Performance Highlights [Key Financial Performance](index=1&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2025, the Group achieved significant growth in total revenue and net profit, with a substantial increase in gross profit margin, demonstrating robust operating strategies and enhanced profitability | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 133.6 | 105.1 | 27.1% | | Gross Profit | 79.1 | 51.9 | 52.4% | | Gross Profit Margin | 59.2% | 49.4% | 9.8 percentage points | | Profit for the Period Attributable to Owners of the Company | 36.4 | 20.4 | 78.4% | | Basic Earnings Per Share | 0.036 RMB | 0.020 RMB | 80.0% | Condensed Consolidated Statement of Comprehensive Income [Condensed Consolidated Statement of Comprehensive Income - Details](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income%20-%20Details) This section provides the condensed consolidated statement of comprehensive income for the six months ended June 30, 2025 and 2024, detailing financial data such as revenue, cost of sales, gross profit, various expenses, operating profit, net finance costs, income tax expense, and profit for the period, including profit attributable to owners of the Company and earnings per share | Metric (RMB thousand) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 133,605 | 105,104 | | Cost of Sales | (54,545) | (53,227) | | Gross Profit | 79,060 | 51,877 | | Other Income | 1,090 | 2,259 | | Net Other Gains/(Losses) | (6) | (435) | | Impairment (Provision)/Reversal of Financial Assets | (5) | 263 | | Selling Expenses | (1,555) | (1,556) | | Administrative Expenses | (33,508) | (23,086) | | Operating Profit | 45,076 | 29,322 | | Net Finance Costs | (2,279) | (3,458) | | Profit Before Income Tax | 42,797 | 25,864 | | Income Tax Expense | (6,809) | (5,418) | | Profit for the Period | 35,988 | 20,446 | | Profit for the Period Attributable to Owners of the Company | 36,403 | 20,446 | | Basic Earnings Per Share (RMB) | 0.036 | 0.020 | Condensed Consolidated Statement of Financial Position [Condensed Consolidated Statement of Financial Position - Details](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20-%20Details) This section presents the condensed consolidated statement of financial position as of June 30, 2025, and December 31, 2024, covering major components such as non-current assets, current assets, equity, non-current liabilities, and current liabilities, reflecting the Group's asset and liability structure | Metric (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 796,998 | 729,494 | | Total Current Assets | 140,651 | 191,699 | | **Total Assets** | **937,649** | **921,193** | | **Equity** | | | | Equity Attributable to Owners of the Company | 566,886 | 530,893 | | Non-controlling Interests | 11,595 | 12,010 | | **Total Equity** | **578,481** | **542,903** | | **Liabilities** | | | | Total Non-current Liabilities | 130,653 | 129,828 | | Total Current Liabilities | 228,515 | 248,462 | | **Total Liabilities** | **359,168** | **378,290** | | **Total Equity and Liabilities** | **937,649** | **921,193** | Company Information and Accounting Policies [General Information](index=6&type=section&id=General%20Information) Hongcheng Environmental Technology Co., Ltd. was incorporated in the Cayman Islands and primarily engages in gold mine hazardous waste treatment services, sales of sulfur concentrate, and its reprocessed products (including sulfuric acid, iron powder, and electricity) in Laizhou, Shandong Province, China, with its shares listed on the Hong Kong Stock Exchange on November 12, 2021, and Mr. Liu Zeming as the ultimate controlling party - The Company was incorporated in the Cayman Islands on January 12, 2021, and listed on the Hong Kong Stock Exchange on November 12, 2021[9](index=9&type=chunk)[10](index=10&type=chunk) - The Group's principal activities include providing gold mine hazardous waste treatment services and selling sulfur concentrate, as well as selling reprocessed sulfur concentrate products (including sulfuric acid, iron powder, and electricity), with its headquarters in Laizhou, Shandong Province, China[9](index=9&type=chunk) - The ultimate controlling party of the Company is Mr. Liu Zeming[10](index=10&type=chunk) [Summary of Significant Accounting Policies](index=6&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) The Group's condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34, using the historical cost convention and revised by fair value remeasurement, with management assessing the Group has sufficient resources to continue as a going concern for the foreseeable future, and the initial adoption of IAS 21 (Revised) "Lack of Exchangeability" had no material impact on financial information - The condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34, using the historical cost convention and revised by remeasurement of financial assets at fair value through other comprehensive income and financial assets at fair value through profit or loss[12](index=12&type=chunk) - The Board of Directors believes the Group has sufficient resources to continue as a going concern for the foreseeable future (not less than twelve months), thus adopting the going concern basis for financial statement preparation[14](index=14&type=chunk) - The initial adoption of International Accounting Standard 21 (Revised) "Lack of Exchangeability" in this period had no impact on the interim condensed consolidated financial information, as both the Group's transaction and functional currencies are convertible[15](index=15&type=chunk) Segment Information [Segment Description and Principal Activities](index=7&type=section&id=Segment%20Description%20and%20Principal%20Activities) The Group's key operating decision-makers (Executive Directors and Chief Financial Officer of the Board) have divided the business into two operating segments: hazardous waste treatment and recycling, and sulfur concentrate reprocessing and others, with all operations and non-current assets located in Laizhou, Shandong Province, China, thus eliminating the need for geographical segment information presentation - The Group's key operating decision-makers have been identified as the Executive Directors and Chief Financial Officer of the Board[16](index=16&type=chunk) - The Group's business is divided into two operating segments: (i) hazardous waste treatment and recycling; and (ii) sulfur concentrate reprocessing and others[16](index=16&type=chunk) - The Group's primary market, majority of revenue and operating profit, and all operations and non-current assets are located in Laizhou, Shandong Province, China, thus eliminating the need for geographical segment information presentation[18](index=18&type=chunk) [Segment Results](index=8&type=section&id=Segment%20Results) Both of the Group's main segments—hazardous waste treatment and recycling, and sulfur concentrate reprocessing and others—achieved revenue and profit growth in the first half of 2025, with the hazardous waste treatment and recycling segment contributing higher revenue and profit, while the sulfur concentrate reprocessing and others segment saw more significant profit growth | Metric (RMB thousand) | Hazardous Waste Treatment and Recycling (2025) | Sulfur Concentrate Reprocessing and Others (2025) | Total (2025) | | :--- | :--- | :--- | :--- | | Segment Revenue | 71,798 | 61,807 | 133,605 | | Segment Profit/(Loss) | 25,630 | 21,154 | 45,076 | | Additions to Non-current Assets | 24,655 | 55,327 | 79,982 | | Total Assets | 484,687 | 450,810 | 937,649 | | Total Liabilities | 247,818 | 109,417 | 359,168 | | Metric (RMB thousand) | Hazardous Waste Treatment and Recycling (2024) | Sulfur Concentrate Reprocessing and Others (2024) | Total (2024) | | :--- | :--- | :--- | :--- | | Segment Revenue | 58,795 | 46,309 | 105,104 | | Segment Profit/(Loss) | 19,820 | 10,805 | 29,322 | | Additions to Non-current Assets | 18,735 | 27,434 | 46,169 | | Total Assets | 381,175 | 380,836 | 764,039 | | Total Liabilities | 190,126 | 73,724 | 273,989 | [Revenue Composition](index=10&type=section&id=Revenue%20Composition) The Group's revenue primarily derives from gold mine hazardous waste treatment services, sales of sulfur concentrate, and sales of sulfur concentrate reprocessing products, with the proportion of revenue from sulfur concentrate sales and reprocessing products increasing in H1 2025, while revenue from hazardous waste treatment services slightly decreased | Revenue Source (RMB thousand) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Provision of Gold Mine Hazardous Waste Treatment Services | 16,446 | 19,150 | | Sales of Sulfur Concentrate | 50,573 | 34,866 | | Sales of Sulfur Concentrate Reprocessing Products | 61,807 | 46,309 | | **Total Revenue from Contracts with Customers** | **128,826** | **100,325** | | Rental Income | 4,779 | 4,779 | | **Total Revenue** | **133,605** | **105,104** | - For the six months ended June 30, 2025, revenue from gold mine hazardous waste treatment services, sales of sulfur concentrate, and sales of sulfur concentrate reprocessing products accounted for approximately **96.4%** of total revenue (95.5% for the same period in 2024)[27](index=27&type=chunk) [Contract Liabilities and Unsatisfied Contracts](index=11&type=section&id=Contract%20Liabilities%20and%20Unsatisfied%20Contracts) The Group's contract liabilities are primarily related to the sales of sulfur concentrate and sulfur concentrate reprocessing products, totaling **RMB 25,375 thousand** as of June 30, 2025, an increase from the end of 2024, with most of the recognized revenue originating from the opening balance of contract liabilities | Contract Liability Type (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Related to Provision of Gold Mine Hazardous Waste Treatment Services | – | 84 | | Related to Sales of Sulfur Concentrate | 12,151 | 21,045 | | Related to Sales of Sulfur Concentrate Reprocessing Products | 4,330 | 4,187 | | **Total** | **25,375** | **16,422** | | Revenue Recognized (RMB thousand) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | From Balance of Contract Liabilities at Beginning of Period | 11,197 | 6,663 | - As of June 30, 2025, the total unsatisfied performance obligations expected to be recognized within one year amounted to **RMB 25,375 thousand**, primarily comprising sales of sulfur concentrate and sulfur concentrate reprocessing products[28](index=28&type=chunk) [Major Customer Information](index=12&type=section&id=Major%20Customer%20Information) For the six months ended June 30, 2025, Customer B became one of the Group's major customers, contributing **RMB 14,115 thousand** in revenue, while the contribution from major Customer A in the prior year period was less than 10% | Customer | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | Not Applicable (i) | 17,708 | | Customer B | 14,115 | Not Applicable (i) | (i) Contributed less than 10% of the Group's total revenue during the relevant period Management Discussion and Analysis [Business Review](index=24&type=section&id=Business%20Review) The Group focuses on gold mine hazardous waste treatment and resource recycling, detoxifying cyanide tailings to recover sulfur concentrate, which is then reprocessed into sulfuric acid, iron powder, and electricity; despite global economic challenges, the Group achieved double-digit growth in revenue and net profit during the reporting period, maintaining its industry-leading position - The Group's core business involves gold mine hazardous waste treatment and resource recycling, including cyanide tailings detoxification, recovery of sulfur concentrate, and its reprocessing into sulfuric acid, iron powder, and electricity[58](index=58&type=chunk) - The Group is the **sole company in Laizhou, Shandong Province**, holding a hazardous waste operating license issued by the Yantai Municipal Ecological Environment Bureau, solidifying its leading position in the industry[59](index=59&type=chunk) - Despite challenging external environments, the Group achieved double-digit growth in both revenue and net profit during the reporting period, with total revenue increasing by **27.1%** and profit attributable to owners of the Company increasing by **78.4%**[59](index=59&type=chunk)[60](index=60&type=chunk) [Outlook](index=25&type=section&id=Outlook) The Group will actively respond to national green development strategies by driving innovation, strengthening cooperation, and integrating ESG strategies to promote green transformation and upgrading, extending industrial chain value, expanding new products, deepening industry-academia-research collaboration, and pursuing high-quality development with sustainability as a core guiding principle [Innovation-Driven, Extending Industrial Chain Value](index=25&type=section&id=Innovation-Driven%2C%20Extending%20Industrial%20Chain%20Value) The Group will continue to increase R&D investment, optimize comprehensive utilization technologies for hazardous waste resources, and has made progress in developing new products like sulfamic acid and magnesium fertilizer and constructing production lines, aiming to diversify its product portfolio, enhance resource utilization efficiency, and improve profitability stability - Will continue to increase R&D investment, focusing on breakthroughs and optimization in comprehensive utilization technologies for hazardous waste resources, and promoting the rapid transformation of scientific research achievements into industrial applications[61](index=61&type=chunk) - Has achieved phased progress in the research and development of new products such as sulfamic acid and magnesium fertilizer, and the construction of production lines, utilizing self-produced sulfuric acid and byproduct steam as core raw materials to extend the industrial chain and enhance resource and energy recycling efficiency[61](index=61&type=chunk) - Will explore multi-field, multi-category synergistic development models in the future, building a new full industrial chain encompassing resource collection, treatment, reprocessing, and product sales[62](index=62&type=chunk)[63](index=63&type=chunk) [Strengthening Cooperation, Building a Technological Highland](index=26&type=section&id=Strengthening%20Cooperation%2C%20Building%20a%20Technological%20Highland) The Group plans to deepen cooperation with research institutions, industry leaders, and local governments to establish platforms for technological exchange and achievement transformation, integrating industry-academia-research to absorb advanced experience and cutting-edge technologies, thereby enhancing hazardous waste resource utilization efficiency and product quality - Will deepen cooperation with research institutions, industry leaders, and local governments to establish platforms for technological exchange and achievement transformation, promoting deep integration of industry-academia-research[64](index=64&type=chunk) - Through cross-sector collaboration and open cooperation, continuously absorb advanced experience and cutting-edge technologies to enhance hazardous waste resource utilization efficiency and product quality, maintaining technological leadership and market advantage[64](index=64&type=chunk) [Integrating ESG Strategy, Leading the Circular Economy](index=26&type=section&id=Integrating%20ESG%20Strategy%2C%20Leading%20the%20Circular%20Economy) The Group deeply integrates ESG (Environmental, Social, and Governance) into its corporate strategy and daily operations, committed to building a high-quality sustainable development model, with particular focus on the high-silicon cyanide tailings valuable element recovery project to achieve "harmlessness, reduction, and resourcefulness" principles, contributing to national "Dual Carbon" goals - Will deeply integrate ESG into corporate strategy, fully permeating daily operations, and actively promote ESG governance into the corporate governance system, committed to building a high-quality sustainable development model[65](index=65&type=chunk) - The high-silicon cyanide tailings valuable element recovery project will further implement the Group's principles of "harmlessness, reduction, and resourcefulness" in hazardous waste resource utilization, setting a new benchmark for the industry[66](index=66&type=chunk) - Will continue to uphold the concept of sustainable development, implement the ESG strategy, improve green production and operation models, and contribute to the healthy development of the industry, the achievement of national "Dual Carbon" goals, and the creation of long-term shareholder value[66](index=66&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance during the reporting period, including revenue composition, changes in gross profit and gross profit margin, increases and decreases in various expenses, net finance costs, income tax expense, capital expenditure, pledge of assets, contingent liabilities, treasury policy, and liquidity position, comprehensively analyzing the driving factors behind the financial data [Revenue](index=27&type=section&id=Revenue) The Group's total revenue increased by **27.1%** year-on-year to **RMB 133.6 million**, primarily driven by higher sulfuric acid unit prices and increased sales of sulfur concentrate, partially offset by a decrease in revenue from gold mine hazardous waste treatment services | Revenue Source | H1 2025 (RMB thousand) | Proportion (%) | H1 2024 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Gold Mine Hazardous Waste Treatment Services | 16,446 | 12.3 | 19,150 | 18.2 | | Sales of Sulfur Concentrate | 50,573 | 37.9 | 34,866 | 33.2 | | Hazardous Waste Storage and Leasing Services | 4,779 | 3.6 | 4,779 | 4.5 | | Sales of Sulfur Concentrate Reprocessing Products | 61,807 | 46.2 | 46,309 | 44.1 | | **Total** | **133,605** | **100.0** | **105,104** | **100.0** | - Total revenue increased by approximately **27.1%**, primarily due to higher sulfuric acid unit prices and increased sales of sulfur concentrate, partially offset by a decrease in revenue from gold mine hazardous waste treatment services[68](index=68&type=chunk)[69](index=69&type=chunk) [Gross Profit and Gross Profit Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's gross profit increased by **52.4%** year-on-year to **RMB 79.1 million**, with the overall gross profit margin rising from **49.4% to 59.2%**, primarily due to significant growth in gross profit margins for sulfur concentrate sales and sulfur concentrate reprocessing products, despite a decrease in gross profit margin for gold mine hazardous waste treatment services - Gross profit increased by approximately **52.4%** to **RMB 79.1 million**, exceeding the increase in total revenue, primarily due to an increase in gross profit margin[70](index=70&type=chunk) - The overall gross profit margin increased from **49.4%** in the same period of 2024 to **59.2%** in the same period of 2025[71](index=71&type=chunk) - The gross profit margin for sulfur concentrate sales increased from **53.0% to 63.8%**; for sulfur concentrate reprocessing products, it increased from **41.1% to 57.2%**; while for gold mine hazardous waste treatment services, it decreased from **61.4% to 53.7%**[71](index=71&type=chunk) [Other Income](index=28&type=section&id=Other%20Income) Other income decreased by **52.2%** year-on-year to **RMB 1.1 million**, primarily due to reduced government grants and a decline in agency service income | Income Source (RMB thousand) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Government Grants | 498 | 1,555 | | Agency Service Income | 590 | 703 | | Individual Income Tax Refund | 2 | 1 | | **Total** | **1,090** | **2,259** | - Other income decreased by approximately **52.2%**, primarily due to a reduction in government grants of approximately **RMB 1.1 million** and a decrease in agency service income[72](index=72&type=chunk) [Selling Expenses](index=29&type=section&id=Selling%20Expenses) Despite an increase in revenue, the Group's selling expenses remained stable at approximately **RMB 1.6 million** during the reporting period, similar to the prior year period - Selling expenses primarily include entertainment expenses and employee salaries and benefits for the sales team[73](index=73&type=chunk) - For the six months ended June 30, 2025, selling expenses were approximately **RMB 1.6 million**, similar to the same period in 2024[73](index=73&type=chunk) [Administrative Expenses](index=29&type=section&id=Administrative%20Expenses) Administrative expenses increased by **45.0%** year-on-year to **RMB 33.5 million**, mainly due to increased employee benefits, taxes and levies, depreciation and amortization, professional and consulting fees, and R&D raw materials, driven by product line and operational expansion - Administrative expenses increased by approximately **45.0%** to **RMB 33.5 million**[74](index=74&type=chunk) - The increase in administrative expenses was primarily due to the combined effect of an increase in employee benefits expenses of approximately **RMB 3.0 million**, an increase in taxes and levies of approximately **RMB 0.8 million**, an increase in depreciation and amortization of approximately **RMB 1.3 million**, an increase in professional and consulting fees of approximately **RMB 2.7 million**, and an increase in raw materials used for research and development of approximately **RMB 2.6 million**[75](index=75&type=chunk) [Net Finance Costs](index=29&type=section&id=Net%20Finance%20Costs) Net finance costs decreased by **34.3%** year-on-year to **RMB 2.3 million**, primarily benefiting from the capitalization of borrowing costs of approximately **RMB 1.3 million** for property, plant and equipment during the period - Net finance costs decreased by approximately **34.3%** to **RMB 2.3 million**[76](index=76&type=chunk)[77](index=77&type=chunk) - The decrease was primarily due to the capitalization of borrowing costs of approximately **RMB 1.3 million** for property, plant and equipment during the current period, whereas no such borrowing costs were capitalized in the prior period[77](index=77&type=chunk) [Income Tax Expense](index=30&type=section&id=Income%20Tax%20Expense) Income tax expense increased by **25.9%** year-on-year to **RMB 6.8 million**, but the effective tax rate decreased from **20.9% to 15.9%**, primarily due to an increased proportion of sulfur concentrate sales (enjoying a 10% taxable income reduction) in total revenue and increased R&D costs eligible for super deduction - Income tax expense increased by approximately **25.9%** to **RMB 6.8 million**[81](index=81&type=chunk) - The effective tax rate decreased from **20.9%** in the same period of 2024 to **15.9%** in the same period of 2025[81](index=81&type=chunk) - The decrease in the effective tax rate was primarily due to the increased proportion of sulfur concentrate sales (which enjoy a 10% reduction in taxable income) in total revenue, and increased R&D costs eligible for super deduction[81](index=81&type=chunk) [Capital Expenditure and Commitments](index=31&type=section&id=Capital%20Expenditure%20and%20Commitments) The Group's capital expenditure for the first half of the year was approximately **RMB 80.0 million**, mainly for the acquisition of property, plant and equipment, right-of-use assets, and intangible assets; as of June 30, 2025, capital commitments amounted to approximately **RMB 25.1 million** - For the six months ended June 30, 2025, capital expenditure was approximately **RMB 80.0 million**, primarily including the acquisition of property, plant and equipment, right-of-use assets, and intangible assets[82](index=82&type=chunk) - As of June 30, 2025, capital commitments were approximately **RMB 25.1 million** (December 31, 2024: RMB 47.4 million)[83](index=83&type=chunk) [Pledge of Assets and Contingent Liabilities](index=31&type=section&id=Pledge%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, several of the Group's assets, including land use rights, buildings, machinery, investment properties, and construction in progress, were pledged to secure bank borrowings and finance lease borrowings; no material contingent liabilities or legal proceedings occurred during the reporting period - As of June 30, 2025, assets pledged to secure bank borrowings and finance lease borrowings included land use rights (**RMB 34.7 million**), buildings (**RMB 72.6 million**), machinery (**RMB 61.9 million**), investment properties (**RMB 114.2 million**), and construction in progress (**RMB 3.7 million**)[84](index=84&type=chunk) - As of June 30, 2025, the Group had no material contingent liabilities or significant legal proceedings[85](index=85&type=chunk) [Treasury Policy and Foreign Exchange Risk Management](index=31&type=section&id=Treasury%20Policy%20and%20Foreign%20Exchange%20Risk%20Management) The Group adopts a prudent treasury policy, closely monitoring liquidity risk, and currently has no foreign exchange hedging policy in place as most transactions are denominated and settled in RMB, and HKD-denominated foreign exchange fluctuations are not considered material - The Group adopts a prudent approach to its treasury policy, closely monitoring its liquidity position to ensure sufficient funds for business development needs[86](index=86&type=chunk) - The majority of the Group's transactions are denominated and settled in RMB, and currently, no foreign exchange hedging policy has been established, as the Board considers foreign exchange fluctuations to be immaterial[87](index=87&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=32&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the Group's net current liabilities were approximately **RMB 87.9 million**, with a gearing ratio of **41.6%**; cash and cash equivalents amounted to **RMB 51.2 million**, primarily met through cash generated from operations and listing proceeds, with no significant changes to the capital structure, which comprises only ordinary shares - As of June 30, 2025, net current liabilities were approximately **RMB 87.9 million** (December 31, 2024: RMB 56.8 million)[88](index=88&type=chunk) - The gearing ratio was approximately **41.6%** (December 31, 2024: 47.1%)[88](index=88&type=chunk) - Cash and cash equivalents amounted to approximately **RMB 51.2 million** (December 31, 2024: RMB 65.2 million)[89](index=89&type=chunk) - The Company's capital structure has not undergone any significant changes and comprises only ordinary shares[89](index=89&type=chunk) Other Information [Interim Dividend](index=32&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[90](index=90&type=chunk) [Future Plans for Material Investments or Capital Assets](index=33&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group has no other future plans for material investments or capital assets beyond those disclosed in the prospectus and this announcement - Except for those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus, the "Management Discussion and Analysis" section of this announcement, and the transaction disclosed in the Company's announcement dated January 6, 2022, the Group has no other future plans for material investments or capital assets[91](index=91&type=chunk) [Use of Proceeds from Listing](index=33&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company raised net proceeds of approximately **RMB 177.3 million** from its listing; as of June 30, 2025, most of the funds have been used for establishing new production facilities, strengthening R&D capabilities, and general working capital, with the remaining **RMB 6.1 million** expected to be fully utilized by June 30, 2026 - The Company raised net proceeds of approximately **RMB 177.3 million** from its listing[92](index=92&type=chunk) | Planned Use | Percentage of Total Amount | Net Proceeds Planned (RMB million) | Net Proceeds Utilized as of June 30, 2025 (RMB million) | Net Proceeds Unutilized as of June 30, 2025 (RMB million) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Establishment of New Production Facilities and Expansion of Product Categories | 86.7% | 153.7 | 147.6 | 6.1 | Before June 30, 2026 | | Strengthening Research and Development Capabilities | 3.9% | 6.9 | 6.9 | – | Not Applicable | | General Working Capital Purposes | 9.4% | 16.7 | 16.7 | – | Not Applicable | | **Total** | **100%** | **177.3** | **171.2** | **6.1** | | - The unutilized net proceeds have been deposited into bank accounts as short-term deposits[93](index=93&type=chunk) [Material Investments, Acquisitions, and Disposals](index=34&type=section&id=Material%20Investments%2C%20Acquisitions%2C%20and%20Disposals) During the reporting period, the Group held no material investments and did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group held no material investments and did not undertake any material acquisitions or disposals of any subsidiaries, associates, or joint ventures[94](index=94&type=chunk) [Events After Reporting Period](index=34&type=section&id=Events%20After%20Reporting%20Period) As of the date of this announcement, no other material events affecting the Group have occurred since June 30, 2025 - No other material events affecting the Group occurred from June 30, 2025, to the date of this announcement[95](index=95&type=chunk) [Employees and Remuneration Policy](index=34&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed **418 staff** with staff costs of approximately **RMB 19.7 million**; remuneration policy is determined by market standards, industry compensation, operating performance, and employee performance, with benefits including social insurance and MPF, and no significant labor disputes occurred during the reporting period - As of June 30, 2025, the Group employed **418 staff**, with staff costs of approximately **RMB 19.7 million**[96](index=96&type=chunk) - Employee remuneration policy is determined by factors such as local market remuneration standards, overall industry remuneration standards, market conditions, operating performance, and employee performance[96](index=96&type=chunk) - During the reporting period, the Group did not encounter any significant issues with employees due to labor disputes, nor did it experience any difficulties in recruiting and retaining experienced employees[97](index=97&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[98](index=98&type=chunk) - As of June 30, 2025, the Company held no treasury shares[99](index=99&type=chunk) [Standard Code for Securities Transactions by Directors](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code of conduct for directors' securities transactions no less exacting than the Standard Code set out in Appendix C3 of the Listing Rules of the Stock Exchange, and all directors have confirmed compliance with this code during the reporting period upon specific inquiry - The Company has adopted a code of conduct for directors' securities transactions in the Company's securities, the terms of which are no less exacting than the Standard Code set out in Appendix C3 of the Listing Rules of the Stock Exchange[100](index=100&type=chunk) - Following specific inquiries made to all Directors, they confirmed that they have complied with the required standards set out in the Standard Code and the Company's code of conduct throughout the reporting period[100](index=100&type=chunk) [Corporate Governance Practices](index=36&type=section&id=Corporate%20Governance%20Practices) During the reporting period, the Company adopted the principles and complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, committed to maintaining high standards of corporate governance to safeguard shareholders' interests and enhance corporate value and accountability - During the reporting period, the Company adopted the principles and complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[101](index=101&type=chunk) - The Group is committed to maintaining high standards of corporate governance to safeguard the interests of the Company's shareholders and enhance corporate value and accountability[101](index=101&type=chunk) [Review of Unaudited Financial Statements and Announcement Publication](index=36&type=section&id=Review%20of%20Unaudited%20Financial%20Statements%20and%20Announcement%20Publication) The Company's Audit Committee has reviewed the Group's unaudited interim results for the reporting period; this interim results announcement has been published on the Stock Exchange website and the Company's website, and the interim report will be dispatched to shareholders in due course - The Company's Audit Committee has reviewed the accounting principles and policies adopted by the Company and the Group, as well as the Group's unaudited interim results for the reporting period[102](index=102&type=chunk) - This interim results announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.sdhcgroup.cn)[103](index=103&type=chunk)

Core Viewpoint - Hong Cheng Environmental Technology (02265) anticipates a significant increase in profit and revenue for the six months ending June 30, 2025, driven by rising demand and prices for sulfur concentrate and sulfur products [1] Financial Performance - The company expects to achieve a profit attributable to shareholders of approximately RMB 36.4 million, an increase of about 78.4% compared to RMB 20.4 million for the same period in 2024 [1] - Revenue is projected to be around RMB 133.6 million, reflecting a growth of approximately 27.1% from RMB 105.1 million in 2024 [1] Contributing Factors - The increase in profit and revenue is primarily attributed to: - A rise in the price of sulfur concentrate due to increased demand from industries that require sulfur concentrate as a key raw material [1] - An increase in the price of sulfur, a product obtained through the reprocessing of sulfur concentrate [1] - The gross profit margin is expected to rise from approximately 49.4% for the six months ending June 30, 2024, to about 59.2% for the current period [1]

Core Viewpoint - Hong Cheng Environmental Technology (02265) expects a significant increase in profit and revenue for the six months ending June 30, 2025, driven by rising prices of sulfur concentrate and sulfur products [1] Financial Performance - The company anticipates a profit attributable to shareholders of approximately RMB 36.4 million, an increase of about 78.4% compared to RMB 20.4 million for the same period in 2024 [1] - Expected revenue for the period is approximately RMB 133.6 million, reflecting a growth of about 27.1% from RMB 105.1 million in 2024 [1] Contributing Factors - The increase in profit and revenue is primarily attributed to: 1. Rising prices of sulfur concentrate due to increased demand from industries that require it as a key raw material [1] 2. Higher prices for sulfur, a product obtained through the reprocessing of sulfur concentrate [1] - The gross profit margin improved from approximately 49.4% for the six months ending June 30, 2024, to about 59.2% for the current period [1]

Core Viewpoint - Hong Cheng Environmental Technology (02265.HK) expects to record a profit attributable to shareholders of approximately RMB 36.4 million for the six months ending June 30, 2025, representing an increase of about 78.4% compared to RMB 20.4 million for the same period in 2024 [1] Financial Performance - The company anticipates revenues of approximately RMB 133.6 million, an increase of about 27.1% from RMB 105.1 million in the same period of 2024 [1] - The gross profit margin is expected to rise from approximately 49.4% for the six months ending June 30, 2024, to about 59.2% for the current period [1] Contributing Factors - The increase in profit and revenue is primarily attributed to: 1. The rise in the unit price of sulfur concentrate driven by increased demand from industries that require sulfur concentrate as a key raw material [1] 2. The increase in the unit price of sulfuric acid, a product obtained through the reprocessing of sulfur concentrate [1]

香 港 交易 及 結 算 所 有限 公 司 及 香港 聯 合 交 易 所有 限 公 司 對 本公 告 的 內 容概 不 負 責， 對 其 準 確 性或 完 整 性 亦不 發 表 任 何 聲明 ， 並 明 確 表示 ， 概 不 對因 本 公 告全 部 或 任 何 部份 內 容 而 產生 或 因 倚 賴 該等 內 容 而 引 致的 任 何 損 失承 擔任何責任。 HONGCHENG ENVIRONMENTAL TECHNOLOGY COMPANY LIMITED 鴻 承 環 保 科 技 有 限 公 司 （ 於開曼群島註冊成立的有限公司） （股份代號：2265） 正面盈利預告 本 公 告 乃 鴻 承 環 保 科 技 有 限 公 司（「 本 公 司 」， 連 同 其 附 屬 公 司 統 稱「 本 集 團」）根據香港聯合交易所有限公司證券上市規則（「上市規則」）第13.09 (2) (a) 條及香港法例第571章證券及期貨條例第XIVA部項下之內幕消息條文（ 定義 見上市規則 ）而作出。 本公司董事（「董事」）會（「董事會」）謹此知會本公司股東（「股東」）及潛在投 資 者 ，根 據 對 本 集 團的 未 經 審 核綜 ...

Group 1 - The company, Hong Cheng Environmental Technology (02265.HK), will hold a board meeting on August 29, 2025, to review and approve the interim results for the six months ending June 30, 2025 [1] - The meeting will also consider the proposal for the distribution of an interim dividend, if any [1]

鴻承環保科技有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈， 董 事 會 將 於 二 零 二 五 年 八 月 二 十 九 日（ 星 期 五 ）舉 行 會 議 ， 以 商 討（ 其 中 包 括 ）下列事項： 3. 考慮建議派付中期股息（ 如有 ）； 4. 考慮及批准其他事務（ 如有 ）。 香 港 交易 及 結 算 所 有限 公 司 及 香港 聯 合 交 易 所有 限 公 司 對 本公 告 的 內 容概 不 負 責， 對 其 準 確 性或 完 整 性 亦不 發 表 任 何 聲明 ， 並 明 確 表示 ， 概 不 對因 本 公 告全 部 或 任 何 部份 內 容 而 產生 或 因 倚 賴 該等 內 容 而 引 致的 任 何 損 失承 擔任何責任。 HONGCHENG ENVIRONMENTAL TECHNOLOGY COMPANY LIMITED 鴻 承 環 保 科 技 有 限 公 司 （ 於開曼群島註冊成立的有限公司） （股份代號：2265） 董事會會議通告 1. 考 慮 及 批 准 本 公 司 及 其 附 屬 公 司（ 統 稱「 本 集 團 」）截 至 二 零 二 五 年 六 月 三十日止六個月 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 鴻承環保科技有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 02265 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 200,000,000,000 | HKD | | 0.01 | HKD | | 2,000,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 200,000,000,000 | HKD | | 0.01 | HKD | | 2,000,000,000 | ...

Financial Performance - The Group's annual revenue for 2024 reached approximately RMB 233.9 million, representing an increase of approximately 116.6% compared to the previous year[23]. - Net profit for 2024 increased significantly by approximately 242.9% year-on-year, reaching approximately RMB 60.0 million, demonstrating the effectiveness of the Group's business strategies[23]. - The Group's revenue for the year ended December 31, 2024, reached approximately RMB 233.9 million, representing a year-on-year increase of approximately 116.6%[45]. - The net profit attributable to owners of the Company for the same period was approximately RMB 60.0 million, reflecting a significant year-on-year increase of approximately 242.9%[45]. - The gross profit increased from approximately RMB 59.6 million in 2023 to approximately RMB 131.8 million in 2024, with a gross profit margin of 56.3%, up from 55.2% in the previous year[46]. - The gross profit for the year ended 31 December 2024 was approximately RMB 131.8 million, representing an increase of approximately 121.1% compared to RMB 59.6 million for the year ended 31 December 2023[64]. - The overall gross profit margin increased from approximately 55.2% for the year ended 31 December 2023 to approximately 56.3% for the year ended 31 December 2024[68]. - Revenue from sales of pyrite concentrate and sales of products from the reprocessing of pyrite concentrate recorded year-on-year increases of approximately 94.6% and 1,016.0%, respectively[62]. Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 921.2 million, an increase from RMB 796.7 million in 2023[18]. - Total liabilities as of December 31, 2024, were RMB 378.3 million, compared to RMB 325.5 million in 2023[18]. - Total equity as of December 31, 2024, reached RMB 542.9 million, up from RMB 471.2 million in 2023[18]. - As of December 31, 2024, the Group's net current liabilities were approximately RMB 56.8 million, compared to net current assets of approximately RMB 25.9 million as of December 31, 2023[104]. - The gearing ratio as of December 31, 2024, was approximately 47.1%, slightly up from approximately 46.6% as of December 31, 2023[104]. - Cash and cash equivalents as of December 31, 2024, were approximately RMB 65.2 million, down from approximately RMB 76.1 million as of December 31, 2023[105]. Operational Developments - The Group successfully launched a new production line for the comprehensive utilization of hazardous waste from gold mines, enhancing profitability and market competitiveness[24]. - The launch of reprocessed products of pyrite concentrate marks a significant breakthrough in industrial upgrading for the Group[25]. - The introduction of reprocessing pyrite concentrate to produce sulfuric acid, iron powder, and electricity marks a significant advancement in the Group's operational capabilities[41]. - The sales of reprocessed products from sulfur concentrate, including sulfuric acid, iron powder, and electricity, began to significantly contribute to the Group's revenue during the reporting period, marking a milestone in the industrial chain extension projects[48]. - The Group has made positive progress in the research and development of new products such as amidosulfonic acid and magnesium fertilizers, which will enrich its product portfolio[26]. - The Group achieved phased results in the research and development of new products such as amidosulfonic acid and magnesium fertilizers, utilizing sulfuric acid and steam generated during production as raw materials[48]. Strategic Focus and Sustainability - The Group's strategic focus on extending the industrial chain and promoting resource recycling is expected to support sustainable development in the future[25]. - The Group is committed to sustainable development and has integrated ESG strategies into its operations, focusing on green production and resource optimization[29]. - The Group's strategic focus for 2025 includes promoting green transformation and upgrading while seizing opportunities presented by national development strategies[51]. - The Group's efforts in extending the industrial chain and enhancing product diversity are expected to significantly improve profit stability and support sustainable development goals[49]. - The Group anticipates that the implementation of the "Fourteenth Five-Year Plan" will provide historic development opportunities and enhance its role in the circular economy[31]. Management and Governance - The company has a strong focus on research and development, with Mr. Sheng leading these efforts since joining in December 2012[122]. - The management team has a diverse background in various industries, enhancing the company's strategic decision-making capabilities[117][122][124][129]. - The company emphasizes the importance of independent judgment in its governance structure, with independent non-executive Directors playing key roles[129]. - The company has adopted the principles and complied with the applicable code provisions in the Corporate Governance Code for the year ended December 31, 2024[151]. - The Board consists of six Directors, including three executive Directors and three independent non-executive Directors as of December 31, 2024[161]. - The company has arranged appropriate liability insurance for Directors facing legal actions, which will be reviewed annually[153]. - The company has a clear division of responsibilities among the Board members to ensure well-balanced power and authority[160]. - The Company has adopted a Board Diversity Policy to maintain a balanced mix of experiences and backgrounds among Board members, including expertise in various industries such as metal ore waste processing and environmental management[172][177]. Expenses and Financial Management - Selling expenses for the year ended 31 December 2024 were approximately RMB 2.1 million, representing an increase of approximately 40.0% compared to RMB 1.5 million for the year ended 31 December 2023[70]. - The Group's administrative expenses for the year ended 31 December 2024 were approximately RMB 52.0 million, representing an increase of approximately 41.7% from RMB 36.7 million for the year ended 31 December 2023[75]. - The increase in administrative expenses was primarily due to a RMB 3.1 million rise in salaries and wages related to the commencement of a new production line and R&D projects, and a RMB 3.9 million increase in depreciation of property, plant, and equipment[76]. - The Group's net finance costs for the year ended 31 December 2024 were approximately RMB 5.5 million, a decrease of approximately 27.6% from RMB 7.6 million for the year ended 31 December 2023[77]. - The Group's income tax expense for the year ended 31 December 2024 was approximately RMB 13.5 million, reflecting an increase of approximately 264.9% compared to RMB 3.7 million for the year ended 31 December 2023[85]. - The effective tax rate increased from approximately 17.3% for the year ended 31 December 2023 to approximately 18.4% for the year ended 31 December 2024, mainly due to a smaller portion of revenue from pyrite concentrate sales entitled to a 10% reduction in CIT[86]. Capital Expenditure and Commitments - The Group incurred capital expenditure of approximately RMB 133.6 million for the year ended 31 December 2024, compared to RMB 78.2 million for the year ended 31 December 2023[92]. - As at 31 December 2024, the Group had capital commitments of approximately RMB 47.4 million, an increase from approximately RMB 17.5 million as at 31 December 2023[93]. - The total net book value of assets pledged to secure the Group's borrowings amounted to approximately RMB 25.1 million for land use rights, RMB 74.2 million for buildings, and RMB 73.7 million for machinery as at 31 December 2024[94]. Legal and Compliance - The Group did not have any material contingent liabilities as at December 31, 2024 and is not involved in any material legal proceedings[95]. - The company has a strong focus on production safety and environmental protection, as evidenced by the extensive experience of its senior management team[140][142].

Financial Performance - For the fiscal year ending December 31, 2024, the group's total revenue was approximately RMB 233.9 million, an increase of about 116.6% compared to RMB 108.0 million for the fiscal year ending December 31, 2023[4] - The group's gross profit for the fiscal year ending December 31, 2024, was approximately RMB 131.8 million, representing an increase of about 121.1% from RMB 59.6 million for the fiscal year ending December 31, 2023[4] - The profit attributable to the owners of the company for the fiscal year ending December 31, 2024, was approximately RMB 60.0 million, a significant increase of about 242.9% from RMB 17.5 million for the fiscal year ending December 31, 2023[5] - Basic earnings per share attributable to the owners of the company for the fiscal year ending December 31, 2024, was approximately RMB 0.060, compared to RMB 0.017 for the fiscal year ending December 31, 2023[5] - The company reported operating profit of approximately RMB 78.8 million for the fiscal year ending December 31, 2024, compared to RMB 28.8 million for the fiscal year ending December 31, 2023[7] - The company reported a net profit of RMB 59,772 thousand for the fiscal year ending December 31, 2024, compared to RMB 17,493 thousand in the previous year[26][28] - The total revenue for the company was RMB 233,908,000 in 2024, compared to RMB 107,988,000 in 2023, indicating an increase of approximately 116.5%[30] - The company achieved a milestone in extending its industrial chain with the launch of sulfur concentrate reprocessing products, marking a significant step in its project development[75] Assets and Liabilities - The total assets of the company as of December 31, 2024, amounted to RMB 921.2 million, an increase from RMB 796.7 million as of December 31, 2023[11] - The equity attributable to the owners of the company as of December 31, 2024, was RMB 530.9 million, compared to RMB 471.2 million as of December 31, 2023[11] - As of December 31, 2024, the total liabilities amounted to RMB 378,290,000, an increase from RMB 325,465,000[13] - The total equity and liabilities amounted to RMB 921,193,000, reflecting a growth from RMB 796,655,000[13] - The total liabilities for the hazardous waste treatment segment were RMB 249,685 thousand, and for the sulfur concentrate segment, they were RMB 124,246 thousand, resulting in total liabilities of RMB 378,290 thousand[26] Revenue Segments - For the fiscal year ending December 31, 2024, total segment revenue reached RMB 289,904 thousand, a significant increase from RMB 120,864 thousand in the previous year[26][28] - The segment profit for hazardous waste treatment and recycling was RMB 42,208 thousand, while the sulfur concentrate reprocessing segment reported a profit of RMB 39,085 thousand, contributing to a total profit of RMB 78,788 thousand[26] - Revenue from hazardous waste treatment services for gold mines was RMB 41,506,000 in 2024, compared to RMB 49,373,000 in 2023, representing a decrease of approximately 16.5%[30] - Revenue from the sale of sulfur concentrate increased significantly to RMB 67,663,000 in 2024 from RMB 34,775,000 in 2023, marking an increase of approximately 94.8%[30] - Total revenue from sulfur concentrate and its processed products reached RMB 115,181,000 in 2024, a substantial rise from RMB 10,321,000 in 2023[30] Costs and Expenses - Total costs for the year were RMB 156,208,000 in 2024, significantly higher than RMB 86,562,000 in 2023, indicating an increase of approximately 80.4%[40] - Administrative expenses for the year ending December 31, 2024, were approximately RMB 52.0 million, an increase of about 41.7% compared to approximately RMB 36.7 million for the year ending December 31, 2023[88] - Financing costs netted approximately RMB 5.5 million for the year ending December 31, 2024, a decrease of about 27.6% from approximately RMB 7.6 million for the year ending December 31, 2023[89] - Other income decreased significantly from approximately RMB 5.4 million for the year ending December 31, 2023, to approximately RMB 1.3 million for the year ending December 31, 2024[85] Taxation - The income tax expense for the year ended December 31, 2024, was RMB 13,472 million, significantly higher than RMB 3,653 million in 2023, representing an increase of approximately 269.5%[44] - The company's income tax expense for the year ending December 31, 2024, is approximately RMB 13.5 million, an increase of about 264.9% compared to RMB 3.7 million for the year ending December 31, 2023[92] - The effective tax rate increased from approximately 17.3% for the year ending December 31, 2023, to about 18.4% for the year ending December 31, 2024, primarily due to a lower proportion of revenue from the sale of sulfur concentrate, which enjoys a 10% tax reduction[92] Corporate Governance - The company has adopted corporate governance principles in line with the listing rules to safeguard shareholder interests and enhance corporate value[114] - The company has established an audit committee to ensure compliance with financial reporting and internal control systems as per listing rules[116] - The audit committee consists of three members, with Mr. Liu Zhongwei serving as the chairman, possessing the required professional qualifications[117] - The financial statements for the year ending December 31, 2024, have been reviewed and recommended for approval by the audit committee[117] Future Plans and Investments - The company has not made any significant investments, acquisitions, or disposals of subsidiaries, joint ventures, or associates during the reporting period[108] - The company has no significant future plans for major investments or capital assets beyond those disclosed in previous announcements[104] - The company plans to enhance its technological innovation capabilities and optimize its product structure to drive diversified development and improve resource utilization efficiency[76] - The company expects to further expand its product portfolio and improve profitability stability through the successful implementation of related projects[75]