[Corporate Information and Announcements](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E5%85%AC%E5%91%8A%E5%A3%B0%E6%98%8E) [Disclaimer](index=1&type=section&id=%E5%85%AC%E5%91%8A%E5%A3%B0%E6%98%8E) The Hong Kong Exchanges and Clearing Limited disclaims responsibility for this announcement's content and any loss arising from reliance upon it[1](index=1&type=chunk) [Corporate Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) China Starch Holdings Limited (Stock Code: 3838) announces its unaudited consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) [Consolidated Financial Statements](index=1&type=section&id=%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=%E5%90%88%E5%B9%B6%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue decreased by 9.4% to RMB 5.115 billion, with profit for the period declining by 15.7% Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 5,114,852 | 5,645,514 | -9.4% | | Cost of sales | (4,686,096) | (5,138,334) | -8.8% | | Gross profit | 428,756 | 507,180 | -15.4% | | Operating profit | 279,725 | 342,483 | -18.3% | | Profit before tax | 297,133 | 355,294 | -16.4% | | Profit and total comprehensive income for the period | 225,636 | 267,482 | -15.7% | | Profit attributable to owners of the Company | 151,390 | 214,659 | -29.5% | | Basic and diluted earnings per share (RMB) | 0.0254 | 0.0360 | -29.4% | [Consolidated Statement of Financial Position](index=2&type=section&id=%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets remained stable at RMB 6.96 billion while total liabilities decreased, indicating an optimized financial structure Key Data from Consolidated Statement of Financial Position | Metric | As at June 30, 2025 (RMB'000) | As at December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total non-current assets | 2,490,059 | 2,539,526 | -1.9% | | Total current assets | 4,469,492 | 4,419,363 | +1.1% | | **Total assets** | **6,959,551** | **6,958,889** | **+0.01%** | | **Equity** | | | | | Equity attributable to owners of the Company | 4,204,055 | 4,105,970 | +2.4% | | Non-controlling interests | 448,431 | 387,685 | +15.7% | | **Total equity** | **4,652,486** | **4,493,655** | **+3.5%** | | **Liabilities** | | | | | Total non-current liabilities | 214,568 | 306,648 | -30.0% | | Total current liabilities | 2,092,497 | 2,158,586 | -3.0% | | **Total liabilities** | **2,307,065** | **2,465,234** | **-6.4%** | - Borrowings under non-current liabilities were reduced to **zero** as of June 30, 2025, from RMB 59,267 thousand at the end of 2024[4](index=4&type=chunk) [Notes to the Financial Statements](index=4&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [Basis of Preparation](index=4&type=section&id=%E7%BC%96%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, using accounting policies consistent with the 2024 annual report - The condensed consolidated interim financial statements are prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34[6](index=6&type=chunk) - The statements are presented in RMB and prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities[6](index=6&type=chunk) [Adoption of New/Revised Hong Kong Financial Reporting Standards (HKFRSs)](index=4&type=section&id=%E6%8E%A1%E7%B4%8D%E6%96%B0%E8%A8%82%E2%95%B1%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group adopted an amendment to HKAS 21 in 2025, which had no material impact on its financial position or performance - The Group adopted the amendment to HKAS 21 "Lack of Exchangeability" in 2025[7](index=7&type=chunk) - The amendment did not have any impact on the Group's results and financial position[7](index=7&type=chunk) [Segment Information](index=4&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates two segments, with upstream product performance declining significantly while fermentation and downstream product performance improved External Sales and Performance by Segment | Segment | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **External Sales** | | | | | Upstream products | 3,149,725 | 3,524,090 | -10.7% | | Fermentation and downstream products | 1,965,127 | 2,121,424 | -7.4% | | **Total** | **5,114,852** | **5,645,514** | **-9.4%** | | **Reportable Segment Performance** | | | | | Upstream products | 5,607 | 98,337 | -94.3% | | Fermentation and downstream products | 295,113 | 255,951 | +15.3% | | **Total** | **300,720** | **354,288** | **-15.1%** | [Other Net Income](index=5&type=section&id=%E5%85%B6%E4%BB%96%E6%B7%A8%E6%94%B6%E5%85%A5) Other net income decreased by 13.9% to RMB 49.4 million, primarily due to an increased loss on the disposal of property, plant, and equipment Breakdown of Other Net Income | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Amortisation of government grants | 37,530 | 38,977 | -3.7% | | Gain on sales of scrap materials | 12,855 | 14,611 | -12.0% | | Net foreign exchange gain | 2,644 | 4,265 | -38.0% | | Loss on disposal of property, plant and equipment | (6,216) | (512) | +1114.1% | | Government grants | 253 | 131 | +93.1% | | Gain on futures | – | 333 | -100.0% | | Others | 2,371 | (389) | +709.0% | | **Total** | **49,437** | **57,416** | **-13.9%** | [Profit Before Tax](index=5&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) The Group's profit before tax was RMB 297.1 million, with notable changes in major expenses including a significant decrease in research costs Breakdown of Major Expenses | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories | 4,018,342 | 4,465,085 | -10.0% | | Salaries and other related expenses | 153,658 | 136,605 | +12.5% | | Depreciation of property, plant and equipment | 134,737 | 136,663 | -1.4% | | Depreciation of right-of-use assets | 5,185 | 5,185 | 0.0% | | Delivery and logistics | 46,767 | 65,622 | -28.7% | | Research expenses | 20,731 | 43,689 | -52.6% | - Research expenses include the cost of inventories, staff costs of the R&D department, and depreciation[10](index=10&type=chunk) [Income Tax Expense](index=5&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 18.6% to RMB 71.5 million, mainly due to a reversal of deferred tax liabilities and over-provision in prior years Breakdown of Income Tax Expense | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current income tax - PRC Enterprise Income Tax | 80,797 | 45,298 | +78.4% | | Over-provision in prior years | (4,933) | – | N/A | | Deferred tax | (4,367) | 42,514 | -110.3% | | **Total** | **71,497** | **87,812** | **-18.6%** | - The enterprise income tax rate for PRC subsidiaries is **25%**, with a preferential rate of **15%** for high-tech enterprises[11](index=11&type=chunk) - The PRC withholding tax rate was reduced from **10%** in 2024 to **5%** in 2025[12](index=12&type=chunk) [Earnings Per Share](index=6&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share for the period decreased by 29.4% to RMB 0.0254, with no diluted EPS presented due to the absence of dilutive shares Calculation of Earnings Per Share | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB'000) | 151,390 | 214,659 | -29.5% | | Weighted average number of ordinary shares in issue ('000) | 5,964,492 | 5,965,532 | -0.02% | | **Basic earnings per share (RMB)** | **0.0254** | **0.0360** | **-29.4%** | - No diluted earnings per share was presented as there were no potential dilutive ordinary shares in either period[13](index=13&type=chunk) [Dividends](index=6&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for the first half of 2025, but a final dividend for 2024 was approved in May 2025 - The Board does not recommend the payment of an interim dividend for H1 2025 (H1 2024: Nil)[14](index=14&type=chunk) - On May 20, 2025, shareholders approved a final dividend of **HK 0.98 cents** per share for 2024 (2023: HK 0.69 cents)[14](index=14&type=chunk) [Trade and Other Receivables](index=6&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE) Total trade and other receivables increased by 22.1% to RMB 535.3 million, driven by higher trade receivables and prepayments Breakdown of Trade and Other Receivables | Item | As at June 30, 2025 (RMB'000) | As at December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 157,110 | 82,970 | +89.4% | | Bills receivable - bank acceptance | 274,145 | 280,774 | -2.4% | | Prepayments and other tax receivables | 94,217 | 52,993 | +77.8% | | Others | 9,853 | 21,602 | -54.3% | | **Total** | **535,325** | **438,339** | **+22.1%** | Ageing Analysis of Trade Receivables | Ageing | As at June 30, 2025 (RMB'000) | As at December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 to 30 days | 152,266 | 75,434 | | 31 to 60 days | 4,844 | 7,190 | | 61 to 90 days | – | 346 | | **Total** | **157,110** | **82,970** | - The Group generally grants a credit period of 0 to 150 days to its customers[15](index=15&type=chunk) [Trade and Other Payables](index=7&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE) Total trade and other payables decreased by 4.3% to RMB 345.3 million, mainly due to the settlement of notes payable and lower other tax payables Breakdown of Trade and Other Payables | Item | As at June 30, 2025 (RMB'000) | As at December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 154,180 | 157,694 | -2.2% | | Notes payable | – | 2,000 | -100.0% | | Payables for construction and equipment | 56,335 | 60,639 | -7.0% | | Salaries and welfare payables | 48,978 | 43,806 | +11.8% | | Accrued expenses | 32,878 | 42,555 | -22.7% | | Other tax payables | 12,876 | 24,665 | -47.8% | | Tender deposits | 31,982 | 20,757 | +54.1% | | **Total** | **345,263** | **360,653** | **-4.3%** | Ageing Analysis of Trade and Notes Payables | Ageing | As at June 30, 2025 (RMB'000) | As at December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 to 60 days | 133,346 | 134,654 | | 61 to 90 days | 1,120 | 2,164 | | Over 90 days | 19,714 | 22,876 | | **Total** | **154,180** | **159,694** | - The average credit period for purchases is 80 days[18](index=18&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Industry Overview and Corporate Development](index=8&type=section&id=%E8%A1%8C%E6%A5%AD%E6%A6%82%E8%A6%BD%E5%8F%8A%E5%85%AC%E5%8F%B8%E7%99%BC%E5%B1%95) The Group faced economic headwinds, intense market competition, and margin pressure from rising corn costs but maintains a stable financial position - In H1 2025, the domestic economy faced challenges with sluggish demand and ongoing Sino-US trade disputes, leading to market oversupply and downward price pressure[20](index=20&type=chunk) - The corn starch and deep processing industry saw stable capacity but faced intensified competition from low-cost imported tapioca starch and weak demand from the feed and breeding sectors[20](index=20&type=chunk) - Domestic corn prices rose steadily, but prices for corn starch and related products remained low due to weak demand, leading to **margin contraction**[21](index=21&type=chunk) - The Group's financial position remains **stable with sufficient funds**, and management has adopted a prudent strategy to control costs and improve operational efficiency[21](index=21&type=chunk) - The Linqing production base expansion project was delayed until early August due to permit approvals but is not expected to affect the 2026 trial production schedule[21](index=21&type=chunk) - The expansion project involved dismantling existing facilities, resulting in a **higher loss on disposal of obsolete equipment** in H1, with no significant further losses expected in H2[22](index=22&type=chunk) [Business Review](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The upstream segment faced multiple pressures while the downstream segment saw improved gross profit despite lower revenue, driven by strategic shifts - **Upstream products (corn starch)** faced pressure from rising corn kernel prices due to lower imports, falling prices of substitutes like wheat/tapioca starch, and industry capacity expansion[23](index=23&type=chunk) - The **fermentation and downstream products** segment saw an overall revenue decline but improved gross profit through strategic adjustments and solid performance of new bio-based materials[24](index=24&type=chunk) - The **lysine business** strategically shifted its sales focus from overseas to domestic channels due to an anti-dumping investigation in China[24](index=24&type=chunk) - The **starch sugar business** faced challenges from weak demand in the catering industry and intensified competition from industry capacity expansion, pressuring profitability[24](index=24&type=chunk) - The **modified starch business** experienced a significant decrease in sales volume, mainly due to stricter wastewater control measures[24](index=24&type=chunk) - The **new bio-based materials business** performed satisfactorily, achieving growth by expanding its distribution network, attracting new customers, and launching new products[24](index=24&type=chunk) [Financial Performance](index=9&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) The Group's revenue and gross profit declined by 9.4% and 15.4% respectively, pressured by lower sales volume and rising raw material costs - The Group's revenue decreased to **RMB 5,114,852,000 (down 9.4% YoY)**, mainly due to a decline in both average selling prices and total sales volume[25](index=25&type=chunk) - A significant increase in the market price of corn kernels (the main raw material) led to a decrease in gross profit to **RMB 428,756,000 (down 15.4% YoY)**, putting significant pressure on profit margins[25](index=25&type=chunk) - Profit before tax was **RMB 297,133,000 (down 16.4% YoY)**, and profit after tax was **RMB 225,636,000 (down 15.7% YoY)**[25](index=25&type=chunk) [Segment Performance: Upstream Products](index=10&type=section&id=%E5%88%86%E9%83%A8%E8%A1%A8%E7%8F%BE%EF%BC%9A%E4%B8%8A%E6%B8%B8%E7%94%A2%E5%93%81) The upstream product segment's revenue and gross margin fell significantly due to rising corn costs, reduced demand, and competition from substitutes Upstream Products Segment Performance | Metric | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,149,725 | 3,524,090 | -10.6% | | Gross Profit | 91,475 | 198,370 | -53.9% | | Gross Profit Margin | 2.9% | 5.6% | -2.7 p.p. | - Corn starch sales volume was approximately **856,500 tonnes** (2024: 891,288 tonnes), with an average selling price of approximately **RMB 2,465 per tonne** (2024: RMB 2,679 per tonne)[26](index=26&type=chunk) - Profitability was mainly affected by a significant increase in corn kernel costs, reduced market demand, and intensified competition from substitutes[26](index=26&type=chunk) [Segment Performance: Fermentation and Downstream Products](index=10&type=section&id=%E5%88%86%E9%83%A8%E8%A1%A8%E7%8F%BE%EF%BC%9A%E7%99%BC%E9%85%B5%E5%8F%8A%E4%B8%8B%E6%B8%B8%E7%94%A2%E5%93%81) The fermentation and downstream segment's revenue decreased by 7.4%, but its gross margin improved due to strategic adjustments and product mix changes Fermentation and Downstream Products Segment Performance | Metric | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 1,965,127 | 2,121,424 | -7.4% | | Gross Profit | 337,281 | 308,810 | +9.2% | | Gross Profit Margin | 17.2% | 14.6% | +2.6 p.p. | Revenue Breakdown of Fermentation and Downstream Products | Product | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Lysine | 1,553,051 | 1,605,963 | -3.3% | | Starch sugar | 222,607 | 247,926 | -10.3% | | Modified starch | 110,250 | 216,954 | -49.2% | | Others (incl. new bio-based materials) | 79,219 | 50,581 | +56.6% | - Domestic sales volume of lysine increased to **247,596 tonnes** (2024: 227,549 tonnes), while total sales volume rose slightly to approximately **275,187 tonnes** (2024: 273,256 tonnes), with the average selling price decreasing to **RMB 5,644 per tonne** (2024: RMB 5,877 per tonne)[28](index=28&type=chunk) - Both sales volume and average selling price of starch sugar decreased, with the proportion of liquid starch sugar rising to **81.7%**, leading to a lower overall average selling price[28](index=28&type=chunk) - Revenue from new bio-based materials and other products grew by **56.6%**, mainly benefiting from an enhanced distribution network[29](index=29&type=chunk) [Cost of Sales](index=11&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Total cost of sales decreased by 8.8% to RMB 4.69 billion, with the average purchase cost of corn kernels being lower than the prior period - Total cost of sales was approximately **RMB 4,686,096,000**, a year-on-year decrease of 8.8%[30](index=30&type=chunk) - The average purchase cost of corn kernels (net of VAT) was approximately **RMB 2,068 per tonne**, lower than H1 2024 (RMB 2,135) but higher than the H2 2025 forecast (RMB 2,040)[30](index=30&type=chunk) - The Group did not enter into any forward/futures contracts to hedge against corn kernel price fluctuations during the period[30](index=30&type=chunk) [Other Operational Review](index=11&type=section&id=%E5%85%B6%E4%BB%96%E7%87%9F%E9%81%8B%E5%9B%9E%E9%A1%A7) The Group saw significant changes in operating expenses, with distribution and research costs decreasing while administrative expenses increased [Distribution and Administrative Expenses](index=11&type=section&id=%E5%88%86%E9%8A%B7%E5%8F%8A%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) Distribution expenses fell by 22.6% due to lower sales volume, while administrative expenses rose by 18.5% driven by higher government levies Breakdown of Distribution Expenses | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Delivery and logistics | 46,767 | 65,622 | -28.7% | | Marketing expenses | 7,604 | 7,817 | -2.8% | | Staff costs | 5,624 | 5,116 | +9.9% | | Others | 3,709 | 3,663 | +1.3% | | **Total** | **63,704** | **82,218** | **-22.6%** | Breakdown of Administrative Expenses | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Staff costs | 60,077 | 52,629 | +14.1% | | Government levies | 22,147 | 13,434 | +64.9% | | Depreciation and amortisation | 18,090 | 17,677 | +2.3% | | Others | 13,719 | 12,466 | +10.1% | | **Total** | **114,033** | **96,206** | **+18.5%** | [Research Expenses](index=12&type=section&id=%E7%A0%94%E7%A9%B6%E8%B2%BB%E7%94%A8) Research expenses decreased substantially by 52.6% as the Group focused on developing production technology and proprietary techniques - Research expenses decreased significantly by **52.6%** from RMB 43,689,000 to RMB 20,731,000[34](index=34&type=chunk) - These expenses, mainly comprising material costs, depreciation, and staff costs, were focused on the development of production technology and proprietary techniques[34](index=34&type=chunk) [Other Net Income](index=12&type=section&id=%E5%85%B6%E4%BB%96%E6%B7%A8%E6%94%B6%E5%85%A5) Other net income decreased by 13.9% to RMB 49.4 million, mainly due to a significant loss on the disposal of equipment at the Linqing plant Breakdown of Other Net Income | Item | For the six months ended June 30, 2025 (RMB'000) | For the six months ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Amortisation of government grants | 37,530 | 38,977 | -3.7% | | Gain on sales of scrap materials | 12,855 | 14,611 | -12.0% | | Net exchange gain | 2,644 | 4,265 | -38.0% | | Loss on disposal of property, plant and equipment | (6,216) | (512) | +1114.1% | | Government grants (one-off) | 253 | 131 | +93.1% | | Gain on futures | – | 333 | -100.0% | | Others | 2,371 | (389) | +709.0% | | **Total** | **49,437** | **57,416** | **-13.9%** | - The decrease in other net income was mainly due to the loss on disposal arising from the dismantling of certain equipment at the Linqing production plant[35](index=35&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=12&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group maintained sufficient working capital and a sound financial structure, with a lower gearing ratio and slightly changed liquidity ratios Key Financial Performance Indicators | Metric | As at June 30, 2025 | As at December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Accounts receivable turnover (days) | 14 | 12 | +2 days | | Accounts payable turnover (days) | 8 | 5 | +3 days | | Inventory turnover (days) | 28 | 24 | +4 days | | Current ratio (times) | 2.1 | 2.0 | +0.1 | | Quick ratio (times) | 1.7 | 1.8 | -0.1 | | Gearing ratio - borrowings to total assets (%) | 20.1 | 21.3 | -1.2 p.p. | - The Group has sufficient working capital to meet its current requirements, and all borrowings are short-term[37](index=37&type=chunk) - Total bank borrowings of **RMB 1,337,864,000** are at fixed interest rates, and a loan from a controlling shareholder of **RMB 61,101,000** is at a fixed annual rate of 0.5%[37](index=37&type=chunk) [Human Resources and Remuneration Policy](index=12&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group reduced its headcount but increased total staff costs, implementing measures to optimize labor efficiency and retain talent - As of June 30, 2025, the Group employed **2,073 staff** (2024: 2,267), a decrease in headcount[38](index=38&type=chunk) - Total staff costs (including directors' remuneration) were approximately **RMB 153,658,000**, a year-on-year increase of 12.5%[38](index=38&type=chunk) - To cope with operational challenges, the Group implemented measures to optimize labor efficiency, support staff retention, increase reliance on automation, and introduce discretionary performance bonuses[38](index=38&type=chunk) - The remuneration review during the period involved an in-depth assessment, resulting in a **significant adjustment** to enhance morale and maintain market competitiveness[38](index=38&type=chunk) [Financial Management, Treasury Policy, and Foreign Exchange Risk](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E7%AE%A1%E7%90%86%E3%80%81%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96%E5%8F%8A%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) There were no material changes to the Group's financial management, treasury policies, or foreign exchange risk exposure compared to the 2024 annual report[39](index=39&type=chunk) [Pledge of Assets](index=13&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group pledged bank deposits and bills receivable totaling RMB 1.138 billion as security for certain banking facilities - As of June 30, 2025, the Group pledged bank deposits and bills receivable with a total carrying value of **RMB 1,138,000,000** as security for banking facilities[40](index=40&type=chunk) - No land use rights or buildings were pledged as security for banking facilities during the period[40](index=40&type=chunk) [Contingent Liabilities](index=13&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group had no significant contingent liabilities as of June 30, 2025[41](index=41&type=chunk) [Material Investments](index=13&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group had no material investments or future plans for significant capital asset investments beyond its disclosed business development plans[42](index=42&type=chunk) [Other Disclosures](index=13&type=section&id=%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2%E4%BA%8B%E9%A0%85) [Interim Dividend](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: Nil)[43](index=43&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=13&type=section&id=%E8%B3%BC%E8%B2%B7%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%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[44](index=44&type=chunk) [Corporate Governance](index=13&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company complied with the applicable code provisions of the Listing Rules, with the exception of the Chairman's absence from the 2025 AGM - The Company has complied with the applicable code provisions contained in Part 2 of Appendix C1 to the Listing Rules[45](index=45&type=chunk) - The Chairman, Mr Tian Qixiang, was unable to attend the 2025 Annual General Meeting due to other business engagements[45](index=45&type=chunk) [Review of Interim Financial Statements](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%AF%A9%E9%96%B1) The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[46](index=46&type=chunk) [Interim Report](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The 2025 Interim Report will be published on the websites of the HKEX and the Company by the end of September 2025[47](index=47&type=chunk)

Core Viewpoint - *ST Sitong (603838.SH) announced that as of the date of this announcement, Mr. Huang Jianping has cumulatively increased his shareholding in the company by 1.884 million shares, accounting for 0.59% of the total share capital, with a total transaction amount of 10.1815 million yuan (excluding transaction fees). The shareholding increase plan has been completed [1] Summary by Category - Shareholding Increase - Mr. Huang Jianping has increased his shareholding by 1.884 million shares [1] - This increase represents 0.59% of the company's total share capital [1] - The total amount spent on this shareholding increase is 10.1815 million yuan [1] - Completion of Plan - The shareholding increase plan has been successfully implemented [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何 聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 CHINA STARCH HOLDINGS LIMITED 中國澱粉控股有限公司 ( 於開曼群島註冊成立之有限公司 ) (股份代號: 3838) 中國澱粉控股有限公司 (「本公司」) 之董事會 (「董事會」) 謹此宣佈將於 二 零二 五 年 八月 二 十(星 期三 ) 舉 行 董 事會 會 議，藉以 （其中包括）批准刊發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 之中 期 業績 及考 慮 派發 中 期股 息(如 有)。 承董事會命 中國澱粉控股有限公司 主席 田其祥 中華人民共和國，壽光，二零二五年八月八日 於本公告日期，本公司董事為： 執行董事： 田其祥先生（主席） 高世軍先生（行政總裁） 于英泉先生 劉象剛先生 獨立非執行董事： 花強教授 孫明導先生 施得安女士 董事會會議通知 ...

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: 中國澱粉控股有限公司 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) | 03838 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.1 | HKD | | 1,000,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.1 | HKD | | 1,000,000,000 | 本月底法 ...

Core Insights - The global starch and starch products market is projected to have significant growth, with China expected to hold a substantial market share by 2025 [2] - The report provides a comprehensive analysis of the starch market, including production, sales, consumption, and the impact of COVID-19 on future developments in China [2][3] - Major companies in the starch industry include Archer Daniels Midland Company, Roquette Freres Co, Cargill, Emsland Group, Ingredion, Agrana Group AG, Avebe U.A., and Tate & Lyle [2][3] Industry Overview - The report categorizes the starch and starch products industry into various segments, focusing on production, consumption data, and future trends across regions such as China, the US, Europe, Japan, Southeast Asia, and India [3] - Different types of starch products are analyzed, including corn starch, cassava starch, potato starch, wheat starch, and others, with insights into their pricing, production volume, market share, and growth trends [3] Market Dynamics - The report outlines the supply and demand conditions for starch and starch products globally, including capacity, production, utilization rates, and development trends [5] - It also discusses the competitive landscape, highlighting the production volume, market share, and revenue of major companies in the starch sector from 2018 to 2025 [5] Regional Analysis - The report provides detailed insights into the market size and growth rates of starch and starch products in various regions, including China, the US, Europe, Japan, Southeast Asia, and India [5][6] - It emphasizes the importance of downstream applications for starch products, such as textiles, paper and plywood, and adhesives, detailing consumption volumes and market shares in these sectors [3][6] Impact of COVID-19 - The report assesses the overall development status of the starch industry in various countries, including the effects of the COVID-19 pandemic on the market [6] - It highlights the international trade environment and policy factors that have influenced the starch and starch products industry during the pandemic [6]

Core Viewpoint - The corn starch industry in China is a crucial pillar of the agricultural product deep processing sector, exhibiting a mature supply-demand system with a balanced state in 2024, where production is projected to reach 37.99 million tons and apparent demand at 37.97 million tons, indicating a tight balance overall [1][13]. Group 1: Industry Overview - The corn starch industry has established a stable supply-demand structure, with production and demand closely aligned, reflecting a trend of "stable total volume and optimized structure" [1][13]. - The industry is transitioning from traditional scale expansion to high-quality development, with an increasing proportion of high-value-added products, demonstrating resilience [1][13]. - The corn starch is derived from corn kernels through various processes and is categorized into three types: regular corn starch, modified starch, and specialty corn starch, widely used in food processing, pharmaceuticals, textiles, and biodegradable materials [2][4]. Group 2: Policy Support - Recent national policies have significantly supported the corn starch industry, emphasizing green manufacturing and high-end product development, with specific encouragement for bio-based products and functional food additives [4]. - Local governments are also promoting the development of the corn starch deep processing industry, aiming for a stable planting area and a substantial industry scale by 2027 [4]. Group 3: Industry Chain - The corn starch industry in China features a complete industrial chain with a "dispersed upstream, concentrated midstream, and diversified downstream" structure [6]. - The midstream processing segment is highly concentrated, with key regions like Shandong and Hebei forming industrial clusters, while downstream applications are diversifying into traditional and emerging sectors [6]. Group 4: Market Dynamics - The corn production in China is vital, with a total output exceeding 294.92 million tons in 2024, accounting for over 40% of the total grain production, supported by increased planting area and yield [9]. - The demand for corn starch is robust across various sectors, with the food industry being the largest consumer, followed by starch sugar, paper, pharmaceuticals, and chemicals [11]. Group 5: Competitive Landscape - The competitive landscape of the corn starch industry is characterized by a concentration of leading firms, with the top five companies holding approximately 45% market share, while smaller firms focus on niche markets [19]. - The industry is evolving towards a "technology-driven, chain collaboration, and scenario-focused" competitive model, with leading companies integrating their operations from corn to starch to bio-based materials [19]. Group 6: Future Trends - The corn starch industry is undergoing a transformation driven by technological innovation, with advancements in smart manufacturing and green production methods [21]. - Market demand is shifting towards high-end and diversified applications, particularly in biodegradable materials and health-oriented products, with significant growth expected in these areas [22][23]. - The industry is also seeing increased integration and globalization, with leading firms expanding their operations and establishing a presence in international markets [24].

Revenue and Business Segments - The Group's revenue is derived from two business segments: upstream products and fermented and downstream products, with production activities carried out in the People's Republic of China (PRC) [5]. - Total revenue for the Group decreased slightly by 3.2% to approximately RMB11,415,755,000, while gross profit increased significantly from approximately RMB556,572,000 to RMB1,163,247,000 [91]. - Revenue from fermented and downstream products rose significantly by 37.7% to RMB4,407,871,000 (2023: RMB3,200,671,000) [105]. - Lysine revenue increased by 51.5% to RMB3,427,579,000 (2023: RMB2,261,792,000), with sales volume reaching 578,095 tonnes, a 69.7% increase [107]. - The annual production capacity for starch and lysine reached 2,800,000 tonnes and 560,000 tonnes, respectively, an increase from 2,700,000 tonnes and 500,000 tonnes in 2023 [77]. Financial Performance - Profit after taxation increased over fourfold to RMB625,589,000, with basic earnings per share rising to RMB0.0808 [92]. - The Group's gross profit for upstream products increased by 230.4% to RMB429,334,000, despite a substantial decrease in market prices for corn kernel and upstream products [83]. - The profitability of the corn-refined industry improved despite a decline in market prices for starch and lysine, as raw corn kernel prices dropped significantly [75]. - Total cost of sales for 2024 was approximately RMB10,252,508,000, an 8.8% decrease from RMB11,240,962,000 in 2023, primarily due to lower raw material prices [110]. - The average corn kernel cost for 2024 was about RMB2,071 per tonne (2023: RMB2,543), reflecting a significant decrease [111]. Dividends and Shareholder Returns - The Board recommends a final dividend of HK0.98 cents per share for the year ended 31 December 2024, expected to be paid on or about 16 July 2025 if approved at the AGM [13]. - The total shareholder return for 2024 was 44.8%, a significant recovery from a negative return of -36.5% in 2023 [132]. - The Company had reserves available for distribution to shareholders amounting to approximately RMB126,115,000 as of December 31, 2024 [140]. Corporate Governance and Compliance - Related party transactions for the year ended 31 December 2024 are fully exempt connected transactions as defined in the Listing Rules [8]. - No significant transactions, arrangements, or contracts involving Directors' material interests were reported during the financial year [25]. - The Directors and other officers are indemnified against losses and liabilities incurred in the execution of their duties, excluding those arising from fraud and dishonesty [26]. - The company has maintained appropriate directors' and officers' liability insurance for indemnifying against losses from legal actions [36]. - There were no incidents of non-compliance with relevant laws and regulations during the year under review, indicating a strong adherence to legal standards [198]. Environmental and Sustainability Efforts - The Group is committed to complying with all environmental policies and has an internal laboratory to monitor product quality to ensure compliance with national standards, including food safety standards [7]. - The Group's environmental and sustainability efforts are detailed on pages 20 to 31, highlighting compliance and stakeholder relationships [6]. - The report highlights the company's commitment to environmental sustainability and compliance with local regulations [164]. - The company recognizes the significance of ESG (Environmental, Social, and Governance) issues and integrates them into its business operations [168]. Risk Management - The Risk Review Report on pages 32 to 36 provides a comprehensive review of principal risks and uncertainties facing the Group [6]. - The Group does not consider foreign exchange risk significant, as most transactions are denominated in Renminbi [148]. Employee and Training Initiatives - The number of employees in 2024 is 2,205, a decrease of 2.6% from 2,263 in 2023 and 6.6% from 2,360 in 2022 [194]. - The staff turnover ratio for all grades in 2024 is 3.6%, down from 4.7% in 2023 and 5.8% in 2022 [194]. - Mandatory in-house training is provided to all staff, enhancing awareness of anti-corruption and conflict of interest situations [197]. - The training hours per month for general staff increased to 15.0 hours in 2024 from 14.6 hours in 2023 [194]. Share Option Scheme - The Share Option Scheme was adopted on May 19, 2017, to incentivize directors and employees [40]. - The Company has not granted any share options under the Share Option Scheme since its adoption [48]. - Eligible participants of the Share Option Scheme include employees, non-executive directors, suppliers, customers, and other contributors to the Group's growth [45]. - Any grant of options to a director or substantial shareholder exceeding 0.1% of the issued shares or valued over HK$5 million requires shareholder approval [46]. Production and Operational Efficiency - The Group's production volume increased due to technological upgrades and improved operational efficiency [74]. - The modified starch business recorded increased sales supported by enhancements in sewage treatment capabilities and increased customer orders [90]. - New thermal power facilities are expected to enhance operational efficiency and reduce energy costs over time [80]. - The management anticipates continued stock competition in 2025 and is exploring opportunities to extend the industrial chain and diversify its business layout [76].

Core Viewpoint - China Starch reported a significant increase in net profit for the fiscal year ending December 31, 2024, despite a slight decline in revenue, indicating strong operational improvements and cost management strategies [1] Financial Performance - The company achieved a net profit attributable to shareholders of RMB 482 million, representing a year-on-year increase of 346.7% [1] - Total revenue for the year was RMB 11.416 billion, reflecting a decrease of 3.2% compared to the previous year [1] - Basic earnings per share were reported at RMB 0.0808, with a proposed final dividend of HKD 0.0098 per share [1] Operational Highlights - The company increased production across various product lines due to technological upgrades, reduced maintenance cycles, and stable production processes [1] - The expansion of lysine production capacity at the end of the previous year contributed to the overall increase in output [1] Market Conditions - The decline in corn prices, driven by increased domestic corn production and reduced demand from the animal feed and farming sectors, positively impacted profitability in the corn deep processing industry [1] - The market for starch and lysine saw price declines that were less severe than the drop in corn prices, leading to improved profitability for the company [1] Strategic Outlook - Management anticipates that the market will remain competitive in 2025, focusing on extending the industrial chain and diversifying operations as a key development strategy [1]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 11,415,755, a decrease of 3.2% compared to RMB 11,797,534 in 2023[2] - Gross profit increased by 109.0% to RMB 1,163,247 from RMB 556,572 in the previous year[2] - Operating profit surged by 418.2% to RMB 815,941, up from RMB 157,470 in 2023[2] - Net profit for the year reached RMB 625,589, a significant increase of 297.5% compared to RMB 157,396 in 2023[2] - Shareholders' profit attributable to the company was RMB 482,253, reflecting a growth of 346.7% from RMB 107,959[2] - Basic earnings per share rose by 348.9% to RMB 0.0808 from RMB 0.0180 in the previous year[2] - Proposed final dividend per share increased by 42.0% to HKD 0.98 from HKD 0.69[2] Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 6,958,889, up from RMB 5,352,626 in 2023[6] - Current assets increased significantly to RMB 4,419,363 from RMB 2,697,624 in the previous year[6] - Total liabilities rose to RMB 2,465,234 from RMB 1,416,073, indicating a growth in financial obligations[6] Revenue Breakdown - Revenue from external customers in China for the reporting period was RMB 10,702,521,000, while revenue from other countries was RMB 713,234,000, compared to RMB 10,856,939,000 and RMB 940,595,000 in the previous year[9] - Revenue from fermentation and downstream products rose significantly by 37.7% to RMB 4,407,871,000, up from RMB 3,200,671,000 in 2023[31] - Lysine revenue increased significantly by 51.5% to RMB 3,427,579,000 in 2024, compared to RMB 2,261,792,000 in 2023[32] - Lysine export volume increased to approximately 72,921 tons in 2024, compared to 59,383 tons in 2023, despite a challenging market environment[26] - Starch sugar revenue was approximately RMB 500,583,000, up from RMB 472,198,000 in 2023, with sales volume increasing by 21.1% to 217,581 tons[32] Cost and Expenses - Cost of goods sold decreased to RMB 8,809,092,000 in 2024 from RMB 10,044,812,000 in 2023, while research expenses dropped significantly to RMB 89,669,000 from RMB 160,490,000[11] - Sales cost decreased by 8.8% to RMB 10,252,508,000 in 2024, down from RMB 11,240,962,000 in 2023, primarily due to a significant drop in corn prices[34] - Average cost of corn in 2024 was RMB 2,071 per ton, compared to RMB 2,543 per ton in 2023[34] - Administrative expenses increased to RMB 217,323,000 in 2024 from RMB 194,551,000 in 2023, driven by higher government fees and employee costs[36] Tax and Income - The income tax expense for 2024 was RMB 212,551,000, a substantial increase from RMB 19,437,000 in 2023, primarily due to the introduction of current income tax in China[12] Shareholder Information - The proposed final dividend for 2024 is HKD 0.98 per share, amounting to HKD 58,452,000, compared to HKD 41,183,000 in 2023[15] - The company reported a total shareholder return rate of 44.8% in 2024, compared to -36.5% in 2023[42] - The company has available reserves for distribution to shareholders of approximately RMB 126,115,000 as of December 31, 2024[46] - The board proposed a final dividend of HKD 0.98 per share for the year ended December 31, 2024, subject to shareholder approval at the 2025 Annual General Meeting[47] Operational Capacity - The production capacity for starch and lysine reached 2,800,000 tons and 560,000 tons respectively by the end of 2024, up from 2,700,000 tons and 500,000 tons in 2023[22] - The company announced two projects aimed at expanding long-term capacity, including upgrading existing starch production facilities to increase annual capacity from 1,000,000 tons to 1,550,000 tons[23] - The company is actively researching to extend its industrial chain and diversify its development direction in response to ongoing market competition[22] - The company plans to enhance production efficiency and customer satisfaction through resource investment and operational optimization[22] Employee and Financial Management - The company employed approximately 2,209 full-time employees as of December 31, 2024, down from 2,267 in 2023, with total employee costs around RMB 283,737,000[39] - The leverage ratio as of December 31, 2024, increased significantly to 21.3% from 10.5% in 2023, primarily due to working capital needs and favorable bank interest rates[43] - Total bank borrowings amounted to approximately RMB 1,420,301,000, all of which were short-term loans as of December 31, 2024[43] - The company has implemented financial risk management policies to ensure all payables are settled within the relevant credit periods[18] Compliance and Governance - The company has complied with the corporate governance code as per the listing rules, except for the absence of the chairman at the 2024 Annual General Meeting due to other business commitments[51] - The 2024 annual report will be published around April 11, 2025, containing all information required by the listing rules[54] Miscellaneous - The company has no recorded losses for trade receivables in both 2024 and 2023, indicating stable credit management[16] - Trade receivables decreased to RMB 82,970,000 in 2024 from RMB 136,797,000 in 2023, with the aging analysis showing a significant drop in receivables aged 0-30 days[16] - Trade payables increased to RMB 157,694,000 in 2024 from RMB 132,443,000 in 2023, with the average credit period for purchases remaining at 80 days[18] - The company pledged assets with a total book value of RMB 1,281,000,000 to secure various credit facilities from banks[44] - As of December 31, 2024, the company had no significant contingent liabilities[45] - The company repurchased a total of 4,075,000 shares at a total cost of approximately HKD 607,000 during the year ended December 31, 2024[50]

[Financial Statements](index=3&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2024, revenue slightly decreased by 2.9%, but a significant drop in cost of sales led to a 189.4% surge in gross profit, achieving a net profit of RMB 267.48 million and a positive basic EPS, reversing prior period losses Key Consolidated Statement of Profit or Loss Data (For the six months ended June 30) | Indicator | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 5,645,514 | 5,814,323 | -2.9% | | **Gross Profit** | 507,180 | 175,247 | +189.4% | | **Operating Profit/(Loss)** | 342,483 | (45,735) | Turned profitable | | **Profit/(Loss) for the period** | 267,482 | (28,959) | Turned profitable | | **Profit/(Loss) attributable to owners of the Company** | 214,659 | (37,754) | Turned profitable | | **Basic EPS** | 0.0360 RMB | (0.0063) RMB | Turned profitable | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets slightly increased to RMB 5.44 billion, while total liabilities decreased to RMB 1.29 billion due to reduced borrowings, optimizing the balance sheet structure with total equity rising to RMB 4.15 billion Key Consolidated Statement of Financial Position Data | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | 5,439,704 | 5,352,626 | +1.6% | | Non-current Assets | 2,549,859 | 2,655,002 | -4.0% | | Current Assets | 2,889,845 | 2,697,624 | +7.1% | | **Total Liabilities** | 1,290,656 | 1,416,073 | -8.9% | | Current Liabilities | 1,022,749 | 1,192,374 | -14.2% | | **Total Equity** | 4,149,048 | 3,936,553 | +5.4% | | **Cash and Cash Equivalents** | 1,094,537 | 899,830 | +21.6% | [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total equity increased to RMB 4.15 billion, primarily driven by a net profit of RMB 267.48 million for the period, partially offset by RMB 37.56 million in dividends paid and RMB 0.55 million from share repurchases - Beginning total equity was **RMB 3.937 billion**, with profit for the period increasing it by **RMB 267.48 million**, offset by **RMB 37.56 million** in 2023 final dividends paid and **RMB 0.55 million** from share repurchases, resulting in an ending total equity of **RMB 4.149 billion**[6](index=6&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, net cash inflow from operating activities was RMB 482.68 million, up 20.7%, while investing activities turned to a net inflow of RMB 215.81 million, and financing activities saw a significant net outflow of RMB 503.78 million primarily for loan repayments, increasing period-end cash and cash equivalents to RMB 1.095 billion Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | | :--- | :--- | :--- | | **Net cash inflow from operating activities** | 482,678 | 399,882 | | **Net cash from/(used in) investing activities** | 215,812 | (212,027) | | **Net cash used in financing activities** | (503,783) | (88,019) | | **Net increase in cash and cash equivalents** | 194,707 | 99,836 | | **Cash and cash equivalents at end of period** | 1,094,537 | 1,102,821 | [Notes to the Unaudited Interim Financial Report](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) [3 SEGMENT INFORMATION](index=9&type=section&id=3%20SEGMENT%20INFORMATION) The company operates in two segments: Upstream Products and Fermentation & Downstream Products; in H1 2024, Upstream Products saw reduced revenue but turned profitable with RMB 98.34 million in segment results, while Fermentation & Downstream Products significantly grew both revenue and results to RMB 255.95 million, becoming the core profit driver Segment Results (For the six months ended June 30) | Segment | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | | :--- | :--- | :--- | | **Upstream Products** | | | | External sales | 3,524,090 | 4,349,545 | | Segment results | 98,337 | (93,324) | | **Fermentation and Downstream Products** | | | | External sales | 2,121,424 | 1,464,778 | | Segment results | 255,951 | 58,500 | [8 DIVIDENDS](index=12&type=section&id=8%20DIVIDENDS) The Board does not recommend an interim dividend for the six months ended June 30, 2024, while the 2023 final dividend of HK 0.69 cents per share remained consistent with 2022 - The Board does not recommend an interim dividend for 2024 (2023 corresponding period: nil)[20](index=20&type=chunk)[21](index=21&type=chunk) [12 SHARE CAPITAL](index=14&type=section&id=12%20SHARE%20CAPITAL) During the reporting period, the company repurchased 4.075 million shares on the Stock Exchange for approximately HKD 0.607 million, all of which have been cancelled, resulting in 5,964,492,043 ordinary shares issued as of June 30, 2024 - The company repurchased a total of **4,075,000 shares** in March and April 2024 for a total consideration of **HKD 0.607 million**, which have been cancelled[28](index=28&type=chunk)[29](index=29&type=chunk) [14 BORROWINGS](index=16&type=section&id=14%20BORROWINGS) As of June 30, 2024, total borrowings significantly decreased by 86.9% to **RMB 73.32 million** from **RMB 559.37 million** at the end of 2023, with all borrowings classified as short-term and due within one year Borrowings | Item | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | **Borrowings repayable within one year** | 73,316 | 559,365 | | Of which: Bank borrowings | 29,508 | 518,585 | | Of which: Other borrowings | 43,808 | 40,780 | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [INDUSTRY OVERVIEW AND COMPANY DEVELOPMENT](index=17&type=section&id=INDUSTRY%20OVERVIEW%20AND%20COMPANY%20DEVELOPMENT) In H1 2024, the corn starch and lysine markets improved as oversupply was absorbed, while the company focused on enhancing production efficiency through improved wastewater treatment, strict personnel cost control, optimized equipment operation, and reduced energy consumption - Market conditions improved as the corn starch and lysine markets absorbed last year's oversupply in 2024[36](index=36&type=chunk) - Production efficiency was enhanced by improving wastewater treatment capacity, controlling headcount, optimizing equipment operation, and upgrading energy-saving equipment to reduce unit production costs[36](index=36&type=chunk) - The Shouguang production facility expansion project was completed in 2023, with lysine sales projected to reach a new record in 2024[36](index=36&type=chunk) [BUSINESS REVIEW](index=18&type=section&id=BUSINESS%20REVIEW) Upstream products saw significantly improved profit margins due to a substantial drop in corn prices, while downstream products, particularly lysine, achieved significant revenue growth by expanding overseas markets with nearly doubled export volumes, modified starch experienced both volume and price increases, and starch sugar business profitability slightly improved - Upstream products recorded increased profit margins despite lower selling prices, benefiting from a significant reduction in corn kernel costs[37](index=37&type=chunk) - Lysine products faced domestic oversupply but achieved substantial revenue growth by aggressively expanding overseas markets, with export volume increasing from **23,204 tons** to **45,708 tons**[37](index=37&type=chunk) - Modified starch saw growth in both sales volume and selling price, primarily due to enhanced wastewater treatment capacity and reduced corn costs[37](index=37&type=chunk) [FINANCIAL PERFORMANCE](index=19&type=section&id=FINANCIAL%20PERFORMANCE) Despite a slight decrease in total revenue due to lower average product selling prices, the significant decline in corn kernel costs to a new low since 2021, exceeding the product price drop, led to substantial increases in both gross profit and net profit, successfully turning the group profitable - Key to performance turnaround: The decrease in raw material costs (corn kernels) was greater than the decrease in product selling prices, leading to a significant increase in gross profit[39](index=39&type=chunk) Upstream Products Segment Performance (For the six months ended June 30) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Revenue (RMB thousands)** | 3,524,090 | 4,349,545 | | **Gross Profit Margin** | 5.6% | 0.4% | Fermentation and Downstream Products Segment Performance (For the six months ended June 30) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Revenue (RMB thousands)** | 2,121,424 | 1,464,778 | | **Gross Profit Margin** | 14.6% | 10.9% | - Total lysine product sales volume was approximately **273,256 tons**, a **71.1% year-on-year increase** (2023: 159,682 tons), serving as the primary driver for downstream business growth[44](index=44&type=chunk) - The average cost of the main raw material, corn kernels, was approximately **RMB 2,135 per ton**, a **16.4% year-on-year decrease** (2023: RMB 2,554 per ton)[47](index=47&type=chunk) [REVIEW OF OTHER OPERATIONS](index=21&type=section&id=REVIEW%20OF%20OTHER%20OPERATIONS) During the reporting period, the company effectively controlled various expenses, with slight decreases in distribution and administrative costs, and a significant **53.5% year-on-year reduction** in research expenses to **RMB 43.69 million** due to fewer research projects - Distribution expenses slightly decreased to **RMB 82.22 million**, and administrative expenses decreased to **RMB 96.21 million**[48](index=48&type=chunk)[51](index=51&type=chunk) - Research expenses significantly decreased from **RMB 94.06 million** to **RMB 43.69 million**, primarily due to a reduction in the number of research projects[53](index=53&type=chunk) [Liquidity, financial resources and capital structure](index=23&type=section&id=Liquidity%2C%20financial%20resources%20and%20capital%20structure) The company maintains a healthy financial position with ample working capital, showing improved key financial ratios including enhanced current and quick ratios, while the leverage ratio (borrowings to total assets) significantly decreased from **10.5% to 1.3%**, indicating reduced financial risk and a more robust capital structure Key Financial Performance Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Current Ratio** | 2.8 times | 2.3 times | | **Quick Ratio** | 1.9 times | 1.6 times | | **Leverage Ratio (Borrowings/Total Assets)** | 1.3% | 10.5% | - As of June 30, 2024, the Group's total number of employees was **2,267**, a decrease from **2,310** in 2023[55](index=55&type=chunk) [Disclosure of Additional Information](index=24&type=section&id=Disclosure%20of%20Additional%20Information) [INTERIM DIVIDEND](index=24&type=section&id=INTERIM%20DIVIDEND) The Board has decided not to declare an interim dividend for the first half of 2024 - The Board does not recommend an interim dividend for the six months ended June 30, 2024 (2023: nil)[57](index=57&type=chunk)[59](index=59&type=chunk) [PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=26&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY%27S%20LISTED%20SECURITIES) In H1 2024, the company repurchased **4,075,000** of its own shares on the Stock Exchange for approximately **HKD 0.607 million**, with all repurchased shares cancelled by May 30, 2024 Share Repurchase Details (2024) | Month | Number of Shares | Price per Share (HKD) | Total Paid (HKD thousands) | | :--- | :--- | :--- | :--- | | **March** | 2,000,000 | 0.146 - 0.150 | 296 | | **April** | 2,075,000 | 0.145 - 0.150 | 311 | | **Total** | **4,075,000** | | **607** | [CORPORATE GOVERNANCE](index=26&type=section&id=CORPORATE%20GOVERNANCE) During the reporting period, the company complied with the Corporate Governance Code under the Listing Rules, and the Audit Committee reviewed the unaudited interim financial statements for the period - The company complied with the applicable code provisions set out in Part 2 of Appendix C1 to the Listing Rules during the reporting period[69](index=69&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024[72](index=72&type=chunk) [Corporate Information](index=28&type=section&id=Corporate%20Information) [Corporate Information](index=28&type=section&id=Corporate%20Information) This section provides essential company information including core management, Board members, registered address, principal place of business, auditors, legal advisors, principal bankers, and share registrar