藍 思 科 技 股 份 有 限 公 司 Lens Technology Co., Ltd. （ 於中華人民共和國註冊成立的股份有限公司） 股份代號 : 6 6 1 3 2025 中期報告 藍 思 科 技 股 份 有 限 公 司 Lens Technology Co., Ltd. Stock Code: 6 6 1 3 (A joint stock company incorporated in the People's Republic of China with limited liability) 2025 INTERIM REPORT 藍 思 科 技 股 份 有 限 公 司 Le ns Tech n olo g y C o., Ltd. Interim R e p ort 2 0 2 5 中期報 告 目錄 釋義 2 公司資料 5 管理層討論與分析 7 其他資料 16 簡明綜合財務報表審閱報告 24 簡明綜合損益及其他全面收益表 26 簡明綜合財務狀況表 28 簡明綜合權益變動表 30 簡明綜合現金流量表 31 簡明綜合財務報表附註 32 釋義 在本報告中，除非文義另有所指，下列詞語具有如下含義： | 釋 ...

企業使命 能動四海 綠享五洲 企業願景 成為一流的清潔能源綜合服務商 企業價值觀 高速致遠 暢和篤行 企業精神 勇於擔當 敢為人先 管理理念 組織氛圍 團結友愛 開放包容 | | 目錄 | | --- | --- | | 2 | 公司資料 | | 3 | 公司架構 | | 4 | 管理層討論與分析 | | 35 | 披露資料 | | 39 | 企業管治 | | 44 | 簡明綜合損益表 | | 45 | 簡明綜合全面收益表 | | 46 | 簡明綜合財務狀況表 | | 48 | 簡明綜合權益變動表 | | 49 | 簡明綜合現金流量表 | | 50 | 簡明綜合財務報表附註 | | 71 | 釋義 | 公司資料 董事會 執行董事 李天章先生 （主席） 朱劍彪先生 王文波先生 劉志杰先生 廖劍蓉女士 李力先生 王萌先生 獨立非執行董事 秦泗釗教授 黃偉德先生 楊祥良先生 趙公直先生 長期主義 目標導向 守正創新 協同共享 審核委員會 黃偉德先生 （主席） 楊祥良先生 趙公直先生 提名委員會 李天章先生 （主席） 廖劍蓉女士 （自二零二五年七月三十一日起獲委任） 秦泗釗教授 黃偉德先生 （自二零二五年七月三十一日 ...

Company Information [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) Key company information for Tiangong International Company Limited, including governance structure and contact details, is provided - The company's registered name is Tiangong International Company Limited, with stock code HKEX: **826**[11](index=11&type=chunk) - The Board of Directors includes Executive Directors Zhu Xiaokun (Chairman), Zhu Zefeng (CEO), Wu Suojun, Jiang Guangqing, and Independent Non-executive Directors Li Zhuoran, Wang Xuesong, Qin Ke[11](index=11&type=chunk) - Li Zhuoran chairs the Audit Committee and Nomination Committee, while Wang Xuesong chairs the Remuneration Committee[11](index=11&type=chunk) - The company's auditor is KPMG, with its principal place of business in Zhenjiang City, Jiangsu Province, China[11](index=11&type=chunk) Management Discussion and Analysis [Business Review](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total revenue decreased by **7.1%** to RMB **2.34 billion** in H1 2025, impacted by US tariff policy uncertainties and reduced demand for titanium wire in consumer electronics, despite a recovery in domestic demand for die steel and high-speed steel | Business Segment | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Die Steel | 1,154,590 | 49.3 | 1,181,417 | 46.9 | (26,827) | (2.3) | | High-Speed Steel | 394,434 | 16.8 | 436,145 | 17.3 | (41,711) | (9.6) | | Cutting Tools | 397,365 | 17.0 | 463,607 | 18.4 | (66,242) | (14.3) | | Titanium Alloy | 348,786 | 14.9 | 384,832 | 15.2 | (36,046) | (9.4) | | Others | 47,320 | 2.0 | 55,647 | 2.2 | (8,327) | (15.0) | | **Total** | **2,342,495** | **100.0** | **2,521,648** | **100.0** | **(179,153)** | **(7.1)** | - Overall revenue decline was primarily due to reduced exports from uncertain US tariff policies and a temporary decrease in demand for titanium wire in the consumer electronics industry[28](index=28&type=chunk) [Die Steel](index=4&type=section&id=%E6%A8%A1%E5%85%B7%E9%8B%BC) The Die Steel segment experienced an overall revenue decrease of **2.3%**, with domestic sales growing **4.7%** due to cost pass-through and industry recovery, while exports fell **8.2%** amid a sluggish European market and North American tariff uncertainties | Market | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Sales | 565,627 | 49.0 | 540,024 | 45.7 | 25,603 | 4.7 | | Exports | 588,963 | 51.0 | 641,393 | 54.3 | (52,430) | (8.2) | | **Total** | **1,154,590** | **100.0** | **1,181,417** | **100.0** | **(26,827)** | **(2.3)** | - Die steel is primarily used in manufacturing industries such as automotive, home appliances, electronic products, medical devices, aerospace, and daily consumer goods[14](index=14&type=chunk) [High-Speed Steel](index=5&type=section&id=%E9%AB%98%E9%80%9F%E9%8B%BC) The High-Speed Steel segment's revenue decreased by **9.6%**, with domestic sales growing **14.1%** due to higher average selling prices and slight demand recovery, while exports significantly dropped **35.4%** due to US tariff policies | Market | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Sales | 259,800 | 65.9 | 227,657 | 52.2 | 32,143 | 14.1 | | Exports | 134,634 | 34.1 | 208,488 | 47.8 | (73,854) | (35.4) | | **Total** | **394,434** | **100.0** | **436,145** | **100.0** | **(41,711)** | **(9.6)** | - The unit price of key raw materials for high-speed steel, such as tungsten, significantly increased, driving up average selling prices[17](index=17&type=chunk) [Cutting Tools](index=5&type=section&id=%E5%88%87%E5%89%8A%E5%B7%A5%E5%85%B7) The Cutting Tools segment's revenue decreased by **14.3%**, with domestic revenue slightly down **5.4%** due to sales network optimization, expected to improve in H2, while exports fell **19.4%** due to escalating US tariffs | Market | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Sales | 159,524 | 40.1 | 168,631 | 36.4 | (9,107) | (5.4) | | Exports | 237,841 | 59.9 | 294,976 | 63.6 | (57,135) | (19.4) | | **Total** | **397,365** | **100.0** | **463,607** | **100.0** | **(66,242)** | **(14.3)** | - The Group implements vertical integration, expanding from upstream high-speed steel production to downstream high-speed steel cutting tool production, providing a cost advantage[19](index=19&type=chunk) [Titanium Alloy](index=6&type=section&id=%E9%88%A6%E5%90%88%E9%87%91) The Titanium Alloy segment's revenue decreased by **9.4%**, with domestic revenue down **8.5%** due to reduced demand for titanium wire in consumer electronics, leading the Group to shift its sales mix towards lower-value titanium plates and tubes, while remaining optimistic about export demand for 3D printing and additive manufacturing applications | Market | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Sales | 347,213 | 99.5 | 379,375 | 98.6 | (32,162) | (8.5) | | Exports | 1,573 | 0.5 | 5,457 | 1.4 | (3,884) | (71.2) | | **Total** | **348,786** | **100.0** | **384,832** | **100.0** | **(36,046)** | **(9.4)** | - Titanium alloy is widely used in aerospace, consumer electronics, and medical industries due to its corrosion resistance and lightweight properties[23](index=23&type=chunk) [Others](index=7&type=section&id=%E5%85%B6%E4%BB%96) The "Others" segment's revenue decreased by **15.0%**, primarily due to reduced orders for power tools and power tool sets exported to the US, driven by US tariff uncertainties | Market | H1 2025 (RMB '000) | Share (%) | H1 2024 (RMB '000) | Share (%) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Exports | 47,320 | 100.0 | 55,647 | 100.0 | (8,327) | (15.0) | - This segment primarily provides assembly and export sales of power tool products, including electric drill sets and electric toothbrush sets, to existing cutting tool customers[26](index=26&type=chunk) [Financial Review](index=7&type=section&id=%E8%B2%A1%E5%8B%99%

[Company Information](index=3&type=section&id=Company%20Information) [Board of Directors and Management](index=3&type=section&id=Board%20of%20Directors%20and%20Management) This section outlines the board members, company secretary, auditor, and committee composition of China Financial Investment Management Limited, providing an overview of its corporate governance structure - Executive Director and Chief Executive Officer is **Mr. Zhang Min**[6](index=6&type=chunk) - Independent Non-executive Directors include **Mr. Chan Chun Keung**, **Mr. Cheung Pak To**, **Mr. Li Ka Wai**, **Ms. Jim Lily** and **Mr. Cheung Kwan**[6](index=6&type=chunk) - The Company's auditor is **Tienche Hong Kong Certified Public Accountants Limited**[6](index=6&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) [Interim Financial Performance Overview](index=4&type=section&id=Interim%20Financial%20Performance%20Overview) The Company's financial performance in the first half of 2025 shows a significant 22.8% year-on-year decrease in interest and financing advisory service income, leading to a 61.5% increase in loss attributable to owners of the Company and a rise in basic loss per share 2025 First Half Financial Summary | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Percentage Change (%) | | :--- | :--- | :--- | :--- | | Interest and Financing Advisory Service Income | 39,595 | 51,297 | (22.8) | | Loss for the period attributable to owners of the Company | (29,599) | (18,323) | 61.5 | | Basic Loss Per Share (HKD) | (0.15) | (0.09) | 66.7 | - Interest and financing advisory service income decreased by **22.8%**, primarily due to uncertain economic conditions, tighter credit controls, and more cash used for debt repayment rather than new loan issuance[7](index=7&type=chunk) - Loss for the period attributable to owners of the Company increased by **61.5%** year-on-year, reflecting challenging operating conditions[7](index=7&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Review](index=5&type=section&id=Industry%20Review) In the first half of 2025, mainland China's economy saw a moderate recovery with a 5.3% GDP growth, driven by the service sector; Hong Kong's economy also recovered with a 3.1% GDP growth, though both regions' real estate markets faced pressure, with mainland investment down 11% and Hong Kong's residential market remaining cautious, while the micro-lending sector slightly contracted - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, totaling approximately **RMB 66 trillion**, with significant contributions from the service sector[8](index=8&type=chunk) - Hong Kong's Q2 GDP grew by **3.1%** year-on-year, with overall economic growth in the first half ranging from **2% to 3%**, supported by consumption, tourism, and cross-border business activities[8](index=8&type=chunk) - Mainland China's real estate development investment decreased by approximately **11%** year-on-year, while Hong Kong's residential market remained cautious, with property mortgage loan demand yet to recover[8](index=8&type=chunk)[9](index=9&type=chunk) [Business Review](index=6&type=section&id=Business%20Review) Facing a complex economic environment, the Group's primary goal is to maintain business stability, actively seek growth opportunities, and adhere to strict risk management principles; in the first half of 2025, the Group's new loans totaled approximately HK$313 million, with a total loan balance of HK$945 million, showing a balanced business distribution and faster growth in Hong Kong - In the first half of 2025, the Group's new loans in Beijing, Chengdu, Shenzhen, and Hong Kong totaled approximately **HK$312,859,000**[10](index=10&type=chunk) - As of the end of June 2025, the Group's total loan balance in these regions reached **HK$945,427,000**[10](index=10&type=chunk) - Beijing's business segment accounted for a slightly higher proportion, while Hong Kong's region experienced relatively faster growth[10](index=10&type=chunk) [Future Outlook](index=6&type=section&id=Future%20Outlook) The Group anticipates continued global economic divergence and heightened geopolitical risks; mainland China will implement real estate risk mitigation measures, while Hong Kong benefits from Greater Bay Area development; the Group will prioritize digital transformation and strategic partnerships to strengthen market positioning and maintain strict risk control for sustainable growth - The Chinese central government plans to implement targeted measures to mitigate real estate industry risks and promote sustainable development[11](index=11&type=chunk) - The continued development of the Greater Bay Area brings significant economic integration and growth opportunities for Hong Kong[11](index=11&type=chunk) - The Group will prioritize **digital transformation** and **strategic cooperation** to strengthen its market position while maintaining strict risk control[11](index=11&type=chunk) [Business Model](index=7&type=section&id=Business%20Model) The Group provides secured and unsecured loans, primarily property mortgage loans accounting for approximately 81.6% of the portfolio with a loan-to-value ratio not exceeding 75%; its business process includes due diligence, credit assessment, loan approval, documentation, and post-loan services, with regular risk reviews; as of June 30, 2025, the Group had 1,269 active customers, with the top five accounting for 24.20% of the total outstanding loan portfolio balance - Property mortgage loans accounted for approximately **81.6%** of the Group's total loan portfolio, with a loan-to-value ratio not exceeding **75%**[18](index=18&type=chunk) - As of June 30, 2025, the Group had **1,269 active customers**, comprising **1,228 individual customers** and **41 corporate customers**[18](index=18&type=chunk) - The top five customers accounted for **24.20%** of the Group's total outstanding loan portfolio balance[19](index=19&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance in the first half of 2025, covering revenue decline, expanded losses, liquidity, capital management strategies, and employee remuneration policies, along with disclosures on pledged assets, foreign exchange risk, and significant investments [Interest and Financing Advisory Service Income](index=9&type=section&id=Interest%20and%20Financing%20Advisory%20Service%20Income) During the reporting period, the Group's interest and financing advisory service income was approximately HK$39,595,000, a decrease of about 22.8% from the prior year, mainly due to uncertain economic conditions, tighter credit controls, and more cash used for debt repayment rather than new loan issuance Interest and Financing Advisory Service Income | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Percentage Change (%) | | :--- | :--- | :--- | :--- | | Interest and Financing Advisory Service Income | 39,595 | 51,297 | (22.8) | Revenue Contribution Percentage (by Operating Region) | Operating Region | 2025 | 2024 | | :--- | :--- | :--- | | Beijing | 25.2% | 31.6% | | Chengdu and Chongqing | 35.4% | 26.1% | | Shenzhen | 10.8% | 12.1% | | Hong Kong | 28.6% | 30.2% | [Interest and Fees](index=10&type=section&id=Interest%20and%20Fees) Interest and fees for the reporting period were approximately HK$23,907,000, a slight increase of about 10.9% compared to the same period last year Interest and Fees | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Percentage Change (%) | | :--- | :--- | :--- | :--- | | Interest and Fees | 23,907 | 21,564 | 10.9 | [Other Income and Other Gains and Losses](index=10&type=section&id=Other%20Income%20and%20Other%20Gains%20and%20Losses) Other income primarily included bank interest income of HK$656,000; other gains and losses were mainly affected by a gain of HK$2,174,000 from fair value changes of financial assets at fair value through profit or loss, a loss of HK$800,000 from disposal of recovered assets, and a net exchange loss of HK$4,266,000 - Bank interest income was approximately **HK$656,000**[26](index=26&type=chunk) - Gain on fair value changes of financial assets at fair value through profit or loss was approximately **HK$2,174,000**[26](index=26&type=chunk) - Net exchange loss was approximately **HK$4,266,000**[26](index=26&type=chunk) [Reversal of Loans and Interest Payable](index=10&type=section&id=Reversal%20of%20Loans%20and%20Interest%20Payable) During the reporting period, the Group recognized a one-off other income of approximately HK$1,907,000 due to successfully reaching final agreements and settlements with certain investors/lenders regarding unauthorized loans - A one-off other income from reversal of interest payable was approximately **HK$1,907,000**[27](index=27&type=chunk) - This reversal resulted from reaching final agreements and settlements with certain investors/lenders regarding unauthorized loans[27](index=27&type=chunk) [General and Administrative Expenses

20 25 中期報告 目錄 | 財務摘要 | 2 | | --- | --- | | 簡明綜合損益表 | 3 | | 簡明綜合損益及其他全面收益表 | 4 | | 簡明綜合財務狀況表 | 5 | | 簡明綜合權益變動表 | 8 | | 簡明綜合現金流量表 | 10 | | 簡明綜合財務報表附註 | 12 | | 管理層討論及分析 | 36 | | 董事會報告及公司管治 | 45 | | 公司資料 | 63 | 二零二五年中期報告 2 財務摘要 巨濤海洋石油服務有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈本公司及其 附屬公司（統稱「本集團」）截至2025年6月30日止六個月的未經審核簡明綜合業績，以及 2024年同期的比較數字。本截至2025年6月30日止六個月的中期財務資料已經本公司審 核委員會（「審核委員會」）審閱但未經本公司核數師審閱。 • 收入較去年同期減少67%至人民幣428,270,000元。 • 毛利較去年同期減少64%至人民幣132,009,000元。 • 本公司擁有人應佔溢利較去年同期減少68%至人民幣56,049,000元。 • 每股基本及每股攤薄盈利分別為人民幣2.629 ...

[Company Information](index=3&type=section&id=Company%20Information) This section details the company's governance structure, key personnel, and administrative information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) Company board members changed, with Dr. Liu Weiwen and Mr. Lin Ge appointed as executive directors on September 10, 2025, while Dr. Liu Ruopeng, Dr. Luan Lin, and Dr. Ji Chunlin resigned on the same day; audit, remuneration, and nomination committee members remained stable - Executive Director changes: **Dr. Liu Weiwen** and **Mr. Lin Ge** were appointed on September 10, 2025, while **Dr. Liu Ruopeng**, **Dr. Luan Lin**, and **Dr. Ji Chunlin** resigned on the same day[4](index=4&type=chunk) [Company Secretary, Auditor, and Offices](index=3&type=section&id=Company%20Secretary%2C%20Auditor%2C%20and%20Offices) Mr. Zheng Zhicong is the Company Secretary; the auditor changed from RSM Hong Kong to BCT CPA Limited; the company has a registered office in Bermuda and principal offices in Hong Kong and Shenzhen - Auditor change: **BCT CPA Limited** was appointed on June 27, 2025, and **RSM Hong Kong** retired on the same day[4](index=4&type=chunk) - The company maintains a registered office in Bermuda, a principal office in Hong Kong, and a principal office in Shenzhen[4](index=4&type=chunk)[5](index=5&type=chunk) [Share Registrar and Principal Bankers](index=4&type=section&id=Share%20Registrar%20and%20Principal%20Bankers) The company's Hong Kong share registrar is Tricor Secretaries Limited, and its Bermuda registrar is Conyers Corporate Services (Bermuda) Limited; principal bankers include Bank of China (Hong Kong) Limited, China Construction Bank Corporation, and Ping An Bank Co., Ltd - Hong Kong Share Registrar: **Tricor Secretaries Limited**[5](index=5&type=chunk) - Principal Bankers: **Bank of China (Hong Kong)**, **China Construction Bank**, and **Ping An Bank**[5](index=5&type=chunk) - Stock Code: **439**[5](index=5&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's financial performance, strategic direction, and key operational aspects for the period [Performance Review and Outlook](index=5&type=section&id=Performance%20Review%20and%20Outlook) For the six months ended June 30, 2025, the Group's revenue slightly increased by 5.1% to HK$33.7 million, achieving a net profit of HK$1.8 million, reversing the loss from the same period last year, primarily due to reduced operating and income tax expenses Performance Highlights (For the six months ended June 30) | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 33,700 | 32,000 | +5.1% | | Net Profit | 1,800 | (5,200) | Turned loss into profit | - The increase in net profit was primarily due to reduced operating expenses and income tax expenses[7](index=7&type=chunk) [Strengthening Core Business and Expanding Strategic Areas](index=5&type=section&id=Strengthening%20Core%20Business%20and%20Expanding%20Strategic%20Areas) The Group continues to deepen its AI product development and vertical industry applications, focusing on smart wearable devices (e.g., police and fire helmets) and smart factory solutions, while management plans to strategically expand into AI and new materials, exploring the integration of AI with traditional materials engineering, novel functional materials R&D, and advanced manufacturing processes to open new growth engines - Core business: Customized system development, with a focus on **smart wearables** (police and fire helmets) and **smart factory solutions**[8](index=8&type=chunk)[9](index=9&type=chunk) - Strategic expansion: Focusing on **Artificial Intelligence** and **new materials**, exploring the integration of AI with traditional materials engineering, novel functional materials R&D, and advanced manufacturing processes[10](index=10&type=chunk) - Potential application areas: **new energy**, **aerospace equipment**, **environmental protection**, **flexible electronics**, and **smart sensing**[10](index=10&type=chunk) - High-end aerospace tooling business steadily expanded, enhancing product design, system integration, and comprehensive solution capabilities in the industrial sector[8](index=8&type=chunk) [Employee Information and Remuneration Policy](index=7&type=section&id=Employee%20Information%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total number of employees was 131, a decrease from 179 at the end of 2024; employee benefit expenses slightly increased year-on-year; the company is committed to attracting high-tech talent and providing continuous training and share option schemes to incentivize employees Employee Data | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Employees | 131 employees | 179 employees | Decrease of 48 employees | | Employee Benefit Expenses | 8,286 HK$ thousand | 7,868 HK$ thousand | Increase of 418 HK$ thousand | - The company will globally recruit high-tech talent in areas such as **Artificial Intelligence**, **big data**, **electronic information**, **industrial design**, and **smart manufacturing engineering**[12](index=12&type=chunk) [Interim Dividend](index=7&type=section&id=Interim%20Dividend) The Board has resolved not to declare any interim dividend for the period, consistent with the same period last year - The Board decided not to declare an interim dividend (2024: nil)[13](index=13&type=chunk) [Capital Structure, Liquidity, and Financial Resources](index=7&type=section&id=Capital%20Structure%2C%20Liquidity%2C%20and%20Financial%20Resources) As of June 30, 2025, the company had 615,692,886 ordinary shares issued; total shareholders' equity, total assets, and total liabilities all decreased; bank and cash balances significantly reduced, and total bank borrowings increased, leading to a gearing ratio change from zero (net cash) to 1.30% Capital Structure and Financial Resources | Metric | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Issued Ordinary Shares | 615.7 | 615.7 | No change | | Total Shareholders' Equity | 2,490.9 | 2,727.4 | Decrease of 236.5 | | Total Assets | 2,945.5 | 3,201.6 | Decrease of 256.1 | | Total Liabilities | 454.6 | 474.2 | Decrease of 19.6 | | Bank and Cash Balances | 77.8 | 147.3 | Decrease of 69.5 | | Total Bank Borrowings | 110.9 | 90.5 | Increase of 20.4 | | Gearing Ratio | 1.30% | 0% | Increase | - Bank borrowings bear interest at floating rates ranging from **3.20% to 6.90%** per annum[16](index=16&type=chunk) - The Group has not entered into any instruments for foreign exchange risk but will closely monitor exchange rate fluctuations[16](index=16&type=chunk) [Pledge of Assets](index=8&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's right-of-use assets (HK$65.9 million) and construction in progress (HK$463.9 million) were pledged as collateral for bank borrowings; additionally, HK$0.87 million in bank deposits were pledged for construction projects and service contracts Pledged Assets | Pledged Assets | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Right-of-use assets | 65.9 | 64.7 | Increase of 1.2 | | Construction in progress | 463.9 | 442.6 | Increase of 21.3 | | Bank deposits | 0.87 | 0.841 | Increase of 0.029 | [Contingent Liabilities and Risk Management](index=9&type=section&id=Contingent%20Liabilities%20and%20Risk%20Management) Except as disclosed elsewhere in the interim condensed consolidated financial information, the Group had no other contingent liabilities as of June 30, 2025; the Group regularly reviews its risk and credit control systems, with no significant changes to risk management policies since the last year-end - Except for disclosed matters, the Group had no other contingent liabilities as of **June 30, 2025**[20](index=20&type=chunk) - The Group regularly reviews its risk and credit control systems, and there have been no significant changes to its risk management policies[21](index=21&type=chunk) [Significant Investments, Major Acquisitions or Disposals](index=9&type=section&id=Significant%20Investments%2C%20Major%20Acquisitions%20or%20Disposals) The Group holds shares in Kuang-Chi Technologies Co., Ltd., with a shareholding of approximately 2.07% and a carrying value of approximately HK$1,959.8 million as of June 30, 2025, accounting for 66.5% of total assets; there were no other significant investments, acquisitions, or disposals during the reporting period - The Group holds shares in **Kuang-Chi Technologies Co., Ltd.**, representing approximately **2.07%** of its issued shares[25](index=25&type=chunk)[99](index=99&type=chunk) Investment in Kuang-Chi Technologies Co., Ltd. | Metric | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Carrying value of Kuang-Chi Technologies shares | 1,959.8 | 2,264.8 | Decrease of 305.0 | | Percentage of Group's total assets | 66.5% | 70.7% | Decrease of 4.2 percentage points | - Kuang-Chi Technologies declared a dividend on October 10, 2024, and the Group received approximately **HK$11.275 million** on October 21, 2024[25](index=25&type=chunk) - There were no other significant investments, acquisitions, or disposals of subsidiaries and associates during the period[26](index=26&type=chunk) [Post-Reporting Period Events and Future Plans](index=10&type=section&id=Post-Reporting%20Period%20Events%20and%20Future%20Plans) No significant events have occurred between the end of the period and the report date that would materially affect the Group; the Group currently has no future plans for any significant investments or capital asset additions - No significant events have occurred after the reporting period that would materially affect the Group[27](index=27&type=chunk) - The Group currently has no future plans for any significant investments or additions of capital assets[28](index=28&type=chunk) [Update on Audit Qualification](index=11&type=section&id=Update%20on%20Audit%20Qualification) Litigation regarding a sales contract dispute between a Group subsidiary and Customer A is ongoing; the second instance judgment was unfavorable to the Group, ordering the cancellation of the contract and the return of RMB103.5 million received; the Group has applied for a retrial with the Guangdong Provincial High People's Court and approximately RMB108.3 million has been deducted by the court; the Board, based on legal advice, believes the final outcome is unlikely to have a material adverse effect on the financial position, but the outcome remains uncertain - Sales contract dispute: The second instance judgment was unfavorable to the Group, ordering the cancellation of the contract and the return of **RMB103.5 million**[31](index=31&type=chunk) - The Group has applied for a retrial with the Guangdong Provincial High People's Court, and approximately **RMB108.3 million** has been deducted by the court[31](index=31&type=chunk) - The Board believes the final outcome is unlikely to have a material adverse effect on the financial position, but the appeal outcome cannot be fully and definitively predicted[31](index=31&type=chunk) [Share Option Scheme](index=12&type=section&id=Share%20Option%20Scheme) The company has a share option scheme to incentivize eligible participants who contribute to the Group's operational success; as of June 30, 2025, a total of 1,746,000 share options remained unexercised, with an exercise price of HK$2.290; no share options were granted, exercised, cancelled, or lapsed during the period Outstanding Share Options | Option Category | Outstanding as of June 30, 2025 | Exercise Price (HK$) | | :--- | :--- | :--- | | Employees | 1,626,000 | 2.290 | | Directors and Chief Executive | 120,000 | 2.290 | | **Total** | **1,746,000** | **2.290** | - Share options vest upon the achievement of certain performance targets stated in their respective offer letters and are exercisable in tranches[35](index=35&type=chunk) - As of June 30, 2025, the number of shares available for issue was **1,746,000**, representing approximately **0.28%** of the weighted average number of issued shares[34](index=34&type=chunk) [Directors' and Chief Executive's Interests in Shares](index=13&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) This section outlines the shareholdings and interests of the company's directors and chief executive in the company's shares [Directors' and Chief Executive's Shareholdings](index=13&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Shareholdings) As of June 30, 2025, Dr. Liu Ruopeng held 83,299,064 shares in the company through corporate interests, representing 13.53% of the total issued shares; Dr. Liu Weiwen held 120,000 relevant shares (share options), representing 0.019% Directors' and Chief Executive's Shareholdings | Name of Director/Chief Executive | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Dr. Liu Ruopeng | Corporate Interest | 83,299,064 (L) | 13.53% | | Dr. Liu Weiwen | Personal Related Share Interest (Share Options) | 120,000 (L) | 0.019% | - Dr. Liu Ruopeng's interests are primarily held through subsidiaries of **Wireless Connection Innovative Technology Limited**, **Innovative Power Group Limited**, and **Shenzhen Kuangchi Youlu Technology Co., Ltd.**, which he controls[38](index=38&type=chunk) - As of **June 30, 2025**, the company's issued shares totaled **615,692,886**[40](index=40&type=chunk) [Substantial Shareholders' Interests in Shares](index=15&type=section&id=Substantial%20Shareholders%27%20Interests%20in%20Shares) This section details the shareholdings of the company's major shareholders, including their beneficial and controlled interests [Substantial Shareholders' Shareholdings](index=15&type=section&id=Substantial%20Shareholders%27%20Shareholdings) As of June 30, 2025, Freedom Bless Limited was the largest shareholder, holding 28.99% of shares; Lam Ka Yan held the same proportion through controlled corporate interests; Ms. Huang Weizi (Dr. Liu's spouse) was deemed to hold 13.53% of shares; Central Faith International Ltd. and World Treasure Global Limited were also substantial shareholders Substantial Shareholders' Shareholdings | Name of Substantial Shareholder/Entity | Capacity | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Freedom Bless Limited | Beneficial Owner | 178,550,936 (L) | 28.99% | | Lam Ka Yan | Interest in Controlled Corporation | 178,550,936 (L) | 28.99% | | Ms. Huang Weizi | Spouse's Interest | 83,299,064 (L) | 13.53% | | New Horizon Wireless | Beneficial Owner | 60,786,205 (L) | 9.87% | | Wireless Connection Innovative Technology Limited | Interest in Controlled Corporation | 60,786,205 (L) | 9.87% | | New Horizon Communication | Beneficial Owner | 22,462,859 (L) | 3.65% | | Innovative Power Group Limited | Interest in Controlled Corporation | 22,462,859 (L) | 3.65% | | Shenzhen Kuangchi Hezhong Technology Co., Ltd. | Interest in Controlled Corporation | 60,836,205 (L) | 9.88% | | Shenzhen Dapeng Kuangchi Investment Consulting Co., Ltd. | Interest in Controlled Corporation | 83,249,064 (L) | 13.52% | | Central Faith International Ltd. | Beneficial Owner and Interest in Controlled Corporation | 97,298,101 (L) | 15.80% | | World Treasure Global Limited | Beneficial Owner | 61,898,101 (L) | 10.05% | | Ye Cheng | Interest in Controlled Corporation | 34,747,198 (L) | 5.64% | - **Freedom Bless Limited** is wholly owned by **Lam Ka Yan**[44](index=44&type=chunk) - Ms. Huang Weizi's interest is based on the shareholdings of companies controlled by her spouse, **Dr. Liu**[44](index=44&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's adherence to corporate governance principles, director conduct, public float, and review of financial results [Corporate Governance Practices and Code of Conduct](index=17&type=section&id=Corporate%20Governance%20Practices%20and%20Code%20of%20Conduct) The company has adopted sound corporate governance principles and complied with all provisions of the Corporate Governance Code during the period; directors also complied with the Model Code for Securities Transactions by Directors of Listed Issuers - The company has adopted sound corporate governance principles and complied with all provisions of the **Corporate Governance Code** during the period[46](index=46&type=chunk)[47](index=47&type=chunk) - All Directors confirmed compliance with the **Model Code for Securities Transactions by Directors of Listed Issuers** throughout the period[48](index=48&type=chunk) [Changes in Directors' Information and Securities Transactions](index=17&type=section&id=Changes%20in%20Directors%27%20Information%20and%20Securities%20Transactions) There were no changes in directors' and chief executive's information requiring disclosure for the six months ended June 30, 2025, and up to the report date; neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period - No changes in directors' and chief executive's information requiring disclosure[49](index=49&type=chunk) - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[50](index=50&type=chunk) [Public Float and Litigation](index=18&type=section&id=Public%20Float%20and%20Litigation) The company maintained a sufficient public float as required by the Listing Rules as of the report date; except as disclosed in Note 18 to the interim condensed consolidated financial information, the Group had no other major litigation or arbitration proceedings during the period - The company maintained a sufficient public float as required by the **Listing Rules**[51](index=51&type=chunk) - Except as disclosed in Note 18, the Group had no other major litigation or arbitration proceedings during the period[52](index=52&type=chunk) [Review of Significant Investments and Future Plans](index=18&type=section&id=Review%20of%20Significant%20Investments%20and%20Future%20Plans) The Group had no significant investments, disposals, or acquisitions of subsidiaries, associates, or joint ventures during the period; directors confirmed that as of the report date, the company currently has no plans to acquire any significant investments or capital assets; the Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025 - No significant investments, disposals, or acquisitions of subsidiaries, associates, or joint ventures during the period[53](index=53&type=chunk) - The company currently has no plans to acquire any significant investments or capital assets[54](index=54&type=chunk) - The **Audit Committee** has reviewed the Group's interim results for the six months ended **June 30, 2025**[55](index=55&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the group's revenues, expenses, and net profit or loss for the reporting period [Profit or Loss Overview](index=19&type=section&id=Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the Group's revenue was HK$33,656 thousand, a slight increase year-on-year; net profit for the period was HK$1,821 thousand, successfully reversing a net loss of HK$5,226 thousand in the prior year, mainly due to increased net finance income and a significant reduction in income tax expense Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 33,656 | 32,028 | +5.1% | | Gross profit | 8,906 | 7,539 | +18.1% | | Net other gains | 3,791 | 12,247 | -69.1% | | Operating loss | (4,504) | (2,803) | Loss widened | | Net finance income | 7,186 | 5,145 | +39.7% | | Profit before tax | 1,979 | 2,342 | -15.5% | | Income tax expense | (158) | (7,568) | -97.9% | | Profit/(loss) for the period | 1,821 | (5,226) | Turned loss into profit | | Basic earnings/(loss) per share | 0.30 HK cents | (0.85) HK cents | Turned loss into profit | - Income tax expense significantly decreased from **HK$7,568 thousand** in 2024 to **HK$158 thousand** in 2025, a key factor in turning the loss into profit[57](index=57&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section details the group's profit or loss for the period and other comprehensive income items, leading to total comprehensive income or loss [Comprehensive Income Overview](index=20&type=section&id=Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, the Group recorded a profit of HK$1,821 thousand, but due to a significant loss from fair value changes of financial assets at fair value through other comprehensive income (HK$325,836 thousand), the total comprehensive loss for the period was HK$236,478 thousand, a stark contrast to the total comprehensive income of HK$65,959 thousand in the prior year Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Profit/(loss) for the period | 1,821 | (5,226) | Turned loss into profit | | Exchange differences arising from translation of foreign operations | 87,537 | (34,210) | Turned into gain | | Fair value changes of financial assets at fair value through other comprehensive income | (325,836) | 105,395 | Turned into loss | | Other comprehensive (loss)/income, net of tax | (238,299) | 71,185 | Turned into loss | | Total comprehensive (loss)/income for the period | (236,478) | 65,959 | Turned into loss | - Fair value changes of financial assets at fair value through other comprehensive income were the primary reason for the shift from comprehensive income to loss[58](index=58&type=chunk) [Condensed Consolidated Statement of Financial Position](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides a snapshot of the group's assets, liabilities, and equity at the end of the reporting period [Financial Position Overview](index=21&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, the Group's total assets were HK$2,945,499 thousand, a decrease of approximately 8% from the end of 2024, mainly due to a decline in the value of financial assets at fair value through other comprehensive income (primarily Kuang-Chi Technologies shares); total equity decreased accordingly, while total liabilities slightly decreased Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total non-current assets | 2,651,374 | 2,930,704 | -9.5% | | Total current assets | 294,125 | 270,927 | +8.5% | | **Total Assets** | **2,945,499** | **3,201,631** | **-8.0%** | | **Equity** | | | | | Total equity | 2,490,904 | 2,727,382 | -8.6% | | **Liabilities** | | | | | Total non-current liabilities | 348,053 | 379,196 | -8.2% | | Total current liabilities | 106,542 | 95,053 | +12.1% | | **Total Liabilities** | **454,595** | **474,249** | **-4.1%** | - Financial assets at fair value through other comprehensive income (primarily **Kuang-Chi Technologies shares**) decreased from **HK$2,264,752 thousand** to **HK$1,959,820 thousand**, which is the main reason for the decline in total assets[60](index=60&type=chunk)[99](index=99&type=chunk) - Trade and other receivables significantly increased from **HK$94,257 thousand** to **HK$186,805 thousand**, primarily due to an increase in other deposits paid (litigation-related)[60](index=60&type=chunk)[100](index=100&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section illustrates the movements in the group's equity components over the reporting period [Changes in Equity Overview](index=23&type=section&id=Changes%20in%20Equity%20Overview) For the six months ended June 30, 2025, total equity attributable to owners of the company decreased from HK$2,727,382 thousand as of January 1, 2025, to HK$2,490,904 thousand; despite recording a profit for the period, a significant loss from fair value changes of financial assets at fair value through other comprehensive income resulted in a total comprehensive loss of HK$236,478 thousand, which was the main reason for the decrease in equity Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 2,727,382 | 1,493,847 | | Profit/(loss) for the period | 1,821 | (5,226) | | Exchange differences on translation | 87,537 | (34,210) | | Fair value changes of financial assets at fair value through other comprehensive income | (325,836) | 105,395 | | Total comprehensive income/(loss) for the period | (236,478) | 65,959 | | Equity-settled share-based payments | – | 75 | | Total equity at end of period | 2,490,904 | 1,559,881 | - Financial assets reserve decreased by **HK$325,836 thousand** due to fair value changes[63](index=63&type=chunk) - Exchange fluctuation reserve increased by **HK$87,537 thousand** due to exchange differences on translation[63](index=63&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the group [Cash Flow Overview](index=25&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the Group's net cash used in operating activities was HK$87,790 thousand, an improvement from the prior year; investing activities generated net cash of HK$68 thousand, compared to net cash used in the prior year; financing activities generated net cash of HK$15,773 thousand; the combined effect resulted in a net decrease of HK$71,949 thousand in bank and cash balances Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (87,790) | (95,545) | Decrease in cash used | | Net cash generated from/(used in) investing activities | 68 | (18,791) | Turned into cash generated | | Net cash generated from/(used in) financing activities | 15,773 | (10,000) | Turned into cash generated | | Net decrease in bank and cash balances | (71,949) | (124,336) | Decrease narrowed | | Bank and cash balances at end of period | 77,764 | 132,907 | Decrease | - Cash flow from investing activities turned into a net inflow, primarily due to no significant acquisition of investment properties during the period[66](index=66&type=chunk) - Cash flow from financing activities turned into a net inflow, primarily due to increased proceeds from bank borrowings[66](index=66&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=26&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed explanations and breakdowns of the figures presented in the interim financial statements [1 General Information](index=26&type=section&id=1%20General%20Information) KuangChi Science Limited is an investment holding company incorporated in Bermuda, with its shares listed on the Main Board of the Hong Kong Stock Exchange; the Group primarily engages in research, development, and manufacturing of innovative products for future technology businesses and provides other innovative technology service solutions; the interim condensed consolidated financial information is presented in HK dollars and was approved for publication by the Board on August 29, 2025, and has not been audited or reviewed by external auditors - The company is an investment holding company primarily engaged in the research, development, and manufacturing of innovative products for future technology businesses and providing innovative technology service solutions[67](index=67&type=chunk) - The interim condensed consolidated financial information is presented in **HK dollars** and has not been audited or reviewed by external auditors[68](index=68&type=chunk) [2 Basis of Preparation](index=26&type=section&id=2%20Basis%20of%20Preparation) This interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange, and should be read in conjunction with the annual financial statements for the year ended December 31, 2024 - Basis of preparation: **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** and **Appendix D2 to the Listing Rules of the Stock Exchange**[69](index=69&type=chunk) - The financial information is prepared on a historical cost basis, except for investment properties measured at fair value, financial assets at fair value through other comprehensive income, and financial assets at fair value through profit or loss[69](index=69&type=chunk) [3 Summary of Significant Accounting Policies](index=27&type=section&id=3%20Summary%20of%20Significant%20Accounting%20Policies) The accounting policies adopted for this period are consistent with those used in the 2024 annual financial statements, except for changes resulting from the application of new and revised Hong Kong Financial Reporting Standards (such as HKAS 21 (Amendment) Lack of Exchangeability); management is assessing the impact of standards issued but not yet effective on the business - The Group first applied **HKAS 21 (Amendment) "Lack of Exchangeability"** during the period, but it had no significant impact on the financial position and performance[71](index=71&type=chunk) - Management is assessing the impact of standards issued but not yet effective (such as amendments to **HKFRS 7, 9, 18, and 10, and HKAS 28**) on the Group's business[72](index=72&type=chunk)[73](index=73&type=chunk) [4 Estimates](index=28&type=section&id=4%20Estimates) The preparation of the interim condensed consolidated financial information requires management to make judgments, estimates, and assumptions, which are consistent with those used in the consolidated financial statements for the year ended December 31, 2024; actual results may differ from these estimates - The significant judgments made by management in applying the financial information and the key sources of estimation uncertainty are the same as those applied in the 2024 annual consolidated financial statements[74](index=74&type=chunk) [5 Financial Risk Management and Financial Instruments](index=28&type=section&id=5%20Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group is exposed to market risks (including currency and interest rate risks), credit risk, and liquidity risk; financial instruments are measured at fair value hierarchy (Level 1 to Level 3), with listed equity securities classified as Level 1 and unlisted equity securities as Level 3; the Group's finance department has a team responsible for valuing financial assets - The Group is exposed to **market risks** (currency risk and interest rate risk), **credit risk**, and **liquidity risk**[75](index=75&type=chunk) Fair Value Hierarchy of Financial Assets (HK$ thousand) | Category | June 30, 2025 (Level 1) | June 30, 2025 (Level 3) | December 31, 2024 (Level 1) | December 31, 2024 (Level 3) | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through other comprehensive income - Listed equity securities | 1,959,820 | – | 2,264,752 | – | | Financial assets at fair value through profit or loss - Unlisted equity securities | – | 5,484 | – | 5,301 | | **Total** | **1,959,820** | **5,484** | **2,264,752** | **5,301** | - The Group's finance department has a team responsible for valuing financial assets, reporting directly to the **Chief Financial Officer** and the **Audit Committee**[79](index=79&type=chunk) [6 Revenue and Segment Information](index=31&type=section&id=6%20Revenue%20and%20Segment%20Information) The Group's business constitutes a single reportable segment; for the six months ended June 30, 2025, total revenue was HK$33,656 thousand, primarily from the sale of metal component products (HK$32,782 thousand); all revenue and non-current assets are derived from the China region - The Group's business constitutes a **single reportable segment**[81](index=81&type=chunk) Revenue by Major Product or Service Line (HK$ thousand) | Product or Service Line | 2025 | 2024 | | :--- | :--- | :--- | | Sales of AI coverage systems and related products | – | 2,506 | | Sales of wearable smart helmets | 874 | 256 | | Sales of metal component products | 32,782 | 29,266 | | **Total Revenue** | **33,656** | **32,028** | Geographical Information (HK$ thousand) | Region | 2025 Revenue | 2024 Revenue | 2025 Non-current Assets* | 2024 Non-current Assets* | | :--- | :--- | :--- | :--- | :--- | | China | 33,656 | 32,028 | 691,554 | 665,952 | [7 Other Income](index=32&type=section&id=7%20Other%20Income) For the six months ended June 30, 2025, the Group's total other income was HK$1,495 thousand, slightly lower than the prior year; the main sources were rental income from investment properties and miscellaneous income Other Income (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Government grants | 32 | 39 | | Rental income from investment properties | 874 | 927 | | Miscellaneous income | 589 | 568 | | **Total** | **1,495** | **1,534** | [8 Net Other Gains](index=32&type=section&id=8%20Net%20Other%20Gains) For the six months ended June 30, 2025, the Group's net other gains were HK$3,791 thousand, a significant decrease from HK$12,247 thousand in the prior year; the decrease was mainly due to gains from the disposal of investment properties in the prior year, while this period included gains from the derecognition of a subsidiary Net Other Gains (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net exchange gains | 692 | 453 | | Gain on disposal of investment properties | – | 11,809 | | Gain on derecognition of a subsidiary | 3,099 | – | | Write-off of property, plant and equipment | – | (15) | | **Total** | **3,791** | **12,247** | - In 2024, the disposal of investment properties generated a gain of **HK$11,809 thousand**, while there was no such gain in 2025[86](index=86&type=chunk) [9 Operating Loss](index=32&type=section&id=9%20Operating%20Loss) For the six months ended June 30, 2025, the Group's operating loss was HK$4,504 thousand, an increase from HK$2,803 thousand in the prior year; major expenses included cost of sales, salaries, wages and other benefits, administrative expenses, and impairment loss on trade receivables Major Components of Operating Loss (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of sales | 24,750 | 24,489 | | Salaries, wages and other benefits | 7,432 | 7,368 | | Amortisation of intangible assets | 3 | 62 | | Depreciation of property, plant and equipment | 450 | 7 | | Amortisation of right-of-use assets | 1,063 | 1,066 | | Directors' emoluments | 854 | 500 | | Impairment loss on trade receivables | 3,152 | 4,887 | - Impairment loss on trade receivables decreased from **HK$4,887 thousand** to **HK$3,152 thousand**[87](index=87&type=chunk) [10 Income Tax Expense](index=33&type=section&id=10%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was HK$158 thousand, a significant decrease from HK$7,568 thousand in the prior year; Hong Kong profits tax was nil, and China corporate income tax was calculated at rates of 25% or 15% (for high-tech enterprises) Income Tax Expense (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong profits tax | – | – | | China corporate income tax | 158 | 7,568 | | **Total** | **158** | **7,568** | - The applicable tax rate for Chinese subsidiaries is **25%**, or **15%** for high-tech enterprises[88](index=88&type=chunk) - Hong Kong profits tax was nil as the Group had no assessable profits in Hong Kong[90](index=90&type=chunk) [11 Dividends](index=33&type=section&id=11%20Dividends) For the six months ended June 30, 2025, and 2024, the company neither paid, declared, nor proposed any dividends - The company neither paid, declared, nor proposed any dividends during the current period and the same period last year[89](index=89&type=chunk) [12 Earnings/(Loss) Per Share](index=34&type=section&id=12%20Earnings%2F%28Loss%29%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the company were HK$0.30 cents, successfully reversing a loss per share of HK$0.85 cents in the prior year; diluted earnings per share were not assumed to be impacted by unexercised share options as their exercise price was higher than the average market price Earnings/(Loss) Per Share | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit/(loss) for the purpose of calculating basic and diluted earnings/(loss) per share | 1,821 | (5,226) | | **Basic per share (HK cents per share)** | **0.30** | **(0.85)** | | **Diluted per share (HK cents per share)** | **0.30** | **(0.85)** | - The calculation of diluted earnings/(loss) per share does not assume the exercise of unexercised share options because their exercise price was higher than the average market price of the company's shares[92](index=92&type=chunk) [13 Property, Plant and Equipment](index=35&type=section&id=13%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the carrying value of property, plant and equipment was HK$471,183 thousand, an increase from HK$448,855 thousand at the end of 2024, primarily due to additions to construction in progress and exchange differences Carrying Value of Property, Plant and Equipment (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Plant and machinery | 6,278 | 6,184 | | Furniture and fixtures | – | – | | Office equipment | 99 | 120 | | Motor vehicles | 922 | – | | Construction in progress | 463,884 | 442,551 | | **Total** | **471,183** | **448,855** | - The cost of construction in progress increased from **HK$442,551 thousand** at the end of 2024 to **HK$463,884 thousand** as of June 30, 2025[93](index=93&type=chunk) [14 Investment Properties](index=36&type=section&id=14%20Investment%20Properties) As of June 30, 2025, the carrying value of investment properties was HK$105,208 thousand, a slight increase from HK$104,048 thousand at the end of 2024; these properties are primarily leased out to earn rental income Carrying Value of Investment Properties (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cost | 123,108 | 118,988 | | Accumulated depreciation | (17,900) | (14,940) | | **Carrying value** | **105,208** | **104,048** | - Investment properties are leased out under operating leases, with rent paid monthly and initial lease terms typically one year[94](index=94&type=chunk) [15 Leases](index=37&type=section&id=15%20Leases) As of June 30, 2025, the balance of right-of-use assets was HK$65,872 thousand, largely consistent with the end of 2024; amortization expense for right-of-use assets recognized during the period was HK$1,063 thousand, and operating lease expenses related to short-term leases were HK$79 thousand Balance of Right-of-Use Assets (HK$ thousand) | Item | June 30, 2025 | | :--- | :--- | | Balance as of January 1, 2025 | 64,714 | | Amortisation expense | (1,063) | | Exchange | 2,221 | | **Balance as of June 30, 2025** | **65,872** | Lease-Related Amounts Recognized in Condensed Consolidated Statement of Profit or Loss (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Amortisation of right-of-use assets | 1,063 | 1,066 | | Expenses relating to short-term leases | 79 | 75 | | **Total** | **1,142** | **1,141** | [16 Intangible Assets](index=38&type=section&id=16%20Intangible%20Assets) As of June 30, 2025, the carrying value of intangible assets (technical know-how and patents) was HK$1 thousand, a further decrease from HK$3 thousand at the end of 2024; amortization expense for the period was HK$3 thousand Carrying Value of Intangible Assets (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cost | 15,169 | 14,661 | | Accumulated amortisation and impairment | (15,168) | (14,658) | | **Carrying value** | **1** | **3** | - Amortisation expense for intangible assets decreased from **HK$65 thousand** in 2024 to **HK$3 thousand** in 2025[98](index=98&type=chunk) [17 Financial Assets at Fair Value Through Other Comprehensive Income](index=38&type=section&id=17%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, the Group's financial assets at fair value through other comprehensive income primarily consisted of listed equity securities of Kuang-Chi Technologies Co., Ltd., with a carrying value of HK$1,959,820 thousand, a significant decrease from HK$2,264,752 thousand at the end of 2024; these investments are designated for long-term strategic purposes Financial Assets at Fair Value Through Other Comprehensive Income (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed equity securities | 1,959,820 | 2,264,752 | - The Group holds **44,693,660** ordinary shares of Kuang-Chi Technologies, representing **2.07%** of its issued ordinary shares[99](index=99&type=chunk) - These investments are designated as at fair value through other comprehensive income because they are held for long-term strategic purposes, avoiding short-term fluctuations impacting profit or loss[99](index=99&type=chunk) [18 Trade and Other Receivables](index=39&type=section&id=18%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were HK$186,805 thousand, a significant increase from HK$94,257 thousand at the end of 2024, primarily due to an increase in other deposits paid (litigation-related); net trade receivables decreased, and the loss allowance account increased Trade and Other Receivables (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net trade receivables | 37,021 | 64,660 | | Other deposits paid | 118,760 | – | | Prepayments | 13,690 | 11,086 | | Value-added tax and other tax receivables | 16,051 | 17,089 | | **Total** | **186,805** | **94,257** | Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 90 days | 21,896 | 40,459 | | 91 to 180 days | 1,263 | – | | 181 to 365 days | 2,186 | 13,431 | | 1 to 2 years | 10,822 | 8,454 | | Over 2 years | 854 | 2,316 | Movement in Loss Allowance Account for Trade Receivables and Contract Assets (HK$ thousand) | Item | Trade Receivables | Contract Assets | Total | | :--- | :--- | :--- | :--- | | As of January 1, 2025 | 12,975 | 166 | 13,141 | | Impairment loss allowance | 3,152 | – | 3,152 | | Exchange differences | 507 | 6 | 513 | | **As of June 30, 2025** | **16,634** | **172** | **16,806** | - Other deposits paid (**HK$118,760 thousand**) are primarily related to sales contract litigation, and this amount has been deducted by the court[101](index=101&type=chunk)[102](index=102&type=chunk) [19 Financial Assets at Fair Value Through Profit or Loss](index=41&type=section&id=19%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss were unlisted equity securities with a carrying value of HK$5,484 thousand, a slight increase from the end of 2024; this investment has a repurchase clause, and repurchase arrangements are currently being negotiated with the investee Financial Assets at Fair Value Through Profit or Loss (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unlisted equity securities outside Hong Kong | 5,484 | 5,301 | - This investment has a repurchase clause, where the seller will repurchase the shares if the investee fails to meet revenue targets; currently, the investee has not met the targets, and the Group is negotiating repurchase arrangements[103](index=103&type=chunk) [20 Loans Receivable](index=41&type=section&id=20%20Loans%20Receivable) As of June 30, 2025, the Group's loans receivable had a carrying value of nil, as a HK$2,368 thousand loan provided to Beyond Verbal was fully impaired in 2017, and no repayments were received during the period Loans Receivable (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Loan to a third party | 2,368 | 2,368 | | Less: Impairment allowance for loans receivable | (2,368) | (2,368) | | **Total** | **–** | **–** | - The loan is unsecured, bears interest at **6%** per annum, was fully impaired in **2017**, and no repayments were received during the period[104](index=104&type=chunk) [21 Share Capital](index=42&type=section&id=21%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was HK$73,167 thousand, and issued and fully paid share capital was HK$61,569 thousand, comprising 615,692,886 shares, consistent with the end of 2024; the share capital structure underwent a share consolidation on January 31, 2024 Share Capital (HK$ thousand) | Item | June 30, 2025 (Number of Shares) | June 30, 2025 (Equivalent HK$ thousand) | December 31, 2024 (Number of Shares) | December 31, 2024 (Equivalent HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorised share capital (HK$0.1 par value per share) | 731,666,666 | 73,167 | 731,666,666 | 73,167 | | Issued and fully paid share capital (HK$0.1 par value per share) | 615,692,886 | 61,569 | 615,692,886 | 61,569 | - The company completed a share consolidation on **January 31, 2024**, where every ten (10) ordinary shares of HK$0.01 par value were consolidated into one (1) ordinary share of **HK$0.10** par value[105](index=105&type=chunk) [22 Other Reserves](index=42&type=section&id=22%20Other%20Reserves) As of June 30, 2025, total other reserves were HK$3,141,756 thousand, a decrease from HK$3,380,055 thousand as of January 1, 2025; this was primarily due to a HK$325,836 thousand loss from fair value changes of financial assets at fair value through other comprehensive income, partially offset by gains from exchange differences Movement in Other Reserves (HK$ thousand) | Item | Share premium | Financial assets reserve | Capital reserve | Contributed surplus | Share-based payment reserve | Exchange fluctuation reserve | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 | 2,339,550 | 1,157,263 | 17,900 | 103,941 | 1,916 | (240,515) | 3,380,055 | | Exchange differences on translation | – | – | – | – | – | 87,537 | 87,537 | | Fair value changes of financial assets at fair value through other comprehensive income | – | (325,836) | – | – | – | – | (325,836) | | **As of June 30, 2025** | **2,339,550** | **831,427** | **17,900** | **103,941** | **1,916** | **(152,978)** | **3,141,756** | - Financial assets reserve decreased by **HK$325,836 thousand** due to fair value changes[106](index=106&type=chunk) - Exchange fluctuation reserve increased by **HK$87,537 thousand** due to exchange differences on translation[106](index=106&type=chunk) [23 Bank Borrowings](index=44&type=section&id=23%20Bank%20Borrowings) As of June 30, 2025, the Group's total bank borrowings were HK$110,926 thousand, an increase from HK$90,493 thousand at the end of 2024; HK$26,007 thousand is repayable within one year, with the remainder as non-current liabilities; borrowings bear interest at floating rates from 3.20% to 6.90% and are secured by right-of-use assets, construction in progress, and guarantees from the company and a company controlled by the controlling shareholder Bank Borrowings (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 26,007 | 21,202 | | One to two years | 26,007 | 23,097 | | Two to five years | 58,912 | 46,194 | | **Total** | **110,926** | **90,493** | - Bank borrowings bear interest at annual rates ranging from approximately **3.20% to 6.90%**[110](index=110&type=chunk) - Borrowings are secured by right-of-use assets (**HK$65,872 thousand**) and construction in progress (**HK$463,884 thousand**), and guaranteed by the company and a company controlled by **Dr. Liu Ruopeng**[110](index=110&type=chunk) [24 Trade and Other Payables](index=44&type=section&id=24%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were HK$73,125 thousand, an increase from HK$66,928 thousand at the end of 2024; trade payables are primarily denominated in RMB, with a significant portion due in over one year Trade and Other Payables (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 42,963 | 36,853 | | Accrued employee benefits | 2,002 | 4,462 | | Value-added tax and other tax payables | 4,913 | 3,209 | | Other payables and accrued expenses | 9,278 | 8,902 | | Accrued construction costs | 13,969 | 13,502 | | **Total** | **73,125** | **66,928** | Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 90 days | 10,402 | 8,926 | | 91 to 365 days | 5,557 | 1,037 | | Over one year | 27,004 | 26,890 | - The carrying values of the Group's trade and other payables are primarily denominated in **RMB**[113](index=113&type=chunk) [25 Share-based Payment Transactions](index=45&type=section&id=25%20Share-based%20Payment%20Transactions) The company has a share option scheme designed to provide incentives to participants who contribute to the Group; as of June 30, 2025, a total of 1,746,000 share options remained unexercised, with an exercise price of HK$2.290; no share option expenses were recognized, nor were any share options granted, exercised, or cancelled during the period - The share option scheme aims to provide incentives to **employees, directors, advisors, consultants, agents, contractors, customers, and suppliers**[114](index=114&type=chunk) Movement in Share Options (For the six months ended June 30) | Item | 2025 (Number of Share Options) | 2025 (Weighted Average Exercise Price) | | :--- | :--- | :--- | | Outstanding as of January 1, 2025 | 1,746,000 | 2.290 | | Lapsed during the period | – | Not applicable | | **Outstanding as of June 30, 2025** | **1,746,000** | **2.290** | - For the six months ended June 30, 2025, the Group recognized approximately **HK$nil** in expenses for share options granted by the company[117](index=117&type=chunk) [26 Capital Commitments](index=47&type=section&id=26%20Capital%20Commitments) As of June 30, 2025, the Group's contracted but not yet incurred capital expenditure primarily related to property, plant and equipment, amounting to HK$44,769 thousand, a decrease from the end of 2024 Capital Commitments (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 44,769 | 50,853 | [27 Related Party Transactions](index=48&type=section&id=27%20Related%20Party%20Transactions) The Group has multiple transactions with related party Foshan Shunde Kuang-Chi, including procurement of materials and sales of metal component products; as of June 30, 2025, trade receivables from Foshan Shunde Kuang-Chi amounted to HK$19,556 thousand; a company controlled by Dr. Liu Ruopeng provides guarantees for the Group's bank credit facilities Related Party Balances (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables - Foshan Shunde Kuang-Chi | 19,556 | 45,540 | | Contract assets - Foshan Shunde Kuang-Chi | 2,572 | 6,743 | Related Party Transactions (For the six months ended June 30, HK$ thousand) | Name of Related Party | Nature of Transaction | 2025 | 2024 | | :--- | :--- | :--- | :--- | | Foshan Shunde Kuang-Chi | Procurement of materials | 1,044 | – | | Foshan Shunde Kuang-Chi | Sales of AI systems and related products | – | 2,506 | | Foshan Shunde Kuang-Chi | Sales of metal component products | 32,782 | 29,266 | | Foshan Shunde Kuang-Chi | Property rental | – | 187 | - **Dr. Liu Ruopeng**, a director and controlling shareholder of the company, is the controlling shareholder of **Foshan Shunde Kuang-Chi**[123](index=123&type=chunk) - A company controlled by **Dr. Liu Ruopeng** provides guarantees for the Group's **HK$310,329 thousand** bank credit facilities[123](index=123&type=chunk) [28 Events After the Reporting Period](index=49&type=section&id=28%20Events%20After%20the%20Reporting%20Period) Except for the matters already disclosed, no other significant events have occurred after the period ended June 30, 2025 - Except for the matters already disclosed, no other significant events have occurred after the end of the period[122](index=122&type=chunk)

Corporate Information [Company Overview & Board](index=3&type=section&id=Company%20Overview%20%26%20Board) The report discloses the composition of the company's board of directors, including executive, non-executive, and independent non-executive directors, along with members and chairs of the audit, remuneration, and nomination committees - Mr. Cheng Jerome serves as the Chairman of the Board, and Mr. Wong Chi Keung succeeded Mr. Cheng Jerome as the Chairman of the Nomination Committee after his resignation on June 24, 2025[4](index=4&type=chunk) [Key Contacts & Advisors](index=4&type=section&id=Key%20Contacts%20%26%20Advisors) This section provides the company's principal place of business in Hong Kong, principal bankers, auditor, legal advisor, stock code, Hong Kong share registrar, company website, and investor relations contact information - The company's stock code is **1039**[7](index=7&type=chunk)[8](index=8&type=chunk) - The auditor is BDO Limited, Hong Kong, and the legal advisor is Nixon, Zheng, Lin & Hu Solicitors[7](index=7&type=chunk)[8](index=8&type=chunk) Management Discussion and Analysis [Business Review](index=5&type=section&id=Business%20Review) Changyou International Group leverages its e-commerce experience to enter the digital points business, forming the Changyou Alliance with major enterprises to develop the 'Changyou Platform' for integrating digital membership points, resources, and strategic advantages, utilizing blockchain and big data technologies to create a global asset blockchain token issuance, circulation, storage, and payment settlement platform - The Changyou Platform utilizes advanced technologies like blockchain and big data to build a global digital asset circulation platform[10](index=10&type=chunk)[14](index=14&type=chunk) [Platform Development & User Growth](index=5&type=section&id=Platform%20Development%20%26%20User%20Growth) The Changyou Platform continues to grow its user base, enrich product and service categories, and refine its business model and consumption scenarios Changyou Platform User Growth | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cumulative Registered Users | Approx. **275.0 million** | - | Newly added approx. **23.2 million** | Changyou Alliance Business Transaction Volume and Revenue | Metric | Amount (RMB) | | :--- | :--- | | Total Transaction Volume | Approx. **122.7 million** | | Revenue | Approx. **90.4 million** | [SaaS Digital Points Services & Ecosystem](index=5&type=section&id=SaaS%20Digital%20Points%20Services%20%26%20Ecosystem) SaaS digital points services maintain stable operations, contributing significant revenue to the group, while user experience optimization and deep scenario linkage strengthen competitive advantages, actively collaborating with China Mobile provincial companies to form a virtuous cycle of "points + scenarios + traffic" - SaaS digital points services maintain stable operations, continuously contributing significant revenue[13](index=13&type=chunk)[16](index=16&type=chunk) - The company actively collaborates with China Mobile provincial companies to develop business synergies, forming a virtuous cycle of "points + scenarios + traffic" to effectively enhance user stickiness and business added value[13](index=13&type=chunk)[16](index=16&type=chunk) [Traffic Expansion Strategy](index=6&type=section&id=Traffic%20Expansion%20Strategy) The company actively explores public domain traffic promotion paths based on the SaaS digital points service ecosystem traffic, deeply integrating with self-operated platform customer acquisition and user retention, establishing a complete closed loop within the Alipay ecosystem, and systematically advancing exploration in the WeChat and Douyin ecosystems - The Alipay ecosystem has established a complete closed loop of "traffic acquisition – user conversion – transaction completion"[18](index=18&type=chunk)[22](index=22&type=chunk) - Exploration of the WeChat and Douyin ecosystems is progressing systematically, laying the foundation for future traffic expansion[18](index=18&type=chunk)[22](index=22&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the group's revenue decreased by 11.8% year-on-year to RMB 90.4 million, primarily due to business partners reducing total points usage; despite the revenue decline, gross profit margin improved from 18.0% to 21.7% through supply chain optimization and product focus, and all expenses (selling and distribution, administrative, R&D) decreased, leading to a turnaround from operating loss to profit - The group's operating profit turned from a loss of **RMB 1.9 million** in the same period of 2024 to a profit of **RMB 4.4 million** in the same period of 2025[89](index=89&type=chunk) [Revenue Performance](index=6&type=section&id=Revenue%20Performance) For the six months ended June 30, 2025, the group's consolidated revenue decreased by 11.8% year-on-year, mainly due to unstable economic conditions leading business partners to reduce total points usage Revenue Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | **90.4** | **102.4** | **-11.8%** | - The decrease in revenue is primarily attributed to business partners reducing the total usage of points amidst an unstable economic environment[19](index=19&type=chunk)[23](index=23&type=chunk) [Profitability Analysis](index=6&type=section&id=Profitability%20Analysis) The group's gross profit increased year-on-year, and gross profit margin significantly improved, primarily due to Changyou Platform supply chain optimization, product category focus, and the integration of points redemption with business promotion, effectively enhancing user conversion rates and overall profitability Gross Profit and Gross Profit Margin Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Gross Profit | **19.6** | **18.4** | **+6.5%** | | Gross Profit Margin | **21.7%** | **18.0%** | **+3.7 percentage points** | - The group improved user conversion rates and overall profitability by optimizing the Changyou Platform supply chain, focusing on specific product categories, and integrating points redemption with business promotion[20](index=20&type=chunk)[24](index=24&type=chunk) [Operating Expenses](index=6&type=section&id=Operating%20Expenses) Selling and distribution expenses, administrative expenses, and research and development costs all decreased year-on-year, reflecting the group's efforts in cost control, particularly through flexible employment, outsourcing cooperation, and strict control over fixed costs and labor expenses Operating Expense Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | **1.9** | **2.1** | **-8.7%** | | Administrative Expenses | **9.8** | **14.6** | **-32.5%** | | Research and Development Costs | **3.4** | **4.0** | **-14.7%** | - The decrease in selling and distribution expenses is directly related to the decline in business scale, achieved through flexible employment and outsourcing cooperation[26](index=26&type=chunk)[31](index=31&type=chunk) - The significant reduction in administrative expenses is primarily due to the group's continuous implementation of cost-saving measures, strictly controlling fixed costs, labor, and administrative expenses[27](index=27&type=chunk)[32](index=32&type=chunk) - The decrease in research and development costs is mainly due to reduced technical infrastructure development costs and employee costs for R&D activities[28](index=28&type=chunk)[33](index=33&type=chunk) - Impairment gains on trade and other receivables were zero, compared to approximately **RMB 26,000** in the prior year period[29](index=29&type=chunk)[34](index=34&type=chunk) [Finance Costs & Taxation](index=7&type=section&id=Finance%20Costs%20%26%20Taxation) The group's finance costs decreased by 13.1% year-on-year, primarily including convertible bonds, equity shareholder loan interest, and lease liability interest, and recorded a net foreign exchange gain; income tax expense of RMB 2.8 million was recognized in the current period, compared to zero in the prior year period Finance Costs and Taxation Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Finance Costs | **5.3** | **6.1** | **-13.1%** | | Income Tax Expense | **2.8** | **0.0** | N/A | - Finance costs include financial expenses for convertible bonds, interest expenses on lease liabilities, interest expenses on equity shareholder loans, and a net foreign exchange gain of **RMB 3.3 million** (compared to a loss of **RMB 0.7 million** in the same period of 2024)[30](index=30&type=chunk)[35](index=35&type=chunk)[137](index=137&type=chunk) [Liquidity and Financial Resources](index=8&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the group's cash and cash equivalents significantly increased, primarily driven by net cash inflow from operating activities; despite this, the group still faces net current liabilities and net liabilities, and there is significant uncertainty regarding its ability to continue as a going concern, relying on financial support from its controlling shareholder - The group's ability to continue as a going concern is highly dependent on the timely financial support from its controlling company, Century Investment (Holding) Limited, posing significant uncertainty[122](index=122&type=chunk)[126](index=126&type=chunk) [Cash Flow & Current Position](index=8&type=section&id=Cash%20Flow%20%26%20Current%20Position) The group's cash and cash equivalents significantly increased, primarily driven by net cash inflow from operating activities, but net current liabilities persist, with a slight improvement in the current ratio Cash and Liquidity Indicators Comparison | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | **26.6** | **8.2** | **+18.4** | | Net Cash Inflow/(Outflow) from Operating Activities | **18.9** (Inflow) | **-18.4** (Outflow) | N/A | | Net Cash Outflow from Investing Activities | **0.043** | **0.6** | N/A | | Net Cash Outflow from Financing Activities | **0.5** | **-1.7** (Inflow) | N/A | | Net Current Liabilities | **53.8** | **54.0** | **-0.2** | | Current Ratio | **0.73** | **0.71** | **+0.02** | [Assets, Liabilities & Debt Ratios](index=8&type=section&id=Assets%20%26%20Liabilities%20%26%20Debt%20Ratios) The group's total assets and total liabilities both increased, but the debt-to-equity ratio slightly decreased, and the asset-to-liability ratio remained negative, indicating negative equity Assets, Liabilities and Debt Ratios Comparison | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Assets | **145.4** | **138.8** | **+6.6** | | Total Liabilities | **304.2** | **293.2** | **+11.0** | | Debt-to-Equity Ratio | **2.09** | **2.11** | **-0.02** | | Total Borrowings | **165.3** | **163.8** | **+1.5** | | Asset-to-Liability Ratio | **-1.04** | **-1.06** | **+0.02** | [Convertible bonds](index=9&type=section&id=Convertible%20bonds) The company issued 3.5% convertible bonds (CB1) in 2020, which matured in 2023; in January 2024, the company entered into an agreement with major shareholder CIH to issue 8% convertible bonds (CB2) to redeem CB1 and offset related amounts; CB2 was issued in April 2024 and is planned for the development of the new international Changyou platform, team building, and working capital - The 2020 convertible bonds (CB1) matured on October 19, 2023, and CIH did not exercise its conversion rights[48](index=48&type=chunk)[52](index=52&type=chunk)[177](index=177&type=chunk) - On January 26, 2024, the company entered into an agreement with CIH to issue **HKD 126 million** of 8% convertible bonds (CB2), which were issued on April 23, 2024, for the redemption of CB1[49](index=49&type=chunk)[52](index=52&type=chunk)[178](index=178&type=chunk) Actual Use of Net Proceeds from 2020 Convertible Bonds (As of June 30, 2025) | Use | Original Use (HKD million) | Revised Use (HKD million) | Actual Use as of June 30, 2025 (HKD million) | Revised Estimated Timeline | | :--- | :--- | :--- | :--- | :--- | | Development of new international Changyou platform | **25.0** | **3.0** | **1.9** | December 31, 2025 | | Establishment of new team to support new international Changyou platform | **25.0** | **10.0** | **7.2** | December 31, 2025 | | General working capital for new international Changyou platform | **10.0** | **2.0** | **0.7** | December 31, 2025 | | Promotion and marketing activities for existing China Changyou platform | - | **10.0** | **10.0** | December 31, 2022 | | Employee costs and technical infrastructure development for existing China Changyou platform | - | **60.0** | **60.0** | December 31, 2021 | | Fixed administrative expenses for existing China Changyou platform | - | **12.0** | **12.0** | December 31, 2021 | | General working capital for the group | **24.4** | **27.4** | **27.4** | June 30, 2022 | | **Total** | **124.4** | **124.4** | **119.2** | | [Loans from an equity shareholder of the Company](index=11&type=section&id=Loans%20from%20an%20equity%20shareholder%20of%20the%20Company) The company's subsidiary PCL entered into a revolving loan facility agreement with Century Investment for a total of **HKD 111 million**; this loan is unsecured, with the interest rate adjusted from 6.5% to 8%, and the loan term has been extended multiple times, most recently to mature in July and September 2027 - The loan facility amount is **HKD 111 million**, unsecured[59](index=59&type=chunk)[66](index=66&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - The loan interest rate was adjusted from **6.5% to 8%** effective May 31, 2024[59](index=59&type=chunk)[66](index=66&type=chunk)[187](index=187&type=chunk) - The loan term has been extended multiple times, most recently on July 28, 2025, to mature in July and September 2027[59](index=59&type=chunk)[66](index=66&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk) Equity Shareholder Loan Status | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Outstanding Principal | **56.08** | **56.08** | | Outstanding Accrued Interest | **6.364** | **4.139** | [Other Financial Information](index=11&type=section&id=Other%20Financial%20Information) This section outlines the group's property and equipment, trade and other receivables, and trade and other payables balances at period-end, confirming no pledged assets, significant contingent liabilities, or contracted capital commitments at period-end - As of June 30, 2025, the group has no pledged assets, significant contingent liabilities, or contracted capital commitments not provided for in the interim financial report[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [Property and equipment](index=11&type=section&id=Property%20and%20equipment) As of June 30, 2025, the group's property and equipment carrying value was **RMB 0.9 million**, a decrease from **RMB 2.5 million** at the end of 2024; new property and equipment costs incurred during the period amounted to **RMB 45,000** Property and Equipment Carrying Value | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Property and Equipment | **0.9** | **2.5** | - For the six months ended June 30, 2025, the group incurred new property and equipment costs of **RMB 45,000**[153](index=153&type=chunk)[157](index=157&type=chunk) [Trade and other receivables](index=11&type=section&id=Trade%20and%20other%20receivables) As of June 30, 2025, the group's trade and other receivables amounted to **RMB 115.3 million**, a decrease from **RMB 122.7 million** at the end of 2024; net trade receivables were **RMB 8.2 million**, primarily due within 3 months Trade and Other Receivables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Trade and Other Receivables | **115.3** | **122.7** | | Net Trade Receivables | **8.2** | **14.3** | - Trade receivables (net of loss allowance) are primarily due within 3 months, amounting to **RMB 8.0 million**[164](index=164&type=chunk)[165](index=165&type=chunk) - Other receivables include **RMB 100 million** due from the issuance of subsidiary shares to a non-controlling equity shareholder, which has not yet been received[159](index=159&type=chunk)[161](index=161&type=chunk) [Trade and other payables](index=11&type=section&id=Trade%20and%20other%20payables) As of June 30, 2025, the group's trade and other payables amounted to **RMB 138.7 million**, an increase from **RMB 127.4 million** at the end of 2024; trade payables were **RMB 17.7 million**, primarily due within 3 months Trade and Other Payables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Trade and Other Payables | **138.7** | **127.4** | | Trade Payables | **17.7** | **9.3** | - Trade payables are primarily due within 3 months, amounting to **RMB 16.9 million**[170](index=170&type=chunk)[171](index=171&type=chunk) - Other payables include advances of **RMB 100 million** from a non-controlling equity shareholder[170](index=170&type=chunk) [Pledged assets, contingent liabilities and capital commitment](index=11&type=section&id=Pledged%20assets%2C%20contingent%20liabilities%20and%20capital%20commitment) As of June 30, 2025, the group had no pledged assets, significant contingent liabilities, or contracted capital commitments not provided for in the interim financial report - As of June 30, 2025, the group had no pledged assets[60](index=60&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the group had no significant contingent liabilities[61](index=61&type=chunk)[68](index=68&type=chunk) - As of June 30, 2025, the group had no contracted capital commitments not provided for in the interim financial report[62](index=62&type=chunk)[69](index=69&type=chunk) [Human Resources & Risk Management](index=12&type=section&id=Human%20Resources%20%26%20Risk%20Management) This section outlines the group's employee situation, remuneration policy, and foreign exchange risk management strategy - The group's business is primarily located in China, with most transactions denominated in RMB, but it has entered into financing agreements denominated in HKD[72](index=72&type=chunk)[76](index=76&type=chunk) - For the six months ended June 30, 2025, the group did not use any forward contracts or currency borrowings to hedge foreign exchange risk, but will continue to monitor and consider hedging when necessary[72](index=72&type=chunk)[76](index=76&type=chunk) [Employees and remuneration policy](index=12&type=section&id=Employees%20and%20remuneration%20policy) As of June 30, 2025, the group had 57 employees, with total employee costs of **RMB 9.0 million**; the group is committed to enhancing employee capabilities and professional skills through internal and external training Employee and Remuneration Information | Metric | June 30, 2025 | H1 2025 (RMB million) | | :--- | :--- | :--- | | Number of Employees | **57** | N/A | | Total Employee Costs | N/A | **9.0** | - The group promotes employee self-improvement and skill enhancement through internal training, external training, and relevant courses[71](index=71&type=chunk)[75](index=75&type=chunk) [Foreign exchange risk](index=12&type=section&id=Foreign%20exchange%20risk) The group's business is primarily denominated in RMB, but it has financing agreements denominated in HKD; no foreign exchange hedging was conducted during the reporting period, but risks will continue to be monitored - The group's business is primarily located in China, with most transactions denominated in RMB, but it has entered into financing agreements denominated in HKD[72](index=72&type=chunk)[76](index=76&type=chunk) - For the six months ended June 30, 2025, the group did not utilize any forward contracts or currency borrowings to hedge foreign exchange risk[72](index=72&type=chunk)[76](index=76&type=chunk) [Strategic Investments & Shareholder Matters](index=12&type=section&id=Strategic%20Investments%20%26%20Shareholder%20Matters) This section clarifies that the group had no significant investments, acquisitions, or disposals during the reporting period, and discloses the controlling shareholder CIH's pledge of its interests in convertible bonds and certain shares to Poly Platinum - For the six months ended June 30, 2025, the group had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[73](index=73&type=chunk)[77](index=77&type=chunk) [Significant investments held, material acquisitions and disposals of subsidiaries, associates or joint ventures, and future plans for material investments or purchase of capital assets](index=12&type=section&id=Significant%20investments%20held%2C%20material%20acquisitions%20and%20disposals%20of%20subsidiaries%2C%20associates%20or%20joint%20ventures%2C%20and%20future%20plans%20for%20material%20investments%20or%20purchase%20of%20capital%20assets) During the reporting period, the group held no significant investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures; the board also did not approve any other plans for significant investments or capital asset purchases - During the reporting period, the group had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[73](index=73&type=chunk)[77](index=77&type=chunk) [Pledge of shares by controlling shareholder](index=12&type=section&id=Pledge%20of%20shares%20by%20controlling%20shareholder) Controlling shareholder CIH pledged its interests in the 2020 and 2024 convertible bonds, as well as its interest in **60,000,000 shares**, to Poly Platinum Enterprises Limited - CIH has pledged its interests in the 2020 convertible bonds and the 2024 convertible bonds to Poly Platinum[74](index=74&type=chunk)[78](index=78&type=chunk) - CIH also pledged its interest in **60,000,000 shares** to Poly Platinum[74](index=74&type=chunk)[78](index=78&type=chunk) [Dividend](index=13&type=section&id=Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[79](index=79&type=chunk)[84](index=84&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk) [Prospects](index=13&type=section&id=Prospects) Looking ahead, the group will continue to deepen its points ecosystem layout, expand redemption scenarios, and enhance the stability of SaaS digital points services; concurrently, it plans to rapidly expand its advertising business, strengthen public domain traffic operations, and deepen cooperation with China Mobile and Bank of China provincial branches to explore the deep integration of points, benefits, and financial services for multi-party win-win outcomes - The group will deepen its points ecosystem layout and expand points redemption scenarios to maintain the stability of its SaaS digital points service business[81](index=81&type=chunk)[86](index=86&type=chunk) - The group aims to rapidly expand its advertising business scale, improve gross profit margin, and build a "public domain traffic acquisition + private domain conversion" closed loop[82](index=82&type=chunk)[87](index=87&type=chunk) - The group will strengthen business cooperation with China Mobile provincial companies and Bank of China provincial branches, exploring the deep integration of points, benefits, and financial services[83](index=83&type=chunk)[87](index=87&type=chunk) Consolidated Financial Statements [Consolidated Statement of Profit or Loss](index=14&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the group recorded revenue of **RMB 90.4 million**, gross profit of **RMB 19.6 million**, operating profit of **RMB 4.4 million**, and a loss for the period of **RMB 3.8 million**; basic and diluted loss per share was **RMB 0.26 cents** Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | **90,372** | **102,429** | | Cost of Sales | **(70,739)** | **(84,040)** | | Gross Profit | **19,633** | **18,389** | | Operating Profit/(Loss) | **4,375** | **(1,936)** | | Finance Costs | **(5,314)** | **(6,112)** | | Loss Before Tax | **(955)** | **(8,083)** | | Income Tax | **(2,833)** | – | | Loss for the Period | **(3,788)** | **(8,083)** | | Basic and Diluted Loss Per Share (RMB cents) | **(0.26)** | **(0.41)** | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the group's loss for the period was **RMB 3.8 million**, which, combined with exchange differences arising from the translation of financial statements into the presentation currency (other comprehensive income), resulted in a total comprehensive loss for the period of **RMB 4.5 million** Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | **(3,788)** | **(8,083)** | | Exchange Differences on Translation of Financial Statements | **(743)** | **(799)** | | Total Comprehensive Loss for the Period | **(4,531)** | **(8,882)** | [Consolidated Statement of Financial Position](index=16&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets were **RMB 145.4 million**, and total liabilities were **RMB 304.2 million**, resulting in net liabilities of **RMB 158.9 million**; the group had net current liabilities of **RMB 53.8 million** Consolidated Statement of Financial Position Key Data (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | **3,251** | **7,676** | | Current Assets | **142,103** | **131,148** | | Current Liabilities | **195,924** | **185,140** | | Net Current Liabilities | **(53,821)** | **(53,992)** | | Non-current Liabilities | **108,322** | **108,045** | | Net Liabilities | **(158,892)** | **(154,361)** | | Share Capital | **117,812** | **117,812** | | Reserves | **109,485** | **114,885** | | Total Equity - Deficit | **(158,892)** | **(154,361)** | [Consolidated Statement of Changes in Equity](index=17&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the loss attributable to equity holders of the company was **RMB 4.7 million**, which, combined with other comprehensive income (exchange reserve movements), resulted in a total comprehensive loss attributable to equity holders of the company of **RMB 5.4 million**, further widening the total equity deficit Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30) | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period Attributable to Equity Holders of the Company | **(4,657)** | **(7,394)** | | Other Comprehensive Income (Exchange Reserve) | **(743)** | **(799)** | | Total Comprehensive Loss for the Period Attributable to Equity Holders of the Company | **(5,400)** | **(8,193)** | | Total Equity - Deficit (End of Period) | **(158,892)** | **(149,800)** | [Condensed Consolidated Cash Flow Statement](index=19&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the group generated net cash inflow of **RMB 18.9 million** from operating activities, while investing and financing activities both resulted in net cash outflows, ultimately leading to a net increase in cash and cash equivalents of **RMB 18.4 million** Condensed Consolidated Cash Flow Statement Key Data (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash From/(Used in) Operating Activities | **18,875** | **(11,350)** | | Net Cash Used in Investing Activities | **(43)** | **(202)** | | Net Cash Used in Financing Activities | **(477)** | **(927)** | | Net Increase/(Decrease) in Cash and Cash Equivalents | **18,355** | **(12,479)** | | Cash and Cash Equivalents at End of Period | **26,566** | **12,947** | Notes to the Unaudited Interim Financial Report [1 Corporate Information](index=20&type=section&id=1%20Corporate%20Information) Changyou International Group Limited was incorporated in the Cayman Islands in 2008 and listed on the Hong Kong Stock Exchange in 2010; the group's principal activities are the development and operation of an electronic trading platform to facilitate the exchange of rewards earned from other companies' customer loyalty programs in China for goods, games, services, and other commercial transactions in the form of virtual assets and credits - The company was incorporated in the Cayman Islands on May 21, 2008, and listed on the Hong Kong Stock Exchange on September 24, 2010[103](index=103&type=chunk)[108](index=108&type=chunk) - The group's principal activities involve the development and operation of an electronic trading platform for selling goods in the form of virtual assets and credits, facilitating the exchange of rewards earned from other companies' customer loyalty programs in China for goods, games, services, and other commercial transactions[104](index=104&type=chunk)[109](index=109&type=chunk)[129](index=129&type=chunk) [2 Basis of Preparation](index=20&type=section&id=2%20Basis%20of%20Preparation) This interim financial report is prepared in accordance with HKAS 34, unaudited but reviewed by the Audit Committee; the report notes that as of June 30, 2025, the group has a net loss, net current liabilities, and net liabilities, with substantial short-term loans and insufficient cash to cover them, indicating significant uncertainty regarding its ability to continue as a going concern, relying on timely financial support from its controlling shareholder Century Investment - For the six months ended June 30, 2025, the group incurred a net loss of **RMB 3,788,000**[116](index=116&type=chunk)[119](index=119&type=chunk) - As of June 30, 2025, the group had net current liabilities of **RMB 53,821,000** and net liabilities of **RMB 158,892,000**[116](index=116&type=chunk)[119](index=119&type=chunk) - The group has loans from an equity shareholder of **RMB 51,142,000** due within one year, while cash and cash equivalents are only **RMB 26,566,000**[116](index=116&type=chunk)[119](index=119&type=chunk) - The group's ability to continue as a going concern faces significant uncertainty, primarily dependent on the timely financial support from its controlling company, Century Investment (Holding) Limited[122](index=122&type=chunk)[126](index=126&type=chunk) - The group controls variable interest entities (VIEs), Shanghai Fen Hulian Information Technology Co., Ltd. and its subsidiaries, through contractual arrangements and accounts for them as subsidiaries[124](index=124&type=chunk)[126](index=126&type=chunk) [3 Changes in Accounting Policies](index=23&type=section&id=3%20Changes%20in%20Accounting%20Policies) The group has applied the amendments to HKAS 21, "Lack of Exchangeability," issued by the HKICPA, but these changes have no material impact on the results and financial position for the current or prior periods - The group has applied the amendments to HKAS 21, "Lack of Exchangeability," issued by the HKICPA[127](index=127&type=chunk)[128](index=128&type=chunk) - These changes in accounting policies have not had a material impact on the group's results or financial position for the current or prior periods[127](index=127&type=chunk)[128](index=128&type=chunk) [16 Fair Value Measurement of Financial Instruments](index=33&type=section&id=16%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) The group's fair value measurement of financial instruments primarily focuses on Level 1, which uses unadjusted quoted prices in active markets for trading securities; there were no transfers between Level 1 and Level 2, or into or out of Level 3 during the reporting period Financial Assets Measured at Fair Value (Level 1) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trading Securities | **183** | **202** | - During the reporting period, there were no transfers between Level 1 and Level 2, or into or out of Level 3[197](index=197&type=chunk)[201](index=201&type=chunk) - There were no significant differences between the carrying amounts and fair values of the group's financial instruments accounted for at cost or amortized cost[198](index=198&type=chunk)[202](index=202&type=chunk) [17 Material Related Party Transactions](index=34&type=section&id=17%20Material%20Related%20Party%20Transactions) The group's main related party transactions with equity shareholders include interest expenses on loans from an equity shareholder of the company Related Party Transactions with Equity Shareholders | Transaction Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Expense on Equity Shareholder Loan | **2,053** | **1,710** | - Details of the issuance of convertible bonds and financial expenses to an equity shareholder of the company are provided in Note 14[205](index=205&type=chunk) Other Information [Share Option Scheme](index=35&type=section&id=Share%20Option%20Scheme) The company adopted the 2020 Share Option Scheme on June 3, 2020, to incentivize or reward eligible participants; the scheme has a ten-year validity period, with approximately 4.75 years remaining as of the reporting date; no share options were granted under the scheme as of June 30, 2025 - The 2020 Share Option Scheme was adopted on June 3, 2020, with a ten-year validity period, and approximately **4.75 years** remaining as of the reporting date[207](index=207&type=chunk)[210](index=210&type=chunk) - As of June 30, 2025, and the reporting date, no share options were granted under the 2020 Share Option Scheme[214](index=214&type=chunk)[217](index=217&type=chunk) - The exercise price of share options shall not be less than the highest of the closing price on the Stock Exchange on the offer date, the average closing price for the five business days immediately preceding the offer date, and the nominal value of the shares[213](index=213&type=chunk)[216](index=216&type=chunk) [Interests and Short Positions of the Directors and Chief Executive of the Company in the Shares, Underlying Shares and Debentures](index=36&type=section&id=Interests%20and%20Short%20Positions%20of%20the%20Directors%20and%20Chief%20Executive%20of%20the%20Company%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, among the company's directors and chief executive, Mr. Sun Jun held **30,000 shares**, representing approximately **0.002%** of the issued shares; apart from this, no other directors or chief executive held disclosable interests or short positions in shares or underlying shares Directors' Long Positions in Company Shares | Director Name | Number of Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | | Mr. Sun Jun | **30,000** | **0.002%** | - As of June 30, 2025, other than Mr. Sun Jun, no other directors or chief executive held disclosable interests or short positions in shares or underlying shares[221](index=221&type=chunk)[223](index=223&type=chunk) [Substantial Shareholders](index=37&type=section&id=Substantial%20Shareholders) As of June 30, 2025, the company's substantial shareholders include Pan Deng, CIH, Greater Bay Area Common Home Investment Limited, Starr International Foundation, Beijing Enterprises Real Estate (Hong Kong) Limited, Liu Yang, and Guo Long, who held long or short positions in the company's shares or underlying shares Substantial Shareholders' Long and Short Positions in Shares and Underlying Shares (As of June 30, 2025) | Substantial Shareholder Name | Nature of Interest | Share Interest | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Pan Deng | Beneficial Interest | **71,367,000** (Long Position) | **3.94%** | | | Controlled Corporation Interest | **898,885,818** (Long Position) | **49.64%** | | | | **660,000,000** (Short Position) | **36.44%** | | CIH | Beneficial Interest | **898,885,818** (Long Position) | **49.64%** | | | | **660,000,000** (Short Position) | **36.44%** | | Greater Bay Area Common Home Investment Limited | Controlled Corporation Interest | **712,647,000** (Long Position) | **39.35%** | | Starr International Foundation | Controlled Corporation Interest | **224,710,691** (Long Position) | **12.41%** | | Beijing Enterprises Real Estate (Hong Kong) Limited | Controlled Corporation Interest | **151,515,000** (Long Position) | **8.37%** | | Liu Yang | Controlled Corporation Interest | **144,853,000** (Long Position) | **8.00%** | | Guo Long | Beneficial Interest | **108,940,000** (Long Position) | **6.02%** | - CIH is wholly owned by Ms. Pan Deng, and its long position includes underlying shares of **300 million** 2024 convertible bonds[227](index=227&type=chunk)[228](index=228&type=chunk) - CIH's short position involves exchangeable bonds convertible into **300 million shares**, and CIH has pledged its interest in the 2024 convertible bonds to Poly Platinum[227](index=227&type=chunk)[228](index=228&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The company is committed to maintaining high standards of corporate governance and has complied with the code provisions of the HKEX Corporate Governance Code; during the reporting period, all company directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers - The company has complied with the code provisions of the HKEX Corporate Governance Code[231](index=231&type=chunk)[235](index=235&type=chunk) - For the six months ended June 30, 2025, all directors declared and confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers[234](index=234&type=chunk)[238](index=238&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares or other listed securities[233](index=233&type=chunk)[237](index=237&type=chunk) [Audit Committee](index=41&type=section&id=Audit%20Committee) The Audit Committee comprises three independent non-executive directors, with Mr. Wong Chi Keung as Chairman; the committee has reviewed the group's accounting principles, practices, and methods, as well as the unaudited interim results for the six months ended June 30, 2025 - The Audit Committee is composed of three independent non-executive directors, with Mr. Wong Chi Keung serving as Chairman[239](index=239&type=chunk)[241](index=241&type=chunk) - The Audit Committee has reviewed the group's accounting principles, practices, and methods, as well as the unaudited interim results for the six months ended June 30, 2025[240](index=240&type=chunk)[242](index=242&type=chunk)

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides essential company details, including board composition, committees, and key operational contacts [Board of Directors and Committees](index=3&type=section&id=1.1%20%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This chapter lists the company's executive and independent non-executive directors, company secretary, authorized representatives, and details the composition of the Audit, Remuneration, and Nomination Committees - The Board of Directors comprises executive directors including Dr. Tang Weikun (Chairman), Mr. Zhou Chao (CEO), Mr. Yang Guang, Ms. Lin Zhiyi, and independent non-executive directors including Ms. Su Caiyun, Dr. Xing Lina, Dr. Pei Geng, and Mr. Hu Yebi[5](index=5&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee are all chaired by independent non-executive director Ms. Su Caiyun[5](index=5&type=chunk) [Company Basic Information](index=3&type=section&id=1.2%20%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This chapter provides the company's official website, auditor, legal counsel, share registrar, principal bankers, registered office, and principal place of business - The company's website is www.grandpharm.com[5](index=5&type=chunk) - The auditor is National Alliance CPA Group Limited, and the Hong Kong share registrar is Computershare Hong Kong Investor Services Limited[5](index=5&type=chunk) - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Bank of China, and Bank of Communications[6](index=6&type=chunk) [Letter to Shareholders](index=3&type=section&id=%E8%87%B4%E8%82%A1%E6%9D%B1%E4%BF%A1) This section provides an overview of the industry, a summary of the company's business performance, and its future outlook [Industry Review](index=4&type=section&id=2.1%20%E8%A1%8C%E4%B8%9A%E5%9B%9E%E9%A1%BE) China's pharmaceutical industry is undergoing transformation, with policy guidance optimizing the industrial landscape, reshaping prices for traditional sectors, and encouraging innovation - China's pharmaceutical industry is advancing amidst transformation, with the industrial landscape continuously optimizing under policy guidance[7](index=7&type=chunk) - Some traditional industries face price system reshaping, demanding higher requirements for enterprises' product structure, cost control, and operational efficiency[7](index=7&type=chunk) - Policies encourage genuine innovation, and systems like the commercial health insurance innovative drug catalog are expected to open up broad development space for innovative drugs[7](index=7&type=chunk) [Business Summary](index=4&type=section&id=2.2%20%E4%B8%9A%E5%8A%A1%E6%80%BB%E7%BB%93) Grand Pharma achieved positive revenue growth in a complex industry environment, with innovative and barrier products accounting for **51.0%** of revenue, a **14.9 percentage point year-on-year increase** - In the first half of the year, the company achieved positive revenue growth despite pressure from centralized procurement price reductions[9](index=9&type=chunk) - Revenue from innovative and barrier products accounted for approximately **51.0%** of total revenue, a **14.9 percentage point year-on-year increase**[9](index=9&type=chunk) - The nuclear medicine anti-tumor diagnosis and treatment segment achieved **doubled revenue growth**, with Yigantai® and LavaTM seeing increased sales[11](index=11&type=chunk) - The company has established eight R&D platforms covering three major countries or regions globally, encompassing nuclear medicine, high-end medical devices, glycomics, and mRNA and other cutting-edge technologies[12](index=12&type=chunk) [Strategy and Performance](index=4&type=section&id=2.2.1%20%E6%88%98%E7%95%A5%E4%B8%8E%E4%B8%9A%E7%BB%A9) Grand Pharma adheres to its "integrated advantages, innovation-driven, global expansion" strategy, achieving positive revenue growth despite centralized procurement price reductions, with innovative and barrier products accounting for **51.0%** of revenue - The company adheres to its "integrated advantages, innovation-driven, global expansion" strategy, evolving from an innovation newcomer to a leader in niche segments[8](index=8&type=chunk) - Revenue achieved a **12.1% compound annual growth rate** over five years, with positive revenue growth in the first half of the year despite the impact of centralized procurement price reductions[9](index=9&type=chunk) - First Half Innovative and Barrier Product Revenue Share | Indicator | H1 2025 | Change | | :--- | :--- | :--- | | Innovative and barrier product revenue share | 51.0% | **14.9 percentage points year-on-year increase** | [Core Business Segment Highlights](index=5&type=section&id=2.2.2%20%E6%A0%B8%E5%BF%83%E4%B8%9A%E5%8A%A1%E6%9D%BF%E5%9D%97%E4%BA%AE%E7%82%B9) The company achieved **doubled revenue growth** in nuclear medicine anti-tumor diagnosis and treatment, significant growth in cardiovascular and cerebrovascular emergency care through M&A, synergistic product development in respiratory and critical care, and continuous launch of innovative ophthalmic products in ENT & Ophthalmology - The nuclear medicine anti-tumor diagnosis and treatment segment saw increased sales of Yigantai® Yttrium [90Y] Microspheres Injection and liquid embolic agent LavaTM, driving **doubled revenue growth** for the segment[11](index=11&type=chunk) - In the cardiovascular and cerebrovascular emergency segment, Nengqilang® Coenzyme Q10 Tablets continued to lead, and Grand Pharma (Tianjin) Co., Ltd. achieved significant growth after acquisition[11](index=11&type=chunk) - In the respiratory and critical care segment, Enzhuorun® Bisihaler®, Enmingrun® Bisihaler®, and Budesonide Nasal Spray synergistically drove stable growth[11](index=11&type=chunk) - In the ENT & Ophthalmology segment, innovative ophthalmic products such as GPN01768 (TP-03) and Varenicline Tartrate Nasal Spray (OC-01) were successively launched in regional markets, fueling growth momentum[11](index=11&type=chunk) [Innovation and R&D](index=5&type=section&id=2.2.3%20%E5%88%9B%E6%96%B0%E4%B8%8E%E7%A0%94%E5%8F%91) The company maintains high R&D investment, establishing eight global R&D platforms covering nuclear medicine, high-end medical devices, glycomics, and mRNA, with a pipeline of innovative projects progressing globally - The company maintains high R&D investment, establishing eight R&D platforms covering three major countries or regions globally, encompassing nuclear medicine, high-end medical devices, glycomics, and mRNA and other cutting-edge technologies[12](index=12&type=chunk) - The innovative pipeline spans the entire process from "early R&D to clinical development and registration application," with R&D projects expanding to mainstream global markets such as the US, Australia, and Europe[12](index=12&type=chunk) - The disruptive innovative drug STC3141 (for sepsis treatment) has completed animal models, overseas Phase II, and China Phase II clinical studies, laying the foundation for global pivotal registration clinical studies[12](index=12&type=chunk) - Significant innovation advantages in nuclear medicine, with Yigantai® Yttrium [90Y] Microspheres Injection achieving **doubled domestic revenue** and approval for a new HCC indication, becoming the world's first and only FDA-approved selective internal radiation therapy product for both unresectable HCC and colorectal cancer liver metastases[13](index=13&type=chunk) [Globalization Expansion](index=6&type=section&id=2.2.4%20%E5%85%A8%E7%90%83%E5%8C%96%E6%8B%93%E5%B1%95) The company is steadily advancing its global expansion, with the world's first closed-loop nuclear medicine full industry chain platform in operation and exclusive agency rights for pharmaceutical-grade Germanium-68/Gallium-68 generators in China - The world's first closed-loop nuclear medicine full industry chain platform has been put into operation, securing exclusive agency rights for globally leading pharmaceutical-grade Germanium-68/Gallium-68 generators in China[13](index=13&type=chunk) - Self-developed innovative nuclear medicines adhere to a "dual US-China submission" strategy, with products like TLX591 and ITM-11 joining international multi-center Phase III clinical trials[13](index=13&type=chunk) [Future Outlook](index=6&type=section&id=2.3%20%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) Grand Pharma is prepared for global expansion, committed to becoming a leader in global pharmaceutical enterprise layout and a key definer of the global pharmaceutical innovation landscape - The company will deeply implement its "global expansion" strategy, aiming to become a leader in the global layout of Chinese pharmaceutical enterprises and a significant definer of the global pharmaceutical innovation landscape[14](index=14&type=chunk) - R&D will continue to advance, ensuring early fruition of core pipelines, especially STC3141, which has a market potential of **tens of billions**[14](index=14&type=chunk) - Through independent innovation and external M&A, the company will identify differentiated blockbuster products and improve product and industrial layouts across various business segments[16](index=16&type=chunk) - The company is committed to building a global pharmaceutical brand with a "Go Global" strategy, independently operating international multi-center clinical trials, exploring diverse international cooperation forms, and increasing global market penetration[16](index=16&type=chunk) [Company Overview](index=7&type=section&id=%E4%BC%81%E6%A5%AD%E6%A6%82%E8%A7%88) This section outlines the company's strategic positioning, R&D status, material matters, and definitions of key terms [Company Positioning](index=8&type=section&id=3.1%20%E4%BC%81%E4%B8%9A%E5%AE%9A%E4%BD%8D) Grand Pharma is positioned as a technology-innovative international pharmaceutical enterprise, with core businesses spanning nuclear medicine anti-tumor diagnosis & treatment, cardiovascular & cerebrovascular precision intervention technology, pharmaceutical technology, and biotechnology - The Group is a technology-innovative international pharmaceutical enterprise, with core businesses spanning nuclear medicine anti-tumor diagnosis & treatment and cardiovascular & cerebrovascular precision intervention technology, pharmaceutical technology, and biotechnology[18](index=18&type=chunk) - Adhering to the development philosophy of "integrated advantages, innovation-driven, and global expansion," the company employs a strategy of "dual-driven independent R&D and global expansion, globalized operational layout, and dual-cycle business development"[18](index=18&type=chunk) - Profitability continues to strengthen, with good M&A and integration capabilities, API-formulation integration, and diversified businesses and entities, effectively enhancing overall advantages[18](index=18&type=chunk) [R&D Status](index=9&type=section&id=3.2%20%E7%A0%94%E5%8F%91%E6%83%85%E5%86%B5) Grand Pharma has 133 R&D projects, including 42 innovative projects, with R&D investment of approximately **HKD 1.02 billion**, focusing on nuclear medicine anti-tumor diagnosis & treatment, cardiovascular & cerebrovascular precision intervention, and ENT & Ophthalmology - R&D Project Overview | Indicator | Quantity/Amount | | :--- | :--- | | Total R&D projects | 133 | | Innovative projects | 42 (32%) | | Generic projects and others | 91 (68%) | | R&D work and project investment | Approximately **HKD 1.02 billion** | | R&D centers | 8 | | R&D platforms | 5 | - Distribution of 42 Innovative Projects by Area | Area | Percentage | | :--- | :--- | | Nuclear Medicine Anti-tumor Diagnosis & Treatment | 40% | | Cardiovascular & Cerebrovascular Precision Intervention | 19% | | ENT & Ophthalmology | 17% | | Respiratory and Critical Care | 14% | | Cardiovascular & Cerebrovascular Emergency | 5% | | Others | 5% | [R&D Project Overview](index=9&type=section&id=3.2.1%20%E7%A0%94%E5%8F%91%E9%A1%B9%E7%9B%AE%E6%80%BB%E8%A7%88) The company has a total of 133 R&D projects, with **32%** being innovative projects and **68%** generic or other projects, with R&D investment of approximately **HKD 1.02 billion**, achieving 38 major milestones - A total of **133 R&D projects**, including **42 innovative projects** and **91 generic projects and others**[20](index=20&type=chunk) - R&D work and project investment amounted to approximately **HKD 1.02 billion**[20](index=20&type=chunk) - **38 major milestones** have been achieved[20](index=20&type=chunk) [Innovation Project Area Distribution](index=9&type=section&id=3.2.2%20%E5%88%9B%E6%96%B0%E9%A1%B9%E7%9B%AE%E9%A2%86%E5%9F%9F%E5%88%86%E5%B8%83) Among the 42 innovative projects, nuclear medicine anti-tumor diagnosis & treatment accounts for the highest proportion at **40%**, followed by cardiovascular & cerebrovascular precision intervention (**19%**) and ENT & Ophthalmology (**17%**), demonstrating the company's strategic focus in these areas - Innovation Project Area Distribution | Area | Percentage | | :--- | :--- | | Nuclear Medicine Anti-tumor Diagnosis & Treatment | 40% | | Cardiovascular & Cerebrovascular Precision Intervention | 19% | | ENT & Ophthalmology | 17% | | Respiratory and Critical Care | 14% | | Cardiovascular & Cerebrovascular Emergency | 5% | | Others | 5% | [Innovation Product Pipeline Layout](index=10&type=section&id=3.2.3%20%E5%88%9B%E6%96%B0%E4%BA%A7%E5%93%81%E7%AE%A1%E7%BA%BF%E5%B8%83%E5%B1%80) The company's innovative product pipeline covers pharmaceutical technology (ENT & Ophthalmology, respiratory and critical care, mRNA platform) and nuclear medicine anti-tumor diagnosis & treatment and cardiovascular & cerebrovascular precision intervention technology, involving various products and indications at different R&D stages - The pharmaceutical technology segment includes ophthalmic products GPN00153, TP-03, GPN00884, respiratory products Ryaltris, STC3141, and the mRNA platform oncology product ARC01[24](index=24&type=chunk) - The nuclear medicine anti-tumor diagnosis & treatment and cardiovascular & cerebrovascular precision intervention technology segment includes Yttrium [90Y] Microspheres Injection, Lava, Kona, AuroLase, Youhu, Youai MRD, TLX591, TLX250, TLX101, ITM-11, ITM-41, GPN02006, covering various cancer diagnoses and treatments[24](index=24&type=chunk) - The cardiovascular & cerebrovascular precision intervention segment includes peripheral vascular access management products aXess, GPG03961, neuro-interventional product GPN01037, structural heart disease product Saturn, and heart failure product CoRisma[24](index=24&type=chunk) [Material Matters](index=11&type=section&id=3.3%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) As of the reporting date, the company has achieved multiple significant advancements in innovative product R&D, commercialization, and industrial base construction, including TLX591's approval for international multi-center Phase III clinical trials, OC-01's commercial launch in mainland China, and FDA approval for a new indication for Yigantai® Yttrium [90Y] Microspheres Injection - TLX591 (prostate cancer RDC drug) received NMPA approval to join international multi-center Phase III clinical trials[25](index=25&type=chunk) - OC-01 (Varenicline Tartrate Nasal Spray, dry eye disease) completed its first commercial prescription in mainland China[25](index=25&type=chunk) - SIR-Spheres® Yttrium [90Y] Microspheres Injection received formal FDA approval for a new indication for the treatment of unresectable hepatocellular carcinoma[25](index=25&type=chunk) - The world's first closed-loop nuclear medicine full industry chain platform (Wenjiang District, Chengdu) obtained a Class A "Radiation Safety Permit" and commenced operations[25](index=25&type=chunk) - STC3141 (sepsis) Phase II clinical study in China successfully reached its clinical endpoint[25](index=25&type=chunk) - Youai® early detection product for urological tumors achieved its first commercial prescription in mainland China[26](index=26&type=chunk) [Definitions](index=13&type=section&id=3.4%20%E9%87%8A%E4%B9%89) This chapter provides definitions for key terms and abbreviations used in the report, covering medical conditions, drug types, regulatory bodies, company entities, and research projects, ensuring a clear understanding of the report's content - Defines various medical terms such as AR (Allergic Rhinitis), ARDS (Acute Respiratory Distress Syndrome), HCC (Hepatocellular Carcinoma), GEP-NETs (Gastroenteropancreatic Neuroendocrine Tumors), etc[27](index=27&type=chunk) - Explains drug types and technologies such as RDC (Radiopharmaceutical Drug Conjugate), mRNA (messenger ribonucleic acid), LNP (Lipid Nanoparticle), etc[28](index=28&type=chunk) - Lists regulatory body abbreviations such as FDA (U.S. Food and Drug Administration), EMA (European Medicines Agency), NMPA or China NMPA (National Medical Products Administration of China)[27](index=27&type=chunk)[28](index=28&type=chunk) - Includes names of company-related entities such as Sirtex, Telix, ITM SE, Macao Pharmaceutical Administration Bureau, Grand Pharma (China), etc[28](index=28&type=chunk)[29](index=29&type=chunk) [Financial Highlights](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section presents key financial data for the company from 2022 to the first half of 2025, including revenue and net profit attributable to owners, illustrating overall financial performance during the reporting period [Key Financial Indicators](index=16&type=section&id=4.1%20%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This chapter provides the company's key financial data from 2022 to the first half of 2025, including revenue and net profit attributable to owners, showing the company's overall financial performance during the reporting period - Key Financial Data (HKD thousands) | Indicator | 2022 | 2023 | 2024 | H1 2024 | H1 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 9,562,285 | 10,529,590 | 11,644,892 | 6,047,236 | 6,107,323 | | Net Profit Attributable to Owners | 2,079,419 | 1,879,998 | 2,468,375 | 1,557,945 | 1,169,019 | [Management Discussion and Analysis](index=17&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a comprehensive review of the company's business, financial performance, R&D, commercialization capabilities, internationalization, significant investments, and other material matters [Business Review and Outlook](index=17&type=section&id=5.1%20%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE%E5%8F%8A%E5%89%8D%E6%99%AF) As of the 2025 reporting period, the company achieved 38 major milestones in innovative products, generic products, APIs, and industrial layout, with core products in nuclear medicine anti-tumor, respiratory and critical care, and cardiovascular and cerebrovascular emergency segments entering rapid growth phases - As of the 2025 reporting period, the Group achieved **38 major milestones**, including **16 innovative products**, **13 generic products**, **3 API products**, **2 industrial layouts**, and **4 major construction projects**[32](index=32&type=chunk) - Core products in the nuclear medicine anti-tumor segment (Yigantai® Yttrium [90Y] Microspheres Injection and liquid embolic agent LavaTM), respiratory and critical care segment (Enzhuorun® Bisihaler®, Enmingrun® Bisihaler®, Budesonide Nasal Spray, and Fluticasone Propionate Nasal Spray), and cardiovascular and cerebrovascular emergency segment (Nengqilang® Coenzyme Q10 Tablets) have entered a rapid growth phase[32](index=32&type=chunk) - Completed the acquisition of a **30.64% equity stake** in Nanjing Kainer Medical Technology Co., Ltd., increasing its holding to **59.91%**, strengthening the layout in the cardiovascular and cerebrovascular precision intervention segment[38](index=38&type=chunk) - Completed the acquisition of an **80% equity stake** in Qinghai Yixin Pharmaceutical Co., Ltd., obtaining exclusive rights to several proprietary Chinese medicines, consolidating competitiveness in the ENT & Ophthalmology segment[38](index=38&type=chunk) - The world's first closed-loop nuclear medicine full industry chain platform in Wenjiang District, Chengdu, has been completed, accepted, and put into operation[40](index=40&type=chunk) [Innovation Product Progress](index=17&type=section&id=5.1.1%20%E5%88%9B%E6%96%B0%E4%BA%A7%E5%93%81%E8%BF%9B%E5%B1%95) The company has made significant progress in innovative products across nuclear medicine anti-tumor diagnosis & treatment, respiratory and critical care, and ENT & Ophthalmology, with multiple RDC drugs entering Phase III clinical trials or approved for market, STC3141 sepsis treatment drug successfully completing Phase II clinical trials, and several innovative ophthalmic drugs approved for market or completing clinical studies - In nuclear medicine anti-tumor diagnosis & treatment, RDC drugs such as ITM-11, TLX591, TLX591-CDx, and GPN02006 have made clinical progress in China or internationally, and Youai® early detection product for urological tumors has achieved commercialization[33](index=33&type=chunk) - Yigantai® Yttrium [90Y] Microspheres Injection received FDA approval for a new indication for the treatment of unresectable hepatocellular carcinoma[34](index=34&type=chunk) - In the respiratory and critical care segment, GPN00204 entered Phase I clinical trials, and STC3141 (sepsis) Phase II clinical trials successfully reached their endpoint[34](index=34&type=chunk) - In the ENT & Ophthalmology segment, CBT-001 (pterygium) completed patient enrollment for Phase III, GPN00884 (pediatric myopia) completed Phase I clinical trials, GPN01768 (demodex blepharitis) received approval for market by the Macao Pharmaceutical Administration Bureau, OC-01 (dry eye disease) achieved commercial prescription in mainland China, and innovative ophthalmic device GPN00646 was approved for market[34](index=34&type=chunk) [Generic and API Products](index=19&type=section&id=5.1.2%20%E4%BB%BF%E5%88%B6%E4%BA%A7%E5%93%81%E4%B8%8E%E5%8E%9F%E6%96%99%E4%BA%A7%E5%93%81) During the reporting period, the company had 13 generic products and 3 API products approved for market by the China NMPA, further enriching its product line - **13 generic products** received NMPA approval for market[36](index=36&type=chunk) - **3 API products** received NMPA approval for market[37](index=37&type=chunk) [Industrial Layout and Base Construction](index=19&type=section&id=5.1.3%20%E4%BA%A7%E4%B8%9A%E5%B8%83%E5%B1%80%E4%B8%8E%E5%9F%BA%E5%9C%B0%E5%BB%BA%E8%AE%BE) The company strengthened its industrial layout in cardiovascular and cerebrovascular precision intervention and ENT & Ophthalmology through acquisitions of Nanjing Kainer and Qinghai Yixin, while making significant progress in constructing multiple global leading R&D and production bases - Acquired a **30.64% equity stake** in Nanjing Kainer, increasing its holding to **59.91%**, strengthening the "cardiovascular and cerebrovascular co-treatment" strategy in the cardiovascular and cerebrovascular precision intervention segment[38](index=38&type=chunk) - Acquired an **80% equity stake** in Qinghai Yixin, obtaining exclusive rights to several proprietary Chinese medicines, consolidating market competitiveness in the traditional Chinese medicine chronic disease treatment segment[38](index=38&type=chunk) - Grand Pharma's radioactive drug R&D and production base (the world's first closed-loop nuclear medicine full industry chain platform) in Wenjiang District, Chengdu, has been completed, accepted, and put into operation[40](index=40&type=chunk) - The main structure and masonry work of the Yongcheng formulation factory construction project (Phase I) in Yangxin County, Huangshi City, Hubei Province, have been completed, which will expand pharmaceutical technology production capacity[41](index=41&type=chunk) - The civil engineering work for the large health nutrition product production base construction project in Huangshi City, Hubei Province, has been largely completed, serving as the core production hub for high-end health nutrition products in the amino acid segment[41](index=41&type=chunk) - Phase II of the amino acid production base project in Xiantao City, Hubei Province, has completed its main structure and masonry work, further expanding the production capacity of high-quality amino acid varieties[43](index=43&type=chunk) [Business Introduction](index=21&type=section&id=5.2%20%E4%B8%9A%E5%8A%A1%E4%BB%8B%E7%BB%8D) Grand Pharma leverages strong technological innovation, internationalization, and robust industrial foundation to comprehensively deploy in nuclear medicine anti-tumor diagnosis & treatment, cardiovascular & cerebrovascular precision intervention, pharmaceutical technology, and biotechnology - The Group possesses strong technological innovation capabilities, outstanding internationalization, and a solid industrial foundation, with a complete industrial chain and significant integrated advantages in API-formulation integration[44](index=44&type=chunk) - Over **130 products** are listed in the "National Essential Drug List" (2018 edition), and over **260 products** are included in the "National Basic Medical Insurance, Work-Related Injury Insurance, and Maternity Insurance Drug List (2024 edition)"[44](index=44&type=chunk) - Focusing on the "nuclear medicine anti-tumor diagnosis & treatment" and "cardiovascular & cerebrovascular precision intervention" segments, the company has become a leading enterprise in China's nuclear medicine anti-tumor diagnosis & treatment and a comprehensive cardiovascular & cerebrovascular precision intervention technology platform with international cutting-edge technology[45](index=45&type=chunk) [Nuclear Medicine Anti-tumor Diagnosis & Treatment and Cardiovascular & Cerebrovascular Precision Intervention Technology](index=21&type=section&id=5.2.1%20%E6%A0%B8%E8%8D%AF%E6%8A%97%E8%82%BF%E7%B8%BD%E8%A8%BA%E7%99%82%E5%8F%8A%E5%BF%83%E8%85%A6%E8%A1%80%E7%AE%A1%E7%B2%BE%E6%BA%96%E4%BB%8B%E5%85%A5%E8%A8%BA%E7%99%82%E7%A7%91%E6%8A%80) The company has a comprehensive layout in nuclear medicine anti-tumor diagnosis & treatment and cardiovascular & cerebrovascular precision intervention, with leading international technology platforms and a rich pipeline of innovative products - The nuclear medicine anti-tumor diagnosis & treatment segment has over **900 global employees**, with R&D bases centered in Boston and Chengdu, production bases in Boston, Frankfurt, Singapore, and Chengdu, and a sales network covering **over 50 countries and regions**, achieving a global nuclear medicine industry chain layout[46](index=46&type=chunk) - In the R&D and registration phase, **15 innovative products** are reserved, covering 5 radionuclides including 68Ga, 177Lu, 131I, 90Y, 89Zr, and 7 cancer types such as liver cancer, prostate cancer, and brain cancer[47](index=47&type=chunk) - Globally, **five RDC drugs** have been approved for clinical research, with **four** having entered Phase III clinical trials[48](index=48&type=chunk) - The cardiovascular and cerebrovascular precision intervention segment has laid out **over 30 products**, with **22 products** in vascular access management approved for market in China, and **1 product** in structural heart disease approved for market in China[69](index=69&type=chunk) [Nuclear Medicine Anti-tumor Diagnosis & Treatment Segment](index=21&type=section&id=5.2.1.1%20%E6%A0%B8%E8%8D%AF%E6%8A%97%E8%82%BF%E7%B8%BD%E8%A8%BA%E7%99%82%E6%9D%BF%E5%9D%97) The nuclear medicine anti-tumor diagnosis & treatment segment has achieved a global industry chain layout, possessing international leading tumor intervention and RDC technology platforms, with 15 innovative products covering 5 radionuclides and 7 cancer types [Core Products](index=23&type=section&id=5.2.1.1.1%20%E6%A0%B8%E5%BF%83%E4%BA%A7%E5%93%81) Core products in the nuclear medicine anti-tumor diagnosis & treatment segment include the global innovative Yigantai® Yttrium [90Y] Microspheres Injection, the global innovative liquid embolic agent LavaTM, and the urothelial cancer early detection product Youai® - Yigantai® Yttrium [90Y] Microspheres Injection received NMPA marketing approval in January 2022 and FDA approval for a new indication for unresectable HCC in July 2025, making it the world's first and only SIRT product approved by the FDA for both unresectable HCC and colorectal cancer liver metastases[50](index=50&type=chunk) - Yigantai® has entered **over 50 hospitals** in **22 provinces and cities** in China and has been included in **over 50 inclusive insurance plans** and **3 special drug insurance plans**, covering **over 24 provincial-level administrative regions** and **over 100 cities**[52](index=52&type=chunk) - LavaTM is the first liquid embolic agent approved in the US for the treatment of peripheral arterial hemorrhage, featuring radiopacity, easy preparation (2 minutes), and two viscosity options[53](index=53&type=chunk) - Youai® urothelial cancer early detection product uses a dual methylation + gene mutation target design, achieving **92.5% sensitivity** and **95.8% specificity**, making it the only dual-mechanism urothelial cancer early detection product approved for market in China[55](index=55&type=chunk) [Innovative R&D Pipeline](index=25&type=section&id=5.2.1.1.2%20%E5%88%9B%E6%96%B0%E7%A0%94%E5%8F%91%E7%AE%A1%E7%BA%BF) The nuclear medicine anti-tumor diagnosis & treatment segment's innovative R&D pipeline includes interventional therapies and RDC drugs, with multiple products advancing through clinical trials or approved for market, and GPN02006 achieving breakthrough clinical results for HCC diagnosis - Interventional Therapy: The global innovative temperature-sensitive embolic agent GPN00289 has completed the first patient enrollment for registration clinical studies; the global innovative liquid embolic agent KonaTM has submitted a PMA application to the FDA; the global innovative solid tumor ablation therapy AuroLase® has submitted a PMA application to the FDA[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - RDC Drugs: TLX591/TLX591-CDx (prostate cancer diagnosis and treatment) TLX591 is undergoing international multi-center Phase III clinical trials overseas, TLX591-CDx has been approved for market in multiple countries and is planned for China marketing application submission this year[61](index=61&type=chunk) - RDC Drugs: TLX250/TLX250-CDx (clear cell renal cell carcinoma diagnosis and treatment) TLX250-CDx achieved successful overseas Phase III clinical trials and received FDA priority review, with the first patient enrolled in China Phase III clinical trials[63](index=63&type=chunk) - RDC Drugs: ITM-11/TOCscan® (gastroenteropancreatic neuroendocrine tumor diagnosis and treatment) ITM-11 reached its primary endpoint in overseas Phase III clinical trials, and China has approved its participation in international multi-center Phase III clinical studies[64](index=64&type=chunk) - RDC Drugs: GPN02006 (hepatocellular carcinoma diagnosis) achieved breakthrough progress in China IIT clinical studies, demonstrating excellent safety and imaging efficacy, expected to improve early diagnosis rates for HCC[67](index=67&type=chunk) [Cardiovascular & Cerebrovascular Precision Intervention Segment](index=29&type=section&id=5.2.1.2%20%E5%BF%83%E8%84%91%E8%A1%80%E7%AE%A1%E7%B2%BE%E6%BA%96%E4%BB%8B%E5%85%A5%E8%A8%BA%E7%99%82%E6%9D%BF%E5%9D%97) The cardiovascular & cerebrovascular precision intervention segment has laid out **over 30 high-end medical device products** focusing on vascular access management, structural heart disease, and heart failure, with multiple products approved for market - The cardiovascular and cerebrovascular precision intervention segment has laid out **over 30 products**, with **22 products** in vascular access management approved for market in China, and **1 product** in structural heart disease approved for market in China[69](index=69&type=chunk) - A comprehensive "passive + active" innovative device platform has been established, with the Wuhan Optics Valley active device R&D and production base, Changzhou passive device R&D and production base, and Shanghai device R&D center all in operation[70](index=70&type=chunk) - The R&D team comprises **over 65%** with master's and doctoral degrees, possessing comprehensive backgrounds in medicine, pharmacy, materials, mechanics, and electronics[70](index=70&type=chunk) [Core Products](index=29&type=section&id=5.2.1.2.1%20%E6%A0%B8%E5%BF%83%E4%BA%A7%E5%93%81) Core products in the cardiovascular & cerebrovascular precision intervention segment include RESTORE DEB®, APERTO® OTW, NOVASIGHT, NOVASYNC, Cormorant®, IberisTM, DEEPQUAKE-CTM, DEEPQUAKETM, and NeoNova®, all demonstrating innovation, clinical advantages, and market potential in their respective sub-segments - RESTORE DEB® is China's first drug-eluting balloon with dual indications for primary coronary artery disease and in-stent restenosis, featuring unique SAFEPAX patented technology[71](index=71&type=chunk) - APERTO® OTW is the first drug-eluting balloon specifically for arteriovenous fistula stenosis in dialysis patients, showing significant advantages in target lesion patency rate at six months post-surgery[72](index=72&type=chunk) - NOVASIGHT and NOVASYNC integrate IVUS and OCT imaging technologies, providing histological and morphological information on intravascular plaques and vessel walls, with NOVASYNC being a domestically produced iterative product[73](index=73&type=chunk) - Cormorant® is the first domestically produced adjustable intracranial thrombectomy stent, designed with a circular wire braided structure, allowing manual diameter adjustment to match target vessels and improve recanalization rates[74](index=74&type=chunk) - IberisTM is a multi-polar renal denervation system for uncontrolled primary hypertension, the world's only RDN product with CE mark approval and dual radial and femoral artery access design[76](index=76&type=chunk) - DEEPQUAKE-CTM and DEEPQUAKETM are domestically produced coronary and peripheral shockwave systems that break down calcified plaques through pulsed acoustic pressure waves, offering diverse treatment options[77](index=77&type=chunk) - NeoNova® is a domestically produced transcatheter mitral valve clip system that repairs mitral regurgitation through interventional means, offering convenient operation, good safety, and an elastic self-locking mechanism[78](index=78&type=chunk) [Innovative R&D Pipeline](index=32&type=section&id=5.2.1.2.2%20%E5%88%9B%E6%96%B0%E7%A0%94%E5%8F%91%E7%AE%A1%E7%BA%BF) The cardiovascular & cerebrovascular precision intervention segment's innovative R&D pipeline includes the global innovative endogenous tissue repair product aXess, the global innovative mitral valve replacement system Saturn, and the global innovative ventricular assist device CoRISMA, all addressing unmet clinical needs and in clinical research or collaborative development stages - aXess (endogenous tissue repair product) for establishing graft arteriovenous fistulas in ESRD patients, with the first patient enrolled in a pivotal clinical study in the US and all patients enrolled in Europe[79](index=79&type=chunk) - Saturn (mitral valve replacement system) is implanted via transseptal intervention, with the first patient enrolled in a transfemoral venous access clinical study in Europe[80](index=80&type=chunk) - CoRISMA (ventricular assist device) is a transcatheter fully implantable ventricular assist medical device for treating Class III and end-stage heart failure, utilizing wireless power supply technology, and is being co-developed with a Yale University incubated company[81](index=81&type=chunk) [Pharmaceutical Technology](index=32&type=section&id=5.2.2%20%E5%88%B6%E8%8D%AF%E7%A7%91%E6%8A%80) The company has deep roots in pharmaceutical technology, covering respiratory and critical care, ENT & Ophthalmology, cardiovascular and cerebrovascular emergency, APIs, and mRNA platforms, with multiple core products leading market share and continuous layout of innovative product pipelines - The Group has been deeply involved in respiratory and critical care, ENT & Ophthalmology, cardiovascular and cerebrovascular emergency, and other fields for many years, now possessing multiple high-barrier products and exclusive varieties with leading market shares[82](index=82&type=chunk) - Established Wuhan Optics Valley International R&D Center, Australian Glycomics R&D Center, and Nanjing Aoruo mRNA R&D Center, providing technical support for R&D innovation in the pharmaceutical technology segment[84](index=84&type=chunk) [Respiratory and Critical Care Segment](index=33&type=section&id=5.2.2.1%20%E5%91%BC%E5%90%B8%E5%8F%8A%E5%8D%B1%E9%87%8D%E7%97%87%E6%9D%BF%E5%9D%97) The respiratory and critical care segment covers multiple indications such as rhinitis, bronchitis, pneumonia, and asthma, with core products Chernor®, Enzhuorun® Bisihaler®, and Enmingrun® Bisihaler® being exclusive national varieties - Products on sale cover multiple indications such as rhinitis, bronchitis, pneumonia, asthma, and chronic obstructive pulmonary disease[85](index=85&type=chunk) - Core products Chernor®, Enzhuorun® Bisihaler®, and Enmingrun® Bisihaler® are all exclusive national varieties, holding leading positions in their respective sub-segments[85](index=85&type=chunk) - Innovative layout includes multiple R&D products covering major unmet clinical needs such as allergic rhinitis, sepsis, and ARDS[85](index=85&type=chunk) [Respiratory Products](index=33&type=section&id=5.2.2.1.1%20%E5%91%BC%E5%90%B8%E7%A7%91%E4%BA%A7%E5%93%81) Key respiratory products include Chernor® (Eucalyptol, Limonene, Pinene Enteric-coated Capsules), Enzhuorun® Bisihaler®, Enmingrun® Bisihaler®, Budesonide Nasal Spray, and Fluticasone Propionate Nasal Spray, all being exclusive national varieties or first generics with significant market positions - Chernor® (Eucalyptol, Limonene, Pinene Enteric-coated Capsules) is an exclusive national variety in China, included in the National Medical Insurance and Essential Drug Catalog, continuously leading the oral antitussive and expectorant market[87](index=87&type=chunk) - Enzhuorun® Bisihaler® is China's first triple combination inhaled preparation approved for asthma indication, administered once daily, using an advanced Bisihaler® inhaler device, significantly reducing the risk of acute exacerbations[88](index=88&type=chunk) - Enmingrun® Bisihaler® is an innovative ICS mometasone furoate and LABA indacaterol acetate dual combination preparation, significantly improving patient lung function and reducing the risk of acute exacerbations[88](index=88&type=chunk) - Budesonide Nasal Spray and Fluticasone Propionate Nasal Spray are both first-line treatments for allergic rhinitis and are the first domestic generics to be launched, expected to change the competitive landscape dominated by foreign enterprises[91](index=91&type=chunk)[92](index=92&type=chunk) [Innovative R&D Pipeline](index=36&type=section&id=5.2.2.1.2%20%E5%88%9B%E6%96%B0%E7%A0%94%E5%8F%91%E7%AE%A1%E7%BA%BF) The respiratory and critical care segment's innovative R&D pipeline includes Ryaltris (GSP 301 NS), a novel compound nasal spray for seasonal allergic rhinitis, and STC3141, a global innovative drug for critical care, with STC3141 successfully completing Phase II clinical studies for sepsis - Ryaltris (GSP 301 NS) is a novel corticosteroid and antihistamine compound nasal spray, approved for market in multiple countries, with successful China Phase III clinical trials and NDA accepted by the NMPA[94](index=94&type=chunk) - STC3141 is the world's first sepsis treatment solution centered on reconstituting immune homeostasis, with China Phase II clinical studies successfully reaching the primary clinical endpoint, confirming efficacy and safety[96](index=96&type=chunk) - STC3141 has obtained **seven clinical approvals** in **five countries** across three continents, covering four indications: sepsis, ARDS, severe COVID-19, and ARDS caused by COVID-19[96](index=96&type=chunk) [ENT & Ophthalmology Segment](index=38&type=section&id=5.2.2.2%20%E4%BA%94%E5%AE%98%E7%A7%91%E6%9D%BF%E5%9D%97) The ENT & Ophthalmology segment covers diseases across ophthalmology, otolaryngology, and stomatology, with products including chemical preparations, traditional Chinese medicine preparations, and health products, adhering to a strategy of integrated traditional Chinese and Western medicine and combined drug-device treatment - The ENT & Ophthalmology segment covers diseases across ophthalmology, otolaryngology, and stomatology, with products including prescription drugs, OTC, devices, and consumer goods[97](index=97&type=chunk) - Adhering to a development strategy of integrated traditional Chinese and Western medicine and combined drug-device treatment, continuously enriching its series of product clusters, providing comprehensive diagnostic and treatment solutions in hospitals, and building eye health consumer brands in retail[97](index=97&type=chunk) - In terms of innovative R&D, the company has reserved multiple global innovative products for "dry eye disease," "demodex blepharitis," "post-ophthalmic surgery anti-inflammatory and analgesic," "pterygium," and "myopia"[97](index=97&type=chunk) [ENT & Ophthalmology Products](index=38&type=section&id=5.2.2.2.1%20%E4%BA%94%E5%AE%98%E7%A7%91%E4%BA%A7%E5%93%81) Core ENT & Ophthalmology products include Hexuemingmu Tablets, Jinsang series, Duoputai® Maixuekang Capsules and Enteric-coated Tablets, Ruizhu® Polyvinyl Alcohol Eye Drops, Nuotong® Xylometazoline Hydrochloride Nasal Spray/Drops, Danzhen Headache Capsules, and Varenicline Tartrate Nasal Spray (OC-01), which is the world's first and only nasal spray approved for treating mild, moderate, and severe dry eye - Hexuemingmu Tablets are an exclusive national variety in China, a national traditional Chinese medicine protected variety, and included in the National Medical Insurance and Essential Drug Catalog, used for fundus diseases caused by yin deficiency, liver hyperactivity, and heat damaging collaterals[99](index=99&type=chunk) - Jinsang series products are exclusive national products, covering all laryngeal diseases, including Jinsang Sanjie Capsules, Jinsang Liyan Capsules, Jinsang Kaiyin Capsules, etc., with multiple products included in the National Medical Insurance Catalog[101](index=101&type=chunk) - Duoputai® Maixuekang Capsules and Enteric-coated Tablets have anticoagulant, antithrombotic, and anti-fibrotic effects, and are the only traditional Chinese medicine in China labeled with antithrombin activity units[102](index=102&type=chunk) - Ruizhu® Polyvinyl Alcohol Eye Drops are single-dose preservative-free artificial tears, a first-line treatment for dry eye, and have won the CPhI Gold Award for nine consecutive years[103](index=103&type=chunk) - Nuotong® Xylometazoline Hydrochloride Nasal Spray/Drops are nasal decongestants for relieving nasal congestion, with the nasal spray being an exclusive domestic dosage form[104](index=104&type=chunk) - Danzhen Headache Capsules are an exclusive national variety, included in the National Medical Insurance and Essential Drug Catalog, used for headaches caused by hyperactivity of liver yang and blood stasis obstructing collaterals[105](index=105&type=chunk) - Varenicline Tartrate Nasal Spray (OC-01) is the world's first and only preservative-free nasal spray approved for treating mild, moderate, and severe dry eye, approved for market in the US and Macao, China, and achieved commercial prescription in mainland China in July 2025[107](index=107&type=chunk) [Innovative R&D Pipeline](index=41&type=section&id=5.2.2.2.2%20%E5%88%9B%E6%96%B0%E7%A0%94%E5%8F%91%E7%AE%A1%E7%BA%BF) The ENT & Ophthalmology innovative R&D pipeline includes the improved new drug GPN00833 for post-ophthalmic surgery anti-inflammatory and analgesic, GPN00153 (CBT-001) for pterygium, GPN00884 for slowing pediatric myopia progression, and GPN01768 (TP-03) for demodex blepharitis and meibomian gland dysfunction, all targeting clear clinical needs and achieving various stages of clinical progress or market approval - Hormone Nanoparticle Suspension Eye Drops GPN00833 (post-ophthalmic surgery anti-inflammatory and analgesic) were approved for market by the US FDA in March 2024, with successful China Phase III clinical studies and NDA preparation underway[108](index=108&type=chunk) - GPN00153 (CBT-001, pterygium) completed Phase II clinical trials in the US, entered Phase III clinical stage for global development in June 2022, and completed patient enrollment for China Phase III clinical trials[109](index=109&type=chunk) - GPN00884 (slowing pediatric myopia progression) was approved for Phase I clinical studies in China in March 2024 and completed Phase I clinical studies in March 2025[110](index=110&type=chunk) - GPN01768 (TP-03, demodex blepharitis and meibomian gland dysfunction) was approved for market by the US FDA in July 2023, making it the first and only FDA-approved drug for demodex blepharitis, and was approved for market by the Macao Pharmaceutical Administration Bureau in May 2025[110](index=110&type=chunk) [Cardiovascular & Cerebrovascular Emergency Segment](index=43&type=section&id=5.2.2.3%20%E5%BF%83%E8%84%91%E8%A1%80%E7%AE%A1%E6%80%A5%E6%95%91%E6%9D%BF%E5%9D%97) The cardiovascular & cerebrovascular emergency segment addresses both emergency rescue and chronic disease management, with **over 30 varieties**, including 14 in the National Emergency Rescue Drug Catalog and 16 in the Shortage Drug Catalog - The cardiovascular and cerebrovascular emergency segment has **over 30 varieties**, with **14 varieties** included in China's National Emergency Rescue Drug Catalog and **16 varieties** included in the Shortage Drug Catalog, ranking among the top in the industry for pipeline quantity[112](index=112&type=chunk) - Core products such as Nengqilang®, Limaitong® Eplerenone Tablets, Hexinshuang®/Hebeishuang®, continue to lead their respective sub-markets[112](index=112&type=chunk) - Hexinshuang®/Hebeishuang® (Diltiazem Hydrochloride Tablets/Sustained-release Capsules, Injection) as a classic calcium channel blocker, offers oral immediate-release, sustained-release, and injectable formulations, meeting clinical needs for hypertension, coronary heart disease, etc., and is included in multiple authoritative guidelines[114](index=114&type=chunk) - Nengqilang® Coenzyme Q10 Tablets are used to improve myocardial metabolism and energy supply, significantly improving symptoms in patients with chronic heart failure, and are included in numerous authoritative guidelines and expert consensuses[115](index=115&type=chunk) - Limaitong® Eplerenone Tablets are a novel MRA drug, filling the gap in China's second-generation selective aldosterone receptor antagonist drugs, and were included in the National Medical Insurance Catalog in November 2024[118](index=118&type=chunk) - Jext® pre-filled adrenaline auto-injector has been approved for market in multiple countries and received approval for urgently needed imported Hong Kong and Macao drugs in the Guangdong-Hong Kong-Macao Greater Bay Area in January 2023[119](index=119&type=chunk) - Runmode Lin® Treprostinil Injection is an orphan drug for pulmonary hypertension, one of only two treprostinil products approved for market in China, and was included in the National Medical Insurance Catalog in January 2023[120](index=120&type=chunk) [API Segment](index=46&type=section&id=5.2.2.4%20%E5%8E%9F%E6%96%99%E8%8D%AF%E6%9D%BF%E5%9D%97) The API segment boasts a rich product pipeline, with both bulk and specialty APIs sold globally, serving as the front-end of the API-formulation integrated supply chain, with modern API production bases focusing on cardiovascular, anti-infective, antipyretic-analgesic, digestive system, and anti-tumor fields - The API segment has a rich product pipeline, with both bulk APIs and specialty APIs sold globally, and sales channels covering the world[121](index=121&type=chunk) - Possesses multiple modern API production bases with complete equipment, exquisite craftsmanship, outstanding industrialization capabilities, and standardized quality control[121](index=121&type=chunk) - The API production and R&D layout focuses on five major areas: cardiovascular, anti-infective, antipyretic-analgesic, digestive system, and anti-tumor, fully supporting the formulation production and R&D work in the pharmaceutical technology segment[121](index=121&type=chunk) [mRNA Platform](index=47&type=section&id=5.2.2.5%20mRNA%E5%B9%B3%E5%8F%B0) The company's mRNA platform focuses on developing anti-tumor and anti-infective mRNA drugs, having established mRNA production and LNP delivery technology platforms, with ARC01 (A002), a therapeutic oncology vaccine for HPV16-positive solid tumors, approved for Phase I clinical studies in China - The mRNA platform focuses on developing anti-tumor and anti-infective mRNA drugs, having completed the establishment of mRNA production technology and LNP delivery technology platforms[123](index=123&type=chunk) - The therapeutic oncology vaccine ARC01 (A002) for HPV16-positive solid tumors was approved for Phase I clinical studies in China in January 2024, making it China's first HPV-positive related tumor mRNA therapeutic vaccine approved for clinical trials[123](index=123&type=chunk) - Utilizes LNP delivery technology and TriMix® adjuvant to significantly enhance the body's immune response and improve the immunotherapeutic effect of the vaccine[123](index=123&type=chunk) [Biotechnology](index=47&type=section&id=5.2.3%20%E7%94%9F%E7%89%A9%E7%A7%91%E6%8A%80) The company's biotechnology segment centers on amino acid products, positioning itself as a global high-quality amino acid service provider, leveraging synthetic biology to produce various amino acids using new biological methods, filling industry gaps - The biotechnology segment's core business is amino acid products, positioning itself as a global high-quality amino acid service provider[124](index=124&type=chunk) - Adheres to green, low-carbon, and sustainable development concepts, promoting high-quality development of the segment with globally leading synthetic biology manufacturing innovation technology[124](index=124&type=chunk) - The amino acid segment holds **over 200 invention patents**, has led or participated in formulating **over 60 national, industry, and group standards**, and has received numerous honors such as National Green Factory and National Manufacturing Single Champion Demonstration Enterprise[124](index=124&type=chunk) [Amino Acid Segment](index=48&type=section&id=5.2.3.1%20%E6%B0%A8%E5%9F%BA%E9%85%B8%E6%9D%BF%E5%9D%97) The amino acid segment has been deeply cultivated for **over 20 years**, using synthetic biology as its core to produce various amino acids with globally leading new biological methods, filling industry gaps - The amino acid segment has been deeply cultivated for **over 20 years**, using synthetic biology as its core, pioneering globally leading new biological methods in China to produce various amino acids, filling industry gaps[125](index=125&type=chunk) - Undertakes China's National Industrial Strengthening Project and Industrial Foundation Rebuilding Project, and is the first enterprise in China to obtain the "Same Line, Same Standard, Same Quality" (Three Sames) certification for amino acids[125](index=125&type=chunk) [New Technologies](index=48&type=section&id=5.2.3.1.1%20%E6%96%B0%E6%8A%80%E6%9C%AF) The company's amino acid segment has established eight technology platforms around synthetic biology, including synthetic biology, enzyme engineering, and fermentation engineering, possessing an integrated system for "new product development, new technology engineering and industrialization, and application solutions" - Eight major technology platforms have been established, including synthetic biology, enzyme engineering, fermentation engineering, process optimization, quality research, and application transformation[126](index=126&type=chunk) - Established long-term deep cooperation relationships with multiple research institutions such as Wuhan University and Huazhong University of Science and Technology to develop new amino acid fermentation technologies and enzyme expression systems[126](index=126&type=chunk) - Fermentation processes centered on strain construction optimization and enzyme conversion processes centered on immobilized enzymes can replace traditional chemical synthesis processes, significantly reducing carbon dioxide emissions[126](index=126&type=chunk) [High Quality](index=49&type=section&id=5.2.3.1.2%20%E9%AB%98%E8%B4%A8%E9%87%8F) The company's amino acid products have comprehensive domestic and international quality certification systems, with many core products passing drug/food system certifications and registrations in Europe, the US, and Japan, ensuring overseas operational compliance and laying the foundation for expanding into new market applications - Amino acid products have passed EU GMP certification, EU REACH registration, US FDA certification, South Korea KFDA registration, ISO quality management system certification, FSSC22000 food system certification, etc[129](index=129&type=chunk) - Comprehensive international system certifications and registrations demonstrate the Group's strong competitiveness in expanding overseas market business[129](index=129&type=chunk) [Industrial Chain](index=49&type=section&id=5.2.3.1.3%20%E4%BA%A7%E4%B8%9A%E9%93%BE) The company possesses nearly **50 types of amino acids** and their derivatives, with **26 API registration numbers**, making it the pharmaceutical enterprise with the most amino acid API registration numbers in China, while actively expanding into formulation products and functional dietary supplements - Possesses nearly **50 types of amino acids** and their derivatives, with **26 amino acid API registration numbers**, making it the pharmaceutical enterprise with the most amino acid API registration numbers in China[130](index=130&type=chunk) - Added multiple food-grade and feed-grade amino acid products, opening up growth space through differentiated pathways[130](index=130&type=chunk) - Two independently developed functional dietary supplements have obtained US FDA certification and achieved commercialization in the US, with **over ten functional food products** approved for market domestically[130](index=130&type=chunk) [Internationalization](index=50&type=section&id=5.2.3.1.4%20%E5%9B%BD%E9%99%85%E5%8C%96) The amino acid segment's sales network covers **over 140 countries and regions globally**, with overseas business accounting for approximately **40%**, and some amino acid varieties ranking among the top three in market share - The amino acid segment's sales network covers **over 140 countries and regions globally**, with overseas business accounting for approximately **40%**, and some amino acid varieties ranking among the top three in market share[131](index=131&type=chunk) - Core products have long served high-quality domestic and international clients, including Fortune 500 companies, establishing long-term stable cooperative relationships[131](index=131&type=chunk) - Future focus will be on high-value-added areas related to pharmaceuticals such as high-end parenteral nutrition formulations, innovative peptide drugs, cell culture media, and large health consumer areas such as sports protection, functional dietary supplements, special medical and infant formula foods, cosmetics, and pet foods[131](index=131&type=chunk) [Financial Review](index=51&type=section&id=5.3%20%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, revenue increased by **1.0%** year-on-year (**2.0%** in RMB terms), or approximately **13.0%** excluding the impact of the tenth round of centralized procurement, while net profit attributable to owners decreased by **25.0%** - H1 2025 Financial Performance | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 6,107,320 | 6,047,240 | **+1.0%** | | Net Profit Attributable to Owners | 1,169,020 | 1,557,950 | **-25.0%** | | Fair Value Change Gain from Telix Investment | 151,730 | 476,630 | **-324,900** | | Normalized Net Profit Attributable to Owners | 1,017,290 | 1,081,320 | **-5.9%** | - Excluding the impact of the tenth round of centralized procurement, revenue in RMB terms increased by approximately **13.0%** year-on-year[133](index=133&type=chunk) - Revenue from innovative and barrier products accounted for approximately **51.0%** of total revenue, a **14.9 percentage point year-on-year increase**[133](index=133&type=chunk) - Normalized profit slightly decreased by approximately

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[Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of the company's board of directors, joint company secretaries, authorized representatives, registered office, and key operational locations [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The company's board comprises executive, non-executive, and independent non-executive directors, with Mr. Zhang Bozho as Chairman and CEO, overseeing various committees - Board members include Executive Directors Zhang Bozho (Chairman and CEO), Zhang Xiaoli, Zhang Junfeng, Zhang Guangdi; Non-Executive Directors Richard Chen Mao, Li Zhen, Zhang Li; and Independent Non-Executive Directors He Mingguang, Guo Hongyan, Li Jianbin, Baoshan[5](index=5&type=chunk) - Mr. Li Jianbin chairs the Audit Committee, Mr. Baoshan chairs the Remuneration Committee, and Mr. Zhang Bozho chairs both the Nomination Committee and the Environmental, Social and Governance Committee[5](index=5&type=chunk) [Joint Company Secretaries](index=3&type=section&id=Joint%20Company%20Secretaries) Mr. Zhang Guangdi and Mr. Zheng Chengjie serve as joint company secretaries, with Ms. Xie Chun resigning on March 17, 2025 - Mr. Zhang Guangdi was appointed Joint Company Secretary on **March 17, 2025**, with Mr. Zheng Chengjie as the other Joint Company Secretary, and Ms. Xie Chun resigned on the same day[5](index=5&type=chunk) [Authorized Representatives](index=3&type=section&id=Authorized%20Representatives) Mr. Zhang Bozho and Mr. Zheng Chengjie are the company's authorized representatives - The authorized representatives are Mr. Zhang Bozho and Mr. Zheng Chengjie[5](index=5&type=chunk) [Registered Office](index=3&type=section&id=Registered%20Office) The company's registered office is located at Harneys Fiduciary (Cayman) Limited in the Cayman Islands - The registered office is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands[5](index=5&type=chunk) [China Headquarters and Principal Place of Business](index=4&type=section&id=China%20Headquarters%20and%20Principal%20Place%20of%20Business) The company's China headquarters and principal place of business are located in Shoukeda Building A, Fengtai District, Beijing - The China headquarters and principal place of business are located at 24th Floor, East Zone, Block A, Shoukeda Building, No. 14 Xisanhuan South Road, Fengtai District, Beijing, China[7](index=7&type=chunk) [Hong Kong Principal Place of Business](index=4&type=section&id=Hong%20Kong%20Principal%20Place%20of%20Business) The company's principal place of business in Hong Kong is situated at One International Finance Centre, Central - The Hong Kong principal place of business is located at 20th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong[7](index=7&type=chunk) [Cayman Islands Principal Share Registrar and Transfer Office](index=4&type=section&id=Cayman%20Islands%20Principal%20Share%20Registrar%20and%20Transfer%20Office) The company's principal share registrar and transfer office in the Cayman Islands is Harneys Fiduciary (Cayman) Limited - The Cayman Islands principal share registrar and transfer office is Harneys Fiduciary (Cayman) Limited[7](index=7&type=chunk) [Hong Kong Share Registrar](index=4&type=section&id=Hong%20Kong%20Share%20Registrar) The company's Hong Kong share registrar is Computershare Hong Kong Investor Services Limited - The Hong Kong share registrar is Computershare Hong Kong Investor Services Limited[7](index=7&type=chunk) [Hong Kong Legal Adviser](index=4&type=section&id=Hong%20Kong%20Legal%20Adviser) The company's Hong Kong legal adviser is Jingtian & Gongcheng Attorneys at Law - The Hong Kong legal adviser is Jingtian & Gongcheng Attorneys at Law[7](index=7&type=chunk) [Auditor](index=4&type=section&id=Auditor) The company's auditor is Ernst & Young - The auditor is Ernst & Young[7](index=7&type=chunk) [Stock Code](index=4&type=section&id=Stock%20Code) The company's stock code is 2219 - The stock code is **2219**[7](index=7&type=chunk) [Company Website](index=4&type=section&id=Company%20Website) The company's official website is www.chaojueye.com - The company website is www.chaojueye.com[7](index=7&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance and position for the six months ended June 30, 2025, including revenue, profit, and asset changes Financial Performance (RMB thousands) | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 698,258 | 734,287 | (4.9%) | | Gross Profit | 297,667 | 335,974 | (11.4%) | | Profit Before Tax | 153,090 | 179,640 | (14.8%) | | Net Profit | 110,739 | 133,620 | (17.1%) | | Non-IFRS Adjusted Net Profit | 118,401 | 144,753 | (18.2%) | | Gross Profit Margin | 42.6% | 45.8% | - | | Net Profit Margin | 15.9% | 18.2% | - | | Non-IFRS Adjusted Net Profit Margin | 17.0% | 19.7% | - | Financial Position (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 3,000,432 | 2,880,916 | 4.1% | | Total Equity | 2,361,897 | 2,326,151 | 1.5% | | Total Liabilities | 638,535 | 554,765 | 15.1% | | Cash and Cash Equivalents | 283,790 | 780,785 | (63.7%) | [Company Profile](index=6&type=section&id=Company%20Profile) This section describes Chaojueye Eye Hospital Group as a leading ophthalmic medical service provider in North China, outlining its business model, service offerings, and competitive advantages - The Group is a leading and nationally renowned ophthalmic medical service group in North China, founded in Baotou, Inner Mongolia in **1988**[11](index=11&type=chunk) - Revenue primarily derives from consumer ophthalmic services (e.g., refractive correction, myopia prevention, dry eye treatment, oculoplastic surgery, optometry products) and basic ophthalmic services (e.g., cataracts, glaucoma, strabismus, fundus diseases)[11](index=11&type=chunk) - The strategic focus will increasingly shift towards consumer ophthalmic services to sustain rapid growth[11](index=11&type=chunk) - Competitive advantages include a leading industry position in China, a cluster-based operating model, centralized and standardized management systems, a high-caliber medical professional team and training system, excellent customer satisfaction, and experienced management and shareholder support[13](index=13&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's operational performance, financial results, strategic initiatives, and risk management for the reporting period [Business Review](index=7&type=section&id=Business%20Review) As of June 30, 2025, Chaojueye operated 31 eye hospitals and 29 optometry centers across seven provinces, with total revenue decreasing by 4.9% due to reduced basic ophthalmic service visits and pricing adjustments - As of June 30, 2025, the Group operated a network of **31 eye hospitals** and **29 optometry centers** across a total of seven provinces, municipalities, and autonomous regions in China[15](index=15&type=chunk) - Revenue decreased by **4.9%** from RMB 734.3 million in H1 2024 to **RMB 698.3 million** in H1 2025[18](index=18&type=chunk) - The decline in revenue was primarily due to a slight decrease in outpatient and inpatient visits, mainly for basic ophthalmic services, and pricing adjustments in response to market competition and national centralized procurement policies[18](index=18&type=chunk) H1 2025 Operating Data Breakdown | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hospital Outpatient Visits | 522,051 | 571,087 | | Average Outpatient Spending (RMB) | 797 | 764 | | Hospital Inpatient Visits | 34,844 | 35,814 | | Average Inpatient Spending (RMB) | 6,688 | 7,052 | | Optometry Center Customer Visits | 48,804 | 51,774 | | Optometry Center Average Selling Price (RMB) | 978 | 868 | H1 2025 Revenue Breakdown by Business Segment (RMB thousands) | Business Segment | H1 2025 Revenue (RMB thousands) | Percentage of Revenue | H1 2024 Revenue (RMB thousands) | Percentage of Revenue | | :--- | :--- | :--- | :--- | :--- | | Consumer Ophthalmic Services | 359,492 | 51.5% | 376,483 | 51.3% | | Basic Ophthalmic Services | 337,467 | 48.3% | 357,214 | 48.6% | | Sales of Equipment and Medical Consumables | 1,299 | 0.2% | 590 | 0.1% | | Total | 698,258 | 100.0% | 734,287 | 100.0% | [Consumer Ophthalmic Services](index=8&type=section&id=Consumer%20Ophthalmic%20Services) Consumer ophthalmic services, including refractive correction and myopia prevention, are the primary revenue source, accounting for 51.5% of total revenue, with fees not covered by public medical insurance - Consumer ophthalmic services include refractive correction (including presbyopia correction), myopia prevention, dry eye treatment, oculoplastic surgery, and optometry products and services, with fees not covered by public medical insurance plans[20](index=20&type=chunk) - The company enhances service quality and reputation by optimizing marketing (focusing on online channels), hosting public welfare screening activities, improving customer membership management, streamlining reception processes, strengthening technical training, and implementing strict medical quality control measures[20](index=20&type=chunk) - For the six months ended June 30, 2025, consumer ophthalmic services accounted for **51.5%** of the Group's total revenue, remaining the primary revenue source[21](index=21&type=chunk) [Basic Ophthalmic Services](index=9&type=section&id=Basic%20Ophthalmic%20Services) Basic ophthalmic services, covering treatments for cataracts and glaucoma, are a major revenue source, accounting for 48.3% of total revenue, with some fees covered by public medical insurance - Basic ophthalmic services include treatments for various common ophthalmic diseases such as cataracts, glaucoma, strabismus, fundus diseases, ocular surface diseases, orbital diseases, and pediatric eye diseases, with some fees eligible for public medical insurance coverage[23](index=23&type=chunk) - The Group continuously invests in advanced ophthalmic equipment, such as femtosecond laser-assisted cataract surgery (FLACS) devices, and high-end diagnostic imaging systems and consumables, to improve surgical quality and patient safety[23](index=23&type=chunk) - For the six months ended June 30, 2025, basic ophthalmic services accounted for **48.3%** of the Group's total revenue, serving as another major revenue source[23](index=23&type=chunk) [Gross Profit and Gross Profit Margin](index=9&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2025, gross profit decreased by 11.4% to RMB 297.7 million, with the gross profit margin declining to 42.6% due to increased market competition and pricing adjustments H1 2025 Gross Profit and Gross Profit Margin by Business Segment (RMB thousands) | Business Segment | H1 2025 Gross Profit (RMB thousands) | Gross Profit Margin | H1 2024 Gross Profit (RMB thousands) | Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Consumer Ophthalmic Services | 150,125 | 41.8% | 183,025 | 48.6% | | Basic Ophthalmic Services | 147,413 | 43.7% | 152,892 | 42.8% | | Sales of Equipment and Medical Consumables | 129 | 9.9% | 57 | 9.7% | | Total | 297,667 | 42.6% | 335,974 | 45.8% | - The Group's gross profit decreased by **11.4%** from RMB 336.0 million in H1 2024 to **RMB 297.7 million** in H1 2025[24](index=24&type=chunk) - The gross profit margin decreased from **45.8%** to **42.6%**, primarily due to pricing adjustments in response to intensified market competition and the implementation of centralized procurement policies[24](index=24&type=chunk) [Medical Professional Team](index=10&type=section&id=Medical%20Professional%20Team) As of June 30, 2025, the company employed 1,500 full-time medical professionals, including 320 physicians and 631 nurses, supplemented by 74 multi-site practicing physicians - As of June 30, 2025, the Group had a total of **1,500 full-time medical professionals** (H1 2024: 1,458)[26](index=26&type=chunk) - This includes **320 physicians** (271 registered as professional ophthalmologists), **631 nurses**, and **549 other professionals**[26](index=26&type=chunk) - Additionally, the Group has **74 multi-site practicing physicians**[26](index=26&type=chunk) [Awards, Recognition, and Social Responsibility](index=10&type=section&id=Awards%2C%20Recognition%2C%20and%20Social%20Responsibility) In the first half of 2025, the company received multiple awards and actively engaged in charitable medical assistance and public welfare projects for underserved communities - In 2025, Chifeng Chaojueye Eye Hospital was rated as a Grade III Class B hospital; Chaojueye (Ulanqab) Eye Hospital Co. Ltd. received the "National Civilized Unit" honorary title; Chaojueye (Inner Mongolia) Eye Hospital Co. Ltd. and Baotou Chaojueye Eye Hospital Co. Ltd. were rated as Grade III Class A specialized hospitals[27](index=27&type=chunk)[28](index=28&type=chunk) - Hangzhou Chaojueye Eye Hospital Co. Ltd. was selected as a unit of the China Ophthalmic Innovative Technology Popularization Alliance[27](index=27&type=chunk) - The Group actively participates in charitable activities, such as "Great Love in Northern Xinjiang, Helping to Realize Dreams of Health" which provides eye examinations and treatments for vulnerable groups, and "Belt and Road: Journey of Light" which offers optician training and cataract surgeries in Mongolia[30](index=30&type=chunk)[31](index=31&type=chunk) [Business Outlook and Strategic Focus](index=11&type=section&id=Business%20Outlook%20and%20Strategic%20Focus) The company plans to expand its network in North China and the Yangtze River Delta region through acquisitions and new establishments, focusing on consumer ophthalmic services and smart technology applications - Demand for ophthalmic medical services in China is steadily growing, but resources are scarce, and surgical penetration rates are relatively low[30](index=30&type=chunk) - The Group intends to continue advancing its network layout in the core regions of North China and expand its presence in the core regions of the Yangtze River Delta through acquisitions and establishment of more hospitals and optometry centers[30](index=30&type=chunk) - Looking ahead, the company will consolidate its leading position in North China, enhance its market position in the Yangtze River Delta, develop specialized ophthalmic hospitals, seize opportunities in the consumer ophthalmic market, improve regional resource utilization efficiency, deepen the application of smart technologies, and continuously promote the establishment of a sound ESG system[34](index=34&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) The company's revenue decreased by 4.9% to RMB 698.3 million, with net profit declining by 17.1% to RMB 110.7 million, primarily due to market competition, pricing adjustments, and goodwill impairment - Revenue decreased by **4.9%** from RMB 734.3 million in H1 2024 to **RMB 698.3 million** in H1 2025[36](index=36&type=chunk) - Cost of sales increased by **0.6%** to **RMB 400.6 million**, primarily due to an increase in refractive surgeries and cataract restoration procedures[39](index=39&type=chunk) - Gross profit decreased by **11.4%** to **RMB 297.7 million**, with the gross profit margin declining from **45.8%** to **42.6%**, mainly due to market competition and pricing adjustments from centralized procurement[40](index=40&type=chunk) - Other income and gains increased by **47.1%** to **RMB 37.8 million**, primarily due to increased government subsidies and fair value gains on financial assets at fair value through profit or loss[42](index=42&type=chunk) - Selling and distribution expenses decreased by **22.5%** to **RMB 48.8 million**, mainly through precise targeting and efficient use of advertising resources[43](index=43&type=chunk) - Administrative expenses decreased by **3.9%** to **RMB 102.2 million**, primarily due to the end of the amortization period for share incentive bonuses for some management personnel and strict control over business entertainment and travel expenses[44](index=44&type=chunk) - Other expenses significantly increased by **290.6%** to **RMB 25.0 million**, mainly due to impairment losses on goodwill and intangible assets for certain underperforming hospitals[45](index=45&type=chunk) - Net profit decreased by **17.1%** to **RMB 110.7 million**, with the net profit margin declining from **18.2%** to **15.9%**[50](index=50&type=chunk) [Revenue](index=13&type=section&id=Revenue) The company's total revenue for the reporting period decreased by 4.9% to RMB 698.3 million, primarily from consumer and basic ophthalmic services - The Group's revenue decreased by **4.9%** from RMB 734.3 million for the six months ended June 30, 2024, to **RMB 698.3 million** for the six months ended June 30, 2025[36](index=36&type=chunk) [Consumer Ophthalmic Services](index=13&type=section&id=Consumer%20Ophthalmic%20Services_1) Revenue from consumer ophthalmic services decreased by 4.5% to RMB 359.5 million, mainly due to pricing adjustments in refractive surgery driven by market competition - Revenue from consumer ophthalmic services decreased by **4.5%** from RMB 376.5 million in H1 2024 to **RMB 359.5 million** in H1 2025[37](index=37&type=chunk) - This was primarily due to pricing adjustments, especially for refractive surgery, in response to intensified market competition[37](index=37&type=chunk) [Basic Ophthalmic Services](index=13&type=section&id=Basic%20Ophthalmic%20Services_1) Revenue from basic ophthalmic services decreased by 5.5% to RMB 337.5 million, influenced by fewer patient visits, pricing adjustments from centralized procurement, and increased equipment allocation - Revenue from basic ophthalmic services decreased by **5.5%** from RMB 357.2 million in H1 2024 to **RMB 337.5 million** in H1 2025[38](index=38&type=chunk) - This was primarily due to the combined impact of a slight decrease in outpatient and inpatient visits, pricing adjustments implemented since H2 2024 due to China's centralized procurement policies, and enhanced allocation of FLACS and other equipment and technologies to supplement basic ophthalmic services[38](index=38&type=chunk) [Cost of Sales](index=13&type=section&id=Cost%20of%20Sales) Cost of sales increased by 0.6% to RMB 400.6 million, mainly due to屈光手術及白內障復明手術程序及例數增加，導致醫療耗材及藥物成本小幅增長 - Cost of sales increased by **0.6%** from RMB 398.3 million in H1 2024 to **RMB 400.6 million** in H1 2025[39](index=39&type=chunk) - This was primarily due to a slight increase in related costs for medical consumables and drugs, driven by an increase in refractive surgeries and cataract restoration procedures[39](index=39&type=chunk) [Gross Profit and Gross Profit Margin](index=13&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin_1) Gross profit decreased by 11.4% to RMB 297.7 million, with the gross profit margin falling to 42.6%, primarily due to intensified market competition and pricing adjustments from centralized procurement - Gross profit decreased by **11.4%** from RMB 336.0 million in H1 2024 to **RMB 297.7 million** in H1 2025[40](index=40&type=chunk) - The gross profit margin decreased from **45.8%** to **42.6%**, primarily due to pricing adjustments implemented since H2 2024 in response to intense market competition and the implementation of centralized procurement policies[40](index=40&type=chunk) [Other Income and Gains](index=14&type=section&id=Other%20Income%20and%20Gains) Other income and gains increased by 47.1% to RMB 37.8 million, driven by higher government subsidies and fair value gains on financial assets - Other income and gains increased by **47.1%** from RMB 25.7 million in H1 2024 to **RMB 37.8 million** in H1 2025[42](index=42&type=chunk) - This was primarily due to certain government subsidies received and an increase in fair value gains on financial assets at fair value through profit or loss[42](index=42&type=chunk) [Selling and Distribution Expenses](index=14&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 22.5% to RMB 48.8 million, primarily due to optimized advertising resource allocation and reduced inefficient advertising spending - Selling and distribution expenses decreased by **22.5%** from RMB 63.0 million in H1 2024 to **RMB 48.8 million** in H1 2025[43](index=43&type=chunk) - This was primarily due to reduced inefficient advertising expenditures through precise targeting and efficient utilization of advertising resources, while maintaining stable advertising effectiveness[43](index=43&type=chunk) [Administrative Expenses](index=14&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 3.9% to RMB 102.2 million, mainly due to the end of amortization for some management share incentives and strict control over business entertainment and travel expenses - Administrative expenses decreased by **3.9%** from RMB 106.4 million in H1 2024 to **RMB 102.2 million** in H1 2025[44](index=44&type=chunk) - This was primarily due to the end of the amortization period for share incentive bonuses for some management personnel and strict control over business entertainment, travel, and other expenses[44](index=44&type=chunk) [Other Expenses](index=14&type=section&id=Other%20Expenses) Other expenses significantly increased by 290.6% to RMB 25.0 million, primarily due to impairment losses on goodwill and intangible assets for underperforming hospitals - Other expenses significantly increased by **290.6%** from RMB 6.4 million in H1 2024 to **RMB 25.0 million** in H1 2025[45](index=45&type=chunk) - This increase was primarily due to impairment losses on goodwill and intangible assets for certain underperforming hospitals[45](index=45&type=chunk) [Net Impairment Losses on Financial Assets at Amortized Cost](index=14&type=section&id=Net%20Impairment%20Losses%20on%20Financial%20Assets%20at%20Amortized%20Cost) Net impairment losses on financial assets at amortized cost remained relatively stable, slightly decreasing from RMB 0.5 million to RMB 0.4 million - Impairment losses on financial assets at amortized cost were **RMB 0.5 million** in H1 2024 and **RMB 0.4 million** in H1 2025, remaining relatively stable[46](index=46&type=chunk) [Finance Costs](index=15&type=section&id=Finance%20Costs) Finance costs remained relatively stable, slightly increasing from RMB 5.6 million to RMB 6.1 million, primarily due to interest expenses on lease liabilities - Finance costs remained relatively stable, at **RMB 5.6 million** in H1 2024 and **RMB 6.1 million** in H1 2025[48](index=48&type=chunk) [Income Tax Expense](index=15&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by 7.8% to RMB 42.4 million, primarily due to a reduction in profit before tax - Income tax expense decreased by **7.8%** from RMB 46.0 million in H1 2024 to **RMB 42.4 million** in H1 2025, primarily due to a decrease in profit before tax[49](index=49&type=chunk) [Profit for the Period and Net Profit Margin](index=15&type=section&id=Profit%20for%20the%20Period%20and%20Net%20Profit%20Margin) Net profit decreased by 17.1% to RMB 110.7 million, with the net profit margin falling from 18.2% to 15.9%, and non-IFRS adjusted net profit also decreased by 18.2% - Net profit decreased by **17.1%** from RMB 133.6 million in H1 2024 to **RMB 110.7 million** in H1 2025[50](index=50&type=chunk) - The net profit margin decreased from **18.2%** in the same period of 2024 to **15.9%** in H1 2025[50](index=50&type=chunk) - Non-IFRS adjusted net profit decreased by **18.2%** from RMB 144.8 million in the same period of 2024 to **RMB 118.4 million** in H1 2025[50](index=50&type=chunk) [Non-IFRS Measures](index=15&type=section&id=Non-IFRS%20Measures) The company provides non-IFRS measures like adjusted net profit and EBITDA to supplement IFRS financial statements, aiding in understanding operational performance by excluding non-recurring items - The company provides non-IFRS adjusted net profit, net profit margin, EBITDA, and adjusted EBITDA to supplement the financial statements presented in accordance with IFRS[51](index=51&type=chunk) - These measures are intended to help investors and management understand and evaluate the Group's condensed consolidated statements of profit or loss and eliminate the impact of items that do not reflect the Group's operating performance[51](index=51&type=chunk) Reconciliation of Non-IFRS Financial Measures (RMB thousands) | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Profit | 110,739 | 133,620 | | Adjustment: Share-based Payment Expenses | 7,662 | 11,133 | | Non-IFRS Adjusted Net Profit | 118,401 | 144,753 | | Non-IFRS Adjusted Net Profit Margin | 17.0% | 19.7% | [Financial Position](index=16&type=section&id=Financial%20Position) As of June 30, 2025, trade receivables decreased by 5.5%, cash and cash equivalents significantly declined by 63.7%, while trade payables and other payables increased - Trade receivables decreased by **5.5%** from RMB 74.4 million as of December 31, 2024, to **RMB 70.3 million** as of June 30, 2025, primarily due to a reduction in medical insurance receivables from earlier insurance receipts compared to the same period in 2024[54](index=54&type=chunk) - For the six months ended June 30, 2025, the Group's cash and cash equivalents decreased by a net of **RMB 497.0 million**, primarily due to net cash inflow from operating activities of RMB 181.6 million, net cash outflow from investing activities of RMB 579.2 million (mainly attributable to the purchase of financial products), and net cash outflow from financing activities of RMB 92.9 million (due to the payment of annual dividends for the year ended December 31, 2024)[58](index=58&type=chunk) - Trade payables increased by **19.6%** from RMB 53.6 million as of December 31, 2024, to **RMB 64.1 million** as of June 30, 2025, primarily due to an increase in payables for medical consumables and drugs[59](index=59&type=chunk) - Other payables and accrued expenses increased by **15.9%** from RMB 231.0 million as of December 31, 2024, to **RMB 267.8 million** as of June 30, 2025, primarily due to an increase in construction payables[60](index=60&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[61](index=61&type=chunk) - As of June 30, 2025, pledged bank deposits amounted to **RMB 5.6 million**, specifically for issuing letters of guarantee to ensure payment of migrant workers' wages in construction projects[62](index=62&type=chunk) - As of June 30, 2025, the Group's total capital commitments were approximately **RMB 69.3 million** (December 31, 2024: RMB 56.4 million), primarily related to subscriptions for equity in investment funds, construction and renovation of internal hospitals, procurement of medical equipment, and acquisitions of equity in Ningbo Boshu Eye Hospital Co. Ltd. and Wuzhong Yunshikang Eye Hospital Co. Ltd[64](index=64&type=chunk) [Trade Receivables](index=16&type=section&id=Trade%20Receivables) Trade receivables decreased by 5.5% to RMB 70.3 million, primarily due to a reduction in medical insurance receivables - Trade receivables decreased by **5.5%** from RMB 74.4 million as of December 31, 2024, to **RMB 70.3 million** as of June 30, 2025, primarily due to a reduction in medical insurance receivables from earlier insurance receipts compared to the same period in 2024[54](index=54&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=Liquidity%20and%20Financial%20Resources) The company's liquidity relies on operating cash flows and external financing, with cash and cash equivalents decreasing by RMB 497.0 million due to financial product purchases and dividend payments - The Group's primary sources of liquidity are cash generated from operations, as well as debt and equity financing[55](index=55&type=chunk) - For the six months ended June 30, 2025, the Group's cash and cash equivalents decreased by a net of **RMB 497.0 million**, primarily due to net cash inflow from operating activities of RMB 181.6 million, net cash outflow from investing activities of RMB 579.2 million (mainly attributable to the purchase of financial products), and net cash outflow from financing activities of RMB 92.9 million (due to the payment of annual dividends for the year ended December 31, 2024)[58](index=58&type=chunk) Net Cash Flows (RMB thousands) | Cash Flow Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 181,554 | 174,461 | | Net Cash Flows Used in Investing Activities | (579,217) | (18,791) | | Net Cash Flows Used in Financing Activities | (92,900) | (224,348) | | Net Effect of Exchange Rate Changes | (6,432) | 975 | | Net Decrease in Cash and Cash Equivalents | (496,995) | (67,703) | [Trade Payables](index=17&type=section&id=Trade%20Payables) Trade payables increased by 19.6% to RMB 64.1 million, mainly due to an increase in payables for medical consumables and drugs - Trade payables increased by **19.6%** from RMB 53.6 million as of December 31, 2024, to **RMB 64.1 million** as of June 30, 2025, primarily due to an increase in payables for medical consumables and drugs[59](index=59&type=chunk) [Other Payables and Accrued Expenses](index=17&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) Other payables and accrued expenses increased by 15.9% to RMB 267.8 million, primarily driven by an increase in construction payables - Other payables and accrued expenses increased by **15.9%** from RMB 231.0 million as of December 31, 2024, to **RMB 267.8 million** as of June 30, 2025, primarily due to an increase in construction payables[60](index=60&type=chunk) [Contingent Liabilities](index=17&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company had no significant contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[61](index=61&type=chunk) [Pledge of Assets](index=17&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the company had pledged bank deposits of RMB 5.6 million to secure payment guarantees for migrant workers' wages in construction projects - As of June 30, 2025, pledged bank deposits amounted to **RMB 5.6 million**, specifically for issuing letters of guarantee to ensure payment of migrant workers' wages in construction projects[62](index=62&type=chunk) [Capital Commitments](index=17&type=section&id=Capital%20Commitments) As of June 30, 2025, total capital commitments were approximately RMB 69.3 million, primarily for investment fund contributions, hospital construction, equipment procurement, and acquisitions - As of June 30, 2025, the Group's total capital commitments were approximately **RMB 69.3 million** (December 31, 2024: RMB 56.4 million)[64](index=64&type=chunk) - These commitments are primarily related to subscriptions for limited partnership equity in Xiamen Ronghui Hongshang Phase II Equity Investment Partnership (Limited Partnership), construction and renovation of internal hospitals, procurement of medical equipment, acquisition of minority interests in Ningbo Boshu Eye Hospital Co. Ltd., and acquisition of equity in Wuzhong Yunshikang Eye Hospital Co. Ltd[64](index=64&type=chunk) [Material Acquisitions and Disposals](index=17&type=section&id=Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, and up to the report date, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - Except as disclosed in this report, for the six months ended June 30, 2025, and up to the date of this report, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[65](index=65&type=chunk) [Material Investments](index=18&type=section&id=Material%20Investments) The company invests in low-risk short-term structured deposit products to enhance capital efficiency, holding RMB 410 million in unredeemed products as of June 30, 2025 - The Group subscribes to low-risk short-term structured deposit products issued by reputable commercial banks using part of its temporarily idle funds to enhance capital efficiency, utilization, and returns[67](index=67&type=chunk) - As of June 30, 2025, the Group held an aggregate unredeemed principal amount of **RMB 410 million** in structured deposit products, representing approximately **13.7%** of the Group's total assets[67](index=67&type=chunk) - For the six months ended June 30, 2025, the Group subscribed to structured deposit products with a total principal amount of **RMB 100 million** and recognized interest income of approximately **RMB 5 million** as fair value gains on financial assets at fair value through profit or loss[67](index=67&type=chunk) Details of Major Structured Deposit Products Outstanding as of June 30, 2025 | Issuer Name | Structured Deposit Product Name | Deposit Start Date | Maturity Date | Principal Amount Subscribed (RMB thousands) | Expected Annualized Investment Return Rate | Realized/Fair Value as of June 30, 2025 (RMB thousands) | Percentage of Group's Total Assets as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Industrial Bank | Industrial Bank Corporate Finance RMB Structured Deposit (CC59240806000) | August 9, 2024 | August 8, 2025 | 20,000 | 1.7000% to 2.3600% | 20,234 | 0.67% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202412451) | August 13, 2024 | August 13, 2025 | 11,000 | 1.4000% to 3.1010% | 11,123 | 0.37% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202412452) | August 13, 2024 | August 15, 2025 | 9,000 | 1.3960% to 3.0950% | 9,100 | 0.30% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202414800) | September 30, 2024 | September 24, 2025 | 125,000 | 1.3000% to 3.1500% | 126,382 | 4.21% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202414801) | September 30, 2024 | September 26, 2025 | 115,000 | 1.2950% to 3.1470% | 116,272 | 3.88% | | Industrial Bank | Industrial Bank Corporate Finance RMB Structured Deposit (CC59241008015) | October 10, 2024 | October 9, 2025 | 30,000 | 1.7000% to 2.3500% | 30,350 | 1.01% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202508788) | June 25, 2025 | January 7, 2026 | 26,000 | 0.8000% to 2.8100% | 26,008 | 0.87% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202508789) | June 25, 2025 | January 9, 2026 | 24,000 | 0.7940% to 2.8180% | 24,007 | 0.80% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202508790) | June 25, 2025 | January 14, 2026 | 26,000 | 0.8000% to 2.8200% | 26,008 | 0.87% | | Bank of China | Bank of China Linked Structured Deposit (Institutional Clients) (CSDVY202508791) | June 25, 2025 | January 16, 2026 | 24,000 | 0.7940% to 2.8280% | 24,007 | 0.80% | [Future Plans for Material Investments and Capital Assets](index=19&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The company entered into a construction contract for the first phase of the Chaojueye Eye Hospital Integrated Medical Complex project for RMB 222.84 million, funded by global offering proceeds and internal resources - The Group has entered into a construction contract with Inner Mongolia Guangsha Jianan Engineering Co. Ltd. for the first phase of the Chaojueye Eye Hospital Integrated Medical Complex project, with a contract price of **RMB 222.84 million** (including tax)[73](index=73&type=chunk) - This transaction constitutes a discloseable transaction for the Company and will be funded by proceeds from the global offering and the Group's internal funds[73](index=73&type=chunk) [Borrowings and Gearing Ratio](index=19&type=section&id=Borrowings%20and%20Gearing%20Ratio) As of June 30, 2025, the company was in a net cash position, rendering the gearing ratio inapplicable - As of June 30, 2025, the Group was in a net cash position, therefore, the gearing ratio is not applicable[75](index=75&type=chunk) [Foreign Exchange Risk](index=20&type=section&id=Foreign%20Exchange%20Risk) Operating primarily in China, the company faces foreign exchange risk related to HKD, which it mitigates by monitoring and minimizing net foreign currency positions without hedging - The Group primarily operates its business in China and is exposed to foreign exchange risk arising from various currency risks, mainly related to HKD[77](index=77&type=chunk) - The Group aims to mitigate its exposure to foreign currency risk by closely monitoring and minimizing its net foreign currency positions[77](index=77&type=chunk) - During the reporting period, the Group did not enter into any currency hedging transactions[77](index=77&type=chunk) [Interest Rate Risk](index=20&type=section&id=Interest%20Rate%20Risk) The company's interest rate risk arises from interest-bearing borrowings, with fixed-rate borrowings exposing it to fair value interest rate risk, and no hedging instruments are currently used - The Group's interest rate risk arises from interest-bearing borrowings, with borrowings issued at fixed rates exposing the Group to fair value interest rate risk[78](index=78&type=chunk) - The Group currently does not use any interest rate swap contracts or other financial instruments to hedge interest rate risk[78](index=78&type=chunk) [Credit Risk](index=20&type=section&id=Credit%20Risk) The company's management has established credit policies and continuously monitors credit risk to address potential losses from counterparty non-performance - The Group's management has established credit policies and continuously monitors the credit risk it faces[79](index=79&type=chunk) [Liquidity Risk](index=20&type=section&id=Liquidity%20Risk) The company's liquidity depends on operating cash inflows and external financing to meet debt obligations and future capital expenditures, maintaining adequate cash levels to support operations - The Group's liquidity primarily depends on its ability to generate sufficient cash inflows from operations to meet its debt obligations as they fall due and to obtain external financing to meet future capital expenditure commitments[80](index=80&type=chunk) - The Group monitors and maintains levels of cash and cash equivalents that management considers adequate to fund its operations and mitigate the impact of cash flow fluctuations[81](index=81&type=chunk) [Interim Dividend](index=20&type=section&id=Interim%20Dividend) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: HKD 0.1307 per share)[82](index=82&type=chunk) [Compliance with Corporate Governance Code](index=20&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) Since January 1, 2025, the company has complied with all applicable code provisions of the Corporate Governance Code, except for the combined roles of Chairman and CEO - From January 1, 2025, and up to the date of this report, the Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Zhang Bozho[83](index=83&type=chunk)[84](index=84&type=chunk) - The Board believes that Mr. Zhang Bozho concurrently serving as Chairman and Chief Executive Officer is beneficial to the Group's management and enhances the efficiency of the Group's decision-making and execution processes[84](index=84&type=chunk) - The Group has implemented appropriate checks and balances through the Board and independent non-executive directors[84](index=84&type=chunk) [Compliance with Model Code for Securities Transactions](index=21&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) The company adopted the Model Code for Securities Transactions by Directors, and all directors confirmed compliance from January 1, 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[85](index=85&type=chunk) - All Directors confirmed that they have complied with the requirements set out in the Model Code from January 1, 2025, and up to the date of this report[85](index=85&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, provides independent opinions on financial reporting, internal controls, and risk management, and oversees audit procedures - The Audit Committee comprises three independent non-executive directors: Mr. Li Jianbin (Chairman), Ms. Guo Hongyan, and Mr. Baoshan[86](index=86&type=chunk) - Its primary responsibilities are to assist the Board in providing independent opinions on the effectiveness of the Group's financial reporting process, internal controls, and risk management systems, and to oversee the audit process[86](index=86&type=chunk) [Use of Proceeds from Global Offering](index=21&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The net proceeds from the global offering were approximately HKD 1.599 billion, with an unutilized balance of HKD 681.5 million as of June 30, 2025, and the Board extended the utilization timeline and reallocated funds - The net proceeds from the global offering were approximately **HKD 1.599 billion**[87](index=87&type=chunk) - As of June 30, 2025, the unutilized balance of the net proceeds was approximately **HKD 681.5 million**[88](index=88&type=chunk) - The Board resolved on August 29, 2025, to further extend the expected timeline for the use of net proceeds by **two years**[88](index=88&type=chunk) - **HKD 167.99 million** originally allocated for "acquiring hospitals in new markets with large populations and relatively high demand for ophthalmic medical services when suitable opportunities arise" and **HKD 60 million** for "upgrading information technology systems" were reallocated to "establishing new hospitals and relocating, upgrading, and renovating existing hospitals"[88](index=88&type=chunk) Updated Use of Net Proceeds from Global Offering and Timeline (HKD millions) | Intended Use of Net Proceeds | Planned Amount (HKD millions) | Revised Allocation (HKD millions) | Amount of Net Proceeds Utilized During Reporting Period (HKD millions) | Actual Amount Utilized up to June 30, 2025 (HKD millions) | Unutilized Net Proceeds as of June 30, 2025 (Revised) (HKD millions) | Updated Expected Timeline for Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Establishing new hospitals and relocating, upgrading, and renovating existing hospitals | 572.44 | 800.42 | 59.01 | 345.06 | 455.36 | Expected to be fully utilized on or before December 31, 2027 | | Acquiring hospitals in new markets with large populations and relatively high demand for ophthalmic medical services when suitable opportunities arise | 716.35 | 548.37 | – | 360.25 | 188.12 | Expected to be fully utilized on or before December 31, 2027 | | Upgrading information technology systems | 150.31 | 90.31 | 3.64 | 52.29 | 38.02 | Expected to be fully utilized on or before December 31, 2027 | | Working capital and other general corporate purposes | 159.90 | 159.90 | – | 159.90 | – | - | | Total | 1,599.00 | 1,599.00 | 62.65 | 917.5 | 681.50 | - | [Purchases, Sales or Redemptions of the Company's Listed Securities](index=23&type=section&id=Purchases%2C%20Sales%20or%20Redemptions%20of%20the%20Company%27s%20Listed%20Securities) From January 1 to June 30, 2025, the company repurchased 16,000 shares for HKD 42,925, which were subsequently cancelled, with no other listed securities transactions - From January 1 to June 30, 2025, the Company repurchased **16,000 shares** from the Stock Exchange, all of which were held as treasury shares by the Company[95](index=95&type=chunk) - The total consideration for the repurchased shares was **HKD 42,925**, with a maximum price of HKD 2.69 per share and a minimum price of HKD 2.67 per share[95](index=95&type=chunk) - All of the aforementioned repurchased shares were cancelled on **April 29, 2025**[95](index=95&type=chunk) - As of June 30, 2025, and the date of this report, the Group did not hold any treasury shares[96](index=96&type=chunk) [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 2,627 full-time employees, offering competitive remuneration packages and a share award scheme to attract and retain talent, alongside systematic training programs - As of June 30, 2025, the Group had **2,627 full-time employees**[98](index=98&type=chunk) Employee Breakdown by Function as of June 30, 2025 | Function | Number of Employees | Percentage of Total Employees | | :--- | :--- | :--- | | Hospital Professionals - Physicians | 320 | 12.18% | | Hospital Professionals - Nurses | 631 | 24.02% | | Hospital Professionals - Other Professionals | 549 | 20.9% | | Optometry Center Professionals | 99 | 3.77% | | Administrative, Financial, and Other Employees - Headquarters | 149 | 5.67% | | Administrative, Financial, and Other Employees - Hospitals | 839 | 31.94% | | Administrative, Financial, and Other Employees - Optometry Centers | 40 | 1.52% | | Total | 2,627 | 100.00% | - The Group's remuneration packages for its employees primarily include basic salaries, performance-linked bonuses, and discretionary year-end bonuses[99](index=99&type=chunk) - The Group adopted a share award scheme on **May 10, 2022**, to recognize and incentivize employee contributions, retain existing employees, and attract new talent[99](index=99&type=chunk) - The Group provides systematic training and education programs, including mandatory internal and external online and on-site training, and sponsors high-potential employees for further studies at renowned medical institutions[101](index=101&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section covers various corporate governance matters, changes in director information, capital structure, post-reporting period events, and shareholder interests [Review of Interim Report](index=26&type=section&id=Review%20of%20Interim%20Report) Ernst & Young reviewed the interim financial information in accordance with HKSRS 2410, concluding that no matters indicated non-compliance with IAS 34 - The Company's independent auditor, Ernst & Young, has reviewed the unaudited interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, issued by the Hong Kong Institute of Certified Public Accountants[103](index=103&type=chunk) - The Audit Committee, together with the Company's management and independent auditor, has reviewed the accounting principles and policies adopted by the Company and discussed the Group's internal controls and financial reporting matters[103](index=103&type=chunk) - The Audit Committee and the independent auditor believe that the preparation of these interim results complies with applicable accounting standards, laws, and regulations, and that the Company has made appropriate and sufficient disclosures[103](index=103&type=chunk) [Changes in Directors' Information](index=26&type=section&id=Changes%20in%20Directors%27%20Information) Executive Director Mr. Zhang Guangdi was appointed Joint Company Secretary, and Independent Non-Executive Director Ms. Guo Hongyan joined the Nomination Committee, with no other material changes - Executive Director Mr. Zhang Guangdi was appointed Joint Company Secretary on **March 17, 2025**[104](index=104&type=chunk) - Independent Non-Executive Director Ms. Guo Hongyan was appointed as a member of the Board's Nomination Committee on **June 30, 2025**[105](index=105&type=chunk) - Save as disclosed above, there were no other changes in Directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules during the reporting period[106](index=106&type=chunk) [Capital Structure](index=26&type=section&id=Capital%20Structure) As of June 30, 2025, the company's total issued share capital was HKD 176.877 million, comprising 707.51 million shares, with a capital structure of 21.3% debt and 78.7% equity - As of the date of this report, the Company's total issued share capital was **HKD 176.877 million**, divided into **707,510,500 shares**[107](index=107&type=chunk) - The Company's total authorized share capital was **HKD 380,000**, divided into **1,520,000,000 shares**[107](index=107&type=chunk) - During the reporting period, the company repurchased and cancelled a total of **16,000 shares**[107](index=107&type=chunk) - As of June 30, 2025, the Group's capital structure was **21.3% debt** and **78.7% equity** (December 31, 2024: 19.3% debt and 80.7% equity)[109](index=109&type=chunk) - As of June 30, 2025, the Group recorded interest-bearing borrowings of **RMB 6.704 million**, with interest rates ranging from **4.15% to 5.70%**, and all such borrowings are due on or before December 31, 2025[109](index=109&type=chunk) [Events After the Reporting Period](index=27&type=section&id=Events%20After%20the%20Reporting%20Period) After the reporting period, the company entered into a RMB 222.84 million construction contract for the Chaojueye Eye Hospital Integrated Medical Complex and subscribed to a RMB 30 million wealth management product - On **July 28, 2025**, Inner Mongolia Chaojueye Medical Technology Co. Ltd., an indirect wholly-owned subsidiary of the Company, entered into a construction contract with Inner Mongolia Guangsha Jianan Engineering Co. Ltd. for the first phase of the Chaojueye Eye Hospital Integrated Medical Complex project, with a contract price of **RMB 222.84 million** (including tax)[110](index=110&type=chunk) - On **August 22, 2025**, Chaojueye Medical Technology Co. Ltd., an indirect wholly-owned subsidiary of the Company, subscribed to a wealth management product issued by Bank of China with a total principal amount of **RMB 30 million**[110](index=110&type=chunk) [Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=27&type=section&id=Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2025, the concert party group, including Mr. Zhang Bozho, held 40.63% of the company's shares, with other major shareholders also disclosed [Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=27&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Zhang Bozho, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, and other concert party members collectively held 40.63% of the company's shares - As of June 30, 2025, Mr. Zhang Bozho, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, Mr. Zhang Fengsheng, and Ms. Zhang Yumei had entered into a concert party agreement and were deemed to be interested in **287,452,328 shares** of the Company, representing **40.63%**[112](index=112&type=chunk)[118](index=118&type=chunk) - Mr. Zhang Guangdi beneficially owned **48,699 shares**, representing **0.01%**[112](index=112&type=chunk) Directors' and Chief Executive's Interests in Shares of the Company | Director Name | Nature of Interest | Number of Shares or Underlying Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Zhang Bozho | Beneficial owner; joint interest with another person; controlled corporation interest | 287,452,328 (L) | 40.63% | | Ms. Zhang Xiaoli | Beneficial owner; joint interest with another person; controlled corporation interest; spouse's interest | 287,452,328 (L) | 40.63% | | Mr. Zhang Junfeng | Beneficial owner; joint interest with another person; controlled corporation interest | 287,452,328 (L) | 40.63% | | Mr. Zhang Guangdi | Beneficial owner | 48,699 (L) | 0.01% | [Interests in Associated Corporations of the Company](index=28&type=section&id=Interests%20in%20Associated%20Corporations%20of%20the%20Company) As of June 30, 2025, Mr. Zhang Bozho, Ms. Zhang Xiaoli, and Mr. Zhang Junfeng held significant equity interests in Xiamen Xinkangnuo - As of June 30, 2025, Mr. Zhang Bozho, Ms. Zhang Xiaoli, and Mr. Zhang Junfeng held **26.64%**, **29.03%**, and **20.67%** equity interests in Xiamen Xinkangnuo, respectively[115](index=115&type=chunk) Directors' Interests in Associated Corporations of the Company | Director Name | Name of Group Member Company | Subscribed Capital Amount (RMB) | Approximate Percentage of Equity | | :--- | :--- | :--- | :--- | | Mr. Zhang Bozho | Xiamen Xinkangnuo | 22,646,550 | 26.64% | | Ms. Zhang Xiaoli | Xiamen Xinkangnuo | 24,677,455 | 29.03% | | Mr. Zhang Junfeng | Xiamen Xinkangnuo | 17,568,480 | 20.67% | [Directors' Right to Acquire Shares or Debentures](index=28&type=section&id=Directors%27%20Right%20to%20Acquire%20Shares%20or%20Debentures) During the reporting period, neither the company nor its subsidiaries entered into arrangements enabling directors to acquire shares or debentures, nor were any such rights granted or exercised by directors or their families - At no time during the reporting period did the Company or any of its subsidiaries enter into any arrangements that would enable the Directors to acquire benefits by purchasing shares or debentures of the Company or any other body corporate[117](index=117&type=chunk) - No rights to subscribe for equity or debt securities of the Company or any other body corporate were granted to, or exercised by, the Directors or any of their spouses or children under the age of 18[117](index=117&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Shares and Underlying Shares of the Company](index=29&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20the%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, the concert party group held 40.63% of the company's shares, with Jutong Medical Management, Sihai Medical Management, and Orchid Asia VII Global Investment also holding significant stakes Substantial Shareholders' Interests and Short Positions in the Shares and Underlying Shares of the Company | Shareholder Name/Entity | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Equity in the Company | Long/Short Position/Lendable Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Zhang Bozho | Beneficial owner; joint interest with another person; controlled corporation interest | 287,452,328 | 40.63% | Long Position | | Ms. Zhang Xiaoli | Beneficial owner; joint interest with another person; controlled corporation interest; spouse's interest | 287,452,328 | 40.63% | Long Position | | Mr. Zhang Junfeng | Beneficial owner; joint interest with another person; controlled corporation interest | 287,452,328 | 40.63% | Long Position | | Mr. Zhang Fengsheng | Beneficial owner; joint interest with another person; controlled corporation interest | 287,452,328 | 40.63% | Long Position | | Ms. Zhang Yumei | Joint interest with another person; controlled corporation interest | 287,452,328 | 40.63% | Long Position | | Ms. Zhang Hongbo | Spouse's interest | 287,452,328 | 40.63% | Long Position | | Mr. He Yong | Beneficial owner; spouse's interest | 287,452,328 | 40.63% | Long Position | | Ms. Su Yuqin | Spouse's interest | 287,452,328 | 40.63% | Long Position | | Ms. Li Furong | Spouse's interest | 287,452,328 | 40.63% | Long Position | | Mr. Jin Longqi | Spouse's interest | 287,452,328 | 40.63% | Long Position | | Jutong Medical Management Co. Ltd. | Beneficial owner | 77,684,000 | 10.98% | Long Position | | Sihai Medical Management Co. Ltd. | Beneficial owner | 84,266,000 | 11.91% | Long Position | | Guangming Medical Management Co. Ltd. | Beneficial owner | 59,966,000 | 8.48% | Long Position | | Orchid Asia VII Global Investment Limited | Beneficial owner | 84,948,500 | 12.01% | Long Position | | ORCHID ASIA VII, L.P. | Controlled corporation interest | 79,002,105 | 11.17% | Long Position | | ORCHID ASIA VII GP, LIMITED | Controlled corporation interest | 79,002,105 | 11.17% | Long Position | | ORCHID ASIA V GROUP, LIMITED | Controlled corporation interest | 79,002,105 | 11.17% | Long Position | | ORCHID ASIA V GROUP MANAGEMENT, LIMITED | Controlled corporation interest | 79,002,105 | 11.17% | Long Position | | OAVII HOLDINGS, L.P. | Controlled corporation interest | 79,002,105 | 11.17% | Long Position | | AREO HOLDINGS LIMITED | Controlled corporation interest | 84,948,500 | 12.01% | Long Position | | Ms. Lin Liming | Controlled corporation interest | 84,948,500 | 12.01% | Long Position | | Mr. Li Jipei | Controlled corporation interest | 84,948,500 | 12.01% | Long Position | | Ms. Zhang Wenwen | Controlled corporation interest | 35,699,000 | 5.05% | Long Position | | Mr. Xiao Feng | Spouse's interest | 35,699,000 | 5.05% | Long Position | - Mr. Zhang Bozho, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, Mr. Zhang Fengsheng, and Ms. Zhang Yumei have entered into a concert party agreement and are deemed to be interested in the Company's shares (i.e., **287,452,328 shares**)[122](index=122&type=chunk) [Share Schemes](index=31&type=section&id=Share%20Schemes) This section details the company's share award scheme, including its purpose, share limits, vesting conditions, and changes in awarded shares during the period [Share Award Scheme](index=31&type=section&id=Share%20Award%20Scheme) The company's Share Award Scheme, adopted on May 10, 2022, aims to incentivize and retain employees, with 55.85 million shares available for grant, representing 7.89% of issued shares - The scheme was approved and adopted by the Board on **May 10, 2022**, aiming to recognize and incentivize contributions from certain Group employees, retain existing employees, and attract and recruit suitable new employees[123](index=123&type=chunk) - The Board may not make further awards if the total number of awarded shares exceeds **10%** of the Company's issued share capital on the adoption date (i.e., **70,762,500 shares**)[124](index=124&type=chunk)[126](index=126&type=chunk) - The maximum number of shares that may be awarded to any selected person under the scheme shall not exceed **1%** of the Company's issued share capital on the adoption date (i.e., **7,076,250 shares**)[125](index=125&type=chunk) - As of the date of this report, the total number of shares available for grant under the scheme was **55,853,287 shares**, representing approximately **7.89%** of the issued shares (excluding treasury shares) as of that date[124](index=124&type=chunk) - During the reporting period, no new awarded shares were granted, and a total of **991,858 awarded shares lapsed**[131](index=131&type=chunk) Details of Changes in Awarded Shares Under Share Award Scheme During Reporting Period | Name/Category | Position/Description | Date of Grant | Purchase Price Per Share (HKD) | Unvested Shares as of January 1, 2025 | Number of New Grants During Reporting Period | Number of Shares Vested During Reporting Period | Weighted Average Closing Price Immediately Before Vesting Date (HKD) | Unvested Shares as of June 30, 2025 | Closing Price Immediately Before Grant Date (HKD) | Awards Cancelled During Reporting Period | Awards Lapsed During Reporting Period | Vesting Period | Fair Value at Grant Date (HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhang Bozho | Executive Director and CEO | June 14, 2023 | 1.00 | 233,737 | – | 100,173 | 2.74 | 133,564 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 1,402,422 | | Zhang Junfeng | Executive Director | June 14, 2023 | 1.00 | 56,448 | – | 24,192 | 2.74 | 32,256 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 338,688 | | Zhang Xiaoli | Executive Director | June 14, 2023 | 1.00 | 70,000 | – | 30,000 | 2.74 | 40,000 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 420,000 | | Zhang Guangdi | Executive Director | June 14, 2023 | 1.00 | 34,426 | – | 14,754 | 2.74 | 19,672 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 206,556 | | Zhang Fengsheng | Substantial Shareholder | June 14, 2023 | 1.00 | 58,429 | – | 25,041 | 2.74 | 33,388 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 350,574 | | Zhang Jiao | Associate of Zhang Junfeng | June 14, 2023 | 1.00 | 52,472 | – | 22,488 | 2.74 | 29,984 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 314,832 | | He Yong | Associate of Zhang Xiaoli | June 14, 2023 | 1.00 | 58,429 | – | 25,041 | 2.74 | 33,388 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 350,574 | | 212 Employee Participants | – | June 14, 2023 | Zero to 1.00 | 8,106,585 | – | 3,258,177 | 2.74 | 4,211,020 | 4.31 | – | 637,388 | April 1, 2024 to May 31, 2026 | 50,698,594.80 | | 5 Service Providers | – | June 14, 2023 | Zero | 364,000 | – | 156,000 | 2.74 | 208,000 | 4.31 | – | – | April 1, 2024 to May 31, 2026 | 2,184,000 | | 4 Service Providers | – | December 17, 2024 | Zero | 300,000 | – | 150,000 | 2.74 | 150,000 | 2.79 | – | – | April 1, 2025 to May 31, 2026 | 837,000 | | 83 Employee Participants | – | December 17, 2024 | Zero to 1.00 | 2,634,270 | – | 1,148,200 | 2.74 | 1,131,600 | 2.79 | – | 354,470 | April 1, 2025 to May 31, 2026 | 7,349,613.3 | | Total | | | | 11,968,796 | – | 4,954,066 | | 6,022,872 | | – | 991,858 | | | [Share Option Scheme](index=34&type=section&id=Share%20Option%20Scheme) The company has not adopted any share option scheme - The Company has not adopted any share option scheme[138](index=138&type=chunk) [Independent Review Report](index=35&type=section&id=Independent%20Review%20Report) Ernst & Young reviewed the interim financial information in accordance with HKSRS 2410, concluding that no matters indicated non-compliance with IAS 34 - Ernst & Young has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, issued by the Hong Kong Institute of Certified Public Accountants[142](index=142&type=chunk) - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, it does not enable the auditor to obtain assurance that all significant matters would be identified, thus no audit opinion is expressed[142](index=142&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[143](index=143&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=36&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue was RMB 698.3 million, cost of sales was RMB 400.6 million, and gross profit was RMB 297.7 million, with profit for the period at RMB 110.7 million Interim Condensed Consolidated Statement of Profit or Loss Summary (RMB thousands) | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 698,258 | 734,287 | | Cost of Sales | (400,591) | (398,313) | | Gross Profit | 297,667 | 335,974 | | Other Income and Gains | 37,833 | 25,674 | | Selling and Distribution Expenses | (48,755) | (62,976) | | Administrative Expenses | (102,167) | (106,437) | | Net Impairment Losses on Financial Assets at Amortized Cost | (353)