Important Notes, Table of Contents, and Definitions [Important Notes](index=2&type=section&id=Important%20Notes) The company's management guarantees the truthfulness, accuracy, and completeness of the semi-annual report and its financial statements, while also highlighting investment risks and the plan for no profit distribution - The Board of Directors, Board of Supervisors, directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, and bear individual and joint legal responsibility[4](index=4&type=chunk) - Forward-looking statements such as future plans and development strategies in this report do not constitute a substantive commitment to investors, who are advised to be aware of investment risks[4](index=4&type=chunk) - The company **plans no cash dividend distribution**, bonus share issuance, or capitalization of capital reserves[4](index=4&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section lists the nine main chapters of the report and their corresponding page numbers, providing an overview of the report's structure [Directory of Documents for Inspection](index=4&type=section&id=Directory%20of%20Documents%20for%20Inspection) This section discloses the reference documents available for inspection during the reporting period, including signed financial statements and original copies of all publicly disclosed documents - Financial statements signed and sealed by the legal representative, the person in charge of accounting, and the head of the accounting department[8](index=8&type=chunk) - Original copies of all company documents and announcements publicly disclosed on media designated by the China Securities Regulatory Commission during the reporting period[9](index=9&type=chunk) - The full text of the 2025 semi-annual report signed by the legal representative[10](index=10&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section provides definitions of frequently used terms in the report, including company names, major related parties, and the reporting period, to ensure clear understanding - The Company, FIYTA refers to FIYTA Precision Technology Co, Ltd[12](index=12&type=chunk) - AVIC refers to Aviation Industry Corporation of China, Ltd[12](index=12&type=chunk) - The Reporting Period refers to the period from January 1, 2025, to June 30, 2025[12](index=12&type=chunk) Company Profile and Key Financial Indicators [Company Profile](index=6&type=section&id=Company%20Profile) This section provides basic information about the company, including its stock abbreviation, stock code, listing exchange, and legal representative - Stock Abbreviation: FIYTA, FIYTA B; Stock Code: 000026, 200026[14](index=14&type=chunk) - Stock Listing Exchange: Shenzhen Stock Exchange[14](index=14&type=chunk) - Legal Representative: Zhang Xuhua[14](index=14&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) This section provides detailed contact information for the company's Board Secretary and Securities Affairs Representative to facilitate investor communication - Board Secretary: Song Yaoming; Securities Affairs Representative: Xiong Yaojia[15](index=15&type=chunk) - Contact Phone: 0755-86013669; Email: investor@fiyta.com.cn[15](index=15&type=chunk) [Other Information](index=6&type=section&id=Other%20Information) This section states that the company's registered address, office address, website, and information disclosure locations remained unchanged during the reporting period - The company's registered address, office address, postal code, website, and email address remained unchanged during the reporting period, with details available in the 2024 annual report[16](index=16&type=chunk) - The stock exchange website and media for disclosing the semi-annual report, as well as the location for report inspection, remained unchanged during the reporting period, with details available in the 2024 annual report[17](index=17&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In H1 2025, the company's revenue and net profit declined significantly year-over-year, while net cash flow from operating activities grew substantially Key Accounting Data and Financial Indicators (Consolidated) | Indicator | Current Period (Yuan) | Prior Year Period (Yuan) | YoY Change | | :--- | :--- | :--- | :--- | | **Income Statement:** | | | | | Operating Revenue | 1,784,131,937.23 | 2,076,397,911.32 | -14.08% | | Net Profit Attributable to Shareholders | 82,445,500.03 | 147,138,482.34 | -43.97% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 78,377,262.19 | 140,445,221.81 | -44.19% | | Net Cash Flow from Operating Activities | 251,490,807.07 | 136,530,796.52 | 84.20% | | Basic Earnings Per Share (Yuan/Share) | 0.2034 | 0.3568 | -42.99% | | Diluted Earnings Per Share (Yuan/Share) | 0.2034 | 0.3564 | -42.93% | | Weighted Average Return on Equity | 2.41% | 4.36% | -1.95% | | **Balance Sheet (End of Period):** | | | | | Total Assets | 3,878,686,383.99 | 4,007,690,717.02 | -3.22% | | Net Assets Attributable to Shareholders | 3,333,609,683.39 | 3,391,843,200.61 | -1.72% | [Differences in Accounting Data under Domestic and Foreign Accounting Standards](index=7&type=section&id=Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Foreign%20Accounting%20Standards) During the reporting period, there were no discrepancies in net profit or net assets between financial reports prepared under IFRS and Chinese Accounting Standards - Differences in net profit and net assets between financial reports disclosed under IFRS and Chinese Accounting Standards: Not applicable[20](index=20&type=chunk) - Differences in net profit and net assets between financial reports disclosed under foreign accounting standards and Chinese Accounting Standards: Not applicable[20](index=20&type=chunk) [Non-recurring Gains and Losses](index=7&type=section&id=Non-recurring%20Gains%20and%20Losses) The company's total non-recurring gains and losses for the period amounted to 4,068,237.84 Yuan, primarily from government grants and impairment reversals Non-recurring Gains and Losses Items and Amounts | Item | Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -424,407.32 | | Government Grants Recognized in Current Profit or Loss | 1,509,835.03 | | Fair Value Changes and Disposal Gains/Losses from Financial Assets/Liabilities Held by Non-financial Enterprises | 247,499.84 | | Reversal of Impairment Provision for Individually Tested Receivables | 2,807,146.61 | | Other Non-operating Income and Expenses | 984,766.23 | | Less: Income Tax Effect | 1,056,602.55 | | Total | 4,068,237.84 | Management Discussion and Analysis [Principal Business Activities](index=8&type=section&id=Principal%20Business%20Activities) The company focuses on the watch industry with a core business layout of proprietary brands and comprehensive services for famous watches, while actively cultivating strategic emerging industries - The company is deeply rooted in the watch industry, forming a core business layout where proprietary watch brands and comprehensive services for famous watches mutually promote each other[23](index=23&type=chunk) - The company owns proprietary watch brands such as **"FIYTA", "Emile Chouriet", and "ADASHER"**, as well as licensed cooperative brands "Beijing" and "Jeep"[23](index=23&type=chunk) - **"Harmony"** is positioned as a "comprehensive service provider for famous watches and a brand operation platform," specializing in the distribution and service of world-renowned watches[24](index=24&type=chunk) - The company has expanded into strategic emerging industries such as precision technology and smart wearables, and will continue to increase resource investment to foster their growth[24](index=24&type=chunk) - During the reporting period, the domestic traditional watch consumer market remained under pressure, with the Federation of the Swiss Watch Industry reporting a **18.7% year-over-year decrease** in cumulative exports to mainland China in the first half of the year[25](index=25&type=chunk) [Core Competitiveness Analysis](index=8&type=section&id=Core%20Competitiveness%20Analysis) The company's core competitiveness is built on full-chain brand management, refined channel operations, core precision technology, digital empowerment, and a professional talent pool - The company possesses full-chain operational management capabilities covering R&D, design, manufacturing, sales, and service, continuously strengthening the differentiation and competitiveness of its core proprietary brand "FIYTA"[26](index=26&type=chunk) - The company has refined channel operation management capabilities, having established a multi-dimensional channel network covering online and offline, domestic and overseas markets[27](index=27&type=chunk) - As a national technology innovation demonstration enterprise, the company holds key core technologies and high-end watchmaking skills, including in-house watch movements, component manufacturing, and aerospace watch development[28](index=28&type=chunk) - The company is advancing its digital transformation through initiatives such as optimizing digital retail systems, upgrading operational management systems, and implementing AI applications[30](index=30&type=chunk) - The company has a sound talent selection, training, and promotion system, and a professional, stable talent pool, having cultivated numerous industry leaders in core areas like design, R&D, and manufacturing[31](index=31&type=chunk) [Analysis of Principal Business](index=9&type=section&id=Analysis%20of%20Principal%20Business) In H1 2025, the company's revenue and profit declined, but operating cash flow increased significantly, as it actively responded to market challenges through various strategic initiatives Key Financial Data for H1 2025 (Consolidated) | Indicator | Current Period (CNY 10,000) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 178,413.19 | -14.08% | | Total Profit | 10,556.07 | -45.50% | | Net Cash Flow from Operating Activities | 25,149.08 | 84.20% | | Asset-Liability Ratio | 14.05% | (End of Period) | - The "FIYTA" brand, positioned with aerospace features and Chinese culture, launched distinctive products like the "Y-20" Hongyun and "Little Spaceship" 3D time-reading models[32](index=32&type=chunk) - The "FIYTA" brand continued to optimize its offline channel structure, strengthening its presence in prime locations like mainstream shopping centers; online, its e-commerce **GMV grew against the trend** during the "618" shopping festival[33](index=33&type=chunk) - The company plans to acquire a controlling stake in Shaanxi Changkong Gear Co, Ltd to enhance the technical strength and core capabilities of its precision technology business[34](index=34&type=chunk) - The company is accelerating the R&D of high-level watch movements and key components, and deepening the application of aerospace materials, innovative materials, and new processes[35](index=35&type=chunk) - The company is promoting the integration of AI technology with digital retail, CRM, and SAP systems to empower business development and improve efficiency[36](index=36&type=chunk) YoY Changes in Key Financial Data | Indicator | Current Period (Yuan) | Prior Year Period (Yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,784,131,937.23 | 2,076,397,911.32 | -14.08% | N/A | | Operating Costs | 1,149,808,611.57 | 1,304,482,455.55 | -11.86% | N/A | | Selling Expenses | 392,808,032.65 | 449,785,002.40 | -12.67% | N/A | | Administrative Expenses | 89,971,510.01 | 89,213,932.54 | 0.85% | N/A | | Financial Expenses | 5,640,080.29 | 9,622,797.59 | -41.39% | Mainly due to reduced interest on borrowings and foreign exchange gains | | Income Tax Expense | 23,115,165.73 | 46,545,035.11 | -50.34% | Mainly due to a decrease in total profit | | R&D Investment | 33,087,871.33 | 27,525,998.33 | 20.21% | N/A | | Net Cash Flow from Operating Activities | 251,490,807.07 | 136,530,796.52 | 84.20% | Mainly due to reduced inventory purchases and period expenses | | Net Cash Flow from Investing Activities | -40,364,724.39 | -83,646,605.14 | 51.74% | Mainly due to changes in the maturity of term deposits | | Net Cash Flow from Financing Activities | -191,150,697.48 | -153,122,505.66 | -24.84% | N/A | | Net Increase in Cash and Cash Equivalents | 20,352,756.48 | -100,273,144.58 | 120.30% | Mainly due to reduced inventory purchases, period expenses, and term deposit effects | Operating Revenue Composition (by Industry) | Industry | Current Period Amount (Yuan) | % of Revenue | Prior Year Period Amount (Yuan) | % of Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Watch Business | 1,659,610,629.02 | 93.02% | 1,910,698,928.67 | 92.03% | -13.14% | | Precision Technology Business | 60,465,539.30 | 3.39% | 88,908,749.85 | 4.28% | -31.99% | | Leasing Business | 57,835,071.51 | 3.24% | 70,906,534.63 | 3.41% | -18.43% | | Other | 6,220,697.40 | 0.35% | 5,883,698.17 | 0.28% | 5.73% | Operating Revenue Composition (by Product) | Product | Current Period Amount (Yuan) | % of Revenue | Prior Year Period Amount (Yuan) | % of Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Watch Brand Business | 315,109,112.17 | 17.66% | 384,620,560.57 | 18.52% | -18.07% | | Famous Watch Comprehensive Service Business | 1,344,501,516.85 | 75.36% | 1,526,078,368.10 | 73.51% | -11.90% | | Precision Technology Business | 60,465,539.30 | 3.39% | 88,908,749.85 | 4.28% | -31.99% | | Leasing Business | 57,835,071.51 | 3.24% | 70,906,534.63 | 3.41% | -18.43% | | Other | 6,220,697.40 | 0.35% | 5,883,698.17 | 0.28% | 5.73% | Industries, Products, or Regions Accounting for Over 10% of Revenue or Profit | Category | Operating Revenue (Yuan) | Operating Costs (Yuan) | Gross Margin | Revenue YoY Change | Cost YoY Change | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **By Industry** | | | | | | | | Watch Business | 1,659,610,629.02 | 1,077,694,608.63 | 35.06% | -13.14% | -10.82% | -1.70% | | **By Product** | | | | | | | | Famous Watch Comprehensive Service Business | 1,344,501,516.85 | 980,624,417.20 | 27.06% | -11.90% | -9.82% | -1.69% | | **By Region** | | | | | | | | South China | 806,381,444.29 | 506,821,115.78 | 37.15% | -18.15% | -18.76% | 0.48% | [Analysis of Non-Principal Business](index=11&type=section&id=Analysis%20of%20Non-Principal%20Business) There is no analysis of non-principal business activities for the reporting period - Not applicable[43](index=43&type=chunk) [Analysis of Assets and Liabilities](index=11&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) At the end of the reporting period, both total assets and net assets attributable to shareholders decreased, with inventory remaining the largest asset category Significant Changes in Asset Composition | Item | End of Period Amount (Yuan) | % of Total Assets | Beginning of Year Amount (Yuan) | % of Total Assets | Change in % | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 539,306,933.97 | 13.90% | 518,954,177.49 | 12.95% | 0.95% | | Accounts Receivable | 295,552,172.33 | 7.62% | 260,152,834.43 | 6.49% | 1.13% | | Inventory | 1,844,734,053.46 | 47.56% | 1,984,486,969.74 | 49.52% | -1.96% | | Short-term Borrowings | 140,084,055.54 | 3.61% | 124,087,754.51 | 3.10% | 0.51% | | Contract Liabilities | 15,914,217.86 | 0.41% | 12,605,722.95 | 0.31% | 0.10% | - At the end of the reporting period, the company's **total assets were 3.88 billion Yuan**, a decrease of 3.22% from the beginning of the year[19](index=19&type=chunk)[43](index=43&type=chunk) - At the end of the reporting period, **net assets attributable to shareholders were 3.33 billion Yuan**, a decrease of 1.72% from the beginning of the year[19](index=19&type=chunk)[43](index=43&type=chunk) [Investment Status Analysis](index=12&type=section&id=Investment%20Status%20Analysis) The company maintained a cautious investment approach during the reporting period, with no significant changes in investment amounts or major equity and non-equity investments - The investment amount for the reporting period was 0.00 Yuan, with no change year-over-year[45](index=45&type=chunk) - No significant equity investments were acquired, and no major non-equity investments were in progress during the reporting period[46](index=46&type=chunk) - Information on securities investment and derivatives investment is not applicable[46](index=46&type=chunk) [Sale of Major Assets and Equity](index=13&type=section&id=Sale%20of%20Major%20Assets%20and%20Equity) No sale of major assets or equity occurred during the reporting period - Not applicable to the sale of major assets[47](index=47&type=chunk) - Not applicable to the sale of major equity[47](index=47&type=chunk) [Analysis of Major Holding and Participating Companies](index=13&type=section&id=Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) Shenzhen Harmony World Watch Center Co, Ltd stands out among the company's major subsidiaries as a significant contributor to profit, leading in assets, revenue, and net profit Major Subsidiaries and Affiliates with >10% Impact on Net Profit | Company Name | Type | Main Business | Registered Capital (Yuan) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Operating Profit (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shenzhen Harmony World Watch Center Co, Ltd | Subsidiary | Sales and repair of watches and parts | 600,000,000.00 | 1,876,497,588.49 | 1,191,373,188.19 | 1,297,382,547.52 | 87,756,037.36 | 66,934,813.99 | | FIYTA Sales Co, Ltd | Subsidiary | Design, R&D, sales of watches and parts | 450,000,000.00 | 407,617,861.09 | 329,091,442.71 | 197,642,858.31 | 7,510,593.10 | 6,318,748.98 | | Shenzhen FIYTA Precision Technology Co, Ltd | Subsidiary | Manufacturing of watches and parts | 180,000,000.00 | 283,995,862.39 | 210,618,304.73 | 117,234,735.66 | 12,518,729.85 | 7,233,524.79 | | Shenzhen FIYTA Technology Development Co, Ltd | Subsidiary | Manufacturing of precision parts | 50,000,000.00 | 205,586,332.09 | 171,479,460.13 | 66,607,775.00 | 15,221.00 | 727,295.62 | | FIYTA (Hong Kong) Limited | Subsidiary | Watch and parts trading and investment | 137,737,520.00 | 276,851,162.20 | 269,894,452.02 | 29,192,948.36 | 7,626,028.31 | 5,402,013.91 | | Emile Chouriet (Shenzhen) Co, Ltd | Subsidiary | Design, R&D, sales of watches and parts | 41,355,200.00 | 122,019,056.21 | 55,036,825.16 | 27,662,208.00 | 261,496.42 | 468,078.86 | - No subsidiaries were acquired or disposed of during the reporting period[48](index=48&type=chunk) [Structured Entities Controlled by the Company](index=13&type=section&id=Structured%20Entities%20Controlled%20by%20the%20Company) The company did not control any structured entities during the reporting period - Not applicable[49](index=49&type=chunk) [Risks and Countermeasures](index=13&type=section&id=Risks%20and%20Countermeasures) The company faces risks from weakening domestic consumer demand and uncertainty in a proposed acquisition, which it plans to mitigate through brand building and strategic expansion - **Consumer Market Risk**: Weakening demand for traditional watches and shifting consumer preferences; the company will strengthen brand positioning, enhance channel operations, expand into overseas/duty-free markets, and accelerate the development of strategic emerging industries[50](index=50&type=chunk) - **Acquisition Risk**: The proposed acquisition of a controlling stake in Changkong Gear is ongoing, with the final plan and completion subject to uncertainty and necessary approvals; the company will proceed with the transaction in an orderly manner[50](index=50&type=chunk) [Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan](index=14&type=section&id=Formulation%20and%20Implementation%20of%20Market%20Value%20Management%20System%20and%20Valuation%20Enhancement%20Plan) The company has not formulated a market value management system or disclosed a valuation enhancement plan during the reporting period - The company has not formulated a market value management system[51](index=51&type=chunk) - The company has not disclosed a valuation enhancement plan[51](index=51&type=chunk) [Implementation of the “Dual Improvement of Quality and Return” Action Plan](index=14&type=section&id=Implementation%20of%20the%20%E2%80%9CDual%20Improvement%20of%20Quality%20and%20Return%E2%80%9D%20Action%20Plan) The company did not disclose an announcement regarding the "Dual Improvement of Quality and Return" action plan during the reporting period - The company did not disclose an announcement regarding the "Dual Improvement of Quality and Return" action plan[52](index=52&type=chunk) Corporate Governance, Environment, and Society [Changes in Directors, Supervisors, and Senior Management](index=14&type=section&id=Changes%20in%20Directors,%20Supervisors,%20and%20Senior%20Management) The composition of the company's directors, supervisors, and senior management remained stable with no changes during the reporting period - There were no changes in the company's directors, supervisors, and senior management during the reporting period; for details, please refer to the 2024 annual report[54](index=54&type=chunk) [Profit Distribution and Capitalization of Capital Reserve](index=14&type=section&id=Profit%20Distribution%20and%20Capitalization%20of%20Capital%20Reserve) The company plans no semi-annual cash dividend, bonus share issuance, or capitalization of capital reserves, reflecting a prudent profit distribution policy - The company plans no semi-annual cash dividend distribution, bonus share issuance, or capitalization of capital reserves[55](index=55&type=chunk) [Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=14&type=section&id=Implementation%20of%20Equity%20Incentive%20Plans,%20Employee%20Stock%20Ownership%20Plans,%20or%20Other%20Employee%20Incentive%20Measures) The third tranche of the company's second restricted stock incentive plan vested, with 2.047 million shares becoming available for trading - The conditions for the third vesting period of the company's second restricted stock incentive plan have been met, and the **2.047420 million A-share restricted stocks** involved were listed for trading on February 5, 2025[56](index=56&type=chunk) - Not applicable to the implementation of employee stock ownership plans[57](index=57&type=chunk) - Not applicable to other employee incentive measures[57](index=57&type=chunk) [Environmental Information Disclosure](index=15&type=section&id=Environmental%20Information%20Disclosure) The company and its major subsidiaries are not listed as enterprises required to disclose environmental information by law - The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law[57](index=57&type=chunk) [Social Responsibility](index=15&type=section&id=Social%20Responsibility) The company actively fulfills its social responsibilities, with its latest ESG report disclosed on March 14, 2025 - The company has actively practiced social responsibility for many years; for the latest information, please refer to the "2024 Environmental, Social, and Governance (ESG) Report" disclosed on cninfo.com.cn on March 14, 2025[57](index=57&type=chunk) Important Matters [Commitments Fulfilled or Overdue by Relevant Parties](index=16&type=section&id=Commitments%20Fulfilled%20or%20Overdue%20by%20Relevant%20Parties) There were no commitments fulfilled or overdue by the company or its related parties during the reporting period - Not applicable[59](index=59&type=chunk) [Non-operational Fund Occupation by Controlling Shareholders and Other Related Parties](index=16&type=section&id=Non-operational%20Fund%20Occupation%20by%20Controlling%20Shareholders%20and%20Other%20Related%20Parties) There were no instances of non-operational fund occupation by the controlling shareholder or other related parties during the reporting period - Not applicable[59](index=59&type=chunk) [Irregular External Guarantees](index=16&type=section&id=Irregular%20External%20Guarantees) The company had no irregular external guarantees during the reporting period - Not applicable[59](index=59&type=chunk) [Appointment and Dismissal of Accounting Firm](index=16&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firm) The semi-annual financial report has not been audited - Has the semi-annual financial report been audited: No[59](index=59&type=chunk) [Board's Explanation on “Non-standard Audit Report”](index=16&type=section&id=Board's%20Explanation%20on%20%E2%80%9CNon-standard%20Audit%20Report%E2%80%9D) There was no "non-standard audit report" issued by the accounting firm for the current reporting period - Not applicable[59](index=59&type=chunk) [Board's Explanation on Prior Year's “Non-standard Audit Report”](index=16&type=section&id=Board's%20Explanation%20on%20Prior%20Year's%20%E2%80%9CNon-standard%20Audit%20Report%E2%80%9D) There is no explanation regarding a "non-standard audit report" from the previous year - Not applicable[59](index=59&type=chunk) [Bankruptcy and Reorganization Matters](index=16&type=section&id=Bankruptcy%20and%20Reorganization%20Matters) The company had no bankruptcy or reorganization matters during the reporting period - Not applicable[59](index=59&type=chunk) [Litigation Matters](index=16&type=section&id=Litigation%20Matters) The company was not involved in any major litigation or arbitration during the reporting period - Not applicable to major litigation and arbitration matters[59](index=59&type=chunk) - Not applicable to other litigation matters[59](index=59&type=chunk) [Penalties and Rectifications](index=16&type=section&id=Penalties%20and%20Rectifications) The company did not receive any penalties or undergo rectification during the reporting period - Not applicable[59](index=59&type=chunk) [Integrity Status of the Company and its Controlling Shareholders](index=17&type=section&id=Integrity%20Status%20of%20the%20Company%20and%20its%20Controlling%20Shareholders) There were no integrity issues concerning the company, its controlling shareholder, or its de facto controller during the reporting period - Not applicable[60](index=60&type=chunk) [Major Related-Party Transactions](index=17&type=section&id=Major%20Related-Party%20Transactions) The company's deposit and loan business with AVIC Finance did not exceed the limits set in the financial services agreement, and all routine related-party transactions were within approved annual estimates - The company has deposit business with AVIC Finance, with a period-end balance of **515.49 million Yuan**[60](index=60&type=chunk) - The company has loan business with AVIC Finance, with a period-end balance of 0 Yuan and a credit line of 800 million Yuan[60](index=60&type=chunk) - During the reporting period, the cumulative amount of routine related-party transactions was within the annual estimated range[62](index=62&type=chunk) [Major Contracts and Their Performance](index=18&type=section&id=Major%20Contracts%20and%20Their%20Performance) The company had no custody, contracting, or leasing matters, while its external guarantees were primarily for subsidiaries, with a notable guarantee of 100 million Yuan for Shenzhen Harmony World Watch Center - Not applicable to custody, contracting, or leasing matters[64](index=64&type=chunk) - The company provided a guarantee to its subsidiary, Shenzhen Harmony World Watch Center Co, Ltd, with an actual guarantee amount of **100 million Yuan**[65](index=65&type=chunk) - At the end of the reporting period, the total approved guarantee limit for subsidiaries was 300 million Yuan, with an actual outstanding balance of 100 million Yuan[66](index=66&type=chunk) - The total actual guarantee amount represents **3.00%** of the company's net assets[66](index=66&type=chunk) [Entrusted Wealth Management](index=20&type=section&id=Entrusted%20Wealth%20Management) The company had no entrusted wealth management activities during the reporting period - Not applicable[67](index=67&type=chunk) [Other Major Contracts](index=20&type=section&id=Other%20Major%20Contracts) The company had no other major contracts during the reporting period - Not applicable[67](index=67&type=chunk) [Explanation of Other Significant Matters](index=20&type=section&id=Explanation%20of%20Other%20Significant%20Matters) The company is pursuing a cash acquisition of a controlling stake in Shaanxi Changkong Gear Co, Ltd, a related-party transaction whose completion remains uncertain pending approvals - The company plans to acquire a controlling stake in Shaanxi Changkong Gear Co, Ltd (Changkong Gear) through a cash transaction, which constitutes a related-party transaction[67](index=67&type=chunk) - The completion of this acquisition is uncertain and is subject to necessary decision-making and approval procedures by all parties[67](index=67&type=chunk) [Significant Matters of Company Subsidiaries](index=20&type=section&id=Significant%20Matters%20of%20Company%20Subsidiaries) There were no significant matters concerning the company's subsidiaries during the reporting period - Not applicable[68](index=68&type=chunk) Changes in Share Capital and Shareholders [Changes in Share Capital](index=21&type=section&id=Changes%20in%20Share%20Capital) During the period, the company's total share capital remained unchanged, while restricted shares decreased and unrestricted shares increased due to executive share adjustments and vesting of stock incentives - The number of restricted shares at the end of the period was **620,090**, accounting for 0.15% of the total, a decrease of 1,855,630 shares from the beginning of the period[71](index=71&type=chunk) - The number of unrestricted shares at the end of the period was **405,143,917**, accounting for 99.85% of the total, an increase of 1,855,630 shares from the beginning of the period[71](index=71&type=chunk) - The changes were mainly due to an increase of 250,500 restricted shares from adjustments to the transferable quota for current senior executives, and the release and listing of 2,047,420 A-share restricted stocks from the third vesting period of the second restricted stock incentive plan[71](index=71&type=chunk)[72](index=72&type=chunk) - The company's total share capital remained unchanged at **405,764,007 shares**[71](index=71&type=chunk)[72](index=72&type=chunk) [Changes in Restricted Shares](index=22&type=section&id=Changes%20in%20Restricted%20Shares) The total number of restricted shares decreased during the period, primarily due to the vesting of the second restricted stock incentive plan and adjustments to executive lock-up shares Changes in Restricted Shares | Shareholder Name | Restricted Shares (Beginning) | Shares Released | Shares Added | Restricted Shares (End) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Pan Bo | 172,537 | 50,100 | 50,100 | 172,537 | Executive Lock-up | | Li Ming | 120,067 | 50,100 | 50,100 | 120,067 | Executive Lock-up | | Lu Wanjun | 120,037 | 50,100 | 50,100 | 120,037 | Executive Lock-up | | Liu Xiaoming | 120,037 | 50,100 | 50,100 | 120,037 | Executive Lock-up | | Tang Haiyuan | 80,662 | 50,100 | 50,100 | 80,662 | Executive Lock-up | | Hu Jing | 6,750 | 0 | 0 | 6,750 | Supervisor Lock-up | | Other Shareholders | 1,855,630 | 1,855,630 | 0 | 0 | N/A | - Reason for shares released: The conditions for the third vesting period of the second restricted stock incentive plan were met; adjustments to the transferable quota for departed executives resulted in a total release of **2,106,130 shares**[75](index=75&type=chunk) - Reason for shares added: A total of **250,500 A-share restricted stocks** released to current senior executives became subject to lock-up provisions for executive shares[75](index=75&type=chunk) [Securities Issuance and Listing](index=23&type=section&id=Securities%20Issuance%20and%20Listing) The company did not issue or list any securities during the reporting period - Not applicable[76](index=76&type=chunk) [Number of Shareholders and Shareholding Status](index=23&type=section&id=Number%20of%20Shareholders%20and%20Shareholding%20Status) At the end of the period, the company had 25,770 common shareholders, with Shentian Technology Holding (Shenzhen) Co, Ltd being the controlling shareholder with a 40.17% stake - Total number of common shareholders at the end of the reporting period: **25,770**[77](index=77&type=chunk) Shareholding of Top 10 Shareholders or Those with >5% Stake | Shareholder Name | Nature | Shareholding Ratio | Shares Held (End of Period) | Change During Period | Unrestricted Shares Held | | :--- | :--- | :--- | :--- | :--- | :--- | | Shentian Technology Holding (Shenzhen) Co, Ltd | State-owned Legal Entity | 40.17% | 162,977,327 | 0 | 162,977,327 | | Wu Jilin | Domestic Individual | 4.38% | 17,770,623 | -201,818 | 17,770,623 | | Foresea Life Insurance Co, Ltd - Participating Insurance Products | Other | 1.52% | 6,186,370 | 6,186,370 | 6,186,370 | | Foresea Life Insurance Co, Ltd - Own Funds | Other | 0.75% | 3,026,000 | 3,026,000 | 3,026,000 | | Qiu Hong | Domestic Individual | 0.69% | 2,800,000 | 290,000 | 2,800,000 | | Bank of China - Huashang Select Return Mixed Securities Investment Fund | Other | 0.63% | 2,549,400 | 2,549,400 | 2,549,400 | | Zhejiang Haokun Shengfa Asset Management - Haokun Xingkong Feima VI Private Fund | Other | 0.61% | 2,492,215 | 2,492,215 | 2,492,215 | | Zhu Rui | Domestic Individual | 0.51% | 2,087,500 | -61,900 | 2,087,500 | | Shao Yixing | Domestic Individual | 0.50% | 2,044,200 | 2,044,200 | 2,044,200 | | Zhan Zhiying | Domestic Individual | 0.50% | 2,031,500 | 2,031,500 | 2,031,500 | - During the reporting period, the name of the company's controlling shareholder changed from "AVIC International Holding Corporation" to "Shentian Technology Holding (Shenzhen) Co, Ltd"[78](index=78&type=chunk) [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=24&type=section&id=Changes%20in%20Shareholdings%20of%20Directors,%20Supervisors,%20and%20Senior%20Management) The total shareholdings of directors, supervisors, and senior management remained unchanged, though the number of restricted shares for some executives was adjusted due to lock-up rules Changes in Shareholdings of Directors, Supervisors, and Senior Management | Name | Position | Status | Shares Held (Beginning) | Shares Held (End) | Restricted Shares (Beginning) | Restricted Shares (End) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pan Bo | Director & General Manager | Current | 230,050 | 230,050 | 50,100 | 0 | | Lu Wanjun | Deputy GM & General Counsel | Current | 160,050 | 160,050 | 50,100 | 0 | | Liu Xiaoming | Deputy General Manager | Current | 160,050 | 160,050 | 50,100 | 0 | | Li Ming | Deputy General Manager | Current | 160,090 | 160,090 | 50,100 | 0 | | Song Yaoming | CFO & Board Secretary | Current | 0 | 0 | 0 | 0 | | Tang Haiyuan | Deputy General Manager | Current | 107,550 | 107,550 | 50,100 | 0 | | Total | -- | -- | 826,790 | 826,790 | 250,500 | 0 | [Changes in Controlling Shareholder or De Facto Controller](index=25&type=section&id=Changes%20in%20Controlling%20Shareholder%20or%20De%20Facto%20Controller) There were no changes in the company's controlling shareholder or de facto controller during the reporting period - Change in controlling shareholder during the reporting period: Not applicable[81](index=81&type=chunk) - Change in de facto controller during the reporting period: Not applicable[81](index=81&type=chunk) [Information on Preferred Shares](index=25&type=section&id=Information%20on%20Preferred%20Shares) The company had no preferred shares during the reporting period - Not applicable[81](index=81&type=chunk) Bond-related Matters [Bond-related Matters](index=26&type=section&id=Bond-related%20Matters) The company had no bond-related matters during the reporting period - Not applicable[83](index=83&type=chunk) Financial Report [Audit Report](index=27&type=section&id=Audit%20Report) The semi-annual report has not been audited - Has the semi-annual report been audited: No[85](index=85&type=chunk) [Financial Statements](index=27&type=section&id=Financial%20Statements) This section presents the company's consolidated and parent company financial statements for the first half of 2025, reflecting its financial position and performance Consolidated Balance Sheet (End of Period) | Item | Closing Balance (Yuan) | Opening Balance (Yuan) | | :--- | :--- | :--- | | **Current Assets:** | | | | Cash and Cash Equivalents | 539,306,933.97 | 518,954,177.49 | | Notes Receivable | 13,890,956.79 | 29,611,600.60 | | Accounts Receivable | 295,552,172.33 | 260,152,834.43 | | Prepayments | 24,636,188.41 | 3,858,053.60 | | Other Receivables | 56,382,345.03 | 56,982,351.27 | | Inventories | 1,844,734,053.46 | 1,984,486,969.74 | | Other Current Assets | 94,506,620.74 | 98,007,925.22 | | **Total Current Assets** | **2,869,009,270.73** | **2,952,053,912.35** | | **Non-current Assets:** | | | | Long-term Equity Investments | 51,401,581.98 | 50,907,036.84 | | Investment Properties | 294,173,788.77 | 301,002,364.41 | | Fixed Assets | 368,564,629.53 | 377,568,144.41 | | Right-of-use Assets | 82,724,677.42 | 98,437,976.41 | | Intangible Assets | 30,819,121.76 | 31,567,927.16 | | Long-term Deferred Expenses | 97,336,736.70 | 110,205,323.29 | | Deferred Tax Assets | 77,387,311.98 | 82,155,778.31 | | Other Non-current Assets | 7,269,265.12 | 3,792,253.84 | | **Total Non-current Assets** | **1,009,677,113.26** | **1,055,636,804.67** | | **Total Assets** | **3,878,686,383.99** | **4,007,690,717.02** | | **Current Liabilities:** | | | | Short-term Borrowings | 140,084,055.54 | 124,087,754.51 | | Accounts Payable | 94,532,784.30 | 115,532,921.57 | | Advances from Customers | 7,813,681.37 | 11,783,796.49 | | Contract Liabilities | 15,914,217.86 | 12,605,722.95 | | Employee Benefits Payable | 61,957,407.90 | 92,260,153.14 | | Taxes Payable | 46,730,334.76 | 49,815,151.35 | | Other Payables | 89,287,084.19 | 104,638,483.81 | | Non-current Liabilities Due within One Year | 57,399,333.79 | 63,538,231.06 | | Other Current Liabilities | 2,429,897.06 | 1,529,468.07 | | **Total Current Liabilities** | **516,148,796.77** | **575,791,682.95** | | **Non-current Liabilities:** | | | | Lease Liabilities | 26,793,779.93 | 35,065,292.04 | | Deferred Tax Liabilities | 2,134,123.90 | 4,990,541.42 | | **Total Non-current Liabilities** | **28,927,903.83** | **40,055,833.46** | | **Total Liabilities** | **545,076,700.60** | **615,847,516.41** | | **Shareholders' Equity:** | | | | Share Capital | 405,764,007.00 | 405,764,007.00 | | Capital Reserve | 935,609,251.94 | 936,339,503.60 | | Less: Treasury Stock | 0.00 | 12,815,556.81 | | Other Comprehensive Income | 25,279,285.71 | 15,686,794.62 | | Special Reserve | 4,288,952.07 | 4,340,162.76 | | Surplus Reserve | 275,010,401.50 | 275,010,401.50 | | Retained Earnings | 1,687,657,785.17 | 1,767,517,887.94 | | **Total Equity Attributable to Parent Company** | **3,333,609,683.39** | **3,391,843,200.61** | | **Total Equity** | **3,333,609,683.39** | **3,391,843,200.61** | | **Total Liabilities and Equity** | **3,878,686,383.99** | **4,007,690,717.02** | Consolidated Income Statement (Current Period) | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | I. Total Operating Revenue | 1,784,131,937.23 | 2,076,397,911.32 | | Including: Operating Revenue | 1,784,131,937.23 | 2,076,397,911.32 | | II. Total Operating Costs | 1,686,829,306.89 | 1,892,890,643.96 | | Including: Operating Costs | 1,149,808,611.57 | 1,304,482,455.55 | | Taxes and Surcharges | 15,513,201.04 | 12,260,457.55 | | Selling Expenses | 392,808,032.65 | 449,785,002.40 | | Administrative Expenses | 89,971,510.01 | 89,213,932.54 | | R&D Expenses | 33,087,871.33 | 27,525,998.33 | | Financial Expenses | 5,640,080.29 | 9,622,797.59 | | Add: Other Income | 2,946,889.68 | 3,103,884.50 | | Investment Income (Loss with "-") | 742,044.98 | 313,834.17 | | Credit Impairment Loss (Loss with "-") | 2,228,174.46 | 2,724,678.43 | | Asset Impairment Loss (Loss with "-") | 1,780,567.39 | 28,336.82 | | Asset Disposal Gain (Loss with "-") | -424,407.32 | 2,906,210.67 | | III. Operating Profit (Loss with "-") | 104,575,899.53 | 192,584,211.95 | | Add: Non-operating Income | 1,204,207.92 | 1,378,138.85 | | Less: Non-operating Expenses | 219,441.69 | 278,833.35 | | IV. Total Profit (Total Loss with "-") | 105,560,665.76 | 193,683,517.45 | | Less: Income Tax Expense | 23,115,165.73 | 46,545,035.11 | | V. Net Profit (Net Loss with "-") | 82,445,500.03 | 147,138,482.34 | | Net Profit Attributable to Parent Company Owners | 82,445,500.03 | 147,138,482.34 | | VI. Net Other Comprehensive Income after Tax | 9,592,491.09 | -5,577,527.76 | | Net OCI Attributable to Parent Company Owners | 9,592,491.09 | -5,577,527.76 | | VII. Total Comprehensive Income | 92,037,991.12 | 141,560,954.58 | | Total Comprehensive Income Attributable to Parent Company Owners | 92,037,991.12 | 141,560,954.58 | | VIII. Earnings Per Share: | | | | (I) Basic Earnings Per Share | 0.2034 | 0.3568 | | (II) Diluted Earnings Per Share | 0.2034 | 0.3564 | Consolidated Cash Flow Statement (Current Period) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | I. Cash Flows from Operating Activities: | | | | Cash Received from Sales of Goods and Services | 1,918,518,666.40 | 2,242,943,860.28 | | Other Cash Received Relating to Operating Activities | 20,316,713.59 | 22,763,002.95 | | Subtotal of Cash Inflows from Operating Activities | 1,939,600,682.01 | 2,267,068,669.91 | | Cash Paid for Goods and Services | 1,117,286,716.61 | 1,493,308,339.25 | | Cash Paid to and for Employees | 295,806,175.23 | 336,053,098.67 | | Payments of All Types of Taxes | 123,135,450.22 | 115,761,812.75 | | Other Cash Paid Relating to Operating Activities | 151,881,532.88 | 185,414,622.72 | | Subtotal of Cash Outflows from Operating Activities | 1,688,109,874.94 | 2,130,537,873.39 | | **Net Cash Flow from Operating Activities** | **251,490,807.07** | **136,530,796.52** | | II. Cash Flows from Investing Activities: | | | | Subtotal of Cash Inflows from Investing Activities | 104,714,728.56 | 125,059,502.67 | | Subtotal of Cash Outflows from Investing Activities | 145,079,452.95 | 208,706,107.81 | | **Net Cash Flow from Investing Activities** | **-40,364,724.39** | **-83,646,605.14** | | III. Cash Flows from Financing Activities: | | | | Subtotal of Cash Inflows from Financing Activities | 140,000,000.00 | 320,000,000.00 | | Subtotal of Cash Outflows from Financing Activities | 331,150,697.48 | 473,122,505.66 | | **Net Cash Flow from Financing Activities** | **-191,150,697.48** | **-153,122,505.66** | | IV. Effect of Foreign Exchange Rate Changes on Cash | 377,371.28 | -34,830.30 | | V. Net Increase in Cash and Cash Equivalents | 20,352,756.48 | -100,273,144.58 | | VI. Cash and Cash Equivalents at End of Period | 539,306,933.97 | 404,356,009.13 | [Company's Basic Information](index=45&type=section&id=Company's%20Basic%20Information) The company, listed on the Shenzhen Stock Exchange since 1993, primarily engages in the watch business and is ultimately controlled by the Aviation Industry Corporation of China - The company was listed on the Shenzhen Stock Exchange on June 3, 1993, and currently holds a business license with a unified social credit code of 91440300192189783K, with a registered capital of 405.764007 million Yuan[118](index=118&type=chunk) - The parent company is Shentian Technology Holding (Shenzhen) Co, Ltd, and the ultimate controlling party is the Aviation Industry Corporation of China, Ltd[118](index=118&type=chunk) - The business nature and main operating activities of the company and its subsidiaries include: watch sales, watch and timing instrument manufacturing, jewelry wholesale and retail, wearable smart device manufacturing and sales, and non-residential real estate leasing[119](index=119&type=chunk) - The company's consolidation scope includes **12 subsidiaries** in the current period, unchanged from the previous period[120](index=120&type=chunk) [Basis of Preparation of Financial Statements](index=46&type=section&id=Basis%20of%20Preparation%20of%20Financial%20Statements) The financial statements are prepared on a going concern basis, in compliance with Chinese Accounting Standards and relevant disclosure requirements - The company prepares its financial statements on a going concern basis, recognizing and measuring transactions and events in accordance with the Enterprise Accounting Standards and their application guidelines and interpretations[122](index=122&type=chunk) - The company has assessed its ability to continue as a going concern for the 12 months from the end of the reporting period and found no matters that would affect it, making the preparation of financial statements on a going concern basis reasonable[123](index=123&type=chunk) [Significant Accounting Policies and Estimates](index=46&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's specific accounting policies and estimates for key areas such as receivables, inventory, impairment, depreciation, income tax, and revenue recognition - The company determines specific accounting policies and estimates based on its production and operation characteristics, mainly reflected in the methods for provisioning expected credit losses on receivables, inventory valuation, depreciation of investment properties and fixed assets, amortization of intangible assets, and revenue recognition[124](index=124&type=chunk) - Financial assets are initially measured at fair value; for financial assets measured at fair value through profit or loss, related transaction costs are expensed immediately, while for other categories, they are included in the initial recognition amount[150](index=150&type=chunk) - The company recognizes revenue when it has fulfilled its performance obligations in a contract, i.e, when the customer obtains control of the relevant goods[215](index=215&type=chunk) - As a lessee, the company classifies leases with a term of 12 months or less and without a purchase option as short-term leases, and leases of low-value assets as low-value asset leases[236](index=236&type=chunk) - As a lessor, the company classifies leases that substantially transfer all the risks and rewards incidental to ownership of an asset as finance leases; all other leases are classified as operating leases[240](index=240&type=chunk) [Taxes](index=70&type=section&id=Taxes) This section discloses the company's main taxes and tax rates, noting that some subsidiaries benefit from preferential income tax policies for high-tech or small-scale enterprises Main Taxes and Tax Rates | Tax Type | Tax Base | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Taxable Revenue | Output tax calculated at 5%, 6%, 9%, 13% of sales, with input tax deducted | | Consumption Tax | Taxable price of high-end watch sales, sales volume | 20% | | Urban Maintenance and Construction Tax | Payable turnover tax | 5%, 7% | | Corporate Income Tax | Taxable income | See table below | | Property Tax | 70% or 80% of the original value of the property | 1.2%, 12% | Entities with Different Corporate Income Tax Rates | Taxpayer Name | Income Tax Rate | | :--- | :--- | | FIYTA Precision Technology Co, Ltd | 25% | | Shenzhen Harmony World Watch Center Co, Ltd | 25% | | FIYTA Sales Co, Ltd | 25% | | Shenzhen FIYTA Precision Technology Co, Ltd | 15% | | Shenzhen FIYTA Technology Development Co, Ltd | 15% | | Harmony World Watch Center (Hainan) Co, Ltd | 20% | | Shenzhen Xunhang Precision Technology Co, Ltd | 25% | | Emile Chouriet (Shenzhen) Co, Ltd | 25% | | Liaoning Hengdarui Trading Co, Ltd | 25% | | Shiyuehui Boutique (Shenzhen) Co, Ltd | 25% | | Shenzhen Harmony E-commerce Co, Ltd | 20% | | FIYTA (Hong Kong) Limited | 16.5% | | Montres Chouriet SA | 30% | - Shenzhen FIYTA Precision Technology Co, Ltd and Shenzhen FIYTA Technology Development Co, Ltd enjoy a reduced **high-tech enterprise income tax rate of 15%**[244](index=244&type=chunk) - Harmony World Watch Center (Hainan) Co, Ltd and Shenzhen Harmony E-commerce Co, Ltd are classified as small and micro enterprises and are subject to a **corporate income tax rate of 20%**[243](index=243&type=chunk) - Hong Kong implements a two-tiered profits tax system, where the first HK$2 million of profits are taxed at 8.25%, and subsequent profits are taxed at 16.5%[245](index=245&type=chunk) [Notes to Consolidated Financial Statement Items](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed breakdowns and explanations for each line item in the consolidated financial statements, reflecting the company's financial details during the reporting period - The period-end balance of **cash and cash equivalents was 539.31 million Yuan**, including 515.49 million Yuan deposited in a finance company[247](index=247&type=chunk) - The period-end balance of **notes receivable was 13.89 million Yuan**, a decrease of 53.10% from the beginning of the period[250](index=250&type=chunk) - The period-end balance of **accounts receivable was 295.55 million Yuan**, with 93.12% being receivables from customers for which bad debt provisions are made on a portfolio basis[263](index=263&type=chunk) - The period-end balance of **inventory was 1.84 billion Yuan**, with finished goods accounting for 93.70%[291](index=291&type=chunk) - The period-end carrying value of **fixed assets was 368.56 million Yuan**, with buildings and structures being the largest component[303](index=303&type=chunk)[306](index=306&type=chunk) - The period-end balance of **short-term borrowings was 140.08 million Yuan**, primarily consisting of credit loans[334](index=334&type=chunk) - The period-end balance of **employee benefits payable was 61.96 million Yuan**, mostly comprising short-term compensation[348](index=348&type=chunk) - **Operating revenue for the period was 1.78 billion Yuan**, and operating costs were 1.15 billion Yuan[378](index=378&type=chunk) - **Financial expenses for the period were 5.64 million Yuan**, a year-over-year decrease of 41.39%, mainly due to reduced interest on borrowings and foreign exchange gains[390](index=390&type=chunk) [R&D Expenses](index=109&type=section&id=R&D%20Expenses) The company's R&D expenditure for the period was 33.09 million Yuan, all of which was expensed and primarily consisted of employee compensation - Total R&D expenditure for the period was **33,087,871.33 Yuan**, all of which was expensed[431](index=431&type=chunk) - The main components of R&D expenditure were: employee compensation of 25,193,556.07 Yuan, sample and material costs of 427,397.19 Yuan, and depreciation and amortization of 2,484,373.63 Yuan[431](index=431&type=chunk) [Changes in the Scope of Consolidation](index=109&type=section&id=Changes%20in%20the%20Scope%20of%20Consolidation) The company's scope of consolidation remained unchanged during the reporting period - Not applicable to business combinations not under common control[432](index=432&type=chunk) - Not applicable to business combinations under common control[433](index=433&type=chunk) - Not applicable to reverse acquisitions[433](index=433&type=chunk) - There were no transactions or events during the period that resulted in the loss of control over a subsidiary[433](index=433&type=chunk) [Interests in Other Entities](index=111&type=section&id=Interests%20in%20Other%20Entities) The company holds interests in 12 subsidiaries and a 25% stake in the associate Shanghai Watch Industry Co, Ltd, which is accounted for using the equity method - The company has 12 subsidiaries, including Shenzhen Harmony World Watch Center Co, Ltd and FIYTA Sales Co, Ltd, with ownership stakes of 100% or close to 100%[434](index=434&type=chunk) - The company holds a **25.00%** equity interest in its associate, Shanghai Watch Industry Co, Ltd, which is accounted for using the equity method[435](index=435&type=chunk) - Shanghai Watch Industry Co, Ltd had total assets of **227.82 million Yuan** and a net profit of 1.98 million Yuan at the end of the period[437](index=437&type=chunk) [Government Grants](index=114&type=section&id=Government%20Grants) During the reporting period, the company recognized government grants totaling 1,509,835.03 Yuan in current profit or loss, primarily through other income - Government grants recognized in current profit or loss for the period amounted to **1,509,835.03 Yuan**[440](index=440&type=chunk) [Risks Related to Financial Instruments](index=114&type=section&id=Risks%20Related%20to%20Financial%20Instruments) The company manages credit, liquidity, and market risks through established policies, regular monitoring, and sensitivity analysis to ensure overall risk remains within controllable limits - The company's risks related to financial instruments arise from the various financial assets and liabilities recognized during its operations, including credit risk, liquidity risk, and market risk[441](index=441&type=chunk) - **Credit risk** mainly arises from cash and cash equivalents, notes receivable, and accounts receivable, which the company controls by assessing customer creditworthiness and regularly monitoring credit records[441](index=441&type=chunk) - **Liquidity risk** is managed by regularly monitoring short-term and long-term funding needs to ensure sufficient cash reserves and readily marketable securities are maintained[444](index=444&type=chunk) Maturity Analysis of Financial Liabilities (as of June 30, 2025) | Item | Within 1 Year (CNY 10,000) | 1-2 Years (CNY 10,000) | 2-3 Years (CNY 10,000) | Over 3 Years (CNY 10,000) | | :--- | :--- | :--- | :--- | :--- | | Short-term Borrowings | 14,008.41 | | | | | Accounts Payable | 9,453.28 | | | | | Other Payables | 8,928.71 | | | | | Non-current Liabilities Due within One Year | 5,739.93 | | | | | Lease Liabilities | | 2,131.33 | 535.56 | 12.49 | | Total | 38,130.33 | 2,131.33 | 535.56 | 12.49 | - **Foreign exchange risk** mainly arises from assets and liabilities denominated in HKD and CHF; a 5% appreciation or depreciation of the RMB against these currencies would affect the annual net profit by approximately 0.74 million Yuan[446](index=446&type=chunk)[447](index=447&type=chunk) - **Interest rate risk** mainly arises from long-term interest-bearing debts such as long-term bank borrowings and bonds payable; the company determines the relative proportion of fixed-rate and floating-rate contracts based on the market environment[447](index=447&type=chunk) [Disclosure of Fair Value](index=117&type=section&id=Disclosure%20of%20Fair%20Value) The company had no assets or liabilities measured at fair value during the reporting period - Not applicable to the fair value of assets and liabilities measured at fair value at the end of the period[449](index=449&type=chunk) - Not applicable to the fair value of financial assets and liabilities not measured at fair value[449](index=449&type=chunk) [Related Parties and Related-Party Transactions](index=118&type=section&id=Related%20Parties%20and%20Related-Party%20Transactions) This section discloses the company's related parties and transactions, including sales, purchases, and fund transfers, with a notable deposit balance of 515 million Yuan with AVIC Finance - The parent company is Shentian Technology Holding (Shenzhen) Co, Ltd, and the ultimate controlling party is the Aviation Industry Corporation of China, Ltd[450](index=450&type=chunk) - The amount of goods purchased from/services received from related parties during the period was **11,633,858.04 Yuan**[455](index=455&type=chunk) - The amount of goods sold to/services provided to related parties during the period was **23,056,798.44 Yuan**[456](index=456&type=chunk) - As a lessor, the company recognized lease income of **307,024.51 Yuan** during the period[458](index=458&type=chunk) - At the end of the period, the company's deposit balance with AVIC Finance was **515,494,103.34 Yuan**[461](index=461&type=chunk) Related-Party Receivables (End of Period) | Item | Related Party | Book Balance (Yuan) | Bad Debt Provision (Yuan) | | :--- | :--- | :--- | :--- | | Bank Deposits | AVIC Finance | 515,494,103.34 | | | Notes Receivable | AVIC and its subsidiaries | | | | Accounts Receivable | AVIC and its subsidiaries | 2,847,374.43 | 299,121.84 | | Accounts Receivable | China Merchants Property Operation & Service and its subsidiaries | 229,665.76 | 11,483.29 | | Accounts Receivable | Shanghai Watch Industry | 779,600.00 | 31,184.00 | | Other Receivables | AVIC and its subsidiaries | 847,287.00 | 42,364.35 | | Other Receivables | China Merchants Property Operation & Service and its subsidiaries | 77,990.00 | 3,899.50 | Related-Party Payables (End of Period) | Item | Related Party | Book Balance (Yuan) | | :--- | :--- | :--- | | Other Payables | AVIC and its subsidiaries | 96,200.00 | | Other Payables | China Merchants Property Operation & Service and its subsidiaries | 1,771,163.40 | | Advances from Customers | AVIC and its subsidiaries | | | Advances from Customers | China Merchants Property Operation & Service and its subsidiaries | | [Share-based Payment](index=120&type=section&id=Share-based%20Payment) The company had no share-based payment arrangements during the reporting period - Not applicable to the overall situation of share-based payments[466](index=466&type=chunk) - Not applicable to equity-settled share-based payments[467](index=467&type=chunk) - Not applicable to cash-settled share-based payments[467](index=467&type=chunk) - Not applicable to share-based payment expenses for the current period[467](index=467&type=chunk) - Not applicable to modifications or terminations of share-based payments[467](index=467&type=chunk) [Commitments and Contingencies](index=121&type=section&id=Commitments%20and%20Contingencies) At the end of the period, the company had commitments related to existing lease contracts but no other significant commitments or contingencies to disclose - The company's significant external commitments and their financial impact relate to lease contracts that have been signed and are being or are about to be performed[467](index=467&type=chunk) - As of June 30, 2025, the company had no other significant commitments to disclose[467](index=467&type=chunk) - The company has no significant contingencies that require disclosure[468](index=468&type=chunk) [Post-Balance Sheet Events](index=121&type=section&id=Post-Balance%20Sheet%20Events) The company had no significant non-adjusting events, profit distribution plans, sales returns, or other post-balance sheet events to report - Not applicable to significant non-adjusting events[469](index=469&type=chunk) - Not applicable to profit distribution situations[470](index=470&type=chunk) - Not applicable to sales returns[470](index=470&type=chunk) - Not applicable to other post-balance sheet events[470](index=470&type=chunk) [Other Significant Matters](index=122&type=section&id=Other%20Significant%20Matters) The company had no prior period error corrections or other significant matters to report and does not present segment information due to its single-business focus on watches - Not applicable to prior period accounting error corrections[471](index=471&type=chunk) - Not applicable to debt restructuring[471](index=471&type=chunk) - Not applicable to asset swaps[471](index=471&type=chunk) - The company's business is singular, mainly involving the production and sale of watches, which management treats as a single segment for operational management and performance evaluation; therefore, segment information is not presented in these financial statements[471](index=471&type=chunk) [Notes to Key Items in the Parent Company's Financial Statements](index=123&type=section&id=Notes%20to%20Key%20Items%20in%20the%20Parent%20Company's%20Financial%20Statements) This section details key items from the parent company's financial statements, including receivables, long-term investments, and revenue, reflecting its standalone financial performance - The parent company's period-end carrying value of **accounts receivable was 8.95 million Yuan**, with 78.29% being receivables from customers[475](index=475&type=chunk) - The parent company's period-end carrying value of **other receivables was 519.46 million Yuan**, primarily due from related parties within the consolidated group[490](index=490&type=chunk) - The parent company's period-end carrying value of **long-term equity investments was 1.64 billion Yuan**, including investments in subsidiaries and associates[500](index=500&type=chunk) - The parent company's **operating revenue for the period was 81.47 million Yuan**, and operating costs were 25.51 million Yuan[509](index=509&type=chunk) - The parent company's **investment income for the period was 0.49 million Yuan**, mainly from long-term equity investments accounted for using the equity method[511](index=511&type=chunk) Other Submitted Data [Other Major Social Security Issues](index=133&type=section&id=Other%20Major%20Social%20Security%20Issues) The company and its subsidiaries had no other major social security issues and received no administrative penalties during the reporting period - The listed company and its subsidiaries do not have other major social security issues[517](index=517&type=chunk) - Were there any administrative penalties during the reporting period: No[517](index=517&type=chunk) [Record of Investor Relations Activities](index=133&type=section&id=Record%20of%20Investor%20Relations%20Activities) This section documents the company's investor relations activities, including online briefings and on-site visits, demonstrating proactive engagement with the investment community - On March 27, 2025, the company held an online exchange via a web platform to explain its 2024 annual operating results and development plans to investors[517](index=517&type=chunk) - On March 28, 2025, the company hosted an on-site visit at the FIYTA Technology Building for several institutional investors to discuss its operating performance and development plans[517](index=517&type=chunk) - On April 3, 2025, the company conducted another on-site visit at the FIYTA Technology Building for institutional investors to discuss its business operations and future strategies[517](index=517&type=chunk) - On June 6 and June 13, 2025, the company communicated with several institutional investors via telephone and web conferences regarding its operating status, development plans, and proposed acquisition projects[518](index=518&type=chunk)[519](index=519&type=chunk) [Fund Transactions between the Company and its Controlling Shareholder and Other Related Parties](index=136&type=section&id=Fund%20Transactions%20between%20the%20Company%20and%20its%20Controlling%20Shareholder%20and%20Other%20Related%20Parties) This section discloses fund transactions with related parties, all of which were within the approved annual estimates and deemed secure due to the good credit standing of the parties involved Fund Transactions with Controlling Shareholder and Other Related Parties (CNY 10,000) | Counterparty Name | Nature of Transaction | Opening Balance | Amount Incurred | Amount Repaid | Closing Balance | Interest Income | Interest Expense | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | AVIC and its subsidiaries | Operational | 432.76 | 2,248.64 | 2,311.93 | 369.47 | | | | China Merchants Property Operation & Service and its subsidiaries | Operational | 5.60 | 162.12 | 136.95 | 30.77 | | | | Shanghai Watch Industry Co, Ltd | Operational | | 239.43 | 161.47 | 77.96 | | | | Shenzhen Harmony World Watch Center Co, Ltd | Non-operational | 52,655.22 | 108,099.40 | 119,920.18 | 40,834.44 | 114.55 | | | Liaoning Hengdarui Trading Co, Ltd | Non-operational | 6,854.85 | 114.79 | 293.15 | 6,676.49 | | | | Shiyuehui Boutique (Shenzhen) Co, Ltd | Non-operational | 4,193.37 | 2,333.44 | 2,733.94 | 3,792.87 | | | | Shenzhen FIYTA Precision Technology Co, Ltd | Non-operational | 1,046.31 | 13,920.57 | 14,966.88 | | | | | Shenzhen Xunhang Prec

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 23.07 CNY for the next six months [5]. Core Insights - The company aims to become a leader in the Chinese watch industry, leveraging its background in aviation precision technology and materials [1]. - The company is actively expanding its precision technology business and plans to acquire a stake in Chang Kong Gear to enhance its capabilities in precision gears and reducers [2][3]. - Revenue projections for 2025-2027 are estimated at 42.57 billion CNY, 46.17 billion CNY, and 50.42 billion CNY respectively, with net profits expected to be 2.41 billion CNY, 2.67 billion CNY, and 2.97 billion CNY [3]. Summary by Sections Company Overview - The company is a key investment enterprise under AVIC Group, focusing on watch design, development, manufacturing, sales, and maintenance [1]. - It has established a core business layout that includes its own watch brands and comprehensive services for luxury watches [1]. Strategic Developments - The company is committed to developing strategic emerging industries, particularly in precision technology and smart wearable devices [2]. - A cash acquisition of Chang Kong Gear is planned to strengthen its position in the precision gear and reducer market [2][3]. Financial Projections - The company anticipates a revenue increase of 8.03% in 2025, followed by 8.46% and 9.20% in the subsequent years [4]. - The projected net profit growth rates are 9.38% for 2025, 10.94% for 2026, and 11.04% for 2027 [4].

Core Viewpoint - The luxury watch market in China, particularly for European brands like Rolex, is experiencing a significant decline, with prices dropping and consumer interest shifting towards domestic and smartwatches [3][4][5]. Group 1: Market Trends - The resale value of Rolex watches has decreased by nearly one-third from March 2022 to March 2025, reaching a four-year low [3]. - Other high-end brands such as Vacheron Constantin, Piaget, and Patek Philippe are also facing price pressures, indicating a broader market trend away from luxury watches as "hard currency" [3][4]. - The export value of Swiss watches to mainland China fell by 26% last year, while exports to Hong Kong dropped by 19%, highlighting a significant market contraction [7]. Group 2: Consumer Behavior - The middle-class consumer segment, which has been a major growth driver for luxury goods, is showing a rapid decline in spending on luxury watches, with 45% of middle-class consumers reporting decreased spending on luxury items [10][13]. - A survey indicated that 80% of consumers who are reducing their luxury purchases believe that luxury goods lack cost-effectiveness, leading to a shift in spending priorities [13]. - The traditional consumer base for luxury watches is evolving, with younger consumers from tech and healthcare sectors seeking more personalized and value-driven products [14]. Group 3: Domestic Brands and Smartwatches - Domestic brands like Seagull and Fiyta are gaining traction, with Fiyta's sales of a co-branded watch with the film "The King of the Sky" increasing by 63% [19]. - Smartwatches from brands like Huawei and Xiaomi are rapidly capturing market share, with Huawei leading the market with a 34.2% year-on-year growth in shipments [15]. - The shift towards smartwatches and domestic brands reflects a broader cultural change, as younger consumers prioritize functionality and value over traditional luxury branding [16][19]. Group 4: Industry Performance - Swatch Group, which owns brands like Omega and Longines, reported a 14.6% decline in net sales to 6.74 billion Swiss francs for 2024, with net profit plummeting over 70% to 220 million Swiss francs [5][7]. - The overall market for luxury goods in China is projected to be below 2022 levels, indicating a challenging environment for luxury brands [10].

Market Overview - The jewelry sector increased by 1.43% on August 20, with Chao Hong Ji leading the gains [1] - The Shanghai Composite Index closed at 3766.21, up 1.04%, while the Shenzhen Component Index closed at 11926.74, up 0.89% [1] Individual Stock Performance - Chao Hong Ji (002345) closed at 15.59, up 4.21% with a trading volume of 290,900 shares and a turnover of 446 million yuan [1] - Shen Zhonghua A (000017) closed at 6.84, up 4.11% with a trading volume of 455,800 shares and a turnover of 313 million yuan [1] - Lai Xi Tong Ling (603900) closed at 10.68, up 2.79% with a trading volume of 274,500 shares and a turnover of 289 million yuan [1] - Man Ka Long (300945) closed at 19.17, up 2.29% with a trading volume of 194,000 shares and a turnover of 370 million yuan [1] - Ming Pai Jewelry (002574) closed at 5.90, up 2.08% with a trading volume of 210,800 shares and a turnover of 123 million yuan [1] - Di A Shares (301177) closed at 29.93, up 1.91% with a trading volume of 21,800 shares and a turnover of 64.5 million yuan [1] - Cai Zi Shares (605599) closed at 15.26, up 1.46% with a trading volume of 51,000 shares and a turnover of 77.2 million yuan [1] - Xing Hua Jewelry (002731) closed at 13.57, up 1.34% with a trading volume of 100,200 shares and a turnover of 135 million yuan [1] - Zhou Da Sheng (002867) closed at 13.09, up 1.16% with a trading volume of 76,500 shares and a turnover of 99.5 million yuan [1] - Lao Feng Xiang (600612) closed at 47.67, up 0.82% with a trading volume of 18,000 shares and a turnover of 85.6 million yuan [1] Capital Flow Analysis - The jewelry sector saw a net inflow of 87.08 million yuan from institutional investors, while retail investors experienced a net outflow of 138 million yuan [2] - The overall capital flow indicates a strong interest from institutional investors despite the outflow from retail investors [2]

Market Overview - The jewelry sector experienced a decline of 0.72% on August 19, with Feiya leading the drop. The Shanghai Composite Index closed at 3727.29, down 0.02%, while the Shenzhen Component Index closed at 11821.63, down 0.12% [1]. Stock Performance - Notable stock performances in the jewelry sector included: - Laisen Tongling (603900) rose by 1.07% to close at 10.39 with a trading volume of 136,600 shares and a turnover of 141 million yuan - Shen Zhonghua A (000017) increased by 0.92% to 6.57 with a trading volume of 186,100 shares and a turnover of 122 million yuan - Other stocks like Ruibeka (600439) and China Gold (600916) saw slight declines of 0.19% and 0.25% respectively [1]. Capital Flow Analysis - The jewelry sector saw a net outflow of 209 million yuan from institutional investors, while retail investors contributed a net inflow of 217 million yuan. Speculative funds experienced a net outflow of 787,770 yuan [2]. - Specific stock capital flows included: - Ruibeka (600439) had a net outflow of 13.05 million yuan from institutional investors, while retail investors contributed a net inflow of 2.27 million yuan - Laisen Tongling (603900) saw a net inflow of 5.10 million yuan from institutional investors, but a net outflow from retail investors [2].

Market Overview - The jewelry sector increased by 0.67% on August 15, with Xinhua Jin leading the gains [1] - The Shanghai Composite Index closed at 3696.77, up 0.83%, while the Shenzhen Component Index closed at 11634.67, up 1.6% [1] Individual Stock Performance - Xinhua Jin (600735) closed at 8.20, up 3.14% with a trading volume of 258,500 shares and a turnover of 212 million yuan [1] - Feiyada (000026) closed at 66.61, up 1.83% with a trading volume of 332,800 shares and a turnover of 653 million yuan [1] - Xinghua Jewelry (002731) closed at 13.73, up 1.78% with a trading volume of 101,900 shares and a turnover of 138 million yuan [1] - Mankalon (300945) closed at 18.65, up 1.63% with a trading volume of 111,900 shares and a turnover of 207 million yuan [1] - Chaohongji (002345) closed at 15.26, up 1.60% with a trading volume of 179,600 shares and a turnover of 274 million yuan [1] - Jinyi Culture (002721) closed at 4.02, up 0.50% with a trading volume of 1,962,600 shares and a turnover of 786 million yuan [1] - Zhou Dazheng (002867) closed at 13.04, up 0.46% with a trading volume of 51,200 shares and a turnover of 66.7 million yuan [1] - Shen Zhonghua A (000017) closed at 6.42, up 0.31% with a trading volume of 134,100 shares and a turnover of 85.7 million yuan [1] - Laixitongling (603900) closed at 10.30, up 0.29% with a trading volume of 154,100 shares and a turnover of 158 million yuan [1] - Caibai Co. (605599) closed at 15.17, up 0.26% with a trading volume of 37,700 shares and a turnover of 57 million yuan [1] Fund Flow Analysis - The jewelry sector experienced a net outflow of 16.31 million yuan from institutional investors and 69.06 million yuan from speculative funds, while retail investors saw a net inflow of 85.37 million yuan [1] - Feiyada (000026) had a net inflow of 28.47 million yuan from institutional investors, while it faced outflows from speculative and retail investors [2] - Xinghua Jewelry (002731) saw a net inflow of 12.94 million yuan from institutional investors, with outflows from speculative and retail investors [2] - Chaohongji (002345) had a net inflow of 12.10 million yuan from institutional investors, with outflows from speculative funds [2] - Zhou Dazheng (002867) experienced a net inflow of 8.85 million yuan from institutional investors, while facing outflows from speculative and retail investors [2] - Xinhua Jin (600735) had a net inflow of 8.81 million yuan from institutional investors, with outflows from speculative funds [2]

Core Points - Feiya's stock price dropped by 9.66% with a turnover rate of 13.74% and a trading volume of 1.016 billion yuan, showing a fluctuation of 9.92% [2] - Institutional investors net sold 4.6198 million yuan, while brokerage seats collectively net bought 12.4866 million yuan [2] - The stock was listed on the Shenzhen Stock Exchange due to a daily price deviation of -8.46% [2] Trading Data - The top five brokerage seats accounted for a total transaction volume of 1.78 billion yuan, with a buying amount of 927.397 million yuan and a selling amount of 848.729 million yuan, resulting in a net buying of 78.668 million yuan [2] - Among the brokerage seats, one institutional seat appeared, with a buying amount of 10.6759 million yuan and a selling amount of 15.2956 million yuan, leading to a net sell of 4.6198 million yuan [2] Fund Flow - The stock experienced a net outflow of 25.4235 million yuan from main funds, including a net outflow of 5.0758 million yuan from large orders and 20.3477 million yuan from major orders [2] - Over the past five days, the main funds have seen a net outflow of 104 million yuan [2]

Core Insights - The jewelry sector experienced a decline of 2.04% on August 14, with Feiyaada leading the drop [1] - The Shanghai Composite Index closed at 3666.44, down 0.46%, while the Shenzhen Component Index closed at 11451.43, down 0.87% [1] Sector Performance - The jewelry sector's main stocks showed varied performance, with notable declines in several companies: - Feiyaada (code: 000026) saw a significant drop of 9.66%, closing at 19.63, with a trading volume of 500,900 shares and a turnover of 1.016 billion [2] - Other companies like Chaohongman (code: 002345) and Xinghua Jewelry (code: 002731) also faced declines of 5.65% and 3.51% respectively [2] - The trading volume and turnover for key stocks in the jewelry sector indicate a mixed response from investors, with some stocks experiencing higher trading activity despite the overall decline [1][2] Capital Flow - The jewelry sector saw a net outflow of 236 million from main funds, while retail investors contributed a net inflow of 287 million [2] - This indicates a divergence in investment behavior, with institutional investors pulling back while retail investors increased their positions [2]

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Market Overview - The jewelry sector experienced a decline of 0.5% on August 13, with Mankalon leading the drop [1] - The Shanghai Composite Index closed at 3683.46, up 0.48%, while the Shenzhen Component Index closed at 11551.36, up 1.76% [1] Individual Stock Performance - Feiyada (000026) closed at 21.73, up 1.35% with a trading volume of 685,200 shares and a transaction value of 1.488 billion [1] - Chaohongji (002345) closed at 15.92, up 0.82% with a trading volume of 223,100 shares and a transaction value of 351 million [1] - Laofengxiang (600612) closed at 47.75, up 0.04% with a trading volume of 11,600 shares and a transaction value of 55.34 million [1] - Mankalon (300945) closed at 19.00, down 2.96% with a trading volume of 216,200 shares and a transaction value of 407 million [2] - The overall trading volume and transaction values for various stocks in the jewelry sector indicate mixed performance, with some stocks showing gains while others declined [1][2] Capital Flow Analysis - The jewelry sector saw a net outflow of 391 million from institutional investors, while retail investors contributed a net inflow of 370 million [2][3] - The data indicates that institutional investors are pulling back, while retail investors are increasing their positions in the sector [2][3] Stock-Specific Capital Flow - Laofengxiang (600612) had a net inflow of 8.49 million from institutional investors, but a net outflow from retail investors [3] - Mankalon (300945) experienced a significant net outflow of 31.19 million from institutional investors [3] - The capital flow data suggests varying levels of investor confidence across different stocks within the jewelry sector [3]