[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides an overview of the company's governance structure and fundamental registration details [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This section lists the composition of the company's Board of Directors, including executive, non-executive, and independent non-executive directors, as well as members of the Audit, Remuneration, and Nomination Committees - The Board of Directors comprises executive directors Mr. Wang Mingfan (Chairman and CEO), Mr. Li Qinglong, Ms. Yang Yingchun (resigned), and Ms. Wang Xinyi; non-executive director Ms. Yin Shuzhen; and independent non-executive directors Mr. Wu Guanyun, Mr. Liang Weimin, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo[6](index=6&type=chunk) - The composition of the Audit, Remuneration, and Nomination Committees is detailed, with Mr. Wu Guanyun chairing the Audit and Remuneration Committees, and Mr. Liang Weimin chairing the Nomination Committee[6](index=6&type=chunk) [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides basic contact and registration details, including the company's registered office, Hong Kong head office and principal place of business, share registrar, share listing information, and company website - The company's registered office is in the Cayman Islands, with its Hong Kong head office and principal place of business located in Kwun Tong Road, Kowloon, Hong Kong[7](index=7&type=chunk) - The company's shares are listed on The Stock Exchange of Hong Kong Limited under stock code **3318**, and its website is www.boton.com.hk[8](index=8&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, total assets slightly increased, driven by non-current asset growth despite a decline in current assets, while total equity and liabilities both saw minor increases, notably in non-current borrowings Consolidated Statement of Financial Position Key Data (RMB in thousands) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 4,590,960 | 4,434,214 | | Current assets | 1,719,706 | 1,863,711 | | **Total assets** | **6,310,666** | **6,297,925** | | **Equity** | | | | Equity attributable to owners of the Company | 3,133,854 | 3,140,955 | | Non-controlling interests | 277,609 | 268,323 | | **Total equity** | **3,411,463** | **3,409,278** | | **Liabilities** | | | | Non-current liabilities | 1,246,529 | 1,071,645 | | Current liabilities | 1,652,674 | 1,817,002 | | **Total liabilities** | **2,899,203** | **2,888,647** | - Borrowings within non-current liabilities significantly increased from **RMB 955,904 thousand** as of December 31, 2024, to **RMB 1,133,013 thousand** as of June 30, 2025[11](index=11&type=chunk) - Trade and other receivables decreased from **RMB 938,946 thousand** as of December 31, 2024, to **RMB 875,808 thousand** as of June 30, 2025[9](index=9&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8) For the six months ended June 30, 2025, the company experienced significant declines in revenue, gross profit, and operating profit, resulting in a loss attributable to owners of the Company, with a basic loss per share of RMB 0.01 Consolidated Statement of Profit or Loss Key Data (RMB in thousands) | Indicator | 2025 H1 (Unaudited) | 2024 H1 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 637,753 | 750,975 | -15.1% | | Cost of sales | (438,894) | (445,344) | -1.4% | | Gross profit | 198,859 | 305,631 | -34.9% | | Operating profit | 33,725 | 109,237 | -69.1% | | Profit before income tax | 10,840 | 81,230 | -86.7% | | Profit for the period | 8,707 | 62,682 | -86.1% | | Profit/(Loss) attributable to owners of the Company | (8,119) | 44,332 | -118.3% | | Basic and diluted (loss)/earnings per share (RMB) | (0.01) | 0.04 | -125.0% | - Net impairment loss on financial assets shifted from an impairment loss of **RMB 9,052 thousand** in the prior period to a reversal of **RMB 4,379 thousand** in the current period[12](index=12&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, total comprehensive income for the period significantly decreased, primarily due to lower profit for the period, despite a positive shift in currency translation differences Consolidated Statement of Comprehensive Income Key Data (RMB in thousands) | Indicator | 2025 H1 (Unaudited) | 2024 H1 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Profit for the period | 8,707 | 62,682 | -86.1% | | Currency translation differences | 2,604 | (3,292) | +179.1% | | Total comprehensive income for the period | 11,311 | 59,390 | -80.9% | | Total comprehensive income/(loss) attributable to owners of the Company | (4,875) | 42,461 | -111.5% | [Interim Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity slightly increased, primarily driven by growth in non-controlling interests, despite a reduction in retained earnings attributable to owners of the Company due to period loss and dividend payments Consolidated Statement of Changes in Equity Key Data (RMB in thousands) | Indicator | Balance as at January 1, 2025 | Balance as at June 30, 2025 | | :--- | :--- | :--- | | Share capital | 101,522 | 101,522 | | Share premium | 1,292,432 | 1,292,432 | | Retained earnings | 1,245,431 | 1,235,057 | | Other reserves | 502,549 | 505,822 | | Total equity attributable to owners of the Company | 3,140,955 | 3,133,854 | | Non-controlling interests | 268,323 | 277,609 | | **Total equity** | **3,409,278** | **3,411,463** | - Profit for the period attributable to owners of the Company was a **loss of RMB 8,119 thousand** in the current period, compared to a **profit of RMB 44,332 thousand** in the prior period[15](index=15&type=chunk) - Total dividends paid in the current period amounted to **RMB 9,126 thousand**, with **RMB 2,255 thousand** attributable to owners of the Company and **RMB 6,871 thousand** to non-controlling interests[15](index=15&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the company's net cash and cash equivalents decreased, primarily due to a significant increase in net cash used in investing activities, despite a substantial rise in net cash generated from financing activities Consolidated Statement of Cash Flows Key Data (RMB in thousands) | Indicator | 2025 H1 (Unaudited) | 2024 H1 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 6,074 | 18,422 | -67.0% | | Net cash used in investing activities | (258,334) | (91,159) | +183.4% | | Net cash generated from financing activities | 203,580 | 41,472 | +391.0% | | Net decrease in cash and cash equivalents | (48,680) | (31,265) | +55.7% | | Cash and cash equivalents at end of period | 236,668 | 319,895 | -26.0% | - Cash outflow for the purchase of property, plant and equipment significantly increased from **RMB 75,311 thousand** in the prior period to **RMB 241,615 thousand** in the current period[17](index=17&type=chunk) - Proceeds from borrowings increased from **RMB 399,919 thousand** in the prior period to **RMB 823,922 thousand** in the current period, with a corresponding increase in repayment of borrowings[17](index=17&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim condensed consolidated financial statements, covering general information, accounting policies, financial risk management, key accounting estimates, segment revenue, balance sheet item details, revenue and expense components, income tax, earnings per share, dividends, contingent liabilities, commitments, and related party transactions, offering deeper context and explanation for the financial statements [1. General Information](index=10&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The Group primarily engages in the production and sale of flavors, fragrances, and e-cigarette products in China and Asia, with the company incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange - The Group's principal activities are the production and sale of **flavors, fragrances, and e-cigarette products**, with its main markets in **China and Asia**[18](index=18&type=chunk) - The Company was incorporated in the **Cayman Islands on March 9, 2005**, and listed on The Stock Exchange of Hong Kong Limited on **December 9, 2005**[18](index=18&type=chunk)[19](index=19&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies](index=10&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E6%9B%B4) The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA, and new and revised standards adopted in the current period have no significant impact on financial performance or position - The interim financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 'Interim Financial Reporting'**[22](index=22&type=chunk) - The new and revised standards adopted in the current period have **no significant impact** on the Group's financial performance and position[23](index=23&type=chunk) [3. Financial Risk Management](index=11&type=section&id=3.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces market risks (including exchange rate, fair value interest rate, and cash flow interest rate risks), credit risk, and liquidity risk, with detailed information available in the annual financial statements - The Group's principal financial risks include **market risk** (exchange rate risk, fair value interest rate risk, and cash flow interest rate risk), **credit risk**, and **liquidity risk**[24](index=24&type=chunk) [4. Critical Accounting Estimates and Judgements](index=11&type=section&id=4.%20%E9%97%9C%E9%8D%B5%E7%9A%84%E6%9C%83%E8%A8%88%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%88%A4%E6%96%B7) The preparation of interim financial statements involves management's judgments, estimates, and assumptions, with significant judgments made in the current period being consistent with those applied in the 2024 annual consolidated financial statements - Significant judgments made by management in preparing the interim financial statements are **consistent** with those applied in the consolidated financial statements for the year ended December 31, 2024[25](index=25&type=chunk) [5. Revenue and Segment Information](index=12&type=section&id=5.%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates in five segments: flavor enhancers, food flavors, daily use fragrances, e-cigarette products, and investment properties; for the six months ended June 30, 2025, flavor enhancer revenue significantly decreased, while e-cigarette products, food flavors, and daily use fragrances saw slight increases, and investment property revenue declined - The Group's business is divided into five segments: **flavor enhancers, food flavors, daily use fragrances, e-cigarette products, and investment properties**[26](index=26&type=chunk) Segment Revenue and Profit (RMB in thousands) | Segment | 2025 H1 Revenue | 2024 H1 Revenue | 2025 H1 Operating Profit/(Loss) | 2024 H1 Operating Profit/(Loss) | | :--- | :--- | :--- | :--- | :--- | | Flavor Enhancers | 179,463 | 308,057 | (7,363) | 88,014 | | Food Flavors | 93,051 | 90,286 | 25,694 | 34,207 | | Daily Use Fragrances | 73,115 | 69,567 | 17,037 | 15,260 | | E-cigarette Products | 267,233 | 256,132 | (20,027) | (15,034) | | Investment Properties | 24,891 | 26,933 | 24,491 | 27,351 | | Total | 637,753 | 750,975 | 33,725 | 109,237 | [6. Property, Plant and Equipment and Intangible Assets](index=14&type=section&id=6.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E5%8F%8A%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) As of June 30, 2025, the net book value of property, plant and equipment increased, primarily due to additions, while the net book value of intangible assets slightly decreased Net Book Value of Property, Plant and Equipment and Intangible Assets (RMB in thousands) | Indicator | June 30, 2025 | January 1, 2025 | June 30, 2024 | January 1, 2024 | | :--- | :--- | :--- | :--- | :--- | | Property, plant and equipment | 2,164,053 | 1,993,623 | 1,570,420 | 1,528,866 | | Intangible assets | 1,597,156 | 1,615,432 | 1,700,598 | 1,721,629 | - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to **RMB 204,622 thousand**, and additions to intangible assets were **RMB 262 thousand**[30](index=30&type=chunk) [7. Leases](index=15&type=section&id=7.%20%E7%A7%9F%E8%B3%83) This section presents lease-related items in the interim condensed consolidated statement of financial position, including right-of-use assets and lease liabilities, as well as depreciation, interest, and short-term lease expenses recognized in the statement of profit or loss Lease-related Items (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Right-of-use assets | 156,771 | 152,934 | | Lease liabilities | 15,356 | 9,879 | Lease-related Expenses (RMB in thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Depreciation expense of right-of-use assets | 5,630 | 4,227 | | Interest expense | 445 | 195 | | Short-term lease related expenses | 5,460 | 4,953 | [8. Trade and Other Receivables](index=16&type=section&id=8.%20%E6%87%89%E6%94%B6%E8%B3%B4%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE) As of June 30, 2025, net trade receivables decreased while net other receivables increased, and the aging analysis of trade receivables indicates a persistently high proportion of receivables over one year old Trade and Other Receivables (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables – net | 385,511 | 466,841 | | Bills receivable | 6,013 | 5,045 | | Other receivables – net | 489,653 | 473,222 | | **Current trade and other receivables** | **875,808** | **938,946** | Aging Analysis of Trade Receivables (RMB in thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Less than 3 months | 208,247 | 300,331 | | More than 3 months but less than 1 year | 153,163 | 149,314 | | More than 1 year | 267,746 | 265,288 | | **Total** | **629,156** | **714,933** | [9. Share Capital](index=17&type=section&id=9.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid ordinary share capital and share premium remained unchanged Share Capital Information (RMB in thousands) | Indicator | June 30, 2025 | | :--- | :--- | | Number of shares (thousands) | 1,080,512 | | Share capital | 101,522 | | Share premium | 1,292,432 | | Total | 1,393,954 | [10. Shares Held Under Share Award Scheme](index=17&type=section&id=10.%20%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83%E9%A0%85%E4%B8%8B%E6%8C%81%E6%9C%89%E7%9A%84%E8%82%A1%E4%BB%BD) The company adopted a share award scheme on December 11, 2023, to reward employees or service providers for their contributions; for the six months ended June 30, 2025, no shares were granted under the scheme, and 500,000 shares remain held by the trustee but ungranted - The Share Award Scheme was adopted on **December 11, 2023**, to reward employees or service providers for their contributions to the Company[37](index=37&type=chunk) - For the six months ended June 30, 2025, **no shares were granted** under the scheme, and **500,000 shares** remain held by the trustee but ungranted[37](index=37&type=chunk) [11. Trade and Other Payables](index=18&type=section&id=11.%20%E6%87%89%E4%BB%98%E8%B3%B4%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE) As of June 30, 2025, total trade and other payables significantly decreased, primarily due to a reduction in trade payables and accrued salaries Trade and Other Payables (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 292,667 | 432,587 | | Payables for business combination | 150,000 | 150,000 | | Accrued salaries | 14,720 | 44,447 | | Other tax payables | 27,543 | 35,136 | | Amount due to a related party | 27,470 | — | | **Total** | **629,461** | **807,141** | Aging Analysis of Trade Payables (RMB in thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Less than 3 months | 133,881 | 290,632 | | More than 3 months but less than 1 year | 87,834 | 64,980 | | More than 1 year | 70,952 | 76,975 | | **Total** | **292,667** | **432,587** | [12. Borrowings](index=19&type=section&id=12.%20%E5%80%9F%E8%B2%B8) As of June 30, 2025, the company's total borrowings increased to RMB 2,039,661 thousand, primarily denominated in RMB and secured by various assets and corporate/personal guarantees Total Borrowings (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current borrowings | 1,133,013 | 955,904 | | Current borrowings | 906,648 | 894,086 | | **Total borrowings** | **2,039,661** | **1,849,990** | - Borrowings are primarily denominated in **RMB (RMB 1,804,455 thousand)**, with a portion in **HKD (RMB 235,206 thousand)**[41](index=41&type=chunk) - Bank borrowings are secured by **property, plant and equipment, investment properties, bank deposits, land use rights, 100% equity pledge of Shenzhen Boton, personal guarantee of Chairman Mr. Wang Mingfan, and corporate guarantees from the Company and Shenzhen Boton**[41](index=41&type=chunk) [13. Revenue](index=21&type=section&id=13.%20%E6%94%B6%E5%85%A5) The Group's revenue primarily derives from the sale of extracts, flavors, fragrances, e-cigarette products, and rental income from investment properties; for the six months ended June 30, 2025, both revenue from contracts with customers and rental income decreased - The Group is principally engaged in the **trading, manufacturing, and sale of extracts, flavors, and fragrances**, as well as the **design and manufacture of e-cigarettes and related products**[43](index=43&type=chunk) Revenue Sources (RMB in thousands) | Revenue Source | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue from contracts with customers (sale of goods) | 612,862 | 724,042 | | Rental income | 24,891 | 26,933 | | **Total revenue** | **637,753** | **750,975** | [14. Other Income](index=21&type=section&id=14.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, other income, primarily comprising government grants and other miscellaneous income, decreased in total compared to the prior period Other Income (RMB in thousands) | Source | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Government grants | 1,239 | 1,306 | | Others | 221 | 938 | | **Total** | **1,460** | **2,244** | [15. Other Gains – Net](index=22&type=section&id=15.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%EF%BC%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, net other gains significantly decreased, primarily due to fair value losses on investment properties and reduced other gains Other Gains – Net (RMB in thousands) | Source | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Fair value loss on investment properties | (400) | (400) | | Others | 583 | 2,938 | | **Total** | **183** | **2,538** | [16. Expenses by Nature](index=22&type=section&id=16.%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%88%86%E9%A1%9E%E7%9A%84%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, total cost of sales, selling and marketing expenses, and administrative expenses decreased, with reductions in raw materials and consumables used and consulting fees, but an increase in advertising expenses Expenses by Nature (RMB in thousands) | Expense Category | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Depreciation and amortisation | 58,207 | 56,326 | | Employee benefit expenses | 91,466 | 96,929 | | Raw materials and consumables used | 348,588 | 405,999 | | Advertising expenses | 6,951 | 2,448 | | Consultancy fees | 15,583 | 24,107 | | **Total** | **610,050** | **637,468** | [17. Finance Income and Costs](index=23&type=section&id=17.%20%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%E5%8F%8A%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, net finance costs decreased, primarily due to lower interest income but increased exchange gains, and a higher amount capitalized for qualifying assets Finance Income and Costs (RMB in thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Interest income | 621 | 2,306 | | Interest expense | (34,879) | (34,456) | | Exchange gains | 3,582 | 737 | | Less: Amount capitalised for qualifying assets | 7,791 | 3,406 | | **Net finance costs** | **(22,885)** | **(28,007)** | [18. Income Tax Expense](index=23&type=section&id=18.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, income tax expense significantly decreased, primarily due to increased reversal of deferred income tax; certain subsidiaries of the Group qualify as high-tech enterprises, enjoying a preferential tax rate of 15% Income Tax Expense (RMB in thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Current income tax | 10,570 | 31,464 | | Deferred income tax | (8,437) | (12,916) | | **Total** | **2,133** | **18,548** | - Certain subsidiaries of the Group (e.g., Shenzhen Boton, Boton Flavors & Fragrances Co., Ltd.) qualify as **High and New Technology Enterprises**, enjoying a **preferential tax rate of 15%**[48](index=48&type=chunk) [19. Earnings Per Share](index=24&type=section&id=19.%20%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, the company reported a basic loss per share of RMB 0.01, compared to earnings per share of RMB 0.04 in the prior period, with diluted earnings per share being the same as basic earnings per share due to no potential dilutive effects Earnings Per Share (RMB) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | (Loss)/profit attributable to owners of the Company (thousands) | (8,119) | 44,332 | | Weighted average number of ordinary shares in issue (thousands) | 1,080,012 | 1,080,493 | | **Basic and diluted (loss)/earnings per share** | **(0.01)** | **0.04** | - Diluted earnings per share is **the same as basic earnings per share**, as there were no potential dilutive effects for both the current and prior periods[51](index=51&type=chunk) [20. Dividends](index=24&type=section&id=20.%20%E8%82%A1%E5%88%A9) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does **not recommend** the payment of an interim dividend for the six months ended June 30, 2025[52](index=52&type=chunk) [21. Contingent Liabilities](index=24&type=section&id=21.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The company is involved in a legal dispute related to the Kimree acquisition, concerning outstanding consideration of RMB 150,000 thousand, with the case in early stages and the outcome not reasonably estimable - The Company is involved in a legal dispute with one of the vendors of the share purchase agreement, concerning outstanding consideration of **RMB 150,000 thousand** related to the Kimree acquisition[53](index=53&type=chunk) - The defense stage of the case has concluded, but the plaintiff has not taken further action, and management is currently **unable to reasonably estimate the outcome**[53](index=53&type=chunk) [22. Commitments](index=25&type=section&id=22.%20%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's capital commitments primarily consist of contracted but unprovided property, plant and equipment, and future minimum lease payments related to short-term leases Capital Commitments (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for property, plant and equipment | 21,724 | 188,898 | Short-term Lease Related Commitments (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | - | 174,412 | [23. Related Party Transactions](index=25&type=section&id=23.%20%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93) For the six months ended June 30, 2025, the Group did not enter into any significant related party transactions - For the six months ended June 30, 2025, **no significant transactions** were entered into with related parties[56](index=56&type=chunk) [Management Discussion and Analysis](index=26&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%92%8C%E5%88%86%E6%9E%90) This section provides management's discussion and analysis of the company's business performance, covering principal activities, business review, revenue and financial performance analysis, corporate culture, outlook, financial review, material investments, contingent liabilities, and post-balance sheet events, detailing operating conditions, challenges, and future development strategies for the reporting period [Principal Activities of the Group](index=26&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) The Group primarily designs and manufactures e-cigarette products and engages in the production, trading, and sale of extracts, flavors, and fragrances, with products widely used across tobacco, food, and daily chemical industries - The Group's principal activities include the **design and manufacture of high-quality e-cigarettes and related products** (such as disposable e-cigarettes, rechargeable e-cigarettes, and accessories), sold to tobacco companies, independent e-cigarette manufacturers, and various brand customers[57](index=57&type=chunk) - Fragrance products are sold to manufacturers in the **tobacco, beverage, daily food, canned food, savory, and confectionery industries** in China and overseas; flavor products are sold to manufacturers in the **beauty, perfume, soap, cosmetics, hair care, deodorant, detergent, and air freshener industries**[57](index=57&type=chunk) [Business Review](index=26&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the global economy remained complex and challenging, with international trade affected by geopolitical tensions, leading to severe challenges across the Group's business segments, rising production costs, and hindered overseas expansion, prompting the company to control costs through automation and corporate restructuring - The global economy is complex, with international trade severely impacted by **prolonged conflicts and geopolitical tensions**, affecting consumption patterns[58](index=58&type=chunk) - Production costs for e-cigarette products increased due to **tightening domestic and international regulations and rising labor costs**, while tariff uncertainties hindered overseas expansion[58](index=58&type=chunk) - The Group strictly controlled costs through **automation of production plants** and **corporate restructuring** to streamline internal procedures[58](index=58&type=chunk) [Revenue Analysis](index=26&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, the Group's total revenue decreased by 15.1% year-on-year, primarily due to a significant decline in the flavor enhancers segment, while e-cigarette products, food flavors, and daily use fragrances segments saw slight increases Segment Revenue Details (RMB in millions) | Segment | 2025 Revenue | % of Total Revenue | 2024 Revenue | % of Total Revenue | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Flavor Enhancers | 179.5 | 28.1% | 308.1 | 41.0% | -41.7% | | Food Flavors | 93.1 | 14.6% | 90.3 | 12.0% | +3.1% | | Daily Use Fragrances | 73.1 | 11.5% | 69.6 | 9.3% | +5.0% | | E-cigarette Products | 267.2 | 41.9% | 256.1 | 34.1% | +4.3% | | Investment Properties | 24.9 | 3.9% | 26.9 | 3.6% | -7.4% | | **Total** | **637.8** | **100.0%** | **751.0** | **100.0%** | **-15.1%** | [Flavor Enhancers](index=27&type=section&id=%E9%A6%99%E5%91%B3%E5%A2%9E%E5%BC%B7%E5%8A%91) Flavor enhancers segment revenue significantly decreased by 41.7%, primarily due to intense industry competition, rising natural raw material costs, stricter government safety regulations, and changing consumer demand, leading to higher production costs and reduced profit margins - Flavor enhancer revenue was approximately **RMB 179.5 million**, a significant year-on-year decrease of **41.7%**[61](index=61&type=chunk) - This segment faced challenges including **intense industry competition, increased natural raw material costs, tightening government safety regulations, and changing consumer demand**, leading to higher production costs and reduced profit margins[61](index=61&type=chunk) [Food Flavors](index=27&type=section&id=%E9%A3%9F%E5%93%81%E9%A6%99%E7%B2%BE) Food flavors segment revenue slightly increased by 3.1%, as the Group maintained stable revenue in a competitive food market by developing new flavors - Food flavor revenue was approximately **RMB 93.1 million**, a slight year-on-year increase of **3.1%**[62](index=62&type=chunk) - The Group continued to **develop new flavors**, maintaining stable revenue in this segment[62](index=62&type=chunk) [Daily Use Fragrances](index=27&type=section&id=%E6%97%A5%E7%94%A8%E9%A6%99%E7%B2%BE) Daily use fragrances segment revenue increased by 5.0%, primarily benefiting from an increase in new customers and continued support from long-term cooperative clients - Daily use fragrance revenue was approximately **RMB 73.1 million**, a year-on-year increase of **5.0%**[63](index=63&type=chunk) - The increase in revenue was attributed to **new customer acquisition** and **continued support from long-term cooperative clients**[63](index=63&type=chunk) [E-cigarette Products](index=27&type=section&id=%E9%9B%BB%E5%AD%90%E7%85%89%E7%94%A2%E5%93%81) E-cigarette product revenue slightly increased by 4.3%, benefiting from diversified local customers and an extensive marketing network. Management is actively negotiating collaborations with major companies, expecting business improvement in the second half of the year - E-cigarette product revenue was approximately **RMB 267.2 million**, a slight year-on-year increase of **4.3%**[64](index=64&type=chunk) - Revenue growth benefited from **diversified local customers** and an **extensive marketing network**[64](index=64&type=chunk) - Management is negotiating collaborations with several major companies, expecting to **enhance synergy and improve business in the second half of the year**[64](index=64&type=chunk) [Investment Properties](index=27&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) Investment property segment revenue decreased by 7.4%, primarily due to some tenants terminating leases amidst the challenging property market conditions in Shenzhen, China - Investment property revenue was approximately **RMB 24.9 million**, a year-on-year decrease of **7.4%**[65](index=65&type=chunk) - The decrease in revenue was due to **certain tenants terminating leases** amidst the challenging property market conditions in Shenzhen, China[65](index=65&type=chunk) [Financial Performance](index=27&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) This section details changes in gross profit, net profit, other income, net other gains, selling and marketing expenses, administrative expenses, and net finance costs during the reporting period, indicating a significant decline in the company's overall profitability [Gross Profit](index=27&type=section&id=%E6%AF%9B%E5%88%A9) For the six months ended June 30, 2025, the Group's gross profit decreased by 34.9% year-on-year to approximately RMB 198.9 million Gross Profit (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross profit | 198.9 | 305.6 | -34.9% | [Net Profit for the Period](index=27&type=section&id=%E6%9C%9F%E9%96%93%E6%B7%A8%E5%88%A9%E6%BD%A4) The Group's net profit for the period significantly decreased by 86.1% to approximately RMB 8.7 million, with the net profit margin falling to about 1.4% Net Profit for the Period (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net profit for the period | 8.7 | 62.7 | -86.1% | | Net Profit Margin | 1.4% | 8.3% | -6.9% | [Other Income](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income decreased by 34.9% year-on-year to approximately RMB 1.5 million, primarily due to reduced auxiliary business income not classified under principal business segments Other Income (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Other income | 1.5 | 2.2 | -34.9% | [Other Gains – Net](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%EF%BC%8D%E6%B7%A8%E9%A1%8D) Net other gains significantly decreased to approximately RMB 0.2 million, primarily due to the absence of gains from derecognition of a PRC subsidiary in the current reporting period Other Gains – Net (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Other gains – net | 0.2 | 2.5 | -92.0% | [Expenses](index=28&type=section&id=%E9%96%8B%E6%94%AF) Selling and marketing expenses increased by 5.5% to approximately RMB 24.9 million, mainly due to higher advertising expenses; administrative expenses decreased by 13.2% to approximately RMB 146.3 million, primarily due to lower employee benefit expenses, consulting fees, and office expenses Key Expenses (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 24.9 | 23.6 | +5.5% | | Administrative expenses | 146.3 | 168.5 | -13.2% | [Net Finance Costs](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%EF%BC%8D%E6%B7%A8%E9%A1%8D) Net finance costs decreased to approximately RMB 22.9 million, primarily due to lower loan interest rates on borrowings Net Finance Costs (RMB in millions) | Indicator | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net finance costs | 22.9 | 28.0 | -18.2% | [Corporate Culture](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E6%96%87%E5%8C%96) The Group upholds its 'Four New and Five Heart' corporate culture and core values of 'High Technology, High Quality, High Starting Point, High Standards,' committed to enhancing competitiveness and achieving international development - The Group's corporate culture embodies the spirit of **'Four New and Five Heart'**: 'New Brand, New Culture, New Strength, New Image' and 'Careful, Dedicated, Meticulous, Sincere, Concerned'[72](index=72&type=chunk) - Its core values are **'High Technology, High Quality, High Starting Point, High Standards,'** aiming to enhance competitiveness and embark on an international journey[72](index=72&type=chunk) [Outlook](index=28&type=section&id=%E5%89%8D%E6%99%AF) Looking ahead to H2 2025, the global economy is expected to recover slowly, driven by emerging economies; the Group will actively regain domestic market share, accelerate globalization, capture high-value-added markets through technological cooperation and production enhancements, and commit to green economy and sustainable development - The global economy is expected to experience a **slow and uneven recovery in H2 2025**, with new economies, particularly Asian countries, driving global growth[73](index=73&type=chunk) - The Group will actively **recover and enhance domestic market share**, accelerate its **globalization efforts**, especially in developing countries, and drive existing business growth through localization and technological cooperation[75](index=75&type=chunk) - The Group will continue to apply **enhanced production technologies** and **capture high-value-added markets**, committing to long-term goals such as the **green economy, carbon reduction, and improved adaptability**[75](index=75&type=chunk) [Financial Review](index=29&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the Group's financial matters, including liquidity, financial resources, capital structure, foreign exchange and interest rate risks, asset pledges, capital expenditures, interim dividends, employee policies, and material investments [Liquidity and Financial Resources](index=29&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group's net current assets and current ratio both improved, primarily due to a reduction in trade and other payables Liquidity and Financial Resources (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net current assets | 67,000 | 46,700 | | Cash and bank deposits pledged for bank borrowings | 420,200 | 466,200 | | Current ratio | 1.04 | 1.03 | [Financing](index=29&type=section&id=%E8%9E%8D%E8%B3%87) The Group is confident in securing sufficient funding for its operations and expansion plans through bank borrowings, equity fundraising, and funds generated from business operations - The Group can obtain financing for its acquisitions through **bank borrowings or equity fundraising**[78](index=78&type=chunk) - Coupled with funds generated from business operations, the Group is confident in having **sufficient funds to achieve its operating and expansion plans**[78](index=78&type=chunk) [Capital Structure](index=29&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, the company had 1,080,512,146 ordinary shares in issue; total borrowings increased, leading to a rise in the gearing ratio to 59.8% - As of June 30, 2025, the total number of ordinary shares issued by the Company was **1,080,512,146**[79](index=79&type=chunk) Capital Structure Key Data (RMB in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total borrowings | 2,039,700 | 1,850,000 | | Gearing ratio | 59.8% | 54.3% | [Foreign Exchange Risk and Interest Rate Risk](index=29&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E5%8F%8A%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) The Group recorded net foreign exchange gains of approximately RMB 3.6 million, with most transactions denominated in RMB and exchange rates closely monitored; interest rate risk is not considered material by the Board, and the Group does not hedge against it - For the six months ended June 30, 2025, the Group recorded **net foreign exchange gains of approximately RMB 3.6 million**[80](index=80&type=chunk) - Most of the Group's transactions are denominated in **RMB**, with some in **USD and HKD**; the Company will closely monitor exchange rates and consider currency hedging possibilities[80](index=80&type=chunk)[81](index=81&type=chunk) - The Board believes that interest rate risk will **not have a material impact** on the Group, and the Group **does not hedge its interest rate risk**[81](index=81&type=chunk) [Pledge of the Group's Assets](index=30&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group has pledged equity interests in certain subsidiaries, properties, land use rights, bank deposits, and Mr. Wang Mingfan's personal guarantee as collateral for borrowings - The Group has pledged **equity interests in certain subsidiaries, several buildings, warehouses, and investment properties held by Shenzhen Boton, land use rights in Hubei, China, held by a PRC subsidiary, certain bank deposits, properties in Hong Kong, and land use rights and construction in progress in Huizhou, China, held by a PRC subsidiary** as collateral for borrowings[82](index=82&type=chunk) - Mr. Wang Mingfan's **personal guarantee** also serves as collateral for bank borrowings[41](index=41&type=chunk)[82](index=82&type=chunk) [Capital Expenditure](index=30&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, the Group's investment in fixed assets and construction in progress significantly increased, with capital commitments primarily funded by internal resources and financing Capital Expenditure (RMB in thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Investment in fixed assets and construction in progress | 241,600 | 75,300 | | Capital commitments relating to fixed assets | 21,700 | 188,900 | - Capital commitments are funded by **internal resources and financing**[83](index=83&type=chunk) [Interim Dividend](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E5%88%A9) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does **not recommend** the payment of an interim dividend for the six months ended June 30, 2025[84](index=84&type=chunk) [Employee Policy](index=30&type=section&id=%E5%83%B1%E5%93%A1%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 1,112 employees, offering competitive remuneration, retirement plans, and benefits, with contributions to social security and provident funds in accordance with Chinese and Hong Kong regulations - As of June 30, 2025, the Group had **1,112 employees** in China, Hong Kong, and Indonesia[85](index=85&type=chunk) - The Group provides employees with **comprehensive and competitive remuneration, retirement plans, share option schemes, and benefits**, making contributions in accordance with the China Social Security Scheme and the Hong Kong Mandatory Provident Fund Scheme[85](index=85&type=chunk) [Material Investments](index=30&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group made a significant investment in a construction project on a piece of land in Huizhou, Guangdong, China, planning to invest approximately RMB 400 million to expand its e-cigarette products segment - The Group made a **material investment** in a construction project on a piece of land located in Zhongkai High-tech Industrial Development Zone, Huizhou, Guangdong Province, China[86](index=86&type=chunk) - The planned investment in fixed assets on this land (including acquisition consideration, building construction, and machinery costs) is approximately **RMB 400,000 thousand**, aimed at expanding the **e-cigarette products segment**[86](index=86&type=chunk) [Contingent Liabilities](index=31&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) Aside from the legal dispute related to the Kimree acquisition, the Group had no other significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had **no other material contingent liabilities** apart from the legal proceedings disclosed in the 'Legal Proceedings against a Vendor of an Acquisition Transaction' section of the Management Discussion and Analysis[88](index=88&type=chunk) [Land Resumption in Shenzhen](index=31&type=section&id=%E4%BD%8D%E6%96%BC%E6%B7%B1%E5%9C%B3%E7%9A%84%E5%BE%B5%E5%9C%B0) Shenzhen Nanshan government departments intend to resume a piece of land owned by Shenzhen Boton in Shenzhen for high-speed rail hub construction; compensation plans are under discussion, and it is not expected to have a material adverse impact on Shenzhen Boton's operations - Shenzhen Nanshan government departments intend to resume a piece of land owned by **Shenzhen Boton Flavors & Fragrances Co., Ltd.** in Shenzhen for the construction of a **high-speed rail hub and related projects**[89](index=89&type=chunk) - Compensation proposals are under discussion, but detailed information is not yet available; preliminary discussions indicate that the land resumption will **not have a material adverse impact** on Shenzhen Boton's operations[89](index=89&type=chunk) [Legal Proceedings Against a Vendor of an Acquisition Transaction](index=31&type=section&id=%E5%B0%8D%E4%B8%80%E9%A0%85%E6%94%B6%E8%B3%BC%E4%BA%A4%E6%98%93%E7%9A%84%E8%B3%A3%E6%96%B9%E9%80%B2%E8%A1%8C%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F) The Group is involved in multiple legal proceedings related to the 2016 Kimree acquisition vendors, including breaches of non-compete undertakings, fiduciary duties, and misrepresentations; the cases are ongoing, and outcomes remain uncertain - The Group is involved in **4 legal proceedings** concerning the vendors of the 2016 Kimree acquisition, including Mr. Liu Qiuming and Mr. Xiang Zhiyong[90](index=90&type=chunk) - The lawsuits involve **breaches of non-compete undertakings, breaches of fiduciary duties, and misrepresentations** regarding the terms of the agreement[90](index=90&type=chunk)[91](index=91&type=chunk) - The cases are **ongoing**, with no judgments rendered as of the report date, and the outcomes are **not reasonably estimable**[91](index=91&type=chunk) [Events After the Reporting Period](index=32&type=section&id=%E7%B5%90%E7%AE%97%E6%97%A5%E5%BE%8C%E4%BA%8B%E9%A0%85) On August 1, 2025, the Group signed a supplemental agreement with the buyer, extending the profit guarantee for Boton Flavors & Fragrances Group, with the new guarantee requiring net profit growth of no less than 5% from January 1, 2025, to March 31, 2026, constituting a connected transaction - On **August 1, 2025**, the contracting parties entered into a supplemental agreement to extend the guarantee arrangement for Boton Flavors & Fragrances Group[93](index=93&type=chunk) - The new guarantee requires Boton Flavors & Fragrances Group's net profit to grow by **no less than 5%** for the period from **January 1, 2025, to March 31, 2026**[93](index=93&type=chunk) - As the buyer is a connected person of the Company, the new guarantee constitutes a **connected transaction** subject to reporting and announcement requirements[93](index=93&type=chunk) [Other Information](index=33&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section provides corporate governance and shareholder information, including directors' and substantial shareholders' interests in securities, share option and share award schemes, dealings in listed securities, and the composition and responsibilities of the Audit, Remuneration, and Nomination Committees, along with the company's corporate governance practices [Directors' and Chief Executive's Interests in Securities](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E7%9A%84%E8%AD%89%E5%88%B8%E6%AC%8A%E7%9B%8A) As of June 30, 2025, directors and the chief executive held long positions in the company's shares, with Mr. Wang Mingfan holding a 67.51% interest in the total issued shares of the company Directors' Interests in Shares and Underlying Shares of the Company (Ordinary Shares) | Name of Director | Personal Interest | Family Interest | Corporate Interest | Total | % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wang Mingfan | 336,555,052 | 25,262,431 | 367,638,743 | 729,456,226 | 67.51% | | Mr. Yang Yingchun | 2,000,000 | — | — | 2,000,000 | 0.19% | - Mr. Wang Mingfan's family interest refers to shares held by his spouse, Ms. Yang Yifan, and corporate interests include shares held by **Chuanghua Co., Limited** and **Full Ashley Enterprises Limited**, in which Mr. Wang Mingfan is deemed to have an interest[95](index=95&type=chunk) [Share Option Scheme](index=34&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a new share option scheme on December 11, 2023, replacing the old one; the new scheme is valid for ten years from December 12, 2023, but no share options have been granted under it as of the report date - The Company adopted a **new Share Option Scheme on December 11, 2023**, and the old Share Option Scheme was terminated[98](index=98&type=chunk) - The new Share Option Scheme remains valid for a period of **ten years from December 12, 2023**, but **no share options were granted** under it during the review period or as of the report date[98](index=98&type=chunk) - The maximum number of shares that may be granted under the new Share Option Scheme shall not exceed **10% of the issued shares** as of the adoption date (i.e., **108,051,214 shares**)[98](index=98&type=chunk) [Share Award Scheme](index=35&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) The company approved the adoption of a share award scheme on December 11, 2023, to reward employees or service providers for their contributions to the Group; no shares were granted during the reporting period, and 500,000 shares remain held by the trustee but ungranted - The Share Award Scheme was approved by shareholders on **December 11, 2023**, to reward employees or service providers for their contributions to the Group[101](index=101&type=chunk) - During the reporting period, **no shares were granted** under the Share Award Scheme, and as of June 30, 2025, **500,000 shares** were held by the trustee but ungranted[101](index=101&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=35&type=section&id=%E8%91%A3%E4%BA%8B%E8%AA%8D%E8%B3%BC%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E5%88%B8%E7%9A%84%E6%AC%8A%E5%88%A9) During the review period, neither the company nor any of its subsidiaries entered into any arrangements enabling directors to acquire benefits by acquiring shares or debt securities of the company or any other corporation - At no time during the review period did the Company or any of its subsidiaries enter into any arrangements that would enable the Company's directors to **acquire benefits by acquiring shares or debt securities** of the Company or any other corporation[102](index=102&type=chunk) [Substantial Shareholders' Interests in Securities](index=35&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%AD%89%E5%88%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, substantial shareholder Mr. Wang Mingfan held a 67.51% interest in the company's issued share capital through beneficial ownership, family interests, and interests in controlled corporations Substantial Shareholders' Long Positions in Ordinary Shares of the Company | Name of Shareholder | Capacity/Nature of Interest | Number of Shares | % of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Wang Mingfan | Beneficial owner, family interest, and interest in controlled corporations | 729,456,226 | 67.51% | | Chuanghua Co., Limited | Beneficial owner | 348,320,509 | 32.24% | | Full Ashley Enterprises Limited | Beneficial owner | 19,318,234 | 1.79% | - Mr. Wang Mingfan is deemed to have an interest in shares held by his spouse, Ms. Yang Yifan, and shares held by **Chuanghua Co., Limited** and **Full Ashley Enterprises Limited**[105](index=105&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&type=section&id=%E8%B3%BC%E5%85%A5%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the Company nor any of its subsidiaries **purchased, sold, or redeemed any of the Company's listed securities** during the six months ended June 30, 2025[106](index=106&type=chunk) [Audit Committee](index=36&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee comprises four independent non-executive directors and is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems - The Audit Committee comprises **four independent non-executive directors**: Mr. Wu Guanyun (Chairman), Mr. Liang Weimin, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo[107](index=107&type=chunk) - The Committee's terms of reference are to **review and supervise the Group's financial reporting process, risk management, and internal control systems**[107](index=107&type=chunk) [Remuneration Committee](index=36&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) The Remuneration Committee is responsible for considering and approving remuneration arrangements for the Group's senior employees, comprising four independent non-executive directors and one executive director - The Remuneration Committee comprises **four independent non-executive directors** (Mr. Wu Guanyun (Chairman), Mr. Liang Weimin, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo) and **one executive director** (Mr. Wang Mingfan)[108](index=108&type=chunk) - The Committee was established to **consider and approve remuneration arrangements for the Group's senior employees**, including terms of salary and bonus schemes and other long-term incentive plans[108](index=108&type=chunk) [Nomination Committee](index=36&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83) The Nomination Committee reviews the Board's structure, size, and diversity, and makes recommendations to the Board on director appointments and succession planning, comprising four independent non-executive directors and two executive directors - The Nomination Committee comprises **four independent non-executive directors** (Mr. Liang Weimin (Chairman), Mr. Wu Guanyun, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo) and **two executive directors** (Mr. Wang Mingfan and Ms. Wang Xinyi)[109](index=109&type=chunk) - The Committee's responsibilities include **reviewing the Board's structure, size, and diversity**, and making recommendations to the Board on **director appointments and succession planning**[109](index=109&type=chunk) [Corporate Governance](index=36&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company is committed to maintaining good corporate governance standards, generally complying with Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period, though the roles of Chairman and Chief Executive Officer are combined, which the Board believes is more suitable for the company - The Company has **complied with all code provisions** set out in Appendix C1 of the Listing Rules' Corporate Governance Code throughout the six months ended June 30, 2025[110](index=110&type=chunk) - Code Provision C.2.1 stipulates that the roles of Chairman and Chief Executive Officer should be separate, but Mr. Wang Mingfan serves concurrently as Executive Director, Chief Executive Officer, and Chairman, a structure the Board believes provides **strong and consistent leadership**[110](index=110&type=chunk) [Standard of Conduct for Directors' Securities Transactions by Listed Issuers](index=37&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period - The Company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 of the Listing Rules[112](index=112&type=chunk) - All directors of the Company confirmed that they have **complied with the required standards** set out in the Model Code throughout the six months ended June 30, 2025[112](index=112&type=chunk)

FF301 致：香港交易及結算所有限公司 公司名稱: 中國波頓集團有限公司 (於開曼群島註冊成立的有限公司) 呈交日期: 2025年9月2日 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 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) | 03318 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 1,600,000,000 | HKD | | 0.1 HKD | | 160,000,000 | | 增加 / 減少 (-) | | | 0 | | | HKD | | 0 | | 本月底結存 | | | 1,600,000,000 | HKD | | 0.1 HKD | | 160,000,000 | F ...

Core Insights - The global oral tobacco market is projected to reach $11.232 billion in 2024, reflecting a year-on-year growth of 57.57%, and is expected to grow to $25.148 billion by 2028, with a CAGR of 22.32% from 2024 to 2028 [1][2] - The North American and European markets are experiencing high growth rates, while the Asian and African markets are in early stages, indicating significant potential for rapid development in emerging markets [1][2] - The FDA's approval of flavored oral tobacco products is anticipated to act as a catalyst for market growth, potentially increasing the overall market ceiling [1][4] Market Overview - The retail market for oral tobacco is highly concentrated, with Philip Morris International, British American Tobacco, and Altria Group holding market shares of 41.1%, 24.6%, and 13.8% respectively, totaling 79.5% of the market [2] - In 2024, the North American oral tobacco market is expected to reach $8.775 billion, growing by 58.30% year-on-year, while the European market is projected to reach $2.415 billion, with a year-on-year growth of 56.12% [1][2] Company Performance - Philip Morris International's ZYN nicotine pouch sales are projected to be 644 million boxes in 2024, a year-on-year increase of 52.93%, with U.S. sales accounting for 581 million boxes, up 51.49% [2] - British American Tobacco's oral tobacco sales, including brands like Velo and Grizzly, are expected to reach 8.3 billion pouches in 2024, reflecting a year-on-year growth of 55%, with U.S. sales surging by 234% [2] Regulatory Developments - The FDA has authorized the sale of 20 ZYN nicotine pouch products, which are deemed to have lower harmful components compared to traditional cigarettes and most smokeless tobacco products, aligning with public health standards [4] - The approval of flavored products is expected to enhance market growth and expand the market's potential [4] Industry Opportunities - Jin Cheng Pharmaceutical is increasing its production capacity to 200 tons per year, focusing on high-purity nicotine for new tobacco products, which positions the company to benefit from the expanding oral tobacco market [5][6] - The company has received various certifications, including FDA PMTA approval, which enhances its competitive edge in the market [6] Investment Recommendations - Companies to watch in the oral tobacco supply chain include Jin Cheng Pharmaceutical (300233.SZ) and Run Du Co., Ltd. (002923.SZ) [7]

Core Viewpoint - China Boton (03318.HK) reported a significant decline in financial performance for the six months ending June 30, 2025, with total revenue decreasing by 15.1% year-on-year [1] Financial Performance - The total revenue for the group was approximately RMB 637.8 million, down from the previous year [1] - Gross profit decreased to approximately RMB 198.9 million, representing a 34.9% decline compared to the same period last year [1] - The net profit for the period was approximately RMB 8.7 million, a substantial decrease of 86.1% year-on-year [1]

Group 1 - The company reported a revenue of RMB 638 million for the six months ending June 30, 2025, representing a year-on-year decrease of 15.08% [1] - The company experienced a loss attributable to shareholders of RMB 8.119 million, marking a shift from profit to loss compared to the previous year [1] - The loss per share was reported at RMB 0.01 [1]

Group 1 - The company reported a revenue of RMB 638 million for the six months ending June 30, 2025, representing a year-on-year decrease of 15.08% [1] - The company experienced a loss attributable to shareholders of RMB 8.119 million, marking a shift from profit to loss compared to the previous year [1] - The loss per share was reported at RMB 0.01 [1]

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This report presents the unaudited interim condensed consolidated financial statements and management's discussion and analysis for the six months ended June 30, 2025 [Disclaimer](index=1&type=section&id=Disclaimer) HKEX and HKSE are not responsible for the content's accuracy or completeness and disclaim liability for any losses incurred from reliance on this announcement - HKEX is not responsible for the content, accuracy, or completeness of this announcement, and disclaims liability for any losses[1](index=1&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) China Boton Group Company Limited's Board approved the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, reviewed by the Audit Committee - China Boton Group Company Limited (Stock Code: 3318) Board approved the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[2](index=2&type=chunk) - The interim financial statements have been reviewed by the Company's Audit Committee[2](index=2&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents China Boton Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, including the balance sheet, income statement, and comprehensive income statement [Interim Condensed Consolidated Balance Sheet](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the Group's total assets slightly increased, driven by non-current asset growth, while current assets decreased; total liabilities and equity remained relatively stable Interim Condensed Consolidated Balance Sheet (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 4,590,960 | 4,434,214 | | Current assets | 1,719,706 | 1,863,711 | | **Total Assets** | **6,310,666** | **6,297,925** | | **Equity** | | | | Attributable to owners of the Company | 3,133,854 | 3,140,955 | | Non-controlling interests | 277,609 | 268,323 | | **Total Equity** | **3,411,463** | **3,409,278** | | **Liabilities** | | | | Non-current liabilities | 1,246,529 | 1,071,645 | | Current liabilities | 1,652,674 | 1,817,002 | | **Total Liabilities** | **2,899,203** | **2,888,647** | - Non-current assets increased, primarily driven by growth in property, plant, and equipment[3](index=3&type=chunk) - Current assets decreased, mainly due to reductions in inventories, trade and other receivables, and cash and cash equivalents[3](index=3&type=chunk) [Interim Condensed Consolidated Income Statement](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue and gross profit significantly declined, leading to a substantial decrease in profit for the period and a loss attributable to owners Interim Condensed Consolidated Income Statement (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 637,753 | 750,975 | | Cost of sales | (438,894) | (445,344) | | Gross profit | 198,859 | 305,631 | | Operating profit | 33,725 | 109,237 | | Profit before income tax | 10,840 | 81,230 | | Profit for the period | 8,707 | 62,682 | | Attributable to owners of the Company | (8,119) | 44,332 | | Basic and diluted (loss)/earnings per share (RMB) | (0.01) | 0.04 | - Revenue decreased by **15.1% year-on-year**, and gross profit decreased by **34.9% year-on-year**[5](index=5&type=chunk) - Profit for the period significantly decreased by **86.1% year-on-year**, with profit attributable to owners of the Company turning into a loss[5](index=5&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income significantly decreased, mainly due to reduced profit for the period and changes in currency translation differences, resulting in a loss attributable to owners Interim Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the period | 8,707 | 62,682 | | Currency translation differences | 2,604 | (3,292) | | Total comprehensive income for the period | 11,311 | 59,390 | | Attributable to owners of the Company | (4,875) | 42,461 | - Total comprehensive income for the period decreased by **80.9% year-on-year**, with the portion attributable to owners of the Company turning into a loss[7](index=7&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering company information, accounting policies, financial risk management, key estimates, segment information, and specific balance sheet and income statement items [General Information](index=6&type=section&id=General%20Information) China Boton Group, established in Cayman Islands in 2005 and listed on HKEX, primarily produces and sells flavors, fragrances, and e-cigarette products in China and Asia, with interim financial information presented in RMB - The Group's principal business involves the production and sale of flavors, fragrances, and e-cigarette products[8](index=8&type=chunk) - The Company was incorporated in the Cayman Islands on March 9, 2005, and listed on the Hong Kong Stock Exchange on December 9, 2005[8](index=8&type=chunk)[9](index=9&type=chunk) - The interim financial information is presented in **RMB** and was approved for issue by the Board on August 22, 2025[10](index=10&type=chunk)[11](index=11&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim financial statements are prepared in accordance with HKAS 34 and should be read with the annual financial statements; new and revised standards adopted have no material impact - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA[13](index=13&type=chunk) - The adoption of new and revised standards by the Group had no material impact on the financial performance and position for the current and prior periods[14](index=14&type=chunk) - Standards issued but not yet effective are not expected to have a significant impact on the entity in current or future reporting periods[15](index=15&type=chunk) [Financial Risk Management](index=7&type=section&id=Financial%20Risk%20Management) The Group faces market risks (exchange rate, interest rate), credit risk, and liquidity risk, with full details available in the annual financial statements - The Group is exposed to market risks (foreign exchange, fair value interest rate, cash flow interest rate), credit risk, and liquidity risk[16](index=16&type=chunk) - The interim financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2024, for complete financial risk management information[16](index=16&type=chunk) [Critical Accounting Estimates and Judgments](index=7&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) Preparing interim financial statements involves management judgments, estimates, and assumptions, which may differ from actual results, with significant judgments consistent with the prior annual consolidated financial statements - The preparation of interim financial statements requires management to make judgments, estimates, and assumptions, and actual results may differ[17](index=17&type=chunk) - The significant judgments made during this period are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024[17](index=17&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) The Group operates in five segments: flavor enhancers, food flavors, daily use flavors, e-cigarette products, and investment properties; total revenue decreased year-on-year, primarily due to a significant decline in flavor enhancers - The Group's business is divided into five segments: flavor enhancers, food flavors, daily use flavors, e-cigarette products, and investment properties[18](index=18&type=chunk) Segment Revenue (RMB thousands) | Segment | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Flavor enhancers | 179,463 | 308,057 | -41.7% | | Food flavors | 93,051 | 90,286 | +3.1% | | Daily use flavors | 73,115 | 69,567 | +5.0% | | E-cigarette products | 267,233 | 256,132 | +4.3% | | Investment properties | 24,891 | 26,933 | -7.6% | | **Total** | **637,753** | **750,975** | **-15.1%** | - The flavor enhancers segment's operating profit turned from profit to loss, and the e-cigarette products segment's loss widened[20](index=20&type=chunk)[22](index=22&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) As of June 30, 2025, the Group's net book value of property, plant, and equipment increased, while intangible assets slightly decreased, with a significant increase in additions to property, plant, and equipment during the period Property, Plant and Equipment and Intangible Assets (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net book value of property, plant and equipment at period end | 2,164,053 | 1,528,866 | | Net book value of intangible assets at period end | 1,597,156 | 1,721,629 | | Additions to property, plant and equipment (current period) | 204,622 | 72,496 | - Additions to property, plant, and equipment for the six months ended June 30, 2025, amounted to **RMB 204,622 thousands**, significantly higher than **RMB 72,496 thousands** in the same period last year[23](index=23&type=chunk) [Leases](index=10&type=section&id=Leases) As of June 30, 2025, both right-of-use assets and lease liabilities increased, along with higher depreciation and interest expenses for right-of-use assets during the period Lease Information (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Right-of-use assets | 156,771 | 152,934 | | Lease liabilities | 15,356 | 9,879 | Lease Expenses (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation expense for right-of-use assets | 5,630 | 4,227 | | Interest expense | 445 | 195 | - Lease liabilities (current and non-current) increased from **RMB 9,879 thousands** as of December 31, 2024, to **RMB 15,356 thousands** as of June 30, 2025[24](index=24&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, both net trade receivables and other receivables decreased, primarily due to a reduction in trade receivables, particularly those less than three months old Trade and Other Receivables (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables – net | 385,511 | 466,841 | | Other receivables – net | 489,653 | 473,222 | | **Total** | **875,808** | **938,946** | Aging Analysis of Trade Receivables (RMB thousands) | Aging of Trade Receivables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than three months | 208,247 | 300,331 | | Over three months but not over one year | 153,163 | 149,314 | | Over one year | 267,746 | 265,288 | - Net trade receivables decreased from **RMB 466,841 thousands** to **RMB 385,511 thousands**, mainly due to a reduction in trade receivables aged less than three months[26](index=26&type=chunk)[27](index=27&type=chunk) - Trade bills are due within six months[27](index=27&type=chunk) [Share Capital](index=12&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid ordinary share capital remained unchanged, with 1,080,512 thousand shares outstanding Share Capital (RMB thousands) | Indicator | June 30, 2025 (thousand shares) | Share Capital (RMB thousands) | Share Premium (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Issued ordinary shares | 1,080,512 | 101,522 | 1,292,432 | 1,393,954 | - The share capital structure remained unchanged from January 1, 2024, to June 30, 2025[29](index=29&type=chunk) [Shares Held Under Share Award Scheme](index=12&type=section&id=Shares%20Held%20Under%20Share%20Award%20Scheme) The Company adopted a share award scheme on December 11, 2023, to reward employees; as of June 30, 2025, 500,000 shares held by the trustee remained unawarded, with no shares awarded during the period - The Company adopted a share award scheme on December 11, 2023, to reward employees or service providers who have contributed to the Company and its subsidiaries[30](index=30&type=chunk) - No shares were awarded under the share award scheme for the six months ended June 30, 2025[30](index=30&type=chunk) - As of June 30, 2025, the trustee held **500,000 shares** that had not yet been awarded[30](index=30&type=chunk) [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables significantly decreased, primarily due to reductions in trade payables, accrued wages, and other payables Trade and Other Payables (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 292,667 | 432,587 | | Payables for consolidated businesses | 150,000 | 150,000 | | Accrued wages | 14,720 | 44,447 | | Other taxes payable | 27,543 | 35,136 | | Amount due to a related party | 27,470 | — | | **Total** | **629,461** | **807,141** | Aging Analysis of Trade Payables (RMB thousands) | Aging of Trade Payables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than three months | 133,881 | 290,632 | - Total trade payables decreased from **RMB 432,587 thousands** to **RMB 292,667 thousands**, with the largest decrease in trade payables aged less than three months[31](index=31&type=chunk)[32](index=32&type=chunk) - A new amount due to a related party of **RMB 27,470 thousands** is unsecured, repayable on demand, and interest-free[31](index=31&type=chunk)[32](index=32&type=chunk) [Borrowings](index=14&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings increased, mainly driven by the growth in non-current secured bank borrowings, primarily denominated in RMB and collateralized by various assets and guarantees Borrowings (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current borrowings | 1,133,013 | 955,904 | | Current borrowings | 906,648 | 894,086 | | **Total Borrowings** | **2,039,661** | **1,849,990** | Borrowings by Currency (RMB thousands) | Borrowing Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | RMB | 1,804,455 | 1,605,911 | | HKD | 235,206 | 244,079 | - Total borrowings increased by **RMB 189,671 thousands**, with non-current borrowings increasing by **RMB 177,109 thousands**[33](index=33&type=chunk) - Bank borrowings are secured by property, plant and machinery, investment properties, bank deposits, land use rights, 100% equity interest in Shenzhen Boton, personal guarantees from the Chairman, and corporate guarantees[38](index=38&type=chunk) [Revenue Details](index=15&type=section&id=Revenue%20Details) The Group's revenue primarily derives from goods sales and rental income; for the six months ended June 30, 2025, both sources experienced a decline Revenue by Source (RMB thousands) | Revenue Source | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods | 612,862 | 724,042 | | Rental income | 24,891 | 26,933 | | **Total Revenue** | **637,753** | **750,975** | - Revenue from sales of goods decreased by **15.3% year-on-year**, and rental income decreased by **7.6% year-on-year**[36](index=36&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) For the six months ended June 30, 2025, the Group's other income decreased year-on-year, mainly due to a reduction in government grants and other miscellaneous income Other Income (RMB thousands) | Income Source | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 1,239 | 1,306 | | Others | 221 | 938 | | **Total** | **1,460** | **2,244** | - Other income decreased by **34.9% year-on-year**[37](index=37&type=chunk) [Other Gains - Net](index=16&type=section&id=Other%20Gains%20-%20Net) For the six months ended June 30, 2025, the Group's other gains – net significantly decreased, primarily due to a reduction in other gains Other Gains - Net (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value loss on investment properties | (400) | (400) | | Others | 583 | 2,938 | | **Total** | **183** | **2,538** | - Other gains – net decreased by **92.8% year-on-year**[39](index=39&type=chunk) [Expenses by Nature](index=16&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, total expenses decreased, mainly due to lower raw materials and consumables used, employee benefit expenses, and consulting fees, despite a significant increase in advertising expenses Expenses by Nature (RMB thousands) | Expense Item | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation and amortization | 58,207 | 56,326 | | Employee benefit expenses | 91,466 | 96,929 | | Raw materials and consumables used | 348,588 | 405,999 | | Advertising expenses | 6,951 | 2,448 | | Consulting fees | 15,583 | 24,107 | | **Total Expenses** | **610,050** | **637,468** | - Raw materials and consumables used decreased by **14.2% year-on-year**, and employee benefit expenses decreased by **5.6% year-on-year**[40](index=40&type=chunk) - Advertising expenses significantly increased by **183.9% year-on-year**[40](index=40&type=chunk) [Finance Income and Costs](index=17&type=section&id=Finance%20Income%20and%20Costs) For the six months ended June 30, 2025, the Group's net finance income and costs both decreased, primarily due to reduced interest income, increased exchange gains, and changes in capitalized amounts Finance Income and Costs (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income – interest income | 621 | 2,306 | | Finance costs – interest expense | (34,879) | (34,456) | | Finance costs – exchange gains | 3,582 | 737 | | Finance costs – net | (22,885) | (28,007) | - Interest income decreased by **73.1% year-on-year**, while exchange gains significantly increased by **385.8% year-on-year**[42](index=42&type=chunk) - Net finance costs decreased by **18.3% year-on-year**[42](index=42&type=chunk) [Income Tax Expense](index=17&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense significantly decreased, mainly due to lower current and deferred income taxes, with some high-tech subsidiaries enjoying a preferential tax rate of 15% Income Tax Expense (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | 10,570 | 31,464 | | Deferred income tax | (8,437) | (12,916) | | **Total** | **2,133** | **18,548** | - Income tax expense significantly decreased by **88.5% year-on-year**[43](index=43&type=chunk) - Certain Chinese subsidiaries, as high-tech enterprises, enjoy a preferential tax rate of **15%**[43](index=43&type=chunk) [Earnings Per Share](index=18&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the Company turned into a loss, resulting in basic and diluted earnings per share shifting from profit to loss Earnings Per Share | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB thousands) | (8,119) | 44,332 | | Weighted average number of ordinary shares outstanding (thousand shares) | 1,080,012 | 1,080,493 | | Basic (loss)/earnings per share (RMB per share) | (0.01) | 0.04 | - Basic and diluted earnings per share turned from a profit of **RMB 0.04** in the prior period to a loss of **RMB 0.01** per share in the current period[45](index=45&type=chunk) - Diluted earnings per share are the same as basic earnings per share, as there were no potential dilutive effects in the current or prior periods[46](index=46&type=chunk) [Dividends](index=18&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025[47](index=47&type=chunk) [Contingent Liabilities (Financial Notes)](index=18&type=section&id=Contingent%20Liabilities%20%28Financial%20Notes%29) As of June 30, 2025, the Company is involved in a legal dispute regarding the outstanding consideration of RMB 150,000,000 for the Kimree acquisition, with the outcome currently not reasonably estimable - The Company is involved in a legal dispute with one of the vendors of the Kimree acquisition, concerning outstanding consideration of **RMB 150,000,000**[48](index=48&type=chunk) - This outstanding consideration has been accrued and included in "Trade and other payables"[48](index=48&type=chunk) - The case is still in its early stages, and management cannot reasonably estimate the outcome[48](index=48&type=chunk) [Commitments](index=19&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments significantly decreased, while short-term lease-related commitments slightly declined Commitments (RMB thousands) | Commitment Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for property, plant and equipment | 21,724 | 188,898 | | Short-term lease-related commitments (within one year) | 174 | 412 | - Capital commitments for property, plant, and equipment significantly decreased from **RMB 188,898 thousands** to **RMB 21,724 thousands**[49](index=49&type=chunk) [Related Party Transactions](index=19&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group did not enter into any significant related party transactions, consistent with the prior year - No significant related party transactions were entered into for the six months ended June 30, 2025[51](index=51&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance, financial position, market challenges, and future outlook for the reporting period, highlighting significant declines in revenue and net profit due to business downturns and economic uncertainties [Principal Activities of the Group](index=20&type=section&id=Principal%20Activities%20of%20the%20Group) The Group primarily designs and manufactures high-quality e-cigarette products and produces, trades, and sells extracts, flavors, and fragrances globally across various industries - The Group's core businesses include e-cigarette products (disposable, rechargeable, and accessories) and flavor and fragrance products (flavor enhancers, food flavors, daily use flavors)[52](index=52&type=chunk) - E-cigarette products are primarily sold to tobacco companies, independent e-cigarette manufacturers, and customers under various brands[52](index=52&type=chunk) - Flavor products are sold to industries such as tobacco, beverages, and daily food, while fragrance products are sold to beauty products, perfumes, and soaps[52](index=52&type=chunk) [Business Review](index=20&type=section&id=Business%20Review) The reporting period saw a complex global economy, international trade disruptions, and shifting consumption patterns, leading to challenges like rising production costs and regulatory tightening, which the Group addressed through cost control and automation - The global economy is complex, with international trade severely impacted by prolonged wars and geopolitical tensions, affecting consumption patterns[53](index=53&type=chunk) - E-cigarette product production costs increased, labor costs rose, and tariff uncertainties hindered overseas expansion[53](index=53&type=chunk) - The Group's total revenue decreased by **15.1% year-on-year** to **RMB 637.8 million**, gross profit decreased by **34.9% year-on-year** to **RMB 198.9 million**, and net profit for the period significantly decreased by **86.1% year-on-year** to **RMB 8.7 million**[53](index=53&type=chunk) [Segment Revenue Breakdown](index=21&type=section&id=Segment%20Revenue%20Breakdown) For the six months ended June 30, 2025, flavor enhancers revenue significantly declined by 41.7%, while food flavors, daily use flavors, and e-cigarette products saw slight increases, and investment property revenue decreased marginally Segment Revenue Breakdown (RMB millions) | Segment | 2025 Revenue (RMB millions) | % of Total Revenue | 2024 Revenue (RMB millions) | % of Total Revenue | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Flavor enhancers | 179.5 | 28.1% | 308.1 | 41.0% | -41.7% | | Food flavors | 93.1 | 14.6% | 90.3 | 12.0% | +3.1% | | Daily use flavors | 73.1 | 11.5% | 69.6 | 9.3% | +5.0% | | E-cigarette products | 267.2 | 41.9% | 256.1 | 34.1% | +4.3% | | Investment properties | 24.9 | 3.9% | 26.9 | 3.6% | -7.4% | | **Total** | **637.8** | **100.0%** | **751.0** | **100.0%** | **-15.1%** | - The **41.7% significant decrease** in flavor enhancers revenue was the primary reason for the overall revenue decline[54](index=54&type=chunk) - E-cigarette products became the largest revenue contributing segment, accounting for **41.9%**[54](index=54&type=chunk) [Flavor Enhancers Business Review](index=21&type=section&id=Flavor%20Enhancers%20Business%20Review) Flavor enhancers revenue significantly decreased by 41.7% due to intense competition, rising raw material costs, stricter regulations, and changing consumer demand, leading to higher production costs and lower profit margins - Flavor enhancers revenue was approximately **RMB 179.5 million**, a significant **41.7% year-on-year decrease**[56](index=56&type=chunk) - Challenges include intense industry competition, increased costs of natural raw materials, stricter government safety regulations, and changing consumer demand[56](index=56&type=chunk) - The Group will allocate resources to improve product quality, competitiveness, and diversify overseas markets[56](index=56&type=chunk) [Food Flavors Business Review](index=21&type=section&id=Food%20Flavors%20Business%20Review) Food flavors revenue slightly increased by 3.1% to approximately RMB 93.1 million, as the Group maintained stable income in a competitive market by continuously developing new flavors - Food flavors revenue was approximately **RMB 93.1 million**, a slight **3.1% year-on-year increase**[57](index=57&type=chunk) - The Group maintained stable revenue in a competitive market by developing new flavors[57](index=57&type=chunk) [Daily Use Flavors Business Review](index=22&type=section&id=Daily%20Use%20Flavors%20Business%20Review) Daily use flavors revenue increased by 5.0% to approximately RMB 73.1 million, driven by the acquisition of new customers and continued support from long-term partners - Daily use flavors revenue was approximately **RMB 73.1 million**, a **5.0% year-on-year increase**[58](index=58&type=chunk) - Revenue growth is attributed to an increase in new customers and continued support from long-term cooperative clients[58](index=58&type=chunk) [E-cigarette Products Business Review](index=22&type=section&id=E-cigarette%20Products%20Business%20Review) E-cigarette product revenue slightly increased by 4.3% to approximately RMB 267.2 million, benefiting from diversified local customers and an extensive marketing network, with management anticipating improved business in the second half through collaborations - E-cigarette product revenue was approximately **RMB 267.2 million**, a slight **4.3% year-on-year increase**[59](index=59&type=chunk) - Revenue growth benefited from diversified local customers and an extensive marketing network[59](index=59&type=chunk) - Management is negotiating collaborations with major companies, expecting enhanced synergies and improved business in the second half of the year[59](index=59&type=chunk) [Investment Properties Business Review](index=22&type=section&id=Investment%20Properties%20Business%20Review) Investment property revenue decreased by 7.4% to approximately RMB 24.9 million, primarily due to lease terminations by some tenants amid a challenging property market in Shenzhen, China - Investment property revenue was approximately **RMB 24.9 million**, a **7.4% year-on-year decrease**[60](index=60&type=chunk) - The revenue reduction is due to the challenging property market in Shenzhen, leading to lease terminations by some tenants[60](index=60&type=chunk) [Gross Profit Analysis](index=22&type=section&id=Gross%20Profit%20Analysis) For the six months ended June 30, 2025, the Group's gross profit was approximately RMB 198.9 million, a significant 34.9% year-on-year decrease Gross Profit (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Gross profit | 198.9 | 305.6 | -34.9% | - Gross profit significantly decreased by **34.9%**, reflecting declining revenue and challenges in cost control[61](index=61&type=chunk) [Net Profit for the Period Analysis](index=22&type=section&id=Net%20Profit%20for%20the%20Period%20Analysis) The Group's net profit for the period was approximately RMB 8.7 million, a substantial 86.1% year-on-year decrease, with the net profit margin falling to approximately 1.4% Net Profit for the Period (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Net profit for the period | 8.7 | 62.7 | -86.1% | | Net profit margin | 1.4% | 8.3% | -6.9 percentage points | - Net profit significantly decreased by **86.1%**, and the net profit margin dropped from **8.3% to 1.4%**[62](index=62&type=chunk) [Other Income Analysis](index=22&type=section&id=Other%20Income%20Analysis) For the six months ended June 30, 2025, other income was RMB 1.5 million, a 34.9% year-on-year decrease, mainly due to reduced auxiliary business income not classified under principal segments Other Income (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Other income | 1.5 | 2.2 | -34.9% | - Other income decreased by **34.9%**, primarily due to a reduction in other auxiliary business income[63](index=63&type=chunk) [Other Gains - Net Analysis](index=23&type=section&id=Other%20Gains%20-%20Net%20Analysis) For the six months ended June 30, 2025, other gains – net were approximately RMB 0.2 million, a significant decrease from RMB 2.5 million in the prior year, mainly due to the absence of gains from derecognition of Chinese subsidiaries Other Gains - Net (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Other gains – net | 0.2 | 2.5 | - Other gains – net significantly decreased, mainly due to the absence of gains from the derecognition of Chinese subsidiaries in the current period[64](index=64&type=chunk) [Expenses Analysis](index=23&type=section&id=Expenses%20Analysis) Selling and marketing expenses increased by 5.5% year-on-year due to higher advertising costs, while administrative expenses decreased by 13.2% due to lower employee benefits, consulting, and office expenses Expenses (RMB millions) | Expense Item | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 24.9 | 23.6 | +5.5% | | Administrative expenses | 146.3 | 168.5 | -13.2% | - Selling and marketing expenses as a percentage of total revenue increased from **3.1% to 3.9%**[65](index=65&type=chunk) - The reduction in administrative expenses is primarily due to decreases in employee benefit expenses, consulting fees, and office expenses[65](index=65&type=chunk) [Net Finance Costs Analysis](index=23&type=section&id=Net%20Finance%20Costs%20Analysis) For the six months ended June 30, 2025, net finance costs were approximately RMB 22.9 million, an 18.3% year-on-year decrease, primarily attributable to lower loan interest rates on borrowings Net Finance Costs (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Net finance costs | 22.9 | 28.0 | -18.3% | - Net finance costs decreased primarily due to lower loan interest rates on borrowings[66](index=66&type=chunk) [Corporate Culture](index=23&type=section&id=Corporate%20Culture) The Group upholds its "Four New and Five Hearts" corporate culture, with core values of "high technology, high quality, high starting point, and high standards," aiming to enhance competitiveness and embark on internationalization - The Group's corporate culture embodies "Four New" (new brand, new culture, new strength, new image) and "Five Hearts" (attentiveness, dedication, meticulousness, sincerity, care)[67](index=67&type=chunk) - Core values are "high technology, high quality, high starting point, and high standards," aiming to enhance competitiveness and embark on an international journey[67](index=67&type=chunk) [Business Outlook](index=24&type=section&id=Business%20Outlook) The Group anticipates a slow global economic recovery in the second half of 2025, driven by emerging economies, and plans to actively regain domestic market share, accelerate globalization, and capture high-value-added markets through technological cooperation and production enhancements, while committing to green economy and sustainability - The global economy is expected to recover slowly and unevenly in the second half of 2025, with growth driven by emerging economies such as India and Southeast Asia[68](index=68&type=chunk) - The Group will actively regain domestic market share, accelerate globalization, and drive existing business growth in overseas markets through localization and technological cooperation[68](index=68&type=chunk) - The Group is committed to long-term goals such as green economy, carbon reduction, and enhancing resilience to maintain sustainable development[68](index=68&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) As of June 30, 2025, the Group's net current assets and current ratio improved, but the gearing ratio increased, while maintaining a prudent financial management approach Financial Ratios (RMB millions) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Net current assets | 67.0 | 46.7 | | Current ratio | 1.04 | 1.03 | | Gearing ratio | 59.8% | 54.3% | - Net current assets increased, primarily due to a reduction in trade and other payables[69](index=69&type=chunk) - The gearing ratio (total borrowings divided by total equity) increased from **54.3% to 59.8%**[70](index=70&type=chunk) [Funding](index=25&type=section&id=Funding) The Group can finance acquisitions through bank borrowings or equity fundraising and is confident in achieving its operational and expansion plans with funds generated from business operations - The Group can obtain financing for its acquisitions through bank borrowings or equity fundraising[71](index=71&type=chunk) - The Group is confident in having sufficient funds to achieve its operational and expansion plans[71](index=71&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) During the reporting period, the Company's share capital consisted of ordinary shares, with the total number of issued shares remaining at 1,080,512,146 - The Company's share capital consists of ordinary shares, with the total number of issued shares remaining at **1,080,512,146**[72](index=72&type=chunk) [Foreign Exchange and Interest Rate Risk](index=25&type=section&id=Foreign%20Exchange%20and%20Interest%20Rate%20Risk) For the six months ended June 30, 2025, the Group recorded a net foreign exchange gain of approximately RMB 3.6 million; its primary business is RMB-denominated, with some transactions and borrowings in USD and HKD, and interest rate risk is not hedged but deemed insignificant Foreign Exchange Net Gain (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Foreign exchange net gain | 3.6 | 0.7 | - Net foreign exchange gain significantly increased year-on-year; the primary business is denominated in **RMB**, with some transactions and borrowings in **USD** and **HKD**[73](index=73&type=chunk) - The Group does not hedge interest rate risk, and the Board believes it will not have a significant impact[73](index=73&type=chunk) [Pledged Assets of the Group](index=25&type=section&id=Pledged%20Assets%20of%20the%20Group) As of June 30, 2025, the Group pledged equity interests in certain subsidiaries, properties in Shenzhen and Huizhou, land use rights, bank deposits, and Hong Kong properties as collateral for borrowings - Pledged assets include equity interests in certain subsidiaries, various buildings, warehouses, investment properties, land use rights in Shenzhen and Huizhou, bank deposits, and Hong Kong properties[74](index=74&type=chunk) - Chairman Mr. Wang Mingfan provided personal guarantees[38](index=38&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's investments in fixed assets and construction in progress significantly increased, while capital commitments substantially decreased, all funded by internal and financing sources Capital Expenditure (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Investment in fixed assets and construction in progress | 241.6 | 75.3 | | Capital commitments for fixed assets | 21.7 | 188.9 | - Investments in fixed assets and construction in progress significantly increased by **220.8% year-on-year**[75](index=75&type=chunk) - Capital commitments for fixed assets significantly decreased from **RMB 188.9 million** to **RMB 21.7 million**[75](index=75&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025[76](index=76&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,112 employees globally, offering competitive remuneration, retirement plans, share option schemes, and benefits, with performance-based bonuses, adhering to social security and provident fund regulations Employee Information | Indicator | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 1,112 | 1,259 | - The number of employees decreased by **11.7% year-on-year**[77](index=77&type=chunk) - The Group offers comprehensive and competitive remuneration, retirement plans, share option schemes, and benefits, with discretionary bonuses based on performance[77](index=77&type=chunk) [Significant Investments](index=26&type=section&id=Significant%20Investments) For the six months ended June 30, 2025, the Group made a significant investment in a construction project on land in Huizhou, China, with a planned investment of approximately RMB 400 million to expand its e-cigarette products segment - The Group made a significant investment in a construction project located in Zhongkai High-tech Zone, Huizhou, China[78](index=78&type=chunk) - A planned investment of approximately **RMB 400 million** in fixed assets on this land aims to expand the e-cigarette products segment[78](index=78&type=chunk) [Contingent Liabilities (Management Discussion)](index=26&type=section&id=Contingent%20Liabilities%20%28Management%20Discussion%29) As of June 30, 2025, the Group had no significant contingent liabilities other than the legal dispute involving the vendor of the Kimree acquisition - The Group has no significant contingent liabilities, except for the legal dispute involving the vendor of the Kimree acquisition[79](index=79&type=chunk) [Land Resumption in Shenzhen](index=26&type=section&id=Land%20Resumption%20in%20Shenzhen) Shenzhen Boton Flavors & Fragrances Co., Ltd. received a letter from Shenzhen Nanshan government regarding the proposed acquisition of its land for a high-speed rail hub; compensation has been offered, and preliminary discussions suggest no significant operational impact - Shenzhen Boton Flavors & Fragrances Co., Ltd. received a letter from Shenzhen Nanshan government regarding the proposed acquisition of its land in Shenzhen for a high-speed rail hub construction[80](index=80&type=chunk) - Relevant departments have provided compensation proposals, but detailed information is not yet available[80](index=80&type=chunk)[81](index=81&type=chunk) - Preliminary discussions indicate that the land resumption (if implemented) will not have a significant impact on Shenzhen Boton's operations[81](index=81&type=chunk) [Legal Proceedings Against Vendor of an Acquisition](index=27&type=section&id=Legal%20Proceedings%20Against%20Vendor%20of%20an%20Acquisition) As of June 30, 2025, the Group is involved in four legal proceedings against the vendors of the Kimree acquisition, including claims for breach of non-compete clauses, fiduciary duties, and misrepresentation, with outcomes remaining uncertain - The Group is involved in **four legal proceedings** against the vendors of the Kimree acquisition, including Mr. Liu Qiuming and Mr. Xiang Zhiyong[82](index=82&type=chunk) - The lawsuits include claims for breach of non-compete clauses, breach of fiduciary duties, and misrepresentation regarding the terms of the acquisition agreement[82](index=82&type=chunk)[83](index=83&type=chunk) - Some cases are still ongoing, with uncertain outcomes, and the Company is seeking legal advice on whether the relevant claims are time-barred[82](index=82&type=chunk)[83](index=83&type=chunk) [Supplemental Agreement - Profit Guarantee Extension](index=28&type=section&id=Supplemental%20Agreement%20-%20Profit%20Guarantee%20Extension) The Group signed a supplemental agreement extending the profit guarantee arrangement for the sale of certain equity interests in Boton Flavors & Fragrances Co., Ltd. until March 31, 2026, requiring a minimum 5% net profit growth, which constitutes a discloseable connected transaction - The Group signed a supplemental agreement extending the profit guarantee arrangement for Boton Flavors & Fragrances Group until **March 31, 2026**[85](index=85&type=chunk) - The new guarantee requires Boton Flavors & Fragrances Group's net profit to grow by no less than **5%** from January 1, 2025, to March 31, 2026[85](index=85&type=chunk) - This supplemental agreement constitutes a connected transaction and is subject to reporting and announcement requirements under the Listing Rules[85](index=85&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers information on the Company's listed securities transactions, the operations of its Audit, Remuneration, and Nomination Committees, corporate governance practices, and the publication arrangements for the interim results report [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[86](index=86&type=chunk) [Audit Committee](index=29&type=section&id=Audit%20Committee) The Audit Committee, comprising four independent non-executive directors, reviews and oversees the Group's financial reporting, risk management, and internal control systems, and has reviewed the unaudited interim condensed consolidated financial statements - The Audit Committee comprises **four independent non-executive directors**, with Mr. Wu Guanyun as Chairman[87](index=87&type=chunk) - The Committee's responsibilities include reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[87](index=87&type=chunk) - The Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[87](index=87&type=chunk) [Remuneration Committee](index=29&type=section&id=Remuneration%20Committee) The Remuneration Committee, consisting of four independent non-executive directors and one executive director, is responsible for considering and approving remuneration arrangements for the Group's senior employees, including salaries, bonuses, and long-term incentive plans - The Remuneration Committee comprises **four independent non-executive directors** (Chairman Mr. Wu Guanyun) and **one executive director** (Mr. Wang Mingfan)[88](index=88&type=chunk) - The Committee aims to consider and approve remuneration arrangements for the Group's senior employees, including terms for salaries, bonus schemes, and other long-term incentive plans[88](index=88&type=chunk) [Nomination Committee](index=29&type=section&id=Nomination%20Committee) The Nomination Committee, composed of four independent non-executive directors and two executive directors, reviews the Board's structure, size, and diversity, and makes recommendations on director appointments and succession planning - The Nomination Committee comprises **four independent non-executive directors** (Chairman Mr. Liang Weimin) and **two executive directors** (Mr. Wang Mingfan and Ms. Wang Xinyi)[89](index=89&type=chunk) - The Committee's responsibilities include reviewing the Board's structure, size, and diversity, and making recommendations to the Board on director appointments and succession planning[89](index=89&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The Company's Board is committed to maintaining high corporate governance standards for transparency and stakeholder protection, complying with all Code Provisions of Appendix C1 of the Listing Rules, except for the separation of Chairman and CEO roles - The Company is committed to maintaining good corporate governance standards to enhance corporate transparency and protect stakeholders' interests[90](index=90&type=chunk) - During the reporting period, the Company complied with all Code Provisions of Appendix C1 of the Listing Rules' Corporate Governance Code, except for Code Provision C.2.1[90](index=90&type=chunk) - Mr. Wang Mingfan serves concurrently as the Company's Executive Director, Chief Executive Officer, and Chairman, with the Board believing the current structure provides strong and continuous leadership[91](index=91&type=chunk) [Standard Code for Securities Transactions by Directors](index=30&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[92](index=92&type=chunk) - All directors confirmed compliance with the required standards set out in the Standard Code during the reporting period[92](index=92&type=chunk) [Publication of Interim Results and Interim Report](index=30&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the HKEX and Company websites, and the 2025 interim report will be dispatched to shareholders and published on these websites in due course - This results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.boton.com.hk)[93](index=93&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course[93](index=93&type=chunk) [Board of Directors Composition](index=30&type=section&id=Board%20of%20Directors%20Composition) As of the announcement date, the Board comprises three executive directors, one non-executive director, and four independent non-executive directors - As of the announcement date, the Executive Directors are Mr. Wang Mingfan, Mr. Li Qinglong, and Ms. Wang Xinyi[95](index=95&type=chunk) - The Non-executive Director is Ms. Yin Shuzhen[95](index=95&type=chunk) - The Independent Non-executive Directors are Mr. Wu Guanyun, Mr. Liang Weimin, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo[95](index=95&type=chunk)

香港交易及結算所有限公 司 及香港聯合交易所有限公司對本公告之內容概不 負 責，對其準確性或完整性 亦 不發表任何聲明，並明確表示概不就因本公告全部 或任何部分內容而 產 生或因倚賴該等內容而引致 之 任何損失承擔任何責任 。 承董 事 會 命 中 國 波頓集團 有限 公 司 主 席 王 明 凡 香港 ， 二零 二 五年 八 月 十 一 日 截 至 本公告日期， 執行董事為王明凡先生、李慶龍先生及 王心怡 女 士 ，非執行 董事為尹淑貞女士，獨立非執行董事為吳冠雲先生、梁偉民先生、周小雄先生 及邱浩波先生 。 China Boton Group Company Limited 中 國 波 頓 集 團 有 限 公 司 (在 開 曼 群 島 註 冊 成 立 的 有 限 公 司) (股份代號：3318) 董事會會議通知 中國 波 頓集 團 有限 公司 （「 本公司 」）董 事會（「 董事會 」）宣 佈， 將 於二 零 二 五 年 八月 二十 二 日（星 期 五 ）召開 董 事會 會 議，藉以（ 其中 包括 ）考 慮 及批 准 本公 司 及其 附 屬公 司截 至 二零 二 五年 六月 三 十日 止 六個 月 的中 期 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何 責任。 China Boton Group Company Limited （在開曼群島註冊成立的有限公司） （股份代號：3318） 關連交易 有關出售波頓香料股權的補充協議 茲提述日期為二零二零年六月十二日之該公告，內容有關（其中包括）賣方出售波頓香料約 30%股權及買方於股權轉讓協議項下的利潤保證。 新保證 於二零二五年八月一日，訂約方訂立補充協議，據此，買方各自保證，波頓香料集團自二零 二五年一月一日至二零二六年三月三十一日的淨利潤增長將不低於5%。 上市規則之涵義 買方為本公司之關連人士，因此新保證構成上市規則項下之關連交易。由於適用百分比率超 過0.1%但低於5%，補充協議及新保證須遵守上市規則第14A章項下之申報及公告規定，惟 獲豁免遵守獨立股東批准及通函規定。 緒言 有關期間已於二零二四年十二月三十一日屆滿。雖然收入保證未能達成，但淨利潤保證已圓滿 實現。波頓香料集團之淨利潤自二零二零至二零二四財政 ...

FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國波頓集團有限公司 (於開曼群島註冊成立的有限公司) 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 03318 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 1,600,000,000 | HKD | | 0.1 HKD | | 160,000,000 | | 增加 / 減少 (-) | | | 0 | | | HKD | | 0 | | 本月底結存 | | | 1,600,000,000 | HKD | | 0.1 HKD | | 160,000,000 | 本 ...