Group 1 - The company, Chang'an Renheng (08139), reported revenue of 98.023 million RMB for the six months ending June 30, 2025, representing a year-on-year increase of 7.6% [1] - The company experienced a loss attributable to equity holders of 3.005 million RMB, marking a transition from profit to loss compared to the previous year [1] - The basic loss per share was reported at 0.078 RMB [1]

[Performance Highlights](index=3&type=section&id=Performance%20Highlights) The Group's revenue increased by 7.6% for the six months ended June 30, 2025, but gross profit decreased by 1.8%, leading to a net loss attributable to shareholders of RMB 3.005 million [Overview of Key Financial Performance](index=3&type=section&id=Performance%20Highlights) For the six months ended June 30, 2025, the Group's revenue increased by 7.6%, but gross profit decreased by 1.8%, with gross margin falling to 37.2%, resulting in a loss attributable to shareholders of approximately RMB 3.005 million and basic loss per share of RMB 0.078, with no interim dividend declared Performance Highlights for H1 2025 | Interim Dividend | Zero | Zero | No Change | [Unaudited Condensed Consolidated Interim Results](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Results) This section presents the unaudited condensed consolidated financial statements, including the statement of comprehensive loss, statement of financial position, statement of changes in equity, and statement of cash flows [Condensed Consolidated Statement of Comprehensive (Loss) / Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20(Loss)%20%2F%20Income) During the reporting period, revenue grew by 7.6% to RMB 98.023 million, but a 14.0% increase in cost of sales led to a 1.8% decline in gross profit, with the company turning from a profit of RMB 2.805 million to a loss of RMB 3.005 million Condensed Consolidated Statement of Comprehensive (Loss) / Income (For the six months ended June 30) | Basic (Loss) / Earnings Per Share (RMB) | (0.078) | 0.073 | Turned from Profit to Loss | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased to RMB 345 million, total liabilities rose to RMB 230 million primarily due to increased borrowings, and total shareholders' equity slightly decreased to RMB 116 million Condensed Consolidated Statement of Financial Position (As of June 30) | Total Liabilities (RMB) | 229,653,652 | 219,288,040 | 4.7% Increase | [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity decreased from RMB 118.7 million to RMB 115.7 million, primarily due to a loss of RMB 3.005 million and other comprehensive loss of RMB 6,598 during the period Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Total Equity (RMB) | 115,682,426 | 118,694,270 | Decrease of 3,011,844 | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company reported a net cash outflow of RMB 0.341 million from operating activities and RMB 3.765 million from investing activities, offset by a net cash inflow of RMB 7.583 million from financing activities, with cash and cash equivalents increasing to RMB 19.862 million at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Cash and Cash Equivalents at Period-End (RMB) | 19,862,374 | 27,318,038 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, segment information, and specific financial line items [1 General Information](index=9&type=section&id=1%20General%20Information) Zhejiang Chang'an Renheng Technology Co., Ltd. and its subsidiaries specialize in bentonite fine chemicals for various industries, established in China in 2000 and listed on the GEM in 2015 - The Group's core business involves the development, production, and sale of bentonite fine chemicals, with products applied in paper-making, metallurgy, and other fields[10](index=10&type=chunk) - The company was established in China on December 4, 2000, and listed on the GEM of the Stock Exchange on January 16, 2015[10](index=10&type=chunk)[12](index=12&type=chunk) [2 Basis of Preparation](index=10&type=section&id=2%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and GEM Listing Rules disclosure requirements, to be read in conjunction with annual financial statements - The interim financial information is prepared in accordance with International Accounting Standard 34 and the GEM Listing Rules[14](index=14&type=chunk) [3 Accounting Policies](index=10&type=section&id=3%20Accounting%20Policies) The accounting policies adopted in this reporting period are consistent with the 2024 annual financial statements, with no significant impact expected from newly revised International Financial Reporting Standards - Accounting policies are consistent with the 2024 annual financial statements, and new revised standards are not expected to have a significant impact[15](index=15&type=chunk)[17](index=17&type=chunk) [4 Segment Information](index=11&type=section&id=4%20Segment%20Information) The Group's entire business activity is focused on the production and sale of bentonite products, which management considers a single operating segment, thus no segment information is presented - The Group operates in a single operating segment, which is the production and sale of bentonite products[18](index=18&type=chunk) [5 Revenue](index=11&type=section&id=5%20Revenue) For the six months ended June 30, 2025, total revenue increased by 7.6% to RMB 98.023 million, driven by significant growth in Bidi powder and high-quality calcium-based bentonite, while paper-making and other chemical revenues declined Revenue by Product Category (For the six months ended June 30) | Total (RMB '000) | 98,023 | 100.0 | 91,123 | 100.0 | 7.6% Increase | - The decrease in revenue from paper-making chemicals was primarily due to a 12.7% decrease in sales volume[45](index=45&type=chunk) - The significant increase in revenue from Bidi powder and high-quality calcium-based bentonite was mainly due to increased sales volume[47](index=47&type=chunk) [6 Other Income – Net](index=12&type=section&id=6%20Other%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2025, other income – net decreased to RMB 0.545 million from RMB 1.048 million in the prior year, primarily due to a significant reduction in government grants Other Income – Net (For the six months ended June 30) | Total (RMB) | 544,721 | 1,048,497 | 48.1% Decrease | [7 Finance Costs – Net](index=12&type=section&id=7%20Finance%20Costs%20%E2%80%93%20Net) For the six months ended June 30, 2025, finance costs – net increased to RMB 3.871 million, primarily due to higher interest expenses, partially offset by foreign exchange gains Finance Costs – Net (For the six months ended June 30) | Finance Costs – Net (RMB) | (3,871,417) | (3,140,291) | 23.3% Increase | [8 Profit/Loss for the Period](index=13&type=section&id=8%20Profit%2FLoss%20for%20the%20Period) The loss for the period was primarily influenced by non-cash expenses such as depreciation and amortization, with increases in depreciation and amortization of leasehold improvements (Loss) / Profit for the Period Deductions (For the six months ended June 30) | Amortization of Leasehold Improvements (RMB) | 1,577,272 | 1,212,070 | 30.1% Increase | [9 Income Tax Expense](index=13&type=section&id=9%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to RMB 0.312 million, with the company and certain subsidiaries benefiting from preferential tax rates as high-tech or small-profit enterprises, while US operations are taxed at 21% Income Tax Expense (For the six months ended June 30) | Income Tax Expense (RMB) | (311,549) | (232,794) | 34.7% Increase | - The Company and Yangyuan Renheng Fine Clay Co., Ltd. enjoy a preferential tax rate of **15%** as high-tech enterprises[28](index=28&type=chunk)[29](index=29&type=chunk) - Zhejiang Chang'an Renheng Chemical Co., Ltd., as a small-profit enterprise, enjoys a preferential income tax rate of **20%**[29](index=29&type=chunk) - Income tax for US operations is calculated at the prevailing rate of **21%**[29](index=29&type=chunk) [10 (Loss) / Earnings Per Share](index=15&type=section&id=10%20(Loss)%20%2F%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the company reported a basic loss per share of RMB 0.078, a reversal from the prior year's earnings per share of RMB 0.073, with no potential dilutive effects on ordinary shares Basic (Loss) / Earnings Per Share (For the six months ended June 30) | Basic (Loss) / Earnings Per Share (RMB) | (0.078) | 0.073 | - For the six months ended June 30, 2025 and 2024, diluted (loss) / earnings per share were the same as basic (loss) / earnings per share, with no potential dilutive effects[31](index=31&type=chunk) [11 Dividends](index=15&type=section&id=11%20Dividends) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare an interim dividend for the first half of 2025[32](index=32&type=chunk) [12 Property, Plant and Equipment](index=15&type=section&id=12%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired property, plant and equipment of approximately RMB 10.657 million, a decrease compared to the same period last year Acquisition of Property, Plant and Equipment (For the six months ended June 30) | Acquisition Amount (RMB) | 10,656,702 | 14,035,835 | 24.1% Decrease | [13 Trade and Other Receivables, Prepayments and Other Current Assets](index=16&type=section&id=13%20Trade%20and%20Other%20Receivables%2C%20Prepayments%20and%20Other%20Current%20Assets) As of June 30, 2025, the net amount of trade and other receivables, prepayments, and other current assets was RMB 84.351 million, largely consistent with the end of 2024, with a slight decrease in net trade receivables and an increase in prepayments, and a typical credit period of 90 to 180 days Trade and Other Receivables, Prepayments and Other Current Assets (As of June 30) | Total Net Amount (RMB) | 84,351,417 | 84,016,939 | 0.4% Increase | - The credit period for trade receivables is generally **90 to 180 days**, and impairment provisions have been made[38](index=38&type=chunk) [14 Trade and Other Payables](index=18&type=section&id=14%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 38.274 million, a slight decrease from the end of 2024, with an increase in trade payables and a decrease in salaries and welfare payable to employees Trade and Other Payables (As of June 30) | Total (RMB) | 38,273,516 | 39,221,460 | 2.4% Decrease | - Ageing analysis of trade payables shows that amounts due within six months account for the highest proportion[40](index=40&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's market and industry, business operations, financial performance, liquidity, capital structure, and future development strategies [Market and Industry Review](index=19&type=section&id=Market%20and%20Industry%20Review) The Group specializes in bentonite fine chemicals for diverse applications, operating within a growing Chinese non-metallic mineral market supported by policies promoting high-value mineral functional materials and a modernizing paper-making industry - The Group's core business is bentonite fine chemicals, with products widely used in paints and coatings, paper-making, water treatment, oilfields, and other applications[41](index=41&type=chunk) - China's demand for non-metallic mineral products is in a growth opportunity period, with policies encouraging the development of mineral functional materials for emerging industries such as national defense, new energy, and environmental protection[41](index=41&type=chunk) - The bentonite industry is evolving towards high quality, high efficiency, and high utilization through technological R&D and innovation, transforming from "resource advantage" to "technological advantage" and "economic advantage"[42](index=42&type=chunk) [Business Review](index=20&type=section&id=Business%20Review) In the first half of 2025, the Group focused on promoting bentonite products for paints, oilfields, and putty mortar, securing supply contracts with major oil companies, while its US subsidiary successfully passed its mining permit review - In the first half of 2025, the Group focused on promoting bentonite for paints and coatings, bentonite for oilfields, putty mortar, and other products[44](index=44&type=chunk) - Bentonite products for oilfields have secured supply contracts with companies such as Sinopec and PetroChina[44](index=44&type=chunk) - The US subsidiary operated normally and successfully passed its mining permit review[44](index=44&type=chunk) - The Group's R&D expenses for the first half of the year were approximately **RMB 6.265 million**[44](index=44&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) This section provides a detailed review of various financial indicators during the reporting period, including revenue, cost of sales, gross profit, various expenses, and the final profit or loss, along with an analysis of the main reasons for these changes [Revenue](index=21&type=section&id=Revenue) Total revenue increased by 7.6% during the reporting period, with significant growth in Bidi powder and high-quality calcium-based bentonite, while paper-making chemicals and other chemicals experienced declines Revenue Changes by Product Category (For the six months ended June 30) | Other Chemicals (RMB '000) | 1,685 | 2,610 | -925 | -35.4% | - | [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Cost of sales increased by 14.0% year-on-year to RMB 61.516 million, primarily due to higher average purchase prices and consumption of CPAM, along with increases in manufacturing overheads and direct labor costs Cost of Sales Composition and Changes (For the six months ended June 30) | Total (RMB '000) | 61,516 | 100.0 | 53,939 | 100.0 | +7,577 | +14.0% | - The increase in raw material costs was primarily due to higher average purchase prices and consumption of CPAM (a key raw material for bentonite products)[49](index=49&type=chunk) [Gross Profit and Gross Margin](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 1.8% to RMB 36.507 million, with gross margin falling from 40.8% to 37.2%, mainly due to changes in product mix and increased cost of sales from higher raw material and energy prices Gross Profit and Gross Margin Changes (For the six months ended June 30) | Gross Margin | 37.2% | 40.8% | -3.6 percentage points | - | - The decrease in gross margin was mainly due to changes in the sales product mix and higher average prices of raw materials and energy[53](index=53&type=chunk) [Distribution Costs](index=24&type=section&id=Distribution%20Costs) Distribution costs increased by 31.5% year-on-year to RMB 17.011 million, primarily driven by higher transportation expenses Distribution Costs Changes (For the six months ended June 30) | Distribution Costs (RMB '000) | 17,011 | 12,938 | +4,073 | +31.5% | - The increase in distribution costs was primarily due to higher transportation expenses[54](index=54&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses increased by 14.5% year-on-year to RMB 12.654 million, mainly due to higher staff costs and professional fees Administrative Expenses Changes (For the six months ended June 30) | Administrative Expenses (RMB '000) | 12,654 | 11,048 | +1,606 | +14.5% | - The increase in administrative expenses was primarily due to higher staff costs and professional fees[55](index=55&type=chunk) [Research and Development Expenses](index=25&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses decreased by 22.3% year-on-year to RMB 6.265 million, primarily due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute Research and Development Expenses Changes (For the six months ended June 30) | Research and Development Expenses (RMB '000) | 6,265 | 8,068 | -1,803 | -22.3% | - The decrease in R&D expenses was primarily due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute[56](index=56&type=chunk) [Other Income – Net](index=25&type=section&id=Other%20Income%20%E2%80%93%20Net) Other income – net decreased by 48.0% year-on-year to RMB 0.545 million, primarily due to a significant reduction in government grants Other Income – Net Changes (For the six months ended June 30) | Other Income – Net (RMB '000) | 545 | 1,048 | -503 | -48.0% | - The decrease in other income – net was primarily due to government grants falling from **RMB 1.191 million** to **RMB 0.347 million**[57](index=57&type=chunk) [Finance Costs – Net](index=25&type=section&id=Finance%20Costs%20%E2%80%93%20Net) Finance costs – net increased by 23.3% year-on-year to RMB 3.871 million, primarily due to an increase in average bank borrowings Finance Costs – Net Changes (For the six months ended June 30) | Finance Costs – Net (RMB '000) | 3,871 | 3,140 | +731 | +23.3% | - The increase in finance costs – net was primarily due to an increase in average bank borrowings[58](index=58&type=chunk) [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) Income tax expense increased by 34.7% year-on-year to RMB 0.312 million Income Tax Expense Changes (For the six months ended June 30) | Income Tax Expense (RMB '000) | 312 | 233 | +79 | +34.7% | [(Loss) / Profit for the Period Attributable to Owners of the Company](index=25&type=section&id=(Loss)%20%2F%20Profit%20for%20the%20Period%20Attributable%20to%20Owners%20of%20the%20Company) Due to the combined effect of various factors, the (loss) / profit for the period attributable to owners of the Company turned from a profit of RMB 2.805 million in the same period last year to a loss of RMB 3.005 million (Loss) / Profit for the Period Attributable to Owners of the Company (For the six months ended June 30) | (Loss) / Profit for the Period Attributable to Owners of the Company (RMB '000) | (3,005) | 2,805 | Turned from Profit to Loss | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The Group primarily relies on cash from operations and bank borrowings for working capital, with RMB 19.862 million in cash and cash equivalents as of June 30, 2025, and sufficient resources for the next twelve months - The Group primarily meets its working capital requirements through cash generated from operations and long-term and short-term bank borrowings[61](index=61&type=chunk) - The weighted average effective annual interest rates for bank borrowings and other borrowings were **4.29%** and **4.22%** respectively[61](index=61&type=chunk) Cash and Cash Equivalents (As of June 30) | Cash and Cash Equivalents at Period-End (RMB) | 19,862,000 | 27,318,038 | - During the reporting period, cash and cash equivalents increased by approximately **RMB 3.531 million**, primarily contributed by net cash inflow from financing activities of **RMB 7.583 million**[62](index=62&type=chunk) [Capital Structure](index=26&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's total borrowings were approximately RMB 184.6 million, an increase from the end of 2024, with smooth renewal of bank loans during the reporting period Total Borrowings (As of June 30) | Total Borrowings (RMB) | 184,604,000 | 172,958,000 | 6.7% Increase | [Gearing Ratio](index=27&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio increased to 142.4% from 132.0% at the end of 2024, primarily due to a decrease in total equity Gearing Ratio (As of June 30) | Gearing Ratio | 142.4% | 132.0% | 10.4 percentage points increase | - The increase in gearing ratio was primarily due to a decrease in total equity[64](index=64&type=chunk) [Pledge of Assets](index=27&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's assets pledged to banks amounted to approximately RMB 13.477 million, a decrease from the end of 2024 Total Pledged Assets (As of June 30) | Total Pledged Assets (RMB) | 13,477,000 | 15,463,000 | 12.8% Decrease | [Capital Expenditure](index=27&type=section&id=Capital%20Expenditure) During the reporting period, the Group's capital expenditure was approximately RMB 10.657 million, primarily for the acquisition of plant and equipment and construction in progress, a decrease compared to the same period last year Capital Expenditure (For the six months ended June 30) | Capital Expenditure (RMB) | 10,657,000 | 14,036,000 | 24.1% Decrease | [Exchange Rate Risk](index=27&type=section&id=Exchange%20Rate%20Risk) The Group's primary business is in China, with transactions mainly in RMB and a few in HKD, posing a risk of changes in China's exchange rate policy, though the Group considers the fluctuation risk among HKD, USD, and RMB to be insignificant without hedging - The Group's primary business is in China, with transactions denominated in RMB and a few amounts in HKD[67](index=67&type=chunk) - RMB is not freely convertible, posing a risk of changes in the Chinese government's exchange rate policy[67](index=67&type=chunk) - The Group has not entered into hedging transactions and considers the exchange rate fluctuation risk to be insignificant[67](index=67&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=27&type=section&id=Contingent%20Liabilities%2C%20Legal%20and%20Potential%20Proceedings) As of June 30, 2025, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings - The Group has no significant contingent liabilities, legal proceedings, or potential proceedings[68](index=68&type=chunk) [Material Acquisitions and Disposals](index=28&type=section&id=Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals - No material acquisitions or disposals occurred during the reporting period[69](index=69&type=chunk) [Going Concern](index=28&type=section&id=Going%20Concern) Based on its current financial position and available financing, the Group has sufficient financial resources to continue as a going concern for the foreseeable future - The Group possesses sufficient financial resources to support its continued operations[70](index=70&type=chunk) [Future Developments](index=28&type=section&id=Future%20Developments) The Group plans to develop three strategic new bentonite product series focusing on high-value, green applications, while expanding into overseas markets like North America, Europe, and Southeast Asia, driven by innovation to create shareholder value - Strategic new product development focuses on three series: organic bentonite, water-based bentonite, and inorganic gels[71](index=71&type=chunk) - Emphasis is placed on green and environmentally friendly product R&D, developing bentonite products for deep, ultra-deep, and offshore drilling[71](index=71&type=chunk) - Key focus on developing overseas customer markets in North America, Europe, Southeast Asia, and expanding foreign trade business[71](index=71&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers human resources, directors' and substantial shareholders' interests, related party transactions, corporate governance, and post-reporting period events [Human Resources and Training](index=29&type=section&id=Human%20Resources%20and%20Training) As of June 30, 2025, the Group employed 232 staff with total costs of approximately RMB 17.637 million, adhering to a "people-oriented" management philosophy to enhance efficiency through rigorous selection, incentives, and regular evaluations Number of Employees and Staff Costs (As of June 30) | Total Staff Costs (RMB '000) | 17,637 | 16,959 | - The Group adopts a "people-oriented" management philosophy, enhancing employee efficiency through rigorous selection, incentive mechanisms, and regular evaluations[72](index=72&type=chunk) [Directors', Supervisors' and Chief Executive's Interests in Shares, Debentures and Underlying Shares of the Company or any Associated Corporation](index=30&type=section&id=Directors'%2C%20Supervisors'%20and%20Chief%20Executive's%20Interests%20in%20Shares%2C%20Debentures%20and%20Underlying%20Shares%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, Mr. Zhang Youlian held 50.05% of the company's shares, Ms. Zhang Jinhua held 1.04%, and Supervisor Mr. Xu Qinshi held 0.26% through his spouse, with no other disclosable interests Directors'/Supervisors' Long Positions in Ordinary Shares of the Company (As of June 30) | Mr. Xu Qinshi | Spouse's Interest | 100,000 | 0.26% | [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=31&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Ms. Yu Hua held 9.31% of the Company's shares, qualifying her as a substantial shareholder, in addition to the interests of Directors, Supervisors, and Chief Executives Substantial Shareholders' Long Positions in Shares of the Company (As of June 30) | Ms. Yu Hua | Beneficial Owner | 3,576,000 | 9.31% | [Directors' and Supervisors' Rights to Acquire Shares or Debentures](index=32&type=section&id=Directors'%20and%20Supervisors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the reporting period, no Director or Supervisor, or their spouse or minor children, was granted or exercised any right to acquire shares or debentures of the Company - During the reporting period, no Director or Supervisor or their associates were granted or exercised any right to acquire shares or debentures of the Company[76](index=76&type=chunk) [Connected Transactions](index=32&type=section&id=Connected%20Transactions) During the reporting period, the Group did not enter into any connected transactions or continuing connected transactions requiring disclosure under the GEM Listing Rules - No disclosable connected transactions occurred during the reporting period[77](index=77&type=chunk) [Directors', Supervisors' and Controlling Shareholders' Interests in Competing Businesses and Conflicts of Interest](index=32&type=section&id=Directors'%2C%20Supervisors'%20and%20Controlling%20Shareholders'%20Interests%20in%20Competing%20Businesses%20and%20Conflicts%20of%20Interest) During the reporting period, no Director, Supervisor, or controlling shareholder and their associates engaged in any business that competes or is likely to compete with the Group's business, or had any conflicts of interest - No Directors, Supervisors, controlling shareholders, or their associates had competing businesses or conflicts of interest[78](index=78&type=chunk) [Public Float](index=32&type=section&id=Public%20Float) During the reporting period, at least 25% of the Company's issued share capital was held by public shareholders, in compliance with regulations - At least **25%** of the Company's issued share capital is held by public shareholders[79](index=79&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[80](index=80&type=chunk) [Capital Commitments](index=32&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments amounted to approximately RMB 1.254 million, a decrease from the end of 2024 Capital Commitments (As of June 30) | Capital Commitments (RMB) | 1,254,000 | 1,672,000 | 25.0% Decrease | [Dividends](index=33&type=section&id=Dividends) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for the first half of 2025[82](index=82&type=chunk) [Corporate Governance Practices](index=33&type=section&id=Corporate%20Governance%20Practices) The Company strives for corporate governance compliance but deviates on the combined roles of Chairman and Chief Executive and the absence of directors' and officers' liability insurance, with the Board believing strong leadership and independent directors balance power, and liability insurance under consideration - The Company complies with the Corporate Governance Code, with two deviations: combined roles of Chairman and Chief Executive (Code Provision C.2.1) and no directors' and officers' liability insurance (Code Provision C.1.8)[83](index=83&type=chunk)[84](index=84&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive provides strong and consistent leadership, and the presence of independent non-executive directors balances power[83](index=83&type=chunk) - Proposals from various underwriters for directors' and officers' liability insurance are under consideration[84](index=84&type=chunk) [Standard Code for Securities Transactions](index=34&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted a standard code for securities transactions no less exacting than required by the GEM Listing Rules, with all Directors confirming full compliance during the reporting period - The Company has adopted a standard code for securities transactions, and all Directors have confirmed full compliance[85](index=85&type=chunk) [Nomination Committee](index=34&type=section&id=Nomination%20Committee) The Company's Nomination Committee, established in 2014, revised its terms of reference on June 30, 2025, and comprises Mr. Fan Fang, Mr. Zhang Lei, and Mr. Tang Jingyan, with Mr. Tang serving as Chairman - The Nomination Committee was established in 2014 and revised its terms of reference on June 30, 2025[86](index=86&type=chunk) - The committee members include Mr. Fan Fang, Mr. Zhang Lei, and Mr. Tang Jingyan, with Mr. Tang serving as Chairman[86](index=86&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Company's Audit Committee, established in 2014, comprises Mr. Zhang Lei (Chairman), Mr. Chen Jianping, and Mr. Tang Jingyan, all independent non-executive directors, and has reviewed the interim report and financial statements, confirming compliance with accounting standards and GEM Listing Rules - The Audit Committee was established in 2014, comprising Mr. Zhang Lei (Chairman), Mr. Chen Jianping, and Mr. Tang Jingyan[87](index=87&type=chunk) - The committee has reviewed this interim report and financial statements, confirming compliance with accounting standards and GEM Listing Rules requirements[88](index=88&type=chunk) [Events After the Reporting Period](index=35&type=section&id=Events%20After%20the%20Reporting%20Period) As of the date of this report, there were no significant events after the reporting period - No significant events occurred after the reporting period[89](index=89&type=chunk) [Disclosure of Information](index=35&type=section&id=Disclosure%20of%20Information) The Company will dispatch the interim report to shareholders and publish it on the Company's website and the Stock Exchange's website at the appropriate time - The interim report will be dispatched to shareholders and published on the Company's website www.renheng.com and the Stock Exchange's website www.hkexnews.hk[90](index=90&type=chunk)

Company Information and Report Overview [Company Basic Information](index=1&type=section&id=1.1%20Company%20Basic%20Information) Zhejiang Chang'an Renheng Technology Co., Ltd. (stock code: 8139) is a company incorporated in the People's Republic of China, primarily engaged in the development, production, and sale of bentonite fine chemicals - Company Name: Zhejiang Chang'an Renheng Technology Co., Ltd., Stock Code: **8139**[1](index=1&type=chunk) - Main Business: Development, production, and sale of bentonite fine chemicals, including paper chemicals, bentonite for metallurgical pellets, and high-quality calcium-based clay[10](index=10&type=chunk) - Established on **December 4, 2000**, and restructured into a joint-stock company on **December 31, 2008**[10](index=10&type=chunk)[11](index=11&type=chunk) [GEM Characteristics and Directors' Responsibility Statement](index=1&type=section&id=1.2%20GEM%20Characteristics%20and%20Directors'%20Responsibility%20Statement) The report highlights that the GEM market offers listing opportunities for small and medium-sized companies, but with higher investment risks and market volatility, and directors are jointly and individually responsible for the accuracy, completeness, and non-misleading nature of the announcement's information - GEM Market Positioning: Provides a listing market for small and medium-sized companies, with higher investment risks and potentially greater market volatility[2](index=2&type=chunk) - Directors' Responsibility: Directors confirm the announcement's information is accurate, complete, not misleading or fraudulent, and without omissions[3](index=3&type=chunk) [Performance Highlights](index=2&type=section&id=1.3%20Performance%20Highlights) For the six months ended June 30, 2025, the company's revenue increased by 7.6% year-on-year, but gross profit decreased by 1.8%, with gross margin falling to 37.2%, resulting in a loss of approximately **RMB 3.005 million** and basic loss per share of **RMB 0.078**, with no interim dividend declared 2025 H1 Performance Highlights | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 98,023,000 | 91,123,000 | Increase 7.6% | | Gross profit | 36,507,000 | 37,184,000 | Decrease 1.8% | | Gross margin | 37.2% | 40.8% | Decrease 3.6 percentage points | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,000) | 2,805,000 | Shift from profit to loss | | Basic Loss / Earnings per share | (0.078) | 0.073 | Shift from profit to loss | | Interim Dividend | Zero | Zero | No declaration | Unaudited Condensed Consolidated Financial Statements [Consolidated Statement of Comprehensive Loss / Income](index=3&type=section&id=2.1%20Consolidated%20Statement%20of%20Comprehensive%20Loss%20%2F%20Income) For the six months ended June 30, 2025, revenue increased to **RMB 98.0227 million**, but increased cost of sales, distribution costs, and administrative expenses led to a decrease in gross profit, resulting in a loss of **RMB 3.0052 million** for the period Key Data from Consolidated Statement of Comprehensive Loss / Income | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Revenue | 98,022,700 | 91,123,166 | | Cost of sales | (61,515,653) | (53,939,153) | | Gross profit | 36,507,047 | 37,184,013 | | Distribution costs | (17,011,145) | (12,938,361) | | Administrative expenses | (12,653,893) | (11,048,469) | | Research and development expenses | (6,264,694) | (8,068,052) | | Operating profit | 1,177,720 | 6,177,628 | | Finance costs – net | (3,871,417) | (3,140,291) | | Loss / Profit before income tax | (2,693,697) | 3,037,337 | | Income tax expense | (311,549) | (232,794) | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,246) | 2,804,543 | | Basic Loss / Earnings per share | (0.078) | 0.073 | [Consolidated Statement of Financial Position](index=4&type=section&id=2.2%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, non-current assets remained stable, and current assets, including inventories, trade and other receivables, and cash and cash equivalents, all grew, while total equity slightly decreased and total liabilities increased, mainly due to a significant rise in current borrowings Key Data from Consolidated Statement of Financial Position | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total assets | 345,336,078 | 337,982,310 | | Non-current assets | 149,071,870 | 146,955,912 | | Current assets | 196,264,208 | 191,026,398 | | Total equity | 115,682,426 | 118,694,270 | | Total liabilities | 229,653,652 | 219,288,040 | | Non-current liabilities | 14,520,565 | 21,274,123 | | Current liabilities | 215,133,087 | 198,013,917 | - Current borrowings increased from **RMB 158.19 million** at the end of 2024 to **RMB 176.24 million** at the end of June 2025, primarily contributing to the increase in current liabilities[7](index=7&type=chunk) [Consolidated Statement of Changes in Equity](index=6&type=section&id=2.3%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity decreased from **RMB 118.694 million** at the beginning of the period to **RMB 115.682 million**, mainly due to a loss of **RMB 3.0052 million** and other comprehensive loss of **RMB 6,598** during the period Key Data from Consolidated Statement of Changes in Equity | Indicator | 2025-01-01 (RMB) | 2025-06-30 (RMB) | | :--- | :--- | :--- | | Share capital | 38,400,000 | 38,400,000 | | Other reserves | 50,342,050 | 50,335,452 | | Retained earnings | 29,952,220 | 26,946,974 | | Total equity | 118,694,270 | 115,682,426 | - A loss of **RMB 3.005 million** and other comprehensive loss of **RMB 6,598** for the period led to a decrease in total equity[8](index=8&type=chunk) [Consolidated Statement of Cash Flows](index=7&type=section&id=2.4%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities turned from a net inflow to a net outflow of **RMB 0.3407 million**, net cash outflow from investing activities slightly decreased, while net cash inflow from financing activities significantly increased, with cash and cash equivalents at period-end rising to **RMB 19.8624 million** Key Data from Consolidated Statement of Cash Flows | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (340,739) | 11,427,084 | | Net cash used in investing activities | (3,764,645) | (3,998,033) | | Net cash generated from financing activities | 7,582,914 | 5,100,483 | | Net increase in cash and cash equivalents | 3,477,530 | 12,529,534 | | Cash and cash equivalents at end of period | 19,862,374 | 27,318,038 | - Net cash flow from operating activities shifted from a net inflow of **RMB 11.4271 million** in the same period of 2024 to a net outflow of **RMB 0.3407 million** in the first half of 2025[9](index=9&type=chunk) - Net cash inflow from financing activities increased from **RMB 5.1005 million** in the same period of 2024 to **RMB 7.5829 million** in the first half of 2025[9](index=9&type=chunk) Notes to the Financial Statements [General Information](index=8&type=section&id=3.1%20General%20Information) This section provides basic information about the company and its subsidiaries, including their main business, establishment history, controlling shareholder, registered address, and listing status - The Group is primarily engaged in the development, production, and sale of bentonite fine chemicals[10](index=10&type=chunk) - The controlling shareholder is **Mr. Zhang Youlian**[10](index=10&type=chunk) - The Company was listed on the GEM of the Stock Exchange on **January 16, 2015**[12](index=12&type=chunk) [Basis of Preparation and Accounting Policies](index=8&type=section&id=3.2%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial information is prepared in accordance with IAS 34 and GEM Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and new IFRS amendments are not expected to have a significant impact on the Group's performance or financial position - Basis of Preparation: International Accounting Standard 34 "Interim Financial Reporting" and the GEM Listing Rules[14](index=14&type=chunk) - Accounting Policies: Consistent with those adopted in the annual financial statements for the year ended **December 31, 2024**[15](index=15&type=chunk) - Impact of New Standards: Directors estimate that the newly revised International Financial Reporting Standards will have no significant impact on the Group's performance and financial position[15](index=15&type=chunk)[17](index=17&type=chunk) [Segment Information](index=9&type=section&id=3.3%20Segment%20Information) All of the Group's business activities revolve around the production and sale of bentonite products, which management considers a single operating segment, thus no segment information is presented - Operating Segment: The Group has only one operating segment, which is the production and sale of bentonite products[18](index=18&type=chunk) [Revenue Breakdown](index=9&type=section&id=3.4%20Revenue%20Breakdown) For the six months ended June 30, 2025, the company's total revenue was **RMB 98.0227 million**, with organic bentonite as the primary source, significant growth in "Bidi powder" and high-quality calcium-based clay, and a decrease in paper chemicals and other products Revenue by Product Category | Product | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Organic bentonite | 52,981,658 | 47,778,559 | | Paper chemicals | 17,085,650 | 19,653,930 | | Inorganic gel | 15,144,080 | 14,926,620 | | Dry strength agent | 5,854,968 | 5,137,843 | | Bidi powder | 2,991,464 | 207,618 | | High-quality calcium-based clay | 2,280,351 | 807,965 | | Others | 1,684,529 | 2,610,631 | | **Total revenue** | **98,022,700** | **91,123,166** | [Other Income – Net](index=10&type=section&id=3.5%20Other%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2025, other income net was **RMB 0.5447 million**, a decrease from **RMB 1.0485 million** in the prior year, primarily due to reduced government grants Other Income – Net | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Government grants – cost-related | 346,610 | 993,846 | | Government grants – asset-related | – | 196,734 | | Others | 198,111 | (142,083) | | **Total** | **544,721** | **1,048,497** | - Total government grants decreased from **RMB 1.1906 million** in the same period of 2024 to **RMB 0.3466 million** in the first half of 2025[21](index=21&type=chunk) [Finance Costs – Net](index=10&type=section&id=3.6%20Finance%20Costs%20%E2%80%93%20Net) For the six months ended June 30, 2025, finance costs net increased to **RMB 3.8714 million** from **RMB 3.1403 million** in the prior year, mainly due to higher interest expenses Finance Costs – Net | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Finance income – interest income from bank deposits | 28,712 | 49,628 | | Finance costs – interest expenses | (3,895,296) | (3,251,827) | | Finance costs – exchange gains on borrowings, cash and cash equivalents – net | 53,872 | 61,908 | | Finance costs – interest expense on lease liabilities | (58,705) | – | | **Finance costs – net** | **(3,871,417)** | **(3,140,291)** | - Interest expenses increased from **RMB 3.2518 million** in the same period of 2024 to **RMB 3.8953 million** in the first half of 2025[22](index=22&type=chunk) [Loss / Profit Before Income Tax](index=11&type=section&id=3.7%20Loss%20%2F%20Profit%20Before%20Income%20Tax) For the six months ended June 30, 2025, the company reported a loss before income tax of **RMB 2.6937 million**, compared to a profit of **RMB 3.0373 million** in the prior year, with increased depreciation and amortization of leasehold improvements Loss / Profit for the period after charging the following | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Depreciation | 3,484,314 | 3,211,070 | | Amortisation of prepaid lease payments for land | 107,992 | 91,254 | | Amortisation of mining rights | 57,800 | 57,800 | | Amortisation of leasehold improvements | 1,577,272 | 1,212,070 | [Income Tax Expense](index=11&type=section&id=3.8%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to **RMB 0.3115 million**, with the company and some subsidiaries enjoying a 15% preferential tax rate for high-tech enterprises, some subsidiaries a 20% preferential tax rate for small low-profit enterprises, and US operations taxed at 21% Income Tax Expense | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Current income tax | (131,862) | (232,794) | | Deferred income tax | (179,687) | – | | **Income tax expense** | **(311,549)** | **(232,794)** | - The Company and its subsidiary, Yangyuan Renheng Fine Clay Co., Ltd., enjoy a **15%** preferential tax rate as high-tech enterprises[24](index=24&type=chunk) - The subsidiary, Zhejiang Chang'an Renheng Chemical Co., Ltd., enjoys a **20%** preferential income tax rate as a small low-profit enterprise[25](index=25&type=chunk) - Profits from the United States are subject to income tax at a rate of **21%**[25](index=25&type=chunk) [Loss / Earnings Per Share](index=12&type=section&id=3.9%20Loss%20%2F%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the company reported a basic loss per share of **RMB 0.078**, compared to earnings per share of **RMB 0.073** in the prior year, with diluted loss per share being the same as basic loss per share due to the absence of potentially dilutive ordinary shares Loss / Earnings Per Share | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Loss / Profit attributable to equity holders of the Company (RMB) | (3,005,246) | 2,804,543 | | Weighted average number of ordinary shares in issue | 38,400,000 | 38,400,000 | | Basic Loss / Earnings per share (RMB per share) | (0.078) | 0.073 | - Diluted Loss / Earnings per share is the same as basic Loss / Earnings per share, as there are no potentially dilutive ordinary shares[28](index=28&type=chunk) [Dividends](index=12&type=section&id=3.10%20Dividends) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors resolved not to declare any interim dividend for the six months ended **June 30, 2025**[29](index=29&type=chunk) [Property, Plant and Equipment](index=12&type=section&id=3.11%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired property, plant, and equipment totaling approximately **RMB 10.6567 million**, a decrease from **RMB 14.0358 million** in the prior year Acquisition of Property, Plant and Equipment | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 10,656,702 | 14,035,835 | [Trade and Other Receivables, Prepayments and Other Current Assets](index=13&type=section&id=3.12%20Trade%20and%20Other%20Receivables%2C%20Prepayments%20and%20Other%20Current%20Assets) As of June 30, 2025, net trade and other receivables, prepayments, and other current assets totaled **RMB 84.3514 million**, a slight increase from the end of 2024, with a decrease in net trade receivables but a significant increase in prepayments, and credit terms generally ranging from 90 to 180 days Trade and Other Receivables, Prepayments and Other Current Assets | Item | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Trade receivables – net | 69,060,244 | 71,606,234 | | Other receivables – net | 2,189,385 | 2,714,251 | | Prepayments | 12,733,150 | 8,898,261 | | Other current assets | 368,638 | 798,193 | | **Total** | **84,351,417** | **84,016,939** | Ageing Analysis of Trade Receivables | Ageing | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Within 180 days | 54,315,596 | 54,627,569 | | 180 days to 1 year | 12,710,874 | 12,961,088 | | 1 year to 2 years | 4,223,054 | 6,699,565 | | 2 years to 3 years | 226,813 | 262,213 | | Over 3 years | 2,972,837 | 3,317,986 | | **Total** | **74,449,174** | **77,868,421** | - Credit terms granted to customers generally range from **90 to 180 days**[33](index=33&type=chunk) [Trade and Other Payables](index=15&type=section&id=3.13%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were **RMB 38.2735 million**, a slight decrease from the end of 2024, with an increase in trade payables and a decrease in accrued staff salaries and benefits Trade and Other Payables | Item | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Trade payables | 21,910,049 | 18,994,736 | | Other payables | 10,559,412 | 11,612,247 | | Accrued staff salaries and benefits | 4,318,431 | 7,395,042 | | Accrued taxes (excluding income tax) | 1,485,624 | 1,219,435 | | **Total** | **38,273,516** | **39,221,460** | Ageing Analysis of Trade Payables | Ageing | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Within 6 months | 18,477,698 | 15,225,818 | | 6 months to 1 year | 38,169 | 99,152 | | 1 year to 2 years | 37,605 | 75,116 | | 2 years to 3 years | 33,552 | 22,291 | | Over 3 years | 3,323,025 | 3,572,359 | | **Total** | **21,910,049** | **18,994,736** | Operating and Financial Review [Market and Industry Review](index=16&type=section&id=4.1%20Market%20and%20Industry%20Review) China's non-metallic mineral product demand is in a growth opportunity period, with rapid development in the bentonite industry and diverse products, while national policies encourage classified mining, technological innovation, and deep processing to promote high-value development, and the paper industry is moving towards efficiency, quality, and low consumption - China's non-metallic mineral product demand is in a growth opportunity period characterized by "quality and quantity improvement in traditional sectors, accelerated expansion in emerging sectors, and effective promotion of demand and supply"[36](index=36&type=chunk) - The bentonite industry has successfully developed products such as edible oil decolorizing agents, drilling mud viscosifiers, and mycotoxin detoxifiers[36](index=36&type=chunk) - National plans guide the classified mining of bentonite mineral resources, enhancing technological R&D and deep processing capabilities to transform "resource advantages" into "technological advantages" and "economic advantages"[37](index=37&type=chunk) - The paper industry continues to develop towards a modern large-scale industry characterized by high efficiency, high quality, high benefits, low consumption, and low emissions[38](index=38&type=chunk) [Business Review](index=17&type=section&id=4.2%20Business%20Review) In the first half of 2025, the Group focused on promoting bentonite for paints and coatings, bentonite for oilfields, and putty mortar products, securing supply contracts with major oil companies for oilfield bentonite, while its US subsidiary operated normally and successfully passed mining permit reviews, with R&D expenses of approximately **RMB 6.265 million** - Business Focus: Promoting bentonite for paints and coatings, bentonite for oilfields, and putty mortar products[39](index=39&type=chunk) - Market Expansion: Oilfield bentonite products have secured supply contracts with companies such as **Sinopec** and **PetroChina**[39](index=39&type=chunk) - Subsidiary Operations: The US subsidiary operates normally, and Yangyuan Renheng Fine Clay Co., Ltd. successfully passed its mining permit review[39](index=39&type=chunk) - R&D Investment: R&D expenses for the first half of 2025 were approximately **RMB 6.265 million**[39](index=39&type=chunk) [Revenue Analysis](index=18&type=section&id=4.3%20Revenue%20Analysis) For the six months ended June 30, 2025, total revenue increased by **7.6%** year-on-year, with significant growth in organic bentonite, "Bidi powder" (up **1338.0%**), and high-quality calcium-based clay, while paper chemicals and other chemicals saw a decrease Revenue and Proportion by Product Category | Product | 2025 H1 (RMB Thousand) | Proportion (%) | 2024 H1 (RMB Thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Organic bentonite | 52,982 | 54.1 | 47,778 | 52.4 | | Paper chemicals | 17,086 | 17.4 | 19,654 | 21.6 | | Inorganic gel | 15,144 | 15.4 | 14,927 | 16.4 | | Dry strength agent | 5,855 | 6.0 | 5,138 | 5.6 | | Bidi powder | 2,991 | 3.1 | 208 | 0.2 | | High-quality calcium-based clay | 2,280 | 2.3 | 808 | 0.9 | | Others | 1,685 | 1.7 | 2,610 | 2.9 | | **Total** | **98,023** | **100.0** | **91,123** | **100.0** | - Organic bentonite revenue increased by **10.9%** to **RMB 52.982 million**, primarily due to increased sales volume[41](index=41&type=chunk) - "Bidi powder" revenue significantly increased by **1338.0%** to **RMB 2.991 million**[41](index=41&type=chunk) - Paper chemicals revenue decreased by **13.1%** to **RMB 17.086 million**, primarily due to decreased sales volume[40](index=40&type=chunk) [Cost of Sales Analysis](index=19&type=section&id=4.4%20Cost%20of%20Sales%20Analysis) For the six months ended June 30, 2025, cost of sales increased by **14.0%** year-on-year to **RMB 61.516 million**, with raw material costs being the main component, increasing by **13.9%** due to higher average purchase unit prices and consumption of CPAM Cost of Sales Breakdown | Item | 2025 H1 (RMB Thousand) | Proportion (%) | 2024 H1 (RMB Thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Raw material costs | 48,058 | 78.1 | 42,180 | 78.2 | | Manufacturing overhead costs | 9,166 | 14.9 | 7,929 | 14.7 | | Direct labor costs | 3,322 | 5.4 | 3,021 | 5.6 | | Others | 970 | 1.6 | 809 | 1.5 | | **Total** | **61,516** | **100.0** | **53,939** | **100.0** | - Cost of sales increased by **14.0%** to **RMB 61.516 million**[43](index=43&type=chunk) - Raw material costs increased by **13.9%** to **RMB 48.058 million**, primarily due to an increase in the average purchase unit price and consumption of CPAM (a key raw material for bentonite products)[44](index=44&type=chunk) [Gross Profit and Gross Margin](index=20&type=section&id=4.5%20Gross%20Profit%20and%20Gross%20Margin) For the six months ended June 30, 2025, gross profit decreased by **1.8%** year-on-year to **RMB 36.507 million**, and gross margin declined from **40.8%** to **37.2%**, mainly due to changes in the sales product mix and higher average costs of raw materials and energy Gross Profit and Gross Margin | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Gross profit | 36,507,000 | 37,184,000 | | Gross margin | 37.2% | 40.8% | - The decrease in gross margin was primarily due to changes in the sales product mix and higher average costs of raw materials and energy compared to the previous year[46](index=46&type=chunk) [Expense Analysis](index=20&type=section&id=4.6%20Expense%20Analysis) This section details changes in distribution costs, administrative expenses, and research and development expenses, with distribution and administrative costs increasing, while R&D expenses significantly decreased due to reduced project work [Distribution Costs](index=20&type=section&id=4.6.1%20Distribution%20Costs) For the six months ended June 30, 2025, distribution costs increased by **31.5%** year-on-year to **RMB 17.011 million**, primarily due to higher transportation expenses Distribution Costs | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Distribution costs | 17,011,000 | 12,938,000 | - The increase in distribution costs was primarily due to higher transportation expenses[47](index=47&type=chunk) [Administrative Expenses](index=20&type=section&id=4.6.2%20Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses increased by **14.5%** year-on-year to **RMB 12.654 million**, mainly due to higher staff costs and professional fees Administrative Expenses | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Administrative expenses | 12,654,000 | 11,048,000 | - The increase in administrative expenses was primarily due to higher staff costs and professional fees[48](index=48&type=chunk) [Research and Development Expenses](index=20&type=section&id=4.6.3%20Research%20and%20Development%20Expenses) For the six months ended June 30, 2025, research and development expenses decreased by **22.3%** year-on-year to **RMB 6.265 million**, mainly due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute Research and Development Expenses | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Research and development expenses | 6,265,000 | 8,068,000 | - The decrease in research and development expenses was primarily due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute[49](index=49&type=chunk) [Other Income – Net](index=21&type=section&id=4.7%20Other%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2025, other income net was **RMB 0.545 million**, a decrease from **RMB 1.048 million** in the prior year, primarily due to reduced government grants Other Income – Net | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Other income – net | 545,000 | 1,048,000 | - The decrease in other income net was primarily due to government grants reducing from **RMB 1.191 million** to **RMB 0.347 million**[50](index=50&type=chunk) [Finance Costs – Net](index=21&type=section&id=4.8%20Finance%20Costs%20%E2%80%93%20Net) For the six months ended June 30, 2025, finance costs net increased to **RMB 3.871 million**, primarily due to an increase in average bank borrowings Finance Costs – Net | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Finance costs – net | 3,871,000 | 3,140,000 | - The increase in finance costs net was primarily due to an increase in average bank borrowings[51](index=51&type=chunk) [Income Tax Expense](index=21&type=section&id=4.9%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **RMB 0.312 million**, an increase from **RMB 0.233 million** in the prior year Income Tax Expense | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Income tax expense | 312,000 | 233,000 | [Loss / Profit Attributable to Equity Holders of the Company for the Period](index=21&type=section&id=4.10%20Loss%20%2F%20Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company%20for%20the%20Period) Due to the combined effect of the aforementioned factors, the loss attributable to equity holders of the Company for the six months ended June 30, 2025, was **RMB 3.005 million**, compared to a profit of **RMB 2.805 million** in the prior year Loss / Profit Attributable to Equity Holders of the Company for the Period | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,000) | 2,805,000 | Financial Position and Future Outlook [Liquidity and Sources of Funds](index=21&type=section&id=5.1%20Liquidity%20and%20Sources%20of%20Funds) The Group primarily meets its working capital needs through cash generated from operations and long-term and short-term bank borrowings, with cash and cash equivalents totaling **RMB 19.862 million** as of June 30, 2025, and the Board believes the Group has sufficient working capital for at least the next twelve months - Sources of Funds: Primarily from cash generated from operations, long-term and short-term bank borrowings, and other borrowings[54](index=54&type=chunk) - The weighted average effective annual interest rates for bank borrowings and other borrowings were **4.29%** and **4.22%**, respectively[54](index=54&type=chunk) Cash and Cash Equivalents | Indicator | 2025-06-30 (RMB) | | :--- | :--- | | Cash and cash equivalents | 19,862,000 | - The Group's cash and cash equivalents increased by approximately **RMB 3.531 million**, primarily contributed by net cash inflow from financing activities[55](index=55&type=chunk) [Capital Structure and Indebtedness](index=22&type=section&id=5.2%20Capital%20Structure%20and%20Indebtedness) As of June 30, 2025, the Group's total borrowings were approximately **RMB 184.6 million**, an increase from the end of 2024, and the Group encountered no difficulties in renewing bank loans during the reporting period Total Borrowings | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total borrowings | 184,604,000 | 172,958,000 | - The Group encountered no difficulties in renewing bank loans with lenders during the reporting period[56](index=56&type=chunk) [Gearing Ratio](index=22&type=section&id=5.3%20Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was **142.4%**, an increase from **132.0%** at the end of 2024, primarily due to an increase in total equity Gearing Ratio | Indicator | 2025-06-30 | 2024-12-31 | | :--- | :--- | :--- | | Gearing ratio | 142.4% | 132.0% | - The increase in the gearing ratio was primarily due to an increase in total equity[57](index=57&type=chunk) [Pledge of Assets](index=22&type=section&id=5.4%20Pledge%20of%20Assets) As of June 30, 2025, the Group pledged assets including buildings, fixtures and fittings, land use rights, and time deposits totaling approximately **RMB 13.477 million** to banks, a decrease from **RMB 15.463 million** at the end of 2024 Pledge of Assets | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total pledged assets | 13,477,000 | 15,463,000 | [Capital Expenditure](index=22&type=section&id=5.5%20Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure was approximately **RMB 10.657 million**, a decrease from **RMB 14.036 million** in the prior year Capital Expenditure | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Capital expenditure | 10,657,000 | 14,036,000 | [Exchange Rate Risk](index=23&type=section&id=5.6%20Exchange%20Rate%20Risk) The Group's primary business is in China, with transactions mainly in RMB, and most assets and liabilities denominated in RMB; despite the non-convertibility of RMB posing exchange rate risk, the Group believes its exposure to exchange rate fluctuations among HKD, USD, and RMB is not significant and has not engaged in hedging transactions - Primary Business and Transaction Currency: Within mainland China, conducted in **RMB**[60](index=60&type=chunk) - Exchange Rate Risk: RMB is not freely convertible, posing a risk that actions by the Chinese government could affect exchange rates[60](index=60&type=chunk) - Risk Assessment: The Group believes its exposure to exchange rate fluctuations among **HKD**, **USD**, and **RMB** is not significant[60](index=60&type=chunk) - Hedging Strategy: The Group has not entered into any hedging transactions to manage foreign currency fluctuation risks[60](index=60&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=23&type=section&id=5.7%20Contingent%20Liabilities%2C%20Legal%20and%20Potential%20Proceedings) As of June 30, 2025, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings - The Group had no significant contingent liabilities, legal proceedings, or potential proceedings[61](index=61&type=chunk) [Significant Acquisitions and Disposals](index=23&type=section&id=5.8%20Significant%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals - The Group did not undertake any significant acquisitions or disposals[62](index=62&type=chunk) [Going Concern](index=23&type=section&id=5.9%20Going%20Concern) Based on its current financial position and available financing, the Group has sufficient financial resources to continue operating for the foreseeable future, thus the financial statements are prepared on a going concern basis - The Group has sufficient financial resources to continue operating for the foreseeable future, and the financial statements are prepared on a going concern basis[63](index=63&type=chunk) [Future Development](index=23&type=section&id=5.10%20Future%20Development) The Group will continue to focus on high-value and high-end utilization of bentonite and its associated minerals, develop strategic new products like organic bentonite, water-based bentonite, and inorganic gels, emphasize green and environmentally friendly product development, and target overseas markets such as North America, Europe, and Southeast Asia, driven by profit and innovation to maximize shareholder value - Product Strategy: Continue to focus on transitioning bentonite from traditional low-value, low-end utilization to high-value, high-end utilization, and research and develop bentonite mineral functional materials and related products[64](index=64&type=chunk) - New Product Development: Develop high-solid rheological additives for coatings, high-solid oil-based pesticide suspending agents, bentonite products for deep, ultra-deep, and offshore drilling, and focus on green and environmentally friendly product R&D[65](index=65&type=chunk) - Market Expansion: Focus on developing overseas customer markets in North America, Europe, Southeast Asia, and expanding foreign trade business[65](index=65&type=chunk) - Development Strategy: Adhere to a profit-centric approach, driven by innovation, actively developing new products, and opening new markets[65](index=65&type=chunk) Corporate Governance and Shareholder Information [Human Resources and Training](index=24&type=section&id=6.1%20Human%20Resources%20and%20Training) As of June 30, 2025, the Group had **232** employees with total staff costs of approximately **RMB 17.637 million**, adhering to a "people-oriented" management philosophy and enhancing employee efficiency and performance through strict selection, annual sales guidelines, quarterly marketing strategies, and various incentive mechanisms Number of Employees and Staff Costs | Indicator | 2025-06-30 | 2024 H1 (RMB) | | :--- | :--- | :--- | | Total number of employees | 232 | - | | Total staff costs | 17,637,000 | 16,959,000 | - Management Philosophy: Adhering to a "people-oriented" approach, building a management and development platform[66](index=66&type=chunk) - Performance Management: Annually issuing sales guidelines, formulating quarterly marketing strategies, and implementing various incentive mechanisms to enhance employee work efficiency[66](index=66&type=chunk) [Interests of Directors, Supervisors and Chief Executive](index=25&type=section&id=6.2%20Interests%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive) As of June 30, 2025, Mr. Zhang Youlian held **50.05%** of the company's shares, Ms. Zhang Jinhua held **1.04%**, and Mr. Xu Qinshi held **0.26%** through his spouse; no other directors, supervisors, or chief executive held disclosable interests in shares or related shares Long Positions of Directors / Supervisors in the Ordinary Shares of the Company | Name of Director / Supervisor | Nature of interest | Number of shares in the Company held | Approximate percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr. Zhang Youlian | Beneficial owner | 19,220,600 | 50.05% | | Ms. Zhang Jinhua | Beneficial owner | 398,400 | 1.04% | | Mr. Xu Qinshi (i) | Spouse's interest | 100,000 | 0.26% | - Save as disclosed above, no other directors or supervisors and chief executive held any interests or short positions required to be registered or notified to the Stock Exchange[68](index=68&type=chunk) [Interests of Substantial Shareholders and Other Persons](index=26&type=section&id=6.3%20Interests%20of%20Substantial%20Shareholders%20and%20Other%20Persons) As of June 30, 2025, apart from directors, supervisors, and the chief executive, Ms. Yu Hua was the only other person holding **5%** or more interest in the company, with **9.31%** of the shares Long Positions of Substantial Shareholders and Other Persons in Shares | Name of Shareholder | Nature of interest | Total number of shares in the Company held | Approximate percentage of issued share capital | | :--- | :--- | :--- | :--- | | Ms. Yu Hua | Beneficial owner | 3,576,000 | 9.31% | - Save as disclosed above, no other persons held any interests or short positions required to be registered[69](index=69&type=chunk) [Rights of Directors and Supervisors to Acquire Shares or Debentures](index=26&type=section&id=6.4%20Rights%20of%20Directors%20and%20Supervisors%20to%20Acquire%20Shares%20or%20Debentures) During the reporting period, no director, supervisor, or their spouse or minor children were granted or exercised any rights to acquire shares or debentures of the company - During the reporting period, no director or supervisor or their respective spouses or minor children were granted or exercised any rights to acquire shares or debentures of the Company[70](index=70&type=chunk) [Connected Transactions](index=26&type=section&id=6.5%20Connected%20Transactions) During the reporting period, the Group did not enter into any connected transactions or continuing connected transactions requiring disclosure under the GEM Listing Rules - The Group did not enter into any connected transactions or continuing connected transactions requiring disclosure under the GEM Listing Rules[71](index=71&type=chunk) [Interests of Directors, Supervisors and Controlling Shareholders in Competing Businesses and Conflicts of Interest](index=26&type=section&id=6.6%20Interests%20of%20Directors%2C%20Supervisors%20and%20Controlling%20Shareholders%20in%20Competing%20Businesses%20and%20Conflicts%20of%20Interest) During the reporting period, no director, supervisor, controlling shareholder, or their associates engaged in any business competing or likely to compete with the Group's business, or held any interests that would create a conflict of interest with the Group - No director, supervisor, or controlling shareholder or their respective associates engaged in any business competing or likely to compete with the Group's business, or held any interests therein that would create a conflict of interest with the Group[72](index=72&type=chunk) [Public Float](index=27&type=section&id=6.7%20Public%20Float) From the reporting period to the date of this announcement, at least **25%** of the Company's issued share capital was held by public shareholders - At least **25%** of the Company's issued share capital is held by public shareholders[73](index=73&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=6.8%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, 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[74](index=74&type=chunk) [Capital Commitments](index=27&type=section&id=6.9%20Capital%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately **RMB 1.254 million**, a decrease from **RMB 1.672 million** at the end of 2024 Capital Commitments | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Capital commitments | 1,254,000 | 1,672,000 | [Dividends](index=27&type=section&id=6.10%20Dividends) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors resolved not to declare any interim dividend for the six months ended **June 30, 2025**[76](index=76&type=chunk) [Corporate Governance Practices](index=27&type=section&id=6.11%20Corporate%20Governance%20Practices) The Company is committed to complying with the Corporate Governance Code but has deviations regarding the combined roles of Chairman and Chief Executive and directors' and officers' liability insurance; the Board believes the current structure is beneficial and is considering liability insurance proposals - The Company complies with all applicable provisions of the Corporate Governance Code, but with two deviations[77](index=77&type=chunk) - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive are combined and held by **Mr. Zhang Youlian**, which the Board believes provides strong and consistent leadership[77](index=77&type=chunk) - Deviation from Code Provision C.1.8: Directors' and officers' liability insurance covering directors' liabilities arising from legal proceedings was not purchased during the reporting period, as the Board required time to consider the proposal[78](index=78&type=chunk) [Standard Code for Securities Transactions](index=28&type=section&id=6.12%20Standard%20Code%20for%20Securities%20Transactions) The Company has adopted a standard code for securities transactions no less exacting than the GEM Listing Rules, and all directors have confirmed full compliance with the code after inquiry - The Company has adopted a standard code for securities transactions no less exacting than the GEM Listing Rules[79](index=79&type=chunk) - All directors confirmed full compliance with the required dealing standards set out in the Standard Code during the reporting period[79](index=79&type=chunk) [Nomination Committee](index=28&type=section&id=6.13%20Nomination%20Committee) The Company's Nomination Committee was established on March 26, 2014, with its terms of reference revised on June 30, 2025, and comprises Mr. Fan Fang (Executive Director), Mr. Zhang Lei, and Mr. Tang Jingyan (Independent Non-executive Directors), with Mr. Tang serving as Chairman - The Nomination Committee was established on **March 26, 2014**, and its terms of reference were revised on **June 30, 2025**[80](index=80&type=chunk) - Committee Members: **Mr. Fan Fang** (Executive Director), **Mr. Zhang Lei**, and **Mr. Tang Jingyan** (Independent Non-executive Directors)[80](index=80&type=chunk) - Chairman: **Mr. Tang Jingyan**[80](index=80&type=chunk) [Audit Committee](index=28&type=section&id=6.14%20Audit%20Committee) The Company's Audit Committee, established on March 26, 2014, comprises Mr. Zhang Lei (Chairman), Mr. Chen Jianping, and Mr. Tang Jingyan (all Independent Non-executive Directors), with primary duties including reviewing financial reports, internal control effectiveness, external auditor independence, and audit process effectiveness, and has reviewed the interim financial statements - The Audit Committee was established on **March 26, 2014**, and its terms of reference have been set out in compliance with the Corporate Governance Code[81](index=81&type=chunk) - Committee Members: **Mr. Zhang Lei** (Chairman), **Mr. Chen Jianping**, and **Mr. Tang Jingyan** (all Independent Non-executive Directors)[81](index=81&type=chunk) - Primary Responsibilities: Providing independent review and oversight of financial reporting, reviewing the effectiveness of internal controls, ensuring the independence of external auditors, and the effectiveness of the audit process[81](index=81&type=chunk) - The unaudited consolidated financial statements of the Company for the six months ended **June 30, 2025**, have been reviewed[82](index=82&type=chunk) Post-Reporting Period Events and Information Disclosure [Events After the Reporting Period](index=29&type=section&id=7.1%20Events%20After%20the%20Reporting%20Period) As of the date of this announcement, the Group has no significant events after the reporting period - As of the date of this announcement, there are no significant events after the reporting period[83](index=83&type=chunk) [Information Disclosure](index=29&type=section&id=7.2%20Information%20Disclosure) The Company will dispatch the interim report for the six months ended June 30, 2025, to shareholders in due course and will publish it on the company's website and the Stock Exchange's website - The interim report will be dispatched to shareholders and published on the Company's website www.renheng.com and the Stock Exchange's website www.hkexnews.hk[84](index=84&type=chunk)

Core Viewpoint - Chang'an Renheng (08139.HK) anticipates a loss of approximately RMB 3 million for the six months ending June 30, 2025, compared to a net profit of about RMB 2.8 million for the same period ending June 30, 2024 [1] Financial Performance - The company expects a decline in profit despite an increase in sales revenue, primarily due to a decrease in gross profit margin [1] - The anticipated loss is attributed to rising costs of raw materials and energy [1] - Increased distribution expenses have also contributed to higher sales costs during the period [1]

Group 1 - The company, Chang'an Renheng (08139), expects to report a loss of approximately RMB 3 million for the six months ending June 30, 2025, compared to a profit of about RMB 2.8 million for the same period in 2024 [1] - The anticipated loss is primarily attributed to a decline in gross profit margin during the current period compared to the previous period [1] - The increase in raw material and energy costs is identified as a key factor contributing to the lower gross profit margin [1] Group 2 - Additionally, the company has experienced an increase in distribution expenses, which has led to higher sales costs for the current period [1]

Group 1 - The company, Chang'an Renheng (08139.HK), expects to report a loss of approximately RMB 3 million for the six months ending June 30, 2025, compared to a profit of about RMB 2.8 million for the same period in 2024 [1] - As of August 22, 2025, Chang'an Renheng's stock closed at HKD 1.58, reflecting a 6.76% increase with a trading volume of 2,500 shares and a total turnover of HKD 3,940 [1] - The company has low attention from investment banks, with no ratings provided in the last 90 days [1] Group 2 - Chang'an Renheng's market capitalization is HKD 56.832 million, ranking 35th in the chemical products industry [1] - Key financial metrics for Chang'an Renheng compared to the industry average are as follows: - Return on Equity (ROE): 1.06% vs. -17.87% (industry average), ranking 18th [1] - Revenue: RMB 195 million vs. RMB 3.48 billion (industry average), ranking 33rd [1] - Net Profit Margin: 0.65% vs. -11.69% (industry average), ranking 20th [1] - Gross Profit Margin: 41.1% vs. 25.73% (industry average), ranking 9th [1] - Debt Ratio: 64.88% vs. 54.14% (industry average), ranking 22nd [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份內容而 產生或因依賴該等內容而引致之任何損失承擔任何責任。 Zhejiang Chang'an Renheng Technology Co., Ltd. * 8139 盈利警告 本公告乃浙江長安仁恒科技股份有限公司（「本公司」，及其附屬公司，統稱「本集團」）根 據香港聯合交易所有限公司GEM上市規則（「GEM上市規則」）第17.10條及香港法例第571 章證券及期貨條例（「證券及期貨條例」）第XIVA部之內幕消息條文（定義見GEM上市規則） 之規定而發出。 經初步評估本集團截至二零二五年六月三十日止六個月（「本期間」）之未經審核綜合管理 賬目，本公司董事（「董事」）會（「董事會」）謹此知會本公司之股東（「股東」）及潛在投資 者，本集團預期與截至二零二四年六月三十日止六個月（「前期間」）錄得純利約人民幣2.8 百萬元相比，本集團本期間將錄得虧損約人民幣3.0百萬元。 根據目前可得資料，雖銷售收入有所增加，預期虧損主要是由於與前期間相比，本集團 本期間之毛利率下降。其 ...

浙江長安仁恒科技股份有限公司（「本公司」，及其附屬公司，統稱「本集團」）之董事（「董 事」）會（「董事會」）茲通告，謹定於二零二五年八月二十九日星期五舉行董事會會議，目 的為審議並批准本集團截至二零二五年六月三十日止六個月之未經審計中期業績及建議 派付中期股息（如有），並處理任何其他事項。 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通告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不就因本通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。 Zhejiang Chang'an Renheng Technology Co., Ltd.* 浙江長安仁恒科技股份有限公司 （於中華人民共和國註冊成立之股份有限公司） （股份代號：8139） 董事會會議通告 本通告將自刊發日期最少七天於聯交所網站www.hkexnews.hk之「最新上公司資料」一頁內 刊載。本通告亦將刊載於本公司網站www.renheng.com。 承董事會命 浙江長安仁恒科技股份有限公司 主席 - 2 - 張有連 中國，浙江省，二零二五年八月十五日 於本通告日期，執行董事為張有連先生、佘文傑先生 ...

Group 1 - As of May 14, 78 stocks reached a 52-week high, with Chang'an Renheng (08139), Hengchang Group International (01421), and Lehua Entertainment (02306) leading the high rate at 65.38%, 42.59%, and 38.52% respectively [1] - The closing price of Chang'an Renheng was 1.370, with a peak price of 2.580, indicating a significant increase [1] - Hengchang Group International closed at 0.690, reaching a high of 0.770, reflecting a 42.59% increase [1] Group 2 - Lehua Entertainment's closing price was 1.510, with a maximum price of 1.690, showing a 38.52% rise [1] - XL Ernan CO (07711) and XL Ernan CO-U had increases of 27.75% and 26.89% respectively, with closing prices of 125.000 and 15.960 [1] - Other notable stocks include Madison Holdings (08057) with a 25.00% increase and Du Fu Wine Group (00986) with a 17.48% increase [1] Group 3 - The report also highlights stocks that reached 52-week lows, with XI Ernan CO (07311) dropping by 36.46% to a closing price of 26.500 [3] - XI Ernan CO-U saw a decrease of 35.53%, closing at 3.386 [3] - Other stocks with significant declines include Touyun Biotechnology (01332) at -22.46% and Aoweiholdings (01370) at -16.67% [3]

Financial Performance - Revenue increased by 20.1% to approximately RMB 194,863,000 (2023: RMB 162,278,000) [3] - Gross profit rose by 22.5% to approximately RMB 80,098,000 (2023: RMB 65,363,000) [3] - Gross margin improved to approximately 41.1% (2023: 40.3%) [3] - Profit before tax decreased by 45.8% to approximately RMB 1,429,000 (2023: RMB 2,638,000) [3] - Profit attributable to equity holders decreased by 44.9% to approximately RMB 1,270,000 (2023: RMB 2,303,000) [3] - Basic earnings per share decreased by 50.0% to approximately RMB 0.03 (2023: RMB 0.06) [3] - The net profit attributable to equity holders for the year ended December 31, 2024, was approximately RMB 1,270,000, a decrease of about RMB 1,033,000 or 44.9% compared to RMB 2,303,000 in 2023 [64] Assets and Liabilities - Total assets increased to RMB 337,982,310 (2023: RMB 292,849,380) [5] - Total liabilities increased to RMB 219,288,040 (2023: RMB 175,419,693) [6] - Non-current assets increased to RMB 146,955,912 (2023: RMB 131,631,817) [5] - Trade receivables increased to RMB 77,868,421 as of December 31, 2024, from RMB 71,469,009 in 2023, marking an increase of about 9.5% [36] - The total unused tax losses as of December 31, 2024, amounted to approximately RMB 25,090,999, an increase from RMB 16,284,584 as of December 31, 2023 [30] - Trade payables decreased significantly to RMB 18,994,736 in 2024 from RMB 39,371,472 in 2023, indicating a reduction of 51.8% [40] Expenses - Research and development expenses increased to RMB 15,542,097 (2023: RMB 11,585,685) [4] - The total cost of sales, selling expenses, administrative expenses, and impairment of financial assets amounted to RMB 187,975,221 for the year ending December 31, 2024, up from RMB 155,684,169 in 2023, representing an increase of approximately 20.7% [22] - The group’s employee benefit expenses increased to RMB 35,703,993 in 2024 from RMB 28,518,993 in 2023, reflecting a rise of approximately 25.4% [22] - Distribution costs increased by approximately RMB 10,220,000 or 42.1%, from RMB 24,249,000 in 2023 to RMB 34,469,000 in 2024, mainly due to higher transportation, marketing, and employee expenses [57] - The company's inventory cost recognized as cost of sales for the year ended December 31, 2024, was RMB 112,520,895, compared to RMB 94,900,017 in 2023, reflecting an increase of approximately 18.5% [35] Taxation - The company's income tax expense for the year ended December 31, 2024, was RMB (158,625) compared to RMB (334,849) for the year ended December 31, 2023, indicating a significant reduction in tax expenses [29] - The effective tax rate decreased from 12.7% in 2023 to 11.1% in 2024, with income tax expenses dropping from approximately RMB 335,000 to RMB 159,000, a decrease of about RMB 176,000 or 52.5% [63] Cash Flow and Capital Structure - Cash and cash equivalents as of December 31, 2024, amounted to RMB 16,330,972, up from RMB 14,888,159 in 2023, reflecting a growth of 9.7% [39] - Total borrowings increased to approximately RMB 172,958,000 in 2024 from RMB 111,401,000 in 2023 [80] - Capital debt ratio rose to 132.0% in 2024 from 82.2% in 2023, mainly due to increased bank borrowings [81] - Cash and cash equivalents increased by approximately RMB 1,443,000, driven by net cash inflow from operating activities of approximately RMB 7,847,000 [79] Research and Development - The company invested approximately RMB 15,542,000 in research and development in 2024, emphasizing its commitment to new product development [47] - Research and development expenses increased from approximately RMB 11,586,000 in 2023 to RMB 15,542,000 in 2024, an increase of about RMB 3,956,000 or 34.1%, primarily due to new projects in the environmental sector [60] Corporate Governance - The company has complied with all applicable provisions of the corporate governance code during the review period, except for deviations from provisions C.2.1 and C.1.8 [102] - The audit committee held two meetings during the review period, with all members in attendance, and reviewed the consolidated financial statements for the year ending December 31, 2024 [105] Future Outlook - In 2025, the group plans to expand its foreign customer market, particularly in North America, Europe, and Southeast Asia [91] - The group aims to develop high-value-added fine chemicals from bentonite resources, focusing on three product categories: organic bentonite series, water-based bentonite series, and inorganic gel series [90]