Group 1 - The mechanical industry showed a strong performance in 2025, with a cumulative increase of 35.07%, outperforming the Shanghai and Shenzhen 300 index (17.94%) and the Shanghai Composite Index (17.99%) [1][17][21] - Emerging sectors such as AI equipment (140%), lithium battery equipment (96%), humanoid robots (67%), and engineering machinery (55%) led the gains in the mechanical industry, indicating significant investment opportunities [1][27][25] - The outlook for 2026 suggests continued growth in AI and technology sectors, with engineering machinery expected to maintain an upward trend and domestic demand gradually recovering from the bottom [1][30][39] Group 2 - Domestic economic conditions are currently experiencing a "weak recovery" phase, with fixed asset investment showing a differentiated pattern: manufacturing > infrastructure > real estate [2][30] - The general manufacturing sector is expected to enter a new investment cycle, driven by improved PPI and inventory levels, with a focus on high-end upgrades and stock replacement [39][46] - The export sector is benefiting from the competitive strength of leading Chinese companies, with a notable increase in orders for high-end machinery from Japan, reflecting the active investment in domestic high-end manufacturing [55][56] Group 3 - The AI-driven technology sector is expected to continue its upward trend, with hardware demand and new process iterations accelerating, particularly in AI PCB technology and humanoid robots [3][30][61] - Solid-state battery technology is at a critical juncture, with leading battery companies expanding production capacity, indicating a significant opportunity for battery equipment manufacturers [3][30][61] - Investment recommendations include focusing on technology growth assets such as AI PCB equipment, humanoid robots, and solid-state battery equipment, as well as engineering machinery and general automation sectors [4][61]

Core Viewpoint - The company is expected to benefit from a recovery in demand for lithium battery outdoor power equipment (OPE) products due to tariff adjustments and a potential increase in end-user demand following interest rate cuts [1][2] Group 1: Short-term Outlook - The impact of tariffs is becoming clearer, and with customer inventory depletion, a replenishment demand is anticipated [1] - The company has shown resilience in operations, with a revenue increase of 11.9% year-on-year to $912 million in the first half of 2025 [1] - The recent adjustment in tariffs, particularly the reduction of the fentanyl tax from 20% to 10%, is expected to improve revenue elasticity [1] Group 2: Long-term Growth Potential - The EGO brand, as a leading player in the lithium battery OPE sector, is well-positioned to benefit from the increasing penetration of lithium battery technology [2] - The company is actively expanding into commercial and riding-style products, as well as innovations like robotic lawn mowers and converting gas-powered equipment to electric, which could open new growth avenues [2] - Profit forecasts remain stable, with expected net profits of $148 million, $174 million, and $201 million for 2025-2027, corresponding to EPS of $0.29, $0.34, and $0.39 [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 29.35 [5][4]. Core Insights - The company is expected to benefit from overseas interest rate cuts, with clear medium to long-term growth prospects. Short-term disruptions from tariffs are becoming clearer, and a subsequent inventory replenishment demand is anticipated, which is expected to boost sales of lithium battery outdoor power equipment (OPE) products [1][2]. - The company has a strong competitive moat in the mid-to-high-end lithium battery OPE sector, with its EGO brand being a leading name in the market. The company is likely to benefit from the increasing penetration of lithium batteries and is actively expanding into commercial and riding-style products, indicating a smooth growth trajectory in the medium to long term [1][3]. Summary by Sections Short-term Outlook - The company has implemented various measures to address tariff disruptions, leading to expected revenue elasticity. Recent adjustments to tariffs, including a reduction in the fentanyl tax rate from 20% to 10%, are seen as marginal improvements. The company has shown resilience in operations, with a revenue increase of 11.9% year-on-year to USD 912 million in the first half of 2025 [2]. Long-term Growth Potential - As a leading global brand in electric tools and lithium battery OPE, EGO has been increasing its market share and deepening user recognition. The trend of rising lithium battery OPE penetration is clear, and the company is expected to maintain robust sales despite short-term disruptions. The expansion into new product lines such as commercial and riding-style products, as well as battery platform extensions, is anticipated to create new growth avenues [3]. Financial Forecast and Valuation - The report maintains its profit forecast, projecting net profits for 2025-2027 to be USD 148 million, USD 174 million, and USD 201 million, respectively. The expected earnings per share (EPS) for the same period are USD 0.29, USD 0.34, and USD 0.39. The target price is based on a 13x price-to-earnings (PE) ratio for 2025, reflecting the company's ongoing ramp-up of overseas production capacity [4][9].

Core Points - The eighth China International Import Expo opened in Shanghai, featuring a special exhibition area for friendly cities, with Nanjing and Stuttgart as the first pair to participate, celebrating 30 years of friendship and cooperation [2][8] - The exhibition theme "Dual City Craftsmanship, Win-Win Future" highlights the achievements in economic, technological, and cultural integration between Nanjing and Stuttgart [2][8] - A trade exchange meeting was held to discuss new cooperation opportunities between the two cities [2] Economic Cooperation - The exhibition showcased various collaborative projects, including Bosch's wine cabinets paired with Stuttgart wines, and smart automotive technologies from both cities [5][12] - Since the establishment of the friendship in 1995, over 300 German investment projects have been set up in Nanjing, with actual German investment reaching $2.2 billion [12] - Nanjing's investment agreements in Germany amount to $730 million, with projected total trade between Nanjing and Germany reaching $4.35 billion in 2024 [12] Cultural Exchange - The exhibition featured a narrative connecting historical and cultural elements, such as the influence of ancient Chinese literature on Stuttgart's garden design [8] - Football jerseys from Stuttgart and Nanjing's "Super League" team were displayed, symbolizing the cultural ties through sports [3][8] - Various cultural activities and products were presented, including digital art exhibitions and traditional festivals, emphasizing the cities' cultural synergy [5][8] Innovation and Technology - The exhibition highlighted collaborative innovations in emerging fields, focusing on shared research capabilities and market network development [5][8] - Bosch China emphasized its role in driving innovation and sustainable development in Nanjing, reflecting the deepening economic and cultural exchanges [10][12]

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10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: 泉峰控股有限公司（於香港註冊成立之有限公司） 呈交日期: 2025年11月3日 I. 法定/註冊股本變動 不適用 FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 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) | 02285 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 511,053,811 | | 0 | | 511,053,811 | | 增加 / 減少 (-) | | | | | | | | | 本月底結存 | | | 511,053,811 | | 0 | | 511,053 ...

Core Insights - The article highlights the short-selling ratios and amounts for several major companies, indicating significant bearish sentiment in the market, particularly for Tencent Holdings and JD.com [1][2]. Short-Selling Ratios - Tencent Holdings-R (80700) and JD.com-SWR (89618) both have a short-selling ratio of 100.00%, indicating complete bearish positions [2]. - SenseTime-WR (80020) follows with a short-selling ratio of 87.56% [1][2]. Short-Selling Amounts - Alibaba-SW (09988) leads in short-selling amount with 1.807 billion, followed by BYD Company (01211) at 1.358 billion, and Tencent Holdings (00700) at 0.977 billion [1][2]. - The short-selling amounts for these companies suggest a high level of investor concern regarding their future performance [1][2]. Deviation Values - Tencent Holdings-R (80700) has the highest deviation value at 51.02%, followed closely by JD.com-SWR (89618) at 50.01% [1][2]. - The deviation values indicate a significant difference between current short-selling ratios and their historical averages, suggesting heightened market volatility for these stocks [1][2].

Summary of Conference Call Records Industry Overview - The hand tools sector is currently at a cyclical low in valuation, with companies like Juxing Technology expected to have a net profit of approximately 3.1 billion RMB in 2026, corresponding to a valuation of about 11 times earnings, indicating medium to long-term investment value [1][2] - The North American real estate cycle is closely linked to the demand for tools, particularly influenced by Federal Reserve interest rates. A decline in interest rates is expected to boost transaction volumes in real estate, subsequently increasing demand for hand and power tools [1][4] Market Dynamics - The global tools market is substantial, estimated at around 110 billion USD, with a fragmented competitive landscape where leading companies hold only 15% market share. Domestic firms like Juxing Technology and Quanfeng Holdings have potential to increase market share by expanding product categories [1][3][6] - The tool industry supply chain shows a progressive increase in profit margins from upstream manufacturers to downstream distributors, with terminal profits being relatively high. The primary demand comes from residential, commercial construction, industrial, and automotive repair sectors, closely tied to real estate and construction market conditions [1][7][8] Demand Influencers - The downstream demand for tools is significantly influenced by the real estate market, with 44% of demand directly linked to housing activities. Historical data shows a strong correlation between real estate sales and the 30-year fixed mortgage rates in the U.S. [8] - The inventory cycle among distributors plays a crucial role in the tool industry. After a period of destocking from 2021 to 2022, a weak replenishment phase is expected to begin post-2024, which could enhance demand as the North American real estate market improves [9] Company Insights - Juxing Technology and Quanfeng Holdings are identified as key players poised to benefit from the upcoming North American real estate recovery, with low current valuations of approximately 12 times and 7-8 times earnings, respectively [5][18] - Juxing Technology has transitioned to an OBM (Own Brand Manufacturer) model, with over 50% of its revenue coming from this segment, while Quanfeng Holdings has an even higher OBM revenue share of 80-90% [15][21] - Both companies are relocating some production to Southeast Asia to mitigate tariff risks, which is expected to attract more orders and expand their product offerings [17] Financial Performance - Juxing Technology's projected profits for 2025 are around 2.7 billion RMB, increasing to approximately 3.3 billion RMB in 2026, with corresponding valuations of 14 times and 12 times earnings [20] - Quanfeng Holdings anticipates net profits of 150 million USD in 2025, rising to between 170 million and 180 million USD in 2026, with a PE ratio of less than 10 times [21] Long-term Outlook - The tool industry presents a significant growth opportunity, with a market space exceeding 100 billion USD and a diverse product range. Companies like Juxing Technology and Quanfeng Holdings are expected to see substantial growth in revenue and market share as the North American market improves [14][18] - The success of companies like Chuangke Industrial, which has effectively navigated the market through strategic decisions and product innovation, serves as a model for domestic firms aiming to replicate similar success [14]

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: 泉峰控股有限公司（於香港註冊成立之有限公司） 呈交日期: 2025年10月8日 I. 法定/註冊股本變動 不適用 FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 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) | 02285 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 511,053,811 | | 0 | | 511,053,811 | | 增加 / 減少 (-) | | | | | | | | | 本月底結存 | | | 511,053,811 | | 0 | | 511,053, ...

[Company Introduction](index=4&type=section&id=Company%20Introduction) The company is a leading global supplier of power tools and outdoor power equipment, focusing on lithium-ion battery technology innovation [Overview](index=4&type=section&id=Overview) Chervon Holdings Limited is a global leader in power tools and outdoor power equipment, driven by lithium-ion battery system technology innovation and a portfolio of renowned brands - The company is a global supplier of power tools and outdoor power equipment (OPE), specializing in lithium-ion battery system technology innovation[6](index=6&type=chunk)[10](index=10&type=chunk) - It owns five differentiated brands: EGO, FLEX, SKIL, DEVON, and X-TRON, covering major regions and market segments[6](index=6&type=chunk)[10](index=10&type=chunk) - Product lines include industrial/professional and consumer power tools, as well as high-end and mass-market OPE products[6](index=6&type=chunk)[10](index=10&type=chunk) [Our Vision](index=4&type=section&id=Our%20Vision) The company's vision is to "make great tools to empower the world" - Vision: Make great tools to empower the world[8](index=8&type=chunk)[12](index=12&type=chunk) [Our Mission](index=4&type=section&id=Our%20Mission) The company's mission is to be an innovation-driven leader in the power tool and OPE industry through continuous innovation, providing superior products to global users in the era of electrification, intelligence, and digitalization - Mission: Through continuous innovation, provide superior products to global users, becoming an innovation-driven leader in the power tool and outdoor power equipment industry in the era of electrification, intelligence, and digitalization[9](index=9&type=chunk)[13](index=13&type=chunk) [Corporate Information](index=5&type=section&id=Corporate%20Information) This section details the company's board, key personnel, and advisors, including recent changes in committee appointments and joint company secretary [Board of Directors and Committees](index=5&type=section&id=Board%20of%20Directors%20and%20Committees) This section outlines the composition of the Board of Directors and its committees, detailing changes in committee appointments effective June 30, 2025 - Mr. Pan Longquan resigned as a member of the Nomination Committee and was appointed as a member of the Remuneration Committee, effective June 30, 2025[15](index=15&type=chunk)[163](index=163&type=chunk) - Ms. Zhang Tong resigned as a member of the Remuneration Committee and was appointed as a member of the Nomination Committee, effective June 30, 2025[15](index=15&type=chunk)[163](index=163&type=chunk) [Key Personnel and Advisors](index=5&type=section&id=Key%20Personnel%20and%20Advisors) This section provides key information on the company's joint company secretaries, authorized representatives, auditor, legal counsel, and other essential corporate details, including recent changes - Ms. Lam Wing Chi resigned as Joint Company Secretary on June 30, 2025, and Ms. Lai Siu Kuen was appointed[16](index=16&type=chunk) - The auditor is KPMG[16](index=16&type=chunk)[17](index=17&type=chunk) - The company's stock code is 2285, listed on The Stock Exchange of Hong Kong Limited, with a listing date of December 30, 2021[19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Summary](index=7&type=section&id=Financial%20Summary) This section provides a high-level overview of the company's financial performance and position, highlighting key results and balance sheet metrics [Results](index=7&type=section&id=Results) For the six months ended June 30, 2025, revenue grew by **11.9%** to **$912.4 million**, gross margin increased by **40 basis points** to **33.3%**, profit for the period surged by **54.6%** to **$95.3 million**, and net cash from operating activities doubled Overview of Results for the Six Months Ended June 30, 2025 | Metric | 2025 (USD '000) | 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | 11.9% | | Gross Margin | 33.3% | 32.9% | +40 bps | | Profit Before Tax | 113,163 | 71,814 | 57.6% | | Profit for the Period | 95,271 | 61,619 | 54.6% | | Adjusted Net Profit | 76,031 | 61,619 | 23.4% | | Net Cash Generated from Operating Activities | 256,652 | 119,138 | 115.4% | | Basic Earnings Per Share (USD) | 0.19 | 0.12 | 58.3% | [Assets, Liabilities and Equity](index=7&type=section&id=Assets%2C%20Liabilities%20and%20Equity) As of June 30, 2025, total assets and liabilities decreased, total equity slightly reduced, while the gearing ratio remained stable Overview of Assets, Liabilities and Equity as of June 30, 2025 | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 1,823,202 | 1,992,297 | -8.5% | | Total Equity | 1,005,237 | 1,036,693 | -3.0% | | Total Liabilities | 817,965 | 955,604 | -14.4% | | Total Equity and Liabilities | 1,823,202 | 1,992,297 | -8.5% | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational and financial performance, strategic initiatives, and future outlook [Business Review and Outlook](index=8&type=section&id=Business%20Review%20and%20Outlook) The Group achieved strong performance with **11.9%** revenue growth to **$912.4 million** and **54.6%** net profit growth, driven by own-brand products, strong EGO gross margins, favorable exchange rates, and a one-off gain from subsidiary disposal, while accelerating capacity transfer to Vietnam - **Revenue** grew by **11.9%** to **$912.4 million** in the first half of 2025, with **net profit** increasing by **54.6%**[25](index=25&type=chunk) - OPE segment revenue increased by **22.8%**, while power tools segment revenue decreased by **2.5%**; OBM business revenue grew by **16.2%**, accounting for **77.5%** of total revenue[26](index=26&type=chunk)[29](index=29&type=chunk) - Gross margin rose by **40 basis points** to **33.3%**, primarily due to an increased sales contribution from high-margin EGO products[27](index=27&type=chunk)[30](index=30&type=chunk) - Approximately **100 new products** were launched during the reporting period, with over **90%** being lithium-ion battery products[28](index=28&type=chunk)[30](index=30&type=chunk) - The Group will accelerate the transfer of production capacity from Nanjing to Vietnam, with a significant increase in Vietnam's capacity expected in the second half of 2025, to mitigate US-China tariff impacts and enhance efficiency[44](index=44&type=chunk)[46](index=46&type=chunk) - The Group remains optimistic about the growth prospects of lithium-ion battery technology and will manage challenges proactively and cautiously[49](index=49&type=chunk)[51](index=51&type=chunk) [Brand Highlights](index=9&type=section&id=Brand%20Highlights) This section details the market performance and strategic advancements of the EGO, FLEX, SKIL, and DEVON brands, highlighting market share growth, technological breakthroughs, and channel expansion - EGO continues to grow its market share, ranking first in multiple product categories, including walk-behind lawn mowers, snow blowers, and ride-on lawn mowers, in the North American lithium-ion OPE market[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - EGO achieved breakthroughs in IoT, AI recognition, visual positioning, and multi-sensor navigation, with smart features to be integrated in 2025 and beyond[37](index=37&type=chunk)[40](index=40&type=chunk) - FLEX was honored as the "Number One Professional Trade Partner" and successfully launched its 24V series in Australia, accelerating lithium-ion platform adoption[38](index=38&type=chunk)[40](index=40&type=chunk) - SKIL's brushless series gained high recognition in Europe and has entered major mainstream retail channels[39](index=39&type=chunk)[41](index=41&type=chunk) - DEVON outperformed the overall market in the high-end segment and received the "Annual Trend New Product Award" from TikTok e-commerce and the "2025 Strategic Lighthouse Award" from JD.com[43](index=43&type=chunk)[45](index=45&type=chunk) [Supply Chain and Manufacturing](index=11&type=section&id=Supply%20Chain%20and%20Manufacturing) The Group is actively reconfiguring its global manufacturing footprint, accelerating capacity transfer from Nanjing to Vietnam to address US-China tariffs and enhance long-term efficiency, while relocating German production to Nanjing for cost reduction - Accelerating the transfer of some production capacity from Nanjing to Vietnam, with a significant increase in Vietnam's capacity expected in the second half of 2025[44](index=44&type=chunk)[46](index=46&type=chunk) - Production at the Steinheim factory in Germany is expected to be relocated to Nanjing by the end of 2025 to reduce manufacturing costs and enhance long-term competitiveness[44](index=44&type=chunk)[46](index=46&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance, covering revenue, gross profit, expenses, taxation, net profit, adjusted net profit, liquidity, financial resources, borrowings, working capital, capital expenditure, capital commitments, and pledged assets Key Financial Data for the First Half of 2025 | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | 11.9% | | Gross Profit | 303,936 | 268,676 | 13.1% | | Gross Margin | 33.3% | 32.9% | +0.4% | | Profit Before Tax | 113,163 | 71,814 | 57.6% | | Profit for the Period | 95,271 | 61,619 | 54.6% | | Net Profit Margin | 10.4% | 7.6% | +2.8% | | Adjusted Net Profit | 76,031 | 61,619 | 23.4% | - Adjusted net profit excludes a one-off gain of **$19.2 million** from the disposal of Chervon (China) Investment[80](index=80&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Revenue by Product Category](index=13&type=section&id=Revenue%20by%20Product%20Category) Outdoor Power Equipment (OPE) product sales revenue increased by **22.8%**, driven by the EGO brand, while power tool sales revenue decreased by **2.5%** due to lower OEM business and a weak Chinese market Revenue by Product Category | Product Category | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | OPE Products | 602,000 | 490,400 | 22.8% | | Power Tools | 305,800 | 313,500 | -2.5% | [Revenue by Geographic Location](index=13&type=section&id=Revenue%20by%20Geographic%20Location) Revenue in North America and Europe grew by **17.9%** and **4.0%** respectively, while revenue in China and other regions decreased by **8.4%** and **13.2%** respectively Revenue by Geographic Location | Region | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | North America | 651,100 | 552,400 | 17.9% | | Europe | 179,200 | 172,300 | 4.0% | | China | 58,700 | 64,100 | -8.4% | | Rest of the World | 23,400 | 27,000 | -13.2% | [Other Net Gain](index=14&type=section&id=Other%20Net%20Gain) Other net gain significantly increased to **$31.3 million** from **$2.3 million** in the prior period, primarily due to **$12.4 million** in net foreign exchange gains and **$19.2 million** from the disposal of a subsidiary Other Net Gain | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Other Net Gain | 31,316 | 2,336 | | Of which: Net Foreign Exchange Gain | 12,400 | -700 | | Of which: Net Gain on Disposal of a Subsidiary | 19,200 | - | [Expenses and Profit](index=14&type=section&id=Expenses%20and%20Profit) Sales and distribution expenses, administrative and other operating expenses, and R&D costs all increased, while net finance costs slightly rose, and share of loss of an associate significantly decreased, collectively driving substantial growth in profit before tax and profit for the period Key Expenses and Profit Changes | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Sales and Distribution Expenses | 129,200 | 106,700 | 21.1% | | Administrative and Other Operating Expenses | 47,300 | 42,300 | 12.0% | | R&D Costs | 40,000 | 37,400 | 6.8% | | Net Finance Costs | 2,700 | 2,000 | 35.0% | | Share of Loss of an Associate | 3,900 | 13,600 | -71.3% | | Income Tax Expense | 17,900 | 10,200 | 75.5% | - Share of loss of an associate significantly decreased, primarily because the equity interest in Chervon Auto Precision Technology is no longer accounted for as an associate after the disposal of Chervon (China) Investment[72](index=72&type=chunk)[76](index=76&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a strong financial position with significantly increased cash and cash equivalents, stable gearing ratio despite slightly higher total borrowings, improved inventory and trade receivables turnover days, and substantially increased capital expenditure and commitments for Vietnam factory expansion Liquidity and Financial Position | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 487,700 | 328,800 | 48.3% | | Total Bank Loans | 311,700 | 295,600 | 5.4% | | Gearing Ratio | 0.3 | 0.3 | 0% | | Inventory Turnover Days | 161 days | 178 days | -17 days | | Trade and Bills Receivables Turnover Days | 83 days | 89 days | -6 days | | Capital Expenditure | 56,300 | 22,100 | 154.7% | | Capital Commitments | 138,300 | 63,700 | 117.1% | | Total Pledged Assets | 143,559 | 46,998 | 205.4% | - Capital expenditure and capital commitments significantly increased, primarily for land acquisition costs and capacity expansion at the Vietnam factory[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - For contingent liabilities, the Group provided guarantees for certain debts of independent third-party customers in mainland China, up to **$21.7 million**[108](index=108&type=chunk)[111](index=111&type=chunk) [Material Acquisitions, Disposals of Subsidiaries and Associates](index=20&type=section&id=Material%20Acquisitions%2C%20Disposals%20of%20Subsidiaries%20and%20Associates) The company disposed of its wholly-owned subsidiary, Chervon (China) Investment Co., Ltd., on June 25, 2025, generating a net gain of **$19.2 million**, resulting in the derecognition of its equity interest in Chervon Auto Precision Technology and a proposed special dividend of **HK$1.1905** per share - The company disposed of its entire equity interest in its wholly-owned subsidiary, Chervon (China) Investment Co., Ltd., for a cash consideration of RMB **570 million** (approximately **$79.5 million** USD)[110](index=110&type=chunk)[113](index=113&type=chunk) - The disposal was completed on June 25, 2025, generating a net gain of **$19.2 million**[62](index=62&type=chunk)[67](index=67&type=chunk)[115](index=115&type=chunk) - Following the disposal, the company's equity interest in Chervon Auto Precision Technology is no longer accounted for as an associate[72](index=72&type=chunk)[76](index=76&type=chunk)[115](index=115&type=chunk) - The Board recommended a special dividend of **HK$1.1905** (approximately **$0.1526** USD) per ordinary share[110](index=110&type=chunk)[113](index=113&type=chunk)[334](index=334&type=chunk) [Major Customers and Suppliers](index=22&type=section&id=Major%20Customers%20and%20Suppliers) During the reporting period, the Group's largest customer and top five customers accounted for **34.3%** and **60.0%** of total revenue respectively, an increase from the prior period, while the largest supplier and top five suppliers accounted for **6.4%** and **13.7%** of total purchases respectively, a decrease from the prior period Customer and Supplier Concentration | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Largest Customer as % of Total Revenue | 34.3% | 30.1% | | Top Five Customers as % of Total Revenue | 60.0% | 57.7% | | Largest Supplier as % of Total Purchases | 6.4% | 14.9% | | Top Five Suppliers as % of Total Purchases | 13.7% | 28.6% | - None of the directors, their associates, or shareholders holding **5%** or more of the company's share capital had any interest in the top five customers or suppliers[126](index=126&type=chunk)[130](index=130&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) As of June 30, 2025, the Group's total employees increased to **6,731**, with total staff costs of **$138.2 million**, while maintaining competitive remuneration, training, and share schemes to attract and retain talent, with a gender ratio of approximately **1.50 to 1** Human Resources Overview | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Employees | 6,731 people | 6,133 people | | Total Staff Costs | 138.2 million USD | 110.0 million USD | - The Group offers competitive remuneration packages, performance bonuses, and long-term incentive plans, along with regular and professional training[132](index=132&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, the employee gender ratio was approximately **1.50 to 1**, which is in line with industry norms, and the Group will strive for a relatively balanced ratio in the future[133](index=133&type=chunk)[134](index=134&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, directors' and shareholders' interests, dividends, and other relevant disclosures [Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures](index=24&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This section discloses the interests of the company's directors and chief executive in shares of the company and its associated corporations as of June 30, 2025, primarily held through controlled corporations, detailing the shareholding percentages of Mr. Pan Longquan, Ms. Zhang Tong, and Mr. Ke Zuqian Directors' Interests in the Company's Shares (as of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Pan Longquan | Interest of Controlled Corporation | 260,226,344 (L) | 50.92% | | Ms. Zhang Tong | Interest of Controlled Corporation | 98,010,850 (L) | 19.18% | | Mr. Ke Zuqian | Interest of Controlled Corporation | 27,118,822 (L) | 5.31% | - As of June 30, 2025, the total number of issued shares was **511,053,811** shares[140](index=140&type=chunk) [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=29&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20in%20Shares%20and%20Underlying%20Shares) This section lists the interests of substantial shareholders and other persons, excluding directors and the chief executive, in the company's shares as of June 30, 2025, including Panmercy, Green Hope, China Minsheng Banking Corp., Ltd., and Klamm Substantial Shareholders' Interests in the Company's Shares (as of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Panmercy | Beneficial Owner | 260,226,344 (L) | 50.92% | | Green Hope | Beneficial Owner | 97,637,750 (L) | 19.18% | | China Minsheng Banking Corp., Ltd. | Interest of Controlled Corporation | 41,940,000 (L) | 8.21% | | Klamm | Beneficial Owner | 27,118,822 (L) | 5.31% | [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[153](index=153&type=chunk)[156](index=156&type=chunk) [Purchase, Sale or Redemption of the Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, except for share purchases under the share award scheme - During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, except for share purchases under the share award scheme[154](index=154&type=chunk)[157](index=157&type=chunk) [Changes to Directors' and Senior Management's Information](index=31&type=section&id=Changes%20to%20Directors%27%20and%20Senior%20Management%27s%20Information) This section discloses changes to directors' information since the publication of the 2024 annual report, primarily concerning adjustments to Mr. Pan Longquan's and Ms. Zhang Tong's roles in the Nomination and Remuneration Committees - Mr. Pan Longquan resigned as a member of the Nomination Committee and was appointed as a member of the Remuneration Committee, effective June 30, 2025[159](index=159&type=chunk)[163](index=163&type=chunk) - Ms. Zhang Tong resigned as a member of the Remuneration Committee and was appointed as a member of the Nomination Committee, effective June 30, 2025[159](index=159&type=chunk)[163](index=163&type=chunk) [Public Float](index=31&type=section&id=Public%20Float) The company has been granted a waiver from strict compliance with the public float requirement by the Stock Exchange, with at least **18.43%** of its issued share capital held by the public as of the reporting date, meeting the minimum public float under the waiver - The company has been granted a waiver from strict compliance with the public float requirement under Note 2 to Rule 8.08(1) of the Listing Rules by the Stock Exchange[160](index=160&type=chunk)[162](index=162&type=chunk) - As of the reporting date, at least **18.43%** of the company's issued share capital was held by the public, meeting the minimum public float required by the waiver[160](index=160&type=chunk)[162](index=162&type=chunk) [2024 Share Scheme](index=32&type=section&id=2024%20Share%20Scheme) The 2024 Share Scheme, adopted on January 29, 2024, aims to align interests, drive performance, and attract and retain talent, with **2,117,600 shares** (approximately **0.4%** of total share capital) purchased by the trustee during the reporting period - The 2024 Share Scheme aims to align the interests of shareholders, the company, and employees, drive performance growth, and improve long-term incentive mechanisms to attract and retain outstanding talent[164](index=164&type=chunk)[167](index=167&type=chunk) - Between June 11 and 19, 2025, the trustee of the 2024 Share Scheme purchased a total of **2,117,600 shares** in the market, representing approximately **0.4%** of the company's total shares[165](index=165&type=chunk)[168](index=168&type=chunk) - As of the reporting date, the total number of shares available for grant under the 2024 Share Scheme was **51,105,381** shares, representing **10%** of the issued shares on the adoption date[164](index=164&type=chunk)[167](index=167&type=chunk) [Event After the Reporting Period](index=33&type=section&id=Event%20After%20the%20Reporting%20Period) No material disclosable events occurred after the reporting period and up to the date of this report, other than those already disclosed - No material events occurred after the reporting period, other than those already disclosed[170](index=170&type=chunk)[174](index=174&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Board has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing accounting principles, internal controls, and financial reporting matters, including the interim financial information for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Dr. Li Minghui (Chairman), Mr. Tian Ming, and Mr. Jiang Li[171](index=171&type=chunk)[175](index=175&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters, including the interim financial information for the six months ended June 30, 2025[172](index=172&type=chunk)[175](index=175&type=chunk) [Independent Review of Auditor](index=33&type=section&id=Independent%20Review%20of%20Auditor) The Group's interim financial report for the six months ended June 30, 2025, is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[173](index=173&type=chunk)[176](index=176&type=chunk) [Corporate Governance Practices](index=34&type=section&id=Corporate%20Governance%20Practices) The company is committed to high corporate governance standards, adopting and complying with the Corporate Governance Code in Appendix C1 of the Listing Rules, with the exception of the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and efficient strategic planning - The company has adopted and complies with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Pan Longquan, which deviates from code provision C.2.1, but the Board believes this arrangement ensures consistent leadership and efficient strategic planning[179](index=179&type=chunk)[181](index=181&type=chunk) - The Board will reassess the division of roles from time to time and may propose to separate the two roles in the future[183](index=183&type=chunk)[184](index=184&type=chunk) [Model Code for Securities Transactions](index=35&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers[185](index=185&type=chunk)[186](index=186&type=chunk) - All directors confirmed compliance with the Model Code during the reporting period, with no instances of non-compliance[185](index=185&type=chunk)[186](index=186&type=chunk) [Independent Auditor's Report](index=36&type=section&id=Independent%20Auditor%27s%20Report) This section presents the independent auditor's review report on the interim financial information, outlining the scope and conclusion of their work [Introduction](index=36&type=section&id=Introduction) KPMG has reviewed Chervon Holdings Limited's interim financial report for the six months ended June 30, 2025, prepared in accordance with Hong Kong Accounting Standard 34, with the Board responsible for its preparation and presentation - KPMG has reviewed the interim financial report for the six months ended June 30, 2025[188](index=188&type=chunk)[191](index=191&type=chunk) - The interim financial report was prepared in accordance with Hong Kong Accounting Standard 34, with the Board responsible for its preparation and presentation[188](index=188&type=chunk)[191](index=191&type=chunk) [Scope of Review](index=36&type=section&id=Scope%20of%20Review) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is substantially less in scope than an audit, thus no audit opinion is expressed, only a conclusion based on the review - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is substantially less in scope than an audit[190](index=190&type=chunk)[193](index=193&type=chunk) - No audit opinion is expressed, only a conclusion based on the review[190](index=190&type=chunk)[193](index=193&type=chunk) [Conclusion](index=37&type=section&id=Conclusion) Based on the review, the auditor found no matters suggesting that the interim financial report as of June 30, 2025, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - The auditor found no matters that lead them to believe the interim financial report as of June 30, 2025, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[195](index=195&type=chunk)[196](index=196&type=chunk) [Consolidated Statement of Profit or Loss](index=38&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the consolidated statement of profit or loss, detailing the company's revenues, expenses, and net profit for the reporting period [Profit or Loss Summary](index=38&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, revenue increased by **11.9%** to **$912.4 million**, gross profit grew by **13.1%** to **$303.9 million**, profit for the period surged by **54.6%** to **$95.3 million**, and basic earnings per share were **$0.19** Key Data from Consolidated Statement of Profit or Loss | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | | Cost of Revenue | (608,501) | (547,069) | | Gross Profit | 303,936 | 268,676 | | Other Income | 1,013 | 2,722 | | Other Net Gain | 31,316 | 2,336 | | Sales and Distribution Expenses | (129,168) | (106,667) | | Administrative and Other Operating Expenses | (47,338) | (42,264) | | R&D Costs | (39,984) | (37,433) | | Operating Profit | 119,775 | 87,370 | | Net Finance Costs | (2,672) | (1,975) | | Share of Loss of an Associate | (3,940) | (13,581) | | Profit Before Tax | 113,163 | 71,814 | | Income Tax Expense | (17,892) | (10,195) | | Profit for the Period | 95,271 | 61,619 | | Basic Earnings Per Share (USD) | 0.19 | 0.12 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=39&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the consolidated statement of profit or loss and other comprehensive income, providing a complete view of the company's financial performance [Comprehensive Income Summary](index=39&type=section&id=Comprehensive%20Income%20Summary) For the six months ended June 30, 2025, profit for the period was **$95.3 million**, other comprehensive income (net of tax) was **$1.0 million**, mainly from exchange differences on translating financial statements of foreign operations, leading to a total comprehensive income of **$96.3 million**, a significant increase from **$40.8 million** in the prior year Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Profit for the Period | 95,271 | 61,619 | | Other Comprehensive Income (net of tax that may be reclassified to profit or loss) | | | | Remeasurement of Net Defined Benefit Liability | 11 | 10 | | Exchange Differences | 1,005 | (20,834) | | Total Comprehensive Income for the Period | 96,287 | 40,795 | - Exchange differences turned from a loss of **$20.8 million** in the first half of 2024 to a gain of **$1.0 million** in the first half of 2025, positively impacting total comprehensive income[201](index=201&type=chunk) [Consolidated Statement of Financial Position](index=40&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section presents the consolidated statement of financial position, providing a snapshot of the company's assets, liabilities, and equity at the reporting date [Financial Position Summary](index=40&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, total assets were **$1,823.2 million**, a decrease from December 31, 2024, with a slight increase in net current assets, total equity of **$1,005.2 million**, and total liabilities of **$818.0 million** Key Data from Consolidated Statement of Financial Position | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 284,868 | 282,495 | | Right-of-Use Assets | 62,142 | 57,511 | | Interests in an Associate | – | 67,348 | | Total Non-current Assets | 437,014 | 478,767 | | **Current Assets** | | | | Inventories | 479,065 | 608,304 | | Trade and Bills Receivables | 356,646 | 489,473 | | Cash and Cash Equivalents | 487,686 | 328,758 | | Total Current Assets | 1,386,188 | 1,513,530 | | **Current Liabilities** | | | | Bank Loans | 194,318 | 192,619 | | Trade and Bills Payables | 170,375 | 317,942 | | Total Current Liabilities | 644,021 | 782,968 | | **Non-current Liabilities** | | | | Bank Loans | 117,398 | 102,935 | | Total Non-current Liabilities | 173,944 | 172,636 | | **Total Equity** | | | | Total Equity | 1,005,237 | 1,036,693 | - Interests in an associate decreased to zero, reflecting the impact of the disposal of Chervon (China) Investment Co., Ltd[203](index=203&type=chunk) - Cash and cash equivalents significantly increased, while inventories and trade and bills receivables notably decreased[203](index=203&type=chunk) [Consolidated Statement of Changes in Equity](index=43&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the consolidated statement of changes in equity, illustrating movements in the company's equity components over the reporting period [Equity Changes Summary](index=43&type=section&id=Equity%20Changes%20Summary) For the six months ended June 30, 2025, total equity decreased from **$1,036.7 million** to **$1,005.2 million**, with a net reduction primarily due to **$118.7 million** in dividends paid, **$4.0 million** for share purchases under the share award scheme, and **$3.8 million** from the disposal of an associate Key Data from Consolidated Statement of Changes in Equity | Metric | H1 2025 (USD '000) | | :--- | :--- | | Balance at January 1 | 1,036,693 | | Profit for the Period | 95,271 | | Other Comprehensive Income | 1,016 | | Total Comprehensive Income | 96,287 | | Appropriation of Dividends | (118,717) | | Purchase of Shares for Share Award Scheme | (4,049) | | Share of Other Reserves of an Associate | (1,135) | | Disposal of Interest in an Associate | (3,842) | | Balance at June 30 | 1,005,237 | - Dividends paid during the period totaled **$118.7 million**, including a final dividend of **$40.9 million** and a special dividend of **$78.0 million**[214](index=214&type=chunk)[334](index=334&type=chunk) - **$4.0 million** was paid for the purchase of shares under the share award scheme[214](index=214&type=chunk)[339](index=339&type=chunk) [Condensed Consolidated Cash Flow Statement](index=46&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) This section presents the condensed consolidated cash flow statement, summarizing the cash inflows and outflows from operating, investing, and financing activities [Cash Flow Summary](index=46&type=section&id=Cash%20Flow%20Summary) For the six months ended June 30, 2025, net cash from operating activities surged by **115.4%** to **$256.7 million**, investing activities generated **$19.2 million** net cash, primarily from subsidiary and financial asset disposals, while financing activities used **$118.6 million** net cash, mainly for dividends and share purchases, increasing period-end cash and cash equivalents to **$487.7 million** Key Data from Condensed Consolidated Cash Flow Statement | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 256,652 | 119,138 | | Net Cash Generated from/(Used in) Investing Activities | 19,234 | (22,309) | | Net Cash Used in Financing Activities | (118,632) | (4,439) | | Net Increase in Cash and Cash Equivalents | 157,254 | 92,390 | | Cash and Cash Equivalents at End of Period | 487,686 | 387,090 | - Net cash generated from operating activities significantly increased by **115.4%**, indicating improved operational efficiency[216](index=216&type=chunk) - Investing activities shifted from a net outflow last year to a net inflow, primarily due to proceeds of **$78.5 million** from the disposal of a subsidiary[216](index=216&type=chunk) - Cash outflow from financing activities significantly increased, mainly due to **$118.7 million** in dividends paid[219](index=219&type=chunk) [Notes to the Unaudited Interim Financial Report](index=48&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed explanatory notes to the unaudited interim financial report, offering further insights into the company's financial figures and accounting policies [General Information](index=48&type=section&id=General%20Information) Chervon Holdings Limited was incorporated in Hong Kong on February 19, 1999, listed on the Main Board of the HKEX on December 30, 2021, and primarily engages in R&D, manufacturing, testing, sales, and after-sales services for power tools, OPE, and related products - The company was incorporated in Hong Kong on February 19, 1999, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 30, 2021[221](index=221&type=chunk)[226](index=226&type=chunk) - The Group primarily engages in the research and development, manufacturing, testing, sales, and after-sales services of power tools, outdoor power equipment, and related products[222](index=222&type=chunk)[226](index=226&type=chunk) [Basis of Preparation](index=48&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with applicable disclosure requirements of the HKEX Listing Rules and Hong Kong Accounting Standard 34, authorized for issue, and reviewed by KPMG - This interim financial report was prepared in accordance with Hong Kong Accounting Standard 34 and authorized for issue on August 28, 2025[223](index=223&type=chunk)[227](index=227&type=chunk) - The report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[230](index=230&type=chunk)[233](index=233&type=chunk) [Changes in Accounting Policies](index=50&type=section&id=Changes%20in%20Accounting%20Policies) The Group applied amendments to HKAS 21, "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," which had no material impact due to the absence of relevant foreign currency transactions, and has not yet applied any new standards or interpretations not yet effective - The Group has applied amendments to HKAS 21, "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," but it had no material impact[235](index=235&type=chunk)[238](index=238&type=chunk) - The Group has not yet applied any new standards or interpretations that are not yet effective[236](index=236&type=chunk)[239](index=239&type=chunk) [Revenue and Segment Reporting](index=50&type=section&id=Revenue%20and%20Segment%20Reporting) This section details the Group's revenue by major business line and geographic location, along with gross profit for each reporting segment, highlighting significant growth in outdoor power equipment revenue and strong contributions from North American and European markets Revenue by Major Product Category | Product Category | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Sales of Power Tools | 305,760 | 313,500 | | Sales of Outdoor Power Equipment | 601,999 | 490,421 | | Others | 4,678 | 11,824 | | Total | 912,437 | 815,745 | Revenue by Geographic Location | Region | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | North America | 651,087 | 552,372 | | Europe | 179,233 | 172,296 | | China | 58,693 | 64,091 | | Rest of the World | 23,424 | 26,986 | | Total | 912,437 | 815,745 | - The Group's reporting segments include power tools, outdoor power equipment, and other businesses involving sales of components to home appliance companies[248](index=248&type=chunk) [Other Revenue and Other Net Gain/(Loss)](index=57&type=section&id=Other%20Revenue%20and%20Other%20Net%20Gain%2F%28Loss%29) Other revenue decreased from **$2.7 million** to **$1.0 million** due to reduced scrap sales, while other net gain significantly increased from **$2.3 million** to **$31.3 million**, driven by **$12.4 million** in net foreign exchange gains and **$19.2 million** from the disposal of a subsidiary Other Revenue | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Government Grants | 644 | 382 | | Sales of Scrap Materials | 179 | 2,146 | | Rental Income | 190 | 194 | | Total | 1,013 | 2,722 | Other Net Gain | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Net Foreign Exchange Gain/(Loss) | 12,372 | (741) | | Net Gain on Disposal of a Subsidiary | 19,240 | – | | Total | 31,316 | 2,336 | - A net gain of **$19.2 million** was recognized from the disposal of Chervon (China) Investment Co., Ltd[270](index=270&type=chunk) [Profit Before Taxation](index=59&type=section&id=Profit%20Before%20Taxation) Profit before taxation significantly increased to **$113.2 million** from **$71.8 million** in the prior period, with this section detailing net finance costs and other profit-impacting items such as depreciation, amortization, and inventory write-down provisions Net Finance Costs | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | (2,565) | (3,683) | | Interest on Bank Loans | 4,632 | 5,593 | | Interest on Lease Liabilities | 605 | 65 | | Net Finance Costs | 2,672 | 1,975 | Other Items Affecting Profit | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Depreciation Expense | 32,325 | 22,305 | | Amortisation of Intangible Assets | 125 | 148 | | Provision for Write-down of Inventories | 8,549 | 320 | | Cost of Inventories Sold | 608,501 | 547,069 | [Income Tax](index=60&type=section&id=Income%20Tax) Income tax expense for the period was **$17.9 million**, a **75.5%** increase from the prior period, with an effective tax rate of **15.8%**, reflecting the application of domestic minimum top-up tax in certain countries since January 1, 2024, and the anticipated application of Pillar Two income tax in Hong Kong and mainland China from January 1, 2025 Income Tax Expense | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Mainland China Corporate Income Tax | 2,423 | 6,144 | | Hong Kong Profits Tax | 14,437 | – | | Tax Jurisdictions Outside Mainland China and Hong Kong | 2,421 | 5,653 | | Deferred Tax | (1,389) | (1,602) | | Total Income Tax Expense | 17,892 | 10,195 | - The effective tax rate for the first half of 2025 was **15.8%**, compared to **14.2%** for the same period in 2024[74](index=74&type=chunk) - From January 1, 2024, the Group's profits in Vietnam, Canada, the UK, and certain European countries are subject to domestic minimum top-up tax[284](index=284&type=chunk)[289](index=289&type=chunk) - From January 1, 2025, the Group's profits in the Hong Kong Special Administrative Region and mainland China will also be subject to Pillar Two income tax under the Hong Kong Inland Revenue (Amendment) Ordinance 2025[285](index=285&type=chunk)[289](index=289&type=chunk) [Earnings Per Share](index=61&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share increased by **58.3%** to **$0.19** from **$0.12** in the prior period, with diluted earnings per share being equal to basic earnings per share due to the absence of potential dilutive ordinary shares Earnings Per Share | Metric | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.19 | 0.12 | | Diluted Earnings Per Share | 0.19 | 0.12 | - Basic earnings per share are calculated based on profit attributable to ordinary equity shareholders of **$95.2 million** and a weighted average of **509,775,827** ordinary shares[287](index=287&type=chunk)[291](index=291&type=chunk) - There were no potential dilutive ordinary shares for the six months ended June 30, 2025, and 2024, thus diluted earnings per share equal basic earnings per share[288](index=288&type=chunk)[292](index=292&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=62&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) During the reporting period, the Group acquired **$32.2 million** in property, plant, and equipment, disposed of **$1.5 million** net book value of related assets, and increased right-of-use assets by **$8.6 million** due to new capitalized lease payments, with certain property, plant, and equipment and leasehold land pledged as collateral for bank loans as of June 30, 2025 Changes in Property, Plant and Equipment and Right-of-Use Assets | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 32,165 | 23,201 | | Net Book Value of Property, Plant and Equipment Disposed Of | 1,539 | 2,374 | | Additions to Right-of-Use Assets | 8,608 | 3,859 | - As of June 30, 2025, property, plant and equipment with a net book value of **$85.4 million** and leasehold land of **$43.4 million** were pledged as collateral for bank loans[295](index=295&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=63&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to **$14.1 million**, comprising **$6.7 million** in non-current insurance products and **$7.4 million** in current structured deposits and wealth management products Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Insurance Products (Non-current) | 6,704 | 6,586 | | Structured Deposits and Wealth Management Products (Current) | 7,404 | – | | Total | 14,108 | 6,586 | - Current financial assets primarily consist of structured deposits and wealth management products issued by banks[301](index=301&type=chunk)[303](index=303&type=chunk) [Inventories](index=64&type=section&id=Inventories) As of June 30, 2025, the Group's inventories decreased to **$479.1 million** from **$608.3 million** on December 31, 2024, with **$8.5 million** in inventory write-down provisions and **$2.5 million** in inventory write-offs recognized during the period Composition of Inventories | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Raw Materials | 136,736 | 187,557 | | Consumables | 4,086 | 3,941 | | Work in Progress | 10,229 | 16,167 | | Finished Goods | 368,833 | 435,453 | | Write-down of Inventories | (40,819) | (34,814) | | Total | 479,065 | 608,304 | - During the six months ended June 30, 2025, **$8.5 million** in inventory write-down provisions and **$2.5 million** in inventory write-offs were recognized[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) [Trade and Bills Receivables](index=65&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables significantly decreased to **$356.6 million** from **$489.5 million** on December 31, 2024, with all receivables expected to be recovered within one year and an improved turnover period of **83 days** Trade and Bills Receivables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Measured at Amortised Cost | 355,157 | 484,735 | | Measured at Fair Value Through Other Comprehensive Income | 1,489 | 4,738 | | Total | 356,646 | 489,473 | Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Within 6 Months | 351,131 | 480,763 | | Over 6 Months but Within 12 Months | 3,542 | 3,414 | | Over 12 Months | 484 | 558 | | Total | 355,157 | 484,735 | - Trade and bills receivables turnover days improved to **83 days** from **89 days** in the same period of 2024[95](index=95&type=chunk)[98](index=98&type=chunk) [Prepayments, Deposits and Other Receivables](index=67&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, current prepayments, deposits, and other receivables totaled **$24.6 million**, while non-current amounted to **$27.1 million**, primarily comprising **$21.8 million** in prepayments for leasehold land Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | **Current** | | | | Recoverable VAT | 8,698 | 15,068 | | Prepayments for Materials and Expenses | 6,572 | 16,289 | | Other Deposits and Receivables | 7,068 | 4,505 | | Total Current | 24,604 | 42,122 | | **Non-current** | | | | Prepayments for Leasehold Land | 21,840 | – | | Total Non-current | 27,138 | 7,824 | - Non-current prepayments for leasehold land increased from zero on December 31, 2024, to **$21.8 million**[316](index=316&type=chunk) [Cash and Cash Equivalents and Pledged Deposits](index=68&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) As of June 30, 2025, cash and cash equivalents totaled **$487.7 million**, with **$411.0 million** located in mainland China, and pledged deposits amounted to **$17.3 million**, primarily for issuing bank financing Cash and Cash Equivalents | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Cash at Bank | 487,619 | 328,688 | | Cash on Hand | 67 | 70 | | Total | 487,686 | 328,758 | - As of the reporting period end, cash and cash equivalents located in mainland China amounted to **$411.0 million**, with fund remittances subject to foreign exchange control regulations[319](index=319&type=chunk) Pledged Deposits | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Issuance of Bills Payable | 2,585 | 4,765 | | Granting of Bank Facilities | 14,688 | 15,424 | | Total | 17,273 | 20,189 | [Bank Loans](index=69&type=section&id=Bank%20Loans) As of June 30, 2025, the Group's total bank loans were **$311.7 million**, with **$194.3 million** due within one year or repayable on demand, primarily denominated in RMB, and split **58.2%** fixed-rate and **41.8%** floating-rate Bank Loan Maturity Profile | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Short-term Bank Loans | 144,777 | 126,599 | | Current Portion of Long-term Bank Loans | 49,541 | 66,020 | | Within 1 Year or On Demand | 194,318 | 192,619 | | After 1 Year but Within 2 Years | 117,398 | 102,935 | | Total | 311,716 | 295,554 | Bank Loan Collateral and Guarantee Status | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Secured | 39,841 | 34,546 | | Secured and Guaranteed | 126,561 | 131,879 | | Guaranteed | 78,212 | 87,488 | | Unsecured and Unguaranteed | 67,102 | 41,641 | | Total | 311,716 | 295,554 | [Trade and Bills Payables](index=70&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables significantly decreased to **$170.4 million** from **$317.9 million** on December 31, 2024, with all payables expected to be settled within one year or on demand Trade and Bills Payables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Trade Payables | 155,072 | 294,758 | | Bills Payable | 15,303 | 23,184 | | Total | 170,375 | 317,942 | Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Within 3 Months | 169,928 | 253,734 | | Over 3 Months but Within 12 Months | 447 | 64,208 | | Total | 170,375 | 317,942 | [Other Payables and Accruals](index=71&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, total other payables and accruals were **$193.3 million**, largely consistent with **$196.6 million** on December 31, 2024, primarily comprising marketing and advertising expenses, salaries, wages, bonuses, and benefits Other Payables and Accruals | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Other Payables and Accrued Expenses | 148,166 | 132,312 | | Accrued Salaries, Wages, Bonuses and Benefits | 21,177 | 38,642 | | Payables for Acquisition of Property, Plant and Equipment | 3,166 | 8,190 | | Other Taxes Payable | 20,482 | 17,109 | | Total | 193,304 | 196,600 | [Capital, Reserves and Dividends](index=72&type=section&id=Capital%2C%20Reserves%20and%20Dividends) During the reporting period, the company declared and approved **$118.7 million** in total dividends, comprising final and special dividends, while the Board resolved not to declare an interim dividend for the six months ended June 30, 2025, and the trustee purchased **2,117,600 shares** for the 2024 Share Scheme Dividends Declared and Approved | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Final Dividend for Prior Financial Year | 40,987 | 18,091 | | Special Dividend for Prior Financial Year | 77,986 | – | | Less: Dividends on Repurchased Shares Held by the Company | (256) | – | | Total | 118,717 | 18,091 | - The Board does not recommend an interim dividend for the six months ended June 30, 2025, and 2024[335](index=335&type=chunk) - For the 2024 Share Scheme, the trustee purchased **2,117,600 shares** in the market between June 11 and 19, 2025, for a total of **$4.0 million**, fully appropriated from retained profits[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) [Material Related Party Transactions](index=74&type=section&id=Material%20Related%20Party%20Transactions) This section discloses material related party transactions, including lease payments, payments on behalf of, and receivables with Nanjing Chervon Auto Precision Technology Co., Ltd., the disposal of a subsidiary to Chervon Precision Technology Holdings Limited, and guarantees provided by Chervon (China) Investment Co., Ltd. for certain bank loans Material Related Party Transactions | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Lease Payments from Nanjing Chervon Auto Precision Technology Co., Ltd. | 180 | 182 | | Payments Made on Behalf of a Related Party (Nanjing Chervon Auto Precision Technology Co., Ltd.) | 475 | 551 | | Disposal of a Subsidiary to Chervon Precision Technology Holdings Limited | 79,533 | – | - As of June 30, 2025, Chervon (China) Investment Co., Ltd. provided guarantees for **$203.4 million** of the Group's bank loans and pledged its equity interest in Nanjing Chervon Auto Precision Technology Co., Ltd[347](index=347&type=chunk)[349](index=349&type=chunk) [Fair Value Measurement of Financial Instruments](index=75&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) This section provides fair value measurement information for the Group's financial instruments, classified into three fair value hierarchy levels as defined by HKFRS 13, primarily including financial assets at fair value through profit or loss (insurance products, structured deposits, and wealth management products) and derivative financial instruments (foreign currency forward contracts, option contracts, and swap contracts) Recurring Fair Value Measurements (as of June 30, 2025) | Item | Fair Value (USD '000) | Level 1 (USD '000) | Level 2 (USD '000) | Level 3 (USD '000) | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets at Fair Value Through Profit or Loss** | | | | | | Insurance Products | 6,704 | – | – | 6,704 | | Structured Deposits and Wealth Management Products | 7,404 | – | – | 7,404 | | **Derivative Financial Instruments (Assets)** | | | | | | Foreign Currency Forward Contracts | 2,531 | – | 2,531 | – | | Foreign Currency Option Contracts | 50 | – | 50 | – | | Foreign Exchange Swap Contracts | 2,141 | – | 2,141 | – | | **Derivative Financial Instruments (Liabilities)** | | | | | | Foreign Currency Forward Contracts | (2,255) | – | (2,255) | – | | Foreign Exchange Swap Contracts | (344) | – | (344) | – | | Trade Receivables | 1,489 | – | – | 1,489 | - Level 2 fair value measurements primarily use the difference between discounted contract forward prices and current forward prices, considering relevant government yield curves and credit spreads[356](index=356&type=chunk)[358](index=358&type=chunk) - Level 3 fair value measurements, such as insurance products, structured deposits and wealth management products, and trade receivables, primarily use cash value or discounted cash flow valuation techniques, positively correlated with expected rates of return[362](index=362&type=chunk)[363](index=363&type=chunk) [Commitments](index=81&type=section&id=Commitments) As of June 30, 2025, the Group's total capital commitments significantly increased to **$138.3 million** from **$63.7 million** on December 31, 2024, primarily for the construction of plant and buildings and acquisition of machinery and equipment, with most authorized but not yet contracted Capital Commitments | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Contracted | 17,048 | 28,290 | | Authorized but Not Contracted | 121,261 | 35,408 | | Total | 138,309 | 63,698 | | Of which: Construction of Plant and Buildings | 137,276 | 62,540 | | Of which: Acquisition of Machinery and Equipment | 1,033 | 1,158 | - Capital commitments significantly increased, primarily for the expansion of the Vietnam factory[102](index=102&type=chunk)[104](index=104&type=chunk) [Contingent Liabilities](index=82&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided guarantees to financial institutions for certain debts of independent third-party customers in mainland China, with a maximum guarantee amount of **$21.7 million** and guarantees issued totaling **$5.2 million** Guarantees Provided to Customers | Bank | Maximum Guarantee Amount as of June 30, 2025 (USD '000) | Guarantees Issued as of June 30, 2025 (USD '000) | | :--- | :--- | :--- | | Bank A | 7,683 | 596 | | Bank B | 13,969 | 4,621 | | Total | 21,652 | 5,217 | - The Group provided guarantees to financial institutions for certain debts of independent third-party customers in mainland China, with the maximum risk limited to the financing granted to individual customers[370](index=370&type=chunk)

Dear Non-Registered Shareholder(1) , Chervon Holdings Limited (the "Company") – Notification of publication of 2025 Interim Report (the "Current Corporate Communications") Chervon Holdings Limited 泉峰控股有限公司 (Incorporated in Hong Kong with limited liability) （於香港註冊成立之有限公司） (Stock Code：2285) (股份代號: 2285) NOTIFICATION LETTER 通知信函 24 September 2025 請注意，當 閣下填寫及寄回申請表格以索取本次公司通訊之印刷本後，即表示確認 閣下收取印刷本之指示將適用於本公司今後所有之公司通訊(2)，直至 閣下 通知本公司之股份過戶登記處另外之安排或停止持有本公司的股份。 The Current Corporate Communication of the Company, in both E ...