 20.0% of total revenue, a significant decrease from 79.2% in the same period in 2023[19]. - The overall decrease in revenue was attributed to a reduction in both the number of trainees and the actual training hours[19]. - The company recorded a loss before income tax of approximately RMB 5.3 million for the six months ended 30 June 2024, compared to a loss of approximately RMB 2.7 million for the same period in 2023[25]. - Gross profit decreased by approximately RMB 2.9 million (or 45.9%) from RMB 6.3 million for the six months ended June 30, 2023, to RMB 3.4 million for the six months ended June 30, 2024, with a gross profit margin decline of 8.2 percentage points from 27.1% to 18.9%[25]. - The net loss attributable to the owners of the Company reduced from approximately RMB 3.3 million for the six months ended June 30, 2023, to approximately RMB 2.3 million for the six months ended June 30, 2024, resulting in a net loss margin of 12.9%[25]. Operational Adjustments and Strategies - The company plans to enhance its service offerings and invest in unique teaching simulators to reduce training costs and maintain gross margins amid price competition[24]. - The company is exploring potential acquisitions and partnerships to expand course enrollments, including a cooperation agreement with a technical secondary school in Gansu Province[24]. - The company aims to stabilize economic income by increasing course enrollments through various methods and measures[21]. - The company emphasizes the importance of timely responses to market changes and strategic decisions to optimize training and examination services[24]. Employee and Cost Management - Employee benefit expenses decreased by approximately RMB 1.7 million, or approximately 27.8%, from RMB 6.1 million for the six months ended June 30, 2023, to RMB 4.4 million for the six months ended June 30, 2024[33]. - Cost of services rendered decreased by approximately RMB 2.4 million (or 13.8%) from RMB 17.1 million to RMB 14.7 million, mainly due to reduced employee benefit expenses and other costs[30]. - Selling and marketing expenses decreased by approximately RMB 0.1 million, or approximately 7.8%, from RMB 1.0 million for the six months ended June 30, 2023, to RMB 0.9 million for the six months ended June 30, 2024[41]. - Administrative expenses decreased by approximately RMB 0.3 million, or approximately 4.3%, from RMB 6.7 million for the six months ended June 30, 2023, to RMB 6.4 million for the six months ended June 30, 2024[42]. Share Capital and Financing - The Company raised approximately HK$7.2 million from a Rights Issue, with net proceeds after expenses amounting to approximately HK$6.1 million[53]. - The issued share capital of the Company after the Rights Issue comprises 435,958,192 Shares of HK$0.01 each[54]. - The Company intends to apply the net proceeds from the Rights Issue for the partial repayment of outstanding bank borrowings[53]. - The Group's bank balances and cash decreased from approximately RMB 152.4 million as at 31 December 2023 to approximately RMB 150.6 million as at 30 June 2024, with a current ratio of 2.34 as of 30 June 2024[52]. Market and Competitive Landscape - The driving training services market has seen a continuous increase in the number of driving schools since the regulatory changes in the third quarter of 2021, intensifying competition[22]. - The company faced challenges in course enrollments due to increased competition from new driving schools and price reduction strategies adopted by some competitors, leading to a decrease in overall economic benefits in the driving training industry[21]. Future Plans and Investments - The Company plans to acquire a parcel of land and construct training fields to increase training capacity, with expected completion by the end of December 2024[66]. - The Company intends to recruit and train 40 new driving instructors, with an allocated budget of HK$10.4 million, of which HK$7.5 million has been utilized[63]. - The Company has not anticipated any changes to the intended use of net proceeds as previously disclosed in the Prospectus[64].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 18,147,000, a decrease of 22% compared to RMB 23,425,000 for the same period in 2023[2] - Gross profit for the same period was RMB 3,432,000, down from RMB 6,348,000, reflecting a gross margin decline[2] - Loss before tax increased to RMB 5,262,000 from RMB 2,684,000 year-on-year[2] - The net loss attributable to owners of the company was RMB 2,348,000, compared to RMB 3,252,000 in the previous year, indicating a reduction in losses[2] - Total revenue for the group decreased by about 22.5%, from RMB 23.4 million in the six months ended June 30, 2023, to approximately RMB 18.1 million in the same period of 2024[37] - Gross profit fell from RMB 6.3 million to RMB 3.4 million, a decrease of RMB 2.9 million or about 45.9%, with gross margin dropping from 27.1% to 18.9%[40] - The loss attributable to owners of the company decreased from approximately RMB 3.3 million to approximately RMB 2.3 million, resulting in a loss margin of 12.9% for the six months ended June 30, 2024, compared to 13.9% for the same period in 2023[40] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 209,031,000, slightly up from RMB 205,695,000 at the end of 2023[3] - Current assets net increased to RMB 86,638,000 from RMB 77,104,000, showing improved liquidity[3] - Non-current liabilities remained stable at RMB 16,201,000 compared to RMB 16,126,000 in the previous year[4] - The company's equity attributable to owners increased to RMB 192,830,000 from RMB 189,569,000, reflecting a positive trend in shareholder value[4] - As of June 30, 2024, the total value of property, plant, and equipment is RMB 137,723 thousand, a decrease from RMB 139,581 thousand as of December 31, 2023[22] - The company's total interest-bearing borrowings amounted to approximately RMB 45.2 million, down from RMB 54.2 million as of December 31, 2023[58] Revenue Breakdown - Revenue from driving training services for the six months ended June 30, 2024, was RMB 18,147,000, a decrease of 22% compared to RMB 23,425,000 for the same period in 2023[10] - Standard course revenue increased significantly to RMB 10,263,000 from RMB 560,000, while advanced course revenue decreased to RMB 7,713,000 from RMB 22,646,000[10] - Revenue from large vehicle driving training services decreased by approximately RMB 5.2 million or 27.6%, from RMB 18.8 million to RMB 13.6 million, primarily due to a reduction in student numbers from 2,861 to 2,306[41] - Revenue from small vehicle driving training services slightly decreased by RMB 0.1 million or 2.2%, from RMB 4.6 million to RMB 4.5 million, despite an increase in actual training hours from 57,124 to 60,280 hours[42] - Revenue from large vehicle driving courses accounted for approximately 75.0% of total revenue for the six months ended June 30, 2024[35] - Revenue from standard courses for large vehicles generated approximately RMB 9.9 million, representing 54.5% of total revenue from large vehicles[37] Enrollment and Training Services - Total course enrollment decreased by 12.4% from 5,404 to 4,736 for the six months ended June 30, 2024, compared to the same period in 2023[35] - The number of students enrolled in Shun Da Driving School dropped by 40.8% to 511, down from 863 in the same period last year[35] - The number of students enrolled in Tong Tai Driving School slightly decreased by 7.0% to 4,225, compared to 4,541 in the previous year[35] - Total enrollment in driving courses decreased by approximately 12.0%, from 6,213 students in the six months ended June 30, 2023, to 5,469 students in the same period of 2024[37] Expenses and Financial Management - Total financial expenses for the six months ended June 30, 2024, were RMB 1,848,000, down from RMB 2,290,000 in the same period of 2023[15] - Employee benefits expenses decreased by RMB 1.7 million or 27.8%, from RMB 6.1 million to RMB 4.4 million, due to a reduction in training hours[44] - Fuel expenses decreased by RMB 1.5 million or 34.1%, from RMB 4.4 million to RMB 2.9 million, consistent with the decrease in actual training hours[44] - Depreciation of property, plant, and equipment increased by RMB 0.8 million or 15.7%, from RMB 5.2 million to RMB 6.0 million, due to fixed depreciation of training facilities and vehicles[44] - Sales and marketing expenses decreased by approximately RMB 0.1 million or 7.8% to RMB 0.9 million for the six months ending June 30, 2024, down from RMB 1.0 million for the same period in 2023[47] - Administrative expenses decreased by approximately RMB 0.3 million or 4.3% to RMB 6.4 million for the six months ending June 30, 2024, compared to RMB 6.7 million for the same period in 2023[48] Future Outlook and Strategic Plans - Future outlook remains cautious due to market conditions, with no specific guidance provided for the upcoming quarters[5] - The company plans to enhance service quality and invest in infrastructure to implement smart teaching, aiming to reduce training costs and maintain profit margins[39] - The company is exploring potential acquisitions and partnerships to expand enrollment, including discussions with local driving schools in Gansu and Xinjiang provinces[39] - The company has reached a cooperation agreement with a technical school in Wuwei City, Gansu Province, to attract students for large vehicle driving training[39] - The company aims to optimize training and examination services while focusing on enrollment growth to achieve better results in the second half of 2024[39] Compliance and Governance - The company has adopted the corporate governance code and has complied with all applicable provisions for the six months ending June 30, 2024[70] - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated financial statements and found them compliant with applicable accounting standards and regulations[72] - The mid-term report for the six months ending June 30, 2024, will be published on the Hong Kong Stock Exchange and the company's website[73]

Enrollment Trends - The overall number of course enrollments declined due to decreased demand for driving courses, particularly for large vehicles, which accounted for approximately 74.2% of total revenue for the year ended December 31, 2023[16]. - The company recorded an increase in standard course enrollments for both small and large vehicles in 2023, despite the overall decline in enrollments[16]. - In 2023, the overall number of course enrollments and trainees attending driving courses declined, resulting in negative growth compared to 2022[32]. - The total number of course enrollments decreased by 3.8% from 9,670 in 2022 to 9,304 in 2023, with both Tong Tai School and Shun Da School experiencing negative growth[35][37]. - Shun Da School's enrollments amounted to 1,368, a decrease of approximately 1.8%, while Tong Tai School's enrollments were 7,936, reflecting a decrease of approximately 4.1%[35][37]. - The overall number of trainees attending driving courses decreased by approximately 13.4%, from 12,509 in 2022 to 10,832 in 2023[43][44]. - The number of trainees for Large Vehicles decreased from 5,692 in 2022 to 4,342 in 2023, with training hours dropping from 307,968 to 257,796[55][57]. - The number of trainees for Small Vehicles decreased from 6,817 in 2022 to 6,490 in 2023, with training hours dropping from 136,972 to 127,783[58]. Revenue Performance - Total revenue for the Group decreased by approximately 16.4%, amounting to approximately RMB 39.9 million in 2023 compared to RMB 47.7 million in 2022[43][44]. - Revenue from driving courses for Large Vehicles accounted for approximately 74.2% of total revenue in 2023, down from 79.4% in 2022[43][44]. - Revenue from premium courses contributed approximately 91.9% of total revenue in 2023, down from 94.5% in 2022[43][44]. - Revenue from Large Vehicles training services decreased by approximately RMB8.3 million, or 22.0%, from RMB37.9 million in 2022 to RMB29.6 million in 2023, accounting for approximately 74.2% of total revenue[54][57]. - Revenue from Small Vehicles training services increased by approximately RMB0.5 million, or 4.8%, from RMB9.8 million in 2022 to RMB10.3 million in 2023[58]. - The decline in revenue was primarily due to decreased demand for driving courses, particularly for Large Vehicles, amid ongoing US-China trade tensions affecting the logistics industry[54]. Cost and Profitability - Gross profit decreased by RMB2.7 million, or 24.3%, from RMB11.3 million in 2022 to RMB8.6 million in 2023, with a gross profit margin decline of 2.2 percentage points to 21.5%[49][50]. - Gross profit for large vehicle training services decreased by approximately RMB4.7 million, or about 48.0%, from approximately RMB9.8 million for the year ended December 31, 2022, to approximately RMB5.1 million for the year ended December 31, 2023[68]. - Gross profit margin for large vehicle training services decreased by approximately 8.6 percentage points from approximately 25.9% for the year ended December 31, 2022, to approximately 17.3% for the year ended December 31, 2023[68]. - Gross profit for small vehicle training services increased by approximately RMB2.0 million, or about 133.5%, from approximately RMB1.5 million for the year ended December 31, 2022, to approximately RMB3.5 million for the year ended December 31, 2023[69]. - Gross profit margin for small vehicle training services increased by approximately 18.4 percentage points from approximately 15.1% for the year ended December 31, 2022, to approximately 33.5% for the year ended December 31, 2023[69]. Strategic Initiatives - The company aims to enhance marketing strategies to meet enrollment targets and will launch preferential policies and campaigns to improve brand reputation and influence[16]. - The company plans to enhance teaching quality in 2024 by implementing stricter standards and developing an integrated online and offline training model[22]. - A commitment to increasing course enrollment efforts is emphasized, with a focus on marketing strategies and partnerships, particularly with Tiktok, to attract more trainees[22]. - The company aims to expand its business into other provinces, cities, and counties in China, targeting both Large and Small Vehicles markets[22]. - In January 2024, staff were assigned to research remote provinces to establish cooperative relationships with local driving training providers and related industries[26]. Financial Position - As of 31 December 2023, the Group's bank balances and cash decreased from approximately RMB182.3 million to approximately RMB152.4 million, primarily due to decreased operating cash flows[87]. - The current ratio of the Group as of 31 December 2023 was 1.93, compared to 1.86 as of 31 December 2022[88]. - As of 31 December 2023, the Group had aggregate interest-bearing borrowings of approximately RMB45.2 million, a decrease from approximately RMB55.2 million as of 31 December 2022[89]. - The gearing ratio of the Group as of 31 December 2023 was approximately 0.30 times, unchanged from 31 December 2022[92]. - The total employee benefit expenses incurred by the group for the year ended December 31, 2023, were approximately RMB 13.3 million, down from approximately RMB 18.2 million for the year ended December 31, 2022[110]. Corporate Governance - The company has complied with all provisions of the Corporate Governance Code for the year ended December 31, 2023[129]. - The Board held four meetings during the year, adhering to the requirement of at least four meetings annually[132]. - The Board composition includes two executive directors, one non-executive director, and three independent non-executive directors, meeting the Listing Rules requirements[143]. - The roles of Chairman and Chief Executive Officer are held separately by Mr. Qi Xiangzhong and Ms. Zhao Yuxia, ensuring a balance of power[137]. - The company received written annual confirmations of independence from all independent non-executive directors, affirming their compliance with independence guidelines[139]. Audit and Risk Management - The Audit Committee reviewed the audited consolidated financial statements for the financial year ended December 31, 2023, and recommended them for approval at the AGM[180]. - The Board agreed to the re-appointment of Moore CPA Limited as the external auditor for the year ending December 31, 2024, pending shareholder approval[181]. - The Audit Committee's duties include overseeing financial reporting, financial control, internal control, and risk management systems of the Group[175]. - The Company engaged an external professional consultant to enhance the effectiveness of the risk management and internal control systems of the Group during the year ended December 31, 2023[173].

Financial Performance - The company's revenue for the year ended December 31, 2023, was RMB 39,884,000, a decrease of 16.4% compared to RMB 47,734,000 in 2022[3] - The gross profit for the same period was RMB 8,560,000, down 24.2% from RMB 11,301,000 in the previous year[3] - The net loss attributable to the owners of the company was RMB 8,443,000, slightly improved from a loss of RMB 8,667,000 in 2022[3] - Basic and diluted loss per share for the year was RMB 2.11, compared to RMB 2.17 in 2022[3] - The group reported a net loss before tax of RMB 16,184,000 for 2023, down from RMB 19,764,000 in 2022, indicating an improvement of 13.1%[26] - The total comprehensive loss for the year ended December 31, 2023, was approximately RMB 8.4 million, compared to RMB 8.7 million for the year ended December 31, 2022, resulting in a net loss margin of 21.2% for 2023 and 18.2% for 2022[85] Assets and Liabilities - Non-current assets increased to RMB 128,591,000 in 2023 from RMB 122,132,000 in 2022, reflecting a growth of 5.5%[4] - Current assets decreased to RMB 159,761,000 in 2023 from RMB 183,096,000 in 2022, a decline of 13.0%[4] - Total liabilities decreased from RMB 98,475,000 in 2022 to RMB 82,657,000 in 2023, a reduction of 16.0%[4] - The company's net asset value as of December 31, 2023, was RMB 189,569,000, down from RMB 198,012,000 in 2022[4] - Cash and bank balances decreased from approximately RMB 182.3 million as of December 31, 2022, to approximately RMB 152.4 million as of December 31, 2023, primarily due to reduced operating cash flow and increased investment cash flow[86] - Current assets as of December 31, 2023, were approximately RMB 159.8 million, with current liabilities of approximately RMB 82.7 million, resulting in a current ratio of 1.93, up from 1.86 as of December 31, 2022[88] Revenue Breakdown - Revenue from standard driving training courses increased to RMB 2,824,000 in 2023 from RMB 2,006,000 in 2022, representing a growth of 40.9%[19] - Revenue from advanced driving training courses decreased to RMB 36,659,000 in 2023 from RMB 45,085,000 in 2022, a decline of 18.6%[19] - Revenue from large vehicle driving training services fell from approximately RMB 37.9 million to RMB 29.6 million, a decrease of about RMB 8.3 million or 22.0%[69] - Revenue from small vehicle driving training services increased slightly from approximately RMB 9.8 million to RMB 10.3 million, an increase of about RMB 0.5 million or 4.8%[71] Enrollment and Training Services - Total course enrollment decreased by 3.8% from 9,670 to 9,304 students as of December 31, 2023[48] - The total number of students participating in driving training courses decreased by approximately 13.4%, from 12,509 to 10,832 students[52] - The number of participants in large vehicle training courses for 2023 was 4,342, generating revenue of RMB 29.6 million, compared to 5,692 participants and RMB 37.9 million in 2022, reflecting a decrease of 23.8% in participants and 21.5% in revenue[53] - The number of participants in small vehicle training courses for 2023 was 6,490, generating revenue of RMB 10.3 million, compared to 6,817 participants and RMB 9.8 million in 2022, indicating a decrease of 4.8% in participants but an increase of 4.9% in revenue[53] Cost Management - Cost of services provided decreased from approximately RMB 36.4 million to RMB 31.3 million, a reduction of about RMB 5.1 million or 14.0%[72] - Selling and marketing expenses decreased from approximately RMB 3.4 million to RMB 1.6 million, a reduction of about RMB 1.8 million or 52.8%[80] - Administrative expenses decreased from approximately RMB 15.1 million to RMB 13.9 million, a decline of about RMB 1.2 million or 8.2%[81] - Financial expenses decreased from approximately RMB 4.6 million to RMB 4.2 million, a reduction of about RMB 0.4 million or 7.8%[83] Future Plans and Strategies - The company is focused on expanding its driving training services in China, with plans for future growth and potential new product developments[5] - The company aims to enhance brand influence and attract more students through targeted marketing strategies, including partnerships with Douyin for advertising[62] - The company plans to leverage new technologies such as virtual reality and intelligent driving systems to improve training effectiveness and create competitive advantages[60] - The company intends to maintain revenue growth in 2024 despite competitive pressures, driven by increasing demand for driving licenses and professional training services[60] Corporate Governance - The board is committed to maintaining high corporate governance standards, ensuring compliance with applicable codes and regulations[108] - The audit committee reviewed the consolidated financial statements for the year ending December 31, 2023, and found them compliant with applicable accounting standards[112] - The independent auditor confirmed that the financial figures reported align with the audited consolidated financial statements for the year ending December 31, 2023[113] Employee and Operational Changes - Employee benefit expenses for the year ended December 31, 2023, totaled approximately RMB 13.3 million, down from RMB 18.2 million for the year ended December 31, 2022[99] - The company had a total of 210 employees as of December 31, 2023, a decrease from 295 employees as of December 31, 2022[97] Rights Issue and Financial Management - The company plans to raise up to approximately HKD 40 million through a rights issue at a subscription price of HKD 0.20 per share[101] - The net proceeds from the rights issue, after deducting related expenses, are intended to be used for repaying part of the outstanding bank borrowings[101] - The group utilized approximately HKD 39.5 million for various purposes as of December 31, 2023, with a total of HKD 108.418 million net proceeds from the initial public offering[104]