[Definitions](index=3&type=section&id=Definitions) This chapter defines key terms used in the report, such as corporate clients, individual paying users, verified headhunters, SaaS, and talent services, ensuring clear understanding of the content - This section defines key terms used in the report, including **"corporate clients," "individual paying users," "verified headhunters," "SaaS,"** and **"talent services,"** ensuring clear understanding of the report's content[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This chapter provides the company's basic information, including board members, registered office, principal place of business, share registrar, stock code (6100), and auditor - This section lists the company's basic information, including **board members, registered office, principal place of business, share registrar, stock code (6100), and auditor**[10](index=10&type=chunk)[11](index=11&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) This chapter summarizes key financial data for the six months ended June 30, 2025, including revenue, gross profit, net profit, and non-GAAP operating profit Key Financial Data for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 937,247 | 1,014,571 | -7.6% | | Gross Profit | 727,618 | 791,879 | -8.1% | | Net Profit | 102,842 | 66,025 | +55.8% | | Net Profit Attributable to Equity Holders of the Company | 80,300 | 45,333 | +77.1% | | Non-GAAP Operating Profit | 124,655 | 93,953 | +32.7% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[14](index=14&type=chunk) [Chairman's Report](index=7&type=section&id=Chairman's%20Report) This chapter describes the company's growth in specific market segments and enhanced user experience and customer stickiness through its AI+Recruitment strategy upgrade amidst macroeconomic pressures - Despite macroeconomic and industry cyclical pressures in the mid-to-high-end recruitment market, the company observed strong growth momentum in segments such as **home appliances, warehousing and logistics, new retail, artificial intelligence, energy and chemicals, and education and training**[15](index=15&type=chunk) - The company is firmly advancing its **"AI+Recruitment" strategic upgrade**, focusing on expanding the market coverage of **"Liepin AI Enterprise Edition,"** accelerating the development of innovative products like **AI interviews**, and utilizing AI tools to enhance sales efficiency and talent development[16](index=16&type=chunk) - The application of AI products significantly improved **corporate user experience and customer stickiness**, positively impacting individual user activation, with **average monthly active users growing substantially to a new historical high**, reinforcing the positive cycle of the BHC business model[17](index=17&type=chunk) - The company is actively developing **AI products for individual users**, expected to be fully launched in the second half of the year, to address job-seeking pain points and optimize user experience[17](index=17&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This chapter provides an in-depth analysis of the market environment, business performance, talent development strategies, future outlook, and financial position, detailing the company's operational achievements and financial health under its AI strategy [Market Review](index=9&type=section&id=Market%20Review) In H1 2025, China's economy grew steadily by 5.3% year-on-year, with stable employment, yet corporate recruitment demand remained in a bottoming-out phase due to international uncertainties, alongside persistent structural mismatches in the labor market and evolving corporate hiring practices favoring AI for efficiency - In H1 2025, China's **GDP grew by 5.3% year-on-year**, with overall stable employment, but corporate recruitment demand remained in a bottoming-out phase, and structural mismatches persisted in labor supply and demand[21](index=21&type=chunk) - **Mid-sized enterprises showed significant growth in hiring demand**, while large enterprises focused on core technology and front-end business positions, with companies demanding higher recruitment efficiency and cost-effectiveness[22](index=22&type=chunk) - **High-end talent in AI, hard tech, and semiconductors** remained a key focus for corporate competition[22](index=22&type=chunk) [Business Review](index=10&type=section&id=Business%20Review) In H1 2025, the Group saw growth in cumulative registered individual users and verified corporate users, despite slight declines in individual paying users and corporate clients, with a significant increase in registered individual users reached by verified headhunters, indicating enhanced platform activity Key Business Data for H1 2025 | Metric | June 30, 2025 | June 30, 2024 | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Cumulative Registered Individual Users (millions) | 111.4 | 100.8 | +10.52% | | Individual Paying Users during the Period | 47,581 | 54,073 | -12.01% | | Cumulative Verified Corporate Users | 1,434,168 | 1,367,938 | +4.84% | | Number of Corporate Clients | 62,916 | 63,472 | -0.88% | | Number of Active Job Postings during the Period (millions) | 5.8 | 6.0 | -3.33% | | Number of Verified Headhunters | 218,170 | 219,006 | -0.38% | | Times Registered Individual Users Reached by Verified Headhunters (millions) | 669.5 | 529.4 | +26.46% | [Talent Acquisition and Other HR Services](index=10&type=section&id=Talent%20Acquisition%20and%20Other%20HR%20Services) The company focused on its AI+Recruitment strategy in H1, launching AI products like 'Liepin AI Enterprise Edition' and Doris AI Interview System, enhancing sales efficiency and client penetration, with AI products covering over 70% of paying clients and significantly improving AI matching capabilities - The company focused on **"AI+Recruitment" strategy** in H1, launching **"Liepin AI Enterprise Edition"** and **Doris AI Interview System**, and utilizing **AI tools** to enhance sales efficiency and client penetration[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - **AI recruitment products** have cumulatively covered over **70% of Liepin's paying clients**, with the recommended candidate product's two-hour recommendation rate increasing to **64%**, and monthly repeat initiation rate stabilizing above **60%**[25](index=25&type=chunk) - **Doris AI Interview System** consistently maintained **AI assessment results above 95% consistency with experts** in white-collar, blue-collar, and grey-collar job interviews, and expanded to internal talent inventory scenarios[26](index=26&type=chunk) - The **Multi-Headhunter RCN business** operated **159,000 job postings**, with **AI functions** assisting headhunters in talent sourcing, matching assessment, and communication, and the **Agent waybill assistant** to be launched in Q3[27](index=27&type=chunk) - The company deeply utilizes mainstream large language models in **AI algorithms**, training its proprietary vertical model **"Tongdaohuicai,"** enhancing person-job matching accuracy through **search augmentation (RAG)**, and reducing negative feedback on corporate user AI products by **50% year-on-year**[28](index=28&type=chunk) - In subsidiary businesses, **online survey SaaS business** maintained good growth, and **flexible employment sub-business** achieved strong growth in industries such as catering, consumer goods, and property management[29](index=29&type=chunk) [Talent Development](index=12&type=section&id=Talent%20Development) The Group has established a unique brand in mid-to-high-end online recruitment, with AI products and platform strategies effectively attracting quality talent, resulting in over 110 million registered talents and a significant 18.5% increase in average monthly active users by June 30, 2025 - As of **June 30, 2025**, the platform has attracted over **110 million registered talents**, with **average monthly active users increasing significantly by 18.5% year-on-year**, reaching a new high for the same period in 2024[30](index=30&type=chunk) - The **online vocational qualification training sub-business** saw growth flatten, but the company continues to deepen its focus on the **psychology-related certification training market**, improving sales conversion and retention[31](index=31&type=chunk) [Future Outlook and Strategies](index=13&type=section&id=Future%20Outlook%20and%20Strategies) The company will continue its 'focus strategy,' promoting 'Liepin AI Enterprise Edition' and AI interview products, leveraging AI tools for precise sales lead identification and efficiency, while investing in AI R&D to optimize proprietary models and expand AI applications for both corporate and individual users - The company will continue to execute its **"focus strategy,"** strengthening the promotion of **"Liepin AI Enterprise Edition"** and **AI interview products**, utilizing **AI tools** to precisely identify quality sales leads and improve human efficiency[32](index=32&type=chunk) - Continuous investment in **AI technology R&D** will optimize proprietary vertical models, with an upgrade to **corporate-side recruitment assistant (Agent) products** and the provision of **personalized AI assistants** for individual users throughout the entire process in the second half of the year[33](index=33&type=chunk) - The company will solidify its diversified service capabilities, including the **Multi-Headhunter RCN platform, online surveys, flexible employment, and online vocational qualification training**, while prudently evaluating overseas market expansion opportunities[33](index=33&type=chunk) - The company made its **first dividend payment since listing** in H1 (**a special dividend of

Corporate Information This section provides an overview of the company's board, committees, professional advisors, and key corporate details [Board and Committees](index=3&type=section&id=Board%20and%20Committees) This section lists the members and chairs of the company's Board of Directors, Supervisory Committee, joint company secretaries, and various committees including Audit, Remuneration, Nomination, and Strategy - The Board of Directors comprises six members, including Executive Director Mr. Pan Yun (Chairman), and three independent non-executive directors[3](index=3&type=chunk)[4](index=4&type=chunk) - The Audit Committee, Remuneration Committee, Nomination Committee, and Strategy Committee have all been established, with their respective chairpersons clearly defined[3](index=3&type=chunk)[4](index=4&type=chunk) [Professional Advisors and Offices](index=4&type=section&id=Professional%20Advisors%20and%20Offices) This section provides information on the company's auditors, legal counsel, compliance advisors, and its registered offices, headquarters, and principal places of business in China and Hong Kong - The company's auditor is Deloitte Touche Tohmatsu, and its legal counsel is DeHeng Law Offices (Hong Kong) LLP[5](index=5&type=chunk)[6](index=6&type=chunk) - The company's registered office in China is located in Qichun County, Hubei Province, its China headquarters in Yantian District, Shenzhen, and its principal place of business in Hong Kong is in North Point[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Company Details](index=5&type=section&id=Company%20Details) This section lists the company's principal bankers, H-share registrar in Hong Kong, share name, stock code, and company website - The company's principal bankers include Ping An Bank Co., Ltd. Shenzhen Branch Longhua Sub-branch and DBS Bank (China) Limited Shenzhen Branch[10](index=10&type=chunk) - The company's share name is Xiangjiang Electric, stock code is **2619**, and company website is http://www.xjgroup.com[10](index=10&type=chunk) Key Highlights This section summarizes the company's critical financial and operational performance indicators [Financial Performance Summary](index=6&type=section&id=Financial%20Performance%20Summary) For the six months ended June 30, 2025, the company experienced significant declines in revenue, gross profit, and profit for the period, reflecting challenging operating conditions Key Financial Indicators for H1 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 542,816 | 614,423 | -11.7% | | Gross Profit | 107,567 | 137,410 | -21.7% | | Profit for the Period | 25,313 | 60,539 | -58.2% | - Revenue decreased by **11.7%** year-on-year, gross profit by **21.7%**, and profit for the period significantly declined by **58.2%**[11](index=11&type=chunk) Management Discussion and Analysis This section provides an in-depth review of the group's business operations, financial performance, future prospects, and liquidity [Business Overview](index=7&type=section&id=Overview%20of%20Business) The Group primarily engages in the R&D, design, production, and sales of electrical and non-electrical household products, including heating, electric, electronic appliances, garden hoses, and cookware - The Group is a Chinese manufacturer of household living products, specializing in the R&D, design, manufacturing, and sales of both electrical and non-electrical household items[12](index=12&type=chunk)[15](index=15&type=chunk) - Electrical household products are categorized into three main types: heating (e.g., electric ovens, air fryers), electric (e.g., blenders, egg beaters), and electronic (e.g., electronic scales, humidifiers)[12](index=12&type=chunk)[15](index=15&type=chunk) - Non-electrical household products include garden hoses and cookware[12](index=12&type=chunk)[15](index=15&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) In H1 2025, the Group experienced declines in sales volume and revenue, gross margin contraction, and increased administrative expenses due to US trade policy uncertainties, leading to a significant drop in net profit; however, the Group actively adjusted strategies and explored emerging markets - Uncertainties arising from US trade policies (e.g., reciprocal tariff policies) led downstream customers to adopt a wait-and-see approach[13](index=13&type=chunk)[16](index=16&type=chunk) Business Performance for H1 2025 | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales Volume | 9.0 million units | 10.6 million units | -15.4% | | Revenue | RMB 542.8 million | RMB 614.4 million | -11.7% | | Gross Margin | 19.8% | 22.4% | -2.6 percentage points | | Gross Profit | RMB 107.6 million | RMB 137.4 million | -21.7% | | Administrative Expenses | RMB 55.4 million | RMB 45.8 million | +20.9% | | Exchange Gain | RMB 4.5 million | RMB 8.8 million | -49.2% | | Net Profit | RMB 25.3 million | RMB 60.5 million | -58.2% | - Leveraging its advantages in product quality and service capabilities, the Group flexibly adjusted sales strategies and actively explored emerging markets and expanded product categories to counter adverse conditions[13](index=13&type=chunk)[16](index=16&type=chunk) [Business Prospects](index=8&type=section&id=Business%20Prospects) The company will pursue strategic goals by advancing overseas production capacity, upgrading automation and digitalization, and increasing R&D investment to enhance core competitiveness and market share in a complex operating environment - The company will steadfastly implement its strategic goals, fully leveraging its advantages in intelligent manufacturing of household products to continuously enhance core competitiveness and market share[18](index=18&type=chunk)[20](index=20&type=chunk) - Advancing overseas production capacity: The first overseas production base was established in Indonesia (2023), and a second base was set up in Thailand (investing **67 mu of land** in 2024), aiming to build a global production layout and mitigate trade risks[18](index=18&type=chunk)[20](index=20&type=chunk) - Upgrading automation and digitalization: Launching an intelligent manufacturing plan, establishing the Xiangjiang Smart Factory in Huizhou, procuring advanced automated equipment, and planning to implement a computerized manufacturing execution system for real-time production monitoring[19](index=19&type=chunk)[21](index=21&type=chunk) - Strengthening R&D investment: Planning to construct a new R&D center with a total floor area of approximately **6,000 square meters** in Qichun County, Hubei, and collaborating with universities and research institutions to explore new technologies, processes, and material applications to enhance product technological content and added value[22](index=22&type=chunk)[26](index=26&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) The Group's financial performance in H1 2025 was impacted by multiple adverse factors, leading to significant declines in revenue, gross profit, and net profit, though other income increased, and shareholders' equity grew due to listing and profit for the period Key Financial Data Changes for H1 2025 | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 542.8 | 614.4 | -11.7% | Sales volume decline due to US tariff policy uncertainties | | Gross Profit | 107.6 | 137.4 | -21.7% | Decline in sales volume and overall gross margin | | Gross Margin | 19.8% | 22.4% | -2.6 percentage points | Decline in gross margin for some products | | Cost of Sales | 435.2 | 477.0 | -8.8% | Decrease in sales volume | | Other Income | 12.7 | 8.8 | +44.3% | **190.5%** increase in government grants | | Other Gains and Losses | 2.5 | 8.5 | -70.6% | Decrease in exchange gains due to exchange rate fluctuations | | Selling Expenses | 12.4 | 14.9 | -17.1% | Decrease in sales personnel wages due to reduced sales scale | | Administrative Expenses | 55.4 | 45.8 | +20.9% | Increase in management personnel at China and Indonesia production facilities | | R&D Expenses | 14.7 | 16.5 | -10.4% | Decrease in the number of R&D projects | | Other Expenses | 0 | 1.8 | -100% | Decrease in donations and termination of A-share listing plan | | Finance Costs | 8.1 | 5.6 | +44.6% | Cessation of interest capitalization after completion of Xiangjiang Smart Factory construction | | Income Tax Expense | 5.4 | 10.4 | -47.9% | Decrease in profit before tax, effective tax rate increased from **14.6%** to **17.7%** | | Net Profit | 25.3 | 60.5 | -58.2% | Impact of the above factors | - Shareholders' equity increased from **RMB 926.2 million** as of December 31, 2024, to **RMB 1,097.1 million** as of June 30, 2025, primarily due to the increase in share capital and reserves from the listing and profit recorded during the reporting period[45](index=45&type=chunk)[50](index=50&type=chunk) [Liquidity and Financial Resources](index=12&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's total bank balances and cash increased, bank borrowings rose, the gearing ratio improved, and no guarantees or pledges were provided to related parties - As of June 30, 2025, the Group's total bank balances and cash amounted to **RMB 593.6 million**, with pledged and restricted bank deposits totaling **RMB 63.5 million**, primarily benefiting from listing proceeds and increased bank borrowings[51](index=51&type=chunk)[57](index=57&type=chunk) - Bank borrowings amounted to approximately **RMB 389.8 million** (December 31, 2024: approximately **RMB 323.1 million**)[51](index=51&type=chunk)[57](index=57&type=chunk) - The gearing ratio decreased from **45.7%** as of December 31, 2024, to **42.1%** as of June 30, 2025[53](index=53&type=chunk)[58](index=58&type=chunk) - As of June 30, 2025, the Group had not provided any guarantees or pledges to related parties[52](index=52&type=chunk)[57](index=57&type=chunk) [Treasury Policies and Market Risks](index=12&type=section&id=Treasury%20Policies%20and%20Market%20Risks) The Group adopts prudent financial management strategies, maintains robust liquidity, and manages interest rate, industry policy, and foreign exchange risks through various approaches - The Group adopts prudent financial management strategies, mitigating credit risk through continuous credit assessments and closely monitoring liquidity to meet funding requirements[54](index=54&type=chunk)[59](index=59&type=chunk) - Interest rate risk is primarily associated with cash, bank deposits, and interest-bearing borrowings; the Group manages this risk through fixed or floating rate deposits and borrowings, and no interest rate swaps were used for hedging during the reporting period[56](index=56&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[67](index=67&type=chunk) - Changes in industry policies may significantly impact the company's business development, production operations, and domestic and international trade[63](index=63&type=chunk)[68](index=68&type=chunk) - Foreign exchange risk arises from USD and RMB revenues and HKD IPO proceeds; the Group will regularly review and use derivative financial instruments for hedging when necessary[64](index=64&type=chunk)[69](index=69&type=chunk) [Other Operational and Financial Information](index=13&type=section&id=Other%20Operational%20and%20Financial%20Information) This section covers the Group's contingent liabilities, employee information, use of global offering proceeds, major investments and asset plans, acquisitions and disposals, and asset pledges - As of June 30, 2025, the Group had no significant contingent liabilities[65](index=65&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, the Group had **2,380** employees, with total staff costs of approximately **RMB 103.3 million**, a decrease compared to the same period last year[66](index=66&type=chunk)[71](index=71&type=chunk) - The company was listed on the Stock Exchange on June 25, 2025, with net proceeds from the global offering of approximately **HKD 155.6 million**, which remained unutilized as of June 30, 2025, and will be used according to the purposes and timetable disclosed in the prospectus[73](index=73&type=chunk)[74](index=74&type=chunk)[78](index=78&type=chunk) - As of June 30, 2025, the Group held no significant equity investments and had no major investment and capital asset plans other than those disclosed in the prospectus[75](index=75&type=chunk)[76](index=76&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - As of June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[81](index=81&type=chunk)[83](index=83&type=chunk) - As of June 30, 2025, certain assets with a total book value of approximately **RMB 492.4 million** were pledged to secure bank loans of approximately **RMB 281.5 million**[82](index=82&type=chunk)[84](index=84&type=chunk) Other Information This section details directors' and substantial shareholders' interests, compliance and governance practices, interim dividend decisions, and audit committee review findings [Directors' and Chief Executives' Interests](index=16&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests) This section discloses the interests or short positions of directors and chief executives in the company's shares, underlying shares, and debentures, including Mr. Pan Yun's beneficial and controlled corporate interests in unlisted domestic shares Mr. Pan Yun's Interests in the Company's Shares (as of June 30, 2025) | Name | Share Class | Capacity/Nature of Interest | Number of Securities Held (L) | Approximate Percentage of Relevant Class of Shares | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Pan Yun | Unlisted Domestic Shares | Beneficial Owner | 110,659,509 | 54.07% | 40.55% | | Mr. Pan Yun | Unlisted Domestic Shares | Interest in Controlled Corporation | 94,000,000 | 45.93% | 34.45% | - Mr. Pan Yun indirectly holds interests in unlisted domestic shares through Qichun Huayu Technology Management Center (Limited Partnership) and Qichun Hengxing Technology Management Center (Limited Partnership)[89](index=89&type=chunk)[91](index=91&type=chunk) [Substantial Shareholders' Interests](index=17&type=section&id=Substantial%20Shareholders'%20Interests) This section lists the interests or short positions of substantial shareholders, other than directors and chief executives, in the company's shares and underlying shares, including Ms. Cao Chengling and several state-backed entities Substantial Shareholders' Interests in the Company's Shares (as of June 30, 2025) | Shareholder Name/Name | Share Class | Capacity/Nature of Interest | Number of Securities Held (L) | Approximate Percentage of Relevant Class of Shares | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Ms. Cao Chengling | Unlisted Domestic Shares | Spouse's Interest | 204,659,509 | 100.00% | 75.00% | | Qichun Huayu | Unlisted Domestic Shares | Beneficial Owner | 54,000,000 | 26.39% | 19.79% | | Qichun Hengxing | Unlisted Domestic Shares | Beneficial Owner | 40,000,000 | 19.54% | 14.66% | | Hubei Shunjie Investment (Hong Kong) Co., Ltd. | H Shares | Beneficial Owner | 15,008,000 | 22.00% | 5.50% | | Hong Kong Xinghuang Holdings Co., Ltd. | H Shares | Beneficial Owner | 11,256,000 | 16.50% | 4.12% | | Hong Kong Yunxing Technology Trade Management Co., Ltd. | H Shares | Beneficial Owner | 3,752,000 | 5.50% | 1.37% | - Ms. Cao Chengling, as the spouse of Mr. Pan Yun, is deemed to have an interest in the shares in which Mr. Pan Yun has an interest[100](index=100&type=chunk) - Several state-backed entities, such as Qichun County State-owned Assets Operation Center and Huanggang City State-owned Assets Management Co., Ltd., hold H-share interests through their controlled corporations[100](index=100&type=chunk) [Compliance and Governance](index=22&type=section&id=Compliance%20and%20Governance) The company has complied with continuous disclosure obligations and the Model Code for Securities Transactions, applying the Corporate Governance Code, with the Board deeming the combined roles of Chairman and CEO held by Mr. Pan Yun to be in the Group's best interest - The company has complied with the continuous disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules[101](index=101&type=chunk)[107](index=107&type=chunk) - From the listing date to June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[102](index=102&type=chunk)[108](index=108&type=chunk) - All Directors and Supervisors have fully complied with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[103](index=103&type=chunk)[104](index=104&type=chunk)[109](index=109&type=chunk) - The company has applied good corporate governance principles and adopted the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are combined and held by Mr. Pan Yun, an arrangement the Board believes is in the best interest of the Group[105](index=105&type=chunk)[106](index=106&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [Interim Dividend and Post-Reporting Events](index=23&type=section&id=Interim%20Dividend%20and%20Post-Reporting%20Events) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, and no significant events occurred after the reporting period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[113](index=113&type=chunk)[119](index=119&type=chunk) - No Director was aware of any significant events relating to the Group's business or financial performance subsequent to the six months ended June 30, 2025, and up to the date of this interim report[114](index=114&type=chunk)[120](index=120&type=chunk) [Audit Committee Review](index=23&type=section&id=Audit%20Committee%20Review) The Audit Committee, composed of three independent non-executive directors, reviewed the Group's accounting principles, interim financial information, and this interim report, deeming them compliant with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors: Dr. Gu Zhaoyang (Chairman), Dr. Huang Hanxiong, and Dr. Li Jiannan[115](index=115&type=chunk)[121](index=121&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group, the unaudited interim financial information, and this interim report, and is of the opinion that they have been prepared in compliance with applicable accounting standards, the Listing Rules, and other legal requirements, and have been adequately disclosed[116](index=116&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) Report on Review of Condensed Consolidated Financial Statements This section presents the independent auditor's review report on the condensed consolidated financial statements [Auditor's Review Report](index=25&type=section&id=Auditor's%20Review%20Report) Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410, concluding that the statements are prepared in all material respects in accordance with International Accounting Standard 34, with no material matters identified - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[126](index=126&type=chunk)[129](index=129&type=chunk) - The scope of review is less than that of an audit, thus no audit opinion was expressed, but nothing has come to their attention that causes them to believe the financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - The comparative condensed consolidated statement of profit or loss and other comprehensive income, statement of changes in equity, and statement of cash flows for the six months ended June 30, 2024, and related notes have not been reviewed in accordance with Hong Kong Standard on Review Engagements 2410[128](index=128&type=chunk)[131](index=131&type=chunk) Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group experienced significant declines in revenue and net profit, while other comprehensive income shifted from a loss to a gain Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 542,816 | 614,423 | | Gross Profit | 107,567 | 137,410 | | Profit for the Period | 25,313 | 60,539 | | Other Comprehensive Income (Expense) for the Period | 784 | (200) | | Total Comprehensive Income for the Period | 26,097 | 60,339 | | Basic and Diluted Earnings Per Share (RMB) | 0.12 | 0.30 | [Condensed Consolidated Statement of Financial Position](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and shareholders' equity increased, net current assets rose, while non-current liabilities remained stable Summary of Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | 734,637 | 688,378 | | Current Assets | 1,161,331 | 1,018,601 | | Current Liabilities | 648,654 | 629,994 | | Net Current Assets | 512,677 | 388,607 | | Non-current Liabilities | 150,260 | 150,774 | | Net Assets | 1,097,054 | 926,211 | | Total Equity | 1,097,054 | 926,211 | - Property, plant and equipment increased to **RMB 562,289 thousand**, and inventories increased to **RMB 265,644 thousand**[134](index=134&type=chunk) - Bank balances and cash significantly increased to **RMB 593,617 thousand**[134](index=134&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity significantly increased due to the issuance of new shares from the initial public offering and profit for the period Summary of Condensed Consolidated Statement of Changes in Equity | Item | January 1, 2025 (RMB thousands) | Profit for the Period (RMB thousands) | Other Comprehensive Income (RMB thousands) | IPO Issuance of New Shares (RMB thousands) | Transaction Costs for New Share Issuance (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 204,660 | – | – | 68,220 | – | 272,880 | | Share Premium | 112,713 | – | – | 109,872 | (33,346) | 189,239 | | Reserves | 608,838 | 25,313 | 784 | – | – | 637,991 | | **Total** | **926,211** | **25,313** | **784** | **178,092** | **(33,346)** | **1,097,054** | - The initial public offering (IPO) of new shares generated proceeds of **RMB 178,092 thousand**, after deducting transaction costs of **RMB 33,346 thousand**[136](index=136&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash from operating activities decreased, net cash used in investing activities increased, but net cash from financing activities significantly rose, leading to a net increase in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 11,983 | 22,063 | | Net Cash Used in Investing Activities | (105,310) | (97,177) | | Net Cash from Financing Activities | 207,964 | 12,751 | | Net Increase (Decrease) in Cash and Cash Equivalents | 114,637 | (62,363) | | Cash and Cash Equivalents at End of Period | 593,617 | 497,018 | - Net cash from financing activities significantly increased, primarily due to new borrowings and proceeds from share issuance[137](index=137&type=chunk) - Net cash used in investing activities increased, mainly for the purchase of property, plant and equipment[137](index=137&type=chunk) Notes to the Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering general information, basis of preparation, revenue, segment information, and other financial details [General Information and Basis of Preparation](index=32&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This section outlines the company's registration, controlling shareholders, listing status, and principal activities, stating that the condensed consolidated financial statements are prepared in accordance with IAS 34, with no material impact from IFRS amendments applied this period - The company was incorporated in China as a joint stock company, with Mr. Pan Yun and his son, Mr. Guangshe Pan, as controlling shareholders[138](index=138&type=chunk)[142](index=142&type=chunk) - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on June 25, 2025[138](index=138&type=chunk)[142](index=142&type=chunk) - The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 issued by the International Accounting Standards Board[140](index=140&type=chunk)[143](index=143&type=chunk) - The amendments to IAS 21 'Lack of Exchangeability' were first applied in the current period, but they had no material impact on the financial position and performance[141](index=141&type=chunk)[144](index=144&type=chunk) [Revenue and Segment Information](index=33&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from electrical and non-electrical household products, with heating appliances being the largest contributor; overseas markets, particularly North America, are the main income source, and non-current assets are concentrated in China, Thailand, and Indonesia Revenue by Product Category (RMB thousands) | Product Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Electrical Household Products | 438,537 | 467,538 | | - Heating Appliances | 275,694 | 296,238 | | - Electric Appliances | 111,458 | 127,415 | | - Electronic Appliances | 51,385 | 43,885 | | Non-Electrical Household Products | 104,279 | 146,885 | | - Garden Hoses | 97,628 | 135,033 | | - Others | 6,651 | 11,852 | | **Total Revenue** | **542,816** | **614,423** | Revenue by Destination of Shipment (RMB thousands) | Destination of Shipment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Overseas | 539,173 | 611,398 | | - North America | 445,227 | 505,598 | | - Europe | 44,316 | 62,042 | | - Oceania | 28,300 | 23,214 | | - Asia (excluding Mainland China) | 15,001 | 16,381 | | - South America | 5,681 | 4,228 | | - Africa | 548 | 135 | | Domestic | 3,743 | 2,825 | | **Total Revenue** | **542,816** | **614,423** | Non-current Assets by Geographical Location (RMB thousands) | Geographical Location | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | China | 583,626 | 602,076 | | Thailand | 79,625 | 15,946 | | Indonesia | 18,525 | 15,234 | | United States | 563 | 1,446 | | **Total** | **682,339** | **634,702** | - All revenue from contracts with customers is recognized at a point in time[156](index=156&type=chunk)[158](index=158&type=chunk) [Other Income and Gains/Losses](index=36&type=section&id=Other%20Income%20and%20Gains%2FLosses) The Group's other income primarily consists of government grants and interest income, with government grants significantly increasing, while net other gains and losses substantially decreased due to reduced exchange gains Other Income (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Government Grants | 4,079 | 1,404 | | Interest Income | 6,090 | 4,942 | | Sales of Materials, Molds, and Scraps | 1,999 | 1,636 | | Rental Income | 415 | 464 | | Others | 164 | 316 | | **Total** | **12,747** | **8,762** | Net Other Gains and Losses (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Exchange Gain | 4,478 | 8,808 | | Loss on Disposal of Property, Plant and Equipment | (369) | (104) | | Loss on Trade Receivables at Fair Value Through Other Comprehensive Income | (1,434) | – | | Others | (183) | (181) | | **Total** | **2,492** | **8,523** | - Government grants increased by **190.5%** to **RMB 4.1 million**, primarily comprising various subsidies provided by Chinese government authorities[30](index=30&type=chunk)[36](index=36&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Net exchange gain decreased by **49.2%** to **RMB 4.5 million** due to exchange rate fluctuations[14](index=14&type=chunk)[17](index=17&type=chunk)[31](index=31&type=chunk)[37](index=37&type=chunk) [Finance Costs and Income Tax](index=37&type=section&id=Finance%20Costs%20and%20Income%20Tax) The Group's finance costs increased due to the cessation of interest capitalization, while income tax expense decreased due to lower profit before tax, though the effective tax rate rose Finance Costs (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Borrowings | 6,295 | 6,893 | | Interest on Lease Liabilities | 1,788 | 1,206 | | Total Borrowing Costs | 8,083 | 8,099 | | Less: Amount Capitalized | – | (2,538) | | **Total** | **8,083** | **5,561** | - The increase in finance costs was primarily due to the cessation of interest capitalization after the completion of the Xiangjiang Smart Factory construction[42](index=42&type=chunk)[47](index=47&type=chunk)[172](index=172&type=chunk) Income Tax Expense (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current Tax | 6,088 | 9,582 | | Over-provision in Prior Years | (1,944) | – | | Deferred Tax | 1,293 | 806 | | **Total** | **5,437** | **10,388** | - The decrease in income tax expense was mainly due to lower profit before tax during the reporting period, with the effective tax rate increasing from **14.6%** in H1 2024 to **17.7%** in H1 2025[43](index=43&type=chunk)[48](index=48&type=chunk) - Chinese subsidiaries are subject to a **25%** tax rate, with high-tech enterprises enjoying a **15%** preferential tax rate; Hong Kong entities are subject to a two-tiered profits tax system, and US subsidiaries are subject to federal **21%** and state income tax rates of up to **8.84%**[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) [Profit for the Period and EPS](index=40&type=section&id=Profit%20for%20the%20Period%20and%20EPS) The Group's profit for the period significantly decreased, leading to a corresponding reduction in basic and diluted earnings per share, with no interim dividend declared for the current period Composition of Profit for the Period (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Depreciation and Amortization | 41,789 | 32,279 | | Capitalized in Inventories | (21,238) | (19,446) | | Capitalized in Construction in Progress | – | (308) | | Listing Expenses | 1,881 | – | | Write-down of Inventories Reversed | (357) | (2,964) | | Cost of Inventories Recognized as Expense | 435,249 | 477,013 | Earnings Per Share (RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB thousands) | 25,313 | 60,539 | | Weighted Average Number of Ordinary Shares (thousand shares) | 206,921 | 204,660 | | Basic and Diluted Earnings Per Share (RMB) | 0.12 | 0.30 | - No interim dividend was declared for the current period[119](index=119&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Assets and Liabilities Details](index=42&type=section&id=Assets%20and%20Liabilities%20Details) This section details changes in the Group's property, plant and equipment, right-of-use assets, inventories, trade receivables, prepayments and other receivables, trade and bills payables, other payables and accrued expenses, and borrowings - In H1 2025, the Group purchased property, plant and equipment amounting to **RMB 87,577 thousand** and renewed or entered into multiple lease agreements with terms of **1-3 years**[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) Composition of Inventories (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 90,207 | 75,195 | | Work in Progress | 119,300 | 74,869 | | Finished Goods | 74,311 | 64,942 | | Goods in Transit | 16,426 | 27,308 | | Less: Provision | (34,600) | (34,957) | | **Total** | **265,644** | **207,357** | - The aging of trade receivables is primarily within **1 year**, with normal credit terms ranging from **30 to 135 days**; as of June 30, 2025, the total overdue amount was **RMB 24,807 thousand**[197](index=197&type=chunk)[198](index=198&type=chunk) - Trade receivables at fair value through other comprehensive income increased to **RMB 9,218 thousand**, all due within **1 year**[201](index=201&type=chunk)[202](index=202&type=chunk) Aging Analysis of Trade and Bills Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 246,916 | 262,081 | | 1-2 years | 678 | 104 | | 2-3 years | 195 | 251 | | Over 3 years | 1,689 | 2,021 | | **Total Trade Payables** | **249,478** | **264,457** | | Bills Payable | 24,823 | 28,017 | | **Total** | **274,301** | **292,474** | - In H1 2025, the Group obtained new bank loans of **RMB 382,273 thousand** and repaid borrowings of **RMB 315,335 thousand**, with new loan interest rates ranging from **2.55% to 5.00%**[212](index=212&type=chunk)[214](index=214&type=chunk) [Share Capital and Commitments](index=49&type=section&id=Share%20Capital%20and%20Commitments) The company's share capital increased due to the issuance of H-shares upon listing, and contracted but unprovided capital expenditures are disclosed Changes in Share Capital (RMB thousands) | Item | Number of Shares | Share Capital | | :--- | :--- | :--- | | January 1, 2025 | 204,659,509 | 204,660 | | Shares Issued After Listing | 68,220,000 | 68,220 | | **June 30, 2025** | **272,879,509** | **272,880** | - Upon listing on June 25, 2025, the company issued **68,220,000 H-shares** with a par value of **RMB 1** per share, generating total proceeds of approximately **HKD 195,109,000** (approximately **RMB 178,092,000**)[216](index=216&type=chunk)[217](index=217&type=chunk) Capital Commitments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for capital expenditure - Property, plant and equipment | 48,566 | 20,224 | [Fair Value Measurements of Financial Instruments](index=50&type=section&id=Fair%20Value%20Measurements%20of%20Financial%20Instruments) The Group's financial assets are measured at fair value, with trade receivables at fair value through other comprehensive income classified as Level 3 fair value measurements, using discounted cash flow with risk-adjusted discount rates and cash flows as key inputs Financial Assets Measured at Fair Value (RMB thousands) | Financial Asset | June 30, 2025 | December 31, 2024 | Fair Value Hierarchy | Valuation Techniques and Key Inputs | Significant Unobservable Inputs | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade Receivables at Fair Value Through Other Comprehensive Income | 9,218 | 2,145 | Level 3 | Discounted cash flow with risk-adjusted discount rates and cash flows | Discount rate | Reconciliation of Level 3 Fair Value Measurements (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | At January 1 | 2,145 | 15,750 | | Additions | 171,387 | 171,674 | | Settlements | (162,846) | (173,275) | | Fair Value Changes Through Other Comprehensive Income | (1,468) | 309 | | **At June 30** | **9,218** | **14,458** | - Changes in unobservable inputs would not significantly alter the fair value of the relevant financial instruments[224](index=224&type=chunk) [Related Party Transactions](index=52&type=section&id=Related%20Party%20Transactions) This section discloses the Group's significant related party transactions during the reporting period, primarily including lease liabilities and interest with Mr. Pan Yun, and key management personnel compensation Related Party Lease Liabilities and Interest (RMB thousands) | Related Party Name | Lease Liabilities (June 30, 2025) | Lease Liabilities (December 31, 2024) | Lease Liabilities Interest (H1 2025) | Lease Liabilities Interest (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | Mr. Pan Yun | 226 | 446 | 7 | 20 | Key Management Personnel Remuneration (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Salaries, Bonuses, and Other Allowances | 2,482 | 3,051 | | Contributions to Retirement Benefit Plans | 24 | 18 | | **Total** | **2,506** | **3,069** | - The remuneration of Directors and Supervisors is determined by the Remuneration Committee based on individual performance and market trends[231](index=231&type=chunk)

Financial Performance - The company achieved revenue of RMB 127,500,000 for the six months ended June 30, 2025, representing an 84.5% increase from RMB 69,100,000 in the corresponding period[7] - Gross profit increased by approximately RMB 16,600,000, a growth of 263.5%, with gross margin improving from 9.2% to 18.0%[11] - The company recorded a net profit of approximately RMB 6,400,000, compared to a net loss of RMB 4,200,000 in the corresponding period[14] - Revenue for the six months ended June 30, 2025, was RMB 127,456,000, representing a 84.5% increase compared to RMB 69,090,000 for the same period in 2024[50] - Gross profit for the same period was RMB 22,919,000, up from RMB 6,325,000, indicating a significant improvement in profitability[50] - Operating profit for the six months ended June 30, 2025, was RMB 6,488,000, compared to an operating loss of RMB 3,855,000 in the previous year[50] - Net profit for the period was RMB 6,448,000, a turnaround from a net loss of RMB 4,184,000 in the same period last year[50] - For the six months ended June 30, 2025, the company's profit attributable to equity holders was RMB 6,448,000, compared to a loss of RMB 4,181,000 for the same period in 2024[96] - Basic earnings per share for the six months ended June 30, 2025, was RMB 0.016, while for the same period in 2024, it was a loss of RMB 0.010[96] Expenses and Costs - Administrative expenses rose by approximately RMB 3,200,000 or 24.4% to about RMB 16,300,000 due to increased operational costs and strategic investments[13] - Sales and marketing expenses increased by RMB 100,000 or 7.1% to approximately RMB 1,500,000[12] - The company reported a significant increase in the cost of raw materials and consumables, which rose to RMB 86,793,000 in 2025 from RMB 45,505,000 in 2024, an increase of approximately 91%[85] - The total remuneration for key management personnel was approximately RMB 1,383,000 for the six months ended June 30, 2025, down from RMB 2,247,000 for the same period in 2024, indicating a reduction of about 38%[106] Financial Position - Bank borrowings increased to approximately RMB 49,500,000 as of June 30, 2025, compared to no borrowings as of December 31, 2024[15] - The group's borrowings amounted to approximately RMB 495 million as of June 30, 2025, with an asset-to-liability ratio of 24.4%[20] - The current ratio (current assets/current liabilities) was 1.7 times as of June 30, 2025, down from 1.9 times as of December 31, 2024[21] - The group held cash and cash equivalents of approximately RMB 23,200,000 as of June 30, 2025, compared to RMB 6,000,000 as of December 31, 2024[20] - Total assets as of June 30, 2025, amounted to RMB 322,132,000, an increase from RMB 280,530,000 as of December 31, 2024[54] - Total equity increased to RMB 202,560,000 as of June 30, 2025, compared to RMB 195,947,000 at the end of 2024[54] - Cash and cash equivalents rose significantly to RMB 23,228,000 from RMB 6,003,000, indicating improved liquidity[53] - Trade and other receivables increased to RMB 134,932,000 from RMB 108,021,000, reflecting growth in sales[53] Strategic Partnerships and Business Focus - The company established a strategic partnership with Anhui Conch Cement Co., ensuring a stable supply chain for core production materials[8] - The company plans to focus on large-scale transportation and urban renewal projects to leverage the recovering infrastructure demand in Nantong and surrounding areas[17] - The company aims to enhance gross margins and expand production capacity to meet growing market demand through strategic partnerships and smart manufacturing solutions[17] - The company is engaged in the manufacturing and sales of prestressed high-strength concrete piles and other concrete products in China, indicating a focus on market expansion within the region[59] Corporate Governance - The company is committed to maintaining high corporate governance standards and has adopted the corporate governance code as per the listing rules[42] - The roles of the Chairman and CEO are not separated, with Ms. Wang Xianyu currently holding both positions[43] - The company has three independent non-executive directors providing independent viewpoints to ensure a balance of power between the board and management[43] Share Capital and Stock Options - As of June 30, 2025, the total issued share capital of the company is 400,000,000 shares[39] - Ms. Wang Xianyu holds 228,536,000 shares, representing approximately 57.13% of the issued share capital[35] - Mr. Wang Liangyou holds 26,870,000 shares, representing approximately 6.72% of the issued share capital[35] - The company has a stock option plan that allows for the issuance of up to 40,000,000 shares, equivalent to 10% of the issued share capital as of the listing date[40] - No stock options have been granted, canceled, or exercised under the stock option plan from the adoption date to the reporting date[41] - The company aims to attract and retain qualified individuals through its stock option plan to enhance performance and efficiency[40] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2025, was a net outflow of RMB 30,599 thousand, compared to a net inflow of RMB 3,678 thousand for the same period in 2024[58] - Cash used in investing activities was RMB 1,256 thousand, a significant decrease from RMB 15,530 thousand in the previous year, primarily due to increased proceeds from the sale of financial assets[58] - Financing activities generated a net cash inflow of RMB 49,080 thousand, compared to a net outflow of RMB 5,223 thousand in the prior year, driven by increased bank borrowings of RMB 86,500 thousand[58] - The company reported a total of RMB 32,180 thousand in financial assets at fair value, with RMB 30,699 thousand classified under level three inputs, indicating significant investments in non-listed equity securities[73] - The company invested RMB 20,698 thousand in financial assets measured at fair value through profit or loss, a substantial increase from RMB 15,416 thousand in the prior year[58] Risks and Liabilities - The group has no significant contingent liabilities as of June 30, 2025[30] - The group has pledged properties valued at approximately RMB 12,207,000 and land use rights valued at approximately RMB 10,614,000 as collateral for its borrowings[31] - The group did not engage in any hedging activities during the period[20] - The group has no foreign currency hedging policy but closely monitors relevant foreign exchange rates to manage currency risk[25] Other Information - The group did not recommend any interim dividend for the period ending June 30, 2024[33] - The company did not declare or pay any dividends for the six months ended June 30, 2025, consistent with the same period in 2024[94] - The applicable corporate income tax rate for the company's subsidiaries in mainland China is 25%, with a reduced rate of 15% for those qualifying as high-tech enterprises[91] - The company recognized a deferred tax expense of RMB 563,000 for the six months ended June 30, 2025, compared to a deferred tax credit of RMB 515,000 for the same period in 2024[92] - There were no significant contingent liabilities as of June 30, 2025, indicating a stable financial position[108] - No significant events occurred after June 30, 2025, that would materially affect the group's business and financial performance[109]

[Company Information](index=2&type=section&id=Company%20Information) [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive directors Fang Gongyu (Chairman), Tian Tao, Ma Xiaoming, Zeng Qin (newly appointed), and independent non-executive directors Jiang Qian, Yuan Jun, Wang Zhiqiang, with audit, nomination, and remuneration committees established and chaired by independent non-executive directors - Executive Directors include Fang Gongyu (Chairman of the Board), Tian Tao, Ma Xiaoming, and Zeng Qin (appointed on March 28, 2025), with Ms. Yu Yuan resigning on the same day[4](index=4&type=chunk) - Independent Non-Executive Directors are Jiang Qian, Yuan Jun, and Wang Zhiqiang[4](index=4&type=chunk) - Mr. Wang Zhiqiang chairs the Audit Committee, Mr. Fang Gongyu chairs the Nomination Committee, and Mr. Jiang Qian chairs the Remuneration Committee[4](index=4&type=chunk) [Company Secretary, Authorized Representatives, and Auditor](index=3&type=section&id=Company%20Secretary%2C%20Authorized%20Representatives%2C%20and%20Auditor) Mr. Lou Qitong serves as the Company Secretary and one of the Authorized Representatives, with PricewaterhouseCoopers as the auditor - Mr. Lou Qitong is the Company Secretary, and Mr. Tian Tao and Mr. Lou Qitong are the Authorized Representatives[4](index=4&type=chunk) - The auditor is PricewaterhouseCoopers[4](index=4&type=chunk) [Registered and Principal Places of Business](index=3&type=section&id=Registered%20and%20Principal%20Places%20of%20Business) The company is registered in the Cayman Islands, with its headquarters and principal place of business in Chengdu, Sichuan Province, China, and a principal place of business in Hong Kong - The registered office is located in the Cayman Islands[4](index=4&type=chunk) - The headquarters and principal place of business in the People's Republic of China are located at No. 2 Jinli Middle Road, Qingyang District, Chengdu, Sichuan Province, China[4](index=4&type=chunk) - The principal place of business in Hong Kong is located at 31/F, 148 Electric Road, North Point, Hong Kong[5](index=5&type=chunk) [Listing and Investor Relations](index=4&type=section&id=Listing%20and%20Investor%20Relations) The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited under stock code 1851, with investor relations contact information provided - The listing venue is the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 1851[6](index=6&type=chunk) - Investor relations contact phone is +852 3598 8991, and email is investorrelations@gingkoeducn.com[6](index=6&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview](index=5&type=section&id=Business%20Overview) The Group is a higher education and vocational training service provider in Sichuan Province, China, specializing in hotel management talent cultivation, with student enrollment slightly increasing to 20,745 in the 2024/2025 academic year and a graduate employment rate of 86.1% - The Group is a higher education and vocational training service provider in Sichuan Province, China, focusing on cultivating practical skills talents for the modern service industry[8](index=8&type=chunk) 2024/2025 Academic Year Student Data | Indicator | 2024/2025 Academic Year | 2023/2024 Academic Year | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Enrolled Students | 20,745 persons | 20,728 persons | +17 persons | +0.1% | | Graduates | 4,332 persons | N/A | N/A | N/A | | Employment Rate | 86.1% | N/A | N/A | N/A | - The Group operates Gingko College (offering 30 bachelor's degree and 24 associate diploma programs) and Yibin Gingko Catering Vocational Training School Co., Ltd[9](index=9&type=chunk) Revenue Breakdown by Source (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Increase/(Decrease) (RMB thousand) | Increase/(Decrease) (%) | | :--- | :--- | :--- | :--- | :--- | | Tuition Fees | 183,587 | 180,219 | 3,368 | 1.9% | | Accommodation Fees | 14,558 | 13,739 | 819 | 6.0% | | Catering Service Fees | 2,642 | 1,803 | 839 | 46.5% | | Hotel Operation Revenue | 1,639 | 1,306 | 333 | 25.5% | | Others | 5,989 | 5,023 | 966 | 19.2% | | **Total** | **208,415** | **202,090** | **6,325** | **3.1%** | - Future strategies include: increasing market penetration and improving teaching quality, actively expanding overseas operations, continuously attracting and retaining quality teachers, and further developing training programs to diversify revenue sources[13](index=13&type=chunk) [New Campus Construction](index=7&type=section&id=New%20Campus%20Construction) The Group is constructing a new campus in Nanxi District, Yibin City, Sichuan Province, with Phase I completed in 2022 and an expansion project (student dormitory and supporting facilities) completed in 2024, totaling approximately 20,715.36 square meters - The Group entered into a land use right grant contract in March 2019 for the construction of a new campus in Nanxi District, Yibin City, Sichuan Province, including a teaching hotel[14](index=14&type=chunk) - Phase I construction of the Nanxi New Campus was completed in 2022, primarily including a teaching hotel, classroom buildings, canteens, dormitories, and other facilities[14](index=14&type=chunk) - The Nanxi New Campus expansion project (mainly student dormitory buildings and supporting facilities) was completed in 2024, with a total construction area of approximately **20,715.36 square meters**[14](index=14&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's revenue grew 3.1% to RMB 208.4 million, driven by tuition and accommodation fees, but cost of sales increased 15.4%, leading to a 3.6% decrease in gross profit to RMB 125.8 million and a gross profit margin of 60.4%, with profit for the period decreasing 5.9% to RMB 100.3 million Key Financial Indicators Changes (Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 208.4 | 202.1 | +3.1% | | Cost of Sales | 82.6 | 71.6 | +15.4% | | Gross Profit | 125.8 | 130.5 | -3.6% | | Gross Profit Margin | 60.4% | 64.6% | -4.2 percentage points | | Profit for the Period | 100.3 | 106.6 | -5.9% | - The increase in revenue was primarily attributable to the increase in enrolled students and higher average tuition and accommodation fees in the 2024/2025 academic year[15](index=15&type=chunk) - The decrease in gross profit and gross profit margin was mainly due to the increase in cost of sales exceeding the increase in revenue[17](index=17&type=chunk) Other Profit and Loss Items Changes (Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 0.8 | 1.0 | Decrease | | Administrative Expenses | 24.1 | 24.4 | Decrease | | Other Income | 1.5 | 3.3 | Decrease | | Other (Losses)/Gains – Net | 0.4 (Loss) | 0 (Gain) | Decrease | | Finance Costs – Net | 1.4 | 1.3 | Increase | | Income Tax Expense | 0.3 | 0.4 | Decrease | [Financial Resources Review](index=9&type=section&id=Financial%20Resources%20Review) As of June 30, 2025, the Group's cash and cash equivalents significantly decreased by 76.0% to RMB 65.3 million, total borrowings decreased to RMB 247.8 million, and the gearing ratio fell to 27.1%, with no significant investments, acquisitions, or disposals during the period, and capital commitments primarily related to expansion projects Liquidity and Borrowings | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 65.3 | 271.7 | -76.0% | | Total Borrowings | 247.8 | 309.8 | -20.0% | | Gearing Ratio | 27.1% | 40.2% | -13.1 percentage points | | Net Current Liabilities | 120.4 | 174.5 | -31.0% | Net Cash Flows (Six Months Ended June 30) | Activity Type | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | 79.6 | 77.4 | | Net Cash Used in Investing Activities | 60.1 | 63.0 | | Net Cash Used in Financing Activities | 66.6 | 1.0 | - Borrowings are denominated in RMB and bear interest at fixed rates[26](index=26&type=chunk) - There were no significant investments, acquisitions, or disposals of subsidiaries and associates during the reporting period[27](index=27&type=chunk) - Capital commitments amounted to approximately **RMB 12.0 million**, mainly related to expansion projects[29](index=29&type=chunk) - The Group faces foreign exchange risk primarily related to USD and HKD but currently has no foreign currency hedging policy[30](index=30&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[31](index=31&type=chunk) - Construction in progress and buildings of **RMB 197.3 million**, land use rights of **RMB 3.4 million**, and rights to tuition and accommodation fees were pledged as security for bank borrowings of **RMB 234.8 million**[32](index=32&type=chunk) Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | 1,167 persons | | December 31, 2024 | 1,088 persons | [Corporate Governance and Other Information](index=11&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Directors' and Chief Executive's Interests](index=11&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, Executive Director Mr. Fang Gongyu held 73.3% of the company's shares through controlled corporations, and Mr. Tian Tao held 1.7% of the shares, with no other directors or chief executives holding disclosable share interests or short positions Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director's Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Fang Gongyu | Interest in controlled corporation | 366,562,500 | 73.3% | | Mr. Tian Tao | Interest in controlled corporation | 8,437,500 | 1.7% | - Mr. Fang Gongyu beneficially and wholly owns Vast Universe Company Limited, and Mr. Tian Tao beneficially and wholly owns HFYX Company Limited[37](index=37&type=chunk) [Substantial Shareholders' Interests](index=12&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, Vast Universe was the largest shareholder, holding 73.3% of the shares, with Ms. Xiong Lan (Mr. Fang Gongyu's spouse) holding the same percentage due to spousal interest, and GreenTree Hospitality Group Ltd. and its ultimate controller Mr. Xu Shuguang holding 8.3% of the shares Substantial Shareholders' Long Positions in Shares (As of June 30, 2025) | Name/Person | Capacity | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Vast Universe | Beneficial owner | 366,562,500 (L) | 73.3% | | Ms. Xiong Lan | Spouse's interest | 366,562,500 (L) | 73.3% | | GreenTree Hospitality Group Ltd. | Beneficial owner | 41,336,000 (L) | 8.3% | | GreenTree Inns Hotel Management Group, Inc. | Interest in controlled corporation | 41,336,000 (L) | 8.3% | | Mr. Xu Shuguang | Interest in controlled corporation | 41,336,000 (L) | 8.3% | [Share Transactions and Corporate Governance](index=13&type=section&id=Share%20Transactions%20and%20Corporate%20Governance) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any shares, and the company maintains high corporate governance standards, complying with the Corporate Governance Code in Appendix 14 of the Listing Rules, except for the combined roles of Chairman and Chief Executive held by Mr. Fang Gongyu - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on the Stock Exchange[43](index=43&type=chunk) - The Company complies with the Corporate Governance Code, but the roles of Chairman and Chief Executive are held by Mr. Fang Gongyu, constituting a deviation[44](index=44&type=chunk) - All Directors have confirmed their compliance with the Model Code for Securities Transactions by Directors throughout the reporting period[46](index=46&type=chunk) [Share Option Scheme and Dividends](index=14&type=section&id=Share%20Option%20Scheme%20and%20Dividends) The share option scheme became effective on January 18, 2019, but no share options have been granted as of the date of this interim report, and the Board has resolved not to pay an interim dividend for the six months ended June 30, 2025 - The share option scheme became effective on January 18, 2019, but no share options have been granted since that date and up to the date of this interim report[47](index=47&type=chunk) - The Board has resolved not to declare or pay any interim dividend for the six months ended June 30, 2025[48](index=48&type=chunk) [Other Disclosures](index=14&type=section&id=Other%20Disclosures) No significant events occurred after the reporting period, the company maintained sufficient public float, and the audit committee reviewed the interim financial information - Other than as disclosed in this interim report, the Directors are not aware of any other significant subsequent events concerning the Group's business or financial performance from June 30, 2025, up to the date of this interim report[49](index=49&type=chunk) - The Company has maintained a sufficient public float as required by the Listing Rules throughout the reporting period[50](index=50&type=chunk) - The Audit Committee has reviewed the unaudited interim condensed consolidated financial information of the Company for the reporting period[51](index=51&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue was RMB 208,415 thousand, a 3.1% increase year-on-year, but due to a 15.4% increase in cost of sales, gross profit decreased 3.6% to RMB 125,785 thousand, with profit for the period at RMB 100,278 thousand, a 5.9% decrease year-on-year, and basic and diluted earnings per share of RMB 0.20 Interim Condensed Consolidated Statement of Comprehensive Income Summary (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 208,415 | 202,090 | +3.1% | | Cost of Sales | (82,630) | (71,625) | +15.4% | | Gross Profit | 125,785 | 130,465 | -3.6% | | Selling Expenses | (835) | (956) | -12.7% | | Administrative Expenses | (24,133) | (24,381) | -1.0% | | Other Income | 1,493 | 3,276 | -54.4% | | Other (Losses)/Gains – Net | (351) | 20 | From gain to loss | | Operating Profit | 101,959 | 108,424 | -6.0% | | Finance Costs – Net | (1,372) | (1,349) | +1.7% | | Profit Before Income Tax | 100,587 | 107,075 | -6.0% | | Income Tax Expense | (309) | (449) | -31.2% | | **Profit for the Period** | **100,278** | **106,626** | **-5.9%** | | Basic and Diluted Earnings Per Share (RMB) | 0.20 | 0.21 | -4.8% | [Interim Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 1,385,140 thousand, a 12.7% decrease from December 31, 2024, with current assets significantly down 71.5% to RMB 80,525 thousand due to reduced cash and cash equivalents, while total equity grew 10.7% to RMB 1,038,187 thousand and total liabilities decreased 46.5% to RMB 346,953 thousand, mainly driven by a significant reduction in contract liabilities Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 1,304,615 | 1,303,386 | +0.1% | | Current Assets | 80,525 | 283,057 | -71.5% | | **Total Assets** | **1,385,140** | **1,586,443** | **-12.7%** | | **Equity** | | | | | Total Equity | 1,038,187 | 937,909 | +10.7% | | **Liabilities** | | | | | Non-current Liabilities | 145,996 | 190,997 | -23.6% | | Current Liabilities | 200,957 | 457,537 | -56.0% | | **Total Liabilities** | **346,953** | **648,534** | **-46.5%** | | Total Equity and Liabilities | 1,385,140 | 1,586,443 | -12.7% | - Cash and cash equivalents within current assets significantly decreased from **RMB 271,723 thousand** to **RMB 65,276 thousand**[54](index=54&type=chunk) - Contract liabilities within current liabilities significantly decreased from **RMB 202,241 thousand** to **RMB 4,612 thousand**[56](index=56&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the company increased to RMB 1,038,187 thousand, primarily due to the inclusion of profit for the period of RMB 100,278 thousand in retained earnings Interim Condensed Consolidated Statement of Changes in Equity Summary | Item | January 1, 2025 (RMB thousand) | Profit for the Period and Total Comprehensive Income (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | | Share Capital | 4,321 | – | 4,321 | | Share Premium | 134,042 | – | 134,042 | | Capital Reserve | 50,000 | – | 50,000 | | Statutory Surplus Reserve | 62,108 | – | 62,108 | | Retained Earnings | 687,438 | 100,278 | 787,716 | | **Total** | **937,909** | **100,278** | **1,038,187** | [Interim Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's cash and cash equivalents decreased by RMB 206,255 thousand, with an ending balance of RMB 65,276 thousand, comprising net cash used in operating activities of RMB 79,572 thousand, net cash used in investing activities of RMB 60,058 thousand, and net cash used in financing activities of RMB 66,625 thousand Interim Condensed Consolidated Statement of Cash Flows Summary (Six Months Ended June 30) | Activity Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (79,572) | (77,360) | | Net Cash Used in Investing Activities | (60,058) | (62,985) | | Net Cash Used in Financing Activities | (66,625) | (979) | | Net Decrease in Cash and Cash Equivalents | (206,255) | (141,324) | | Cash and Cash Equivalents at Beginning of Period | 271,723 | 215,713 | | Cash and Cash Equivalents at End of Period | 65,276 | 74,352 | - Net cash used in financing activities significantly increased, primarily due to increased repayment of bank borrowings (**RMB 75,000 thousand** in 2025 vs. **RMB 35,000 thousand** in 2024)[61](index=61&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=20&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [General Information and Basis of Preparation](index=20&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in the Cayman Islands, primarily provides private higher education services in China, with Mr. Fang Gongyu as the ultimate controlling shareholder, and this interim condensed consolidated financial information is unaudited and prepared in accordance with HKAS 34 - The Company was incorporated in the Cayman Islands as an exempted company on March 23, 2018, under the Companies Law[62](index=62&type=chunk) - The Group is principally engaged in providing private higher education services in the People's Republic of China, and the ultimate controlling shareholder is Mr. Fang Gongyu[62](index=62&type=chunk) - This interim condensed consolidated financial information is unaudited and has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[64](index=64&type=chunk)[65](index=65&type=chunk) [Significant Accounting Policies and Financial Risk Management](index=21&type=section&id=Significant%20Accounting%20Policies%20and%20Financial%20Risk%20Management) The Group adopted certain new and revised standards and is evaluating the impact of new standards not yet effective, facing market, credit, and liquidity risks managed by monitoring cash levels and bank borrowings, with net current liabilities of RMB 115,820 thousand (excluding contract liabilities) as of June 30, 2025 - The Group was not required to change its accounting policies or make retrospective adjustments due to the adoption of certain revised standards[66](index=66&type=chunk) - New standards not yet adopted include HKFRS 9 and 7 (Amendments), Annual Improvements to HKFRS Accounting Standards – Volume 11, HKFRS 18, and HKFRS 19, for which the Group is assessing their full impact[67](index=67&type=chunk) - The Group's business faces market risks (foreign currency risk, interest rate risk), credit risk, and liquidity risk[68](index=68&type=chunk) - As of June 30, 2025, the Group's net current liabilities were approximately **RMB 115,820 thousand** (excluding contract liabilities which do not require future cash outflows)[70](index=70&type=chunk) - Management expects to receive tuition fee proceeds of **RMB 330 million** for the September 2025 academic year by the end of September 2025 or earlier, and therefore believes there is no significant liquidity risk[70](index=70&type=chunk) Maturity Analysis of Non-Derivative Financial Liabilities (As of June 30, 2025) | Item | Within One Year (RMB thousand) | One to Two Years (RMB thousand) | Two to Five Years (RMB thousand) | Over Five Years (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings (Principal plus Interest) | 108,429 | 87,634 | 60,829 | – | 256,892 | | Accruals and Other Payables | 81,211 | – | – | – | 81,211 | | Lease Liabilities | 317 | 693 | – | – | 1,010 | | **Total** | **189,957** | **88,327** | **60,829** | **–** | **339,113** | Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Listed Equity Investments | 2,045 | – | – | 2,045 | | Wealth Management Products | 5,165 | – | – | 5,165 | | **Total** | **7,210** | **–** | **–** | **7,210** | [Segment Information and Revenue](index=25&type=section&id=Segment%20Information%20and%20Revenue) The Group considers its business as a single reportable segment, with total revenue of RMB 208,415 thousand for the six months ended June 30, 2025, primarily from tuition fees (RMB 183,587 thousand) and accommodation fees (RMB 14,558 thousand), and contract liabilities significantly decreased from RMB 202,241 thousand on December 31, 2024, to RMB 4,612 thousand on June 30, 2025 - The Group's chief operating decision maker views the business as a single reportable segment[79](index=79&type=chunk) Revenue Source Details (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Tuition Fees | 183,587 | 180,219 | | Accommodation Fees | 14,558 | 13,739 | | Catering Service Fees | 2,642 | 1,803 | | Hotel Operation Revenue | 1,639 | 1,306 | | Others | 5,989 | 5,023 | | **Total** | **208,415** | **202,090** | Contract Liabilities (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Contract Liabilities Related to Tuition Fees | 456 | 182,077 | | Contract Liabilities Related to Accommodation Fees | 3,991 | 18,534 | | Others | 165 | 1,630 | | **Total** | **4,612** | **202,241** | - Revenue recognized from contract liabilities balance at the beginning of the year was **RMB 197,988 thousand** (2024: **RMB 197,050 thousand**)[85](index=85&type=chunk) [Operating Profit and Finance Costs](index=28&type=section&id=Operating%20Profit%20and%20Finance%20Costs) For the six months ended June 30, 2025, operating profit was RMB 101,959 thousand, with major expenses including employee benefit expenses of RMB 59,118 thousand and depreciation and amortization of RMB 26,083 thousand, and net finance costs of RMB 1,372 thousand, partially offset by capitalized amounts of RMB 2,901 thousand Major Components of Operating Profit (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 59,118 | 52,364 | | Depreciation and Amortization | 26,083 | 21,446 | | Office Expenses | 5,249 | 7,357 | | Training Expenses | 2,686 | 1,676 | | Government Subsidies | (363) | (1,447) | Finance Costs – Net (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Expense on Borrowings | (4,560) | (5,640) | | Interest Expense on Lease Liabilities | (27) | (16) | | Capitalized Amount for Qualifying Assets | 2,901 | 3,161 | | Bank Interest Income | 314 | 1,146 | | **Net Finance Costs** | **(1,372)** | **(1,349)** | - The capitalization rate used to determine the amount of borrowing costs to be capitalized was **3.17%** (2024: **3.39%**)[88](index=88&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was RMB 309 thousand, with the company exempt from corporate income tax in the Cayman Islands and BVI, and Gingko College exempt from corporate income tax on income from formal academic education services, while no deferred income tax liability was recognized for Chinese withholding tax on profit distribution to overseas investors Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax on Profit for the Period | 309 | 449 | - The Company is exempted from corporate income tax in the Cayman Islands and the British Virgin Islands[89](index=89&type=chunk)[90](index=90&type=chunk) - Gingko College, as a private non-enterprise entity, is exempted from corporate income tax on income derived from providing formal academic education services[91](index=91&type=chunk) - The Group's subsidiaries in China are subject to a 10% Chinese withholding income tax on profits distributed to overseas investors, but no deferred income tax liability has been recognized as dividends are not expected to be distributed in the foreseeable future[92](index=92&type=chunk) [Earnings Per Share and Dividends](index=31&type=section&id=Earnings%20Per%20Share%20and%20Dividends) For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.20, and the Group neither paid nor declared any interim dividends Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share (RMB) | 0.20 | 0.21 | | Profit Attributable to Ordinary Equity Holders of the Company for Basic EPS (RMB thousand) | 100,278 | 106,626 | | Weighted Average Number of Ordinary Shares (thousand shares) | 500,000 | 500,000 | - The Group did not pay or declare any dividends for the six months ended June 30, 2025 and 2024[95](index=95&type=chunk) [Asset Details](index=32&type=section&id=Asset%20Details) As of June 30, 2025, total right-of-use assets were RMB 62,335 thousand, with land use rights and buildings pledged for bank borrowings, property, plant and equipment net book value was RMB 1,236,592 thousand, construction in progress and buildings also pledged, intangible assets (computer software) net book value was RMB 2,532 thousand, financial assets at fair value through profit or loss totaled RMB 7,210 thousand, and trade and other receivables totaled RMB 7,782 thousand Right-of-Use Assets (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Land Use Rights | 61,413 | 62,278 | | Buildings | 922 | 1,190 | | **Total** | **62,335** | **63,468** | - Land use rights of approximately **RMB 3,385 thousand** have been pledged to secure bank borrowings of **RMB 234,790 thousand**[96](index=96&type=chunk) Property, Plant and Equipment Net Book Value (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 1,139,406 | 1,154,151 | | Construction in Progress | 47,318 | 23,890 | | **Total** | **1,236,592** | **1,236,249** | - Construction in progress and buildings of approximately **RMB 197,303 thousand** have been pledged to secure bank borrowings of **RMB 234,790 thousand**[99](index=99&type=chunk) Intangible Assets (Computer Software) Net Book Value (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Book Value | 2,532 | 2,935 | | Additions | 166 | 729 | | Amortization Expense | (443) | (358) | Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Listed Ordinary Share Investments (Non-current) | 2,045 | – | | Wealth Management Products (Current) | 5,165 | – | | **Total** | **7,210** | **–** | Trade and Other Receivables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,160 | 1,825 | | Other Receivables | 6,622 | 6,726 | | **Total** | **7,782** | **8,551** | [Prepayments and Payables](index=39&type=section&id=Prepayments%20and%20Payables) As of June 30, 2025, total prepayments were RMB 1,113 thousand, and total accruals and other payables were RMB 92,548 thousand, a decrease from RMB 134,236 thousand on December 31, 2024, mainly due to reduced payables for property, plant and equipment purchases and student sundry fees received Prepayments (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Student-related Prepayments and Other Expenses | 1,113 | 1,625 | | Prepayments for Purchase of Property, Plant and Equipment | 1,111 | 734 | | **Total** | **2,224** | **2,359** | | Less: Non-current Portion | (1,111) | (734) | | **Current Portion** | **1,113** | **1,625** | Accruals and Other Payables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Payables for Purchase of Property, Plant and Equipment | 32,269 | 62,643 | | Government Subsidies Payable to Students | 20,450 | 4,307 | | Student Sundry Fees Received | 12,657 | 27,959 | | Other Taxes Payable | 10,542 | 10,024 | | Accruals | 5,498 | 6,918 | | Salaries and Welfare Payable | 606 | 8,305 | | Others | 10,526 | 14,080 | | **Total** | **92,548** | **134,236** | [Borrowings and Commitments](index=40&type=section&id=Borrowings%20and%20Commitments) As of June 30, 2025, total borrowings were RMB 247,790 thousand, a decrease from December 31, 2024, with RMB 103,000 thousand due within one year, a weighted average effective interest rate of 3.17%, and borrowings primarily secured by land use rights, construction in progress, buildings, and corporate guarantees, with capital commitments of approximately RMB 11,985 thousand mainly related to property, plant and equipment Total Borrowings (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Borrowings | 103,000 | 120,000 | | Non-current Borrowings | 144,790 | 189,790 | | **Total Borrowings** | **247,790** | **309,790** | Borrowings Maturity Analysis (As of June 30) | Maturity Date | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within One Year | 103,000 | 120,000 | | One to Two Years | 84,631 | 80,000 | | Two to Five Years | 60,159 | 109,790 | | **Total** | **247,790** | **309,790** | - The weighted average effective interest rate was **3.17%** (December 31, 2024: **3.39%**)[109](index=109&type=chunk) - Long-term bank borrowings are secured by land use rights, construction in progress, buildings, and corporate guarantees[109](index=109&type=chunk) Capital Commitments (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 11,985 | 17,737 | - The total future minimum lease payments under non-cancellable operating leases amounted to **RMB 15 thousand** (December 31, 2024: **RMB 20 thousand**)[115](index=115&type=chunk) [Related Party Transactions and Contingent Liabilities](index=42&type=section&id=Related%20Party%20Transactions%20and%20Contingent%20Liabilities) The Group engaged in related party transactions for goods and services with companies controlled by its controlling shareholder, such as Chengdu Gingko Jingge Catering Co., Ltd., with total key management personnel compensation of RMB 1,310 thousand, and no significant contingent liabilities as of June 30, 2025 Related Party Transactions: Purchase of Goods and Services (Six Months Ended June 30) | Related Party | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Chengdu Gingko Jingge Catering Co., Ltd. | 158 | 3 | | Chengdu Gingko Catering Management Co., Ltd. | 104 | 4 | | Chengdu Gingko Hotel Management Co., Ltd. | 5 | 5 | | **Total** | **267** | **12** | Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Wages, Salaries and Bonuses | 1,090 | 1,063 | | Contributions to Pension Schemes | 81 | 92 | | Benefits, Medical and Other Expenses | 139 | 172 | | **Total** | **1,310** | **1,327** | - As of June 30, 2025, the Group had no significant contingent liabilities[120](index=120&type=chunk)

[UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=3&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, the company turned a loss into a profit of HK$2,537 thousand, compared to a loss of HK$6,000 thousand in the prior period, with revenue slightly up by 1.5% and gross profit margin significantly increasing to 53.6% Key Profit or Loss Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 18,961 | 18,676 | +1.5% | | Cost of sales | (8,793) | (14,723) | -40.3% | | Gross profit | 10,168 | 3,953 | +157.2% | | Other income, gains and losses | 37 | (6,137) | Turned loss into gain | | Selling and distribution expenses | (2,500) | (1,098) | +127.7% | | Administrative expenses | (5,167) | (2,718) | +90.1% | | Profit/(Loss) before income tax | 2,537 | (6,000) | Turned loss into profit | | Profit/(Loss) for the period | 2,537 | (6,000) | Turned loss into profit | | Basic earnings/(loss) per share (HK cents) | 1.72 | (4.07) | Turned loss into profit | - Gross profit margin significantly increased from approximately **21.1%** in the same period of 2024 to approximately **53.6%** in the first half of 2025[10](index=10&type=chunk)[85](index=85&type=chunk) - Selling and distribution expenses increased by **128%** year-on-year to **HK$2,500 thousand**, primarily due to increased marketing costs[10](index=10&type=chunk)[82](index=82&type=chunk)[86](index=86&type=chunk) - Administrative expenses increased by **90.1%** year-on-year to **HK$5,167 thousand**, mainly due to increased costs for developing AI and IT functionalities[10](index=10&type=chunk)[83](index=83&type=chunk)[87](index=87&type=chunk) [UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the company's total assets and total equity both increased, with non-current assets remaining stable, a significant rise in trade and other receivables, and a decrease in bank balances and cash Key Financial Position Data | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 17 | 23 | -26.1% | | Goodwill | 5,161 | 5,161 | 0% | | **Current assets** | | | | | Loans receivable | 9,968 | 9,531 | +4.6% | | Trade and other receivables | 46,228 | 32,727 | +41.2% | | Financial assets at fair value through profit or loss | 11,968 | 11,616 | +3.0% | | Bank balances and cash | 1,520 | 6,903 | -78.0% | | **Current liabilities** | | | | | Trade and other payables | 47,191 | 41,088 | +14.8% | | Tax liabilities | 85 | 85 | 0% | | **Equity** | | | | | Share capital | 5,902 | 5,902 | 0% | | Share premium and reserves | 21,684 | 18,886 | +14.8% | | Total equity | 27,586 | 24,788 | +11.3% | - Total assets increased from approximately **HK$65,961 thousand** as of December 31, 2024, to approximately **HK$74,862 thousand** as of June 30, 2025[16](index=16&type=chunk)[105](index=105&type=chunk) - Bank balances and cash significantly decreased by **78.0%**, from approximately **HK$6,903 thousand** to approximately **HK$1,520 thousand**[16](index=16&type=chunk)[105](index=105&type=chunk) [UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY](index=8&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, total equity increased from HK$24,788 thousand as of January 1, 2025, to HK$27,586 thousand, primarily driven by a profit of HK$2,537 thousand and positive movements in exchange reserves Key Equity Movement Data (For the six months ended June 30) | Indicator | January 1, 2025 (HK$ thousand) | Profit/(Loss) for the period (HK$ thousand) | Other comprehensive income/(expense) (HK$ thousand) | June 30, 2025 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 5,902 | – | – | 5,902 | | Share premium | 89,449 | – | – | 89,449 | | Capital reserve | 755 | – | – | 755 | | Share option reserve | – | – | – | – | | Capital redemption reserve | 11,690 | – | – | 11,690 | | Exchange reserve | (4,102) | – | 261 | (3,841) | | Retained profit/(loss) | (78,906) | 2,537 | – | (76,369) | | **Subtotal** | **24,788** | **2,537** | **261** | **27,586** | | Non-controlling interests | – | – | – | – | | **Total** | **24,788** | **2,537** | **261** | **27,586** | - Total comprehensive income for the period was **HK$2,798 thousand**, a significant improvement from a total comprehensive expense of **HK$6,990 thousand** in the prior period[19](index=19&type=chunk) - Exchange reserve improved from **(HK$4,102 thousand)** as of January 1, 2025, to **(HK$3,841 thousand)** as of June 30, 2025, with an exchange gain of **HK$261 thousand** generated during the period[19](index=19&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash used in operating activities decreased, and net cash used in investing activities also slightly declined, leading to a narrower net decrease in cash and cash equivalents Key Cash Flow Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (5,292) | (8,962) | -41.0% | | Net cash from/(used in) investing activities | (352) | (457) | -23.0% | | Net (decrease)/increase in cash and cash equivalents | (5,644) | (9,419) | -40.0% | | Effect of foreign exchange rate changes on cash balances | 261 | (990) | Turned loss into gain | | Cash and cash equivalents (end of period) | 1,520 | 10,713 | -85.8% | - Cash and cash equivalents at period-end significantly decreased by **85.8%**, from **HK$10,713 thousand** in the same period of 2024 to **HK$1,520 thousand**[23](index=23&type=chunk) [NOTES](index=11&type=section&id=NOTES) The notes detail the basis of preparation, accounting policies, revenue, segment information, taxation, EPS calculation, dividend policy, asset movements, receivables/payables, share capital, financial instrument fair value, related party transactions, key management compensation, other income, and post-reporting events, providing essential context for financial data [1. BASIS OF PREPARATION](index=11&type=section&id=1.%20BASIS%20OF%20PREPARATION) The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and GEM Listing Rules Chapter 18, unaudited by the company's auditors, and may be subject to adjustments during the annual audit - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and Chapter 18 of the GEM Listing Rules[24](index=24&type=chunk)[28](index=28&type=chunk) - The financial statements have not been reviewed by the company's auditors and may be subject to adjustments during the annual audit[25](index=25&type=chunk)[28](index=28&type=chunk) [2. PRINCIPAL ACCOUNTING POLICIES](index=11&type=section&id=2.%20PRINCIPAL%20ACCOUNTING%20POLICIES) The Group's financial statements are prepared under the historical cost convention, except for financial instruments measured at fair value, with principal accounting policies consistent with the 2024 annual financial statements and new HKFRS amendments effective January 1, 2025, adopted without significant impact on financial performance or position - The financial statements are prepared under the historical cost convention, with certain financial instruments measured at fair value[26](index=26&type=chunk)[29](index=29&type=chunk) - New and revised Hong Kong Financial Reporting Standards effective January 1, 2025, have been adopted but have not resulted in significant changes to financial performance or position[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) [3. REVENUE](index=12&type=section&id=3.%20REVENUE) For the six months ended June 30, 2025, the Group's total revenue was HK$18,961 thousand, a slight increase from HK$18,676 thousand in the prior period, with financial magazines and other media business remaining the primary source and securities investment contributing new revenue Revenue Analysis (For the six months ended June 30) | Business Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Travel media | 350 | 240 | +45.8% | | Financial magazines and other media business | 17,822 | 18,000 | -1.0% | | Securities investment | 353 | – | New | | Money lending | 436 | 436 | 0% | | Virtual reality | – | – | 0% | | **Total** | **18,961** | **18,676** | **+1.5%** | [4. SEGMENT INFORMATION](index=13&type=section&id=4.%20SEGMENT%20INFORMATION) The Group currently has four reportable segments: travel media business, financial magazines and other media business, securities investment, and money lending, with the virtual reality business deregistered in February 2025; financial magazines and other media is the primary revenue and profit contributor, and the Group's operations and employees are mainly in Singapore and Hong Kong, with revenue primarily from Hong Kong - The Group has four reportable segments: travel media business, financial magazines and other media business, securities investment, and money lending business[32](index=32&type=chunk)[35](index=35&type=chunk) - The virtual reality business was deregistered on February 8, 2025, and contributed no revenue during the period[100](index=100&type=chunk)[104](index=104&type=chunk) Segment Revenue and Profit (For the six months ended June 30) | Business Segment | 2025 Revenue (HK$ thousand) | 2025 Profit/(Loss) (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2024 Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Travel media business | 350 | 168 | 240 | 26 | | Financial magazines and other media business | 17,822 | 4,216 | 18,000 | 1,274 | | Securities investment | 353 | 351 | – | – | | Money lending | 436 | (76) | 436 | (493) | | Virtual reality | – | – | – | (2) | | **Total Reportable Segments** | **18,961** | **4,659** | **18,676** | **805** | - The Group's operations and employees are primarily located in Singapore and Hong Kong, with all revenue from external customers originating from Hong Kong[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [5. INCOME TAX](index=16&type=section&id=5.%20INCOME%20TAX) For the six months ended June 30, 2025, no Hong Kong profits tax provision was made due to the absence of assessable profits, with the standard tax rate at 16.5% and a two-tiered system applying 8.25% to the first HK$2 million of assessable profits - No Hong Kong profits tax provision was made for the period ended June 30, 2025, as no assessable profits arose[44](index=44&type=chunk)[47](index=47&type=chunk) - Hong Kong profits tax rate is **16.5%**, with a two-tiered profits tax regime applying **8.25%** to the first **HK$2 million** of assessable profits since the 2018/2019 year of assessment[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) [6. PROFIT/(LOSS) FOR THE PERIOD](index=17&type=section&id=6.%20PROFIT%2F%28LOSS%29%20FOR%20THE%20PERIOD) The calculation of profit (previously loss) for the period accounts for depreciation, staff costs, and net exchange gains, notably showing a significant year-on-year decrease in staff costs and a shift from net exchange loss to gain Profit/(Loss) for the Period Calculation Items (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 5 | 241 | -97.9% | | Staff costs (including directors' emoluments) | 572 | 1,584 | -63.9% | | Net exchange (gain)/loss | (37) | (205) | Turned loss into gain | | Bank interest income | – | 1 | -100% | - Staff costs (including directors' emoluments) significantly decreased by **63.9%** year-on-year, from **HK$1,584 thousand** to **HK$572 thousand**[49](index=49&type=chunk) - Net exchange difference turned from a loss of **HK$205 thousand** in the same period of 2024 to a gain of **HK$37 thousand** in the same period of 2025[49](index=49&type=chunk) [7. EARNINGS/(LOSS) PER SHARE](index=18&type=section&id=7.%20EARNINGS%2F%28LOSS%29%20PER%20SHARE) For the six months ended June 30, 2025, the company's basic and diluted earnings per share were **1.72 HK cents**, a significant improvement from a loss per share of **4.07 HK cents** in the prior period, with the weighted average number of ordinary shares outstanding remaining unchanged Earnings/(Loss) Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit/(Loss) for the purpose of calculating basic earnings/(loss) per share | 2,537 | (6,000) | | Weighted average number of ordinary shares (thousand shares) | 147,541 | 147,541 | | Basic earnings/(loss) per share (HK cents) | 1.72 | (4.07) | - The weighted average number of ordinary shares outstanding remained unchanged at **147,541 thousand shares** for both reporting periods[53](index=53&type=chunk) [8. DIVIDEND](index=19&type=section&id=8.%20DIVIDEND) The Board does not recommend the payment of an interim dividend for the six-month period (2024: nil) - The Board does not recommend the payment of an interim dividend for the six-month period (2024: nil)[54](index=54&type=chunk)[55](index=55&type=chunk) [9. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT](index=19&type=section&id=9.%20MOVEMENTS%20IN%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) During the six-month period, the Group made no new acquisitions of computer equipment, resulting in zero total additions to property, plant, and equipment - The cost of computer equipment acquired by the Group during the six-month period was **nil** (2024: nil)[54](index=54&type=chunk)[55](index=55&type=chunk) - Total additions to property, plant and equipment during the six-month period were **nil** (2024: nil)[54](index=54&type=chunk)[55](index=55&type=chunk) [10. ACCOUNTS AND OTHER RECEIVABLES](index=20&type=section&id=10.%20ACCOUNTS%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, net trade and other receivables increased to HK$46,228 thousand, a 41.2% rise from December 31, 2024, with the largest portion comprising amounts over 180 days but within one year Ageing Analysis of Trade and Other Receivables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 90 days | 8,895 | 6,297 | | 91-120 days | 2,910 | 2,060 | | 121-180 days | 5,821 | 4,121 | | Over 180 days but within one year | 28,602 | 20,249 | | **Total** | **46,228** | **32,727** | - The Group's transactions with customers are primarily on credit, with credit terms generally ranging from **1 to 3 months**, extendable up to **12 months** for major customers[58](index=58&type=chunk) - The Group maintains strict control over trade receivables, implements credit control policies to mitigate risks, and regularly reviews overdue balances for impairment loss provisions[58](index=58&type=chunk) [11. ACCOUNT AND OTHER PAYABLES](index=21&type=section&id=11.%20ACCOUNT%20AND%20OTHER%20PAYABLES) As of June 30, 2025, trade and other payables increased to HK$47,191 thousand, a 14.8% rise from December 31, 2024, with the largest portion comprising amounts over 180 days but within one year Ageing Analysis of Trade and Other Payables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 90 days | 6,007 | 5,230 | | 91-180 days | 6,008 | 5,231 | | Over 180 days but within one year | 35,176 | 30,627 | | **Total** | **47,191** | **41,088** | [12. SHARE CAPITAL](index=21&type=section&id=12.%20SHARE%20CAPITAL) As of June 30, 2025, the company's authorized share capital was HK$500,000 thousand, with 147,540,930 issued and fully paid shares at HK$0.04 par value each, totaling HK$5,902 thousand, unchanged from December 31, 2024 Share Capital Structure | Indicator | June 30, 2025 (number of shares) | December 31, 2024 (number of shares) | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized share capital (HK$0.04 per share) | 12,500,000,000 | 12,500,000,000 | 500,000 | 500,000 | | Issued and fully paid share capital (HK$0.04 per share) | 147,540,930 | 147,540,930 | 5,902 | 5,902 | [13. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS](index=22&type=section&id=13.%20FAIR%20VALUE%20MEASUREMENTS%20OF%20FINANCIAL%20INSTRUMENTS) The Group's available-for-sale financial assets, primarily unlisted private equity funds, are recognized at cost less impairment due to an excessively wide range of fair value estimates, while other financial assets and liabilities recorded at amortized cost have carrying amounts approximating their fair values - Available-for-sale financial assets (unlisted private equity funds) are recognized at cost less impairment, as their fair value cannot be reliably measured due to an excessively wide range of estimates[62](index=62&type=chunk)[65](index=65&type=chunk) - The carrying amounts of financial assets and financial liabilities recorded at amortized cost approximate their fair values[63](index=63&type=chunk)[65](index=65&type=chunk) [14. RELATED PARTY TRANSACTIONS](index=22&type=section&id=14.%20RELATED%20PARTY%20TRANSACTIONS) During the six-month period, the Group had no related party transactions - During the six-month period, the Group had no related party transactions[64](index=64&type=chunk)[66](index=66&type=chunk) [15. COMPENSATION OF KEY MANAGEMENT PERSONNEL](index=22&type=section&id=15.%20COMPENSATION%20OF%20KEY%20MANAGEMENT%20PERSONNEL) For the six months ended June 30, 2025, total compensation for key management personnel (including directors and four employees) was HK$432 thousand, a decrease from HK$532 thousand in the prior period Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Short-term benefits | 372 | 472 | | Contributions to retirement benefit schemes | 60 | 60 | | **Total** | **432** | **532** | - Key management personnel compensation is determined by the Remuneration Committee based on individual performance and market trends[68](index=68&type=chunk) [16. OTHER INCOME, GAINS AND LOSSES](index=23&type=section&id=16.%20OTHER%20INCOME%2C%20GAINS%20AND%20LOSSES) For the six-month period, other income, gains, and losses amounted to a gain of approximately HK$37 thousand, a significant improvement from a loss of approximately HK$6,137 thousand in the prior period - For the six-month period, other income, gains and losses amounted to a gain of approximately **HK$37 thousand** (2024: loss of approximately **HK$6,137 thousand**)[69](index=69&type=chunk)[72](index=72&type=chunk) [17. EVENT SUBSEQUENT TO THE END OF REPORTING PERIOD](index=23&type=section&id=17.%20EVENT%20SUBSEQUENT%20TO%20THE%20END%20OF%20REPORTING%20PERIOD) Subsequent to the reporting period, the Board proposed a rights issue of up to 221,311,395 rights shares at HK$0.08 per share on a three-for-two basis, expecting to raise approximately HK$17.7 million gross (HK$16.5 million net) on a non-underwritten basis; additionally, an EGM will be held on September 12, 2025, and the Nomination Committee's terms of reference have been updated - The Board proposed a rights issue of up to **221,311,395** rights shares at a subscription price of **HK$0.08** per share on the basis of three rights shares for every two shares held[71](index=71&type=chunk)[73](index=73&type=chunk) - The rights issue is expected to raise gross proceeds of approximately **HK$17.7 million** (net proceeds of approximately **HK$16.5 million** after expenses) and will be conducted on a non-underwritten basis[71](index=71&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - The company will arrange for the placing agent to place unsubscribed rights shares and unsold rights shares of excluded shareholders to independent placees on a best-effort basis[75](index=75&type=chunk)[76](index=76&type=chunk) - The company will hold an extraordinary general meeting on Friday, September 12, 2025, at 11:00 a.m.[78](index=78&type=chunk)[80](index=80&type=chunk) - The terms of reference for the Nomination Committee have been updated and published on the company's and HKEX websites[78](index=78&type=chunk)[80](index=80&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=26&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section reviews the Group's financial results and business performance for the six-month period, covering revenue, gross profit, expenses, segment operations, and discusses financial position, capital structure, liquidity, exchange rate risk, significant investments, and future outlook [RESULTS](index=26&type=section&id=RESULTS) The Group achieved a turnaround to a profit of HK$2,537 thousand for the six-month period, with revenue slightly up by 1.5% driven by travel media business growth, gross profit margin significantly increasing to 53.6%, and both selling/distribution and administrative expenses rising sharply due to marketing and AI/IT development costs - Revenue for the six-month period was approximately **HK$18,961 thousand**, an increase of approximately **1.5%** compared to the same period in 2024, primarily due to increased revenue from the travel media business[81](index=81&type=chunk)[84](index=84&type=chunk) - Gross profit margin increased from approximately **21.1%** in the same period of 2024 to approximately **53.6%**[81](index=81&type=chunk)[85](index=85&type=chunk) - Selling and distribution expenses increased by approximately **128%** to **HK$2,500 thousand**, mainly due to increased marketing costs[82](index=82&type=chunk)[86](index=86&type=chunk) - Administrative expenses increased by approximately **90.1%** to **HK$5,167 thousand**, mainly due to increased costs for developing artificial intelligence and information technology functionalities[83](index=83&type=chunk)[87](index=87&type=chunk) - Profit for the period attributable to owners of the company was approximately **HK$2,537 thousand**, compared to a loss of approximately **HK$6,000 thousand** in the same period of 2024[89](index=89&type=chunk)[93](index=93&type=chunk) [BUSINESS REVIEW](index=27&type=section&id=BUSINESS%20REVIEW) The Group's travel media business revenue grew by 45.8% and recorded segment profit, financial magazines and other media business remained the primary revenue source, securities investment market value increased, money lending revenue was stable but recorded a segment loss, and the virtual reality business was deregistered with no further revenue - Travel media business revenue was approximately **HK$350 thousand**, a year-on-year increase of **45.8%**, accounting for approximately **1.8%** of the Group's total revenue, and recorded a segment profit of approximately **HK$168 thousand**; the Group plans to reallocate more resources to more profitable segments[90](index=90&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Financial magazines and other media business revenue was approximately **HK$17,822 thousand**, contributing **94%** of the Group's total revenue, with a segment profit of **HK$4,216 thousand**; the Group focuses on expanding advertising business on digital platforms and other media channels[96](index=96&type=chunk)[97](index=97&type=chunk)[101](index=101&type=chunk) - As of June 30, 2025, the total market value of investments held for trading in securities was approximately **HK$12 million** (2024: **HK$6.4 million**)[98](index=98&type=chunk)[102](index=102&type=chunk) - Money lending business revenue was approximately **HK$436 thousand**, accounting for approximately **2.3%** of the Group's total revenue[99](index=99&type=chunk)[103](index=103&type=chunk) - The virtual reality business generated no revenue during the six-month period, and its wholly-owned subsidiary was deregistered on February 8, 2025[100](index=100&type=chunk)[104](index=104&type=chunk) [FINANCIAL REVIEW](index=29&type=section&id=FINANCIAL%20REVIEW) The Group's liquidity primarily stems from internal cash flow, with both total equity and assets increasing, maintaining a stable capital structure without asset pledges; no fundraising activities occurred during the period, and while most assets and liabilities are denominated in SGD and HKD, management continues to monitor foreign currency risk, with no significant contingent liabilities, growing trading investments (none exceeding 5% of total assets), and stable employee numbers - The Group generally funds its operations through internally generated cash flows[105](index=105&type=chunk)[107](index=107&type=chunk) - As of June 30, 2025, total equity was approximately **HK$27,586 thousand** (December 31, 2024: **HK$24,788 thousand**), and total assets were approximately **HK$74,862 thousand** (December 31, 2024: **HK$65,961 thousand**)[105](index=105&type=chunk)[107](index=107&type=chunk) - As of June 30, 2025, the Group's consolidated net assets were **HK$27.6 million**, an increase of approximately **HK$2.8 million** from 2024[106](index=106&type=chunk)[108](index=108&type=chunk) - There were no fundraising activities or asset pledges during the six-month period[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Most of the Group's assets, liabilities, and business transactions are denominated in Singapore Dollars and Hong Kong Dollars; no hedging was undertaken during the six-month period, and management will continue to closely monitor foreign currency risk[111](index=111&type=chunk)[115](index=115&type=chunk) - As of June 30, 2025, investments held for trading had a market value of **HK$11,968 thousand**, representing **16%** of total assets, with a fair value gain of **HK$353 thousand** during the period, and no single investment exceeding **5%** of total assets[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - As of June 30, 2025, the Group had **27** full-time employees across Hong Kong, China, and Singapore, consistent with 2024[120](index=120&type=chunk)[123](index=123&type=chunk) [OUTLOOK](index=32&type=section&id=OUTLOOK) The Group remains committed to enhancing operational efficiency and profitability, actively seeking opportunities to expand its customer base and market share, and undertaking more projects that enhance shareholder value - The Group will continue to focus on improving business operational efficiency and profitability[121](index=121&type=chunk)[124](index=124&type=chunk) - The Group will actively seek opportunities to expand its customer base and market share, undertaking more projects to enhance shareholder value[121](index=121&type=chunk)[124](index=124&type=chunk) [INTERESTS AND SHORT POSITIONS OF DIRECTORS AND CHIEF EXECUTIVE IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS](index=33&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20DIRECTORS%20AND%20CHIEF%20EXECUTIVE%20IN%20THE%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY%20AND%20ITS%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, Executive Director Mr. Wang Tao held a long position in 2,119,950 share options of the company, representing 1.44% of the issued share capital; no other directors or chief executives held disclosable interests or short positions in the company's or its associated corporations' shares, underlying shares, or debentures Directors' Long Positions in the Company's Shares | Name | Capacity | Long/Short Position | Equity Derivatives (Share Options) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Wang Tao | Beneficial owner | Long position | 2,119,950 | 1.44% | - The relevant percentage is calculated with reference to the **147,540,930 shares** in issue as at June 30, 2025[127](index=127&type=chunk)[133](index=133&type=chunk) - Save as disclosed, no other directors had any disclosable interests or short positions in the shares, underlying shares or debentures of the company or any of its associated corporations[128](index=128&type=chunk)[129](index=129&type=chunk) [INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY](index=35&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20SUBSTANTIAL%20SHAREHOLDERS%20IN%20THE%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) As of June 30, 2025, substantial shareholder Mr. Niu Chengjun held a long position in 22,336,184 shares of the company, representing 15.14% of the issued share capital; no other substantial shareholders held disclosable interests or short positions in the company's shares or underlying shares Substantial Shareholders' Long Positions in the Company's Shares | Name | Number of Shares | Number of Underlying Shares | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Niu Chengjun | 22,336,184 (L) | – | 15.14% (L) | - The relevant percentage is calculated with reference to the **147,540,930 shares** in issue as at June 30, 2025[133](index=133&type=chunk) - Save as disclosed, no other person (other than directors and chief executive) had informed the company of any disclosable interests or short positions in the shares or underlying shares[133](index=133&type=chunk)[134](index=134&type=chunk) [PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=36&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY%27S%20LISTED%20SECURITIES) During the six-month period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six-month period, neither the company nor any of its subsidiaries purchased, sold or redeemed any of the company's listed securities[135](index=135&type=chunk)[139](index=139&type=chunk) [COMPETING INTERESTS](index=36&type=section&id=COMPETING%20INTERESTS) During the six-month period, the Board was unaware of any business or interest of any director or their close associates that competed or might compete with the Group's business, nor any other conflicts of interest - During the six-month period, the Board was not aware of any business or interest of any director or their close associates that competed or might compete with the Group's business[136](index=136&type=chunk)[140](index=140&type=chunk) - The Board was also not aware of any other conflicts of interest that any such persons had or might have with the Group[136](index=136&type=chunk)[140](index=140&type=chunk) [SECURITIES TRANSACTIONS BY DIRECTORS](index=36&type=section&id=SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The company has adopted the required standard of dealings in securities as set out in the GEM Listing Rules, and all directors confirmed compliance or no non-compliance during the six-month period upon specific enquiry - The company has adopted the required standard of dealings in securities as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[137](index=137&type=chunk)[141](index=141&type=chunk) - All directors confirmed compliance with the required standard of dealings or no non-compliance during the six-month period[137](index=137&type=chunk)[141](index=141&type=chunk) [CORPORATE GOVERNANCE CODE COMPLIANCE](index=36&type=section&id=CORPORATE%20GOVERNANCE%20CODE%20COMPLIANCE) The company is committed to good corporate governance, emphasizing a high-quality board, sound internal controls, and enhanced transparency and accountability, having adopted and complied with the Corporate Governance Code provisions in Appendix C1 of the GEM Listing Rules during the reporting period - The company believes that good corporate governance is crucial for effective management, a healthy corporate culture, sustainable business growth, and enhancing shareholder value[138](index=138&type=chunk)[142](index=142&type=chunk) - The company's corporate governance principles emphasize a high-quality board, sound internal controls, and enhanced transparency and accountability[138](index=138&type=chunk)[142](index=142&type=chunk) - During the reporting period, the company adopted and complied with the code provisions of the Corporate Governance Code as set out in Appendix C1 to the GEM Listing Rules[143](index=143&type=chunk)[145](index=145&type=chunk) [AUDIT COMMITTEE](index=37&type=section&id=AUDIT%20COMMITTEE) The Audit Committee has reviewed the accounting principles and practices adopted by the Group, as well as the unaudited condensed consolidated financial statements for the six-month period - The Audit Committee has reviewed the accounting principles and practices adopted by the Group, as well as the unaudited condensed consolidated financial statements for the six-month period[144](index=144&type=chunk)[146](index=146&type=chunk)

2025 目錄 | 公司資料 | 2 | | --- | --- | | 簡明綜合損益表 | 3 | | 簡明綜合損益及其他全面收益表 | 4 | | 簡明綜合財務狀況報表 | 5 | | 簡明綜合權益變動表 | 7 | | 簡明綜合現金流量報表 | 8 | | 簡明綜合財務報表附註 | 9 | | 管理層討論及分析 | 22 | | 權益披露 | 25 | | 企業管治 | 30 | | 其他資料 | 31 | 目錄 公司資料 董事會 執行董事 李朝波先生 （主席兼行政總裁） 季加銘先生 非執行董事 張貴卿先生 獨立非執行董事 吳志豪先生 郭堅華先生 鄺美雲女士 審核委員會 吳志豪先生 （委員會主席） 郭堅華先生 鄺美雲女士 薪酬委員會 郭堅華先生 （委員會主席） 吳志豪先生 鄺美雲女士 提名委員會 郭堅華先生 （委員會主席） 吳志豪先生 鄺美雲女士 公司秘書 陳愷賢先生 公司授權代表 李朝波先生 （主席） 陳愷賢先生 核數師 天健國際會計師事務所有限公司 執業會計師 網址 www.city-infrastructure.com 註冊辦事處 Cricket Square Hutchins Drive P.O ...

Company Information This section provides an overview of the company's governance structure, board composition, and essential contact and registration details [Board and Committee Composition](index=3&type=section&id=Board%20and%20Committee%20Composition) The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - Executive Directors include **Lam Ka Ming (Chairman)**, **Fong Po Kiu**, and **Wong Yee Ting**[4](index=4&type=chunk) - Independent Non-Executive Directors include **Chu Chung Yee (Audit Committee Chairman)**, **Cheng Tak Chung**, and **Ma Siu Shun (Remuneration Committee Chairman)**[4](index=4&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=Company%20Contact%20and%20Registration%20Information) The company is registered in the Cayman Islands, with its principal place of business in Hong Kong, and is listed on the Hong Kong Stock Exchange under stock code 1362 - The company's registered office is in the Cayman Islands, with its principal place of business at Room 3118, 1 Hung To Road, Kwun Tong, Kowloon, Hong Kong[4](index=4&type=chunk) - The company's stock code is **1362**, and investor information is available at www.sismobile.com.hk[5](index=5&type=chunk) Chairman's Statement The Chairman's statement reviews business performance, outlines future strategies amidst market challenges, and expresses gratitude to stakeholders [Business Review](index=4&type=section&id=Business%20Review) Despite a challenging consumer environment in Hong Kong's mobile phone sector, the company's turnover increased by **21%** year-on-year, but significant pressure on gross profit margin led to a **36% decline in gross profit**, resulting in a net loss of **HKD 3,297,000** compared to a net profit of HKD 4,140,000 in the prior period - Turnover increased by **21%** compared to the same period last year, demonstrating the company's ability to drive sales and maintain market share in a challenging consumer environment[7](index=7&type=chunk) - Significant pressure on gross profit margin led to a **36% decline in gross profit**[7](index=7&type=chunk) Net Profit Comparison for the Period | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Profit | Loss of 3,297,000 HKD | Profit of 4,140,000 HKD | [Outlook](index=4&type=section&id=Outlook) Facing a continued sluggish consumer outlook in Hong Kong, intensified competition from Mainland brands, and shifting consumer behavior, the company is actively reviewing its cost structure, optimizing inventory management, and exploring new revenue streams and business models to address these challenges - Hong Kong's consumer outlook remains sluggish, primarily due to intense competition from Mainland brands and consumers' preference for value-oriented purchases and longer replacement cycles[8](index=8&type=chunk) - The company is actively re-evaluating its cost structure, enhancing operational flexibility, and exploring new product categories or business models[9](index=9&type=chunk) [Acknowledgements](index=5&type=section&id=Acknowledgements) The Chairman extends gratitude to employees, customers, business partners, and shareholders for their support, committing to continuous strategy adjustments to create shareholder value - The Chairman expresses gratitude to employees, customers, business partners, and shareholders for their continued support and trust[10](index=10&type=chunk) - The company remains committed to creating value for shareholders and adapting strategies to market changes[10](index=10&type=chunk) Condensed Consolidated Financial Statements This section presents the condensed consolidated financial statements, including the income statement, balance sheet, statement of changes in equity, and cash flow statement [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue increased by **20.6%**, but a substantial rise in cost of sales led to a **35.8% decrease in gross profit**, ultimately resulting in a loss of **3,297,000 HKD** compared to a profit in the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 567,357 | 470,383 | | Cost of Sales | (550,797) | (444,574) | | Gross Profit | 16,560 | 25,809 | | (Loss) Profit Before Tax | (3,199) | 5,449 | | (Loss) Profit for the Period | (3,297) | 4,140 | | (Loss) Earnings Per Share — Basic and Diluted (HK cents) | (1.18) | 1.47 | - The net loss for the period was **3,297,000 HKD**, compared to a net profit of 4,140,000 HKD in the prior period[13](index=13&type=chunk) - Basic and diluted loss per share was **1.18 HK cents**, compared to a profit of 1.47 HK cents in the prior period[13](index=13&type=chunk) [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased, but net current assets and net assets both decreased, primarily due to increased inventories and a significant rise in trade payables Condensed Consolidated Statement of Financial Position (As at June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current assets | 23,250 | 25,400 | | Current assets | 194,805 | 179,255 | | Current liabilities | 48,133 | 27,616 | | Net current assets | 146,672 | 151,639 | | Net assets | 166,907 | 170,980 | - Inventories increased from **15,231,000 HKD** as of December 31, 2024, to **31,013,000 HKD** as of June 30, 2025[14](index=14&type=chunk) - Trade payables, other payables, and accruals increased from **23,127,000 HKD** as of December 31, 2024, to **40,815,000 HKD** as of June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the total equity attributable to owners of the company decreased from **170,980,000 HKD** at the beginning of the period to **166,907,000 HKD**, primarily due to the loss for the period and dividend distribution Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total at beginning of period | 170,980 | 163,316 | | (Loss) Profit for the period | (3,297) | 4,140 | | Total comprehensive (loss) income | 127 | 5,206 | | Dividends recognised as distribution | (4,200) | (4,200) | | Total at end of period | 166,907 | 164,322 | - The company recorded a loss of **3,297,000 HKD** for the period, compared to a profit of 4,140,000 HKD in the prior period[15](index=15&type=chunk) - Dividends recognized as distribution for the period amounted to **4,200,000 HKD**, consistent with the prior period[15](index=15&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company generated net cash of **2,311,000 HKD** from operating activities, a significant improvement from the net cash outflow in the prior period, with bank balances and cash increasing to **82,543,000 HKD** at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net cash generated from (used in) operating activities | 2,311 | (22,483) | | Net cash generated from investing activities | 992 | 1,524 | | Net cash used in financing activities | (1,802) | (1,254) | | Net increase (decrease) in cash and cash equivalents | 1,501 | (22,213) | | Cash and cash equivalents at end of period | 82,543 | 88,285 | - Cash flow from operating activities improved from a net outflow of **22,483,000 HKD** in the prior period to a net inflow of **2,311,000 HKD**[16](index=16&type=chunk) - Bank balances and cash at period-end amounted to **82,543,000 HKD**, an increase from **81,042,000 HKD** at the beginning of the year[16](index=16&type=chunk) Notes to the Condensed Consolidated Financial Statements This section details the basis of preparation, accounting policies, segment reporting, tax, earnings per share, asset changes, and analyses of receivables, payables, share capital, and related party transactions [Basis of Preparation and Accounting Policies](index=10&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Hong Kong Stock Exchange Listing Rules, adopting the same accounting policies as the previous year, with no significant impact from newly applied standards this period - The condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34** and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[17](index=17&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during the current period had **no significant impact** on the Group's financial position and performance in current and prior periods[18](index=18&type=chunk) [Segment Reporting and Revenue Recognition](index=11&type=section&id=Segment%20Reporting%20and%20Revenue%20Recognition) The Group primarily engages in the distribution and retail of mobile phones and related products in Hong Kong, with revenue mainly derived from the sale of goods, and no detailed segment reporting is presented due to a lack of separate financial information - The Group primarily engages in the distribution and retail of mobile phones and related products in Hong Kong[19](index=19&type=chunk) - Revenue represents the net amounts received and receivable from the sale of goods generated from the distribution and retail of mobile phones and related products[20](index=20&type=chunk) [(Loss) Profit Before Tax and Income Tax Expense](index=12&type=section&id=(Loss)%20Profit%20Before%20Tax%20and%20Income%20Tax%20Expense) The loss before tax for the period was **3,199,000 HKD**, primarily influenced by increased inventory costs and depreciation expenses, with an income tax expense of **98,000 HKD** (Loss) Profit Before Tax Key Components | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | (Loss) Profit Before Tax | (3,199) | 5,449 | | Cost of inventories recognised as an expense | 550,797 | 444,574 | | Depreciation of right-of-use assets | 1,677 | 1,149 | | Interest income from bank deposits | (630) | (1,274) | Income Tax Expense | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 98 | 1,309 | [(Loss) Earnings Per Share and Dividends](index=13&type=section&id=(Loss)%20Earnings%20Per%20Share%20and%20Dividends) Basic and diluted loss per share for the period was **1.18 HK cents**, and the directors do not recommend an interim dividend - Basic and diluted loss per share was **1.18 HK cents**, compared to a profit of 1.47 HK cents in the prior period[24](index=24&type=chunk) - For the six months ended June 30, 2025, the directors do not recommend the payment of an interim dividend[25](index=25&type=chunk) [Asset Changes and Investments](index=13&type=section&id=Asset%20Changes%20and%20Investments) Additions to property, plant and equipment decreased this period, while the total fair value of equity instruments at fair value through other comprehensive income increased by **24.2%** Additions to Property, Plant and Equipment | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Additions | 38,000 | 75,000 | Equity Instruments at Fair Value Through Other Comprehensive Income | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total | 17,541 | 14,117 | [Analysis of Trade and Other Receivables and Payables](index=14&type=section&id=Analysis%20of%20Trade%20and%20Other%20Receivables%20and%20Payables) As of June 30, 2025, total trade receivables amounted to **21,464,000 HKD**, and total trade payables were **27,740,000 HKD**, with a significant increase in trade payables due within 30 days Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Within 30 days | 15,181 | 19,254 | | Total Trade Receivables | 21,464 | 25,418 | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Within 30 days | 21,726 | 5,806 | | Total Trade Payables | 27,740 | 11,785 | - Total trade payables significantly increased from **11,785,000 HKD** as of December 31, 2024, to **27,740,000 HKD** as of June 30, 2025[30](index=30&type=chunk)[31](index=31&type=chunk) [Share Capital and Related Party Transactions](index=15&type=section&id=Share%20Capital%20and%20Related%20Party%20Transactions) The company's share capital remained unchanged, related party rental payments increased this period, and some lease contracts were terminated and restructured as short-term leases Share Capital Information | Metric | Number of Ordinary Shares | Par Value (Thousand HKD) | | :--- | :--- | :--- | | Authorised Share Capital | 500,000,000 | 50,000 | | Issued and Fully Paid Share Capital | 280,000,000 | 28,000 | Related Party Rental Payments | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Office and warehouse rental | 1,575,000 | 1,415,000 | - As of June 30, 2025, no right-of-use assets or lease liabilities were recognized as the relevant lease contracts were terminated and restructured as short-term leases at prevailing market rates[32](index=32&type=chunk) Interim Dividend This section addresses the Board's recommendation regarding the interim dividend for the period [Interim Dividend Recommendation](index=17&type=section&id=Interim%20Dividend%20Recommendation) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[33](index=33&type=chunk) Management Discussion and Analysis This section provides management's discussion and analysis of the company's liquidity, financial resources, employee information, capital expenditures, significant investments, and risk management strategies [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group maintained a current ratio of approximately **4.0** and a net cash surplus of **82,543,000 HKD**, indicating a healthy liquidity position with no bank borrowings Liquidity Position | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 218,055,000 HKD | - | | Total Equity | 166,907,000 HKD | - | | Total Liabilities | 51,148,000 HKD | - | | Current Ratio | Approx. 4.0 | Approx. 6.5 | | Bank Balances and Cash | 82,543,000 HKD | 81,042,000 HKD | - The Group's working capital requirements are primarily met by internal resources and short-term bank borrowings, but there were **no bank borrowings** as of June 30, 2025[34](index=34&type=chunk) [Number of Employees and Remuneration](index=17&type=section&id=Number%20of%20Employees%20and%20Remuneration) As of June 30, 2025, the Group's employee count increased to **54**, while salaries and other benefits expenses slightly decreased, maintaining a remuneration policy that includes discretionary bonuses based on performance appraisals Number of Employees and Remuneration | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Employees | 54 | 51 | | Salaries and other benefits (excluding directors' emoluments) | 10,262,000 HKD | 10,886,000 HKD | - The employee remuneration policy remained largely unchanged from the previous year, with employees receiving discretionary bonuses based on performance appraisals, in addition to MPF contributions and medical insurance[36](index=36&type=chunk) [Capital Expenditure and Significant Investments](index=17&type=section&id=Capital%20Expenditure%20and%20Significant%20Investments) Capital expenditure decreased this period, while long-term listed securities investments appreciated by **24%**, generating a fair value gain of **3,424,000 HKD** and dividend income of **400,000 HKD** Capital Expenditure | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 38,000 | 75,000 | - The Group's listed securities appreciated by **24%** for the six months ended June 30, 2025, with a fair value gain of **3,424,000 HKD** recognized in other comprehensive income[38](index=38&type=chunk) Significant Investment Portfolio (As of June 30, 2025) | Share Name | Fair Value (Thousand HKD) | Percentage of Total Assets | Fair Value Gain Recognised in Investment Reserve for the Period (Thousand HKD) | | :--- | :--- | :--- | :--- | | Nutanix Inc. (NTNX.US) | $6,844 | 3.1% | $1,366 | | AIA Group Limited (1299.HK) | $1,760 | 0.8% | $352 | | China Construction Bank Corporation (939.HK) | $2,376 | 1.1% | $432 | | Hang Seng Bank Limited (11.HK) | $1,764 | 0.8% | $331 | | HSBC Holdings plc (5.HK) | $3,625 | 1.7% | $731 | | HKT Trust and HKT Limited (6823.HK) | $1,172 | 0.5% | $212 | | **Total** | **$17,541** | **8.0%** | **$3,424** | [Risk Management](index=18&type=section&id=Risk%20Management) The Group anticipates no significant currency risk between USD and HKD, currently has no currency hedging policy, and holds no material contingent liabilities or guarantees - As the Hong Kong Dollar is pegged to the US Dollar, the Group's management anticipates **no significant currency risk** between the US Dollar and the Hong Kong Dollar[40](index=40&type=chunk) - The Group currently has **no currency hedging policy** and holds no derivative financial instruments[40](index=40&type=chunk) - As of June 30, 2025, the Group had **no material contingent liabilities or guarantees**[41](index=41&type=chunk) Other Information This section provides additional information on directors' and major shareholders' interests, corporate governance practices, and transactions involving listed securities [Directors' Interests in Shares](index=19&type=section&id=Directors'%20Interests%20in%20Shares) As of June 30, 2025, several directors held interests in the shares of the company and its associated corporation, New Dragon International, with Chairman Lam Ka Ming holding **73.42%** of the company's issued share capital Directors' Long Position in the Company's Ordinary Shares (As of June 30, 2025) | Director Name | Total Number of Issued Ordinary Shares Held | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | | Lam Ka Ming | 205,587,371 | 73.42% | | Lim Wai Hoi | 2,211,314 | 0.79% | | Lim Yuk Lui | 158,000 | 0.06% | | Lim Yi | 64,000 | 0.02% | Directors' Long Position in New Dragon International's Ordinary Shares (As of June 30, 2025) | Director Name | Total Number of Issued Ordinary Shares Held | Percentage of New Dragon International's Issued Share Capital | | :--- | :--- | :--- | | Lam Ka Ming | 184,827,200 | 66.49% | | Lim Wai Hoi | 9,296,358 | 3.34% | | Chu Chung Yee | 1,662,000 | 0.60% | - As of June 30, 2025, all share options held by directors and their associates in New Dragon International had lapsed[47](index=47&type=chunk) [Major Shareholders](index=22&type=section&id=Major%20Shareholders) As of June 30, 2025, Summertown Ltd, Gold Sceptre Limited, and New Dragon International Group Limited were the company's major shareholders, with Summertown Ltd holding **72.72%** of the shares Major Shareholders' Long Position in the Company's Ordinary Shares (As of June 30, 2025) | Name of Shareholder | Total Number of Issued Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | | Summertown Ltd | 203,607,467 | 72.72% | | Gold Sceptre Limited | 191,357,867 | 68.34% | | New Dragon International Group Limited | 146,442,667 | 52.30% | | Lim Lik Xian and Lim Lik Shi (executors of the estate of the late Lim Ka Fung) | 205,454,221 | 73.38% | - New Dragon International is approximately **50.5%** owned by Gold Sceptre Limited[50](index=50&type=chunk) [Corporate Governance and Compliance](index=23&type=section&id=Corporate%20Governance%20and%20Compliance) The company has complied with the Corporate Governance Code set out in Appendix C1 and the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Hong Kong Stock Exchange Listing Rules, and the Audit Committee has reviewed the financial statements for this period - The company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[52](index=52&type=chunk) - All directors have confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[53](index=53&type=chunk) - The Audit Committee has reviewed the company's condensed consolidated financial statements for the six months ended June 30, 2025[54](index=54&type=chunk) [Dealings in Listed Securities](index=23&type=section&id=Dealings%20in%20Listed%20Securities) During the period ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[55](index=55&type=chunk)

（股份代號：145） 中期報告 目錄 | 公司資料 | 2 | | --- | --- | | 簡明綜合損益及其他全面收益表 | 3 | | 簡明綜合財務狀況表 | 4 | | 簡明綜合權益變動表 | 5 | | 簡明綜合現金流量表 | 6 | | 簡明綜合財務報表附註 | 7 | | 管理層討論及分析 | 24 | 執行董事 鄭聿恬先生 張國龍先生 莫贊生先生（於二零二五年四月一日辭任） 蘇達文先生（於二零二五年五月一日獲委任） 庄苗忠先生 獨立非執行董事 李黎明女士 楊偉雄先生 袁慧敏女士 披露其他資料 28 信能低碳有限公司 二零二五年中期業績報告 2 公司資料 頁次 董事會 袁慧敏女士 （主席） 李黎明女士 楊偉雄先生 審核委員會 核數師 栢淳會計師事務所有限公司 執業會計師 公司秘書 曾坤業先生 主要往來銀行 袁慧敏女士 （主席） 李黎明女士 楊偉雄先生 提名委員會 袁慧敏女士 （主席） 李黎明女士 楊偉雄先生 薪酬委員會 中信銀行（國際）有限公司 中國工商銀行 華僑永亨銀行 上海浦東發展銀行 香港上海滙豐銀行有限公司 法律顧問 徐沛雄律師行 股份過戶登記處 卓佳證券登記有限公司 香港 夏愨道16號 ...

Corporate Information [Directors and Key Personnel](index=3&type=section&id=Directors%20and%20Key%20Personnel) This section lists the company's executive directors, independent non-executive directors, and company secretary, providing core members of the corporate governance structure - Executive directors include **Yu Jianqiu, Kuang Weixin, Gao Qiang, and Zhu Yufen**[4](index=4&type=chunk)[5](index=5&type=chunk) - Independent non-executive directors include **Li Wei, Fang Guanghua, and Yu Renzhong**[4](index=4&type=chunk)[6](index=6&type=chunk) - The company secretary is **Zhang Yingkun**[5](index=5&type=chunk)[6](index=6&type=chunk) [Corporate Governance and Contact Details](index=4&type=section&id=Corporate%20Governance%20and%20Contact%20Details) This section provides detailed information on the company's auditor, legal counsel, committee members, registered office, China head office, Hong Kong place of business, principal bankers, company website, and stock code - The auditor is **ZHONGHUI ANDA CPA Limited**[8](index=8&type=chunk)[9](index=9&type=chunk) - The Chairman of the Audit and Corporate Governance Committee is **Yu Renzhong**[8](index=8&type=chunk)[9](index=9&type=chunk) - The company's stock code is **1636**[10](index=10&type=chunk) - The company website is **http://www.cmru.com.cn**[10](index=10&type=chunk) Financial Highlights [Key Financial Performance Indicators](index=6&type=section&id=Key%20Financial%20Performance%20Indicators) For the six months ended June 30, 2025, the company's turnover decreased by 25% year-on-year, net loss narrowed, but cash and cash equivalents significantly decreased, with total equity remaining negative and expanding Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 340,852 | 454,200 | -25.07% | | Net loss attributable to owners of the Company | (208,066) | (221,735) | -6.16% | | Loss per share | (0.46) | (0.49) | -6.12% | | Net loss margin | (61.0%) | (48.8%) | -25.00% | | Return on equity | N/A | N/A | - | Balance Sheet Summary as at Period End | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 880 | 3,613 | -75.64% | | Total assets | 1,067,511 | 1,083,120 | -1.44% | | Total liabilities | (5,429,378) | (5,244,623) | 3.52% | | Total equity | (4,361,867) | (4,161,503) | 4.81% | Operating Efficiency Indicators as at Period End | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Inventory turnover days | 43 | 38 | increased by 5 days | | Receivables turnover days | 7 | 62 | decreased by 55 days | | Payables turnover days | 841 | 578 | increased by 263 days | | Current ratio | 0.1 | 0.1 | No change | | Quick ratio | 0.1 | 0.1 | No change | | Debt-to-equity ratio | (38)% | (40)% | improved by 2% | | Net debt-to-equity ratio | (38)% | (40)% | improved by 2% | Management Discussion and Analysis [Business Review](index=8&type=section&id=Business%20Review) In the first half of 2025, China's copper market experienced volatile growth, with the company's turnover decreasing by 25% and net loss narrowing by 6.1%. To address difficulties, the company applied for bankruptcy reorganization for some operating subsidiaries to restructure debt and unlock asset potential. Recycled copper product sales reached RMB 339 million, but communication and power distribution cable businesses were suspended due to insufficient working capital and a weak real estate market - In the first half of 2025, China's copper prices fluctuated, with Shanghai Futures Exchange copper prices rising from approximately **RMB 76,000/tonne** to a peak of approximately **RMB 82,600/tonne** in May, then falling back to approximately **RMB 80,000/tonne** in June[16](index=16&type=chunk)[20](index=20&type=chunk) Business Performance in H1 2025 | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 341 | 454 | -25.00% | | Loss | 208 | 222 | -6.31% | - The company has proactively applied for bankruptcy reorganization of some operating subsidiaries to restructure and reduce debt, unlocking the intrinsic value and commercial potential of quality assets[18](index=18&type=chunk)[20](index=20&type=chunk) - For the six months ended June 30, 2025, the Group sold **4,877 tonnes** of recycled copper products, generating sales turnover of **RMB 339 million**[22](index=22&type=chunk)[25](index=25&type=chunk) - Communication cable and power distribution cable businesses have not resumed operations due to a lack of working capital and unfavorable conditions in the real estate sector[22](index=22&type=chunk)[25](index=25&type=chunk) [Prospects](index=9&type=section&id=Prospects) China's copper market is undergoing an adjustment period in 2025, with short-term impacts from slowing housing completions, declining seasonal demand, and tighter solar energy regulations. Nevertheless, long-term demand is supported by investments in infrastructure, renewable energy, and electric vehicles. The Asia-Pacific copper market is projected to grow from **USD 136.16 billion** in 2025 to **USD 213.8 billion** by 2034, at a **CAGR of 5.3%**. The company's immediate priority is to complete the bankruptcy reorganization of its subsidiaries - China's copper market faces short-term headwinds, including reduced housing completions, declining seasonal demand for home appliances, and tighter regulations on solar installations[23](index=23&type=chunk)[26](index=26&type=chunk) - Long-term demand is continuously driven by national strategic investments in infrastructure, renewable energy, and electric vehicle production[24](index=24&type=chunk)[26](index=26&type=chunk) - The Asia-Pacific copper market is projected to expand from **USD 136.16 billion** in 2025 to **USD 213.8 billion** by 2034, with a **CAGR of 5.3%**[28](index=28&type=chunk)[31](index=31&type=chunk) - The company's immediate priority is to successfully complete the bankruptcy reorganization of its subsidiaries as soon as possible, while remaining confident in its long-term business prospects[30](index=30&type=chunk)[32](index=32&type=chunk) [Debt Restructuring Progress](index=11&type=section&id=Debt%20Restructuring%20Progress) Multiple company subsidiaries (Tongxin, Jincircular, Taiyue, Yinlian Xiangbei, Hubei Rongsheng, Baohe New Century, Jinxin) are undergoing bankruptcy reorganization or pre-reorganization procedures, aiming to restructure debt, unlock asset value, and ensure continued operations. Relevant applications have been approved by the courts, and creditors' meetings have been held - Five subsidiaries, including **Tongxin, Jincircular, Taiyue, Yinlian Xiangbei, and Hubei Rongsheng**, are undergoing debt restructuring to reduce debt, unlock asset value, and enhance turnover capacity[33](index=33&type=chunk)[34](index=34&type=chunk)[214](index=214&type=chunk) - The bankruptcy reorganization applications for **Tongxin and Jincircular** were accepted by the Youxian Court on **January 3, 2023**, with the first creditors' meeting held on **March 28, 2023**[42](index=42&type=chunk)[44](index=44&type=chunk)[203](index=203&type=chunk) - **Taiyue's** voluntary bankruptcy reorganization application was submitted to the court on **May 18, 2023**, and accepted by the Youxian Court on **May 24, 2023**[37](index=37&type=chunk)[39](index=39&type=chunk)[206](index=206&type=chunk) - **Yinlian Xiangbei's** bankruptcy reorganization application was accepted by the Miluo City People's Court on **July 21, 2023**, dismissing the winding-up petition[38](index=38&type=chunk)[40](index=40&type=chunk)[209](index=209&type=chunk) - **Hubei Rongsheng's** pre-reorganization application was approved by the Yunmeng County People's Court of Hubei Province on **September 12, 2023**[41](index=41&type=chunk)[43](index=43&type=chunk)[213](index=213&type=chunk) - The bankruptcy reorganization applications for **Baohe New Century and Jinxin** were accepted by the Youxian Court on **March 31, 2025, and May 12, 2025**, respectively[47](index=47&type=chunk)[48](index=48&type=chunk)[216](index=216&type=chunk) [Human Resources](index=15&type=section&id=Human%20Resources) As of June 30, 2025, the Group had **248 employees**, with staff costs of approximately **RMB 11.4 million**. The company offers competitive remuneration, emphasizes employee training and team building, and is committed to social responsibility by employing disabled individuals Number of Employees and Staff Costs | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total employees | 248 employees | 250 employees | | Staff costs (for the six months ended June 30, 2025) | RMB 11.4 million | - | - The Group is committed to fostering a culture of learning and sharing within the organization, emphasizing individual employee training and development, as well as team building[49](index=49&type=chunk)[51](index=51&type=chunk) - The Group is committed to social responsibility, employing disabled individuals and providing appropriate working environments and safeguards[49](index=49&type=chunk)[51](index=51&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[50](index=50&type=chunk)[52](index=52&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) This section provides a detailed review of the company's financial performance, including declining turnover, narrowing losses, capital structure, liquidity, and asset pledges. The company faces severe liquidity challenges, but receivables turnover days have significantly improved [Revenue Analysis](index=16&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, the company's turnover was **RMB 341 million**, a **25% decrease** from the same period in 2024. Sales of recycled copper products decreased by **24%**, primarily due to a **30% reduction in sales volume**, partially offset by a **9% increase in average selling price** Turnover Analysis (RMB thousands) | Category | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales of recycled copper products | 339,422 | 445,883 | -24.09% | | Sales of power distribution cables | 543 | 177 | 206.78% | | Sales of communication cables | – | 42 | -100.00% | | Sales of waste materials | – | 5,011 | -100.00% | | Others | 887 | 3,087 | -71.24% | | **Total** | **340,852** | **454,200** | **-25.07%** | - Sales volume of recycled copper products decreased by **30%** from **7,004 tonnes** in H1 2024 to **4,877 tonnes** in H1 2025[59](index=59&type=chunk)[61](index=61&type=chunk) - The average selling price of recycled copper products increased by **9%** from **RMB 63,658 per tonne** in H1 2024 to **RMB 69,596 per tonne** in H1 2025[59](index=59&type=chunk)[61](index=61&type=chunk) [Loss for the Period](index=17&type=section&id=Loss%20for%20the%20Period) For the six months ended June 30, 2025, the company's loss was **RMB 208 million**, a reduction from **RMB 222 million** in the same period of 2024, primarily due to a significant decrease in bad debt provisions Loss for the Period Comparison (RMB millions) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss | 208 | 222 | | Bad debt provisions | 2 | 20 | - The reduction in loss was primarily due to a decrease in bad debt provisions from **RMB 20 million** in H1 2024 to approximately **RMB 2 million** in H1 2025[60](index=60&type=chunk)[62](index=62&type=chunk) [Capital Structure](index=17&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's capital structure primarily comprised shareholders' equity, bank and other borrowings, and finance leases. Total interest-bearing borrowings slightly decreased to **RMB 1.652 billion**, all due within one year or repayable on demand Total Interest-Bearing Borrowings (RMB thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bills payable | 24,003 | 24,373 | | Interest-bearing bank and other borrowings | 1,627,777 | 1,642,001 | | **Total interest-bearing borrowings** | **1,651,780** | **1,666,374** | - All interest-bearing borrowings are due within one year and repayable on demand[64](index=64&type=chunk)[65](index=65&type=chunk) - The effective interest rate for bills payable is **12–13%**, and for interest-bearing bank and other borrowings, it is **3.85–9.92%**[65](index=65&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the company's cash and cash equivalents significantly decreased by **75.64%** to **RMB 0.9 million**. Inventory turnover days increased, receivables turnover days significantly improved, but payables turnover days deteriorated. The company has net liabilities of approximately **RMB 4.362 billion** and is discussing a potential share subscription with state-owned enterprise Kefa to repay entrusted loans Changes in Liquidity and Turnover Days | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 880 | 3,613 | -75.64% | | Inventories | 41,497 | 39,208 | 5.84% | | Trade and bills receivables | 13,624 | 13,254 | 2.79% | | Trade and bills payables | 790,503 | 789,288 | 0.15% | - Inventory turnover days increased from **38 days** in 2024 to **43 days** in H1 2025, primarily due to reduced copper product sales[68](index=68&type=chunk)[72](index=72&type=chunk) - Net receivables turnover days decreased from **62 days** in 2024 to **7 days** in H1 2025, mainly due to accelerated collection from customers and improved operations[69](index=69&type=chunk)[72](index=72&type=chunk) - Payables turnover days increased from **578 days** in 2024 to **841 days** in H1 2025, primarily due to delays in settling payables[70](index=70&type=chunk)[73](index=73&type=chunk) - As of June 30, 2025, the Group's total interest-bearing borrowings slightly decreased by **RMB 14 million** to **RMB 1.652 billion**[71](index=71&type=chunk)[73](index=73&type=chunk) - The company has net liabilities of approximately **RMB 4.362 billion**, resulting in negative debt-to-equity and net debt-to-equity ratios[79](index=79&type=chunk)[80](index=80&type=chunk) - The company is in discussions with state-owned enterprise Kefa regarding a potential share subscription, with proceeds intended to repay entrusted loans of approximately **RMB 300 million**[75](index=75&type=chunk)[76](index=76&type=chunk) [Charge on Assets](index=21&type=section&id=Charge%20on%20Assets) As of June 30, 2025, the Group had pledged assets including property, plant and equipment, right-of-use assets, inventories, and bank deposits, with a total net book value of **RMB 335 million**, as collateral for certain bank financing Net Book Value of Pledged Assets (RMB thousands) | Asset Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 196,841 | 205,093 | | Right-of-use assets | 79,769 | 74,857 | | Inventories | 26,583 | 26,583 | | Bank deposits | 32,139 | 32,262 | | **Total** | **335,332** | **338,795** | [Risk Management](index=22&type=section&id=Risk%20Management) This section outlines the company's main risks, including commodity price volatility and foreign exchange risks. The company considers using copper futures to hedge commodity risk but currently has no open contracts. Foreign exchange risk primarily stems from HKD-denominated liabilities, resulting in an exchange difference of **RMB 7.7 million** in H1 2025 [Commodity Risk](index=22&type=section&id=Commodity%20Risk) The company's primary raw material is scrap copper, exposing it to price fluctuations in raw materials and finished products. The company considers using copper futures contracts to hedge some of this risk, but as of June 30, 2025, it had no open contracts - The company's main raw material for producing recycled copper products is scrap copper, which is subject to price fluctuations in both raw materials and finished products[84](index=84&type=chunk)[87](index=87&type=chunk) - The company will consider using copper futures contracts to mitigate some of the risks associated with copper price fluctuations[84](index=84&type=chunk)[87](index=87&type=chunk) - As of June 30, 2025, the Group had no open copper futures contracts[84](index=84&type=chunk)[87](index=87&type=chunk) [Foreign Currency Risk](index=22&type=section&id=Foreign%20Currency%20Risk) The functional currency for most of the Group's entities is RMB, but it is primarily exposed to currency risk involving HKD-denominated cash, convertible bonds, and contingent consideration liabilities. As of June 30, 2025, certain borrowings were denominated in HKD, totaling approximately **HKD 376.2 million**, resulting in an exchange difference of **RMB 7.7 million** during the period - The Group is primarily exposed to currency risk involving HKD-denominated cash and cash equivalents, convertible bonds, and contingent consideration liabilities[85](index=85&type=chunk)[88](index=88&type=chunk) - As of June 30, 2025, certain interest-bearing bank and other borrowings were denominated in HKD, with a total principal amount of approximately **HKD 376.2 million**[86](index=86&type=chunk)[88](index=88&type=chunk) - For the six months ended June 30, 2025, the company recognized an exchange difference of approximately **RMB 7.7 million** from the translation of financial statements of entities outside China[86](index=86&type=chunk)[88](index=88&type=chunk) - During the period, the Group did not commit to entering into any financial instruments to hedge its foreign exchange risk[86](index=86&type=chunk)[88](index=88&type=chunk) [Other Operational Information](index=23&type=section&id=Other%20Operational%20Information) This section covers information on the company's significant investments, acquisitions and disposals, capital expenditures, capital commitments, contingent liabilities, and post-reporting period events. The company had no significant changes or activities in these areas but faces multiple legal proceedings resulting in frozen bank accounts and seized assets - For the six months ended June 30, 2025, the Group held no significant investments in equity interests of any other companies (other than subsidiaries and associates)[89](index=89&type=chunk)[95](index=95&type=chunk] - During the period, the Group had no significant acquisitions or disposals of subsidiaries or associates, nor any significant capital expenditures[90](index=90&type=chunk)[91](index=91&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk] - As of June 30, 2025, capital commitments contracted but not provided for in the consolidated financial statements amounted to **RMB 25.8 million**, primarily for property, plant and equipment and land use rights[92](index=92&type=chunk)[98](index=98&type=chunk] - Multiple legal proceedings related to bank and other borrowings, as well as trade and other payables, are ongoing against the Group, resulting in the freezing of certain bank accounts and the seizure of certain properties, right-of-use assets, and inventories[93](index=93&type=chunk)[99](index=99&type=chunk] - No significant events requiring adjustment or disclosure affecting the Group occurred after the end of the financial period ended June 30, 2025[94](index=94&type=chunk)[100](index=100&type=chunk] Other Information [Directors' and Chief Executives' Interests in Shares](index=24&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20in%20Shares) As of June 30, 2025, the company's directors and chief executives held long and short positions in the company's shares and related shares. Mr. Yu Jianqiu held a significant number of shares through controlled corporations and incurred short positions due to pledged shares Directors' Interests in Shares and Related Shares of the Company | Name of Director | Capacity/Nature of Interest | Number of Shares Held (L) | Number of Related Shares (L) | Number of Related Shares (S) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Yu Jianqiu | Beneficial owner | 620,400 | – | – | 0.14% | | | Interest in controlled corporation | 32,768,240 | – | 20,000,000 | 7.31% (L), 4.46% (S) | | Mr. Kuang Weixin | Beneficial owner | 327,260 | 400,000 | – | 0.16% | | Ms. Zhu Yufen | Beneficial owner | – | 300,000 | – | 0.07% | - Mr. Yu Jianqiu's **20 million** short position refers to shares pledged by Shijian Co., Ltd. to China Huarong International Holdings Limited[106](index=106&type=chunk)[108](index=108&type=chunk) - The number of related shares for Mr. Kuang Weixin and Ms. Zhu Yufen originated from share options granted under the expired share option scheme[104](index=104&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=26&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) For the six months ended June 30, 2025, no rights to acquire benefits by way of purchase of shares or debentures of the company were granted to any director or their family members, nor were any such rights exercised by them - For the six months ended June 30, 2025, no rights to acquire benefits by way of purchase of shares or debentures of the company were granted to any director or their respective spouses or children under 18, nor were any such rights exercised by them[111](index=111&type=chunk)[112](index=112&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Company's Shares and Related Shares](index=27&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions) As of June 30, 2025, several substantial shareholders held 5% or more interests or short positions in the company's shares, including long positions held through controlled corporations and short positions arising from pledged shares Substantial Shareholders' Long and Short Positions in the Company's Ordinary Shares | Name | Capacity/Nature of Interest | Number of Shares Held (L) | Number of Related Shares (L) | Number of Shares Held (S) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | :--- | :--- | | Kwek Steven Poh Song | Interest in controlled corporation | 28,031,290 | – | – | 6.25% | | Mianyang Youxian District State-owned Assets Supervision and Administration Office | Interest in controlled corporation | 71,799,456 | – | – | 16.02% | | China CITIC Financial Asset Management Co., Limited | Interest in controlled corporation | 9,048,529 | – | – | 2.02% | | | Person with security interest over shares | – | 70,000,000 | – | 15.62% | | Leung Lisa | Interest in controlled corporation | 55,762,726 | – | – | 12.44% | | Huang Weiping | Interest in controlled corporation | – | – | 31,031,700 | 6.92% | | Mianyang Yuancheng Integration Development Group Co., Ltd. | Beneficial interest | – | – | 50,000,000 | 11.16% | | Mianyang Science and Technology City Development Investment (Group) Co., Ltd. | Person with security interest over shares | – | 31,031,700 | – | 6.92% | | Chan Man Hoi | As receiver | – | 87,672,800 | – | 19.56% | | He Junyu | As receiver | – | 87,672,800 | – | 19.56% | - Mianyang Youxian District State-owned Assets Supervision and Administration Office holds shares through **Mianyang Fule Investment Co., Ltd. and Mianyang Zantai Industrial Co., Ltd.**[119](index=119&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Mianyang Yuancheng Integration Development Group Co., Ltd.'s **50 million** short position resulted from shares pledged to Huarong International[125](index=125&type=chunk)[127](index=127&type=chunk)[132](index=132&type=chunk) - Huang Weiping's **31.0317 million** short position resulted from shares pledged by his controlled company to Mianyang Science and Technology City Development Investment (Group) Co., Ltd.[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Expired Share Option Scheme](index=31&type=section&id=Expired%20Share%20Option%20Scheme) The company's share option scheme expired on **January 28, 2024**. As of June 30, 2025, **11.28 million** share options remained unexercised, with **2.7 million** lapsing during the period. The fair value of share options is estimated using a binomial model - The share option scheme became effective upon listing on **February 21, 2014**, and expired on **January 28, 2024**[134](index=134&type=chunk)[136](index=136&type=chunk) Details of Share Option Movements (thousand share options) | Category | Held at January 1, 2025 | Granted during the period | Exercised during the period | Cancelled/Lapsed during the period | Number of share options at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 700 | 0 | 0 | 0 | 700 | | Employees (excluding directors) | 10,580 | 0 | 0 | 0 | 10,580 | | Service providers | 2,700 | 0 | 0 | (2,700) | 0 | | **Total for all categories** | **13,980** | **0** | **0** | **(2,700)** | **11,280** | - The adjustment to unexercised share options became effective on **April 9, 2025**, the effective date of the share consolidation[139](index=139&type=chunk) - The fair value of the granted share options is estimated using a binomial model on the grant date[141](index=141&type=chunk)[143](index=143&type=chunk) [Purchase, Sale or Redemption of Shares](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[146](index=146&type=chunk)[150](index=150&type=chunk) [Corporate Governance](index=34&type=section&id=Corporate%20Governance) The company largely complied with the Corporate Governance Code in H1 2025, with two deviations: no legal action insurance for directors and the Chairman also serving as CEO. Additionally, Mr. Yu Jianqiu had a non-compliance event due to a forced sale of shares during a blackout period - The company did not make appropriate insurance arrangements for legal actions against its directors, as service fee quotations exceeded the budget[147](index=147&type=chunk)[151](index=151&type=chunk) - Chairman Mr. Yu Jianqiu also serves as the Chief Executive Officer, which the Board believes is in the best interest of the Group[148](index=148&type=chunk)[151](index=151&type=chunk) - A forced sale during the blackout period constituted a non-compliance event, involving the sale of **5,112,000 shares** by Shijian Co., Ltd., controlled by Mr. Yu Jianqiu[152](index=152&type=chunk)[155](index=155&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) [Compliance with the Required Standard of Securities Transactions by Directors of Listed Issuers](index=35&type=section&id=Compliance%20with%20Securities%20Transactions%20Standard) All directors, except Mr. Yu Jianqiu, complied with the Model Code for Securities Transactions. Mr. Yu's non-compliance was due to a forced sale of shares during a blackout period, deemed an inadvertent breach under special circumstances. The company has taken steps to strengthen internal controls and will organize training for directors - All directors, except Mr. Yu Jianqiu, confirmed compliance with the Model Code for the six months ended June 30, 2025[154](index=154&type=chunk)[158](index=158&type=chunk) - Mr. Yu Jianqiu's non-compliance event was due to a forced sale of **5,112,000 shares** by Shijian Co., Ltd., which he controls, during a blackout period, and was accepted by the directors (excluding Mr. Yu) as an inadvertent breach under special circumstances[155](index=155&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - The company has taken measures to strengthen internal controls and will organize training for directors regarding the requirements of the Listing Rules[164](index=164&type=chunk)[166](index=166&type=chunk) [Changes in Directors' Information](index=37&type=section&id=Changes%20in%20Directors'%20Information) In accordance with Rule 13.51B(1) of the Listing Rules, there have been no changes in the company's directors' information since the publication of the 2024 annual report - There have been no changes in the company's directors' information since the publication of the 2024 annual report[167](index=167&type=chunk)[170](index=170&type=chunk) [Review of Interim Report](index=37&type=section&id=Review%20of%20Interim%20Report) The Group's interim report and unaudited consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the company's Audit Committee - The Group's interim report and unaudited consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the company's Audit Committee[168](index=168&type=chunk)[171](index=171&type=chunk) [Acknowledgement](index=37&type=section&id=Acknowledgement) The Board takes this opportunity to thank all shareholders and business partners for their continuous strong support, and all employees of the Group for their efforts and contributions - The Board thanks all shareholders, business partners, and employees for their strong support and contributions[169](index=169&type=chunk)[172](index=172&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group recorded a net loss of **RMB 208 million**, narrowing from **RMB 222 million** in the prior year. Turnover decreased, but gross loss and bad debt provisions significantly reduced, while foreign currency translation generated a positive exchange difference Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Turnover | 340,852 | 454,200 | | Cost of sales | (343,169) | (487,992) | | Gross loss | (2,317) | (33,792) | | Other income and gains, net | 2,879 | 33,708 | | Net impairment losses on trade receivables | (1,577) | (20,347) | | Finance costs | (162,514) | (151,992) | | Loss before tax | (208,066) | (221,660) | | Loss for the period attributable to owners of the Company | (208,066) | (221,735) | | Exchange differences on translation of foreign operations | 7,702 | (5,603) | | Total comprehensive loss for the period attributable to owners of the Company | (200,364) | (227,338) | | Basic loss per share (RMB) | (0.46) | (0.49) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets slightly decreased, but total liabilities continued to rise, leading to further deterioration in net current liabilities and total equity (net liabilities), indicating severe financial challenges for the company Summary of Condensed Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total non-current assets | 535,181 | 549,506 | | Total current assets | 532,330 | 533,614 | | **Total assets** | **1,067,511** | **1,083,120** | | Total current liabilities | 5,429,378 | 5,244,623 | | **Total liabilities** | **5,429,378** | **5,244,623** | | Net current liabilities | (4,897,048) | (4,711,009) | | Total assets less current liabilities | (4,361,867) | (4,161,503) | | **Total equity (net liabilities)** | **(4,361,867)** | **(4,161,503)** | - As of June 30, 2025, cash and cash equivalents were **RMB 0.88 million**, a significant decrease from **RMB 3.613 million** as of December 31, 2024[180](index=180&type=chunk) Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the Group's accumulated losses increased due to the loss for the period and the impact of lapsed share options, partially offset by exchange differences on translation of foreign operations, leading to a further expansion of total equity (net liabilities) Summary of Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Item | January 1, 2025 (Audited) | Loss for the period | Exchange differences on translation of foreign operations | Lapsed share options | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 363,611 | – | – | – | 363,611 | | Share premium | 2,204,701 | – | – | – | 2,204,701 | | Exchange reserve | (55,808) | – | 7,702 | – | (48,106) | | Capital reserve | 132,055 | – | – | – | 132,055 | | Statutory reserve | 144,662 | – | – | – | 144,662 | | Share-based payment reserve | 22,849 | – | – | (8,290) | 14,559 | | Accumulated losses | (6,973,573) | (208,066) | – | 8,290 | (7,173,349) | | **Total** | **(4,161,503)** | **(208,066)** | **7,702** | **–** | **(4,361,867)** | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's operating activities shifted from net cash inflow to net outflow, while investing and financing activities continued to be net cash outflows, resulting in a significant decrease in cash and cash equivalents at period-end Summary of Condensed Consolidated Statement of Cash Flows (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash (used in)/from operating activities | (2,178) | 7,813 | | Net cash used in investing activities | (147) | (125) | | Net cash used in financing activities | (421) | (4,346) | | Net (decrease)/increase in cash and cash equivalents | (2,746) | 3,342 | | Cash and cash equivalents at beginning of period | 3,613 | 18,327 | | Effect of foreign exchange rate changes, net | 13 | (37) | | **Cash and cash equivalents at end of period** | **880** | **21,632** | Notes to the Condensed Consolidated Financial Information [General Information and Basis of Preparation](index=44&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This note provides basic company information, principal activities, and the basis of preparation for the interim financial report. The company primarily engages in the manufacturing, sales, and trading of copper, aluminum, and related products. The report is prepared in accordance with IAS 34 and details the significant going concern uncertainties faced by the company and its mitigation measures - The company was incorporated in the Cayman Islands on **February 22, 2013**, and listed on the Main Board of the Hong Kong Stock Exchange on **February 21, 2014**[185](index=185&type=chunk)[186](index=186&type=chunk)[189](index=189&type=chunk) - The Group's principal activities are the manufacturing, sales, and trading of copper, aluminum, and related products[186](index=186&type=chunk)[189](index=189&type=chunk) - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard 34 Interim Financial Reporting[187](index=187&type=chunk)[190](index=190&type=chunk) [Going Concern Basis](index=46&type=section&id=Going%20Concern%20Basis) The Group faces significant going concern uncertainties due to continuous losses, substantial net current liabilities and net liabilities, debt defaults, and multiple legal proceedings resulting in frozen bank accounts and seized assets. Management is actively implementing financial plans and measures, including debt restructuring, seeking refinancing, strengthening cost control, and resolving litigation to address these challenges - The Group recorded net losses of approximately **RMB 208 million** and **RMB 222 million** for the two consecutive periods ended June 30, 2025, and 2024, respectively[199](index=199&type=chunk)[200](index=200&type=chunk) - As of June 30, 2025, the Group's net current liabilities were approximately **RMB 4.897 billion**, and net liabilities were approximately **RMB 4.362 billion**[199](index=199&type=chunk)[200](index=200&type=chunk) - As of June 30, 2025, the Group failed to repay approximately **RMB 1.628 billion** in interest-bearing bank and other borrowings and approximately **RMB 24 million** in bills payable[199](index=199&type=chunk)[200](index=200&type=chunk) - The Group faces multiple lawsuits, resulting in the freezing of several bank accounts and the seizure of property, plant and equipment, right-of-use assets, and inventories[199](index=199&type=chunk)[200](index=200&type=chunk) - Management has implemented or is implementing several financial plans and measures, including debt restructuring, negotiating extensions with creditors, seeking new financing, cost control, and resolving litigation to unfreeze assets[201](index=201&type=chunk)[219](index=219&type=chunk)[222](index=222&type=chunk) [Changes in Accounting Policies and Disclosures](index=55&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The accounting policies adopted in preparing the condensed consolidated interim financial information are consistent with those applied in the Group's annual consolidated financial statements for the year ended December 31, 2024. The adoption of new and revised IFRS accounting standards had no significant impact on the Group's financial performance and position - The accounting policies adopted for the preparation of the interim financial report are the same as those used for the 2024 annual financial statements[226](index=226&type=chunk)[229](index=229&type=chunk) - The adoption of new and revised International Financial Reporting Standards had no significant impact on the Group's financial performance and position[227](index=227&type=chunk)[229](index=229&type=chunk) [Segment Reporting](index=56&type=section&id=Segment%20Reporting) The Group is organized into three reportable operating segments based on products and services: recycled copper products, power distribution cables, and communication cables. Segment results are assessed based on adjusted profit before tax. The recycled copper products segment is the primary revenue source, but its sales decreased in H1 2025 - The Group is organized into three reportable operating segments: **recycled copper products, power distribution cables, and communication cables**[231](index=231&type=chunk) Sales to External Customers (RMB thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Recycled copper products | 340,309 | 453,981 | | Power distribution cables | 543 | 177 | | Communication cables | – | 42 | | **Total** | **340,852** | **454,200** | - In H1 2025, the recycled copper products segment recorded a loss of **RMB 41.031 million**[237](index=237&type=chunk) - In H1 2025, Customer A contributed **RMB 326 million** to the recycled copper products segment's turnover, representing the vast majority of the Group's turnover[246](index=246&type=chunk) [Revenue](index=61&type=section&id=Revenue) The Group's revenue primarily derives from the manufacturing and sale of copper and related products in China, recognized at the point of goods transfer. For the six months ended June 30, 2025, total turnover was **RMB 341 million**, a **25.07% decrease** from the prior year, mainly impacted by reduced sales of recycled copper products - Revenue from contracts with customers primarily originates from the production and sale of copper and related products in China, with revenue recognized at the point in time when goods are transferred[249](index=249&type=chunk)[258](index=258&type=chunk) Breakdown of Revenue Categories (RMB thousands) | Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of recycled copper products | 339,422 | 445,883 | | Sales of power distribution cables | 543 | 177 | | Sales of communication cables | – | 42 | | Sales of waste materials | – | 5,011 | | Others | 887 | 3,087 | | **Total** | **340,852** | **454,200** | [Other Income and Gain, Net](index=64&type=section&id=Other%20Income%20and%20Gain%2C%20Net) For the six months ended June 30, 2025, the Group's other income and gains, net, significantly decreased to **RMB 2.879 million**, primarily due to a substantial decline in VAT refunds and government grants. A gain on debt forgiveness of **RMB 2.485 million** was recognized during the period Other Income and Gains, Net (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | VAT refunds | 399 | 12,989 | | Government grants | 19 | 20,300 | | Interest income | 4 | 20 | | Net exchange differences | – | (1) | | Loss on disposal of property, plant and equipment | – | (15) | | Gain on debt forgiveness | 2,485 | – | | Others | (28) | 415 | | **Total** | **2,879** | **33,708** | - The VAT refund rate decreased from **50% to 30%**, leading to a significant reduction in refund amounts[262](index=262&type=chunk) - Government grants are primarily provided by local governments for general operations, with no future related costs[263](index=263&type=chunk)[264](index=264&type=chunk) [Loss Before Tax](index=65&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, the Group's loss before tax was **RMB 208 million**, narrowing from **RMB 222 million** in the prior year. This was primarily due to reduced cost of sales and depreciation of property, plant and equipment Components of Loss Before Tax (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of sales | 343,169 | 487,992 | | Staff costs | 11,437 | 10,862 | | Depreciation of property, plant and equipment | 10,996 | 16,624 | | Depreciation of right-of-use assets | 1,742 | 1,998 | - Cost of sales includes **RMB 3.411 million** (2024: **RMB 5.62 million**) related to staff costs, depreciation, and amortization[267](index=267&type=chunk) [Income Tax](index=66&type=section&id=Income%20Tax) For the six months ended June 30, 2025, the Group had no income tax expense, compared to **RMB 0.075 million** in the prior year. Entities in the Cayman Islands and British Virgin Islands are exempt from income tax, while Chinese subsidiaries are subject to corporate income tax Income Tax Expense (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current tax – PRC corporate income tax | – | 75 | - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands[269](index=269&type=chunk) - The company's PRC subsidiaries are subject to PRC corporate income tax applicable to each subsidiary[269](index=269&type=chunk) [Loss Per Share](index=66&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, the Group's basic and diluted loss per share was **RMB (0.46)**, an improvement from **RMB (0.49)** in the prior year. Diluted loss per share was the same as basic loss per share due to the absence of potential dilutive ordinary shares Loss Per Share (RMB) | Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic | (0.46) | (0.49) | | Diluted | (0.46) | (0.49) | - Basic loss per share is calculated based on the loss attributable to equity holders of the company of **RMB 208 million** and the weighted average number of ordinary shares in issue of **448,155,726** after the share consolidation for the interim period[269](index=269&type=chunk)[270](index=270&type=chunk) - As the company's outstanding share options had no potential dilutive ordinary shares, diluted loss per share was the same as basic loss per share[271](index=271&type=chunk) [Property, Plant and Equipment](index=67&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the Group's property, plant and equipment had a net book value of **RMB 375 million**, with **RMB 197 million** pledged. There were no significant acquisitions or disposals during the period Net Book Value of Property, Plant and Equipment (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 374,901 | 387,299 | - As of June 30, 2025, property, plant and equipment with a net book value of **RMB 197 million** were pledged as collateral for certain bank financing granted to the Group[276](index=276&type=chunk) - For the six months ended June 30, 2025, and 2024, there were no significant acquisitions or disposals of property, plant and equipment[276](index=276&type=chunk) [Inventories](index=67&type=section&id=Inventories) As of June 30, 2025, the Group's inventories amounted to **RMB 41.5 million**, of which **RMB 26.58 million** were pledged as collateral for bank financing Inventories (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Inventories | 41,497 | 39,208 | - As of June 30, 2025, inventories of **RMB 26.583 million** were pledged as collateral for bank financing granted to the Group[273](index=273&type=chunk)[275](index=275&type=chunk) [Trade and Bills Receivables, Prepayments, Other Receivables and Other Assets](index=68&type=section&id=Trade%20and%20Bills%20Receivables%2C%20Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, net trade and bills receivables amounted to **RMB 13.624 million**, with the majority (**RMB 11.62 million**) overdue for more than 180 days. Total prepayments, other receivables, and other assets were **RMB 436 million** Ageing Analysis of Trade and Bills Receivables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 2,004 | 3 | | 61 to 180 days | – | 407 | | Over 180 days | 11,620 | 12,844 | | **Total (net of impairment losses)** | **13,624** | **13,254** | Prepayments, Other Receivables and Other Assets (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Government grant receivables | 211,797 | 211,698 | | Other deposits, prepayments and receivables | 224,553 | 225,390 | | **Total** | **436,350** | **437,088** | - Trade and bills receivables are normally due within **90 days** from the invoice date[281](index=281&type=chunk) [Trade and Bills Payables, Other Payables and Accruals](index=69&type=section&id=Trade%20and%20Bills%20Payables%2C%20Other%20Payables%20and%20Accruals) As of June 30, 2025, trade and bills payables amounted to **RMB 791 million**, with the vast majority (**RMB 789 million**) overdue for more than 180 days. Total other payables and accruals reached **RMB 2.838 billion** Ageing Analysis of Trade and Bills Payables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 428 | 144 | | 31 to 60 days | 838 | 81 | | 61 to 180 days | 249 | 83 | | Over 180 days | 788,988 | 788,980 | | **Total** | **790,503** | **789,288** | Other Payables and Accruals (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contract liabilities | 370,462 | 370,486 | | Accrued expenses and other payables | 2,467,063 | 2,268,276 | | **Total** | **2,837,525** | **2,638,762** | [Interest-Bearing Bank and Other Borrowings](index=70&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total interest-bearing bank and other borrowings amounted to **RMB 1.628 billion**, all due within one year or repayable on demand, and were in default. Multiple assets and equity interests were pledged as collateral Analysis of Interest-Bearing Bank and Other Borrowings (RMB thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank loans – secured | 252,330 | 252,330 | | Bank loans – unsecured | 5,000 | 5,000 | | Other borrowings – secured | 108,160 | 108,160 | | Other borrowings – unsecured and unguaranteed | 449,190 | 463,414 | | Factoring loans – secured | 507,000 | 507,000 | | Entrusted loans – secured | 306,097 | 306,097 | | **Total** | **1,627,777** | **1,642,001** | - As of June 30, 2025, all interest-bearing bank and other borrowings were repayable within one year or on demand, and the Group had failed to repay these borrowings[285](index=285&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) - Bank financing is secured by property, plant and equipment (**RMB 197 million**), right-of-use assets (**RMB 79.77 million**), inventories (**RMB 26.58 million**), and pledged deposits (**RMB 32.14 million**)[289](index=289&type=chunk) - Some borrowings are secured by **31.0317 million** ordinary shares of the company (representing **6.9%** of the issued share capital) held by shareholder Mr. Huang Weiping[290](index=290&type=chunk) - Some bank loans are guaranteed by property, plant and equipment of Sichuan Gushan Oil Chemical Co., Ltd., a private company controlled by Mr. Yu Jianqiu (**RMB 12 million**), and by property, plant and equipment of Mianyang Baohe Jiahao Waste Material Recycling Co., Ltd., a private company controlled by an associate of the Group (**RMB 47 million**)[290](index=290&type=chunk) [Capital, Reserves and Dividends](index=73&type=section&id=Capital%2C%20Reserves%20and%20Dividends) This section explains the company's dividend policy, share capital movements (including the 10-for-1 share consolidation effective April 7, 2025), statutory reserve fund, share premium account, and the treatment of share-based payment reserve - No interim dividend was declared for the six months ended June 30, 2025[293](index=293&type=chunk)[297](index=297&type=chunk) - Pursuant to an ordinary resolution passed on **April 7, 2025**, every **10 ordinary shares** of **HKD 0.1** each in the issued and unissued share capital of the company were consolidated into **one consolidated ordinary share** of **HKD 1** each[299](index=299&type=chunk)[302](index=302&type=chunk) - PRC subsidiaries are required to appropriate funds to a statutory reserve fund, which is not available for dividend distribution to shareholders[300](index=300&type=chunk)[301](index=301&type=chunk) - Funds in the share premium account may be distributed to shareholders, provided the company is able to pay its debts as they fall due in the ordinary course of business[303](index=303&type=chunk)[306](index=306&type=chunk) - The share-based payment reserve represents the fair value portion of unexercised share options granted to employees at the grant date[304](index=304&type=chunk)[305](index=305&type=chunk) [Equity-Settled Share-Based Transactions](index=76&type=section&id=Equity%20Settled%20Share-Based%20Transactions) The company's share option scheme expired on **January 28, 2024**. As of June 30, 2025, after adjustment for the share consolidation, **11.28 million** share options remained unexercised, with **2.7 million** lapsing during the period - The company's share option scheme became effective upon listing on **February 21, 2014**, and expired on **January 28, 2024**[307](index=307&type=chunk)[308](index=308&type=chunk) Number of Share Options and Weighted Average Exercise Price under Share Option Scheme | Item | For the six months ended June 30, 2025 (thousands) | Weighted average exercise price (HKD) | | :--- | :--- | :--- | | Outstanding at January 1 | 139,800 | 0.70 | | Share consolidation | (125,820) | – | | Lapsed during the period | (2,700) | 16.80 | | **Outstanding at end of period** | **11,280** | **4.65** | | Exercisable at end of period | 11,280 | 4.65 | [Fair Value Measurement of Financial Instruments](index=78&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The carrying amounts of the Group's financial assets and liabilities approximate their respective fair values. The company manages its capital to ensure going concern and maximize shareholder returns. As of June 30, 2025, no financial instruments were categorized into three levels for fair value measurement inputs - The carrying amounts of the Group's financial assets and liabilities presented in the consolidated statement of financial position approximate their respective fair values[316](index=316&type=chunk)[317](index=317&type=chunk) Categories of Financial Instruments (RMB thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial assets measured at amortized cost | 122,161 | 119,926 | | Financial liabilities measured at amortized cost | 3,987,566 | 3,804,339 | - The Group manages its capital to ensure its ability to continue as a going concern while maximizing returns to stakeholders through the optimization of the debt and equity balance[318](index=318&type=chunk)[322](index=322&type=chunk) - As of June 30, 2025, and December 31, 2024, no financial instruments were categorized into three levels for fair value measurement inputs[326](index=326&type=chunk)[327](index=327&type=chunk) [Commitments](index=81&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments contracted but not provided for amounted to **RMB 25.787 million**, primarily for property, plant and equipment and land use rights, consistent with December 31, 2024 Capital Commitments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 13,242 | 13,242 | | Land use rights | 12,545 | 12,545 | | **Total** | **25,787** | **25,787** | [Material Related Party Transactions](index=81&type=section&id=Material%20Related%20Party%20Transactions) The Group engaged in several material related party transactions during the period, including payment of delivery costs to an associate's subsidiary and provision of bank loan collateral by companies controlled by directors and associates Other Related Party Transactions (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Delivery costs received by Mianyang Jincircular Financial Warehousing Co., Ltd. | 1,331 | 515 | | Pledge provided by Gushan Oil (a private company controlled by Mr. Yu Jianqiu) | 12,000 | 12,000 | | Loans secured by property, plant and equipment of Mianyang Baohe Jiahao (a private company controlled by an associate of the Group) | 47,000 | 47,000 | - Delivery costs ranged from **RMB 28 to RMB 680 per tonne**[339](index=339&type=chunk) [Compensation of Key Management Personnel](index=83&type=section&id=Compensation%20of%20Key%20Management%20Personnel) For the period ended June 30, 2025, the Group's total compensation for key management personnel was **RMB 3.637 million**, a decrease from **RMB 7.131 million** in the prior year Compensation of Key Management Personnel (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total compensation for key management personnel | 3,637 | 7,131 |

H股股份代號 A股股份代號 2025 中期報告 INTERIM REPORT 2025 2025 INTERIM REPORT 中期報告 重要提示 經中船防務第十一屆董事會第十六次會議審議通過，本公司2025年半年度擬向全體股東每10股派發現金紅利人民幣0.80元 （含稅），截至2025年6月30日，公司總股本為1,413,506,378股，以此計算合計擬派發現金紅利人民幣113,080,510.24元（含 稅），佔公司2025年1-6月歸屬於上市公司股東的淨利潤的比例為21.48% ，剩餘未分配利潤1,468,170,857.41元結轉至以後期 間分配。公司2025年半年度不實施資本公積金轉增股本。在實施權益分派的股權登記日前公司總股本發生變動的，擬維持每 股分配比例不變，相應調整分配總額，並將另行公告具體調整情況。 2024年年度股東會已審議通過《2025年度中期分紅相關安排的議案》，本次利潤分配方案在股東會授權董事會決策的權限範圍 內，無需再提交公司股東會審議。 1 中船海洋與防務裝備股份有限公司 2025 年半年度報告 一、 本公司董事會及董事、高級管理人員保證半年度報告內容的真實性、準確性、完整性， ...