Core Insights - On September 5, shareholders of Zhongshen Jianye (02503) transferred shares from Beta International Securities to Bank of China (Hong Kong), with a transfer value of HKD 145 million, accounting for 9.80% of the total shares [1] Company Performance - Zhongshen Jianye, acting as a general contractor or subcontractor, is involved in overall project coordination and management, providing various construction services including construction engineering, municipal public works, foundation engineering, and specialized contracting [1] - The company reported a revenue of HKD 201 million for the first half of 2025, representing a year-on-year decrease of 46.9% [1] - The company recorded a loss attributable to shareholders of HKD 11.81 million, compared to a profit of HKD 335,000 in the same period last year [1] - The decline in revenue is primarily attributed to a reduction in construction project activities during the reporting period [1]

Key Points - A total of 83 stocks reached a 52-week high as of September 5, with notable performers including Ding Shi Capital (02940), GCL-Poly Energy (00451), and Pearl River Steel Pipe (01938) [1] - Ding Shi Capital achieved a high rate of 96.72%, closing at 0.790 and peaking at 1.200 [1] - GCL-Poly Energy and Pearl River Steel Pipe followed with high rates of 28.57% and 27.91%, respectively [1] 52-Week High Rankings - The top three stocks by high rate are: - Ding Shi Capital (02940): 96.72% [1] - GCL-Poly Energy (00451): 28.57% [1] - Pearl River Steel Pipe (01938): 27.91% [1] - Other notable stocks include: - Kinetic Holdings (01215): 25.00% [1] - Chengzhi Holdings (01741): 23.40% [1] - Capital Financial Holdings (08239): 20.00% [1] 52-Week Low Rankings - The stocks that reached a 52-week low include: - Wanma Holdings (02935): -20.00% [3] - Zhongshen Jianye (02503): -12.26% [3] - Yuzhou Group (01628): -11.76% [3] - Other significant declines include: - Likao Group (01622): -10.11% [3] - Riscon Group (02941): -5.00% [3] - Baile Palace (02536): -4.15% [3]

Core Viewpoint - The stock price of Zhongshen Jianye experienced a dramatic decline after initially rising over 3%, dropping more than 76% during trading, indicating significant volatility and investor concern regarding the company's financial performance [1][3]. Company Overview - Zhongshen Jianye is the first construction general contracting company listed on the Hong Kong Stock Exchange in the Guangdong-Hong Kong-Macao Greater Bay Area, holding 16 qualifications including "double first-class" for construction and municipal public engineering [3]. - The company has been listed among Shenzhen's top 500 enterprises for five consecutive years [3]. Financial Performance - In the recently released 2025 interim report, Zhongshen Jianye reported revenues of 201 million yuan, a decrease of 46.9% year-on-year, and a loss attributable to shareholders of 11.81 million yuan, compared to a profit of 335,000 yuan in the same period last year, marking a significant shift from profit to loss [3]. - The company attributed the loss primarily to a reduction in the number of construction projects compared to the previous year, leading to decreased revenue, as well as impairment losses on trade and other receivables and contract assets, whereas the previous year had a reversal of impairment losses [3]. Recent Stock Activity - In July, Zhongshen Jianye's stock price surged from 0.71 HKD to a peak of 2 HKD within six days, representing an increase of over 181% [5]. - The stock price experienced a sharp decline, with a drop to 0.465 HKD during trading, reflecting a loss of over 76% from its peak [1][5].

Group 1: Market Overview - The Hang Seng Index rose by 0.62%, while the Hang Seng Tech Index increased by 0.82%, with a total turnover of HKD 124.6 billion in the morning session [1] - The Hang Seng Biotechnology Index surged by 3.1%, driven by optimism in the innovative drug sector ahead of the 2025 World Lung Cancer Conference, indicating potential for valuation recovery [1] Group 2: Company Performances - Three-Six Pharmaceutical (01530) saw a significant increase of 9.6% [1] - Hengrui Medicine-B (02142) rose by 5.82% [1] - Hutchison China MediTech (00013) increased by 6% [1] - United Laboratories (03933) gained 5% [1] - WuXi Biologics (02269) rose by 4.17% [1] Group 3: Other Notable Stocks - Chow Tai Fook (06168) surged over 13% as the gold consumption market enters a peak season, with expectations of inclusion in the Hong Kong Stock Connect [2] - FunPlus (09890) increased by over 5% after completing a name change and upgrading its overseas brand integration, with a higher proportion of overseas revenue in the first half [2] - Lehua Entertainment (02306) rose by 16%, with a nearly 90% year-on-year increase in interim profit attributable to shareholders, expanding monetization channels for its trendy IP [3] - UBTECH Robotics (09880) increased by 3%, with humanoid robot orders reaching CNY 400 million and securing a USD 1 billion strategic investment from a Middle Eastern fund [4] - Mobi Development (01860) surged over 12%, hitting a historical high with a cumulative increase of over 110% this year [5] - Goldwind Technology (02208) rose over 10%, reaching a new high as the wind power sector experiences accelerated growth, leading the industry in gross margin improvement [5] - Zhongshen Jianye (02503) experienced a significant drop, falling over 74% to a historical low, with a loss of CNY 11.81 million in the first half [5]

Core Viewpoint - Zhongshen Jianye (02503) experienced a significant drop in stock price, falling over 74% to reach a historical low after a previous six-day increase of 70% [1] Company Performance - The company reported a revenue of 201 million HKD for the mid-term of 2025, representing a year-on-year decrease of 46.9% [1] - The loss attributable to the company's owners was 11.81 million HKD, compared to a profit of 335,000 HKD in the same period last year [1] - The decline in revenue is primarily attributed to a reduction in construction project activities during the reporting period [1]

Core Viewpoint - Zhongshen Jianye (02503) experienced a significant drop in stock price, falling over 74% to reach a historical low after a substantial increase of 70% over the previous six trading days [1] Company Performance - The company reported a revenue of 201 million yuan for the mid-term of 2025, representing a year-on-year decrease of 46.9% [1] - The loss attributable to the company's owners was 11.81 million yuan, compared to a profit of 335,000 yuan in the same period last year [1] - The decline in revenue is primarily attributed to a reduction in construction project activities during the reporting period [1] Market Activity - As of the latest update, the stock was trading at 0.57 HKD with a trading volume of 117 million HKD [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中深建業控股有限公司 呈交日期: 2025年9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) | 02503 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 2,000,000,000 | HKD | | 0.01 | HKD | | 20,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 2,000,000,000 | HKD | | 0.01 | HKD | | 20,000,000 | 本月底法定/註冊股本 ...

Core Points - The company reported a revenue of 201 million, representing a year-on-year decrease of 46.9% [1] - The loss attributable to the company's owners was 11.81 million, compared to a profit of 335 thousand in the same period last year [1] - The basic loss per share was 1.98 cents [1] - The decrease in revenue was primarily due to a reduction in engineering construction projects during the period [1]

[Financial Summary](index=1&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, the company reported significant declines in revenue and gross profit, shifting from profit to loss, with net assets increasing by 7.4% from year-end 2024 Key Financial Performance Indicators for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (RMB Million) | June 30, 2024 (RMB Million) | Change (RMB Million) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 201.3 | 379.0 | (177.7) | -46.9% | | Gross Profit | 11.8 | 21.7 | (9.9) | -45.6% | | Profit/Loss for the Period | (11.8) (Loss) | 0.3 (Profit) | (12.1) | Shift from profit to loss | | Net Assets (Period-end) | 511.4 | 476.0 (December 31, 2024) | 35.4 | +7.4% | - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024[4](index=4&type=chunk) [Interim Results](index=2&type=section&id=Interim%20Results) The company's interim results show a significant decline in financial performance, with revenue and gross profit decreasing, leading to a net loss for the period [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company experienced a significant decline in revenue and gross profit, leading to a shift from operating profit to loss, resulting in a net loss and basic loss per share of RMB 1.98 cents Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | Change (RMB Thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 201,276 | 379,026 | (177,750) | -46.9% | | Cost of Revenue | (189,435) | (357,353) | 167,918 | -47.0% | | Gross Profit | 11,841 | 21,673 | (9,832) | -45.4% | | Administrative Expenses | (19,587) | (20,164) | 577 | -2.9% | | Operating (Loss)/Profit | (10,947) | 3,644 | (14,591) | Shift from profit to loss | | (Loss)/Profit Before Income Tax | (12,114) | 3,500 | (15,614) | Shift from profit to loss | | (Loss)/Profit and Total Comprehensive (Loss)/Income for the Period Attributable to Owners of the Company | (11,810) | 335 | (12,145) | Shift from profit to loss | | Basic (Loss)/Earnings Per Share (RMB Cents) | (1.98) | 0.07 | (2.05) | Shift from profit to loss | [Unaudited Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities decreased, while total equity increased, primarily due to a rise in other reserves, leading to a 7.4% increase in net assets compared to the end of 2024 Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | Change (RMB Thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,590,668 | 1,648,128 | (57,460) | -3.5% | | Non-current Assets | 68,817 | 70,844 | (2,027) | -2.9% | | Current Assets | 1,521,851 | 1,577,284 | (55,433) | -3.5% | | Total Equity | 511,403 | 475,976 | 35,427 | +7.4% | | Total Liabilities | 1,079,265 | 1,172,152 | (92,887) | -7.9% | | Non-current Liabilities | 110 | 23,389 | (23,279) | -99.5% | | Current Liabilities | 1,079,155 | 1,148,763 | (69,608) | -6.1% | [Notes](index=5&type=section&id=Notes) This section provides detailed notes on the company's general information, accounting policies, revenue, expenses, and financial position items [General Information](index=5&type=section&id=General%20Information) The company is an investment holding company incorporated in the Cayman Islands, primarily engaged in construction services in China, with its shares listed on the Main Board of the Hong Kong Stock Exchange on January 9, 2024 - The Company is an investment holding company primarily engaged in providing construction services in the People's Republic of China[9](index=9&type=chunk) - The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 9, 2024[10](index=10&type=chunk) [Basis of Preparation and Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial statements are prepared in accordance with HKAS 34, consistent with the accounting policies used for the annual consolidated financial statements as of December 31, 2024, with no significant impact from new or revised standards - The unaudited condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[11](index=11&type=chunk) - The accounting policies adopted are consistent with those followed in the consolidated financial statements for the year ended December 31, 2024, and new or revised standards have no significant impact on the Group's results and financial position[11](index=11&type=chunk) [Revenue and Segment Information](index=6&type=section&id=Revenue%20and%20Segment%20Information) The Group primarily provides construction services, identified as a single operating segment, with revenue significantly decreasing to RMB 201,276 thousand for the six months ended June 30, 2025, from RMB 379,026 thousand in the prior year - The Group is principally engaged in providing construction services to customers and is determined by the Directors to be one operating segment[12](index=12&type=chunk)[13](index=13&type=chunk) Construction Service Revenue | Period | Revenue (RMB Thousand) | | :--- | :--- | | For the six months ended June 30, 2025 | 201,276 | | For the six months ended June 30, 2024 | 379,026 | - All revenue is derived from external customers in Mainland China[17](index=17&type=chunk) [Expenses by Nature](index=7&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, total expenses (including cost of revenue and administrative expenses) significantly decreased to RMB 209,022 thousand from RMB 377,517 thousand in the prior period, primarily due to lower costs for raw materials, labor subcontracting, and equipment usage Details of Expenses by Nature | Expense Category | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Raw materials and consumables used | 100,513 | 146,025 | | Employee benefits expenses and labor subcontracting costs | 66,050 | 131,015 | | Professional construction subcontracting costs | 26,917 | 55,089 | | Equipment and machinery usage costs | 5,262 | 32,074 | | Design and testing service costs | 1,141 | 2,597 | | Depreciation and amortization expenses | 2,614 | 1,910 | | Listing expenses | — | 1,563 | | Total | 209,022 | 377,517 | [Net Finance Costs](index=7&type=section&id=Net%20Finance%20Costs) For the six months ended June 30, 2025, net finance costs increased from RMB 144 thousand to RMB 1,167 thousand, primarily due to higher factoring and bank borrowing interest expenses, coupled with reduced bank deposit interest income Details of Net Finance Costs | Item | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest income from bank deposits | 67 | 554 | | Factoring interest expenses | (290) | (32) | | Bank borrowing interest expenses | (939) | (652) | | Lease liabilities interest expenses | (5) | (14) | | Net finance costs | (1,167) | (144) | [Income Tax (Credit)/Expense](index=8&type=section&id=Income%20Tax%20%28Credit%29%2FExpense) For the six months ended June 30, 2025, the company recorded an income tax credit of RMB 304 thousand, compared to an expense of RMB 3,165 thousand in the prior period, mainly influenced by changes in deferred income tax Details of Income Tax (Credit)/Expense | Item | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current income tax | 423 | 2,444 | | Deferred income tax | (727) | 721 | | Income tax (credit)/expense | (304) | 3,165 | [Loss/Earnings Per Share](index=8&type=section&id=Loss%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, the company reported a basic loss per share of RMB 1.98 cents, compared to earnings per share of RMB 0.07 cents in the prior period, primarily due to the shift from profit to loss Loss/Earnings Per Share Data | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB Thousand) | (11,810) | 335 | | Weighted average number of ordinary shares in issue | 597,281,768 | 509,142,857 | | Basic (Loss)/Earnings Per Share (RMB Cents) | (1.98) | 0.07 | - Diluted (loss)/earnings per share is equal to basic (loss)/earnings per share as there were no dilutive potential ordinary shares outstanding for the six months ended June 30, 2025 and 2024[22](index=22&type=chunk) [Dividends](index=8&type=section&id=Dividends) For the six months ended June 30, 2025, the company neither paid nor declared any dividends, consistent with the prior period - For the six months ended June 30, 2025, the Company neither paid nor declared any dividends (June 30, 2024: nil)[23](index=23&type=chunk) [Contract Assets and Trade Receivables](index=9&type=section&id=Contract%20Assets%20and%20Trade%20Receivables) As of June 30, 2025, net contract assets slightly decreased to RMB 980,253 thousand, while net trade receivables remained stable at RMB 241,175 thousand compared to year-end 2024, though the proportion of 1-2 year aged receivables increased Net Contract Assets and Trade Receivables | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net contract assets | 980,253 | 1,016,678 | | Net trade receivables | 241,175 | 240,360 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 year | 136,381 | 177,332 | | 1 to 2 years | 82,311 | 43,179 | | Over 2 years | 35,284 | 29,097 | | Total | 253,976 | 249,608 | [Trade and Other Payables](index=10&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased to RMB 953,902 thousand from RMB 1,104,475 thousand at year-end 2024, primarily due to a significant reduction in trade payables within one year Total Trade and Other Payables | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade payables | 935,075 | 1,086,289 | | Other payables and accrued expenses | 18,827 | 18,186 | | Total | 953,902 | 1,104,475 | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 year | 129,255 | 284,479 | | 1 to 2 years | 388,539 | 369,326 | | Over 2 years | 417,281 | 432,484 | | Total | 935,075 | 1,086,289 | [Bank Borrowings](index=10&type=section&id=Bank%20Borrowings) As of June 30, 2025, total bank borrowings increased to RMB 69,582 thousand, all reclassified as current liabilities with no non-current portion, showing a significant rise in fixed-rate borrowings and the first appearance of unsecured borrowings Changes in Bank Borrowing Structure | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current bank borrowings | 69,582 | 33,008 | | Non-current bank borrowings | — | 23,346 | | Total | 69,582 | 56,354 | | Secured bank borrowings (fixed rate) | 40,000 | 30,028 | | Secured bank borrowings (floating rate) | — | 26,326 | | Unsecured bank borrowings (fixed rate) | 29,582 | — | - As of June 30, 2025, all bank borrowings were current liabilities due within one year, whereas on December 31, 2024, a portion was non-current[26](index=26&type=chunk) [Commitments](index=11&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments remained stable at RMB 5,000 thousand, consistent with year-end 2024, primarily for contracted but unprovided unlisted equity securities Capital Commitments | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Contracted but not provided for: unlisted equity securities | 5,000 | 5,000 | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's business operations, financial performance, liquidity, capital resources, and human resources for the reporting period [Business Review](index=12&type=section&id=Business%20Review) The company is a private general contracting construction enterprise in China, holding five Grade-I and six Grade-II construction qualifications, offering services including building, municipal, foundation, and specialized contracting, and has been recognized as a 'Shenzhen Top 500 Enterprise' for several consecutive years - The Company is a developing private general contracting construction enterprise in China, holding five Grade-I and six Grade-II construction contracting qualifications[28](index=28&type=chunk) - The Company primarily provides services including building construction, municipal public utility engineering, foundation engineering, and specialized contracting[28](index=28&type=chunk) - The Company has been selected as a "Shenzhen Top 500 Enterprise" for consecutive years from 2020 to 2024[28](index=28&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) During the period, the company's revenue and gross profit significantly declined due to fewer construction projects, leading to a shift from profit to loss, with administrative expenses slightly decreasing but finance costs substantially increasing [Revenue](index=12&type=section&id=Revenue) For the six months ended June 30, 2025, the company's revenue significantly decreased by 46.9% year-on-year to RMB 201.3 million, primarily due to fewer construction projects, with building and municipal engineering revenues declining, while specialized contracting revenue surged by 501.3% - The Group's revenue decreased by approximately **RMB 177.7 million or 46.9%** from approximately RMB 379.0 million for the six months ended June 30, 2024, to approximately **RMB 201.3 million** for the six months ended June 30, 2025, primarily due to a reduction in construction projects[29](index=29&type=chunk) Revenue Breakdown by Project Type | Project Type | 2025 (RMB Thousand) | 2025 (%) | 2024 (RMB Thousand) | 2024 (%) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Building construction projects | 103,518 | 51.4 | 246,900 | 65.1 | -58.1% | | Municipal public utility projects | 74,283 | 36.9 | 126,144 | 33.3 | -41.1% | | Foundation engineering projects | 2,009 | 1.0 | 2,412 | 0.6 | -16.7% | | Specialized contracting projects | 21,466 | 10.7 | 3,570 | 1.0 | +501.3% | | Total | 201,276 | 100.0 | 379,026 | 100.0 | -46.9% | - Revenue from specialized contracting projects significantly increased by **501.3%**, mainly due to the commencement of several projects with relatively higher contract values during the period[34](index=34&type=chunk) [Cost of Revenue](index=14&type=section&id=Cost%20of%20Revenue) For the six months ended June 30, 2025, cost of revenue decreased by 47.0% year-on-year to RMB 189.4 million, consistent with the decline in revenue, with raw material and labor subcontracting costs remaining the primary components - Cost of revenue for the six months ended June 30, 2025, decreased by approximately **RMB 167.9 million or 47.0%** compared to the same period last year, consistent with the decrease in revenue resulting from fewer construction projects[36](index=36&type=chunk) Cost of Revenue Breakdown by Nature | Cost Category | 2025 (RMB Thousand) | 2025 (%) | 2024 (RMB Thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Raw materials cost | 100,513 | 53.1 | 146,025 | 40.9 | | Labor subcontracting cost | 52,939 | 27.9 | 118,278 | 33.1 | | Professional construction subcontracting cost | 26,917 | 14.2 | 55,089 | 15.4 | | Equipment and machinery usage cost | 5,262 | 2.8 | 32,074 | 9.0 | | Other project costs | 3,804 | 2.0 | 5,887 | 1.6 | | Total cost of revenue | 189,435 | 100.0 | 357,353 | 100.0 | [Gross Profit and Gross Profit Margin](index=15&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Total gross profit decreased by 45.4% year-on-year, but the overall gross profit margin slightly increased to 5.9%, with building engineering project margins rising due to final settlement revenue recognition, while municipal engineering project margins declined due to lower margins on new projects Gross Profit and Gross Profit Margin by Project Type | Project Type | 2025 Gross Profit (RMB Thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB Thousand) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Building construction projects | 7,003 | 6.8 | 14,905 | 6.0 | | Municipal public utility projects | 3,509 | 4.7 | 6,433 | 5.1 | | Foundation engineering projects | 119 | 5.9 | 147 | 6.1 | | Specialized contracting projects | 1,210 | 5.6 | 188 | 5.3 | | Total | 11,841 | 5.9 | 21,673 | 5.7 | - The gross profit margin for building construction projects increased from **6.0% to 6.8%**, primarily due to revenue recognition after final settlement for certain projects[37](index=37&type=chunk) - The gross profit margin for municipal public utility projects decreased from **5.1% to 4.7%**, mainly due to the commencement of several new projects with relatively lower gross profit margins during the period[38](index=38&type=chunk) [Administrative Expenses](index=15&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses decreased by 2.9% to RMB 19.6 million, primarily due to no listing expenses recognized in the period, partially offset by increased depreciation of property, plant, and equipment - Administrative expenses decreased by approximately **RMB 0.6 million or 2.9%** for the six months ended June 30, 2025, primarily due to no listing expenses recognized during the period[41](index=41&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs increased, primarily due to higher bank borrowing and factoring interest expenses, coupled with reduced bank deposit interest income - The increase in finance costs was primarily due to higher bank borrowing and factoring interest expenses, as well as a decrease in bank deposit interest income[42](index=42&type=chunk) [Income Tax Credit/(Expense)](index=16&type=section&id=Income%20Tax%20Credit%2F%28Expense%29) Income tax credit/(expense) primarily comprises corporate income tax and changes in deferred tax assets - Income tax credit/(expense) primarily comprises corporate income tax and changes in deferred tax assets[43](index=43&type=chunk) [Loss/Profit and Total Comprehensive Loss/Income for the Period](index=16&type=section&id=Loss%2FProfit%20and%20Total%20Comprehensive%20Loss%2FIncome%20for%20the%20Period) The Group shifted from profit to loss for the period, primarily due to decreased revenue and gross profit, and the recognition of impairment losses on trade and other receivables and contract assets - The Group shifted from a profit of approximately **RMB 0.3 million** for the six months ended June 30, 2024, to a loss of approximately **RMB 11.8 million** for the six months ended June 30, 2025[44](index=44&type=chunk) - The shift to loss was primarily due to decreased revenue and gross profit, as well as the recognition of impairment losses on trade and other receivables and contract assets[44](index=44&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents remained stable, while total bank borrowings increased and were reclassified as current liabilities, leading to a higher gearing ratio, yet maintaining a net cash position, with ongoing liquidity risk monitoring and no significant foreign exchange exposure [Cash Flow](index=16&type=section&id=Cash%20Flow) As of June 30, 2025, the company's cash and cash equivalents were approximately RMB 99.7 million, a slight increase from year-end 2024, primarily utilized for daily operations and project-related working capital needs Cash and Cash Equivalents | Date | Amount (RMB Million) | | :--- | :--- | | June 30, 2025 | 99.7 | | December 31, 2024 | 96.7 | [Bank Borrowings](index=16&type=section&id=Bank%20Borrowings) As of June 30, 2025, current bank borrowings increased to RMB 69.6 million, with no non-current portion, showing a significant rise in fixed-rate borrowings and the first appearance of unsecured borrowings Bank Borrowing Structure | Item | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Current bank borrowings | 69.6 | 33.0 | | Non-current bank borrowings | — | 23.3 | | Fixed-rate borrowings | 69.6 | 30.0 | | Floating-rate borrowings | — | 26.3 | [Gearing Ratio](index=17&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio increased to 13.6% from 11.8% at year-end 2024 Gearing Ratio | Date | Gearing Ratio (%) | | :--- | :--- | | June 30, 2025 | 13.6 | | December 31, 2024 | 11.8 | [Net Debt to Equity Ratio](index=17&type=section&id=Net%20Debt%20to%20Equity%20Ratio) The net debt to equity ratio is not applicable as the Group maintained a net cash position on both reporting dates - The net debt to equity ratio is not applicable as of June 30, 2025, and December 31, 2024, because the Group maintained a net cash position on both dates[48](index=48&type=chunk) [Prepayments to Suppliers](index=17&type=section&id=Prepayments%20to%20Suppliers) The Group's prepayments to suppliers primarily consist of advances to raw material suppliers and labor subcontractors, maintaining a policy of providing prepayments based on agreed percentages - The Group's prepayments to suppliers primarily consist of prepayments to raw material suppliers and labor subcontractors[49](index=49&type=chunk) - The Company maintains a policy of providing prepayments based on agreed percentages to ensure timely payments to workers[49](index=49&type=chunk) [Treasury Management](index=17&type=section&id=Treasury%20Management) The Group maintains sufficient cash and bank financing, with management continuously reviewing trade receivables and liquidity to manage liquidity risk - The Group maintains sufficient levels of cash and bank financing for its trading activities in the ordinary course of business[50](index=50&type=chunk) - Management closely monitors the Group's liquidity position to ensure its funding needs are met[50](index=50&type=chunk) [Capital Expenditure and Commitments](index=17&type=section&id=Capital%20Expenditure%20and%20Commitments) For the six months ended June 30, 2025, the Group incurred no capital expenditure, with capital commitments remaining at RMB 5.0 million - For the six months ended June 30, 2025, the Group incurred no capital expenditure (June 30, 2024: RMB 4.6 million)[51](index=51&type=chunk) Capital Commitments | Date | Amount (RMB Million) | | :--- | :--- | | June 30, 2025 | 5.0 | | December 31, 2024 | 5.0 | [Foreign Exchange Risk](index=17&type=section&id=Foreign%20Exchange%20Risk) The Group's majority of revenue and expenses are denominated in RMB, expecting no significant foreign exchange risk, and currently does not use financial instruments for hedging - The Group's majority of revenue and expenses are denominated in RMB, the functional currency of the Company, and is not expected to face any significant foreign exchange risk that could materially impact its operating results[52](index=52&type=chunk) - The Group has not used any financial instruments to hedge its current foreign exchange risk[52](index=52&type=chunk) [Pledge of Assets](index=18&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, land and buildings with a net book value of approximately RMB 43.6 million were pledged as collateral for certain interest-bearing bank borrowings Net Book Value of Pledged Assets | Date | Amount (RMB Million) | | :--- | :--- | | June 30, 2025 | 43.6 | | December 31, 2024 | 44.7 | - The pledged assets serve as collateral for certain interest-bearing bank borrowings[53](index=53&type=chunk) [Human Resources](index=18&type=section&id=Human%20Resources) As of June 30, 2025, the Group had 244 employees with total employee costs of approximately RMB 13.1 million, maintaining good employee relations and offering competitive remuneration and welfare programs - As of June 30, 2025, the Group had **244 employees**, all located in China[54](index=54&type=chunk) Total Employee Costs | Period | Amount (RMB Million) | | :--- | :--- | | For the six months ended June 30, 2025 | 13.1 | | For the six months ended June 30, 2024 | 12.7 | - The Group has established various welfare programs in accordance with Chinese laws and regulations and local government policies, including basic medical insurance, unemployment insurance, and other related insurances[54](index=54&type=chunk) [Prospects and Future Plans](index=18&type=section&id=Prospects%20and%20Future%20Plans) This section outlines the company's future outlook, driven by favorable government policies, and its plans for significant investments or acquisitions to expand market share [Prospects](index=18&type=section&id=Prospects) Driven by the '14th Five-Year Plan' and Guangdong Province's construction industry development plan, China's construction service demand is expected to grow, with Guangdong's construction market output value projected to increase at a CAGR of 5% to 8%, enabling the company to consolidate and expand its market share - The "14th Five-Year Plan for National Economic and Social Development" proposes accelerating infrastructure construction in China, including transportation, water conservancy, and energy, while the Guangdong Provincial Government has also issued a five-year development plan for the construction industry, anticipating continued growth in demand for construction services[55](index=55&type=chunk) - The total output value of Guangdong Province's construction market increased at a compound annual growth rate of approximately **9.4%** from 2020 to 2024, reaching approximately **RMB 2,636.4 billion** in 2024, and is expected to continue growing at a compound annual growth rate of approximately **5% to 8%**[55](index=55&type=chunk) - The Company will leverage its extensive experience and knowledge to consolidate and expand its construction service offerings, increase market share, and seize more opportunities[55](index=55&type=chunk) [Plans for Material Investments or Acquisitions of Capital Assets in the Future](index=19&type=section&id=Plans%20for%20Material%20Investments%20or%20Acquisitions%20of%20Capital%20Assets%20in%20the%20Future) The company plans to use approximately RMB 27.7 million from the net proceeds of new share subscriptions for potential acquisitions of construction companies with municipal public utility qualifications, with no legally binding agreements or specific targets identified yet - The Company plans to use approximately **RMB 27.7 million** of the net proceeds from the subscription of new shares for the potential acquisition of one or more construction companies with relevant qualifications and licenses for municipal public utility projects[56](index=56&type=chunk) - As of the date of this announcement, the Group has not entered into any letters of intent or legally binding agreements for such acquisitions, nor has it identified any specific acquisition targets[56](index=56&type=chunk) [Other Disclosures](index=19&type=section&id=Other%20Disclosures) This section provides additional disclosures regarding contingent liabilities, use of share issue proceeds, interim dividends, post-balance sheet events, corporate governance, and other compliance matters [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[57](index=57&type=chunk) [Use of Proceeds from Share Issue](index=19&type=section&id=Use%20of%20Proceeds%20from%20Share%20Issue) The company utilized RMB 41.3 million of the RMB 77.3 million net IPO proceeds for project capital and working capital, with the remaining RMB 36.0 million allocated for equipment acquisition and staff recruitment; additionally, RMB 19.5 million from the RMB 47.2 million net proceeds of new share subscriptions in January 2025 was used for general working capital, and RMB 27.7 million for potential construction company acquisitions Use of Proceeds from Initial Public Offering | Use | Allocation as per Prospectus (RMB Million) | Utilized as of June 30, 2025 (RMB Million) | Unutilized as of June 30, 2025 (RMB Million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | Funding capital requirements and cash flow for certain projects | 35.3 | 35.3 | — | Not applicable | | Acquisition of equipment and machinery | 31.9 | — | 31.9 | Before December 31, 2025 | | Recruitment of additional staff | 5.4 | 1.3 | 4.1 | Before December 31, 2026 | | Working capital and other general corporate purposes | 4.7 | 4.7 | — | Not applicable | | Total | 77.3 | 41.3 | 36.0 | | Use of Proceeds from Subscription of New Shares under General Mandate | Use | Net Proceeds (RMB Million) | Utilized as of June 30, 2025 (RMB Million) | Unutilized as of June 30, 2025 (RMB Million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | Potential acquisition of construction companies | 27.7 | — | 27.7 | Before December 31, 2025 | | General working capital | 19.5 | 19.5 | — | Not applicable | | Total | 47.2 | 19.5 | 27.7 | | [Interim Dividends](index=20&type=section&id=Interim%20Dividends) The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[60](index=60&type=chunk) [Events After the Reporting Period](index=20&type=section&id=Events%20After%20the%20Reporting%20Period) On July 2, 2025, the company entered into agreements with six subscribers to subscribe for a total of 123,552,000 shares at HK$0.61 per share, with the subscription completed on July 17, 2025 - On July 2, 2025, the Company entered into six subscription agreements with six subscribers, respectively, to subscribe for a total of **123,552,000 shares** of the Company at a subscription price of **HK$0.61 per share**[61](index=61&type=chunk) - The subscription was completed on July 17, 2025[61](index=61&type=chunk) [Corporate Governance Practices](index=20&type=section&id=Corporate%20Governance%20Practices) The Board has reviewed the company's corporate governance practices and is satisfied that the company has complied with the principles and code provisions of the Corporate Governance Code in Appendix C1 Part 2 of the Listing Rules - The Board has reviewed the Company's corporate governance practices and is satisfied that the Company has complied with the principles and code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[62](index=62&type=chunk) [Standard Code for Directors' Securities Transactions](index=21&type=section&id=Standard%20Code%20for%20Directors'%20Securities%20Transactions) The company has adopted a code of conduct for directors' securities transactions no less exacting than the Standard Code in Appendix C3 of the Listing Rules, with all directors confirming compliance and no non-compliance incidents identified - The Company has adopted a code of conduct for directors' securities transactions, the terms of which are no less exacting than the required standard set out in the Standard Code in Appendix C3 of the Listing Rules[63](index=63&type=chunk) - All Directors confirmed that they have complied with the required standards set out in the Standard Code and its code of conduct for directors' securities transactions for the six months ended June 30, 2025[63](index=63&type=chunk) [Competing Interests](index=21&type=section&id=Competing%20Interests) As of June 30, 2025, and up to the date of this announcement, no controlling shareholder, director, or their close associates held any interest in businesses competing directly or indirectly with the Group's operations - As of the six months ended June 30, 2025, and up to the date of this announcement, none of the controlling shareholders, Directors, or their respective close associates had any interest in any business that directly or indirectly competes with the Group's business[64](index=64&type=chunk) [Compliance Adviser's Interests](index=21&type=section&id=Compliance%20Adviser's%20Interests) The company has appointed Rich Harvest Finance Limited as its compliance adviser, and other than the compliance adviser agreement, neither the compliance adviser nor its directors, employees, or close associates have any notifiable interests related to the company - The Company has appointed Rich Harvest Finance Limited as its compliance adviser[65](index=65&type=chunk) - Save for the compliance adviser agreement entered into between the Company and the compliance adviser, neither the compliance adviser nor its directors, employees, or close associates have any interests in relation to the Company that need to be disclosed to the Company[65](index=65&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[66](index=66&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Board's Audit Committee has reviewed the Group's adopted accounting principles and policies, internal controls, and financial reporting matters, including the unaudited condensed consolidated interim financial statements and interim results for the six months ended June 30, 2025 - The primary responsibilities of the Board's Audit Committee are to review and supervise the Group's financial reporting process and internal control and risk management systems[67](index=67&type=chunk) - The Audit Committee has reviewed the accounting principles and policies adopted by the Group, its internal controls, and financial reporting matters, including the unaudited condensed consolidated interim financial statements and the interim results for the six months ended June 30, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) [Publication of Interim Report](index=22&type=section&id=Publication%20of%20Interim%20Report) The company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be timely provided to shareholders and published on the HKEX and company websites - The Company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be timely provided to the Company's shareholders and published on the HKEX and the Company's website in accordance with the Listing Rules[69](index=69&type=chunk)

Group 1 - The company, Zhongshen Jianye (02503.HK), expects to report a loss attributable to shareholders of approximately RMB 12 million for the six months ending June 30, 2025, compared to a profit of approximately RMB 335,000 for the six months ending June 30, 2024 [1] - This represents a significant decline in financial performance, indicating a shift from profitability to a notable loss [1] - The announcement highlights the company's challenging financial outlook for the upcoming period [1]