Core Insights - The lighting market in Shangrao, Jiangxi, is experiencing robust growth driven by its strategic location and diverse consumer demands [1][2] - Local distributors are adapting their strategies to cater to two main consumer trends: improvement-oriented demand and assurance-oriented demand [5][6] Market Characteristics - Shangrao's lighting distributors are concentrated in key commercial areas, particularly Jiangnan Trade City, with around 50 businesses specializing in lighting and smart home products [2] - Major brands such as NVC Lighting, Opple Lighting, and Philips Lighting have established a strong presence, contributing to a high market concentration [4] Consumer Demand Trends - Improvement-oriented consumers prioritize design, smart features, and brand prestige, showing less price sensitivity [5] - Assurance-oriented consumers focus on product performance, stability, cost-effectiveness, and after-sales service [5] Business Strategies - Local distributors exhibit flexibility by adopting a multi-brand strategy, combining core brands with complementary products to meet diverse customer needs [6] - Some distributors are enhancing their competitive edge by expanding their product offerings and improving service capabilities [11][19] Market Challenges and Opportunities - The market faces challenges from increased competition and brand channel expansion into rural areas, impacting local distributors reliant on city markets [8] - Despite these challenges, many brands are investing in store renovations and upgrades, indicating confidence in future market growth [8] Case Studies - A distributor expanded its operations by introducing Opple Lighting, enhancing its product range and supporting retail growth [11] - Another distributor focused on smart lighting solutions while ensuring professional service quality to maintain competitiveness in the market [17] - A distributor shifted from wholesale to a multi-channel approach, adapting to changing market demands and enhancing customer service [19][21]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年9月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 雷士國際控股有限公司 呈交日期: 2025年10月3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) | 02222 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 50,000,000,000 | USD | | 0.000001 | USD | | 50,000 | | 增加 / 減少 (-) | | | 0 | | | | USD | | 0 | | 本月底結存 | | | 50,000,000,000 | USD | | 0.000001 | USD | | 50,000 | ...

Core Points - The company, NVC Lighting, was awarded the title of "2025 China Manufacturing · Consumer Trusted Brand" during the "2025 China Brand Development Conference" held on September 15, as part of the National Quality Month [1] - NVC Lighting has established a digital quality management system that ensures traceability throughout the product lifecycle, enhancing quality control efficiency by over 15% compared to traditional methods [3] - The company emphasizes innovation by collaborating with Chinese aerospace research institutions to develop the "Accompanying Natural Light" technology, which aims to improve user experience across multiple dimensions [3] Group 1 - NVC Lighting received recognition for its commitment to quality and consumer trust, reflecting its 27 years of responsibility and innovation in the lighting industry [2][3] - The company offers tailored lighting solutions for various demographics, including eye protection for students, elderly-friendly lighting, and easy-to-use home lighting solutions for young families [3] - Each product from NVC Lighting is assigned a unique quality traceability code, ensuring transparency and reliability from production to sales [3] Group 2 - The digital quality management system implemented by NVC Lighting allows for real-time monitoring of the entire production process, ensuring high standards of quality and reliability [3] - The collaboration with aerospace institutions signifies NVC Lighting's commitment to advancing lighting technology and enhancing user experience through scientific research [3]

Core Viewpoint - The company operates in the lighting industry, focusing on the production and sales of light sources, lamps, and related products, with a commitment to providing efficient, energy-saving, and comfortable lighting solutions across various sectors [10]. Financial Performance - The company's revenue and net profit showed significant fluctuations, with a notable decline in revenue growth rate of -9.58% and net profit growth rate of -15.56% in 2023 compared to the previous year [12][14]. - In the first half of 2025, the company reported a revenue composition of $0.87 billion from international non-Raishi brand sales, $0.159 billion from international Raishi brand sales, and $0.043 billion from domestic non-Raishi brand sales [14]. - The average return on equity for the first half of 2025 was 3.3%, an increase of 1.73 percentage points from the same period last year [18]. Asset and Liability Changes - As of the first half of 2025, the company's cash and cash equivalents increased by 11.38%, while accounts receivable decreased by 8.29% [25]. - The company experienced a significant increase in short-term borrowings by 427.16%, while accounts payable decreased by 29.54% [28]. - The company's liquidity ratios were strong, with a current ratio of 3.19 and a quick ratio of 2.67 as of the first half of 2025 [31]. Industry Comparison - The company's asset-liability ratio was reported at 49.97% in 2023, which is lower than the industry average [30]. - The company's total asset turnover ratio and fixed asset turnover ratio have been tracked over the years, indicating performance relative to industry benchmarks [20][21].

Financial Performance - Revenue for the six months ended June 30, 2025, was US$107,162,000, a decrease of 9.4% from US$118,510,000 in the same period of 2024[5] - Gross profit increased to US$40,576,000, up 9.9% from US$37,107,000 year-on-year[5] - Profit before tax rose to US$16,742,000, compared to US$10,329,000 in the previous year, reflecting a 62.5% increase[5] - Profit for the period attributable to owners of the Company was US$15,218,000, significantly up from US$7,660,000, marking a 98.5% increase[5] - Basic earnings per share attributable to owners of the Company increased to US$3.00 cents from US$1.51 cents, representing a 98.7% rise[5] - Sales revenue for the Group amounted to US$107,162,000, representing a decrease of 9.6% compared to the corresponding period[79] - Gross profit for the Group was US$40,576,000, representing a 9.3% increase compared to the previous period, with a gross profit margin of 37.9%[89] - Other income decreased by 9.9% due to a combination of increased government grants and decreased bank interest income[94] - The Group recorded a net gain of US$8.4 million in other gains and losses, a significant improvement from a net loss of approximately US$0.6 million in the previous period[96] - Selling and distribution costs were US$15,180,000, a decrease of 3.4%, but as a percentage of revenue, they increased from 13.3% to 14.2%[98] - Administrative expenses increased by 7.5% to US$15,980,000, with the percentage of revenue rising from 12.5% to 14.9%[103] - Income tax for the Group increased to US$1,478,000 compared to the previous period[106] - Net profit for the period, including profit attributable to non-controlling interests, was US$15,264,000[107] - Profit attributable to owners of the Company was US$15,218,000 during the period[108] Market Performance - The Group's international lighting business remained the core business, contributing the majority of revenue despite a challenging economic environment[8] - In the first half of 2025, Japan's domestic demand for LED lighting products remained stable compared to the same period in 2024, with overall sales in the Japanese market increasing year-on-year due to the introduction of new customers[19][23] - North America saw sales exceed expectations in the first half of 2025, driven by the normalization of retail prices and new product launches, while domestic sales lagged[18] - The UK market is currently facing a lack of confidence, with the new government's short-term measures showing no significant impact on the economy[20][24] - D&H, a subsidiary, experienced strong growth in its order book during the first half of 2025, although delivery timing may affect sales targets[28] - NVC Nordics recorded growth in both sales and margins in 2024, with expectations for stronger results in the second half of 2025 due to new product launches[29][31] - The overall sales performance in the first half of 2025 was supported by strong trends observed in Sweden, contributing to a robust market position in the Nordics[22][29] - The Vietnam market underperformed expectations due to project delays and rising costs from customized solutions for small orders[34] - The UK and Nordic markets are expected to see improved sales performance in the second half of the year due to changes in the sales team and strong order books[54] - The Group aims to strengthen its business in the Middle East and Southeast Asia markets while promoting cost-effective and intelligent products[45] Strategic Initiatives - The Group adjusted its procurement strategy to reduce costs through supplier selection, bidding, and price negotiations, enhancing product competitiveness[7] - New product designs and launches are part of the Group's strategy to enhance competitiveness in pricing and functionality[10] - The Company is focusing on localizing production in Vietnam to address tariff-related challenges and improve production capacity[15] - The company implemented a dual-channel business strategy focusing on Flow Channels and Project Channels, which has shown promising results in the first half of 2025[32][36] - The company is advancing its brand upgrade for its lighting sub-brand, with plans for an official relaunch in the second half of 2025[35] - The Group plans to launch approximately ten highly anticipated ETI-branded products with excellent specifications and a high cost-performance ratio in the second half of 2025[47] - The Group will focus on online sales of new products, expanding e-commerce presence on platforms like Amazon and Rakuten[53] - In Vietnam, the focus will shift from low-volume customized projects to standardized solutions through Flow Projects[55] - The Group will continue to enhance brand visibility through participation in major exhibitions and hosting customer seminars[56] - The Group plans to expand sales channels and strengthen online sales in Japan, focusing on both proprietary brand business and new customer development[58] - The Group aims to enhance brand awareness and unlock new business opportunities through strategic upgrades of key brand assets in the second half of 2025[61] - The Group will focus on product research and development to improve cost performance and expand the application of core patented technologies[62] - The Group will implement procurement cost control measures, including annual bidding and special cost reduction projects, to enhance product cost competitiveness[63] Operational Insights - Current assets totaled US$262,121,000, while current liabilities amounted to US$82,136,000, resulting in net current assets of US$179,985,000[124] - The current ratio improved from 3.02 to 3.19 as of June 30, 2025[125] - Capital expenditure during the period was US$3,682,000, primarily for property, plant, and equipment[131] - Cash and cash equivalents at the end of the period were US$104,613,000, reflecting an increase from US$93,928,000 at the beginning of the period[120] - Net cash flows from operating activities were US$4,541,000, compared to a negative cash flow of US$267,000 in the previous period[120] - Total debt as of June 30, 2025, was US$13,722,000, significantly up from US$2,603,000 at the end of 2024[129] - Capital commitments for the purchase of property, plant, and equipment were US$387,000 as of June 30, 2025[133] - The carrying amounts of the Group's assets pledged for borrowings include property, plant, and equipment valued at $6,057,000 and trade receivables valued at $5,863,000 as of June 30, 2025[146] - The Group has no significant liquidity risk, having reviewed working capital and capital expenditure requirements[150] - The Group entered into insurance contracts covering 90% of uncollectible receivables from international sales, with a maximum compensation amount of $20,000,000 for the period from July 1, 2025, to June 30, 2026[156] Human Resources - The Group had approximately 1,901 employees as of June 30, 2025, a decrease from 2,163 employees as of December 31, 2024[162] - Ms. CHAN Kim Yung, Eva resigned as CEO effective April 1, 2025, and the company is currently searching for a new CEO[188] - Mr. WANG Donglei assumed CEO responsibilities temporarily after the resignation of the previous CEO[189] - The company ensured effective communication with shareholders during the AGM held on June 13, 2025, despite the chairman's absence[190] - The company has established an audit and risk control department to monitor and assess internal risks and control systems[196] Corporate Governance - The company has adopted the CG Code as its own code of corporate governance and has generally complied with its principles, except for provisions C.2.1 and F.1.3[187] - The Audit Committee consists of three independent non-executive Directors and has reviewed the interim results for the period under review[197] - The Board oversees the effectiveness of the internal control system, including resources, staff qualifications, and training programs[196] - The Company established a Remuneration Committee in compliance with the Listing Rules[200] - The primary duties of the Remuneration Committee include reviewing and making recommendations on remuneration packages for executive Directors and senior management[200] - The Remuneration Committee consists of one executive Director and two independent non-executive Directors[200] - Mr. LEE Kong Wai, Conway serves as the chairman of the Remuneration Committee[200] - The Committee ensures transparent procedures for developing remuneration policies to prevent conflicts of interest[200] Shareholder Information - The company has a total of 507,273,677 issued shares as of June 30, 2025[170] - Director YE Yong holds 27,403,900 ordinary shares, representing 5.40% of the total issued shares[167] - Elec-Tech International (H.K.) Company Limited is a substantial shareholder with 74,034,600 ordinary shares, accounting for 14.59% of the total issued shares[173] - Rising Wealth Limited holds 63,840,000 ordinary shares, which is 12.58% of the total issued shares[173] - Harbour Faith Enterprises Limited has 41,491,100 ordinary shares, representing 8.18% of the total issued shares[173] - Veritas Holdings Limited and AEGEAN Anstalt each control 151,412,677 ordinary shares, making up 29.85% of the total issued shares[173] - Canopy Capital Limited owns 84,545,613 ordinary shares, which is 16.67% of the total issued shares[173] - Gold Interact Investment Limited holds 66,867,064 ordinary shares, representing 13.18% of the total issued shares[173] - During the review period, the company did not purchase, sell, or redeem any listed securities[180] - The company had no controlling shareholders during the review period[183] - There were no purchases, sales, or redemptions of the company's listed securities during the review period, and as of June 30, 2025, the company held no treasury shares[184] - The company did not issue any equity securities or sell treasury shares for cash during the review period[185]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 雷士國際控股有限公司 呈交日期: 2025年9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) | 02222 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 50,000,000,000 | USD | | 0.000001 | USD | | 50,000 | | 增加 / 減少 (-) | | | 0 | | | | USD | | 0 | | 本月底結存 | | | 50,000,000,000 | USD | | 0.000001 | USD | | 50,000 | ...

Core Viewpoint - 雷士国际 (02222.HK) reported a decline in revenue for the first half of 2025, despite an increase in gross profit and significant growth in net profit attributable to shareholders [1] Financial Performance - The group's revenue for the six months ending June 30, 2025, reached 107,162 thousand USD, representing a decrease of 9.6% compared to the same period last year [1] - The group's gross profit amounted to 40,576 thousand USD, which is an increase of 9.3% year-on-year [1] - Net profit attributable to shareholders for the period was 15,218 thousand USD, compared to 7,660 thousand USD in the same period last year [1] - Basic earnings per share attributable to shareholders were 3.00 cents, up from 1.51 cents in the same period last year [1]

Core Viewpoint - NVC International (02222) reported a mid-year revenue of approximately $107 million for 2025, reflecting a year-on-year decline of 9.6% [1] Financial Performance - Revenue reached approximately $107 million, down 9.6% compared to the same period last year [1] - Gross profit amounted to $40.576 million, an increase of 9.3% year-on-year [1] - Profit attributable to shareholders for the period was $15.218 million, representing a significant year-on-year growth of 98.67% [1] - Basic earnings per share were 3.00 cents [1]

Core Insights - The company reported a revenue of approximately $107 million for the first half of 2025, representing a decline of 9.6% compared to the same period last year [1] - Gross profit reached $40.576 million, which is an increase of 9.3% year-on-year [1] - Profit attributable to shareholders for the period was $15.218 million, showing a significant year-on-year growth of 98.67% [1] - Basic earnings per share were reported at 3.00 cents [1]

Executive Summary and Financial Highlights [Summary for the Six Months Ended June 30, 2025](index=1&type=section&id=Summary%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) The Group faced global economic challenges in H1 2025, with revenue decreasing by 9.6% year-on-year to US$107,162 thousand, yet gross profit increased by 9.3% to US$40,576 thousand through cost control, leading to significant growth in profit before tax and profit attributable to owners, with basic earnings per share doubling Key Financial Highlights | Metric | Six Months Ended June 30, 2025 (US$ Thousand) | Six Months Ended June 30, 2024 (US$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 107,162 | 118,510 | -9.6% | | Gross Profit | 40,576 | 37,107 | +9.3% | | Profit Before Income Tax | 16,742 | 10,329 | +62.1% | | Profit for the Period Attributable to Owners of the Company | 15,218 | 7,660 | +98.7% | | Basic Earnings Per Share (US Cents) | 3.00 | 1.51 | +98.7% | | Interim Dividend | Not Declared | Not Declared | - | Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue was US$107,162 thousand, a 9.6% year-on-year decrease, while significantly reduced cost of sales led to a 9.3% increase in gross profit to US$40,576 thousand, with other gains and losses turning profitable and profit attributable to owners of the company surging by 98.7% to US$15,218 thousand Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Revenue | 107,162 | 118,510 | | Cost of Sales | (66,586) | (81,403) | | Gross Profit | 40,576 | 37,107 | | Other Income | 3,187 | 3,536 | | Other Gains and Losses | 8,357 | (624) | | Selling and Distribution Expenses | (15,180) | (15,717) | | Administrative Expenses | (15,980) | (14,872) | | Impairment Losses under Expected Credit Loss Model | (268) | (812) | | Other Expenses | (3,123) | (2,254) | | Finance Costs | (259) | (385) | | Share of Results of Associates | (568) | 4,350 | | Profit Before Income Tax | 16,742 | 10,329 | | Income Tax Expense | (1,478) | (1,475) | | Profit for the Period | 15,264 | 8,854 | | Profit for the Period Attributable to Owners of the Company | 15,218 | 7,660 | | Non-controlling Interests | 46 | 1,194 | | Basic Earnings Per Share (US Cents) | 3.00 | 1.51 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period increased to US$13,220 thousand from US$8,651 thousand in the prior year, driven by higher profit for the period, partially offset by fair value losses on equity investments at fair value through other comprehensive income and exchange differences from translating overseas operations Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Profit for the Period | 15,264 | 8,854 | | **Other Comprehensive (Expense) Income** | | | | Fair value (loss) gain on equity instruments at fair value through other comprehensive income, net of tax | (702) | 98 | | Exchange differences arising from translating overseas operations | (1,954) | 327 | | Share of other comprehensive income (expense) of associates, net of related income tax | 612 | (628) | | **Total Comprehensive Income for the Period** | 13,220 | 8,651 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 13,121 | 7,869 | | Non-controlling Interests | 99 | 782 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, with stable non-current assets and a significant rise in cash and cash equivalents within current assets, while current liabilities saw a substantial increase in borrowings, reflecting overall financial stability and growth in net assets and total equity Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 62,873 | 62,678 | | Investment Properties | 1,444 | 1,438 | | Goodwill | 29,529 | 29,406 | | Interests in Associates | 115,050 | 114,523 | | Total Non-current Assets | 313,316 | 312,182 | | **Current Assets** | | | | Inventories | 42,717 | 40,361 | | Trade and Bills Receivables | 45,427 | 49,535 | | Financial Assets at Fair Value Through Profit or Loss | 58,364 | 54,731 | | Cash and Cash Equivalents | 104,613 | 93,928 | | Total Current Assets | 262,121 | 249,238 | | **Current Liabilities** | | | | Trade and Bills Payables | 28,787 | 40,854 | | Borrowings | 13,722 | 2,603 | | Total Current Liabilities | 82,136 | 82,541 | | Net Current Assets | 179,985 | 166,697 | | **Total Equity** | | | | Equity Attributable to Owners of the Company | 469,619 | 456,498 | | Non-controlling Interests | 11,531 | 11,432 | | Total Equity | 481,150 | 467,930 | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation and Principal Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The Group's condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and the HKEX Listing Rules, based on historical cost except for certain financial instruments measured at fair value, and consistent with 2024 annual financial statements, with no significant impact from IFRS amendments - The condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and the HKEX Listing Rules[11](index=11&type=chunk) - Except for certain financial instruments, the statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual financial statements[12](index=12&type=chunk) - The application of amendments to IFRS accounting standards during this interim period did not have a significant impact on the financial position and performance[13](index=13&type=chunk) [Revenue](index=7&type=section&id=Revenue) The Group's revenue primarily stems from sales to external customers, with all revenue recognized at a point in time, totaling US$107,162 thousand in H1 2025, a decrease from US$118,510 thousand in H1 2024, mainly due to a decline in sales in the US market, despite international non-NVC brand sales remaining the primary revenue source Revenue by Source | Revenue Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | International NVC Brand | 15,859 | 16,812 | | Domestic Non-NVC Brand | 4,348 | 5,063 | | International Non-NVC Brand | 86,955 | 96,635 | | **Total** | 107,162 | 118,510 | Revenue by Geographical Market | Geographical Market | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | United States | 63,005 | 77,532 | | Japan | 19,831 | 15,561 | | China | 4,348 | 5,063 | | United Kingdom | 10,080 | 10,218 | - All revenue is recognized at a "point in time," indicating primarily goods sales[14](index=14&type=chunk)[15](index=15&type=chunk) [Operating Segments](index=9&type=section&id=Operating%20Segments) The Group is structured into three reporting segments: International NVC Brand, Domestic Non-NVC Brand, and International Non-NVC Brand, with the International Non-NVC Brand segment being the primary contributor to revenue and segment results, showing significant growth in H1 2025, while the other two segments experienced declines - The Group's reporting segments include: International NVC Brand (sales of NVC brand lighting products outside China), Domestic Non-NVC Brand (sales of non-NVC brand lighting products within China), and International Non-NVC Brand (sales of non-NVC brand lighting products outside China)[18](index=18&type=chunk) Segment Revenue and Results | Segment | 2025 Segment Revenue (US$ Thousand) | 2025 Segment Results (US$ Thousand) | 2024 Segment Revenue (US$ Thousand) | 2024 Segment Results (US$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | International NVC Brand | 15,859 | 6,089 | 16,812 | 7,093 | | Domestic Non-NVC Brand | 4,348 | 759 | 5,063 | 948 | | International Non-NVC Brand | 86,955 | 33,728 | 96,635 | 29,066 | | **Consolidated** | 107,162 | 40,576 | 118,510 | 37,107 | - Key operating decision-makers allocate resources and assess performance based on each segment's operating results, but segment assets and liabilities analysis is not presented[20](index=20&type=chunk) [Other Income](index=11&type=section&id=Other%20Income) The Group's other income totaled US$3,187 thousand in H1 2025, a decrease from US$3,536 thousand in H1 2024, primarily due to a significant increase in government grants and other subsidies, offset by a reduction in bank interest income and trademark licensing fees Other Income Sources | Income Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Government Grants and Other Subsidies | 279 | 36 | | Bank Interest Income | 990 | 1,247 | | Consulting Service Income | 572 | 534 | | Trademark Licensing Fees | 508 | 787 | | Rental Income - Fixed Lease Payments | 243 | 194 | | Surcharge from Vendors | 129 | 275 | | Others | 466 | 463 | | **Total** | 3,187 | 3,536 | - Government grants and other subsidies significantly increased from **US$36 thousand in 2024** to **US$279 thousand in 2025**[21](index=21&type=chunk) - Bank interest income decreased from **US$1,247 thousand in 2024** to **US$990 thousand in 2025**[21](index=21&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) The Group's income tax expense for H1 2025 was US$1,478 thousand, largely consistent with the prior year, with fluctuations in Hong Kong profits tax and PRC corporate income tax, a decrease in taxes from other countries, and certain PRC subsidiaries benefiting from a 15% preferential tax rate as high-tech enterprises Income Tax Expense by Type | Tax Type | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 807 | 273 | | PRC Corporate Income Tax | 88 | 276 | | Other Countries | 732 | 1,116 | | Total Current Tax | 1,627 | 1,665 | | Deferred Tax | (149) | (190) | | **Total** | 1,478 | 1,475 | - Hong Kong profits tax operates under a two-tiered tax rate system, with eligible entities taxed at **8.25% on the first HKD2,000 thousand of profits** and **16.5% thereafter**[22](index=22&type=chunk) - PRC subsidiaries are generally subject to a 25% tax rate, but Yixun (Zhuhai) Optoelectronics Technology Co., Ltd. and Zhejiang Jiangshan Sanyou Electronics Co., Ltd. enjoy a **15% preferential tax rate** as high-tech enterprises[22](index=22&type=chunk)[23](index=23&type=chunk) [Components of Profit for the Period](index=12&type=section&id=Components%20of%20Profit%20for%20the%20Period) The composition of profit for the period shows a slight decrease in total amortization and depreciation, a significant increase in employee benefit expenses (including wages and salaries), and reductions in recognized inventory costs, research and development expenses, and impairment losses under the expected credit loss model Components of Profit for the Period | Item | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Amortization of Other Intangible Assets | 1,348 | 2,546 | | Depreciation (Property, Plant and Equipment, Investment Properties, Right-of-use Assets) | 4,769 | 3,817 | | **Total Amortization and Depreciation** | 6,117 | 6,363 | | Wages and Salaries | 21,117 | 16,761 | | Retirement Benefit Scheme Contributions | 2,070 | 1,700 | | Other Benefit Expenses | 564 | 566 | | **Total Staff Costs** | 23,751 | 19,027 | | Recognized Cost of Inventories | 66,728 | 81,984 | | Research and Development Expenses | 3,123 | 2,254 | | Write-down of Inventories | (142) | (581) | | Impairment Losses under Expected Credit Loss Model | 268 | 812 | - Total staff costs increased from **US$19,027 thousand in 2024** to **US$23,751 thousand in 2025**, primarily driven by an increase in wages and salaries[25](index=25&type=chunk) - Impairment losses under the expected credit loss model significantly decreased from **US$812 thousand in 2024** to **US$268 thousand in 2025**[25](index=25&type=chunk) [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company significantly increased to 3.00 US Cents, up from 1.51 US Cents in the prior year, reflecting a substantial rise in profit attributable to owners while the weighted average number of ordinary shares remained constant Basic Earnings Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company for Basic EPS Calculation (US$ Thousand) | 15,218 | 7,660 | | Weighted Average Number of Ordinary Shares for Basic EPS Calculation (Thousand Shares) | 507,274 | 507,274 | | **Basic Earnings Per Share (US Cents)** | 3.00 | 1.51 | - Diluted earnings per share are not presented for either period as there are no outstanding potential ordinary shares[26](index=26&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Company has not declared or proposed any dividends to ordinary shareholders during the current or prior interim periods, nor has it proposed any dividends since the end of the reporting period - The Company has not declared or proposed any dividends during the current or prior interim periods[27](index=27&type=chunk) [Trade and Bills Receivables](index=14&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables decreased to US$45,427 thousand from US$49,535 thousand on December 31, 2024, with an increase in credit loss allowance but a significant reduction in impairment losses under the expected credit loss model, and most trade receivables are aged within 3 months Trade and Bills Receivables | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Trade Receivables | 46,180 | 49,913 | | Less: Allowance for Credit Losses | (798) | (530) | | Net Trade Receivables | 45,382 | 49,383 | | Bills Receivables | 45 | 152 | | **Total** | 45,427 | 49,535 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Within 3 Months | 41,109 | 46,252 | | 4 to 6 Months | 2,927 | 1,285 | | 7 to 12 Months | 199 | 587 | | 1 to 2 Years | 426 | 293 | | Over 2 Years | 721 | 966 | - The Group grants an average credit period of **30 to 90 days** to its trade customers[29](index=29&type=chunk) - Trade receivables with a carrying amount of **US$5,863 thousand** have been pledged as collateral for borrowings[30](index=30&type=chunk) - Impairment losses of **US$268 thousand** were recognized under the expected credit loss model during this interim period, a significant reduction from **US$812 thousand** in the corresponding period[30](index=30&type=chunk) [Trade and Bills Payables](index=15&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables significantly decreased to US$28,787 thousand from US$40,854 thousand on December 31, 2024, with the majority of payables aged within 3 months Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Within 3 Months | 22,716 | 36,660 | | 4 to 6 Months | 839 | 401 | | 7 to 12 Months | 108 | 270 | | 1 to 2 Years | 506 | 170 | | Over 2 Years | 867 | 752 | | **Total** | 28,787 | 40,854 | [Borrowings](index=16&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings significantly increased to US$13,722 thousand from US$2,603 thousand on December 31, 2024, driven by new unsecured bank loans of US$9,080 thousand for property, plant, and equipment purchases (largely repaid post-period) and an increase in secured bank loans for daily operations Borrowings by Type | Borrowing Type | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Unsecured Bank Loans | 9,080 | – | | Secured Bank Loans | 4,642 | 2,603 | | **Total** | 13,722 | 2,603 | - New unsecured bank loans of **US$9,080 thousand**, bearing interest at a floating rate of LPR minus 20 basis points, were obtained for purchasing property, plant, and equipment, and have been largely repaid after the reporting period[33](index=33&type=chunk) - New secured bank loans of **US$4,642 thousand**, bearing interest at a floating rate of prime rate plus 1.9%, were obtained for daily operations[33](index=33&type=chunk) [Share Capital and Capital Commitments](index=17&type=section&id=Share%20Capital%20and%20Capital%20Commitments) The Company's authorized and issued share capital remained stable at 507,274 thousand shares, with a share capital of US$1,268 thousand, and capital commitments for property, plant, and equipment decreased to US$387 thousand as of June 30, 2025, compared to December 31, 2024 Share Capital | Metric | Number of Shares (Thousand Shares) | Share Capital (US$ Thousand) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary shares of US$0.000001 each) | 50,000,000 | 46,977 | | Issued and Fully Paid Share Capital (Ordinary shares of US$0.000001 each) | 507,274 | 1,268 | Capital Commitments | Capital Commitment Item | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Purchase of Property, Plant and Equipment | 387 | 484 | Management Discussion and Analysis [Market and Performance Review](index=18&type=section&id=Market%20and%20Performance%20Review) In H1 2025, the global economy faced recession concerns due to tariffs, the Russia-Ukraine war, and high interest rates, leading to downward revisions in GDP growth forecasts, which the Group addressed by optimizing procurement strategies, advancing Vietnam localization, and enhancing in-house production to reduce costs and maintain competitiveness in the international lighting business - The global economy is affected by Trump's tariffs, the Russia-Ukraine war, and high interest rates, with market concerns about economic recession and the IMF forecasting **3.0% global economic growth in 2025**[35](index=35&type=chunk) - The Group achieved comprehensive cost reduction by adjusting procurement strategies (supplier layout, bidding, large order negotiation, price linkage) and advancing Vietnam localization and in-house production capabilities[35](index=35&type=chunk) - The international lighting business remains core, enhancing product price and functional competitiveness through new product design, new product launches, and procurement strategy evaluation[36](index=36&type=chunk) [Sales and Distribution](index=19&type=section&id=Sales%20and%20Distribution) The Group has established sales networks across major global markets, with North America exceeding retail expectations due to strong customer partnerships and new product listings, while Japan saw overall sales growth from new client introductions, but the UK market faced confidence issues and low wholesale investment, and other overseas markets showed mixed results with successes in Uruguay and Papua New Guinea, but delays and cost increases in Vietnam - The Group has established sales networks and channels in major countries and regions including North America, Europe, Australia, East Asia, the Middle East, Southeast Asia, and China[37](index=37&type=chunk) [North America and Japan Markets](index=19&type=section&id=North%20America%20and%20Japan%20Markets) The North American market benefited from strong collaboration with its largest customer and new product listings, exceeding retail sales expectations, but domestic sales and commercial channels underperformed, while the Japanese market, despite a weak domestic recovery, saw overall sales rise due to new customer introductions and a short-term increase in LED prices - The North American market benefited from good business cooperation with its largest customer, exceeding sales expectations due to normalized retail prices and new product listings[38](index=38&type=chunk) - North American commercial channel sales performed poorly, with slow progress on engineering projects[38](index=38&type=chunk) - The Japanese economy in H1 2025 showed "weak domestic recovery + increased external risks," but overall sales increased year-on-year, mainly due to the introduction of new customers[38](index=38&type=chunk)[39](index=39&type=chunk) [UK and Nordic Markets](index=20&type=section&id=UK%20and%20Nordic%20Markets) The UK market is challenged by low confidence and wholesale channels' reluctance to invest in inventory due to credit risk concerns, while Dernier and Hamlyn (D&H) is experiencing strong order growth in the ultra-high-end market, and the Nordic market, despite sluggish growth, maintains a high market share due to the company's robust demand strategy, with NVC UK improving its market position through cost reduction and sales team restructuring - The UK market is plagued by a lack of confidence, with wholesale channels unwilling to invest in inventory due to credit risk concerns[40](index=40&type=chunk) - D&H focuses on the ultra-high-end market, with strong order growth and projected significant sales increase in 2025[40](index=40&type=chunk)[42](index=42&type=chunk) - The Nordic market faces sluggish growth, but the company's demand strategy is well-developed, leading to a higher market share[40](index=40&type=chunk) - NVC UK has improved its market position by reducing structural operating costs, rebuilding its external sales team, and adjusting sales leadership[41](index=41&type=chunk) [Other Overseas Markets](index=21&type=section&id=Other%20Overseas%20Markets) The Group's dual-channel business strategy, focusing on distribution and project channels, has shown good results in other overseas markets, with Uruguay and Papua New Guinea exceeding targets through supermarket partnerships, while Vietnam underperformed due to project delays and increased costs from small-batch customization, and Singapore and surrounding markets met expectations - The implementation of a dual-channel business strategy focusing on distribution and project channels has shown good results in H1 2025[43](index=43&type=chunk) - Uruguay and Papua New Guinea exceeded targets through partnerships with local large supermarkets[43](index=43&type=chunk) - The Vietnam market underperformed due to project delays and increased costs from small-batch customized orders[43](index=43&type=chunk) [Brand Building and New Product Development](index=22&type=section&id=Brand%20Building%20and%20New%20Product%20Development) The Group is advancing its lighting sub-brand upgrades, with a planned relaunch in H2, and has updated its parent brand and North American lighting brand "ETI," while "NVC Lighting" is undergoing significant adjustments for a new image launch in H2 2025, and a new brand "AURA" is focusing on trendy linear lighting systems with a promotional video, as the R&D department has developed over a hundred new lighting products in H1, adhering to "innovation, speed, quality, cost" principles and continuously improving its "four-ization" initiatives - The Group focuses on "light," "air," and "water" as three key elements for business development, continuously advancing lighting sub-brand upgrades, with a formal relaunch planned for H2[44](index=44&type=chunk) - The "NVC Lighting" brand is undergoing significant adjustments and updates, including brand identity, application scenarios, and marketing material design style, with the new image expected to be launched in H2 2025[44](index=44&type=chunk) - The new brand "AURA" focuses on trendy linear lighting systems, with an official promotional video produced in H1 and a planned launch concurrently with exhibitions in H2[45](index=45&type=chunk) - The R&D department, adhering to "innovation, speed, quality, cost" principles, has developed or completed over a hundred new lighting products in H1 and continues to build and improve its "platformization, serialization, modularization, and standardization" initiatives[46](index=46&type=chunk) [Future Outlook](index=23&type=section&id=Future%20Outlook) The Group anticipates international lighting business to remain core in H2 2025, with enhanced sales performance driven by R&D innovation, strong sales channels, and new product promotion, alongside optimized management structure, integrated overseas operations, strengthened Middle East and Southeast Asian markets, and the promotion of cost-effective and smart products - In H2 2025, the international lighting business remains core, with sales performance to be enhanced through R&D innovation, strong sales channels, and new product promotion[47](index=47&type=chunk) - The Group will optimize its management structure, integrate overseas operations, strengthen the Middle East and Southeast Asian markets, and promote cost-effective and smart products[47](index=47&type=chunk) [North America and Japan Market Outlook](index=24&type=section&id=North%20America%20and%20Japan%20Market%20Outlook) In H2, the US market will focus on production in tariff-friendly regions, actively competing for existing shelf products in offline retail stores, and plans to launch innovative downlight combinations and rectangular ceiling lights, while re-evaluating its commercial product line, as the Japanese economy is expected to continue a weak recovery with higher-than-expected inflation, leading to a "strong commercial, stable residential" lighting market, with new products and expanded e-commerce channels planned for H2 - The US market will focus on production in tariff-friendly safe regions, actively competing for existing shelf products in offline retail stores, and plans to launch innovative downlight combinations and rectangular ceiling lights[48](index=48&type=chunk) - The Japanese economy is likely to continue a weak recovery in H2 2025, with higher-than-expected inflation, and the lighting market will show a differentiated pattern of "strong commercial, stable residential"[48](index=48&type=chunk)[49](index=49&type=chunk) - In H2, the Japanese market will gradually launch new products in retail channels, simultaneously expand sales through e-commerce channels like Amazon and Rakuten, and focus on developing new customers[49](index=49&type=chunk) [UK and Nordic Market Outlook](index=25&type=section&id=UK%20and%20Nordic%20Market%20Outlook) UK management anticipates improved sales performance in the UK and Nordic markets in H2, attributed to changes in the NVC UK sales team, strong orders for D&H, and upcoming new product launches in the Nordic region - UK and Nordic market sales performance is expected to improve in H2, thanks to changes in the NVC UK sales team, strong D&H orders, and new product launches in the Nordic region[50](index=50&type=chunk) [Other Overseas Market Outlook](index=25&type=section&id=Other%20Overseas%20Market%20Outlook) The Vietnam market will transition from low-volume customized projects to standardized solutions via distribution channels, while Singapore and surrounding markets anticipate increased distribution channel activities and planned expansion into southern Malaysia, though challenges including over-customization in Vietnam, slow progress on government projects in Pakistan, and lingering economic crisis effects in Sri Lanka are expected to persist until the end of 2025 - The Vietnam market will shift from low-volume customized projects to standardized solutions, promoted through distribution channels[51](index=51&type=chunk) - Singapore and surrounding markets expect increased distribution channel activities in H2 and plan to expand operations into southern Malaysia[51](index=51&type=chunk) - Market challenges include over-customization in Vietnam, slow progress on government projects in Pakistan, and lingering effects of the Sri Lankan economic crisis, expected to continue until the end of 2025[51](index=51&type=chunk) [Brand Building, Product Development, and Internal Management Outlook](index=26&type=section&id=Brand%20Building%2C%20Product%20Development%2C%20and%20Internal%20Management%20Outlook) The Group's H2 brand strategy will emphasize steady investment, building long-term brand assets, nurturing its sub-brand portfolio, and strategically upgrading key brand assets, while product R&D will focus on improving human-centric lighting technology, expanding core patent applications, and continuing "platformization, serialization, modularization, and standardization" initiatives, with supply chain cost control through annual bidding, cost reduction plans, in-house production, technical transformation, and Vietnam localization, alongside driving group-wide digitalization and informatization, including ERP system migration and functional enhancements, to boost overall operational efficiency and governance effectiveness - The H2 brand strategy will continue to emphasize steady investment, building long-term brand assets, nurturing the sub-brand portfolio, and strategically upgrading key brand assets[52](index=52&type=chunk) - Product R&D will focus on improving human-centric lighting technology, expanding core patent applications, and continuing "platformization, serialization, modularization, and standardization" initiatives[52](index=52&type=chunk) - Supply chain cost control will be achieved through annual bidding, cost reduction plans, in-house production projects, technical transformation projects, and Vietnam localization procurement[53](index=53&type=chunk) - The Group will promote group-wide digitalization and informatization, including ERP system migration, to enhance overall operational efficiency and governance effectiveness[53](index=53&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) This financial review details the Group's H1 2025 financial performance, showing a 9.6% year-on-year decrease in sales revenue due to declines in both Chinese and international markets, but a lower cost of sales as a percentage of revenue led to a significant improvement in gross margin, while other income slightly decreased, other gains and losses turned profitable, selling and distribution expenses and administrative expenses both increased, and finance costs and share of results of associates decreased, ultimately resulting in substantial growth in both profit for the period and profit attributable to owners of the company [Sales Revenue](index=27&type=section&id=Sales%20Revenue) The Group's sales revenue for H1 2025 was US$107,162 thousand, a 9.6% decrease from the prior period, primarily due to a 14.1% decline in the Chinese market and a 9.4% decrease in international market sales, with non-NVC brand ODM products remaining the main component Sales Revenue by Source | Sales Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | | China Non-NVC Brand | 4,348 | 5,063 | (14.1%) | | International NVC Brand | 15,859 | 16,812 | (5.7%) | | International Non-NVC Brand | 86,955 | 96,635 | (10.0%) | | **Total** | 107,162 | 118,510 | (9.6%) | - China sales revenue decreased by **14.1%**, primarily due to increasing competition[55](index=55&type=chunk) - International sales revenue decreased by **9.4%**, leading to an overall sales revenue decrease of **9.6%**[55](index=55&type=chunk) [Cost of Sales](index=28&type=section&id=Cost%20of%20Sales) Cost of sales for H1 2025 significantly decreased to US$66,586 thousand from the prior period, with the cost of sales as a percentage of revenue falling from 68.7% to 62.1%, primarily due to reduced raw material costs and the Group's shift to in-house production of blow-molded, extruded, and roll-formed parts, replacing third-party procurement Cost of Sales Components | Cost of Sales Component | 2025 (US$ Thousand) | % of Revenue | 2024 (US$ Thousand) | % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Raw Materials (including outsourced production costs) | 53,934 | 50.3% | 66,197 | 55.9% | | Labor Costs | 7,906 | 7.4% | 8,323 | 7.0% | | Overhead | 4,746 | 4.4% | 6,883 | 5.8% | | **Total Cost of Sales** | 66,586 | 62.1% | 81,403 | 68.7% | - Cost of sales as a percentage of revenue decreased from **68.7% to 62.1%**, with gross margin increasing from **31.3% to 37.9%**[56](index=56&type=chunk) - The main reasons are reduced raw materials and the Group's shift to in-house production of blow-molded, extruded, and roll-formed parts, replacing procurement from third-party suppliers[56](index=56&type=chunk) [Gross Profit and Gross Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit for H1 2025 was US$40,576 thousand, a 9.3% year-on-year increase, with the gross margin rising from 31.3% to 37.9%, primarily due to falling commodity prices and freight costs, which reduced production costs, and a significant improvement in the gross margin of international non-NVC brands Gross Profit and Gross Margin by Segment | Segment | 2025 Gross Profit (US$ Thousand) | 2025 Gross Margin (%) | 2024 Gross Profit (US$ Thousand) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | China Non-NVC Brand | 759 | 17.5% | 948 | 18.7% | | International NVC Brand | 6,089 | 38.4% | 7,093 | 42.2% | | International Non-NVC Brand | 33,728 | 38.8% | 29,066 | 30.1% | | **Total** | 40,576 | 37.9% | 37,107 | 31.3% | - The overall gross margin increased from **31.3% to 37.9%**, primarily due to continuous declines in commodity prices and freight costs, leading to lower production costs[58](index=58&type=chunk) [Other Income](index=30&type=section&id=Other%20Income) The Group's other income for H1 2025 was US$3,187 thousand, a 9.9% decrease from the prior period, primarily due to the combined effect of increased government grants and other subsidies and decreased bank interest income - Other income decreased by **9.9%** compared to the prior period, mainly due to the combined effect of increased government grants and other subsidies and decreased bank interest income[59](index=59&type=chunk) [Other Gains and Losses](index=30&type=section&id=Other%20Gains%20and%20Losses) The Group's other gains and losses recorded a net gain of US$8,400 thousand in H1 2025, a significant turnaround from a net loss of approximately US$600 thousand in the prior period, primarily driven by a substantial increase in net exchange gains (from US$100 thousand to US$4,700 thousand) and a shift from loss to net gain in fair value changes of financial assets (approximately US$3,600 thousand) - Other gains and losses turned from a net loss of approximately **US$600 thousand** in the prior period to a net gain of **US$8,400 thousand** in the review period[60](index=60&type=chunk) - This was primarily due to net exchange gains increasing from approximately **US$100 thousand** to approximately **US$4,700 thousand**[60](index=60&type=chunk) - Fair value changes of financial assets turned from a net loss of approximately **US$900 thousand** in the prior period to a net gain of approximately **US$3,600 thousand** in the review period[60](index=60&type=chunk) [Selling and Distribution Expenses](index=30&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's selling and distribution expenses for H1 2025 were US$15,180 thousand, a 3.4% decrease from the prior period, however, as a percentage of revenue, these expenses increased from 13.3% to 14.2% - Selling and distribution expenses amounted to **US$15,180 thousand**, a **3.4% decrease** compared to the prior period[61](index=61&type=chunk) - Selling and distribution expenses as a percentage of revenue increased from **13.3% to 14.2%**[61](index=61&type=chunk) [Administrative Expenses](index=31&type=section&id=Administrative%20Expenses) The Group's administrative expenses for H1 2025 were US$15,980 thousand, a 7.5% increase from the prior period, primarily due to higher staff costs, and as a percentage of revenue, these expenses rose from 12.5% to 14.9% - Administrative expenses amounted to **US$15,980 thousand**, a **7.5% increase** compared to the prior period, mainly due to increased staff costs[62](index=62&type=chunk) - Administrative expenses as a percentage of revenue increased from **12.5% to 14.9%**[62](index=62&type=chunk) [Finance Costs](index=31&type=section&id=Finance%20Costs) The Group's finance costs for H1 2025 were US$259 thousand, a decrease from the prior period, primarily comprising interest expenses on bank loans and lease liabilities - Finance costs were **US$259 thousand**, a decrease from **US$385 thousand** in the prior period[6](index=6&type=chunk)[63](index=63&type=chunk) - Finance costs primarily consist of interest on bank loans and lease liabilities[63](index=63&type=chunk) [Share of Results of Associates](index=31&type=section&id=Share%20of%20Results%20of%20Associates) The Group's share of results of associates for H1 2025 was a loss of US$568 thousand, a reversal from a profit of US$4,350 thousand in the prior period, reflecting a shift from profit to loss in the performance of associates - Share of results of associates turned from a profit of **US$4,350 thousand** in the prior period to a loss of **US$568 thousand**[6](index=6&type=chunk)[64](index=64&type=chunk) - This item reflects the Group's share of net profit or loss from its associates[64](index=64&type=chunk) [Income Tax](index=31&type=section&id=Income%20Tax) The Group's income tax expense for H1 2025 increased slightly to US$1,478 thousand compared to the prior period - Income tax expense increased to **US$1,478 thousand** compared to the prior period[6](index=6&type=chunk)[65](index=65&type=chunk) [Profit for the Period](index=31&type=section&id=Profit%20for%20the%20Period) The Group's net profit for the period (including profit attributable to non-controlling interests) for H1 2025 was US$15,264 thousand, a significant increase from US$8,854 thousand in the prior period - Net profit for the period (including profit attributable to non-controlling interests) was **US$15,264 thousand**[6](index=6&type=chunk)[66](index=66&type=chunk) [Profit Attributable to Owners of the Company](index=31&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the company for H1 2025 was US$15,218 thousand, a substantial increase from US$7,660 thousand in the prior period - Profit attributable to owners of the company was **US$15,218 thousand**[6](index=6&type=chunk)[67](index=67&type=chunk) [Profit Attributable to Non-controlling Interests](index=32&type=section&id=Profit%20Attributable%20to%20Non-controlling%20Interests) The Group's profit attributable to non-controlling interests for H1 2025 was US$46 thousand, a significant decrease from US$1,194 thousand in the prior period - Profit attributable to non-controlling interests was **US$46 thousand**[6](index=6&type=chunk)[68](index=68&type=chunk) [Cash Flow and Liquidity](index=32&type=section&id=Cash%20Flow%20and%20Liquidity) In H1 2025, the Group's net cash flow from operating activities turned positive, net cash flow from investing activities shifted from inflow to outflow, and net cash flow from financing activities changed from outflow to inflow, resulting in a net increase in cash and cash equivalents, while net current assets and the current ratio both improved, with directors deeming working capital sufficient [Cash Flow](index=32&type=section&id=Cash%20Flow) The Group's net cash flow from operating activities for H1 2025 was a positive US$4,541 thousand, a turnaround from a negative balance in the prior period, while net cash flow from investing activities shifted from an inflow of US$20,425 thousand to an outflow of US$2,488 thousand, and net cash flow from financing activities changed from an outflow of US$8,968 thousand to an inflow of US$9,505 thousand, leading to a net increase in cash and cash equivalents of US$11,558 thousand Cash Flow Summary | Cash Flow Type | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Net Cash Flow from (Used in) Operating Activities | 4,541 | (267) | | Net Cash Flow from (Used in) Investing Activities | (2,488) | 20,425 | | Net Cash Flow from (Used in) Financing Activities | 9,505 | (8,968) | | Net Increase in Cash and Cash Equivalents | 11,558 | 11,190 | | Cash and Cash Equivalents at End of Period | 104,613 | 118,817 | - Net cash flow from operating activities turned positive, indicating improved operating conditions[70](index=70&type=chunk) - Net cash flow from financing activities shifted from outflow to inflow, possibly related to new borrowings[70](index=70&type=chunk) [Liquidity](index=33&type=section&id=Liquidity) As of June 30, 2025, the Group's total net current assets increased to US$179,985 thousand from US$166,697 thousand on December 31, 2024, and the current ratio improved from 3.02 to 3.19, with directors confident in sufficient working capital for current and future 12-month needs Liquidity Metrics | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Total Current Assets | 262,121 | 249,238 | | Total Current Liabilities | 82,136 | 82,541 | | Net Current Assets | 179,985 | 166,697 | | Current Ratio | 3.19 | 3.02 | - Directors believe the Group has sufficient working capital to meet its current and next 12-month funding requirements[73](index=73&type=chunk) [Capital Management](index=34&type=section&id=Capital%20Management) The Group's primary capital management objective is to maintain financial stability and growth, managed by monitoring the capital gearing ratio (net debt divided by total equity attributable to owners of the company), which is not applicable as cash and cash equivalents exceed borrowings, resulting in negative net debt Capital Management Metrics | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Borrowings | 13,722 | 2,603 | | Less: Cash and Cash Equivalents | (104,613) | (93,928) | | Net Debt | Not Applicable | Not Applicable | | Total Equity Attributable to Owners of the Company | 469,619 | 456,498 | | Capital Gearing Ratio | Not Applicable | Not Applicable | - The capital management objective is to maintain the company's financial stability and growth, managed by monitoring the capital gearing ratio[75](index=75&type=chunk) - As cash and cash equivalents exceed borrowings, net debt is negative, rendering the capital gearing ratio not applicable[75](index=75&type=chunk) [Capital Expenditure](index=35&type=section&id=Capital%20Expenditure) The Group's capital expenditure for H1 2025 was US$3,682 thousand, primarily for property, plant, and equipment, funded by cash generated from operations and bank loans - During the review period, the Group's capital expenditure was **US$3,682 thousand**, mainly due to increased costs for property, plant, and equipment[76](index=76&type=chunk) - Capital expenditure was funded by cash generated from operations and bank loans[76](index=76&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) The Group had no outstanding derivative financial instruments or off-balance sheet guarantees for outstanding loans during the review period, nor did it engage in transactions involving non-exchange traded contracts - The Group had no outstanding derivative financial instruments or off-balance sheet guarantees for outstanding loans during the review period[77](index=77&type=chunk) - The Group did not engage in transactions involving non-exchange traded contracts[77](index=77&type=chunk) [Capital Commitments](index=35&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments for the acquisition of property, plant, and equipment amounted to US$387 thousand, a decrease from US$484 thousand on December 31, 2024 - As of June 30, 2025, capital commitments for the acquisition of property, plant, and equipment amounted to **US$387 thousand**[78](index=78&type=chunk) [Contingent Liabilities](index=35&type=section&id=Contingent%20Liabilities) A subsidiary of the Group is involved in a patent infringement legal dispute, and the directors believe the expected outcome is uncertain, making it impossible to reliably estimate the potential liability amount, timing, and impact - A subsidiary of the Group is involved in a patent infringement legal dispute[79](index=79&type=chunk) - The directors believe the expected outcome of this legal dispute is uncertain, making it impossible to reliably estimate the potential liability amount, timing, and impact[79](index=79&type=chunk) [Mergers, Acquisitions, Investments, Disposals, and Significant Investments Held](index=35&type=section&id=Mergers%2C%20Acquisitions%2C%20Investments%2C%20Disposals%2C%20and%20Significant%20Investments%20Held) The Group did not undertake any significant acquisitions, mergers, investments, or disposals of subsidiaries, associates, or joint ventures during the review period, nor did it hold any significant investments - The Group did not undertake any significant acquisitions, mergers, investments, or disposals of subsidiaries, associates, or joint ventures during the review period[80](index=80&type=chunk) - The Group held no significant investments[80](index=80&type=chunk) [Future Plans for Material Investments or Capital Assets](index=36&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, and the date of this announcement, the Group has not authorized any other plans for material investments or additions to capital assets - As of June 30, 2025, and the date of this announcement, the Group has not authorized any other plans for material investments or additions to capital assets[81](index=81&type=chunk) [Pledged Assets](index=36&type=section&id=Pledged%20Assets) The Group's borrowings are secured by certain property, plant, and equipment, as well as trade receivables, with changes in the carrying value of pledged assets as of June 30, 2025 Pledged Assets | Type of Pledged Asset | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 6,057 | 5,618 | | Trade Receivables | 5,863 | 7,777 | [Market Risks](index=36&type=section&id=Market%20Risks) The Group faces foreign currency risk, commodity price risk, liquidity risk, and credit risk in its daily operations, mitigating foreign currency risk through forward exchange contracts but not commodity price risk with derivatives, while directors consider liquidity risk not significant, and credit risk from receivables is managed through credit limits and export credit insurance - The Group faces foreign currency transaction risk, which is hedged through forward exchange contracts[84](index=84&type=chunk) - The Group is exposed to raw material price fluctuation risk but has not entered into commodity derivative instruments for hedging[85](index=85&type=chunk) - The directors have reviewed working capital and capital expenditure requirements and determined there is no significant liquidity risk[86](index=86&type=chunk) - The primary credit risk arises from trade and bills receivables, mitigated through credit limit controls and the purchase of export credit insurance (covering **90% of international sales receivables**, with a maximum compensation of **US$20,000 thousand**)[87](index=87&type=chunk) Other Information [Events After the Reporting Period](index=38&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the Company have occurred from June 30, 2025, up to the date of this announcement - No significant events affecting the Company have occurred from **June 30, 2025**, up to the date of this announcement[88](index=88&type=chunk) [Interim Dividend](index=38&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors resolved not to declare an interim dividend for the six months ended **June 30, 2025** (2024 corresponding period: nil)[89](index=89&type=chunk) [Employees](index=38&type=section&id=Employees) As of June 30, 2025, the Group had approximately 1,901 employees, a decrease from 2,163 on December 31, 2024, with the company regularly reviewing employee remuneration and benefits, providing social insurance, provident funds, and discretionary bonuses, and emphasizing employee training through scientific and reasonable programs to enhance professional skills - As of **June 30, 2025**, the Group had approximately **1,901 employees** (December 31, 2024: **2,163 employees**)[90](index=90&type=chunk) - The company regularly reviews employee remuneration and benefits, providing social insurance, employee provident fund schemes, and discretionary bonus schemes[90](index=90&type=chunk) - The Group continuously improves its internal employee training system, develops scientific and reasonable training and development plans, and conducts effectiveness evaluations[90](index=90&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[91](index=91&type=chunk) - As of **June 30, 2025**, the Company held no treasury shares[91](index=91&type=chunk) [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The Company has adopted the Corporate Governance Code, but during the review period, there were two deviations: the roles of Chairman and Chief Executive Officer were not separated, with Mr. Wang Donglei serving both functions, and Mr. Wang Donglei was unable to attend the Annual General Meeting, though the Board believes these deviations are appropriate under current circumstances and has taken steps to ensure effective communication and decision-making - The Company has adopted the Corporate Governance Code, but during the review period, there were two deviations: the roles of Chairman and Chief Executive Officer were not separated, with Mr. Wang Donglei serving as both Chairman and Chief Executive Officer[92](index=92&type=chunk)[93](index=93&type=chunk) - Mr. Wang Donglei, the Chairman, was unable to attend the Annual General Meeting held on **June 13, 2025**, due to other work arrangements[93](index=93&type=chunk) - The Board believes that the deviation from Code Provision C.2.1 is appropriate, contributing to more effective planning and execution of long-term business strategies and enhancing decision-making efficiency during the transition period[93](index=93&type=chunk) [Audit Committee](index=40&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Mr. Li Gangwei as Chairman, is responsible for maintaining auditor relations, reviewing financial information, and overseeing financial reporting, risk management, and internal control systems, and has reviewed and discussed the interim results for the reporting period - The Audit Committee comprises three independent non-executive directors: Mr. Li Gangwei (Chairman), Mr. Wang Xuexian, and Mr. Chen Hong[95](index=95&type=chunk) - Its primary responsibilities include maintaining relations with auditors, reviewing financial information, and overseeing the financial reporting system, risk management, and internal control systems[95](index=95&type=chunk) - The Committee has reviewed and discussed the interim results for the reporting period[95](index=95&type=chunk) [Remuneration Committee](index=40&type=section&id=Remuneration%20Committee) The Remuneration Committee, consisting of one executive director and two independent non-executive directors with Mr. Li Gangwei as Chairman, is primarily responsible for reviewing the remuneration packages, policies, and structure for directors and senior management, ensuring transparency in the remuneration determination process - The Remuneration Committee comprises Ms. Chen Jianrong (Executive Director), Mr. Li Gangwei (Chairman, Independent Non-executive Director), and Mr. Wang Xuexian (Independent Non-executive Director)[96](index=96&type=chunk) - Its primary responsibilities include reviewing the remuneration packages, policies, and structure for directors and senior management, and ensuring transparency in the remuneration determination process[96](index=96&type=chunk) [Nomination Committee](index=40&type=section&id=Nomination%20Committee) The Nomination Committee, composed of two executive directors and three independent non-executive directors with Mr. Wang Donglei as Chairman, is primarily responsible for reviewing the Board structure, developing director nomination and appointment procedures, advising on director appointments and succession planning, and assessing the independence of independent non-executive directors - The Nomination Committee comprises Mr. Wang Donglei (Chairman, Executive Director), Ms. Chen Jianrong (Executive Director), Mr. Li Gangwei, Mr. Wang Xuexian, and Mr. Chen Hong (Independent Non-executive Directors)[97](index=97&type=chunk) - Its primary responsibilities include reviewing the Board structure, developing director nomination and appointment procedures, advising on director appointments and succession planning, and assessing the independence of independent non-executive directors[97](index=97&type=chunk) [Strategy and Planning Committee](index=41&type=section&id=Strategy%20and%20Planning%20Committee) The Strategy and Planning Committee, consisting of four executive directors and one independent non-executive director with Mr. Wang Donglei as Chairman, is primarily responsible for recommending and formulating the Company's strategic development plans for Board consideration - The Strategy and Planning Committee comprises Mr. Wang Donglei (Chairman, Executive Director), Ms. Chen Jianrong, Mr. Xiao Yu, Mr. Wang Dun (Executive Directors), and Mr. Wang Xuexian (Independent Non-executive Director)[98](index=98&type=chunk) - Its primary responsibility is to recommend and formulate the Company's strategic development plans for Board consideration[98](index=98&type=chunk) [Changes in Directors' Information](index=41&type=section&id=Changes%20in%20Directors%27%20Information) Effective January 1, 2025, Ms. Chen Jianrong resigned as Chief Executive Officer and was appointed as a member of the Nomination Committee, and Mr. Wang Xuexian was also appointed as a member of the Nomination Committee, with no other discloseable changes to the Board or directors' information since then - Ms. Chen Jianrong resigned as the Company's Chief Executive Officer, effective **April 1, 2025**[99](index=99&type=chunk) - Ms. Chen Jianrong was appointed as a member of the Nomination Committee, effective **June 27, 2025**[99](index=99&type=chunk) - Mr. Wang Xuexian was appointed as a member of the Nomination Committee, effective **June 27, 2025**[100](index=100&type=chunk) Report Publication and Acknowledgements [Publication of Interim Results Announcement and Interim Report](index=42&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, and the Group's interim report, containing all information required by the Listing Rules, will be released on these websites in due course - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.nvc-international.com)[101](index=101&type=chunk) - The Group's interim report will be published on the aforementioned websites in due course[101](index=101&type=chunk) [Review of Interim Results](index=42&type=section&id=Review%20of%20Interim%20Results) The Group's interim results have been reviewed by the Audit Committee and approved by the Board of Directors, and external auditor Deloitte Touche Tohmatsu has conducted a review of the interim results in accordance with Hong Kong Standard on Review Engagements 2410 - The Group's interim results have been reviewed by the Audit Committee and approved by the Board of Directors[102](index=102&type=chunk) - External auditor Deloitte Touche Tohmatsu has reviewed the interim results in accordance with Hong Kong Standard on Review Engagements 2410[102](index=102&type=chunk) [Acknowledgements](index=42&type=section&id=Acknowledgements) The Board of Directors extends its sincere gratitude to the Group's management and employees for their contributions during the review period, and to all shareholders for their strong support - The Board of Directors extends its sincere gratitude to the Group's management and employees for their contributions during the review period[103](index=103&type=chunk) - The Board of Directors sincerely thanks all shareholders for their strong support[103](index=103&type=chunk) Definitions [Definitions](index=43&type=section&id=Definitions) This section provides definitions for key terms and terminology used in the announcement, ensuring consistent understanding of the report's content - This section provides definitions for key terms and terminology used in the announcement, including "Audit Committee," "Board," "China," "Corporate Governance Code," "Company," "Corresponding Period," "Directors," "Group," "Hong Kong," "LED," "Listing Rules," "Model Code," "ODM," "Review Period," "RMB," "SEK," "Shares," "Shareholders," "Stock Exchange," "Subsidiary," "Treasury Shares," "UK," "US," "US$," and "We"[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)