[Company Information](index=3&type=section&id=Company%20Information) This section provides essential corporate details, including board composition, governance structure, and fundamental operational information [Board of Directors and Corporate Governance](index=3&type=section&id=Board%20of%20Directors%20and%20Corporate%20Governance) This section lists the company's board members, committee compositions (audit, remuneration, nomination), and key positions, reflecting its governance structure - The Board of Directors includes Executive Director Mr. Tan Zheng (Chairman), Dr. Wang Yu (CEO and CTO, resigned), and several Non-executive and Independent Non-executive Directors[4](index=4&type=chunk) - The Audit Committee is chaired by Mr. Ng Chi Kit, the Remuneration Committee by Professor Wang Yingdian, and the Nomination Committee by Mr. Tan Zheng[4](index=4&type=chunk) [Company Basic Information](index=4&type=section&id=Company%20Basic%20Information) This section provides the company's main bankers, headquarters, principal places of business, registered office, share registrar, stock code, website, and listing date - The company's headquarters and principal place of business in China are located at 8th Floor, Building 1, Guosheng Science and Technology Park, No. 1 Kangding Street, Beijing Economic-Technological Development Area, Beijing, China[5](index=5&type=chunk) - The company's stock code is **6978**, and it was listed on the Stock Exchange on **July 10, 2020**[5](index=5&type=chunk) [Financial and Operating Data Summary](index=5&type=section&id=Financial%20and%20Operating%20Data%20Summary) This section summarizes the Group's key financial and operational performance for the six months ended June 30, 2025, highlighting significant changes in profitability and financial position [Summary for the Six Months Ended June 30, 2025](index=5&type=section&id=Summary%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) For the six months ended June 30, 2025, the company's loss expanded by **39.4%** to **RMB 129.03 million**, primarily due to a net other gains and losses turning into a loss; current assets significantly decreased by **53.4%**, leading to a **33.0%** increase in net current liabilities and a **784.2%** surge in net liabilities Key Financial Data Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | 99.8 | | Net other gains and losses | (51,045) | 19,836 | (357.3) | | Administrative expenses | (19,643) | (23,048) | (14.8) | | Research and development expenses | (67,449) | (91,118) | (26.0) | | Finance costs | (3,350) | (3,851) | (13.0) | | Other expenses | (579) | (901) | (35.7) | | Loss before tax | (129,030) | (92,556) | 39.4 | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | 39.4 | | Loss attributable to owners of the Company | (129,103) | (92,515) | 39.5 | | Basic and diluted loss per share | (0.25) | (0.18) | - | Key Balance Sheet Data (Period-end) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 448,136 | 476,548 | (6.0) | | Current assets | 40,763 | 87,494 | (53.4) | | Current liabilities | (496,539) | (430,206) | 15.4 | | Net current liabilities | (455,776) | (342,712) | 33.0 | | Non-current liabilities | (137,845) | (150,289) | (8.3) | | Net liabilities | (145,485) | (16,453) | 784.2 | [Company Overview](index=6&type=section&id=Company%20Overview) This section provides a general overview of the Group's core business, key product pipeline, and strategic positioning in the cell immunotherapy sector [Overview](index=6&type=section&id=Overview) The Group is a leading cell immunotherapy biopharmaceutical company in China, with nearly 18 years of focus on T-cell immunotherapy R&D and commercialization; its core pipeline product EAL® has over a decade of clinical application track record, showing therapeutic effects on various cancers, with a conditional NDA currently under review by the NMPA - The Group is a leading cell immunotherapy biopharmaceutical company in China, focusing on T-cell immunotherapy R&D and commercialization for nearly **18 years**[7](index=7&type=chunk) - The core pipeline product EAL® is a multi-target cell immunotherapy product with over **ten years** of clinical application track record, demonstrating therapeutic effects on various cancers[7](index=7&type=chunk) - The conditional NDA for EAL® is currently under review by the Center for Drug Evaluation of the National Medical Products Administration (NMPA) and was included in China's priority review and approval list in **March 2025**[7](index=7&type=chunk)[11](index=11&type=chunk) - The product pipeline covers non-genetically modified and genetically modified products, including EAL®, 6B11, CAR-T cell series, and TCR-T cell series[7](index=7&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's business operations, research and development progress, and financial performance for the reporting period [Business Review](index=7&type=section&id=Business%20Review) The Group continued to advance the R&D of multiple cell immunotherapy products during the reporting period, with the conditional NDA for core product EAL® under review and CAR-T-19 injection completing Phase II clinical trial enrollment and receiving breakthrough therapy designation; the company is also expanding R&D and production facilities, implementing a stringent quality assurance system, and plans to accelerate EAL® commercialization, expand CDMO business, and pursue strategic collaborations [R&D of Pipeline Products](index=7&type=section&id=R%26D%20of%20Pipeline%20Products) The company has a rich pipeline of R&D products, including non-genetically modified products EAL® (post-surgery for liver cancer, post-surgery for gastric cancer) and 6B11 (platinum-resistant ovarian cancer), as well as genetically modified CAR-T series (CAR-T-19 YT003, Dinolunsi Injection, VAC-aT19) and TCR-T series (YT008, YT007); the conditional NDA for EAL® is under review, and CAR-T-19 injection has completed Phase II clinical trial enrollment and received breakthrough therapy designation - The conditional NDA for the core pipeline product EAL® is under review by the Center for Drug Evaluation of the NMPA, with **430 target patients** enrolled in Phase II clinical trials[11](index=11&type=chunk) - CAR-T-19 injection received breakthrough therapy designation from the Center for Drug Evaluation for treating relapsed/refractory B-ALL patients aged **25 and below**, and has completed enrollment of **52 target patients** in Phase II clinical trials[14](index=14&type=chunk)[15](index=15&type=chunk) - Dinolunsi Injection (for relapsed/refractory diffuse large B-cell lymphoma) has completed enrollment of **13 target patients** in Phase I clinical trials[17](index=17&type=chunk) - aT19 injection received IND approval for Phase I clinical trials in **February 2024**, aiming to address insufficient persistence and recurrence issues in CAR-T cell therapy[18](index=18&type=chunk) - The TCR-T cell product pipeline has multiple products undergoing preclinical research, targeting clear cell renal carcinoma, CMV, and EBV viral infections[19](index=19&type=chunk) [Group Facilities](index=10&type=section&id=Group%20Facilities) The Group owns an R&D and production center in Beijing covering approximately **27,604 square meters** with an annual processing capacity of about **40,000 samples**; to support EAL® commercialization and future demand, new R&D and production centers are planned in North China (Beijing) and East China (Shaoxing, Shanghai), with estimated total investments of approximately **RMB 1.2 billion** and **RMB 1.0 billion**, respectively - The Group's R&D and production center in Beijing, China, covers approximately **27,604 square meters** and can process about **40,000 samples** annually[22](index=22&type=chunk) - Plans are underway to construct an R&D and industrialization base in North China, with an estimated investment of approximately **RMB 1.2 billion** and an annual production capacity exceeding **200,000 batches**[22](index=22&type=chunk) - Plans are also in place to establish an EAL® R&D and production center in East China, with an expected total investment of approximately **RMB 1.0 billion**, and construction of a production center in Shaoxing has commenced[25](index=25&type=chunk) [Quality Assurance](index=11&type=section&id=Quality%20Assurance) The Group has established a GMP-compliant quality management system covering the entire production process to ensure consistent product quality; EAL® production is standardized, and the quality department has **43 employees** reporting directly to the CEO - The Group has developed quality management documents in accordance with GMP, covering production processes, quality standards, equipment operation, inspection, training, and environmental monitoring[23](index=23&type=chunk) - EAL® production has been standardized to ensure consistent product quality[24](index=24&type=chunk) - The quality department has **43 employees** who report directly to the Chief Executive Officer, comprising two sub-teams: Quality Assurance and Quality Control[24](index=24&type=chunk) [Future and Outlook](index=12&type=section&id=Future%20and%20Outlook) The company plans to accelerate EAL® commercialization, advance preclinical research for CAR-T and TCR-T pipeline products, enhance its technology platform to enrich the product pipeline, develop viral vector production and CDMO services, and expand strategic collaborations and explore M&A opportunities based on organic growth - Plans include comprehensively advancing EAL® post-market commercialization preparations, covering government affairs, hospital access, marketing, medical, and sales[26](index=26&type=chunk) - Continued investment in preclinical research for CAR-T and TCR-T cell product pipelines is planned, particularly for treating viral infections and solid tumors[27](index=27&type=chunk)[28](index=28&type=chunk) - A GMP-compliant viral vector production system has been established, and CDMO business is being developed based on its technology platform[29](index=29&type=chunk) - The company plans to expand strategic collaborations, seeking sales, technology transfer, and strategic partnerships for existing and R&D products, and exploring M&A opportunities[30](index=30&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) The Group's financial performance for the six months ended June 30, 2025, showed an expanded loss, primarily due to fair value losses on other financial liabilities; liquidity deteriorated, with both current and quick ratios declining, and the company has utilized convertible bond proceeds and faces foreign exchange risk [Operating Results Analysis](index=13&type=section&id=Operating%20Results%20Analysis) For the six months ended June 30, 2025, the Group's loss before tax increased by **39.4%** to **RMB 129.03 million**; other income rose by **99.8%** to **RMB 13.04 million** due to increased government grants, but net other gains and losses shifted from a gain to a loss of **RMB 51.05 million**, mainly from fair value losses on other financial liabilities, while administrative and R&D expenses decreased by **14.8%** and **26.0%**, respectively Operating Results for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | 6,510 | 99.8 | | Net other gains and losses | (51,045) | 19,836 | (70,881) | (357.3) | | Administrative expenses | (19,643) | (23,048) | 3,405 | (14.8) | | Research and development expenses | (67,449) | (91,118) | 23,669 | (26.0) | | Finance costs | (3,350) | (3,851) | 501 | (13.0) | | Other expenses | (579) | (901) | 322 | (35.7) | | Loss before tax | (129,030) | (92,556) | (36,474) | 39.4 | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | (36,476) | 39.4 | - Other income increased by **99.8%** to **RMB 13.0 million**, primarily due to increased government grants for subscription funds incentives[32](index=32&type=chunk)[33](index=33&type=chunk) - Net other gains and losses shifted from a gain of **RMB 19.8 million** in 2024 to a loss of **RMB 51.0 million** in 2025, mainly due to fair value losses on other financial liabilities[34](index=34&type=chunk) - Research and development expenses decreased by **26.0%** to **RMB 67.4 million**, primarily due to lower contract costs, staff costs, and material costs for R&D projects[36](index=36&type=chunk)[37](index=37&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) The Group's Chinese subsidiaries, Beijing Yongtai and Yongtai Ruike, enjoy a **15%** preferential corporate income tax rate due to their high-tech enterprise status; Hong Kong subsidiaries have no taxable profits and are exempt from profits tax, and deferred tax assets are not recognized due to unpredictable future profit streams - Beijing Yongtai and Yongtai Ruike are recognized as high-tech enterprises, enjoying a **15%** preferential corporate income tax rate[40](index=40&type=chunk) - For the six months ended June 30, 2025, income tax expense was **RMB 2 thousand**[31](index=31&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) The Group's bank balances and cash decreased to **RMB 21.1 million**, indicating tight liquidity; lease liabilities amounted to approximately **RMB 111.7 million**; convertible bonds totaling **RMB 300.0 million** were issued for EAL® clinical trials and new R&D and production center construction, with proceeds fully utilized and transfer completed post-reporting period - Bank balances and cash decreased from **RMB 47.0 million** as at December 31, 2024, to **RMB 21.1 million** as at June 30, 2025, primarily due to daily operating expenses[41](index=41&type=chunk) - As at June 30, 2025, lease liabilities amounted to approximately **RMB 111.7 million**[42](index=42&type=chunk) - Convertible bonds with a principal amount of **RMB 300.0 million** were issued for EAL® clinical trials (**RMB 102.3 million**) and the construction of new R&D and production centers (**RMB 197.7 million**), with proceeds fully utilized as at June 30, 2025[45](index=45&type=chunk)[47](index=47&type=chunk) - The convertible bonds were transferred to an independent third party on **July 15, 2025**[48](index=48&type=chunk) [Foreign Exchange](index=19&type=section&id=Foreign%20Exchange) The Group primarily operates in China and is exposed to foreign exchange rate fluctuations between RMB and HKD, but no currency hedging transactions were entered into during the reporting period - The Group is exposed to foreign exchange rate fluctuations between RMB and HKD[49](index=49&type=chunk) - No currency hedging transactions were entered into during the reporting period[49](index=49&type=chunk) [Selected Financial Ratios](index=19&type=section&id=Selected%20Financial%20Ratios) The Group's current ratio and quick ratio both significantly declined, with the current ratio falling from **0.20** to **0.08** and the quick ratio from **0.19** to **0.07**, mainly due to a decrease in financial assets at fair value through profit or loss and an increase in other financial liabilities Selected Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 0.08 | 0.20 | | Quick ratio | 0.07 | 0.19 | | Gearing ratio | 0.14 | – | - The current ratio and quick ratio decreased, primarily due to financial assets at fair value through profit or loss decreasing to **zero** and an increase in other financial liabilities[52](index=52&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section covers various supplementary details including interim dividends, use of IPO proceeds, employee information, and corporate governance compliance [Interim Dividend](index=20&type=section&id=Interim%20Dividend) During the reporting period, the company neither paid, declared, nor proposed any interim dividend - No dividends were paid, declared, or proposed during the reporting period[53](index=53&type=chunk) [Use of Net Proceeds from Listing and Over-allotment Option](index=20&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing%20and%20Over-allotment%20Option) The company's net proceeds from global offering and over-allotment option were approximately **HKD 1,127.8 million**, with approximately **HKD 1,124.8 million** utilized as at June 30, 2025, primarily for EAL® clinical trials and commercialization, CAR-T-19 clinical trials, TCR-T series pipeline products, other R&D expenses, and working capital; the remaining proceeds are expected to be exhausted by the end of **2025** - The net proceeds from the global offering and over-allotment option were approximately **HKD 1,127.8 million**[54](index=54&type=chunk) - As at June 30, 2025, approximately **HKD 1,124.8 million** had been utilized, with **HKD 385.6 million** for EAL® clinical trials and commercialization, and **HKD 374.5 million** for CAR-T-19 and TCR-T series pipeline products[54](index=54&type=chunk)[55](index=55&type=chunk) - The company expects the net proceeds to be fully utilized by the end of **2025**[56](index=56&type=chunk) [Material Investments, Acquisitions and Disposals](index=21&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) As at the date of this interim report, the Group held no material investments and had no future plans for material investments or capital assets - The Group held no material investments or future plans for material investments or capital assets[57](index=57&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) As at June 30, 2025, the Group had **173 employees**, with total remuneration of approximately **RMB 26.0 million**, a year-on-year decrease; the company has an evaluation system, provides training, and contributes to social insurance and housing provident funds for its Chinese employees - As at June 30, 2025, the Group had **173 employees** in China[58](index=58&type=chunk) - Total employee remuneration for the six months ended June 30, 2025, was approximately **RMB 26.0 million** (compared to RMB 36.6 million for the same period in 2024)[58](index=58&type=chunk) Number of Employees by Function as at June 30, 2025 | Function | Number of Employees | | :--- | :--- | | General Management and Administration | 18 | | Research and Development | 13 | | Senior Management | 5 | | Production, Purification, Equipment, Safety and Supply Chain | 78 | | Quality | 43 | | Clinical Support and Business Development | 16 | | Total | 173 | [Financing and Treasury Policies](index=22&type=section&id=Financing%20and%20Treasury%20Policies) The Group adopts a stable and conservative financing and treasury policy aimed at maintaining optimal financial health, minimizing financial costs and risks, and regularly reviewing financing needs to support business operations and R&D - The Group adopts a stable and conservative financing and treasury policy, aiming to maintain optimal financial position, the most economical finance costs, and the lowest financial risks[62](index=62&type=chunk) - Cash and cash equivalents are typically deposited with financial institutions with low credit risk, and financing needs are regularly reviewed[62](index=62&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=23&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This section discloses the interests of directors and the chief executive in the company's shares and underlying shares, with Mr. Tan Zheng holding beneficial interests and interests in controlled corporations, and Mr. Zheng Hyun Cheol holding interests in controlled corporations Directors' and Chief Executive's Interests in Shares and Underlying Shares | Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Tan Zheng | Beneficial interest | 5,000,000 | 0.97% | | | Interest in controlled corporation | 180,480,000 | 35.07% | | Mr. Zheng Hyun Cheol | Interest in controlled corporation | 44,112,000 | 8.57% | - Mr. Tan Zheng's interests include shares he can subscribe for as a share option grantee, and shares held by Tan Zheng Ltd, his wholly-owned company (including voting rights entrusted by passive minority shareholders)[64](index=64&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=24&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section lists the interests of substantial shareholders (excluding directors and the chief executive) in the company's shares and underlying shares, including Evodevo Ltd, Tan Zheng Ltd, Tasly (Hong Kong) Pharmaceutical Investment Co., Ltd. and its associates, Beijing Pharmaceutical Investment Management (BVI) Co., Ltd. and its associates, Greater Bay Area Common Home Development Fund, Tan Xiaoyang, Tan Yueyue, Zhang Junzheng, and Jiaze Global Capital Limited Substantial Shareholders' Interests in Shares and Underlying Shares | Shareholder Name/Name | Nature of Interest | Number of Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Evodevo Ltd | Beneficial interest | 44,112,000 | 8.57% | | Tan Zheng Ltd | Beneficial interest | 38,400,000 | 7.46% | | | Interest of parties to an agreement | 142,080,000 | 27.61% | | Tasly (Hong Kong) Pharmaceutical Investment Co., Ltd. | Beneficial interest | 96,678,571 | 18.79% | | Beijing Pharmaceutical Investment Management (BVI) Co., Ltd. | Beneficial interest | 51,458,400 | 10.00% | | China Resources Pharmaceutical Group Limited | Interest in controlled corporation | 148,136,971 | 28.79% | | China Resources Co., Ltd. | Interest in controlled corporation | 148,136,971 | 28.79% | | Jiaze Global Capital Limited | Beneficial interest (convertible instrument) | 68,493,150 | 13.31% | - Of the shares held by Tan Zheng Ltd, **19,285,714 shares** are pledged to Tasly under a subscription agreement[69](index=69&type=chunk) - Jiaze Global Capital Limited holds convertible bonds, and assuming full conversion, its approximate shareholding would be **13.31%**[70](index=70&type=chunk) [Share Option Schemes](index=27&type=section&id=Share%20Option%20Schemes) The company has a Pre-IPO Share Option Scheme and a Post-IPO Share Option Scheme; as at June 30, 2025, **35,930,000 share options** remained unexercised under the Pre-IPO scheme, granted to Tan Zheng, Wang Yu, and employees, with an exercise price of **HKD 5.5**; no share options were granted under the Post-IPO scheme - As at June 30, 2025, **35,930,000 share options** remained unexercised under the Pre-IPO Share Option Scheme[75](index=75&type=chunk)[77](index=77&type=chunk) Pre-IPO Share Option Details (As at June 30, 2025) | Grantee Name | Date of Grant | Exercise Price | Number of Unexercised Share Options | | :--- | :--- | :--- | :--- | | Tan Zheng | December 31, 2019 | HKD 5.5 | 5,000,000 | | Wang Yu | December 31, 2019 | HKD 5.5 | 23,450,000 | | Employees (Total) | December 31, 2019 | HKD 5.5 | 7,480,000 | | Total | - | - | 35,930,000 | - The Post-IPO Share Option Scheme became effective from its adoption date for a maximum period of **10 years**, but no share options were granted, exercised, cancelled, or lapsed from the listing date to the date of this interim report[79](index=79&type=chunk)[81](index=81&type=chunk) [Compliance with Corporate Governance Code](index=29&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Group is committed to maintaining high standards of corporate governance and confirms its compliance with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the six months ended June 30, 2025[82](index=82&type=chunk) [Compliance with Model Code for Securities Transactions](index=29&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules and confirms that all Directors have complied with it during the reporting period - The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules to regulate all dealings in the company's securities by Directors and relevant employees[83](index=83&type=chunk) - All Directors have confirmed their compliance with the applicable standards set out in the Model Code for the six months ended June 30, 2025[83](index=83&type=chunk) [Directors' Interests in Contracts](index=29&type=section&id=Directors'%20Interests%20in%20Contracts) During the reporting period and up to the date of this interim report, no Director had any direct or indirect material interest in any contract entered into by the company, its subsidiaries, or fellow subsidiaries that was significant to the Group's business - No Director had any direct or indirect material interest in any contract entered into by the company, its subsidiaries, or fellow subsidiaries that was significant to the Group's business[84](index=84&type=chunk) [Purchase, Sale and Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company's%20Listed%20Securities) As at June 30, 2025, the company held no treasury shares, and neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares - As at June 30, 2025, the company held no treasury shares[85](index=85&type=chunk) - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares[86](index=86&type=chunk) [Audit Committee and Review of Financial Report](index=30&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Report) The Audit Committee, comprising three members, has reviewed the company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting principles; the interim results have been reviewed by the auditor in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee comprises two Independent Non-executive Directors (Mr. Ng Chi Kit as Chairman, Professor Wang Yingdian) and one Non-executive Director (Ms. Yu Xiaohui)[87](index=87&type=chunk) - The Audit Committee has reviewed the company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements[87](index=87&type=chunk) - The interim results have been reviewed by the auditor in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[87](index=87&type=chunk) [Changes in Directors](index=30&type=section&id=Changes%20in%20Directors) During the reporting period, several changes occurred in the Board of Directors, including the appointment of Ms. Yu Xiaohui as a Non-executive Director, the resignation of Mr. Tao Ran, the resignation of Dr. Wang Yu as Executive Director, CEO, and CTO, and the appointments of Mr. Yang Xin, Mr. Liu Rui, and Mr. Zhang Guoguang as Non-executive or Independent Non-executive Directors - Ms. Yu Xiaohui was appointed as a Non-executive Director and a member of the Audit Committee, and Mr. Tao Ran resigned[89](index=89&type=chunk) - Dr. Wang Yu resigned as Executive Director, CEO, and CTO of the Group[89](index=89&type=chunk) - Mr. Yang Xin and Mr. Liu Rui were appointed as Non-executive Directors, and Mr. Zhang Guoguang was appointed as an Independent Non-executive Director[89](index=89&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=31&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Save for the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme, no arrangements were entered into by the company or its subsidiaries during or at the end of the reporting period that would enable Directors to benefit from acquiring shares or debentures of the company or any other body corporate - Save for the share option schemes, no arrangements were entered into by the company or its subsidiaries that would enable Directors to benefit from acquiring shares or debentures of the company or any other body corporate[91](index=91&type=chunk) [Publication of Interim Results and 2025 Interim Report on HKEX and Company Websites](index=31&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report%20on%20HKEX%20and%20Company%20Websites) The company has published its interim results announcement on the HKEX website and its own website, and will timely publish the 2025 Interim Report, encouraging shareholders to view it electronically for environmental support - The interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.eaal.net)[92](index=92&type=chunk) - The company encourages shareholders to view corporate communications via the HKEX and company websites instead of receiving printed copies[93](index=93&type=chunk) [Events After Reporting Period](index=31&type=section&id=Events%20After%20Reporting%20Period) Save as disclosed, to the best of the company's knowledge, no significant events affecting the Group occurred after the end of the reporting period and up to the date of this interim report - Save as disclosed, no significant events affecting the Group occurred after the end of the reporting period and up to the date of this interim report[94](index=94&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=32&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) This section presents the auditor's review report, which includes a disclaimer of conclusion due to significant uncertainties regarding the Group's going concern ability [Basis for Disclaimer of Conclusion](index=32&type=section&id=Basis%20for%20Disclaimer%20of%20Conclusion) The auditor is unable to express a conclusion due to significant doubts about the Group's ability to continue as a going concern, as it recorded a loss of **RMB 129.03 million**, net cash outflow from operating activities of **RMB 45.17 million**, net current liabilities of **RMB 455.78 million**, and net liabilities of **RMB 145.49 million** for the six months ended June 30, 2025; despite management's plans to improve liquidity, the auditor could not obtain sufficient appropriate evidence to assess the likelihood of these plans' success - The Group incurred a loss of **RMB 129,032,000** and a net cash outflow from operating activities of **RMB 45,169,000** for the six months ended June 30, 2025[96](index=96&type=chunk) - As at June 30, 2025, the Group had net current liabilities of **RMB 455,776,000**, net liabilities of **RMB 145,485,000**, and bank balances and cash of **RMB 21,053,000**, raising significant doubts about its ability to continue as a going concern[96](index=96&type=chunk) - Management has developed several plans and measures to improve liquidity, including equity financing, convertible bond extension, additional financial support from shareholders, managing payment schedules, bank borrowings, and government subsidies[97](index=97&type=chunk) - The auditor was unable to obtain sufficient appropriate evidence to assess the significant assumptions and estimates related to management's cash flow forecasts and the likelihood of success of the Group's plans and measures, thus disclaiming a conclusion on the condensed consolidated financial statements[98](index=98&type=chunk)[100](index=100&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the Group's financial performance, including revenue, expenses, and total comprehensive loss for the six months ended June 30, 2025 [For the Six Months Ended June 30, 2025](index=34&type=section&id=For%20the%20Six%20Months%20Ended%20June%2030%2C%202025) The Group recorded a loss of **RMB 129.03 million** for the six months ended June 30, 2025, an increase of **39.4%** compared to the **RMB 92.56 million** loss in the prior year; other income grew by **99.8%**, but net other gains and losses shifted from a gain to a loss, which was the primary reason for the expanded loss Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | | Net other gains and losses | (51,045) | 19,836 | | Administrative expenses | (19,643) | (23,048) | | Research and development expenses | (67,449) | (91,118) | | Finance costs | (3,350) | (3,851) | | Other expenses | (579) | (901) | | Loss before tax | (129,030) | (92,556) | | Income tax expense | (2) | – | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | | Loss attributable to owners of the Company | (129,103) | (92,515) | | Basic and diluted loss per share (RMB) | (0.25) | (0.18) | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's assets, liabilities, and equity as at June 30, 2025, reflecting its financial health at the period end [As at June 30, 2025](index=35&type=section&id=As%20at%20June%2030%2C%202025) As at June 30, 2025, the Group's current assets significantly decreased by **53.4%** to **RMB 40.76 million**, while current liabilities increased by **15.4%** to **RMB 496.54 million**, leading to an expanded net current liabilities of **RMB 455.78 million**; net liabilities surged from **RMB 16.45 million** as at December 31, 2024, to **RMB 145.49 million**, indicating a deteriorating financial position Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 448,136 | 476,548 | | Current assets | 40,763 | 87,494 | | Current liabilities | 496,539 | 430,206 | | Net current liabilities | (455,776) | (342,712) | | Non-current liabilities | 137,845 | 150,289 | | Net liabilities | (145,485) | (16,453) | | Total deficit | (145,485) | (16,453) | - Current assets significantly decreased by **53.4%**, primarily due to financial assets at fair value through profit or loss decreasing from **RMB 10.54 million** to **zero**, and a reduction in bank balances and cash[6](index=6&type=chunk)[103](index=103&type=chunk) - Net liabilities surged from **RMB 16.45 million** as at December 31, 2024, to **RMB 145.49 million** as at June 30, 2025[6](index=6&type=chunk)[104](index=104&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in the Group's equity attributable to owners and non-controlling interests for the six months ended June 30, 2025 [For the Six Months Ended June 30, 2025](index=37&type=section&id=For%20the%20Six%20Months%20Ended%20June%2030%2C%202025) The Group's statement of changes in equity for the six months ended June 30, 2025, shows that the accumulated loss attributable to owners of the Company increased from **RMB 1,807.06 million** as at January 1, 2025, to **RMB 1,936.16 million**, leading to an expanded total deficit attributable to owners of **RMB 142.40 million** Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Share capital | 3,576 | 3,576 | | Share premium | 1,402,498 | 1,402,498 | | Capital reserve | 180,349 | 180,349 | | Statutory surplus reserve | 2,001 | 2,001 | | Share option reserve | 205,339 | 205,339 | | Accumulated losses | (1,936,162) | (1,807,059) | | Subtotal attributable to owners of the Company | (142,399) | (13,296) | | Non-controlling interests | (3,086) | (3,157) | | Total equity/deficit | (145,485) | (16,453) | - The loss and total comprehensive expenses for the period attributable to owners of the Company amounted to **RMB 129,103 thousand**[105](index=105&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 [For the Six Months Ended June 30, 2025](index=38&type=section&id=For%20the%20Six%20Months%20Ended%20June%2030%2C%202025) For the six months ended June 30, 2025, the Group's net cash used in operating activities was **RMB 45.17 million**, net cash from investing activities was **RMB 7.31 million**, and net cash from financing activities was **RMB 11.96 million**; the net decrease in cash and cash equivalents for the period was **RMB 25.90 million**, with an ending balance of **RMB 21.05 million** Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (45,169) | (79,516) | | Net cash from investing activities | 7,314 | 117,669 | | Net cash from (used in) financing activities | 11,959 | (10,677) | | Net (decrease) increase in cash and cash equivalents | (25,896) | 27,476 | | Cash and cash equivalents at January 1 | 46,957 | 52,161 | | Cash and cash equivalents at June 30 | 21,053 | 79,645 | - Net cash used in operating activities improved compared to **RMB 79.52 million** in the prior year, but remained negative[107](index=107&type=chunk) - Net cash from investing activities significantly decreased, mainly due to lower proceeds from the disposal/redemption of financial assets at fair value through profit or loss, and government grant income in the prior year[107](index=107&type=chunk) - Financing activities shifted from a net cash outflow in the prior year to a net inflow, primarily benefiting from new other borrowings of **RMB 20.00 million**[107](index=107&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=38&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements, including accounting policies and significant events [General Information](index=39&type=section&id=General%20Information) The company was incorporated in the Cayman Islands, with its ordinary shares listed on the Main Board of the Stock Exchange; its principal business is investment holding, and its subsidiaries are primarily engaged in the R&D, manufacturing, and commercialization of cell immunotherapy products in China; the condensed consolidated financial statements are presented in RMB - The company was incorporated in the Cayman Islands on **April 11, 2018**, and its ordinary shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since **July 10, 2020**[108](index=108&type=chunk) - Its principal business is investment holding, and its subsidiaries are primarily engaged in the research and development, manufacturing, and commercialization of cell immunotherapy products for cancer treatment in China[108](index=108&type=chunk) - The condensed consolidated financial statements are presented in RMB[109](index=109&type=chunk) [Basis of Preparation](index=39&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34, but the auditor has significant doubts about the Group's ability to continue as a going concern due to recorded losses, net cash outflows from operations, and net liabilities; despite management's plans to improve liquidity, including equity financing and convertible bond extensions, the success of these plans involves significant uncertainty - The Group's condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[110](index=110&type=chunk) - The Group incurred a loss of **RMB 129,032,000** and a net cash outflow from operating activities of **RMB 45,169,000** for the six months ended June 30, 2025, and had net current liabilities of **RMB 455,776,000**, net liabilities of **RMB 145,485,000**, and bank balances and cash of **RMB 21,053,000**, raising significant doubts about its ability to continue as a going concern[111](index=111&type=chunk) - The Group has developed several plans and measures aimed at improving liquidity and cash flow, including equity financing, convertible bond extensions, additional financial support from shareholders, managing payment schedules for construction contractors and suppliers, obtaining bank borrowings, and government subsidies[112](index=112&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) [Accounting Policies](index=41&type=section&id=Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value; the amendments to International Financial Reporting Standards (IAS 21 amendments) were first applied in this interim period but had no significant impact on the financial position and performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value as at the end of the reporting period[117](index=117&type=chunk) - The amendments to IAS 21 "Lack of Exchangeability" were first applied in this interim period but had no significant impact on the Group's financial position and performance[118](index=118&type=chunk) [Segment Information](index=41&type=section&id=Segment%20Information) The Group has only one operating and reportable segment and recorded no revenue; all non-current assets are located in China, thus no geographical information analysis is presented - The Group has only one operating and reportable segment, and no further analysis of this single segment is presented[119](index=119&type=chunk) - The Group recorded no revenue for the six months ended June 30, 2025[120](index=120&type=chunk) - All of the Group's non-current assets are located in China, so no geographical information analysis is presented[120](index=120&type=chunk) [Other Income](index=42&type=section&id=Other%20Income) The Group's other income increased by **99.8%** from approximately **RMB 6.5 million** in the prior year to approximately **RMB 13.0 million** in the current period, primarily due to increased government grants for subscription funds incentives Other Income Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Income from providing cell cryopreservation services | 365 | 355 | | Income from providing technical services | 610 | 832 | | Interest income from bank balances and deposits | 283 | 381 | | Government grants - subscription funds incentives | 6,770 | – | | Government grants - machinery | 4,691 | 4,128 | | Government grants - R&D activities | 46 | 428 | | Total | 13,036 | 6,526 | - Government grants for subscription funds incentives increased from **zero** in 2024 to **RMB 6.77 million** in 2025, being the main driver of other income growth[121](index=121&type=chunk) [Net Other Gains and Losses](index=42&type=section&id=Net%20Other%20Gains%20and%20Losses) The Group recorded a net other loss of approximately **RMB 51.0 million** for the six months ended June 30, 2025, compared to a net gain of approximately **RMB 19.8 million** in the prior year; the shift from gain to loss was primarily due to fair value losses on other financial liabilities and the absence of fair value gains on financial assets at fair value through profit or loss Net Other Gains and Losses Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 65 | 3,323 | | Fair value (losses) gains on other financial liabilities | (50,493) | 41,048 | | Loss on termination of an intangible asset | – | (19,316) | | Impairment loss on prepayments to a supplier | – | (5,183) | | Total | (51,045) | 19,836 | - The fair value of other financial liabilities shifted from a gain of **RMB 41.05 million** in 2024 to a loss of **RMB 50.49 million** in 2025[122](index=122&type=chunk) - In the prior year, a loss on termination of an intangible asset of **RMB 19.32 million** and an impairment loss on prepayments of **RMB 5.18 million** were recorded[122](index=122&type=chunk) [Income Tax Expense](index=43&type=section&id=Income%20Tax%20Expense) The Group's Chinese subsidiaries, Beijing Yongtai and Yongtai Ruike, enjoy a **15%** preferential corporate income tax rate due to their high-tech enterprise status; Hong Kong subsidiaries have no taxable profits and are exempt from profits tax; deferred tax assets are not recognized for unused tax losses due to the unpredictability of future profit streams - Current China corporate income tax for the six months ended June 30, 2025, was **RMB 2 thousand**[123](index=123&type=chunk) - Beijing Yongtai and Yongtai Ruike, as high-tech enterprises, enjoy a **15%** reduced corporate income tax rate[124](index=124&type=chunk) - The Group's estimated unused tax losses are approximately **RMB 2,051,015,000**, but no deferred tax assets have been recognized due to the unpredictability of future profit streams[125](index=125&type=chunk) [Loss for the Period](index=44&type=section&id=Loss%20for%20the%20Period) This section lists the main expense items contributing to the loss for the period, including staff costs, depreciation of property, plant and equipment, amortization of intangible assets, material costs for R&D projects, and subcontracting costs; both staff costs and R&D-related costs decreased Major Components of Loss for the Period (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total staff costs | 25,996 | 36,641 | | Depreciation of property, plant and equipment | 27,509 | 28,938 | | Amortisation of intangible assets | 1,273 | 1,311 | | Raw materials and other consumables costs included in R&D expenses | 2,925 | 9,829 | | Subcontracting costs included in R&D expenses | 15,430 | 25,664 | - Total staff costs decreased by approximately **29.1%** to **RMB 26.0 million**[126](index=126&type=chunk) - Material costs and subcontracting costs for R&D projects both significantly decreased[126](index=126&type=chunk) [Dividends](index=44&type=section&id=Dividends) No dividends were paid, declared, or proposed during this period; the Directors have decided not to pay any dividend for the interim period - No dividends were paid, declared, or proposed during this period[127](index=127&type=chunk) [Loss Per Share](index=45&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share attributable to owners of the Company were **RMB 0.25**, an increase from **RMB 0.18** in the prior year; share options and unexercised convertible bonds were not included in the calculation of diluted loss per share as their inclusion would result in a decrease in loss per share Loss Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic loss per share | (0.25) | (0.18) | | Diluted loss per share | (0.25) | (0.18) | - For the purpose of calculating diluted loss per share, share options granted under the Pre-IPO Share Option Scheme and the conversion of unexercised convertible bonds were not included, as their inclusion would result in a decrease in loss per share[128](index=128&type=chunk) [Prepayments, Deposits and Other Receivables](index=46&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) The Group's total prepayments, deposits, and other receivables decreased from **RMB 23.71 million** as at December 31, 2024, to **RMB 19.06 million** as at June 30, 2025, primarily due to a reduction in prepayments to suppliers and service providers and recoverable VAT Components of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments to suppliers and service providers | 8,782 | 13,411 | | Recoverable value-added tax | 2,958 | 3,939 | | Prepayments for purchase of property, plant and equipment | 1,035 | 1,029 | | Advances to employees | 1,539 | 706 | | Lease deposits | 3,474 | 3,375 | | Other deposits | 1,126 | 1,140 | | Total | 19,060 | 23,708 | - Prepayments to suppliers and service providers decreased by approximately **34.5%** to **RMB 8.78 million**[129](index=129&type=chunk) - Recoverable value-added tax decreased by approximately **24.9%** to **RMB 2.96 million**[129](index=129&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=46&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group's total financial assets at fair value through profit or loss decreased from **RMB 10.54 million** as at December 31, 2024, to **zero** as at June 30, 2025; this was primarily due to the cessation of investments in certificates of deposit and the fair value of investments in Tasly Fund and Shaoxing Fund being assessed as zero Components of Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Investment in Tasly Fund | – | – | | Investment in Shaoxing Fund | – | – | | Investment in certificates of deposit | – | 10,536 | | Total | – | 10,536 | - Investments in certificates of deposit are no longer held, leading to a reduction of this asset class from **RMB 10.54 million** to **zero**[130](index=130&type=chunk) - The fair value of the investment in Tasly Fund is close to **zero** because Target A has ceased clinical research; the fair value of the investment in Shaoxing Fund is **zero** because the remaining principal of the convertible bond is overdue[131](index=131&type=chunk)[134](index=134&type=chunk) [Trade and Other Payables](index=47&type=section&id=Trade%20and%20Other%20Payables) The Group's total trade and other payables decreased from **RMB 131.93 million** as at December 31, 2024, to **RMB 126.21 million** as at June 30, 2025; trade payables increased, while payables for property, plant and equipment decreased; the aging analysis of trade payables shows an increase in debts over **2 years** Components of Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 40,354 | 33,609 | | Payables for purchase of property, plant and equipment | 66,383 | 74,932 | | Accrued salaries and other allowances | 4,175 | 8,797 | | Payables for purchase of intangible assets | 1,995 | 1,947 | | Payables for service expenses | 12,824 | 12,207 | | Total | 126,205 | 131,925 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 14,467 | 16,855 | | 1 to 2 years | 11,235 | 11,674 | | 2 to 3 years | 9,921 | 5,080 | | Over 3 years | 4,731 | – | | Total | 40,354 | 33,609 | - Trade payables increased by approximately **20.1%** to **RMB 40.35 million**[132](index=132&type=chunk) - Trade payables over **3 years** increased from **zero** as at December 31, 2024, to **RMB 4.73 million** as at June 30, 2025[135](index=135&type=chunk) [Deferred Government Grants](index=48&type=section&id=Deferred%20Government%20Grants) The Group's total deferred government grants decreased from **RMB 60.51 million** as at January 1, 2025, to **RMB 55.77 million** as at June 30, 2025, primarily due to the release of deferred government grants related to machinery and R&D activities Changes in Deferred Government Grants | Item | Machinery (RMB thousands) | R&D Activities (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | As at January 1, 2025 (audited) | 60,461 | 46 | 60,507 | | Release of deferred government grants | (4,691) | (46) | (4,737) | | As at June 30, 2025 (unaudited) | 55,770 | – | 55,770 | - Total deferred government grants released during the period amounted to **RMB 4.74 million**, of which **RMB 4.69 million** was related to machinery and **RMB 46 thousand** to R&D activities[137](index=137&type=chunk) [Other Financial Liabilities](index=49&type=section&id=Other%20Financial%20Liabilities) The Group's other financial liabilities primarily consist of convertible bonds, whose fair value increased from **RMB 268.10 million** as at December 31, 2024, to **RMB 318.59 million** as at June 30, 2025, mainly due to fair value changes; the bonds have a principal of **RMB 300 million** and an annual interest rate of **6%**, and were transferred to an independent investor on **July 15, 2025** Other Financial Liabilities (Convertible Bonds) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Convertible bonds | 318,590 | 268,097 | - The convertible bonds have a principal of **RMB 300 million**, an annual interest rate of **6%**, mature within **3 years** from the issue date, and an initial conversion price of **RMB 4.38 per share**[139](index=139&type=chunk) - The change in fair value of the convertible bonds resulted in an increase of **RMB 50.49 million**[140](index=140&type=chunk) - The convertible bonds were transferred to an independent investor on **July 15, 2025**[142](index=142&type=chunk) [Other Borrowings](index=51&type=section&id=Other%20Borrowings) The Group incurred new other borrowings of **RMB 20.04 million** during the period, from Ms. Wei, a family member of Mr. Tan Zheng, and Tasly Great Health Industry Investment Group Co., Ltd., an indirect shareholder of Tasly; these loans bear interest at an annual rate of **4.5%** and are due one year from their respective receipt dates or the completion date of equity financing, whichever is earlier Components of Other Borrowings | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Tasly Great Health Industry Investment Group Co., Ltd. | 10,019 | – | | Ms. Wei Anping | 10,019 | – | | Total | 20,038 | – | - The Group borrowed **RMB 10 million** from Ms. Wei, a family member of Mr. Tan Zheng, on **June 9, 2025**, and **RMB 10 million** from Tasly Great Health Industry Investment Group Co., Ltd., an indirect shareholder of Tasly, on **June 20, 2025**[143](index=143&type=chunk) - These loans bear interest at an annual rate of **4.5%** and are due one year from their respective receipt dates or the completion date of equity financing, whichever is earlier[143](index=143&type=chunk) [Share-based Payment Transactions](index=51&type=section&id=Share-based%20Payment%20Transactions) The company has a Pre-IPO Share Option Scheme designed to encourage participants to contribute to the Group's long-term interests; as at June 30, 2025, a total of **35,930,000 share options** were exercisable, granted to senior management and employees, with an exercise price of **50%** of the offer price - The company's Pre-IPO Share Option Scheme was approved to encourage participants to contribute to the Group's long-term interests[144](index=144&type=chunk) - On **December 31, 2019**, the company granted **37,500,000 share options** to **7 senior management** and **25 eligible employees**, with an exercise price of **50%** of the offer price[144](index=144&type=chunk)[145](index=145&type=chunk) - As at June 30, 2025, **35,930,000 share options** were exercisable[146](index=146&type=chunk) [Capital Commitments](index=52&type=section&id=Capital%20Commitments) As at June 30, 2025, the Group had capital expenditures contracted but not yet provided for in the condensed consolidated financial statements, totaling **RMB 32.21 million**, primarily for the acquisition of machinery, leased land, leasehold improvements, and construction projects Capital Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Capital expenditures contracted but not yet provided for in the condensed consolidated financial statements | 32,214 | 35,642 | - Capital expenditures are primarily for the acquisition of machinery, leased land, leasehold improvements, and construction projects[147](index=147&type=chunk) [Fair Value Measurement of Financial Instruments](index=53&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) Some of the Group's financial instruments are measured at fair value, with convertible bonds classified as Level 3 fair value measurements; their valuation uses a binomial model, with key inputs including volatility and discount rate; sensitivity analysis of these inputs shows that fair value is more sensitive to changes in volatility Fair Value Measurement of Financial Instruments (As at June 30, 2025) | Item | Fair Value (RMB thousands) | Fair Value Level | | :--- | :--- | :--- | | Investment in certificates of deposit | – | Level 2 | | Convertible bonds | 318,590 | Level 3 | - The valuation of convertible bonds uses a binomial model, with key valuation assumptions including a bond maturity of **0.64 years**, volatility of **97.27%**, company share price of **RMB 2.56**, risk-free rate of **1.34%**, and the company's discount rate of **43.91%**[141](index=141&type=chunk) - Sensitivity analysis shows that a **5.00%** increase or decrease in volatility would lead to an increase of **RMB 52.13 million** or a decrease of **RMB 47.95 million** in the fair value of convertible bonds, while a **1.00%** change in the discount rate would impact by approximately **RMB 0.1 million**[150](index=150&type=chunk) [Related Party Transactions](index=54&type=section&id=Related%20Party%20Transactions) The Group engaged in several related party transactions, including key management personnel remuneration, share collateral provided by related parties for convertible bonds, and new borrowings from related parties - Related parties include Tasly Great Health Industry Investment Group Co., Ltd., Mr. Tan Zheng, and Ms. Wei Anping[151](index=151&type=chunk) Key Management Personnel Remuneration (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries and other allowances | 3,227 | 4,669 | | Retirement benefits | 70 | 101 | | Total | 3,297 | 4,770 | - Mr. Tan Zheng and his close family members provided collateral for the convertible bonds, including **19,286 thousand** ordinary shares of the company held by Tan Zheng LTD (fair value **RMB 49,422 thousand**) and **6,714 thousand** ordinary shares of the company held by Tan Yueyue LTD (fair value **RMB 17,205 thousand**)[153](index=153&type=chunk) - New other borrowings of **RMB 20.04 million** were received from Tasly Great Health Industry Investment Group Co., Ltd. and Ms. Wei Anping, respectively[154](index=154&type=chunk) [Definitions and Glossary of Technical Terms](index=55&type=section&id=Definitions%20and%20Glossary%20of%20Technical%20Terms) This section provides clear definitions for key terms and technical vocabulary used throughout the interim report [Glossary of Terms](index=55&type=section&id=Glossary%20of%20Terms) This section provides definitions for key terms and technical vocabulary used in the interim report to ensure a clear understanding of the content for readers - Definitions are provided for biomedical and financial terms such as "6B11", "CAR-T cells", "EAL®", "GMP", "NDA", and "TCR"[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)

Company Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, nomination, and remuneration committees to ensure sound corporate governance - The Board members include Chairman Mr. Chan Kwok Po (Executive Director), CEO Mr. Wong Chun Fei (Executive Director), and Vice Chairman Mr. Jiang Jiangyu (Non-executive Director, appointed on January 28, 2025)[3](index=3&type=chunk) - The Audit, Nomination, and Remuneration Committees are all chaired by Independent Non-executive Director Mr. Yim Kin Kwan[3](index=3&type=chunk) [Principal Place of Business and Banks](index=3&type=section&id=Principal%20Place%20of%20Business%20and%20Banks) The company is registered in the Cayman Islands, with its headquarters and main China operations in Shanghai, and principal places of business in Singapore and Hong Kong, banking with Shanghai Pudong Development Bank, DBS Bank, and OCBC Bank - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in China located at 3/F, East Block, No. 1275 Meichuan Road, Putuo District, Shanghai[4](index=4&type=chunk) - The principal place of business in Hong Kong is at 3/F, GF Tower, 81 Lockhart Road, Wan Chai, and in Singapore at 31 Sungei Kadut Avenue[4](index=4&type=chunk) - Principal bankers include Shanghai Pudong Development Bank Co., Ltd. Hong Kong Branch, DBS Bank (Hong Kong) Limited, DBS Bank Ltd., and Oversea-Chinese Banking Corporation Limited[4](index=4&type=chunk) [Listing Information](index=4&type=section&id=Listing%20Information) The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 2225 and a board lot size of 5,000 shares - The company is listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 2225[5](index=5&type=chunk) - The board lot size for trading is **5,000 shares**[5](index=5&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Overview of Period Performance](index=5&type=section&id=Overview%20of%20Period%20Performance) For the six months ended June 30, 2025, the company experienced a significant decline in revenue, leading to an expanded loss for the period and an increase in total comprehensive expense Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Revenue | 14,529 | 25,937 | | Cost of sales and services | (12,447) | (18,515) | | Gross profit | 2,082 | 7,422 | | Other income, gains and losses, net | 200 | 873 | | Selling expenses | (256) | (214) | | Administrative expenses | (12,505) | (13,675) | | Reversal of provision for expected credit losses on trade receivables | 106 | – | | Finance costs | (349) | (347) | | Loss before tax | (10,722) | (5,941) | | Income tax expense | (78) | (12) | | Loss for the period | (10,800) | (5,953) | | Total comprehensive expense for the period | (10,274) | (6,246) | | Loss for the period attributable to owners of the Company | (10,253) | (6,043) | | Basic and diluted loss per share (Singapore cents) | (0.20) | (0.12) | Condensed Consolidated Statement of Financial Position [Assets, Liabilities, and Equity Status](index=6&type=section&id=Assets,%20Liabilities,%20and%20Equity%20Status) As of June 30, 2025, the company's total assets and total equity both decreased compared to December 31, 2024, with a significant reduction in net current assets Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 26,403 | 28,703 | | Current assets | 23,748 | 30,164 | | **Total assets** | **50,151** | **58,867** | | **Equity** | | | | Equity attributable to owners of the Company | 27,356 | 31,806 | | Non-controlling interests | 419 | 973 | | **Total equity** | **27,775** | **32,779** | | **Liabilities** | | | | Non-current liabilities | 2,129 | 2,731 | | Current liabilities | 20,247 | 23,357 | | **Total liabilities** | **22,376** | **26,088** | | Net current assets | 3,501 | 6,807 | | Total assets less current liabilities | 29,904 | 35,510 | | Net assets | 27,775 | 32,779 | - Net current assets decreased from **S$6,807 thousand** as of December 31, 2024, to **S$3,501 thousand** as of June 30, 2025, a **48.6% decline**[8](index=8&type=chunk) Condensed Consolidated Statement of Changes in Equity [Analysis of Equity Changes](index=8&type=section&id=Analysis%20of%20Equity%20Changes) For the six months ended June 30, 2025, the company's total equity decreased due to loss for the period and other comprehensive expenses, despite an increase in share-based payments Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | June 30, 2025 (S$ thousand) | June 30, 2024 (S$ thousand) | | :--- | :--- | :--- | | At January 1 (audited) | 32,779 | 37,490 | | Loss for the period | (10,800) | (5,953) | | Other comprehensive income/(expense) for the period | 526 | (293) | | Total comprehensive income/(expense) for the period | (10,274) | (6,246) | | Share-based payments | 5,270 | 6,453 | | Forfeiture of share options | – | – | | Changes in equity for the period | (5,004) | 207 | | At June 30 | 27,775 | 37,697 | - Equity attributable to owners of the Company decreased from **S$31,806 thousand** as of January 1, 2025, to **S$27,356 thousand** as of June 30, 2025, primarily due to a **loss for the period of S$10,253 thousand**[9](index=9&type=chunk) Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=9&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the company experienced net cash outflow from operating activities, net cash inflow from investing activities, and net cash outflow from financing activities, resulting in a significant decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (8,709) | 844 | | Net cash generated from/(used in) investing activities | 2,671 | (7,592) | | Net cash used in financing activities | (63) | (178) | | Net decrease in cash and cash equivalents | (6,101) | (6,926) | | Cash and cash equivalents at beginning of period | 10,446 | 20,196 | | Cash and cash equivalents at end of period | 4,889 | 13,173 | - Net cash used in operating activities was **S$8,709 thousand** in the first half of 2025, compared to a net inflow of **S$844 thousand** in the same period last year[11](index=11&type=chunk) - Cash and cash equivalents at the end of the period decreased from **S$10,446 thousand** at the beginning of the period to **S$4,889 thousand**[11](index=11&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. General Information](index=10&type=section&id=1.%20General%20Information) Imhai Medical Technology Co., Ltd. is an investment holding company primarily engaged in providing minimally invasive surgical solutions, medical products and related services, labor dispatch, dormitory services, IT services, and construction support services - The Company is an investment holding company, and its operating subsidiaries are principally engaged in providing minimally invasive surgical solutions and medical products and related services, labor dispatch and ancillary services, dormitory services, information technology services, and construction support services for the construction and building industry[12](index=12&type=chunk) [2. Basis of Preparation](index=10&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules, with accounting policies consistent with the 2024 annual financial statements - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Stock Exchange[13](index=13&type=chunk) - The accounting policies and methods of computation used in the preparation of these condensed consolidated financial statements are consistent with those used in the annual financial statements for the year ended December 31, 2024[13](index=13&type=chunk) [3. Application of New and Revised International Financial Reporting Standards](index=10&type=section&id=3.%20Application%20of%20New%20and%20Revised%20International%20Financial%20Reporting%20Standards) The Group has adopted all new and revised International Financial Reporting Standards effective January 1, 2025, with no significant changes to accounting policies, financial statement presentation, or reported amounts for the current and prior periods - The Group has adopted all new and revised International Financial Reporting Standards issued by the International Accounting Standards Board that are relevant to its operations and effective for accounting periods beginning on January 1, 2025[14](index=14&type=chunk) - The adoption of these new and revised International Financial Reporting Standards has not resulted in significant changes to the Group's accounting policies, the presentation of the Group's consolidated financial statements, or the amounts reported for the current and prior periods[14](index=14&type=chunk) [4. Fair Value Measurement](index=11&type=section&id=4.%20Fair%20Value%20Measurement) The Group's fair value measurements use a three-level hierarchy, primarily involving investments at fair value through profit or loss (listed equities and funds) and equity investments at fair value through other comprehensive income (unlisted funds), with unlisted fund investments classified as Level 3 measurements Total Recurring Fair Value Measurements | Description | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | | :--- | :--- | :--- | | Investments at fair value through profit or loss | 2,081 | 4,479 | | Equity investments at fair value through other comprehensive income | 522 | 556 | | **Total recurring fair value measurements** | **2,603** | **5,035** | - Investments at fair value through profit or loss primarily consist of listed equity investments and listed fund investments, categorized as Level 1 inputs[19](index=19&type=chunk)[20](index=20&type=chunk) - Equity investments at fair value through other comprehensive income are unlisted fund investments, categorized as Level 3 inputs, with their fair value decreasing from **S$556 thousand** as of December 31, 2024, to **S$522 thousand** as of June 30, 2025[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [5. Revenue and Segment Information](index=13&type=section&id=5.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from minimally invasive surgical solutions and medical product services in China, and labor dispatch, dormitory services, IT services, and construction support services in Singapore. Total revenue significantly decreased in the first half of 2025, mainly due to business adjustments in China and reduced demand for dormitory services in Singapore Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30) | Geographical Market | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | China | 6,333 | 12,432 | | Singapore | 6,818 | 7,894 | | **Revenue from contracts with customers** | **13,151** | **20,326** | | Rental income from provision of dormitory services | 1,378 | 5,611 | | **Total revenue** | **14,529** | **25,937** | - Total revenue for the first half of 2025 was **S$14,529 thousand**, a **44% decrease** compared to **S$25,937 thousand** in the same period of 2024[26](index=26&type=chunk) - Revenue from China decreased from **S$12,432 thousand** to **S$6,333 thousand**, and revenue from Singapore decreased from **S$7,894 thousand** to **S$6,818 thousand**[26](index=26&type=chunk) - Fees for providing minimally invasive surgical solutions and medical products and related services were **S$6,333 thousand** in the first half of 2025, compared to **S$12,302 thousand** in the prior year period, representing a key revenue source[26](index=26&type=chunk) [6. Other Income, Gains and Losses, Net](index=15&type=section&id=6.%20Other%20Income,%20Gains%20and%20Losses,%20Net) Other income, gains and losses, net, significantly decreased in the first half of 2025, primarily due to exchange losses offsetting net fair value changes in investments at fair value through profit or loss Other Income, Gains and Losses, Net (For the six months ended June 30) | Item | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Government grants | 78 | 34 | | Dividend income from listed equity investments | 33 | 45 | | Interest income | 3 | 11 | | Work injury/worker compensation claims | 71 | 50 | | Sub-lease income | 226 | 183 | | Net fair value change on investments at fair value through profit or loss | 848 | 32 | | (Loss)/gain on disposal of investments at fair value through profit or loss | (370) | 7 | | Net exchange (loss)/gain | (826) | 449 | | Others | 137 | 57 | | **Total** | **200** | **873** | - Other income, gains and losses, net, for the first half of 2025 was **S$200 thousand**, a significant decrease from **S$873 thousand** in the same period of 2024[30](index=30&type=chunk) - Key changes include a net fair value change on investments at fair value through profit or loss increasing from **S$32 thousand** to **S$848 thousand**, but net exchange gain turning into a **loss of S$826 thousand** from a **gain of S$449 thousand**[30](index=30&type=chunk) [7. Finance Costs](index=16&type=section&id=7.%20Finance%20Costs) Finance costs slightly increased in the first half of 2025, mainly due to higher interest on bank borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 139 | 220 | | Interest on bank borrowings | 210 | 127 | | **Total** | **349** | **347** | - Interest on bank borrowings increased from **S$127 thousand** in the first half of 2024 to **S$210 thousand** in the first half of 2025[32](index=32&type=chunk) [8. Income Tax Expense](index=16&type=section&id=8.%20Income%20Tax%20Expense) Income tax expense significantly increased in the first half of 2025, primarily due to provisions for Singapore corporate income tax and under-provision in prior years Income Tax Expense (For the six months ended June 30) | Item | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | China corporate income tax | – | 12 | | Singapore corporate income tax (provision for the period) | 31 | – | | Singapore corporate income tax (under-provision in prior years) | 35 | – | | Deferred tax | 12 | – | | **Total income tax expense** | **78** | **12** | - China business income tax is calculated at a **25% tax rate**, while Singapore business income tax is provided at a **17% tax rate**[36](index=36&type=chunk) [9. Loss for the Period](index=17&type=section&id=9.%20Loss%20for%20the%20Period) The loss for the period expanded to S$10.8 million in the first half of 2025, primarily due to decreased revenue and lower gross profit margin, with depreciation, R&D expenses, and staff costs also contributing to the loss Items Deducted in Arriving at Loss for the Period (For the six months ended June 30) | Item | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 220 | 55 | | Depreciation of right-of-use assets | 464 | 1,531 | | Depreciation of investment properties | 1,425 | 1,103 | | Research and development expenses | 415 | 245 | | Cost of inventories sold | 5,999 | 11,916 | | Staff costs (including directors' emoluments) | 11,826 | 13,645 | - The loss for the period was **S$10,800 thousand**, an increase from **S$5,953 thousand** in the prior year period[6](index=6&type=chunk) - Staff costs (including salaries, wages and other benefits, contributions to defined contribution plans, foreign worker levies, and equity-settled share-based payments) totaled **S$11,826 thousand**[37](index=37&type=chunk) [10. Dividends](index=17&type=section&id=10.%20Dividends) No dividends were paid or declared by the company for the six months ended June 30, 2025, and 2024 - No dividends were paid or declared by the Company for the six months ended June 30, 2025, and 2024[38](index=38&type=chunk) [11. Loss Per Share](index=18&type=section&id=11.%20Loss%20Per%20Share) Basic and diluted loss per share for the first half of 2025 was 0.20 Singapore cents, an increase from the prior year, mainly due to the expanded loss for the period Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (S$ thousand/thousand shares/Singapore cents) | 2024 (S$ thousand/thousand shares/Singapore cents) | | :--- | :--- | :--- | | Loss for the purpose of calculating basic and diluted loss per share | (10,253) | (6,043) | | Weighted average number of ordinary shares (thousand shares) | 5,170,000 | 5,170,000 | | Basic and diluted loss per share (Singapore cents) | (0.20) | (0.12) | - Diluted loss per share is the same as basic loss per share as the Company had no potential dilutive ordinary shares outstanding[41](index=41&type=chunk) [12. Investment Properties](index=18&type=section&id=12.%20Investment%20Properties) The amount of investment properties acquired by the Group significantly decreased in the first half of 2025 Acquisition of Investment Properties (For the six months ended June 30) | Item | 2025 (S$ thousand) | 2024 (S$ thousand) | | :--- | :--- | :--- | | Acquisition of investment properties | 218 | 10,515 | [13. Trade Receivables](index=18&type=section&id=13.%20Trade%20Receivables) As of June 30, 2025, total trade receivables slightly decreased, but receivables overdue by 61-90 days significantly increased Ageing Analysis of Trade Receivables (Net of provision for impairment losses) | Ageing | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | | :--- | :--- | :--- | | Not overdue | 1,334 | 2,460 | | 1 to 30 days | 662 | 1,944 | | 31 to 60 days | 111 | 131 | | 61 to 90 days | 1,963 | 16 | | Over 90 days | 246 | 305 | | **Total** | **4,316** | **4,856** | - Trade receivables overdue by **61 to 90 days** significantly increased from **S$16 thousand** as of December 31, 2024, to **S$1,963 thousand** as of June 30, 2025[43](index=43&type=chunk) [14. Trade Payables](index=19&type=section&id=14.%20Trade%20Payables) As of June 30, 2025, total trade payables significantly decreased, primarily due to reductions in payables within 30 days and 31-90 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | | :--- | :--- | :--- | | Within 30 days | 584 | 1,872 | | 31 to 90 days | 550 | 3,134 | | 91 to 365 days | 446 | 92 | | Over 365 days | 113 | 31 | | **Total** | **1,693** | **5,129** | - Total trade payables decreased from **S$5,129 thousand** as of December 31, 2024, to **S$1,693 thousand** as of June 30, 2025, a **67% reduction**[44](index=44&type=chunk) [15. Share Capital](index=19&type=section&id=15.%20Share%20Capital) As of June 30, 2025, the company's authorized and issued share capital remained unchanged, with 5,170,000 thousand issued ordinary shares at a par value of HK$0.0025 Share Capital Details | Item | Number of Shares (thousand shares) | Amount (S$ thousand) | | :--- | :--- | :--- | | Issued and fully paid as of June 30, 2025 | 5,170,000 | 2,252 | - On December 12, 2024, each existing share of **HK$0.01** par value in the company's share capital was subdivided into four subdivided shares of **HK$0.0025** par value each[45](index=45&type=chunk) [16. Share-based Payments](index=20&type=section&id=16.%20Share-based%20Payments) The company has a share option scheme to incentivize eligible participants. As of June 30, 2025, 460,130 thousand share options remained unexercised, with a weighted average exercise price of HK$0.635 - The share option scheme aims to provide eligible participants with an opportunity to acquire an ownership interest in the Company and encourage them to strive for enhancing the value of the Company and its shares[46](index=46&type=chunk) - Eligible participants include directors and employees of the Company or its subsidiaries, service providers, and directors and employees of holding companies, fellow subsidiaries, or associated companies[47](index=47&type=chunk) Details of Unexercised Share Options | Indicator | 2025 (thousand units/HK$) | 2024 (thousand units/HK$) | | :--- | :--- | :--- | | At January 1 | 509,245 | – | | Granted | – | 128,605 | | Lapsed | (49,115) | – | | At June 30 | 460,130 | 128,605 | | Exercisable at June 30 | 92,026 | – | | Weighted average exercise price (HK$) | 0.635 | 2.540 | - At the end of the period, the remaining contractual life of unexercised share options was **8.5 years**[55](index=55&type=chunk) [17. Contingent Liabilities](index=23&type=section&id=17.%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: Nil)[59](index=59&type=chunk) [18. Related Party Transactions](index=23&type=section&id=18.%20Related%20Party%20Transactions) During the period, the Group engaged in transactions with related parties, including key management personnel remuneration and sub-lease income, and had a balance of borrowings from its ultimate holding company Related Party Transactions and Balances (For the six months ended June 30) | Item | 2025 (S$) | 2024 (S$) | | :--- | :--- | :--- | | Key management personnel remuneration – salaries and other benefits | 1,721 | 1,661 | | Sub-lease income received from an associate | 226 | – | | **Borrowings from ultimate holding company at period end (S$ thousand)** | **1,786** | **875** | - Sub-lease income of **S$226** was received from an associate whose ultimate beneficial owner is Mr. Chan Kwok Po, an executive director of the Group[60](index=60&type=chunk) [19. Approval of Condensed Consolidated Financial Statements](index=23&type=section&id=19.%20Approval%20of%20Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025 - The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025[61](index=61&type=chunk) Management Discussion and Analysis [Business Review and Outlook](index=24&type=section&id=Business%20Review%20and%20Outlook) The Group's revenue decreased by 44% in the first half of 2025, mainly due to a slowdown in Singapore's economy and product portfolio adjustments in China's minimally invasive surgical solutions business. The future focus will shift to the China minimally invasive surgical market, with consideration to scale down Singapore operations, while seeking new business and investment opportunities - In the first half of 2025, the Group recorded revenue of **S$14.5 million**, a **44% decrease** compared to the same period last year[63](index=63&type=chunk) - The Board is shifting its business focus to providing minimally invasive surgical solutions, medical products, and related services in China, anticipating long-term growth in this sector[63](index=63&type=chunk) - The market size for minimally invasive surgical instruments in China is projected to reach **US$1.71 billion** in 2025 and **US$2.68 billion** by 2030, with a **CAGR of 9.45%**[63](index=63&type=chunk) - Given the anticipated slowdown in Singapore's economic growth, the Group is prudently considering the possibility of gradually scaling down some of its operations in Singapore[65](index=65&type=chunk)[66](index=66&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) The Group's revenue significantly decreased by 44% to S$14.5 million in the first half of 2025, with gross profit and gross profit margin also notably declining. The loss for the period expanded to S$10.8 million, primarily attributable to the dual impact of reduced revenue and gross profit margin Revenue Breakdown (For the six months ended June 30) | Service Type | H1 2025 (S$ thousand) | H1 2024 (S$ thousand) | Decrease (%) | | :--- | :--- | :--- | :--- | | Minimally invasive surgical solutions and medical products and related services fees | 6,333 | 12,302 | (48.5) | | Labor dispatch and ancillary services | 6,451 | 7,634 | (15.5) | | Dormitory services | 1,378 | 5,611 | (75.4) | | Construction support services | 139 | 140 | (0.7) | | Information technology services | 228 | 250 | (8.8) | | **Total** | **14,529** | **25,937** | **(44.0)** | - Gross profit decreased from **S$7.4 million** in the first half of 2024 to **S$2.1 million** in the first half of 2025, with the gross profit margin declining from **28.6% to 14.3%**[69](index=69&type=chunk) - Administrative expenses decreased by **S$1.2 million**, mainly due to a reduction in share-based payments related to share options[71](index=71&type=chunk) - Loss for the period expanded from **S$6.0 million** in the first half of 2024 to **S$10.8 million** in the first half of 2025[73](index=73&type=chunk) [Liquidity, Financial Resources, and Gearing Ratio](index=27&type=section&id=Liquidity,%20Financial%20Resources,%20and%20Gearing%20Ratio) The Group's liquidity primarily comes from internal funds and listing proceeds. The use of listing proceeds has been adjusted multiple times, with placement proceeds mainly used for expanding the medical industry and labor dispatch businesses. As of June 30, 2025, cash and cash equivalents decreased, and the gearing ratio increased Use of Net Proceeds from Listing (As of June 30, 2025) | Intended Use | Original Allocation (HK$ million) | Amount Utilized as of June 30, 2025 (HK$ million) | Unutilized Amount as of June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Funding for additional foreign worker dormitories | 77.1 | 46.6 | – | | Funding for additional 10 trucks | 5.5 | 1.8 | 1.9 | | Funding for investment in securities | – | 10.0 | – | | Capital injection into Imhai Medical | – | 20.5 | – | | **Total** | **82.6** | **78.9** | **1.9** | Use of Net Proceeds from Placement (As of June 30, 2025) | Intended Use | Original Allocation (HK$ million) | Amount Utilized as of June 30, 2025 (HK$ million) | Unutilized Amount as of June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Expansion of medical industry business | 69.0 | 69.0 | – | | Expansion of labor dispatch and ancillary services business | 15.0 | 7.0 | 8.0 | | General working capital | 15.0 | 15.0 | – | | **Total** | **99.0** | **91.0** | **8.0** | - As of June 30, 2025, cash and cash equivalents were **S$4.9 million**, a significant decrease from **S$10.4 million** as of December 31, 2024[82](index=82&type=chunk) - The gearing ratio increased from **44.3%** as of December 31, 2024, to **52.8%** as of June 30, 2025[83](index=83&type=chunk) [Foreign Exchange Risk](index=30&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign exchange risk primarily due to assets and liabilities denominated in RMB and HKD, resulting in a net exchange loss in the first half of 2025 - The Group primarily transacts in RMB, with its functional currency being Singapore Dollars, and retains a significant portion of its listing proceeds denominated in HKD[84](index=84&type=chunk) - In the first half of 2025, currency translation differences arising from overseas operations resulted in a **gain of S$0.5 million**, while a net exchange loss of **S$0.8 million** was incurred[84](index=84&type=chunk) [Pledge of the Group's Assets and Contingent Liabilities](index=30&type=section&id=Pledge%20of%20the%20Group's%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, certain lease liabilities and borrowings are secured by pledged lease assets, and the Group has no significant contingent liabilities - Certain lease liabilities and borrowings are secured by pledged lease assets with a total net book value of **S$9.8 million**[85](index=85&type=chunk) - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[86](index=86&type=chunk) [Capital Expenditure and Commitments](index=30&type=section&id=Capital%20Expenditure%20and%20Commitments) The Group's capital expenditure in the first half of 2025 was primarily for the purchase of property, plant, and equipment, with no capital commitments at period-end - The Group recorded capital expenditure of **S$23,000** for the purchase of property, plant, and equipment in the first half of 2025[87](index=87&type=chunk) - As of June 30, 2025, and December 31, 2024, the Group had no capital commitments[88](index=88&type=chunk) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=31&type=section&id=Material%20Investments%20Held,%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates,%20and%20Joint%20Ventures) The Group, through Imhai Shanghai, is injecting capital into Shanghai Pailiya, which is expected to become a subsidiary. Additionally, the Group holds listed investments and manages internal funds through the acquisition of listed securities - Imhai Shanghai agreed to inject up to **RMB16,500,000** into Shanghai Pailiya, after which Imhai Shanghai will hold a **55% equity interest** in Shanghai Pailiya, making it a subsidiary of the Company[89](index=89&type=chunk) - As of June 30, 2025, the fair value of the Group's listed investments was **S$2.1 million**, a decrease from **S$4.5 million** as of December 31, 2024[90](index=90&type=chunk) - The Group generates returns through dividend income and fair value gains by acquiring certain listed securities in the open market[91](index=91&type=chunk) [Off-balance Sheet Transactions](index=31&type=section&id=Off-balance%20Sheet%20Transactions) As of June 30, 2025, the Group had not entered into any significant off-balance sheet transactions - As of June 30, 2025, the Group had not entered into any significant off-balance sheet transactions[92](index=92&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 458 employees and determines remuneration based on employee performance, qualifications, and position, with a sales incentive plan in place - As of June 30, 2025, the Group had **458 employees** (December 31, 2024: 488 employees)[93](index=93&type=chunk) - The Group determines employee salaries based on their qualifications, position, and experience, and has a sales incentive plan[93](index=93&type=chunk) - Worker and staff costs (including directors' and chief executive's emoluments) for the first half of 2025 were **S$11.8 million**, a decrease from **S$13.6 million** in the prior year period[93](index=93&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Group faces interest rate risk, foreign currency risk, credit risk, liquidity risk, fair value risk, and equity price risk, which are managed through monitoring, portfolio diversification, and credit assessment measures - The Group is exposed to cash flow interest rate risk from floating interest rates earned on bank balances and fair value interest rate risk related to fixed-rate finance lease commitments[94](index=94&type=chunk) - The Group is exposed to foreign currency risk due to certain bank balances, investments, trade receivables, and payables denominated in USD, RMB, and HKD[96](index=96&type=chunk) - To mitigate credit risk, the Group has policies for setting credit limits, credit approval, and other monitoring procedures, and reviews the recoverability of individual trade debts[98](index=98&type=chunk)[99](index=99&type=chunk) - The Group manages liquidity risk by monitoring cash and cash equivalents levels and manages price risk arising from investments in equity securities through portfolio diversification[100](index=100&type=chunk)[102](index=102&type=chunk) Corporate Governance and Other Information [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations](index=33&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Chan Kwok Po held 48.94% of the company's shares through controlled corporations, while Mr. Wong Chun Fei and Mr. Jiang Jiangyu held share options Directors'/Chief Executive's Long Positions in Shares of the Company | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of the Company's Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Chan Kwok Po | Interest in controlled corporation | 2,530,000,000 | 48.94% | | Mr. Wong Chun Fei | Beneficial owner | 25,850,000 | 0.49% | | Mr. Jiang Jiangyu | Beneficial owner | 25,850,000 | 0.49% | - The beneficial interests held by Mr. Wong Chun Fei and Mr. Jiang Jiangyu are share options granted by the Company on January 9, 2024, under the Share Option Scheme[107](index=107&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=35&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Baolai International Limited was a substantial shareholder, holding 48.94% of the company's shares. Ms. Jiang Xiahong was deemed to have the same interest due to spousal relationship, and Mr. Liu Lei held share options Substantial Shareholders' and Other Persons' Long Positions in Shares | Name of Shareholder/Entity | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Shares | | :--- | :--- | :--- | :--- | | Baolai | Beneficial owner | 2,530,000,000 | 48.94% | | Ms. Jiang Xiahong | Interest of spouse | 2,530,000,000 | 48.94% | | Mr. Liu Lei | Beneficial owner | 284,350,000 | 5.50% | - Ms. Jiang Xiahong is the spouse of Mr. Chan Kwok Po and is deemed, under the Securities and Futures Ordinance, to have an interest in all shares held by Mr. Chan Kwok Po through his controlled corporation[110](index=110&type=chunk) - The beneficial interest held by Mr. Liu Lei represents share options granted to him by the Company on January 9, 2024, under the Share Option Scheme[110](index=110&type=chunk) [Share Option Scheme](index=35&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on December 29, 2023, to incentivize eligible participants. As of June 30, 2025, the scheme's authorized limit and service provider sub-limit were both 0, with 92,260,000 shares under exercisable options - Eligible participants of the Share Option Scheme include directors, employees, service providers, and participants of related entities[111](index=111&type=chunk) - The vesting period for share options shall not be less than **12 months**, and the exercise period is within **ten years** from the date of grant[113](index=113&type=chunk)[114](index=114&type=chunk) - A total of **128,603,750 share options** were granted on January 9, 2024, with an exercise price of **HK$2.54 per share**, vesting in three tranches[115](index=115&type=chunk)[117](index=117&type=chunk) Share Option Scheme Limits (As of June 30, 2025) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Scheme authorized limit | 0 | 0 | | Service provider sub-limit | 0 | 0 | - As of June 30, 2025, **92,260,000 shares** under share options granted under all the Company's schemes were exercisable, representing **1.78%** of the weighted average number of issued shares of the relevant class[129](index=129&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=41&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the period, neither the company, its subsidiaries, nor fellow subsidiaries entered into any arrangements enabling directors or their associates to acquire benefits through purchasing shares or debentures of the company or any other body corporate - Neither the Company, any of its subsidiaries, nor fellow subsidiaries entered into any arrangements at any time during the period that would enable directors or their respective associates to acquire benefits through purchasing shares or debentures of the Company or any other body corporate[132](index=132&type=chunk) [Changes in Directors' Information](index=41&type=section&id=Changes%20in%20Directors'%20Information) No other information is required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules - No other information is required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules[130](index=130&type=chunk) [Material Post-Balance Sheet Events](index=41&type=section&id=Material%20Post-Balance%20Sheet%20Events) On July 11, 2025, the company entered into subscription agreements with three subscribers to subscribe for a total of 120,000,000 shares at HK$1.35 per share, with net proceeds of HK$161.0 million to be used for potential M&A of healthcare-related projects, R&D expenses, and general working capital - On July 11, 2025, the Company entered into subscription agreements with three subscribers to subscribe for a total of **120,000,000 subscription shares** at a subscription price of **HK$1.35 per share**[131](index=131&type=chunk) - The net proceeds of **HK$161.0 million** are intended to be used for potential mergers and acquisitions of healthcare-related projects and/or companies and investments in healthcare-related industries (**HK$96.6 million**), research and development expenses (**HK$32.2 million**), and general working capital (**HK$32.2 million**)[133](index=133&type=chunk)[134](index=134&type=chunk) - The proceeds are expected to be fully utilized by July 31, 2026[134](index=134&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=Repurchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the period, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - During the period, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities[135](index=135&type=chunk) [Directors' Securities Transactions](index=42&type=section&id=Directors'%20Securities%20Transactions) The company has adopted the Model Code as the code of conduct for directors' securities transactions, and all directors complied with it during the period - The Company has adopted the Model Code as the code of conduct for directors' securities transactions[136](index=136&type=chunk) - All directors have confirmed that they have complied with the Model Code and its code of conduct regarding directors' securities transactions throughout the period[136](index=136&type=chunk) [Directors' and Controlling Shareholders' Interests in Competing Businesses](index=43&type=section&id=Directors'%20and%20Controlling%20Shareholders'%20Interests%20in%20Competing%20Businesses) During the period, neither the directors nor the company's controlling shareholders or their respective close associates had any interests in any business that directly or indirectly competes with the Group's business - During the period, neither the directors nor the Company's controlling shareholders or their respective close associates had any interests in any business, other than the Group's business, that competes or is likely to compete, directly or indirectly, with the Group's business[137](index=137&type=chunk) [Compliance with Corporate Governance Code](index=43&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied in all material respects with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the period - The Company has complied in all material respects with all applicable code provisions set out in the Corporate Governance Code during the period[139](index=139&type=chunk) [Review by Audit Committee](index=43&type=section&id=Review%20by%20Audit%20Committee) The company's Audit Committee has reviewed the unaudited interim results for the period and believes that the financial information and reporting comply with applicable accounting standards and the Listing Rules - The Company's Audit Committee has reviewed the unaudited interim results (including the interim report) for the period and is of the opinion that the financial information and reporting are prepared in accordance with applicable accounting standards, the Listing Rules, and other applicable legal requirements[140](index=140&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 members, management, auditors, and principal bankers [Board of Directors and Management](index=2&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%88%87%E7%AE%A1%E7%90%86%E5%B1%A4) This chapter details key company information including executive and independent non-executive directors, company secretary, auditor, and principal bankers - Executive Directors include Mr. Cheng Kai Man (Chairman), Mr. Hui Wing Ho, Ms. Lau Kam Mei, and Ms. Ng Yuet Ying[3](index=3&type=chunk) - The auditor is Deloitte Touche Tohmatsu, and principal bankers are The Hongkong and Shanghai Banking Corporation Limited and Bank of China (Hong Kong) Limited[3](index=3&type=chunk) [Interim Results](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) This section presents the company's financial performance and dividend policy for the interim period [Financial Performance Overview](index=3&type=section&id=%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0%E6%A6%82%E8%A7%88) Net profit attributable to company owners, excluding revaluation and depreciation, increased by 30% to HK$39 million for the six months ended June 30, 2025 Net Profit Attributable to Company Owners (Excluding Revaluation and Depreciation) | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Company Owners | 39,000 | 30,000 | +30% | [Interim Dividend Policy](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board decided not to declare an interim dividend for the six months ended June 30, 2025, primarily due to the absence of cash dividend income from its major subsidiary - No interim dividend is recommended for the six months ended June 30, 2025 (2024: Nil)[5](index=5&type=chunk) - The primary reason is that the company did not receive cash dividend income from its major subsidiary, Magnificent Hotel Investments Limited[5](index=5&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E4%B9%8B%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the group's business operations, financial performance, and future outlook [Business Overview and Overall Performance](index=3&type=section&id=%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88%E4%B8%8E%E6%95%B4%E4%BD%93%E8%A1%A8%E7%8E%B0) The Group's core businesses include commercial property investment, property leasing and development, and hotel investment and management, with net profit attributable to owners (excluding revaluation and depreciation) increasing by 30% to HK$39 million - The Group's core businesses include commercial property investment, property leasing and development, and hotel investment and management[6](index=6&type=chunk) Net Profit Attributable to Company Owners (Excluding Revaluation and Depreciation) | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Company Owners | 39,000 | 30,000 | +30% | [Hotel Business Performance](index=3&type=section&id=%E9%85%92%E5%BA%97%E4%B8%9A%E5%8A%A1%E8%A1%A8%E7%8E%B0) Hotel business revenue increased by 3% to HK$268 million, with Magnificent Hotel Investments Limited's net profit (excluding revaluation and depreciation) surging by 43% to HK$59.3 million, driven by increased revenue and reduced costs Hotel Business Revenue | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Business Revenue | 268,000 | 260,000 | +3% | - The Group owns nine hotels with approximately 3,042 rooms, making it one of the largest hotel groups in Hong Kong[7](index=7&type=chunk) Net Profit Attributable to Magnificent Hotel Investments Limited Owners (Excluding Revaluation and Depreciation) | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Magnificent Hotel Investments Limited Owners | 59,300 | 41,600 | +43% | Key Financial Indicators of Magnificent Hotel Investments Limited Group | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Hotel Profit | 8,631 | 712 | +1,112% | | Property Investment Profit | 20,380 | 14,010 | +45% | | Securities Investment Income | 25 | – | Not Applicable | | Other Income and Gains and Losses | 1,615 | 2,182 | -26% | | Administrative Expenses | (22,205) | (23,159) | -4% | | Finance Costs | (17,177) | (23,228) | -26% | | Income Tax Expense | (6,654) | (3,063) | +117% | | Loss After Tax | (15,385) | (32,546) | -53% | | Net Profit Attributable to Company Owners After Tax and Excluding Revaluation and Depreciation of Land, Property and Equipment | 59,295 | 41,562 | +43% | - The annual rent for the Royal Scot Hotel in London successfully increased by **34% to GBP4,737,000**[11](index=11&type=chunk) [Commercial Property Rental Income](index=5&type=section&id=%E5%95%86%E4%B8%9A%E7%89%A9%E6%A5%AD%E7%A7%9F%E9%87%91%E6%94%B6%E5%85%A5) Commercial property rental income increased by 10% to HK$66 million, primarily from UK hotel properties, Magnificent Commercial Building, 633 King's Road, and some hotel shops, with occupancy rates of 91% and 77% for Magnificent Commercial Building and 633 King's Road respectively Commercial Property Rental Income | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Commercial Property Rental Income | 66,000 | 60,000 | +10% | Hong Kong Commercial Property Occupancy Rate (as of June 30, 2025) | Property Name | Occupancy Rate | | :--- | :--- | | Magnificent Commercial Building | 91% | | 633 King's Road | 77% | [Cash Flow and Debt](index=5&type=section&id=%E8%B5%84%E9%87%91%E6%B5%81%E5%90%91%E8%88%87%E8%B2%A0%E5%80%B5) As of June 30, 2025, the Group's total debt decreased to HK$955 million, with the gearing ratio falling to 12%, primarily exposing the Group to foreign exchange risk from HKD and GBP floating-rate bank loans Group Total Debt and Gearing Ratio | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Debt | 955,000 | 1,060,000 | -10% | | Gearing Ratio | 12% | 13% | -1% | - The Group's bank loans are primarily denominated in HKD and GBP with floating interest rates, exposing it to foreign exchange risk[14](index=14&type=chunk) [Key Business Achievements](index=6&type=section&id=%E9%87%8D%E9%BB%9E%E6%A5%AD%E5%8B%99%E6%88%90%E7%B8%BE) During the period, Hong Kong recorded approximately 11.3 million overnight visitor arrivals, with 75% from mainland China, though per capita spending remained below pre-pandemic levels, while the Group's average hotel occupancy rate consistently exceeded 90%, hotel revenue grew by 3%, and total revenue increased by 5% Overnight Visitor Arrivals in Hong Kong | Indicator | Six Months Ended June 30, 2025 (Ten Thousand Visits) | Six Months Ended June 30, 2024 (Ten Thousand Visits) | Same Period in 2019 (Ten Thousand Visits) | | :--- | :--- | :--- | :--- | | Overnight Visitor Arrivals | 1,130 | 1,060 | 1,500 | | Per Capita Spending by Mainland Chinese Visitors | <HK$5,100 | - | HK$6,000 | - The Group's average hotel occupancy rate consistently exceeded **90%**[15](index=15&type=chunk) Group Revenue Growth | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | | Hotel Revenue | 268,000 | +3% | | Total Revenue | 334,000 | +5% | - The renovation project for the Wood Street Hotel in London has been approved, transforming it into a luxury hotel with approximately 216 rooms[16](index=16&type=chunk) [Future Outlook](index=6&type=section&id=%E5%B1%95%E6%9C%9B%E6%9C%AA%E4%BE%86) The Group holds nine hotels and the Wood Street Hotel renovation project in London, but future hotel business and rental income face challenges from a weak Chinese economy, expensive HKD against RMB, and the US-China trade war, prompting management to focus on increasing revenue and controlling costs - The Group holds nine income-generating hotels (seven in Hong Kong, one in Shanghai, and one in London) and the Wood Street Hotel renovation project in London[17](index=17&type=chunk) - Tourism recovery is affected by the weak Chinese economy and the expensive HKD against RMB, leading Chinese tourists to prefer day trips to the Greater Bay Area[17](index=17&type=chunk) - Commercial property occupancy rates are impacted by the US-China trade war and declining import/export volumes in Hong Kong[17](index=17&type=chunk) - Management will continue efforts to increase revenue and control costs to address these challenges[17](index=17&type=chunk) [Listed Securities Transactions](index=6&type=section&id=%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - During the period, neither the company nor its subsidiaries engaged in any purchase, sale, or redemption of listed securities[18](index=18&type=chunk) [Directors' Interests in Listed Securities](index=7&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A) This section details the interests of the company's directors in its shares and those of its associated corporations [Interests in Company Shares](index=7&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Executive Director Mr. Cheng Kai Man held 226,454,825 shares in the company, representing 74.40% of the total share capital, including personal holdings and shares held through his controlled corporations Mr. Cheng Kai Man's Interests in Company Shares | Director Name | Capacity | Nature of Interest | Number of Shares / Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Cheng Kai Man | Beneficial Owner and Interest of Corporation Controlled by Him | Personal and Corporate | 226,454,825 | 74.40 | - Mr. Cheng Kai Man holds controlling interests through Magnificent Assets Holdings Limited and Mercury Fast Limited, in addition to personal shareholdings[19](index=19&type=chunk) [Interests in Shares of Associated Corporations](index=8&type=section&id=%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E8%82%A1%E4%BB%BD%E6%AC%8A%E7%9B%8A) Mr. Cheng Kai Man holds significant interests in associated corporations such as Magnificent Hotel Investments Limited and Magnificent Hotel Investments Limited, with 66.48% and 71.09% interests respectively Mr. Cheng Kai Man's Interests in Shares of Associated Corporations | Director Name | Name of Associated Corporation | Capacity | Nature of Interest | Number of Shares / Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Cheng Kai Man | Magnificent Hotel Investments Limited | Beneficial Owner and Interest of Corporation Controlled by Him | Personal and Corporate | 385,395,999 | 66.48 | | Cheng Kai Man | Magnificent Hotel Investments Limited | Interest of Corporation Controlled by Him | Corporate | 6,360,585,437 | 71.09 | | Cheng Kai Man | Magnificent Assets Holdings (BVI) | Beneficial Owner | Personal | 2 | 100.00 | [Major Shareholders](index=9&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1) This section identifies the company's major shareholders who are not directors [Non-Director Major Shareholders](index=9&type=section&id=%E9%9D%9E%E8%91%A3%E4%BA%8B%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C) As of June 30, 2025, Mercury Fast, Magnificent Hotel Investments Limited, Magnificent Hotel Investments Limited, and Magnificent Assets Holdings (BVI) are major shareholders, with Magnificent Assets Holdings (BVI) holding a 71.17% interest, and Ms. Li Pui Ling deemed to have a 74.40% interest due to her spouse Mr. Cheng Kai Man's holdings Major Shareholder Interests | Shareholder Name | Capacity | Number of Shares / Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mercury Fast | Beneficial Owner | 62,602,700 | 20.60 | | Magnificent Hotel Investments Limited | Interest of Corporation Controlled by Him | 62,602,700 | 20.60 | | Magnificent Hotel Investments Limited | Interest of Corporation Controlled by Him | 62,602,700 | 20.60 | | Magnificent Assets Holdings (BVI) | Beneficial Owner and Interest of Corporation Controlled by Him | 216,608,825 | 71.17 | | Li Pui Ling | Spouse's Interest | 226,454,825 | 74.40 | - Magnificent Assets Holdings (BVI) beneficially owns **50.60%** of shares and is deemed to own the **20.60%** of shares held by Mercury Fast[24](index=24&type=chunk) - Ms. Li Pui Ling is deemed to have a **74.40%** interest in shares due to her spouse Mr. Cheng Kai Man's interests[24](index=24&type=chunk) [Independent Review](index=10&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1) This section outlines the independent review process for the interim results [Interim Results Review](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%AE%A1%E9%98%85) The interim results for the six months ended June 30, 2025, were unaudited but reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410 and by the Group's Audit Committee - The interim results were unaudited but reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410[25](index=25&type=chunk) - The interim results and interim report have been reviewed by the Group's Audit Committee[25](index=25&type=chunk) [Corporate Governance](index=10&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) This section details the company's adherence to corporate governance codes and standards [Compliance with Corporate Governance Code](index=10&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) For the six months ended June 30, 2025, the company complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, with one deviation where the Chairman and Chief Executive Officer roles are combined, which the Board believes facilitates effective strategy implementation and cost savings - The company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for one deviation[26](index=26&type=chunk) - Deviation: Code Provision C.2.1 (the roles of chairman and chief executive officer should be separate), Mr. Cheng Kai Man holds both positions, which the Board believes provides strong and consistent leadership and saves costs[26](index=26&type=chunk) [Compliance with Model Code](index=10&type=section&id=%E6%A0%87%E5%87%86%E5%AE%88%E5%88%99%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed their compliance throughout the period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors have confirmed their compliance throughout the period[27](index=27&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=11&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) This section presents the independent review report on the condensed consolidated financial statements [Introduction and Responsibilities](index=11&type=section&id=%E5%BC%95%E8%A8%80%E8%88%87%E8%B2%A3%E4%BB%BB) Deloitte Touche Tohmatsu has reviewed Shun Ho Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2025, with the Board responsible for preparing and presenting the statements in accordance with HKAS 34, and the auditor's responsibility to conclude based on the review - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements, including the statement of financial position, statement of profit or loss, statement of comprehensive income, statement of changes in equity, and statement of cash flows[30](index=30&type=chunk) - The company's directors are responsible for preparing and presenting the condensed consolidated financial statements in accordance with Hong Kong Accounting Standard 34[30](index=30&type=chunk) [Scope of Review and Conclusion](index=11&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D%E8%88%87%E7%B5%90%E8%AB%96) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is less extensive than an audit, thus no audit opinion is expressed, and based on the review, the auditor found no matters indicating that the condensed consolidated financial statements were not prepared in accordance with HKAS 34 - The scope of the review is less extensive than an audit, therefore no audit opinion is expressed[31](index=31&type=chunk) - The auditor has not become aware of any matter that causes them to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[32](index=32&type=chunk) [Condensed Consolidated Financial Statements](index=13&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the condensed consolidated financial statements of the Group [Condensed Consolidated Statement of Profit or Loss](index=13&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group reported total revenue of HK$334,338,000, a loss for the period of HK$147,561,000, with a loss attributable to company owners of HK$79,376,000, resulting in a basic loss per share of 32.83 HK cents Summary of Condensed Consolidated Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Revenue | 334,338 | 319,575 | | Gross Profit | 73,691 | 56,890 | | Impairment of Investment Properties at Fair Value | (154,800) | (92,232) | | Loss Before Tax | (135,077) | (98,835) | | Loss for the Period | (147,561) | (106,520) | | Loss Attributable to Company Owners | (79,376) | (54,034) | | Basic Loss Per Share (HK Cents) | (32.83) | (22.35) | [Condensed Consolidated Statement of Comprehensive Income](index=14&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%B8%BD%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the loss for the period was HK$147,561,000, but other comprehensive income from exchange differences on translating foreign operations amounted to HK$121,222,000, reducing the total comprehensive expense for the period to HK$26,238,000 Summary of Condensed Consolidated Statement of Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Loss for the Period | (147,561) | (106,520) | | Exchange Differences Arising from Translating Foreign Operations | 121,222 | (13,773) | | Other Comprehensive Income (Expense) for the Period | 121,323 | (13,944) | | Total Comprehensive Expense for the Period | (26,238) | (120,464) | | Total Comprehensive (Expense) Income Attributable to Company Owners | (32,433) | (59,430) | [Condensed Consolidated Statement of Financial Position](index=15&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets were HK$9,344,070,000, total liabilities were HK$1,235,097,000, and equity attributable to company owners was HK$4,013,125,000, with property, plant and equipment and investment properties being the main components of non-current assets Summary of Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Non-Current Assets | 9,115,643 | 9,213,584 | | Current Assets | 228,427 | 266,941 | | Current Liabilities | 482,579 | 528,467 | | Net Current Liabilities | (254,152) | (261,526) | | Equity Attributable to Company Owners | 4,013,125 | 4,045,558 | | Non-Controlling Interests | 4,095,848 | 4,089,653 | | Total Equity | 8,108,973 | 8,135,211 | | Non-Current Liabilities | 752,518 | 816,847 | | Consolidated Assets | 9,344,070 | 9,480,525 | | Consolidated Liabilities | 1,235,097 | 1,345,314 | [Condensed Consolidated Statement of Changes in Equity](index=17&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, equity attributable to company owners decreased from HK$4,045,558,000 at the beginning of the period to HK$4,013,125,000 at the end, primarily due to a loss for the period of HK$79,376,000, partially offset by an increase in exchange reserves Summary of Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (HK$ Thousand) | Loss for the Period (HK$ Thousand) | Exchange Differences (HK$ Thousand) | Fair Value Gain (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Company Owners | 4,045,558 | (79,376) | 46,904 | 39 | 4,013,125 | | Non-Controlling Interests | 4,089,653 | (68,185) | 74,318 | 62 | 4,095,848 | | Total Equity | 8,135,211 | (147,561) | 121,222 | 101 | 8,108,973 | [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash generated from operating activities was HK$112,407,000, net cash used in investing activities was HK$1,621,000, and net cash used in financing activities was HK$155,723,000, resulting in a decrease in cash and cash equivalents at period-end compared to the beginning Summary of Condensed Consolidated Statement of Cash Flows | Indicator | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 112,407 | 106,642 | | Net Cash Used in Investing Activities | (1,621) | (226,013) | | Net Cash Used in Financing Activities | (155,723) | (28,727) | | Net Decrease in Cash and Cash Equivalents | (44,937) | (148,098) | | Cash and Cash Equivalents at End of Period | 198,515 | 184,817 | [Notes to the Condensed Consolidated Financial Statements](index=21&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes explaining the basis of preparation, accounting policies, and specific financial items within the condensed consolidated financial statements [1. Basis of Preparation](index=21&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These condensed consolidated financial statements are presented in Hong Kong Dollars, with the Group's principal activities being hotel investment and operation, property investment, and securities investment, prepared in accordance with HKAS 34 and on a going concern basis, supported by internal financial resources and bank loan refinancing despite current liabilities exceeding current assets - The company is a public listed company incorporated in Hong Kong, with Magnificent Assets Holdings Limited as its ultimate holding company[42](index=42&type=chunk) - Principal activities include investing in and operating hotels, property investment, and securities investment[42](index=42&type=chunk) - The statements are prepared in accordance with Hong Kong Accounting Standard 34 and on a going concern basis, as the Group has sufficient financial resources to support operations[43](index=43&type=chunk) [2. Principal Accounting Policies](index=22&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) These condensed consolidated financial statements are prepared on a historical cost basis, with certain investment properties and financial instruments measured at fair value, and the accounting policies applied this period are consistent with the prior year, with no significant impact from the application of HKFRS amendments on financial position and performance - The statements are prepared on a historical cost basis, except for investment properties and certain financial instruments[44](index=44&type=chunk) - The accounting policies and methods of computation applied this period are consistent with those in the prior year's financial statements[44](index=44&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards had no significant impact on the financial position and performance for the current and prior periods[46](index=46&type=chunk) [3. Revenue](index=23&type=section&id=3.%20%E6%94%B6%E5%85%A5) The Group's total revenue was HK$334,338,000, primarily comprising hotel operating income of HK$268,032,000 and property rental income of HK$66,281,000, with hotel service revenue mainly derived from the Hong Kong market, predominantly from room rentals and ancillary services Revenue Composition | Revenue Source | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hotel Operating Income | 268,032 | 259,757 | | Property Rental Income | 66,281 | 59,818 | | Dividend Income | 25 | – | | **Total Revenue** | **334,338** | **319,575** | Hotel Service Revenue by Category | Revenue Type | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Room Rental Income and Other Ancillary Services | 259,352 | 252,270 | | Food and Beverages | 8,680 | 7,487 | | **Total** | **268,032** | **259,757** | Hotel Service Market Geographical Distribution | Region | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong | 255,673 | 249,234 | | China | 12,359 | 10,523 | | **Total** | **268,032** | **259,757** | [4. Segment Information](index=24&type=section&id=4.%20%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group's operating and reportable segments include hotel services, property investment, and securities investment, with hotel services revenue at HK$268,032,000 and property investment revenue at HK$66,281,000, showing a shift from loss to profit for hotel services and an expanded loss for property investment, while total segment assets were HK$9,011,650,000 and total segment liabilities were HK$82,134,000 - The Group's principal operating and reportable segments include hotel services, property investment, and securities investment[48](index=48&type=chunk)[49](index=49&type=chunk) Segment Revenue and Results | Segment | Six Months Ended June 30, 2025 Revenue (HK$ Thousand) | Six Months Ended June 30, 2024 Revenue (HK$ Thousand) | Six Months Ended June 30, 2025 Results (HK$ Thousand) | Six Months Ended June 30, 2024 Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 268,032 | 259,757 | 9,353 | (1,066) | | Property Investment | 66,281 | 59,818 | (90,487) | (34,276) | | Securities Investment | 25 | – | 25 | – | | **Total** | **334,338** | **319,575** | **(81,109)** | **(35,342)** | Segment Assets and Liabilities | Segment | June 30, 2025 Assets (HK$ Thousand) | December 31, 2024 Assets (HK$ Thousand) | June 30, 2025 Liabilities (HK$ Thousand) | December 31, 2024 Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 4,498,937 | 4,536,933 | 34,797 | 47,497 | | Property Investment | 4,511,873 | 4,575,240 | 47,336 | 47,956 | | Securities Investment | 840 | 739 | 1 | 1 | | **Total Segments** | **9,011,650** | **9,112,912** | **82,134** | **95,454** | [5. Finance Costs](index=28&type=section&id=5.%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, the Group's finance costs totaled HK$25,542,000, primarily comprising interest on bank loans (HK$23,819,000) and interest on amounts due to a fellow subsidiary (HK$1,723,000), representing a decrease from the prior year Finance Costs Composition | Cost Type | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on Bank Loans | 23,819 | 31,657 | | Interest on Amounts Due to a Fellow Subsidiary | 1,723 | 1,846 | | **Total Finance Costs** | **25,542** | **33,503** | [6. Income Tax Expense](index=28&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, income tax expense was HK$12,484,000, mainly consisting of Hong Kong profits tax and UK profits tax, and the Group expects its consolidated annual revenue to be below EUR750,000,000, thus not requiring supplementary tax under Pillar Two rules Income Tax Expense Composition | Tax Type | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 9,410 | 7,070 | | UK Current Tax | 4,231 | 2,459 | | Underprovision in Prior Years (Hong Kong) | 111 | – | | Deferred Tax | (1,268) | (1,844) | | **Total Income Tax Expense** | **12,484** | **7,685** | - Hong Kong profits tax rate remains at **16.5%**[56](index=56&type=chunk) - The Group expects its consolidated annual revenue to be below **EUR750,000,000**, thus not requiring supplementary tax under Pillar Two rules[56](index=56&type=chunk) [7. Loss for the Period](index=29&type=section&id=7.%20%E6%9C%AC%E6%9C%9F%E4%BA%8F%E6%90%8D) For the six months ended June 30, 2025, the loss for the period was determined after deducting depreciation of right-of-use assets of HK$384,000 and depreciation of property, plant and equipment of HK$83,192,000, and including bank deposit interest income and loss on disposal of property, plant and equipment Loss for the Period Adjustment Items | Item | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 384 | 381 | | Depreciation of Property, Plant and Equipment | 83,192 | 82,458 | | Interest Income from Bank Deposits | (1,487) | (2,981) | | Loss on Disposal of Property, Plant and Equipment | 82 | 2,497 | [8. Dividends](index=30&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2025[58](index=58&type=chunk) [9. Loss Per Share](index=30&type=section&id=9.%20%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%90%8D) For the six months ended June 30, 2025, the basic loss per share was 32.83 HK cents, calculated based on a loss attributable to company owners of HK$79,376,000 and 241,766,000 issued shares, with no diluted loss per share as no potential ordinary shares were outstanding during the period Basic Loss Per Share | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss Attributable to Company Owners for the Period (HK$ Thousand) | 79,376 | 54,034 | | Issued Shares During the Period (Thousand Shares) | 241,766 | 241,766 | | Basic Loss Per Share (HK Cents) | (32.83) | (22.35) | - No potential ordinary shares were outstanding during the period, hence no diluted loss per share is presented[59](index=59&type=chunk) [10. Property, Plant and Equipment and Investment Properties](index=30&type=section&id=10.%20%E7%89%A9%E6%A5%AD%E3%80%81%E6%9C%BA%E5%99%A8%E5%8F%8A%E8%AE%BE%E5%A4%87%E5%8F%8A%E6%8A%95%E8%B5%84%E7%89%A9%E6%A5%AD) For the six months ended June 30, 2025, the Group acquired property, plant and equipment of HK$3,123,000, and the fair value of investment properties decreased by HK$154,800,000, recognized directly in the statement of profit or loss, with investment properties carried at fair value based on independent professional valuations using the income approach Changes in Property, Plant and Equipment and Investment Properties | Item | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Acquisition of Property, Plant and Equipment | 3,123 | 12,985 | | Loss on Disposal of Property, Plant and Equipment | 82 | 2,497 | | Decrease in Fair Value of Investment Properties | 154,800 | 92,232 | - Investment properties are carried at fair value based on independent professional valuations using the income approach to assess market value[60](index=60&type=chunk) - The total carrying amount of investment properties of approximately **HK$3,781,074,000** was leased out under operating leases at the end of the period[61](index=61&type=chunk) [11. Trade and Other Receivables](index=32&type=section&id=11.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E5%B8%B3%E6%AC%BE) As of June 30, 2025, total trade and other receivables amounted to HK$13,022,000, comprising trade receivables (customer contracts) of HK$6,999,000 and lease receivables of HK$2,534,000, with the Group typically granting hotel customers credit terms of 30 to 60 days Composition of Trade and Other Receivables | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Receivables (Customer Contracts) | 6,999 | 10,088 | | Lease Receivables | 2,534 | 2,250 | | Other Receivables | 3,489 | 3,116 | | **Total** | **13,022** | **15,454** | Ageing Analysis of Trade and Lease Receivables (as of June 30, 2025) | Ageing | Amount (HK$ Thousand) | | :--- | :--- | | Not Yet Due | 9,280 | | 0－30 Days | 80 | | 31－60 Days | 173 | | 61－90 Days | – | | **Total** | **9,533** | [12. Trade and Other Payables and Accruals](index=33&type=section&id=12.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E5%B8%B3%E6%AC%BE%E5%8F%8A%E9%A0%90%E6%8F%90%E5%B8%B3%E6%AC%BE) As of June 30, 2025, total trade and other payables and accruals amounted to HK$49,498,000, a decrease from the year-end, including trade payables of HK$4,748,000 and accrued staff costs of HK$6,615,000 Composition of Trade and Other Payables and Accruals | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Payables | 4,748 | 5,288 | | Accrued Interest | 1,045 | 2,047 | | Other Payables | 6,756 | 3,304 | | Rental Received in Advance | 12,069 | 10,716 | | Accrued Staff Costs | 6,615 | 17,953 | | **Total** | **49,498** | **60,590** | Ageing Analysis of Trade Payables (as of June 30, 2025) | Ageing | Amount (HK$ Thousand) | | :--- | :--- | | 0－30 Days | 4,740 | | 31－60 Days | 7 | | 61－90 Days | 1 | | **Total** | **4,748** | [13. Bank Loans](index=34&type=section&id=13.%20%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE) As of June 30, 2025, the Group's total secured bank loans amounted to HK$900,619,000, with HK$334,498,000 classified as current liabilities and HK$566,121,000 as non-current liabilities, all bearing floating interest rates with an effective annual interest rate of 4.54% Bank Loan Composition | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Secured Bank Loans | 900,619 | 1,005,073 | | Classified Under Current Liabilities | 334,498 | 378,352 | | Classified Under Non-Current Liabilities | 566,121 | 626,721 | | Effective Annual Interest Rate | 4.54% | 6.05% | - All bank loans are floating-rate loans and are secured by certain assets of the Group[65](index=65&type=chunk) [14. Share Capital](index=35&type=section&id=14.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company had 304,369,000 issued and fully paid ordinary shares with a nominal value of HK$172,252,000, of which 62,603,000 shares were held by a subsidiary and carried no voting rights at company meetings Share Capital Information | Item | Number of Shares (Thousand Shares) | Nominal Value (HK$ Thousand) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Shares | 304,369 | 172,252 | - **62,603,000 shares** of the company are held by a subsidiary and carry no voting rights at company meetings[67](index=67&type=chunk) [15. Related Party Transactions and Balances](index=35&type=section&id=15.%20%E9%97%9C%E9%80%A3%E4%BA%BA%E5%A3%AB%E4%BA%A4%E6%98%93%E5%8F%8A%E7%B5%90%E9%A4%98) During the period, key related party transactions included interest expense of HK$1,723,000 due to Saola Enterprises Inc., rental income of HK$420,000 from Mr. Cheng Kai Man, and key management personnel remuneration of HK$10,759,000, with period-end balances showing HK$48,940,000 due to Saola and HK$5,088,000 due to Mr. Cheng Kai Man Related Party Transactions | Transaction Type | Six Months Ended June 30, 2025 (HK$ Thousand) | Six Months Ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest Expense on Amounts Due to Saola Enterprises Inc. | 1,723 | 1,846 | | Rental Income from Mr. Cheng Kai Man | 420 | 420 | | Remuneration of Key Management Personnel | 10,759 | 10,871 | Related Party Balances | Balance Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Amounts Due to Saola Enterprises Inc. | 48,940 | 47,238 | | Amounts Due to Mr. Cheng Kai Man | 5,088 | 7,487 | - Amounts due to Saola Enterprises Inc. bear interest at prime rate plus **2%**, are unsecured, and repayable on demand[69](index=69&type=chunk) - Amounts due to Mr. Cheng Kai Man are non-trade related, unsecured, interest-free, and repayable on demand[69](index=69&type=chunk) [16. Pledges of Assets](index=36&type=section&id=16.%20%E8%B3%87%E7%94%A2%E4%B9%8B%E6%8A%B5%E6%8A%BC) As of the reporting period end, the Group's bank loan facilities were secured by investment properties, hotel properties, pledged shares of certain subsidiaries, and assignments of certain property rental income and insurance policies for investment properties - Bank loan facilities are secured by investment properties (carrying amount approximately **HK$3,583,000,000**) and hotel properties (carrying amount approximately **HK$1,468,000,000**)[69](index=69&type=chunk) - Pledged shares of certain subsidiaries have a total net asset value of approximately **HK$3,819,000,000**[69](index=69&type=chunk) - Other pledges include assignments of property rental income from certain subsidiaries and insurance policies for certain investment properties[69](index=69&type=chunk) [17. Fair Value Measurement of Financial Instruments](index=37&type=section&id=17.%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E4%B9%8B%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) The Group's financial assets measured at fair value on a recurring basis primarily include equity investments presented at fair value through other comprehensive income, which amounted to HK$840,000 as of June 30, 2025, classified as Level 1 fair value measurements, while the carrying amounts of other financial assets and liabilities approximate their fair values Financial Assets Measured at Fair Value | Financial Asset | June 30, 2025 Fair Value (HK$ Thousand) | December 31, 2024 Fair Value (HK$ Thousand) | Fair Value Hierarchy Level | | :--- | :--- | :--- | :--- | | Equity Investments at Fair Value Through Other Comprehensive Income | 840 | 739 | Level 1 | - Level 1 fair value measurements are derived from unadjusted quoted prices for identical assets or liabilities in active markets[72](index=72&type=chunk) - The carrying amounts of other financial assets and financial liabilities approximate their fair values[71](index=71&type=chunk)

Financial Performance - The net profit attributable to the company's owners for the six months ended June 30, 2025, was HKD 79,000,000, an increase of HKD 18,000,000 (+29%) compared to HKD 61,000,000 for the same period in 2024[4] - The net profit attributable to the owners of Huada Hotel Group for the six months ended June 30, 2025, was HKD 59,300,000, an increase of HKD 17,700,000 (+43%) compared to HKD 41,600,000 for the same period in 2024[8] - The overall profit of Huada Hotel Group increased mainly due to a 5% increase in revenue and a reduction in hotel operating costs and financial costs[10] - Total revenue for the six months ended June 30, 2025, was HKD 334,338,000, an increase of 4.8% compared to HKD 319,575,000 for the same period in 2024[33] - Customer contracts revenue was HKD 268,032,000, up from HKD 259,757,000, reflecting a growth of 3.9% year-over-year[33] - Gross profit for the period was HKD 73,691,000, compared to HKD 56,890,000, indicating a significant increase of 29.5%[33] - The company reported a pre-tax loss of HKD 132,771,000, which is a decline from the pre-tax loss of HKD 96,368,000 in the previous year[33] - The net loss for the period was HKD 145,255,000, compared to a net loss of HKD 104,053,000 for the same period last year, representing an increase in losses of 39.6%[33] - Basic loss per share was HKD 27.01, compared to HKD 18.15 for the same period in 2024, reflecting a deterioration in earnings per share[33] Revenue Sources - The hotel business generated revenue of HKD 268,000,000, representing a 3% increase from HKD 260,000,000 for the six months ended June 30, 2024[8] - The group's hotel revenue increased by 3% to HKD 268 million, while total revenue rose by 5% to HKD 334 million[14] - Hotel services revenue increased to HKD 268,032,000 for the six months ended June 30, 2025, compared to HKD 259,757,000 for the same period in 2024, representing a growth of 4.9%[48] - Property rental income rose to HKD 66,281,000 for the six months ended June 30, 2025, from HKD 59,818,000 in the previous year, marking an increase of 10.8%[48] Costs and Expenses - The financial costs decreased by 25% to HKD 23,855,000 for the six months ended June 30, 2025, compared to HKD 31,732,000 for the same period in 2024[7] - Administrative expenses were HKD 30,223,000, slightly down from HKD 30,573,000 in the previous year[33] - The company incurred a fair value impairment of investment properties amounting to HKD 154,800,000, compared to HKD 92,232,000 in the previous year[33] - Interest expenses decreased to HKD 23,855,000 for the six months ended June 30, 2025, from HKD 31,732,000 in the previous year, a reduction of 25%[53] Assets and Liabilities - The company's total assets decreased to HKD 9,153,831,000 as of June 30, 2025, from HKD 9,258,032,000 at the end of 2024, indicating a decline of about 1.1%[35] - Current liabilities decreased to HKD 436,583,000 from HKD 484,744,000, reflecting a reduction of approximately 9.9%[35] - The company's equity attributable to owners decreased to HKD 6,970,034,000 from HKD 7,026,412,000, a decline of about 0.8%[36] - The company's bank loans amounted to HKD 900,619,000 as of June 30, 2025, down from HKD 1,005,073,000 as of December 31, 2024[64] - Total liabilities also decreased to HKD 1,189,101,000 as of June 30, 2025, down from HKD 1,301,591,000, indicating a reduction of 8.6%[52] Shareholder Information - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2025, to ensure higher cash flow amid challenging economic conditions[5] - No dividends were declared or paid to shareholders for the six months ended June 30, 2025, and June 30, 2024[57] - As of June 30, 2025, the largest shareholder, Zheng Qiweng, holds 66.48% of the company's shares[18] Market Conditions - The group is facing challenges in the hotel and rental income sectors due to a weak Chinese economy and high exchange rates, impacting future revenue prospects[16] - For the six months ending June 30, 2025, the number of overnight visitors to Hong Kong reached approximately 11.3 million, a 6.6% increase from 10.6 million in the same period of 2024[14] Investment Activities - The group acquired the Wood Street Police Headquarters in London for GBP 40 million, which will be renovated into a luxury hotel with approximately 216 rooms[15] - The company did not acquire any investment properties for the six months ended June 30, 2025, compared to HKD 207,000,000 for the same period in 2024[60] - The company purchased property, plant, and equipment amounting to HKD 3,123,000 for the six months ended June 30, 2025, a significant decrease from HKD 12,985,000 for the same period in 2024[59] Cash Flow - The net cash generated from operating activities was HKD 118,197,000, compared to HKD 110,353,000 in the prior year, showing an increase of about 7.1%[38] - Cash and cash equivalents decreased by HKD 44,839,000, compared to a decrease of HKD 148,047,000 in the previous year, indicating an improvement in cash flow management[39] - The company incurred a net cash outflow from investing activities of HKD 1,621,000, a significant reduction from HKD 226,013,000 in the prior year, reflecting a decrease of approximately 99.3%[39] - The company’s total cash and cash equivalents at the end of the period stood at HKD 198,476,000, compared to HKD 184,638,000 at the end of the previous year, reflecting a growth of approximately 7.1%[39] Fair Value Measurements - The fair value of investment properties decreased by HKD 154,800,000 for the six months ended June 30, 2025, compared to a decrease of HKD 92,232,000 for the same period in 2024[60] - The fair value of equity investments presented in other comprehensive income is HKD 39,028,000 as of June 30, 2025, compared to HKD 45,187,000 as of December 31, 2024[70] - The group’s financial assets are measured at fair value at each reporting period end, with specific valuation techniques and input data provided[69]

[Company Information](index=2&type=section&id=Company%20Information) The company's board comprises executive, non-executive, and independent non-executive directors, supported by a company secretary, auditor, lawyer, and key banking partners - The company's board of directors consists of executive directors including Mr. Cheng Kai Man (Chairman), Mr. Hui Wing Ho, Ms. Lau Kam Mei, and Ms. Ng Yuet Ying; non-executive directors including Ms. Lui Fung Mei Yee; and independent non-executive directors including Mr. Chan Kim Fai, Mr. Lam Kwai Cheung, and Mr. Liu Yuk Chor[4](index=4&type=chunk) - The company secretary is Ms. Koo Ching Fun, the auditor is Deloitte Touche Tohmatsu, the legal advisor is Withers LLP, and principal bankers include The Hongkong and Shanghai Banking Corporation Limited and Bank of China (Hong Kong) Limited[4](index=4&type=chunk) [Interim Results Summary](index=3&type=section&id=Interim%20Results%20Summary) This section highlights a **43%** increase in net profit attributable to owners, excluding revaluation and depreciation, and the board's decision not to declare an interim dividend [Interim Results](index=3&type=section&id=Interim%20Results) For the six months ended June 30, 2025, net profit attributable to owners, after tax and before revaluation and depreciation of land, property, and equipment, increased by **43%** year-on-year to **HKD 59.3 million** Net Profit Attributable to Owners (Excluding Revaluation and Depreciation) | Metric | For the six months ended June 30, 2025 (HKD) | For the six months ended June 30, 2024 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net profit | 59,300,000 | 41,600,000 | +43% | [Interim Dividend](index=3&type=section&id=Interim%20Dividend) The board does not recommend an interim dividend for the six months ended June 30, 2025, prioritizing cash flow for unstable hotel market conditions, debt reduction, and London Wood Street Hotel renovations - The board does not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil)[6](index=6&type=chunk) - Reasons for not distributing dividends include ensuring higher cash flow to navigate challenging economic conditions with high operating and interest costs in the hotel industry; retaining cash to further reduce bank and shareholder loans; and reserving cash for the renovation of the Wood Street Hotel in London[6](index=6&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the group's business operations, financial performance, revenue drivers, cost structure, financing, key achievements, and future strategic outlook [Business Overview](index=4&type=section&id=Business%20Overview) The Group continued its engagement in hotel investment, hotel management, property leasing, and property development, achieving a **43%** year-on-year increase in net profit attributable to owners, excluding revaluation and depreciation - The Group's principal businesses include hotel investment, hotel management, property leasing, and property development[7](index=7&type=chunk) Net Profit Attributable to Owners (Excluding Revaluation and Depreciation) | Metric | For the six months ended June 30, 2025 (HKD) | For the six months ended June 30, 2024 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net profit | 59,300,000 | 41,600,000 | +43% | [Financial Performance](index=4&type=section&id=Financial%20Performance) For the six months ended June 30, 2025, the Group's overall profit significantly increased by **81%**, driven by a **5%** revenue increase and reduced hotel operating and finance costs Key Financial Performance Indicators | Metric | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Profit from hotel operations | 8,631 | 712 | +1,112% | | Profit from property investment | 20,380 | 14,010 | +45% | | Income from securities investment | 25 | – | N/A | | Administrative expenses | (22,205) | (23,159) | -4% | | Finance costs | (17,177) | (23,228) | -26% | | Loss after tax | (15,385) | (32,546) | -53% | | Net profit attributable to owners after tax and before revaluation and depreciation of land, property and equipment | 59,295 | 41,562 | +43% | - Overall profit increased by **81%**, primarily due to a **5%** increase in revenue and a reduction in hotel operating and finance costs[8](index=8&type=chunk) [Revenue Analysis](index=5&type=section&id=Revenue%20Analysis) The Group's total revenue increased by **5%** year-on-year to **HKD 258 million**, driven by a **3%** rise in hotel operations revenue (due to increased room rates) and a **34%** increase in investment property income (from London Royal Scot Hotel rent) Revenue Composition and Changes | Revenue Source | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue from hotel operations | 231,238 | 224,959 | +3% | Increased room rates | | Revenue from investment properties | 25,380 | 19,010 | +34% | Increased rental income from London Royal Scot Hotel | | Other income | 1,640 | 2,182 | -25% | N/A | | **Total** | **258,258** | **246,151** | **+5%** | | - The Group's total revenue increased by **5%** year-on-year, from approximately **HKD 246 million** to approximately **HKD 258 million**[9](index=9&type=chunk) [Hotel Operations Performance](index=6&type=section&id=Hotel%20Operations%20Performance) The Group operates seven hotels and leases one in London, with hotel operations revenue growing by **3%**, while the London Royal Scot Hotel's annual rent increased by **34%** to **GBP 4,737,000**, and most hotels maintained over **90%** average room occupancy - The Group currently owns eight hotels, operating seven and leasing one located in London[10](index=10&type=chunk) Average Room Occupancy Rate of Key Hotels (Jan-Jun 2025) | Hotel Name | Average Room Occupancy Rate (%) | | :--- | :--- | | Ramada Hong Kong Harbour View | 98 | | Ramada Hong Kong Grand | 99 | | Best Western Plus Hotel Hong Kong | 97 | | Grand View Hotel Causeway Bay | 99 | | Best Western Plus Hotel Tsim Sha Tsui | 98 | | Grand View Hotel Bay | 98 | | Shanghai Grand International Hotel | 88 | - The annual rent for the London Royal Scot Hotel successfully increased by **34%**, from **GBP 3,546,000** to **GBP 4,737,000**[11](index=11&type=chunk) [Cost Analysis](index=6&type=section&id=Cost%20Analysis) During the period, hotel service costs decreased by **2%** to **HKD 151.9 million**, administrative expenses (excluding depreciation) decreased by **4%** to **HKD 21 million**, while hotel property depreciation slightly increased Hotel Service Costs | Metric | For the six months ended June 30, 2025 (Million HKD) | For the six months ended June 30, 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel service costs | 151.9 | 154.6 | -2% | Administrative Expenses and Depreciation | Metric | For the six months ended June 30, 2025 (Million HKD) | For the six months ended June 30, 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses (excluding depreciation) | 21.0 | 22.3 | -4% | | Depreciation of hotel properties | 68.2 | 68.0 | +0.3% | [Financing Status](index=7&type=section&id=Financing%20Status) The Group's total debt decreased by **HKD 64 million** to **HKD 636 million**, with the gearing ratio falling to **15%**, and finance costs reduced by **26%** due to lower interest rates, though foreign exchange risk remains Debt Structure and Changes | Metric | As at June 30, 2025 (Million HKD) | As at December 31, 2024 (Million HKD) | Change (Million HKD) | | :--- | :--- | :--- | :--- | | Bank loans | 301 | 345 | -44 | | Shareholder loans | 335 | 355 | -20 | | **Total debt** | **636** | **700** | **-64** | | Gearing ratio | 15% | 17% | -2% | Finance Costs | Metric | For the six months ended June 30, 2025 (Million HKD) | For the six months ended June 30, 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total interest expense | 17.2 | 23.2 | -26% | | Interest expense on bank loans | 8.2 | 10.8 | -24% | | Interest expense on shareholder loans | 9.0 | 12.4 | -27% | - The decrease in finance costs was primarily due to lower interest rates[17](index=17&type=chunk) - The Group's bank loans are primarily denominated in HKD and GBP, bearing interest at floating rates, thus exposing the Group to foreign exchange risk[17](index=17&type=chunk) [Key Business Achievements](index=8&type=section&id=Key%20Business%20Achievements) Despite visitor numbers and per capita spending not fully recovering, the Group maintained over **90%** average hotel occupancy, achieved a **5%** total revenue increase, successfully raised London Royal Scot Hotel's annual rent by **34%**, and plans renovation for London Wood Street Hotel Overnight Visitor Arrivals to Hong Kong Data | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Pre-pandemic H1 2019 | | :--- | :--- | :--- | :--- | | Overnight visitor arrivals (persons) | Approx. 11.3 million | 10.6 million | 15 million | | Per capita spending by Mainland Chinese visitors (HKD) | Below 5,100 | N/A | 6,000 | - The Group's average hotel occupancy rate consistently exceeded **90%**[19](index=19&type=chunk) - The Group's hotel revenue increased by **3%** to **HKD 231 million**, and total revenue increased by **5%** to **HKD 258 million**[19](index=19&type=chunk) - The annual rent for the London Royal Scot Hotel successfully increased by **34%** from **GBP 3,546,000** to **GBP 4,737,000**[20](index=20&type=chunk) - The London Wood Street Hotel (former police headquarters) has been approved for renovation into a luxury hotel with approximately **216** rooms[20](index=20&type=chunk) [Future Outlook](index=9&type=section&id=Future%20Outlook) The Group holds eight hotels and the London Wood Street Hotel renovation project, facing challenges from a weak Chinese economy and expensive HKD against RMB, but multi-entry visa policies in other major Chinese cities offer encouraging prospects, with management focused on increasing revenue and controlling costs - The Group holds eight revenue-generating hotels (six in Hong Kong, one in Shanghai, and one in London) and the renovation project for the Wood Street Hotel in London[21](index=21&type=chunk) - The future outlook faces challenges from a weak Chinese economy and an expensive HKD against RMB, leading more Mainland Chinese visitors to opt for overnight stays in the Greater Bay Area and day trips to Hong Kong[21](index=21&type=chunk) - The further implementation of multi-entry visa policies in other major Chinese cities is expected to bring encouraging prospects for the future[21](index=21&type=chunk) - Management will continue efforts to increase revenue and control costs to address challenges in hotel operations and rental income[21](index=21&type=chunk) [Disclosures Relating to Listed Securities](index=9&type=section&id=Disclosures%20Relating%20to%20Listed%20Securities) This section details the absence of listed securities transactions by the company, outlines directors' interests, and identifies major shareholders and their respective holdings [Purchase, Sale or Redemption of Listed Securities](index=9&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[22](index=22&type=chunk) [Directors' Interests in Listed Securities](index=10&type=section&id=Directors%27%20Interests%20in%20Listed%20Securities) As of June 30, 2025, Chairman Mr. Cheng Kai Man held a **71.09%** equity interest in the Company through his controlled entities and had controlling interests in associated corporations like Magnificent Hotel Investments Limited, Magnificent Realty Investment Holdings Limited, and Magnificent Assets Holdings Limited Directors' Interests in the Company's Shares | Director's Name | Capacity | Nature of Interest | Number of Shares/Underlying Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Cheng Kai Man | Interest in controlled corporation | Corporate | 6,360,585,437 | 71.09 | - Mr. Cheng Kai Man holds controlling interests in Magnificent Hotel Investments Limited, Good Taylor Limited, South Point Investments Limited, Magnificent Network Development Limited, and Jetco Construction Company Limited, which collectively hold **71.09%** of the Company's shares[23](index=23&type=chunk) Directors' Interests in Shares of Associated Corporations | Director's Name | Name of Associated Corporation | Capacity | Nature of Interest | Number of Shares/Underlying Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Cheng Kai Man | Magnificent Hotel Investments Limited | Beneficial owner and interest in controlled corporation | Personal and Corporate | 385,395,999 | 66.48 | | Cheng Kai Man | Magnificent Realty Investment Holdings Limited | Beneficial owner and interest in controlled corporation | Personal and Corporate | 226,454,825 | 74.40 | | Cheng Kai Man | Magnificent Assets Holdings Limited | Beneficial owner | Personal | 2 | 100.00 | [Major Shareholders](index=12&type=section&id=Major%20Shareholders) As of June 30, 2025, Magnificent Hotel Investments Limited and its associated companies (including Omnico Company Inc., Magnificent Realty Investment Holdings Limited, and Magnificent Assets Holdings (BVI)) collectively held **71.09%** of the Company's shares as the largest shareholder, with Alef United Holdings Limited and its concert parties holding **9.89%** Major Shareholders' Shareholding | Shareholder Name | Capacity | Number of Shares/Underlying Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Magnificent Hotel Investments Limited | Beneficial owner and interest in controlled corporation | 6,360,585,437 | 71.09 | | Omnico Company Inc. | Interest in controlled corporation | 6,360,585,437 | 71.09 | | Magnificent Realty Investment Holdings Limited | Interest in controlled corporation | 6,360,585,437 | 71.09 | | Magnificent Assets Holdings (BVI) | Interest in controlled corporation | 6,360,585,437 | 71.09 | | Li Pui Ling | Interest of spouse | 6,360,585,437 | 71.09 | | Jetco | Beneficial owner | 2,978,198,581 | 33.29 | | Alef United Holdings Limited | Beneficial owner and interest of parties acting in concert | 885,094,524 | 9.89 | | Credit Suisse Trust Limited | Interest in controlled corporation | 885,094,524 | 9.89 | | Hashim Majed Hashim A. | Interest in controlled corporation | 885,094,524 | 9.89 | | North Salomon Limited | Interest in controlled corporation | 885,094,524 | 9.89 | | Saray Capital Limited | Interest in controlled corporation | 885,094,524 | 9.89 | | Saray Value Fund SPC | Beneficial owner and interest of parties acting in concert | 885,094,524 | 9.89 | | Shobokshi Hussam Ali H. | Interest in controlled corporation | 885,094,524 | 9.89 | - Magnificent Hotel Investments Limited, Omnico, Magnificent Realty Investment Holdings Limited, and Magnificent Assets Holdings (BVI) are deemed to have an interest in **71.09%** of the Company's shares due to their direct or indirect interests in Magnificent Hotel Investments Limited[28](index=28&type=chunk) - Alef United Holdings Limited and Saray Value Fund SPC, along with other parties acting in concert, collectively hold a **9.89%** equity interest in the Company[29](index=29&type=chunk) [Review Report and Corporate Governance](index=14&type=section&id=Review%20Report%20and%20Corporate%20Governance) This section details the independent review of interim results, the company's compliance with corporate governance codes, and the auditor's review report on the condensed consolidated financial statements [Independent Review](index=14&type=section&id=Independent%20Review) The interim results for the six months ended June 30, 2025, were reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410 and by the Group's audit committee - The interim results are unaudited but have been reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410[31](index=31&type=chunk) - The interim results and interim report have been reviewed by the Group's audit committee[31](index=31&type=chunk) [Corporate Governance](index=15&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code, with a deviation where the Chairman and CEO roles are combined under Mr. Cheng Kai Man, an arrangement the board believes provides consistent leadership and cost savings, and all directors confirmed compliance with the Model Code for Securities Transactions - The Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules of the Stock Exchange, save for one deviation[32](index=32&type=chunk) - Deviation from code provision C.2.1: The roles of Chairman and Chief Executive Officer are combined and performed by Mr. Cheng Kai Man, which the board believes provides strong and consistent leadership, facilitates strategy implementation, and achieves significant cost savings[32](index=32&type=chunk) - All directors have confirmed their compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules throughout the period[33](index=33&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=16&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410, finding no matters suggesting non-compliance with Hong Kong Accounting Standard 34 - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[36](index=36&type=chunk) - The review concluded that nothing has come to the reviewer's attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[37](index=37&type=chunk) - As the scope of a review is substantially less than that of an audit, no audit opinion has been expressed[36](index=36&type=chunk) [Condensed Consolidated Financial Statements](index=17&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's total revenue grew to **HKD 256.6 million**, with gross profit significantly increasing to **HKD 34.036 million**, and despite lower finance and administrative costs, increased impairment of investment properties and income tax expense resulted in a reduced loss for the period of **HKD 15.385 million** Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total revenue | 256,643 | 243,969 | | Cost of sales | (2,105) | (1,641) | | Other service costs | (151,896) | (154,585) | | Depreciation of property, plant and equipment | (68,222) | (67,640) | | Gross profit | 34,036 | 19,722 | | Fair value loss on investment properties | (5,000) | (5,000) | | Administrative expenses | (22,205) | (23,159) | | Finance costs | (17,177) | (23,228) | | Loss before tax | (8,731) | (29,483) | | Income tax expense | (6,654) | (3,063) | | Loss for the period | (15,385) | (32,546) | | Basic loss per share (HK cents) | (0.17) | (0.36) | [Condensed Consolidated Statement of Comprehensive Income](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The loss for the period was **HKD 15.385 million**, but a positive foreign exchange difference of **HKD 121.2 million** from translating overseas operations resulted in a total comprehensive income of **HKD 93.545 million**, a significant improvement from the prior period's total comprehensive expense Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loss for the period | (15,385) | (32,546) | | Fair value loss on equity investments at fair value through other comprehensive income | (12,292) | (908) | | Exchange differences arising from translation of overseas operations | 121,222 | (13,773) | | Other comprehensive income (expense) for the period | 108,930 | (14,681) | | Total comprehensive income (expense) for the period | 93,545 | (47,227) | | Total comprehensive income (expense) attributable to owners of the Company | 93,732 | (47,041) | - Exchange differences arising from the translation of overseas operations amounted to **HKD 121.2 million**, significantly improving the total comprehensive income for the period[40](index=40&type=chunk) [Condensed Consolidated Statement of Financial Position](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased to **HKD 5.025 billion**, with investment properties and property, plant, and equipment as major non-current assets; current liabilities exceeded current assets, resulting in a net current liability of **HKD 498.8 million**, while total equity grew to **HKD 4.2305 billion** Key Data from Condensed Consolidated Statement of Financial Position | Metric | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 3,613,123 | 3,633,234 | | Investment properties | 1,117,145 | 1,030,990 | | Total non-current assets | 4,831,395 | 4,777,882 | | Bank balances and cash | 174,354 | 203,139 | | Total current assets | 194,187 | 224,446 | | Total current liabilities | 693,064 | 761,854 | | Net current liabilities | (498,877) | (537,408) | | Total assets less current liabilities | 4,332,518 | 4,240,474 | | Equity attributable to owners of the Company | 4,224,058 | 4,130,326 | | Total equity | 4,230,507 | 4,136,962 | | Deferred tax liabilities | 100,885 | 102,506 | - Current liabilities exceeded current assets by **HKD 498.8 million**, but the board has carefully considered future liquidity and prepared the financial statements on a going concern basis, supported by internal financial resources, refinanced bank loans, and the immediate holding company's agreement not to demand repayment of amounts due[41](index=41&type=chunk)[49](index=49&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners of the Company increased from **HKD 4.1303 billion** to **HKD 4.2241 billion**, primarily driven by a positive foreign exchange difference of **HKD 121.2 million** from translating overseas operations, despite the loss for the period and fair value loss on equity investments Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | As at January 1, 2025 (Thousand HKD) | Loss for the period (Thousand HKD) | Exchange differences (Thousand HKD) | Fair value loss on equity investments (Thousand HKD) | As at June 30, 2025 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 4,130,326 | (15,198) | 121,222 | (12,292) | 4,224,058 | | Non-controlling interests | 6,636 | (187) | – | – | 6,449 | | **Total** | **4,136,962** | **(15,385)** | **121,222** | **(12,292)** | **4,230,507** | - Exchange differences arising from the translation of overseas operations, amounting to **HKD 121.2 million**, were the primary contributor to the increase in equity for the period[43](index=43&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities was **HKD 70.094 million**, net cash used in investing activities was **HKD 1.827 million**, and net cash used in financing activities was **HKD 105.384 million**, resulting in a net decrease in cash and cash equivalents of **HKD 37.117 million** and an ending balance of **HKD 174.354 million** Key Data from Condensed Consolidated Statement of Cash Flows | Metric | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net cash from operating activities | 70,094 | 61,969 | | Net cash used in investing activities | (1,827) | (7,278) | | Net cash used in financing activities | (105,384) | (212,400) | | Net decrease in cash and cash equivalents | (37,117) | (157,709) | | Cash and cash equivalents at end of period | 174,354 | 149,742 | - Net cash outflow from financing activities primarily included bank loan repayments of **HKD 99.882 million** and repayments of amounts due to the immediate holding company of **HKD 26.831 million**, offset by new bank loans of **HKD 32 million**[46](index=46&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=25&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the basis of preparation, significant accounting policies, revenue breakdown, segment information, finance costs, income tax, loss for the period, dividends, loss per share, property details, receivables, payables, bank loans, share capital, related party transactions, pledges of assets, and fair value measurement of financial instruments [Basis of Preparation](index=25&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are presented in HKD, prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules, and despite current liabilities exceeding current assets, the board prepared them on a going concern basis, supported by internal financial resources, refinanced bank loans, and holding company support - These condensed consolidated financial statements are presented in HKD and prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited[47](index=47&type=chunk) - As at June 30, 2025, the Group's current liabilities exceeded its current assets by **HKD 498.8 million**, but the board believes the Group has financial resources to fund its operations, including internal financial resources and refinanced bank loans, and the immediate holding company has agreed not to demand repayment of amounts due, thus preparing the statements on a going concern basis[49](index=49&type=chunk) [Principal Accounting Policies](index=26&type=section&id=Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, applying all amendments to Hong Kong Financial Reporting Standards issued by the HKICPA, which had no significant impact on the financial position or performance - These condensed consolidated financial statements are prepared on the historical cost basis, except for investment properties and certain financial instruments which are measured at fair value where applicable[50](index=50&type=chunk) - The amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants that are effective for the current interim period have been applied for the first time, but they have had no significant impact on the Group's financial position and performance and/or disclosures[51](index=51&type=chunk) [Revenue](index=27&type=section&id=Revenue) The Group's total revenue primarily comprises hotel operations revenue (**HKD 231.2 million**), property rental income (**HKD 25.38 million**), and dividend income (**HKD 25 thousand**), with hotel service revenue mainly from room rentals and ancillary services, and Hong Kong being the largest market contributor Revenue Source Analysis | Revenue Source | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue from hotel operations | 231,238 | 224,959 | | Property rental income | 25,380 | 19,010 | | Dividend income | 25 | – | | **Total revenue** | **256,643** | **243,969** | Analysis of Revenue by Hotel Service Category | Type of goods or services | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Room rental income and other ancillary services | 223,334 | 218,166 | | Food and beverages | 7,904 | 6,793 | | **Total** | **231,238** | **224,959** | | **Geographical distribution of markets** | | | | Hong Kong | 218,879 | 214,436 | | People's Republic of China | 12,359 | 10,523 | | **Total** | **231,238** | **224,959** | [Segment Information](index=28&type=section&id=Segment%20Information) The Group's operating and reportable segments include hotel services, property investment, and securities investment, with hotel services showing growth in both revenue and results, notably from Best Western Plus Hotel Hong Kong and Ramada Hong Kong Harbour View, and a significant increase in Wood Street Hotel's asset value - The Group's operating and reportable segments include hotel services (eight hotels), property investment, and securities investment[53](index=53&type=chunk)[54](index=54&type=chunk) Segment Revenue and Results | Segment | Revenue for the six months ended June 30, 2025 (Thousand HKD) | Revenue for the six months ended June 30, 2024 (Thousand HKD) | Results for the six months ended June 30, 2025 (Thousand HKD) | Results for the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Hotel services | 231,238 | 224,959 | 8,631 | 712 | | Property investment | 25,380 | 19,010 | 20,380 | 14,010 | | Securities investment | 25 | – | 25 | – | | **Total** | **256,643** | **243,969** | **29,036** | **14,722** | Segment Assets | Segment | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Hotel services | 3,579,714 | 3,604,343 | | －Wood Street Hotel | 447,475 | 404,384 | | Property investment | 1,117,145 | 1,030,990 | | Securities investment | 79,912 | 92,204 | | **Total segment assets** | **4,776,771** | **4,727,537** | Segment Liabilities | Segment | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Hotel services | 30,118 | 40,495 | | Property investment | 15,914 | 14,378 | | Securities investment | 1 | 1 | | **Total segment liabilities** | **46,033** | **54,874** | [Finance Costs](index=32&type=section&id=Finance%20Costs) Total finance costs for the period amounted to **HKD 17.177 million**, a **26%** decrease from the prior period, primarily due to lower interest expenses on bank loans and amounts due to the immediate holding company Composition of Finance Costs | Source of Interest | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank loans | 8,195 | 10,764 | | Amounts due to immediate holding company | 8,982 | 12,464 | | **Total** | **17,177** | **23,228** | [Income Tax Expense](index=33&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was **HKD 6.654 million**, a **117%** increase year-on-year, mainly from current tax in Hong Kong and the UK, with the Group not expecting to pay top-up tax under Pillar Two rules Composition of Income Tax Expense | Source of Tax | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current tax: Hong Kong | 3,933 | 2,260 | | Current tax: United Kingdom | 4,231 | 2,459 | | Underprovision in prior years: Hong Kong | 111 | – | | Deferred tax | (1,621) | (1,656) | | **Total** | **6,654** | **3,063** | - Hong Kong profits tax rate is **16.5%**[63](index=63&type=chunk) - The Group expects its consolidated annual revenue to be less than **EUR 750 million**, thus not requiring payment of top-up tax under Pillar Two rules[64](index=64&type=chunk) [Loss for the Period](index=34&type=section&id=Loss%20for%20the%20Period) The loss for the period was **HKD 15.385 million**, after deducting **HKD 69.109 million** in depreciation of property, plant, and equipment and including **HKD 1.23 million** in bank deposit interest income Key Adjustments to Loss for the Period | Item | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 384 | 381 | | Depreciation of property, plant and equipment | 69,109 | 68,541 | | Interest income from bank deposits | (1,230) | (2,718) | | Loss on disposal of property, plant and equipment | 12 | 741 | [Dividends](index=34&type=section&id=Dividends) For the six months ended June 30, 2025, the board of directors resolved not to declare or recommend any interim dividend - No dividends were declared or paid to shareholders for the six months ended June 30, 2025, and 2024[67](index=67&type=chunk) - The board of directors resolved not to declare or recommend any interim dividend for the six months ended June 30, 2025, and 2024[67](index=67&type=chunk) [Loss Per Share](index=34&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share narrowed to **0.17 HK cents** from **0.36 HK cents** in the prior period, with no diluted loss per share presented due to the absence of potential ordinary shares Basic Loss Per Share | Metric | For the six months ended June 30, 2025 (HK cents) | For the six months ended June 30, 2024 (HK cents) | | :--- | :--- | :--- | | Basic loss per share | (0.17) | (0.36) | - Basic loss per share is calculated based on the loss for the period attributable to owners of the Company of **HKD 15.198 million** and **8.947 billion** ordinary shares in issue during the period[68](index=68&type=chunk) - No diluted loss per share is presented as there were no potential ordinary shares in issue during the period or prior period[68](index=68&type=chunk) [Property, Plant and Equipment and Investment Properties](index=35&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Investment%20Properties) During the period, **HKD 3.017 million** was spent on property, plant, and equipment acquisitions, with a **HKD 12 thousand** loss on disposal, while investment properties experienced a **HKD 5 million** fair value decrease, with a total carrying amount of approximately **HKD 1.09 billion**, valued by independent professional valuers using the income approach Changes in Property, Plant and Equipment and Investment Properties | Item | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 3,017 | 10,496 | | Loss on disposal of property, plant and equipment | 12 | 741 | | Fair value decrease on investment properties | 5,000 | 5,000 | - Investment properties are stated at fair value, assessed by independent professional valuers using the income approach, with a total carrying amount of approximately **HKD 1.09 billion**[69](index=69&type=chunk) - The valuation methodology considers current market rental levels for existing leases and future reversionary income, capitalizing the rental income[70](index=70&type=chunk) [Trade and Other Receivables](index=36&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to **HKD 9.072 million**, a decrease from year-end, with trade receivables primarily comprising amounts not yet due, and a typical credit period of **30 to 60 days** Trade and Other Receivables | Item | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade receivables (customer contracts) | 5,951 | 8,361 | | Other receivables | 3,121 | 2,776 | | **Total** | **9,072** | **11,137** | Ageing Analysis of Trade Receivables | Ageing | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Not yet due | 5,728 | 8,162 | | 0-30 days | 49 | 104 | | 31-60 days | 174 | 94 | | 61-90 days | – | 1 | - The Group grants credit terms of **30 to 60 days** to travel agents and certain customers of its hotels[71](index=71&type=chunk) [Trade and Other Payables and Accruals](index=37&type=section&id=Trade%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, total trade and other payables and accruals amounted to **HKD 39.685 million**, a decrease from year-end, with accrued staff costs and rental deposits being major components Trade and Other Payables and Accruals | Item | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade payables | 4,324 | 5,031 | | Interest payable | 202 | 278 | | Other payables | 3,006 | 1,129 | | Legal and professional fees payable | 1,461 | 2,349 | | Rental deposits received | 12,008 | 10,638 | | Accrued staff costs | 6,219 | 16,031 | | Other accruals | 12,465 | 11,960 | | **Total** | **39,685** | **47,416** | Ageing Analysis of Trade Payables | Ageing | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0-30 days | 4,317 | 5,024 | | 31-60 days | 6 | 6 | | 61-90 days | 1 | 1 | [Bank Loans](index=38&type=section&id=Bank%20Loans) As of June 30, 2025, the Group's total secured bank loans amounted to **HKD 301.3 million**, a decrease from year-end, with all loans bearing floating interest rates at an effective annual rate of **5.19%** Bank Loan Status | Item | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Secured bank loans | 301,298 | 345,152 | | Repayable within one year | 251,298 | 227,152 | | Bank loans containing a repayment on demand clause | 50,000 | 118,000 | - All of the Group's bank loans are floating rate loans, with an effective annual interest rate of **5.19%** (December 31, 2024: **6.25%**)[73](index=73&type=chunk) [Share Capital](index=39&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid ordinary share capital remained consistent with year-end, totaling **8.947 billion** shares with a nominal value of **HKD 841.9 million** Ordinary Share Capital | Item | Number of Shares (Thousand shares) | Nominal Value (Thousand HKD) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (as at June 30, 2025) | 8,947,051 | 841,926 | [Related Party Transactions and Balances](index=39&type=section&id=Related%20Party%20Transactions%20and%20Balances) The Group engaged in various related party transactions, including short-term lease and interest expenses paid to its immediate holding company, and corporate management fee income received, with outstanding balances of **HKD 329.5 million** owed to the immediate holding company and **HKD 5.088 million** owed to Mr. Cheng Kai Man at period-end Related Party Transactions During the Period | Transacting Party | Type of Transaction | For the six months ended June 30, 2025 (Thousand HKD) | For the six months ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | | Magnificent Hotel Investments Limited and its subsidiaries | Short-term lease expenses | 520 | 520 | | Magnificent Hotel Investments Limited and its subsidiaries | Interest expense | 8,982 | 12,464 | | Magnificent Hotel Investments Limited and its subsidiaries | Corporate management fee income for administrative facilities provided | 2,323 | 2,307 | | Magnificent Realty Investment Holdings Limited | Corporate management fee income for administrative facilities provided | 75 | 75 | | Mr. Cheng Kai Man | Rental income from Mr. Cheng Kai Man | 420 | 420 | | Key management personnel | Remuneration | 6,651 | 6,684 | Related Party Balances at Period-End | Item | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Amounts due to immediate holding company | 329,541 | 347,390 | | Amounts due to Mr. Cheng Kai Man | 5,088 | 7,487 | - Amounts due to the immediate holding company are unsecured, bear interest at **5.20%** per annum, and are repayable on demand[75](index=75&type=chunk) [Pledges of Assets](index=40&type=section&id=Pledges%20of%20Assets) As of June 30, 2025, the Group's bank loan facilities were secured by investment properties, hotel properties, shares of certain subsidiaries, property rental income, and an insurance assignment for one investment property Carrying Value of Pledged Assets | Pledged Assets | As at June 30, 2025 (Thousand HKD) | As at December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Investment properties | Approx. 1,043,000 | 995,000 | | Hotel properties | Approx. 1,468,000 | 1,493,000 | | Net assets of certain subsidiaries pledged as security for shares | Approx. 713,000 | 629,000 | - Other pledges include assignments of property rental income from certain subsidiaries and an insurance assignment for one investment property[75](index=75&type=chunk) [Fair Value Measurement of Financial Instruments](index=41&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group's financial assets, such as equity investments at fair value through other comprehensive income, are measured at fair value and classified as Level 1, determined by quoted prices in active markets, while the carrying amounts of other financial assets and liabilities approximate their fair values Financial Assets Measured at Fair Value | Financial Assets | Fair Value as at June 30, 2025 (Thousand HKD) | Fair Value as at December 31, 2024 (Thousand HKD) | Fair Value Hierarchy | | :--- | :--- | :--- | :--- | | Equity investments at fair value through other comprehensive income | 79,912 | 92,204 | Level 1 | - Level 1 fair value measurements are derived from unadjusted quoted prices in active markets for identical assets or liabilities[78](index=78&type=chunk) - The directors of the Company consider that the carrying amounts of other financial assets and financial liabilities recorded at amortised cost approximate their fair values[77](index=77&type=chunk)

Financial Performance - For the six months ended June 30, 2025, the revenue decreased by 25.4% to RMB 18,520,559,000 compared to RMB 24,816,532,000 in the same period of 2024[20] - Gross profit for the same period was RMB 3,849,743,000, reflecting a decline of 13.7% from RMB 4,459,982,000 in 2024[20] - The loss attributable to owners of the parent was RMB 3,479,512,000, a slight improvement of 5.5% compared to RMB 3,682,268,000 in the previous year[20] - Basic and diluted loss per share was RMB (82.4) cents, which is a 5.5% improvement from RMB (87.2) cents in 2024[20] - Revenue decreased by 25.4% from approximately RMB24,816,532,000 in the first half of 2024 to approximately RMB18,520,559,000 in the first half of 2025, primarily due to a decrease in property sales income[62] - Income from property sales decreased by 26.9% from approximately RMB23,925,857,000 in the first half of 2024 to approximately RMB17,482,222,000 in the first half of 2025, attributed to a decrease in delivered property area and average unit selling price[63] - Delivered property area decreased by 3.4% from 1,513,368 sq.m. in the first half of 2024 to 1,461,452 sq.m. in the first half of 2025, while the average unit selling price fell from RMB15,810 per sq.m. to RMB11,962 per sq.m.[63] Assets and Liabilities - Total assets decreased by 14.6% to RMB 109.51 billion as of June 30, 2025, compared to RMB 128.29 billion at the end of 2024[22] - The total liabilities decreased by 12.9% to RMB 102.51 billion as of June 30, 2025, from RMB 117.72 billion at the end of 2024[22] - The cash and bank balances decreased by 14.6% to RMB 3.46 billion compared to RMB 4.05 billion at the end of 2024[22] - The Group's investment properties decreased to RMB 15,873,300,000 as of June 30, 2025, from RMB 17,329,400,000 as of December 31, 2024, a decline of approximately 8.4%[98] - Properties under development fell to RMB 33,945,342,000 as of June 30, 2025, down from RMB 44,598,089,000 as of December 31, 2024, representing a decrease of about 23.9%[98] - The total borrowings of the Group as of June 30, 2025, amounted to RMB 34,570,203,000, a slight decrease from RMB 35,418,566,000 as of December 31, 2024, indicating a reduction of about 2.4%[92] Sales and Market Performance - Contracted sales for the first half of 2025 amounted to approximately RMB 3.743 billion, representing a significant year-on-year decrease of 38.9%[27] - The average selling price of properties during the period was RMB 8,120 per sq.m[27] - The sales amount of newly developed national commodity houses in the first half of 2025 was approximately RMB 4,424.1 billion, a decline of 5.5% year-on-year[25] - The Group ranked 18th in the "Top Delivery Volume Rankings for Typical Chinese Real Estate Developers" in the first half of 2025, indicating its commitment to delivery[28] - The Yangtze River Delta Economic Zone accounted for approximately 29.9% of total contracted sales, with an amount of RMB 1.120 billion[41] - Contracted sales in first-tier cities totaled RMB 291 million, representing 7.8% of total contracted sales[41] Operational Strategy - The Company continues to implement a prudent development strategy to secure its regional leading position in various economic zones[7] - The Company focuses on property development, commercial management, property management, and long-term rental apartments as its core business areas[5] - The Company aims to create smart living solutions to enhance customer satisfaction and happiness[6] - Future strategies include market expansion and potential mergers and acquisitions to strengthen its market position[6] - The Group will adopt a price-driven operation strategy to accelerate inventory turnover and stabilize gross profit margins[58] - The Group aims to enhance operational efficiency and brand value through refined business layout and synergy across segments[59] Corporate Governance - The Company is committed to high standards of corporate governance to enhance operational efficiency and safeguard shareholder interests[149] - The Audit Committee, established on January 6, 2010, comprises three independent non-executive Directors and oversees the Group's financial reporting and risk management[153] - The chairman of the Audit Committee has considerable experience in accounting and financial management, aligning with regulatory requirements[152] - The roles of chairman and chief executive officer are performed by the same individual, which the Board believes enhances consistency and efficiency in decision-making[150] Shareholder Information - Mr. Wong Chiu Yeung held a beneficial interest of 2,120,500,000 shares, representing 50.21% of the Company's issued share capital as of June 30, 2025[122] - Mr. Cheng Hiu Lok held a beneficial interest of 230,230,000 shares, representing 5.45% of the Company's issued share capital as of June 30, 2025[122] - Newup Holdings Limited holds 1,660,040,000 shares, accounting for 39.31% of the company's issued share capital[132] - As of June 30, 2025, no other directors or chief executives have registered interests in the company's shares[129] Debt and Financing - The Company has approximately RMB17.445 billion in defaulted or cross-defaulted principal of offshore senior notes and interest-bearing borrowings as of June 30, 2025[180] - The Company has pledged 504,000,000 shares, representing about 26.0% of its issued share capital, as collateral under the 2023 Facility Agreement[174] - The Company has not made a payment of approximately US$61 million in principal and interest under the 2021 Facility Agreement, resulting in an event of default[177] - Events of default under the 2023 Facility Agreement are ongoing and have not been waived[187] Employment and Human Resources - The total employment cost for the Group during the review period was approximately RMB 418,175,000, with a total of 5,860 employees as of June 30, 2025[113]

INTERIM REPORT 中期報告 2025 粵 海 置 地 控 股 有 限 公 司 GUANGDONG LAND HOLDINGS LIMITED 目錄 | | 頁次 | | --- | --- | | 公司資料 | 2 | | 摘要 | 3 | | 管理層之討論及分析 | 4 | | 董事的證券權益及淡倉 | 17 | | 主要股東權益 | 18 | | 企業管治及其他資料 | 19 | | 審閱報告 | 23 | | 未經審核中期財務報告 | | | 綜合損益表 | 24 | | 綜合全面收益表 | 25 | | 綜合財務狀況表 | 26 | | 綜合權益變動表 | 28 | | 綜合現金流量表 | 29 | | 未經審核中期財務報告附註 | 30 | 粤海置地控股有限公司 中期報告2025 1 公司資料 （於2025年8月25日） 董事會 執行董事 鍾育彬 （主席） 王健 （董事總經理） 非執行董事 温引珩 王蘇荣 李文昌 獨立非執行董事 方和 銅紫荊星章，太平紳士 李君豪 中國人民政治協商會議全國委員會（中國政協）委員， 銅紫荊星章，比利時官佐勳銜 梁聯昌 審核委員會 李君豪 中國人民政治協商會 ...

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20%26%20Committees) This section details the composition of the company's Board of Directors and its various committees, including audit, remuneration, nomination, risk control, and sustainability - Board members include executive directors Zhang Ping (Chairman) and Lu Zhenwei, non-executive directors Liu Guoxi, Su Yongjian, Li Hao, Huang Jiao, Wang Cheng, and independent non-executive directors Jin Xinbin, Zhu Jianbiao, Zeng Ming, and Liu Jingwei[3](index=3&type=chunk)[4](index=4&type=chunk) - Mr. Liu Jingwei serves as Chairman of the Audit and Remuneration Committees, while Mr. Zhang Ping chairs the Nomination, Risk Control, and Sustainability Committees[3](index=3&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Details](index=4&type=section&id=Company%20Details) This section provides essential company information, including auditors, legal advisors, share registrar, registered office, and principal place of business in Hong Kong - The auditor is Grant Thornton Hong Kong Limited[7](index=7&type=chunk)[8](index=8&type=chunk) - Legal advisors include Conyers Dill & Pearman (Bermuda), Jones Day (Hong Kong), and Beijing Yingke Law Firm, Beijing Zhongce Law Firm (Mainland China)[7](index=7&type=chunk)[8](index=8&type=chunk) - The Hong Kong share registrar and transfer office is Computershare Hong Kong Investor Services Limited[7](index=7&type=chunk)[8](index=8&type=chunk) [Principal Bankers and Company Website](index=5&type=section&id=Principal%20Bankers%20%26%20Website) This section lists the company's principal bankers, which are major financial institutions in and outside China, and provides the official company website - Principal bankers include Agricultural Bank of China, Bank of China, China CITIC Bank, China Construction Bank, China Everbright Bank, China Guangfa Bank, China Merchants Bank, Hua Xia Bank, Industrial and Commercial Bank of China, Industrial Bank, Ping An Bank, Shanghai Pudong Development Bank, The Bank of East Asia, The Export-Import Bank of China, and The Hongkong and Shanghai Banking Corporation[9](index=9&type=chunk)[10](index=10&type=chunk) - The company's website is http://www.bjei.com[10](index=10&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=6&type=section&id=Business%20Review) The Group aims to be an international clean energy ecosystem investor and operator, focusing on developing, investing, operating, and managing power plants and other clean energy projects, significantly expanding its clean energy business and generation capacity during the period [Investment Locations and Portfolio Diversification](index=6&type=section&id=Investment%20Locations%20and%20Portfolios) The company develops, invests in, operates, and manages power plants and other clean energy projects, aspiring to be a respected international clean energy ecosystem investor and operator - The Group primarily engages in the development, investment, operation, and management of power plants and other clean energy projects[11](index=11&type=chunk)[14](index=14&type=chunk) - The strategic goal is to become the most respected international clean energy ecosystem investor and operator[11](index=11&type=chunk)[14](index=14&type=chunk) [Power Plant Projects Overview](index=6&type=section&id=Power%20Plant%20Projects%20Overview) The Group actively expands its solar, wind, hydro, and energy storage businesses through self-development and M&A, achieving significant growth in grid-connected capacity by June 30, 2025, primarily diversified across 28 provinces in China - The Group accelerates the expansion of its clean energy portfolio through self-development and acquisitions, focusing on solar, wind, hydro, and energy storage businesses[12](index=12&type=chunk)[15](index=15&type=chunk) Changes in Power Plant Count and Grid-Connected Capacity | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Solar Power Plants (units) | 187 | 166 | Increased by 21 units | | Wind Power Plants (units) | 39 | 38 | Increased by 1 unit | | Hydro Power Plants (units) | 26 | 26 | No change | | Energy Storage Plants (units) | 3 | 3 | No change | | Total Grid-Connected Capacity (MW) | Approx. 13,692 | Approx. 12,639 | Increased by approx. 1,053 | - Except for a few power plants in Australia and Vietnam, all others are located across 28 different provinces in China, achieving diversified布局[12](index=12&type=chunk)[15](index=15&type=chunk) [Other Clean Energy Projects](index=7&type=section&id=Other%20Clean%20Energy%20Projects) The Group holds development rights for approximately 5 GW of hydropower in Tibet, awaiting preliminary approvals, and will continue to focus on solar, wind, hydro, and energy storage while optimizing its asset structure for long-term multi-energy supply - The Group holds hydropower development rights with an estimated capacity of **5 GW**, with 75% indirectly held by the company and 25% by the Tibet Autonomous Region People's Government[17](index=17&type=chunk)[20](index=20&type=chunk) - In the short term, the Group will continue to focus on developing solar, wind, hydro, and energy storage businesses, continuously improving its asset structure to achieve long-term diversified energy supply[18](index=18&type=chunk)[20](index=20&type=chunk) [Electricity Generation Performance](index=7&type=section&id=Electricity%20Generation%20Performance) During the period, the total electricity generation from power plants held by the company's subsidiaries significantly increased by 51.7%, with all plants grid-connected and operating stably Total Electricity Generation Change | Metric | H1 2025 | H1 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Total Electricity Generation (MWh) | Approx. 11,514,751 | Approx. 7,590,356 | Approx. 51.7% | [Power Plant Summary and Location-Based Data](index=8&type=section&id=Power%20Plant%20Summary%20Tables) This section provides detailed data for the Group's and its associates' power plants, including number of plants, grid-connected capacity, generation volume, weighted average utilization hours, and generation revenue and average tariff by geographical location Subsidiary Power Plant Summary (Six Months Ended June 30, 2025) | Type | Number of Power Plants | Approx. Grid-Connected Capacity (MW) | Electricity Generation (MWh) | Weighted Average Utilization Hours (Hours) | | :--- | :--- | :--- | :--- | :--- | | Solar Power Plants | 187 | 7,958 | 4,863,871 | 616 | | Wind Power Plants | 39 | 4,432 | 5,177,066 | 1,179 | | Hydro Power Plants | 26 | 952 | 1,348,606 | 1,416 | | Energy Storage Plants | 3 | 350 | 125,208 | 358 | | **Total** | **255** | **13,692** | **11,514,751** | **-** | Associate Power Plant Summary (Six Months Ended June 30, 2025) | Type | Number of Power Plants | Approx. Grid-Connected Capacity (MW) | Electricity Generation (MWh) | Weighted Average Utilization Hours (Hours) | | :--- | :--- | :--- | :--- | :--- | | Solar Power Plants | 3 | 34 | 23,197 | 975 | | Wind Power Plants | 3 | 476 | 598,821 | 1,265 | | Hydro Power Plants | 2 | 352 | 466,692 | 1,328 | | **Total** | **8** | **862** | **1,088,710** | **-** | Power Plant Data by Location (Six Months Ended June 30, 2025) | Location | Approx. Grid-Connected Capacity (MW) | Electricity Generation (MWh) | Electricity Generation Revenue (RMB million) | Average Tariff (RMB per kWh) | | :--- | :--- | :--- | :--- | :--- | | Inner Mongolia, China | 3,235 | 3,535,039 | 1,031 | 0.29 | | Yunnan, China | 1,946 | 2,071,431 | 520 | 0.25 | | Hebei, China | 1,555 | 956,798 | 323 | 0.34 | | Australia | 592 | 412,005 | 146 | 0.35 | | Vietnam | 46 | 36,035 | 22 | 0.62 | | **Total** | **14,544** | **12,603,461** | **4,494** | **0.36** | [Financing](index=10&type=section&id=Financing) The Group actively explores diversified financing channels to reduce capital costs and enhance financing capabilities, significantly lowering its weighted average annual interest rate through refinancing high-interest loans and issuing perpetual medium-term notes Weighted Average Annual Interest Rate for Bank and Other Borrowings | Metric | H1 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Weighted Average Annual Interest Rate | Approx. 3.17% | Approx. 3.73% | Decreased by 0.56 percentage points | - The decrease in weighted average annual interest rate is primarily due to the Group refinancing high-interest loans with low-interest RMB borrowings and benefiting from decreases in benchmark rates like LPR and SOFR[30](index=30&type=chunk)[33](index=33&type=chunk) - During the period, the Group completed the issuance of two tranches of perpetual medium-term notes, totaling **RMB 900 million** and **RMB 600 million**, with fixed distribution rates of **2.47%** and **2.38%**, respectively, with net proceeds used to repay domestic borrowings[31](index=31&type=chunk)[33](index=33&type=chunk) - Jingneng Development secured **RMB 1,500 million** and **RMB 1,050 million** through private placement perpetual medium-term notes via investment agreements with China Life Investment and Allianz Insurance, respectively, for working capital and debt repayment[32](index=32&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[39](index=39&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) During the period, the Group's net profit slightly increased, while revenue and EBITDA significantly grew due to expanded grid-connected capacity and efficient operations; average tariff decreased due to a higher proportion of grid-parity projects, and finance costs slightly reduced from refinancing activities [Net Profit, Revenue, and EBITDA](index=11&type=section&id=Net%20Profit%2C%20Revenue%20and%20EBITDA) During the period, the Group's net profit slightly increased, while revenue and EBITDA significantly grew due to expanded grid-connected capacity and efficient operations Key Financial Indicators (Six Months Ended June 30, 2025) | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Net Profit | 293 | 292 | Increased by 1 | | Revenue | 4,086 | 3,272 | Increased by 814 | | EBITDA | 3,276 | 2,686 | Increased by 590 | - The increase in revenue and EBITDA is primarily attributable to: (i) the expansion of grid-connected capacity from approximately **10,045 MW** as of June 30, 2024, to approximately **13,692 MW** as of June 30, 2025, an increase of approximately **36.3%** through self-developed power plants; and (ii) effective operation and management of power plants[37](index=37&type=chunk)[41](index=41&type=chunk) [Average Tariff per kWh](index=11&type=section&id=Average%20Tariff%20per%20kWh) The average tariff per kWh (excluding VAT) decreased during the period, mainly due to the continuous increase in grid-connected capacity of grid-parity solar and wind power projects, which do not include subsidies in their tariffs Average Tariff per kWh (Excluding VAT) | Metric | H1 2025 (RMB) | H1 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Average Tariff | Approx. 0.35 | Approx. 0.43 | Decreased by 0.08 | - The decrease in average tariff is mainly due to the continuous increase in grid-connected capacity of grid-parity solar and wind power projects, whose electricity generation proportion of total generation significantly increased, and whose tariffs do not include subsidies[38](index=38&type=chunk)[41](index=41&type=chunk) [Finance Costs](index=12&type=section&id=Finance%20Costs) Total finance costs slightly decreased during the period, primarily benefiting from the gradual refinancing of high-interest loans with low-interest RMB borrowings Total Finance Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Finance Costs | 1,099 | 1,105 | Decreased by 6 | - The decrease in finance costs is primarily due to the gradual refinancing of high-interest loans with low-interest RMB borrowings[43](index=43&type=chunk)[47](index=47&type=chunk) [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) The Group's operations in China are subject to a 25% PRC corporate income tax, with certain renewable energy project subsidiaries enjoying preferential tax exemptions - The statutory corporate income tax rate in China is **25%**[44](index=44&type=chunk)[48](index=48&type=chunk) - Certain subsidiaries of renewable energy projects have been granted preferential tax exemptions[44](index=44&type=chunk)[48](index=48&type=chunk) [Trade, Bills, and Tariff Adjustment Receivables](index=12&type=section&id=Trade%2C%20Bills%20and%20Tariff%20Adjustment%20Receivables) This section details trade, bills, and tariff adjustment receivables, with tariff adjustment receivables primarily representing government subsidies for renewable energy projects, and provides total amounts and aging analysis by invoice date Details of Trade, Bills, and Tariff Adjustment Receivables (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Receivables | 881 | 590 | | Tariff Adjustment Project List | 9,021 | 6,906 | | Other Tariff Adjustments | 624 | 559 | | **Total** | **10,526** | **8,055** | - Tariff adjustment receivables primarily refer to central government subsidies for renewable energy projects collected from State Grid and Inner Mongolia Power, based on power purchase agreements and current national government policies[49](index=49&type=chunk)[200](index=200&type=chunk) Aging Analysis of Unbilled and Tariff Adjustment Receivables (RMB million) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 3,341 | 3,188 | | One to two years | 2,219 | 1,750 | | Two to three years | 1,428 | 968 | | Over three years | 3,472 | 2,096 | | **Total** | **10,460** | **8,002** | [Liquidity, Financial Resources, Gearing Ratio, and Capital Structure](index=13&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20Gearing%20Ratio%20and%20Capital%20Structure) The Group is committed to reducing funding costs and improving liquidity through diversified financing channels and hedging instruments to manage financial risks; during the period, the gearing ratio decreased due to increased equity from perpetual medium-term note issuance, indicating an improved financial structure [Bank and Other Borrowings](index=13&type=section&id=Bank%20and%20Other%20Borrowings) The Group actively seeks financing and refinancing opportunities to reduce funding costs and improve liquidity, with this section providing the maturity and currency breakdown of bank and other borrowings Maturity and Currency Breakdown of Bank and Other Borrowings (RMB million) | Currency | Within one year | Second year | Three to five years | Six to ten years | After ten years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | RMB | 9,867 | 11,767 | 19,832 | 11,438 | 4,249 | 57,153 | | USD | 6,394 | 3,472 | – | – | – | 9,866 | | AUD | 1,890 | – | – | – | – | 1,890 | | HKD | 648 | – | – | – | – | 648 | | **Total** | **18,799** | **15,239** | **19,832** | **11,438** | **4,249** | **69,557** | [Key Performance Indicators](index=13&type=section&id=Key%20Performance%20Indicators) The Group measures business performance using key indicators such as EBITDA margin, debt-to-EBITDA ratio, operating cash flow-to-net debt ratio, and interest coverage ratio, with changes primarily driven by business scale expansion during the period Changes in Key Performance Indicators (Six Months Ended June 30, 2025) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | EBITDA Margin | Approx. 80% | Approx. 82% | Decreased by 2% | | Debt to EBITDA Ratio | Approx. 19.5 | Approx. 22.7 | Decreased by 3.2 | | Operating Cash Flow to Net Debt Ratio | Approx. 3.5% | Approx. 2.7% | Increased by 0.8% | | Interest Coverage Ratio | Approx. 2.98 | Approx. 2.61 | Increased by 0.37 | - The decrease in EBITDA margin is mainly due to the expansion of power generation business scale and additional operating expenses[55](index=55&type=chunk)[56](index=56&type=chunk) - The decrease in debt-to-EBITDA ratio, increase in operating cash flow-to-net debt ratio, and increase in interest coverage ratio are all primarily attributable to the expansion of the Group's business scale[54](index=54&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Capital Structure and Gearing Ratio](index=15&type=section&id=Capital%20Structure%20and%20Gearing%20Ratio) The Group monitors its capital structure; during the period, current liabilities exceeded current assets, but the gearing ratio decreased due to increased equity from perpetual medium-term note issuance, and the Group will continue efforts to reduce it through deleveraging and co-investments with strategic partners Capital Structure (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | Approx. 19,581 | Approx. 16,602 | | Current Liabilities | Approx. 26,515 | Approx. 28,976 | | Net Debt | 63,848 | 62,978 | | Total Equity | 25,460 | 22,660 | | Total Capital | 89,308 | 85,638 | | Gearing Ratio | 71.5% | 73.5% | - The decrease in gearing ratio is primarily due to the increase in equity resulting from the issuance of perpetual medium-term notes[69](index=69&type=chunk)[70](index=70&type=chunk) - The Group will strive to reduce its gearing ratio through deleveraging debt, including co-investing in power plants with strategic business partners to reduce capital expenditure[69](index=69&type=chunk)[70](index=70&type=chunk) Cash Deposit Currency Distribution (June 30, 2025, RMB million) | Currency | Pledged Deposits | Restricted Cash | Cash and Bank Balances | Total | | :--- | :--- | :--- | :--- | :--- | | RMB | 243 | 148 | 3,770 | 4,161 | | USD | 52 | – | 1,008 | 1,060 | | HKD | 1 | 10 | 267 | 278 | | VND | – | – | 115 | 115 | | AUD | – | 6 | 74 | 80 | | **Total** | **296** | **164** | **5,234** | **5,694** | [Other Management Information](index=17&type=section&id=Other%20Management%20Information) This section covers the Group's lack of material acquisitions or disposals during the reporting period, reliance on key customers, asset charges, employee and remuneration policies, exchange rate fluctuation risks and hedging measures, and contingent liabilities [Material Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=17&type=section&id=Material%20Acquisitions%20and%20Disposals) During the period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[74](index=74&type=chunk)[79](index=79&type=chunk) [Performance and Future Prospects of Significant Investments and Future Plans for Major Investments or Capital Assets](index=17&type=section&id=Significant%20Investments%20and%20Future%20Plans) As of June 30, 2025, the Group held no significant investments or capital assets and will actively seek suitable investment opportunities with promising prospects to enhance future financial performance and profitability - As of June 30, 2025, the Group held no significant investments or capital assets[75](index=75&type=chunk)[80](index=80&type=chunk) - The Group will closely monitor changing market conditions and actively seek suitable investment opportunities with promising prospects to enhance future financial performance and profitability[75](index=75&type=chunk)[80](index=80&type=chunk) [Material Reliance on Key Customers](index=17&type=section&id=Material%20Reliance%20on%20Key%20Customers) The Group's electricity sales business in China is materially reliant on subsidiaries of State Grid Corporation of China and Inner Mongolia Power (Group) Co., Ltd - The main customers for electricity sales in China are subsidiaries of State Grid Corporation of China and Inner Mongolia Power (Group) Co., Ltd[76](index=76&type=chunk)[81](index=81&type=chunk) Reliance on Key Customers for Receivables (June 30, 2025) | Customer | Percentage of Total Trade, Bills, and Tariff Adjustment Receivables | | :--- | :--- | | State Grid Subsidiaries | Approx. 74.5% | | Inner Mongolia Power Subsidiaries | Approx. 17.9% | [Charge on Assets](index=17&type=section&id=Charge%20on%20Assets) As of June 30, 2025, approximately 30.5% of the Group's bank and other borrowings were secured by pledges of certain power generation modules and equipment, guarantee deposits, electricity sales collection rights, and/or shares/equity in certain subsidiaries - As of June 30, 2025, approximately **30.5%** of the Group's bank and other borrowings were secured by pledges of certain power generation modules and equipment, guarantee deposits, collection rights for electricity sales of certain subsidiaries, and/or pledges of shares/equity in certain Group subsidiaries[78](index=78&type=chunk)[82](index=82&type=chunk) [Employees and Remuneration Policies](index=18&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group had 1,918 full-time employees, with total employee benefit expenses of approximately RMB 279 million, offering competitive compensation and benefits with regular reviews to motivate staff Employee Count and Benefit Expenses | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Full-time Employees (units) | 1,918 | 1,856 | | Total Employee Benefit Expenses (RMB million) | Approx. 279 | Approx. 251 | - Employee remuneration is determined based on job nature, individual qualifications, performance, work experience, and market trends, with additional medical insurance, discretionary bonuses, training programs, and share option schemes provided[84](index=84&type=chunk)[87](index=87&type=chunk) [Exchange Rate Fluctuations and Related Hedges](index=18&type=section&id=Exchange%20Rate%20Fluctuations%20and%20Hedges) The Group primarily operates in Mainland China and Hong Kong, with most transactions settled in RMB, HKD, and USD; exchange rate fluctuation risk mainly arises from conversion to the presentation currency, and the Group uses cross-currency swaps to hedge foreign exchange and interest rate risks - The Group primarily operates in Mainland China and Hong Kong, with most transactions settled in RMB, HKD, and USD[85](index=85&type=chunk)[88](index=88&type=chunk) - Exchange rate fluctuation risk primarily arises from conversion to the Group's presentation currency, as the USD and HKD exchange rates are pegged under the linked exchange rate system[85](index=85&type=chunk)[88](index=88&type=chunk) - The Group holds derivative financial instruments (i.e., cross-currency swaps) to hedge foreign exchange and interest rate fluctuation risks on bank borrowings[63](index=63&type=chunk)[65](index=65&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) [Contingent Liabilities](index=18&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no other material contingent liabilities - As of June 30, 2025, the Group had no other material contingent liabilities beyond those disclosed in this interim report[86](index=86&type=chunk)[89](index=89&type=chunk) [Material Events After Statement of Financial Position Date](index=19&type=section&id=Material%20Events%20After%20Financial%20Position%20Date) In July 2025, the Group, through Jingneng Development, entered into a trust agreement with Industrial Bank International Trust Co., Ltd. to establish a trust for issuing asset-backed commercial papers totaling approximately RMB 2,000 million - In July 2025, Jingneng Development entered into a trust agreement with Industrial Bank International Trust Co., Ltd. to establish a trust for issuing asset-backed commercial papers totaling approximately **RMB 2,000 million** through the National Association of Financial Market Institutional Investors[90](index=90&type=chunk)[94](index=94&type=chunk)[282](index=282&type=chunk)[285](index=285&type=chunk) [Prospects](index=19&type=section&id=Prospects) 2025 marks the final year of the "14th Five-Year Plan" and a critical period for the company's high-quality development, transitioning to a balanced asset operation and development approach, expanding diversified businesses, and focusing on quality improvement, efficiency enhancement, and comprehensive cost control to achieve a "green-led, multi-energy complementary, smart collaborative" clean energy industrial ecosystem - 2025 is the final year of implementing the "14th Five-Year Plan" and a critical year for the company to enter a stage of high-quality development[91](index=91&type=chunk)[95](index=95&type=chunk) - Strategically, the company will shift from heavy asset holding to a balanced asset operation and development approach, exploring light asset development and operation models with comprehensive project development costs and regional consumption as key considerations[93](index=93&type=chunk)[95](index=95&type=chunk) - In business expansion, the company will deepen its hydropower business (Yunnan, Zayu River Basin in Tibet), steadily advance gas turbine businesses (Yangxi, Jiangmen in Guangdong, Dazu in Chongqing), transition comprehensive energy businesses to light assets, and track green hydrogen business development[97](index=97&type=chunk)[100](index=100&type=chunk) - Operationally, the focus will be on improving quality and efficiency, guided by profit contribution, comprehensive cost control, strict control of engineering costs, thorough post-project evaluation, enhancing regional benchmarking, emphasizing electricity spot trading, and introducing equity financing to reduce funding costs[98](index=98&type=chunk)[101](index=101&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, showing the Group's revenue, expenses, EBITDA, profit before income tax, profit for the period, and earnings per share and dividend information Interim Condensed Consolidated Statement of Profit or Loss Key Data (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Electricity Sales | 2,945 | 2,094 | | Tariff Subsidies | 1,141 | 1,178 | | **Revenue** | **4,086** | **3,272** | | Employee Benefit Expenses | (279) | (251) | | Operation and Maintenance Costs | (232) | (150) | | Professional Fees | (85) | (48) | | Taxes and Surcharges | (48) | (28) | | Other Expenses | (224) | (156) | | **EBITDA** | **3,276** | **2,686** | | Depreciation of Property, Plant and Equipment | (1,683) | (1,102) | | Finance Costs | (1,099) | (1,105) | | Share of Profits of Investments Accounted for Using Equity Method | 40 | 17 | | **Profit Before Income Tax** | **448** | **434** | | Income Tax Expense | (155) | (142) | | **Profit for the Period** | **293** | **292** | | Profit Attributable to Equity Holders of the Company | 173 | 33 | | Non-controlling Interests | 120 | 259 | | Basic and Diluted Earnings Per Share (RMB cents) | 7.87 | 1.48 | | Dividends (RMB million) | 193 | 196 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the unaudited condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, showing profit for the period and other comprehensive income/(loss), primarily including currency translation differences Interim Condensed Consolidated Statement of Comprehensive Income Key Data (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period | 293 | 292 | | Currency Translation Differences | 195 | (134) | | Other Comprehensive Income/(Loss) for the Period, Net of Tax | 195 | (134) | | **Total Comprehensive Income for the Period** | **488** | **158** | | Total Comprehensive Income/(Loss) for the Period Attributable to Equity Holders of the Company | 368 | (101) | | Non-controlling Interests | 120 | 259 | [Interim Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the unaudited condensed consolidated statement of financial position as of June 30, 2025, detailing the Group's assets, equity, and liabilities, showing growth in total assets and equity, while current liabilities continue to exceed current assets Interim Condensed Consolidated Statement of Financial Position Key Data (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | 76,091 | 75,749 | | Right-of-Use Assets | 2,940 | 2,858 | | Trade, Bills and Tariff Adjustment Receivables | 10,525 | 8,054 | | Cash and Cash Equivalents | 5,398 | 5,195 | | **Total Non-Current Assets** | **86,046** | **85,867** | | **Total Current Assets** | **19,581** | **16,602** | | **Total Assets** | **105,627** | **102,469** | | Perpetual Medium-Term Notes | 13,322 | 10,777 | | Non-controlling Interests | 7,273 | 7,133 | | **Total Equity** | **25,460** | **22,660** | | Bank and Other Borrowings (Non-Current) | 50,758 | 47,936 | | Bank and Other Borrowings (Current) | 18,784 | 20,646 | | **Total Non-Current Liabilities** | **53,652** | **50,833** | | **Total Current Liabilities** | **26,515** | **28,976** | | **Total Liabilities** | **80,167** | **79,809** | | **Total Equity and Liabilities** | **105,627** | **102,469** | - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately **RMB 6,934 million**[125](index=125&type=chunk)[129](index=129&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the unaudited condensed consolidated statement of changes in equity for the six months ended June 30, 2025, detailing movements in various equity components, including share capital, reserves, perpetual medium-term notes, and non-controlling interests Summary of Changes in Equity (RMB million) | Metric | January 1, 2025 | Profit for the Period | Other Comprehensive Income | Dividends Declared | Profit Attributable to Perpetual Medium-Term Note Holders | Distributions to Perpetual Medium-Term Note Holders | Share-Based Payments | Lapse of Share Options | Capital Contribution from Non-Controlling Interests | Dividends Declared to Non-Controlling Interests | Safety Production Reserve | Transfer to Statutory Reserve | Issuance of Perpetual Medium-Term Notes | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 1,915 | – | – | – | – | – | – | – | – | – | – | – | – | 1,915 | | Reserves | 999 | 173 | 195 | (193) | (87) | – | 1 | 8 | – | – | 26 | – | – | 1,055 | | Perpetual Medium-Term Notes | 10,777 | – | – | – | 87 | (87) | – | – | – | – | – | – | 2,545 | 13,322 | | Non-controlling Interests | 7,133 | 120 | – | – | – | – | – | – | 33 | (13) | – | – | – | 7,273 | | **Total Equity** | **22,660** | **293** | **195** | **(193)** | **–** | **(87)** | **1** | **8** | **33** | **(13)** | **26** | **–** | **2,545** | **25,460** | [Interim Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, detailing net cash flows from operating, investing, and financing activities Interim Condensed Consolidated Statement of Cash Flows Key Data (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 715 | 1,273 | | Net Cash Outflow from Investing Activities | (2,341) | (7,012) | | Net Cash Inflow from Financing Activities | 1,802 | 8,052 | | Net Increase in Cash and Cash Equivalents | 176 | 2,313 | | Cash and Cash Equivalents at End of Period | 5,398 | 8,539 | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) [General Information](index=30&type=section&id=General%20Information) The company, incorporated in Bermuda, primarily develops, invests in, operates, and manages power plants and other clean energy projects, with Beijing Energy Investment Group (Hong Kong) Co., Ltd. as its direct controlling shareholder and Jingneng Group as the ultimate controlling shareholder - The company is incorporated in Bermuda, and its ordinary shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[117](index=117&type=chunk)[122](index=122&type=chunk) - Beijing Energy Investment Group (Hong Kong) Co., Ltd. is the direct controlling shareholder, holding approximately **32.14%** of the issued share capital, and its parent company, Jingneng Group, is a Chinese state-owned enterprise indirectly wholly owned by the Beijing State-owned Assets Supervision and Administration Commission[118](index=118&type=chunk)[122](index=122&type=chunk) - The Group primarily engages in the development, investment, operation, and management of power plants and other clean energy projects[119](index=119&type=chunk)[123](index=123&type=chunk) [Basis of Preparation](index=30&type=section&id=Basis%20of%20Preparation) This financial information is prepared in accordance with the Listing Rules and HKAS 34, using the historical cost convention; despite significant uncertainty from current liabilities exceeding current assets, management has plans to ensure going concern, and the adoption of revised HKAS 21 during the period had no material impact [Going Concern](index=31&type=section&id=Going%20Concern) As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately RMB 6,934 million, with substantial short-term borrowings maturing; management has formulated plans, including successful issuance of perpetual medium-term notes, securing long-term bank borrowings, loan support from Jingneng Group, and unutilized credit guarantee facilities, to ensure its ability to continue as a going concern - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **RMB 6,934 million**, with total bank and other borrowings of approximately **RMB 69,542 million**, of which approximately **RMB 18,784 million** are due for repayment within the next twelve months[125](index=125&type=chunk)[129](index=129&type=chunk) - The Group successfully issued **RMB 450 million** in perpetual medium-term notes and secured approximately **RMB 1,565 million** in long-term bank and other borrowings[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - The Group obtained loan support of approximately **RMB 6,815 million** from Jingneng Group and its subsidiaries and is utilizing unutilized credit guarantee facilities provided by Jingneng Group to raise approximately **RMB 5,196 million** in new financing[131](index=131&type=chunk) - The Directors believe that, given the aforementioned plans and measures, the Group will have sufficient working capital to meet its financial obligations for the next twelve months and are satisfied that preparing the financial statements on a going concern basis is appropriate[132](index=132&type=chunk)[135](index=135&type=chunk) [Changes in Accounting Policies and Disclosures](index=34&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) During the period, the adoption of revised HKAS 21 "Lack of Exchangeability" had no material impact on the Group's financial position or performance, and other newly issued but not yet effective HKFRSs are also not expected to have a significant impact upon future adoption - During the period, the revised HKAS 21 "Lack of Exchangeability," effective from January 1, 2025, was adopted[137](index=137&type=chunk)[141](index=141&type=chunk) - The adoption of this revised HKFRS had no material impact on the Group's financial position and performance and/or disclosures of financial information for the current and prior periods[139](index=139&type=chunk)[141](index=141&type=chunk) - Newly issued but not yet effective HKFRSs, including HKFRS 18 and HKFRS 19, are not expected to have a material impact on the Group's financial statements upon future adoption[142](index=142&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) [Critical Accounting Estimates and Assumptions](index=36&type=section&id=Critical%20Accounting%20Estimates%20and%20Assumptions) The significant judgments and key sources of estimation uncertainty used in preparing this financial information are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024 - The significant judgments made by management and the key sources of estimation uncertainty used in preparing the financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[148](index=148&type=chunk)[149](index=149&type=chunk)[153](index=153&type=chunk) [Financial Risk Management](index=36&type=section&id=Financial%20Risk%20Management) The Group faces market risks (including foreign exchange risk and cash flow interest rate risk), credit risk, and liquidity risk; to mitigate foreign exchange and cash flow interest rate risks, the Group uses cross-currency swaps to convert floating-rate foreign currency borrowings into fixed-rate RMB borrowings - The Group's operations expose it to market risks (including foreign exchange risk and cash flow interest rate risk), credit risk, and liquidity risk[150](index=150&type=chunk)[154](index=154&type=chunk) - The Group primarily operates in Mainland China, with transactions mainly denominated and settled in RMB, but also operates in other overseas markets, facing foreign exchange risk[151](index=151&type=chunk)[154](index=154&type=chunk) - The Group uses cross-currency swaps to convert floating-rate foreign currency borrowings into fixed-rate RMB borrowings to mitigate foreign exchange risk and cash flow interest rate risk[155](index=155&type=chunk)[159](index=159&type=chunk) [Revenue and Segment Information](index=37&type=section&id=Revenue%20and%20Segment%20Information) The Group's operating segments are categorized by solar, wind, hydro power generation, and other businesses; during the period, solar power generation contributed the largest share of revenue, with China being the primary revenue source, and the Group exhibits high reliance on key customers like State Grid and Inner Mongolia Power [Business Segments](index=37&type=section&id=Business%20Segments) The Group's operating segments include solar, wind, and hydro power generation businesses, and other activities; during the period, solar power generation contributed the highest revenue and segment results - The Group's operating segments include solar power generation business, wind power generation business, hydro power generation business, and others (including energy storage business, corporate revenue and expenses, other direct investments, etc.)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) Business Segment Revenue and Results (Six Months Ended June 30, 2025, RMB million) | Segment | Revenue | Segment Results | | :--- | :--- | :--- | | Solar Power Generation Business | 2,161 | 1,115 | | Wind Power Generation Business | 1,529 | 660 | | Hydro Power Generation Business | 330 | 130 | | Other | 66 | (359) | | **Total** | **4,086** | **1,546** | Business Segment Assets and Liabilities (June 30, 2025, RMB million) | Segment | Segment Assets | Investments in Associates | Segment Liabilities | | :--- | :--- | :--- | :--- | | Solar Power Generation Business | 44,581 | 133 | 20,148 | | Wind Power Generation Business | 36,022 | 1,365 | 18,998 | | Hydro Power Generation Business | 9,167 | 303 | 5,435 | | Other | 10,028 | 197 | 32,496 | | **Total** | **99,798** | **1,998** | **77,077** | [Geographical Segments](index=40&type=section&id=Geographical%20Segments) The Group's primary operating entities are located in China, which contributes the vast majority of revenue and non-current assets, with minor business contributions from Australia and Vietnam Revenue by Geographical Segment (Six Months Ended June 30, 2025, RMB million) | Region | Revenue | | :--- | :--- | | China | 3,918 | | Australia | 146 | | Vietnam | 22 | | **Total** | **4,086** | Non-Current Assets by Geographical Segment (June 30, 2025, RMB million) | Region | Non-Current Assets | | :--- | :--- | | China | 75,166 | | Australia | 7,321 | | Vietnam | 469 | | Hong Kong | 3 | | **Total** | **82,959** | [Information About Major Customers](index=41&type=section&id=Information%20About%20Major%20Customers) During the period, two customers each contributed over 10% to the Group's total revenue, primarily subsidiaries of State Grid or China Southern Power Grid Co., Ltd - During the period, the Group had **2 customers** (2024: 3 customers) each contributing over **10%** to the Group's total revenue[172](index=172&type=chunk)[173](index=173&type=chunk) Major Customer Revenue Contribution (Six Months Ended June 30, 2025, RMB million) | Customer | Revenue | | :--- | :--- | | Customer A | 2,833 | | Customer B | 513 | | Customer C | 315 | - The parent companies of the major customers are State Grid Corporation of China or China Southern Power Grid Co., Ltd[172](index=172&type=chunk)[173](index=173&type=chunk) [Finance Costs Note](index=41&type=section&id=Finance%20Costs_Note) This section details the composition of finance costs for the period, primarily including interest expenses on bank and other borrowings, loan financing fees, and interest expenses on lease liabilities Details of Finance Costs (Six Months Ended June 30, 2025, RMB million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Expense on Bank and Other Borrowings | 1,046 | 1,060 | | Loan Financing Fees for Bank and Other Borrowings | 20 | 19 | | Interest Expense on Lease Liabilities | 31 | 24 | | Interest Expense on Restoration Provisions | 2 | 2 | | **Total** | **1,099** | **1,105** | [Income Tax Expenses Note](index=42&type=section&id=Income%20Tax%20Expenses_Note) This section provides a breakdown of income tax expenses for the period, including current and deferred income tax, and reiterates the PRC corporate income tax rate and tax incentives for renewable energy projects Details of Income Tax Expenses (Six Months Ended June 30, 2025, RMB million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current Income Tax | 169 | 156 | | Deferred Income Tax | (14) | (14) | | **Total** | **155** | **142** | - The statutory corporate income tax rate in China is **25%**, with certain renewable energy project subsidiaries enjoying preferential tax exemptions[178](index=178&type=chunk)[179](index=179&type=chunk) [Earnings Per Share](index=43&type=section&id=Earnings%20Per%20Share) This section provides the basic and diluted earnings per share attributable to equity holders of the company, explaining adjustments made for the share consolidation's impact on the calculation Earnings Per Share (RMB cents) | Metric | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (RMB million) | 173 | 33 | | Weighted Average Number of Ordinary Shares (million shares) | 2,198 | 2,236 | | Basic Earnings Per Share | 7.87 | 1.48 | | Diluted Earnings Per Share | 7.87 | 1.48 | - The weighted average number of ordinary shares used to calculate basic and diluted earnings per share has been adjusted for the effect of the share consolidation effective from November 1, 2024[184](index=184&type=chunk)[185](index=185&type=chunk) - No exercise of share options was assumed in calculating diluted earnings for the period because the exercise price was higher than the average market price of the shares[187](index=187&type=chunk)[189](index=189&type=chunk) [Dividends](index=45&type=section&id=Dividends) During the period, the Board declared a final dividend of HKD 10.00 cents per ordinary share for 2024 but did not pay or declare any interim dividend for the current period Dividends Declared (RMB million) | Dividend Year | H1 2025 | H1 2024 | | :--- | :--- | :--- | | 2024 Final Dividend (HKD 10.00 cents per share) | 193 | – | | 2023 Final Dividend (HKD 1.00 cent per share) | – | 196 | - The company did not pay or declare any interim dividend for the current period[192](index=192&type=chunk)[193](index=193&type=chunk) [Property, Plant and Equipment](index=46&type=section&id=Property%2C%20Plant%20and%20Equipment) This section analyzes changes in property, plant, and equipment, including opening balance, additions, depreciation, and exchange differences, showing a slight overall increase in carrying value Changes in Property, Plant and Equipment (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At January 1 | 75,749 | 64,150 | | Additions | 1,820 | 13,428 | | Depreciation | (1,683) | (2,475) | | Exchange Differences | 205 | (417) | | **At End of Period** | **76,091** | **75,749** | [Leases](index=46&type=section&id=Leases) This section provides information on the Group's leases as a lessee, including right-of-use assets (land use rights and buildings) and lease liabilities (non-current and current portions) Lease-Related Assets and Liabilities (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land Use Rights | 2,780 | 2,737 | | Buildings | 160 | 121 | | **Total Right-of-Use Assets** | **2,940** | **2,858** | | Lease Liabilities (Non-Current) | 1,447 | 1,386 | | Lease Liabilities (Current) | 162 | 126 | | **Total Lease Liabilities** | **1,609** | **1,512** | [Trade, Bills, and Tariff Adjustment Receivables Note](index=47&type=section&id=Trade%2C%20Bills%20and%20Tariff%20Adjustment%20Receivables_Note) This section details the composition and aging analysis of trade receivables and tariff adjustment receivables; electricity sales receivables are typically settled within 1 to 6 months, and tariff adjustment receivables primarily represent government subsidies Trade, Bills, and Tariff Adjustment Receivables (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 881 | 587 | | Tariff Adjustment Receivables | 9,645 | 7,465 | | Bills Receivable | – | 3 | | Less: Accumulated Impairment | (1) | (1) | | **Total** | **10,525** | **8,054** | - Trade receivables primarily refer to receivables from electricity sales, typically settled within one to six months[200](index=200&type=chunk) - Tariff adjustment receivables primarily refer to central government subsidies for renewable energy projects collected from State Grid and Inner Mongolia Power, based on power purchase agreements and current national government policies[200](index=200&type=chunk) Aging Analysis of Trade and Tariff Adjustment Receivables by Invoice Date (RMB million) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unbilled | 10,460 | 8,002 | | Within one year | 61 | 45 | | One to two years | 3 | 1 | | Two to three years | 2 | – | | Over three years | – | 4 | | **Total** | **10,526** | **8,052** | [Capital and Reserves](index=49&type=section&id=Capital%20and%20Reserves) This section details the company's share capital and reserve movements, including authorized share capital, issued and fully paid share capital, the impact of share consolidation, and treasury share holdings [Share Capital](index=49&type=section&id=Share%20Capital) The company's share capital underwent a share consolidation on November 1, 2024, where every 10 shares of HKD 0.10 par value were consolidated into 1 share of HKD 1.00 par value; no new shares were issued during the period Changes in Share Capital (Million Shares/RMB million) | Item | Number of Shares (million shares) | RMB million | | :--- | :--- | :--- | | At January 1, 2024 and June 30, 2024 (HKD 0.10 per share) | 22,400 | 1,921 | | Cancellation of Repurchased Shares | (66) | (6) | | Share Consolidation | (20,100) | – | | **At June 30, 2025 (HKD 1.00 per share)** | **2,234** | **1,915** | - The share consolidation became effective on November 1, 2024, where every 10 shares of HKD 0.10 par value were consolidated into 1 share of HKD 1.00 par value[211](index=211&type=chunk) - The company did not issue any shares during the period[211](index=211&type=chunk) [Treasury Shares](index=50&type=section&id=Treasury%20Shares) As of June 30, 2025, the company held approximately 34.5 million treasury shares for strategic acquisitions or market resale; no share repurchases or cancellations occurred during the period Changes in Treasury Shares (Million Shares) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At January 1 | 34.5 | 65.9 | | Cancellation | – | (65.9) | | Repurchase | – | 345.0 | | Share Consolidation | – | (310.5) | | **At End of Period** | **34.5** | **34.5** | - During the period, the company did not cancel any of its repurchased ordinary shares, nor did it repurchase any ordinary shares[216](index=216&type=chunk)[217](index=217&type=chunk) - As of June 30, 2025, approximately **34.5 million** repurchased ordinary shares were held as treasury shares for strategic acquisitions or resale in the market[220](index=220&type=chunk) [Perpetual Medium-Term Notes](index=52&type=section&id=Perpetual%20Medium-Term%20Notes) During the period, the company issued two tranches of perpetual medium-term notes totaling RMB 1,500 million, with distribution rates of 2.47% and 2.38%; these notes have no maturity date and allow for discretionary deferral of distributions, further diversifying the company's financing channels Changes in Perpetual Medium-Term Notes (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At January 1 | 10,777 | 3,494 | | Issuance of Perpetual Medium-Term Notes | 2,550 | 7,300 | | Transaction Costs for Issuance of Perpetual Medium-Term Notes | (5) | (17) | | Profit Attributable to Perpetual Medium-Term Note Holders | 87 | 145 | | Distributions to Perpetual Medium-Term Note Holders | (87) | (145) | | **At End of Period** | **13,322** | **10,777** | - During the period, the company issued two tranches of perpetual medium-term notes with a total principal amount of **RMB 1,500 million**, carrying distribution rates of **2.47%** and **2.38%** per annum, respectively[224](index=224&type=chunk)[225](index=225&type=chunk) - The perpetual medium-term notes have no maturity date, are redeemable at the company's option, and allow for discretionary deferral of distribution payments indefinitely[224](index=224&type=chunk)[225](index=225&type=chunk) - Jingneng Development secured a total of **RMB 1,050 million** through private placement perpetual medium-term notes via an investment agreement with Allianz Insurance, with a fixed distribution rate of **3.30%** per annum[226](index=226&type=chunk)[227](index=227&type=chunk) [Bank and Other Borrowings Note](index=54&type=section&id=Bank%20and%20Other%20Borrowings_Note) This section provides details on the non-current and current portions of bank and other borrowings, analyzing their movements, including proceeds from borrowings, repayments, and weighted average annual interest rates and tenures Bank and Other Borrowings (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-Current | 50,758 | 47,936 | | Current | 18,784 | 20,646 | | **Total** | **69,542** | **68,582** | | At January 1, 2025 | 68,582 | – | | Proceeds from Bank Borrowings | 14,360 | – | | Repayment of Bank Borrowings | (13,620) | – | | Proceeds from Loans from Financial Institutions | 2,152 | – | | Repayment of Loans from Financial Institutions | (1,903) | – | | Repayment of Other Loans | (64) | – | | Interest Payable on Bank and Other Borrowings | 13 | – | | Amortization of Loan Financing Fees | 6 | – | | Unamortized Interest Cost of Pledged Deposits | 20 | – | | Exchange Differences | (4) | – | | **At June 30, 2025** | **69,542** | – | - As of June 30, 2025, the weighted average annual interest rate for bank and other borrowings was approximately **3.17%** (December 31, 2024: approximately **3.73%**), with a weighted average tenure of approximately **5.45 years** (December 31, 2024: approximately **5.67 years**)[232](index=232&type=chunk)[234](index=234&type=chunk) [Convertible Bonds](index=54&type=section&id=Convertible%20Bonds) In the first half of 2024, the three-year convertible bonds issued by the company to an independent third party were fully redeemed - In the first half of 2024, the three-year convertible bonds issued to an independent third party were fully redeemed[233](index=233&type=chunk) [Acquisitions of Subsidiaries](index=55&type=section&id=Acquisitions%20of%20Subsidiaries) The Group's strategy is to identify suitable investment opportunities for acquiring renewable energy projects; no business combinations or asset acquisitions occurred during the period, but details of asset acquisitions in the first half of 2024 are disclosed [Business Combinations](index=55&type=section&id=Business%20Combinations) No business combinations occurred within the Group for the six months ended June 30, 2025 - No business combinations occurred for the six months ended June 30, 2025[236](index=236&type=chunk)[241](index=241&type=chunk) [Acquisitions of Assets](index=55&type=section&id=Acquisitions%20of%20Assets) No asset acquisitions occurred within the Group for the six months ended June 30, 2025; this section outlines details of equity acquisitions in two Chinese companies in the first half of 2024, including consideration, fair value of acquired assets, and contributions to revenue and profit - No asset acquisitions occurred for the six months ended June 30, 2025[237](index=237&type=chunk)[242](index=242&type=chunk) - In the first half of 2024, the company, through its subsidiaries, acquired equity in two Chinese companies from independent third parties, which were treated as asset acquisitions[238](index=238&type=chunk)[242](index=242&type=chunk) Details of Asset Acquisitions in H1 2024 | Company Name | Acquisition Month | Equity Acquired | Consideration (RMB million) | Type | Location | Number of Power Plants | Grid-Connected Capacity (MW) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pingquan Bangcheng New Energy Technology Co., Ltd. | March 2024 | 85.0% | 68 | Solar | Hebei | 1 | 100.0 | | Heshun Runneng New Energy Co., Ltd. | April 2024 | 100.0% | 149 | Wind | Shanxi | 1 | 80.0 | - The acquisitions in the first half of 2024 contributed **RMB 18 million** in revenue and a loss of **RMB 5 million** from the acquisition dates[248](index=248&type=chunk)[249](index=249&type=chunk) [Cash Generated from Operations](index=58&type=section&id=Cash%20Generated%20from%20Operations) This section provides details on the calculation of cash generated from operations, adjusting profit before income tax for non-cash items and working capital changes to derive the period's operating cash flow Calculation of Cash Generated from Operations (RMB million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Before Income Tax | 448 | 434 | | Depreciation of Property, Plant and Equipment | 1,683 | 1,102 | | Finance Costs | 1,099 | 1,105 | | Changes in Trade, Bills and Tariff Adjustment Receivables | (2,471) | (2,098) | | Changes in Other Receivables, Deposits and Prepayments | 244 | (290) | | Changes in Other Payables and Accrued Expenses | (192) | 1,080 | | **Cash Generated from Operations** | **883** | **1,401** | [Capital Commitments](index=58&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had capital commitments related to property, plant, and equipment totaling approximately RMB 2,525 million Capital Commitments (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital Commitments for Property, Plant and Equipment | Approx. 2,525 | Approx. 3,083 | [Related-Party Transactions](index=59&type=section&id=Related-Party%20Transactions) This section discloses significant transactions and balances between the Group and related parties, primarily involving interest expenses paid to and bank and other loans received from the controlling shareholder and its subsidiaries [Significant Related Party Transactions](index=59&type=section&id=Significant%20Related%20Party%20Transactions) During the period, the Group incurred interest expenses to the controlling shareholder and its subsidiaries, earned interest income from a subsidiary of the controlling shareholder, and paid building management fees and administrative office service expenses Summary of Significant Related Party Transactions (Six Months Ended June 30, 2025, RMB million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Expense to a Controlling Shareholder | 29 | 195 | | Interest Expense to a Subsidiary of a Controlling Shareholder | 155 | 185 | | Interest Expense to an Associate | 1 | 1 | | Interest Income from a Subsidiary of a Controlling Shareholder | 2 | 14 | | Building Management Fees to a Subsidiary of a Controlling Shareholder | 2 | 3 | | Administrative Office Service Expenses to a Subsidiary of a Controlling Shareholder | 9 | 9 | - Interest expenses from Jingneng Group loans were paid at annual interest rates ranging from **2.01% to 4.05%**[265](index=265&type=chunk) - Interest expenses from loans from Jingneng Group Finance Co., Ltd. and Beijing Jingneng Financial Leasing Co., Ltd. were paid at annual interest rates ranging from **2.40% to 3.20%**[265](index=265&type=chunk) [Significant Related Party Balances](index=60&type=section&id=Significant%20with%20Related%20Party%20Balances) As of June 30, 2025, the Group had several significant balances with related parties, primarily consisting of bank loans and financial institution loans from the controlling shareholder and its subsidiaries Summary of Significant Related Party Balances (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank Loans from a Subsidiary of a Controlling Shareholder | 5,180 | 5,450 | | Bank Loans from a Controlling Shareholder | 1,635 | 1,624 | | Loans from Financial Institutions from a Subsidiary of a Controlling Shareholder | 6,851 | 7,001 | | Other Loans from an Associate | 60 | 60 | [Key Management Compensation](index=60&type=section&id=Key%20Management%20Compensation) During the period, total key management compensation was approximately RMB 2.32 million, including short-term employee benefits, contributions to retirement benefit plans, and share-based payment expenses Key Management Compensation (RMB million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-Term Employee Benefits | 2.05 | 1.62 | | Contributions to Retirement Benefit Plans | 0.16 | 0.05 | | Share-Based Payment Expenses | 0.11 | 0.24 | | **Total** | **2.32** | **1.91** | [Fair Value Measurement](index=61&type=section&id=Fair%20Value%20Measurement) This section explains the fair value measurement hierarchy for financial instruments (Level 1, Level 2, Level 3) and provides details on changes in Level 3 instruments and sensitivity analysis to assess the impact of changes in unobservable inputs on fair value [Financial Assets and Financial Liabilities Measured at Fair Value](index=61&type=section&id=Financial%20Assets%20and%20Financial%20Liabilities%20Measured%20at%20Fair%20Value) This section defines the fair value measurement hierarchy for financial instruments (Level 1, Level 2, Level 3) and presents changes in Level 3 instruments (unlisted investments and contingent consideration payable) during the period - Fair value measurement hierarchy is categorized into: Level 1 (quoted prices in active markets), Level 2 (observable market data, not quoted prices), and Level 3 (unobservable inputs)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[275](index=275&type=chunk) Changes in Level 3 Instruments (June 30, 2025, RMB million) | Item | Unlisted Investments | Contingent Consideration Payable | | :--- | :--- | :--- | | At January 1, 2025 | 31 | (3) | | Revaluation | – | 2 | | Exchange Differences | – | (1) | | **At June 30, 2025** | **31** | **(2)** | [Sensitivity Analysis of Observable and Unobservable Inputs](index=63&type=section&id=Sensitivity%20Analysis%20of%20Observable%20and%20Unobservable%20Inputs) This section explains the sensitivity of Level 3 financial assets and liabilities' fair values to changes in unobservable inputs, including discount rates and revenue growth rates for unlisted investments, and effective generation hours and discount rates for contingent consideration payable - The fair values of Level 3 financial assets and liabilities are sensitive to changes in the assumptions used to generate the input data[278](index=278&type=chunk)[279](index=279&type=chunk) Sensitivity Analysis of Level 3 Financial Assets (June 30, 2025, RMB million) | Item | Fair Value | Significant Input Data | Input Data Range | Favorable/(Unfavorable) Change to Profit or Loss | | :--- | :--- | :--- | :--- | :--- | | Unlisted Investments | 31 | Discount Rate 5.10% | +0.5% | (0.1) | | | | | –0.5% | 0.1 | | | | Revenue Growth Rate 0% | +5% | 0.7 | | | | | –5% | (0.5) | | Contingent Consideration Payable | 2 | 2,200–2,630 Effective Generation Hours | +1% | – | | | | | –1% | – | | | | Discount Rate 8.80% | +3% | – | | | | | –3% | – | - As of June 30, 2025, the carrying amounts of all the Group's financial assets and financial liabilities approximated their fair values[281](index=281&type=chunk)[284](index=284&type=chunk) [Events After the Date of Statement of Financial Position Note](index=64&type=section&id=Events%20After%20the%20Date%20of%20Statement%20of%20Financial%20Position_Note) In July 2025, the Group, through Jingneng Development, entered into a trust agreement with Industrial Bank International Trust Co., Ltd. to establish a trust for issuing asset-backed commercial papers totaling approximately RMB 2,000 million - In July 2025, Jingneng Development entered into a trust agreement with Industrial Bank International Trust Co., Ltd. concerning the establishment of a trust for Industrial Bank International Trust to issue asset-backed commercial papers totaling approximately **RMB 2,000 million** through the National Association of Financial Market Institutional Investors[282](index=282&type=chunk)[285](index=285&type=chunk) [Comparative Figures](index=64&type=section&id=Comparative%20Figures) Certain comparative figures have been restated to conform to the current period's presentation - Certain comparative figures have been restated to conform to the current period's presentation[283](index=283&type=chunk)[286](index=286&type=chunk) [Other Information](index=64&type=section&id=Other%20Information) [Directors' and Chief Executives' Interests in Shares, Underlying Shares and Debentures](index=65&type=section&id=Directors%27%20and%20Chief%20Executives%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, certain directors and chief executives held long positions in the company's shares and underlying shares, primarily related to share options Directors' and Chief Executives' Long Positions in the Company's Shares and Underlying Shares (June 30, 2025) | Name | Capacity/Nature of Interest | Total Number of Shares/Underlying Shares Held | Approx. Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Zhang Ping | Beneficial Owner | 1,736,000 | 0.08% | | Mr. Liu Guoxi | Beneficial Owner | 429,000 | 0.02% | | Mr. Zhu Jun | Beneficial Owner | 1,045,650 | 0.05% | - Shares held include those related to sh

[Corporate Information](index=2&type=section&id=Corporate%20Information) The company's corporate information details its board, committees, auditors, legal advisers, registered and principal business offices, and other key administrative data [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The company's board comprises non-executive, executive, and independent non-executive directors - The Board of Directors includes a non-executive director (Chairman), an executive director, and independent non-executive directors[3](index=3&type=chunk) [Committees](index=3&type=section&id=Committees) Audit, Nomination, and Remuneration Committees are chaired by specific directors to ensure effective corporate governance - The Audit Committee is chaired by Mr. Zhao Xianbo, the Nomination Committee by Mr. Zeng Juncai, and the Remuneration Committee by Ms. Wang Fen[3](index=3&type=chunk) [Auditor and Legal Advisers](index=3&type=section&id=Auditor%20and%20Legal%20Advisers) The company's auditor is CCTH CPA Limited, with legal advisers for Hong Kong and Cayman Islands law - The auditor is CCTH CPA Limited (中正天恆會計師有限公司)[4](index=4&type=chunk) - The Hong Kong legal adviser is Paul Hastings (Hong Kong) LLP (普衡律師事務所(香港)有限法律責任合夥)[5](index=5&type=chunk) - The Cayman Islands legal adviser is Walkers (Hong Kong)[5](index=5&type=chunk) [Registered and Business Offices](index=4&type=section&id=Registered%20and%20Business%20Offices) The company's registered office is in the Cayman Islands, with main business operations in Nanjing and Hong Kong - The registered office is located in the Cayman Islands[7](index=7&type=chunk) - The principal place of business and headquarters in China are located at 25th Floor, Hongyang Building, No. 9 Daqiao North Road, Nanjing, Jiangsu Province[7](index=7&type=chunk) - The principal place of business in Hong Kong is located at Room 2612, 26th Floor, China Merchants Tower, Shun Tak Centre, Sheung Wan[9](index=9&type=chunk) [Other Corporate Information](index=5&type=section&id=Other%20Corporate%20Information) Details joint company secretaries, authorized representatives, principal bankers, and stock code - The joint company secretaries are Mr. Jia Hongbo and Ms. Chen Zhuoman[9](index=9&type=chunk) - The authorized representatives are Mr. Zeng Juncai and Ms. Chen Zhuoman[9](index=9&type=chunk) - The principal bankers are Agricultural Bank of China Nanjing Qiaobei Sub-branch and Industrial and Commercial Bank of China Nanjing Qiaobei Sub-branch[10](index=10&type=chunk) - The stock code is HKEX: 1971[10](index=10&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) The company experienced revenue growth but declines in gross profit and net profit for the six months ended June 30, 2025 2025 First Half Key Financial Indicators | Indicator | 2025 First Half (RMB million) | 2024 Same Period (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 510.4 | 465.3 | +9.7% | | Gross Profit | 113.4 | 127.5 | -11.1% | | Gross Profit Margin | 22.2% | 27.4% | -5.2 percentage points | | Profit for the Period | 28.5 | 40.1 | -29.1% | | Profit Attributable to Equity Holders | 24.4 | 36.6 | -33.2% | 2025 First Half Revenue by Business Segment | Business Segment | 2025 First Half Revenue (RMB million) | % of Total Revenue | 2024 Same Period Revenue (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 420.0 | 82.3% | 375.4 | +11.9% | | Non-Owner Value-Added Services | 11.0 | 2.2% | 20.3 | -45.8% | | Community Value-Added Services | 79.4 | 15.5% | 69.6 | +14.1% | - As of June 30, 2025, contracted GFA was approximately **49.9 million sq.m.**, a decrease of approximately **3.7%** compared to the same period in 2024[13](index=13&type=chunk) - As of June 30, 2025, GFA under management was approximately **48.2 million sq.m.**, an increase of approximately **2.3%** compared to the same period in 2024[13](index=13&type=chunk) - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[13](index=13&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the first half of 2025, detailing business and financial performance, future outlook, significant transactions, and human resource policies [Review for the First Half of 2025](index=9&type=section&id=Review%20for%20the%20First%20Half%20of%202025) The property management industry faced macroeconomic pressures, shifting from scale expansion to quality-driven growth and smart transformation - The property management industry's scale expansion logic has been reshaped, with leading enterprises focusing on core city clusters and a slowdown in GFA growth[14](index=14&type=chunk)[18](index=18&type=chunk) - Service price structural differentiation is evident, regional development imbalances are prominent, and the industry is accelerating its transformation from scale-driven to quality-driven competition[14](index=14&type=chunk)[18](index=18&type=chunk) - At the policy level, intelligent transformation has become a mandatory requirement, with enterprises failing to meet standards facing market elimination risks[15](index=15&type=chunk)[19](index=19&type=chunk) - In the first half of the year, the Group adhered to its strategic layout of "penetrating Greater Jiangsu, deeply cultivating the Yangtze River Delta, and strengthening central cities," transitioning from scale expansion to quality and efficiency-driven development[16](index=16&type=chunk)[19](index=19&type=chunk) - In the diversified property types sector, new school and data center property types were added, effectively offsetting cyclical industry risks, and the investment segment achieved considerable returns through precise layout around new property types[17](index=17&type=chunk)[20](index=20&type=chunk) - The Group ranked **16th** among the "2025 China Property Service Top 100 Enterprises" and received honors as "2025 China Property Service Top 100 Satisfaction Leading Enterprise" and "2025 China Red Property Service Excellent Enterprise"[25](index=25&type=chunk)[28](index=28&type=chunk) - As of June 30, 2025, the Group provided services to **47 cities** nationwide, with **340 contracted projects**, a contracted GFA of approximately **49.9 million sq.m.** (a **3.7%** YoY decrease), and a total GFA under management of approximately **48.2 million sq.m.** (a **2.3%** YoY increase)[26](index=26&type=chunk)[28](index=28&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) The group's strategy focuses on property management, non-owner value-added, and community value-added services, with residential and third-party projects dominating - The Group's business model revolves around a "customer-centric" service philosophy, deepening the Hongyang model, and providing property management services, non-owner value-added services, and community value-added services[30](index=30&type=chunk)[32](index=32&type=chunk) - Property management services include security, cleaning, landscaping, facility management, customer service, and maintenance, covering residential, commercial, office buildings, industrial parks, and schools[31](index=31&type=chunk)[32](index=32&type=chunk) - Non-owner value-added services include consulting for other property management companies, preliminary planning and design consulting for real estate developers, co-selling services, acceptance services, and property maintenance services[33](index=33&type=chunk)[35](index=35&type=chunk) - Community value-added services include eight major categories: real estate agency, home beautification, community convenience, public area value-added, intelligent services, retail services, asset management services, and home decoration services[34](index=34&type=chunk)[35](index=35&type=chunk) Total Revenue Breakdown by Business Line (For the six months ended June 30, 2025) | Business Line | Revenue (RMB thousand) | % of Total | | :--- | :--- | :--- | | Property Management Services | 420,018 | 82.3 | | Non-Owner Value-Added Services | 10,993 | 2.2 | | Community Value-Added Services | 79,360 | 15.5 | | **Total** | **510,371** | **100.0** | Property Management Services Revenue, GFA Under Management, and Project Count by Developer Type (As of June 30, 2025) | Developer Type | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Hongyang Group | 166,735 | 98 | 17,624 | | Third-Party Real Estate Developers | 253,283 | 225 | 30,607 | | - Third-Party Developers | 168,934 | 170 | 22,017 | | - Joint Ventures and Associates of Hongyang Group | 84,349 | 55 | 8,590 | | **Total** | **420,018** | **323** | **48,231** | Property Management Services Revenue, GFA Under Management, and Project Count by Property Type (As of June 30, 2025) | Property Type | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Residential Properties | 352,785 | 252 | 43,770 | | Non-Residential Properties | 67,233 | 71 | 4,461 | | **Total** | **420,018** | **323** | **48,231** | Property Management Services Revenue, GFA Under Management, and Project Count by Geographical Distribution (As of June 30, 2025) | City | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Nanjing | 118,274 | 95 | 12,962 | | Jiangsu (excluding Nanjing) | 99,567 | 81 | 14,644 | | Shanghai | 4,466 | 1 | 601 | | Anhui | 47,021 | 35 | 7,269 | | Shandong | 773 | 1 | 100 | | Hunan | 9,067 | 9 | 1,111 | | Henan | 2,164 | 1 | 239 | | Zhejiang | 16,559 | 11 | 1,331 | | Hubei | 76,168 | 47 | 5,617 | | Chongqing | 16,278 | 8 | 1,101 | | Guangdong | 7,634 | 6 | 685 | | Jiangxi | 4,210 | 3 | 411 | | Sichuan | 16,217 | 17 | 1,743 | | Shaanxi | 1,620 | 8 | 417 | | **Total** | **420,018** | **323** | **48,231** | [Financial Review](index=17&type=section&id=Financial%20Review) Revenue increased due to property management and community services, but higher costs led to reduced gross profit and net profit, while the debt-to-asset ratio improved - Total revenue was **RMB 510.4 million**, a year-on-year increase of **9.7%**, primarily due to increased revenue from property management services and community value-added services[47](index=47&type=chunk)[52](index=52&type=chunk) - Revenue from property management services was **RMB 420.0 million**, a year-on-year increase of **11.9%**, mainly due to an increase in property management projects[48](index=48&type=chunk)[53](index=53&type=chunk) - Revenue from non-owner value-added services was **RMB 11.0 million**, a year-on-year decrease of **45.8%**, primarily due to a reduction in on-site projects served[49](index=49&type=chunk)[54](index=54&type=chunk) - Revenue from community value-added services was **RMB 79.4 million**, a year-on-year increase of **14.1%**, mainly due to increased revenue from community retail services[50](index=50&type=chunk)[55](index=55&type=chunk) - Cost of services was **RMB 397.0 million**, an increase of approximately **17.5%** year-on-year, primarily due to increased staff costs and outsourcing costs for property management projects[51](index=51&type=chunk)[56](index=56&type=chunk) - Gross profit was **RMB 113.4 million**, a year-on-year decrease of **11.1%**, and the gross profit margin was **22.2%**, a year-on-year decrease of **5.2 percentage points**, mainly due to increased costs for property management services[57](index=57&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) Gross Profit Margin by Business Line (For the six months ended June 30, 2025) | Business Line | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | | Property Management Services | 20.0% | 26.4% | | Non-Owner Value-Added Services | 15.0% | 15.0% | | Community Value-Added Services | 35.1% | 36.6% | | **Total** | **22.2%** | **27.4%** | - Administrative expenses were **RMB 41.4 million**, an increase of approximately **34.9%** year-on-year, mainly due to an increase in project management personnel[65](index=65&type=chunk)[69](index=69&type=chunk) - Net impairment losses on financial assets were **RMB 26.9 million**, a decrease from **RMB 40.9 million** in the same period of 2024, primarily due to a decrease in impairment provisions for receivables from related companies[70](index=70&type=chunk)[74](index=74&type=chunk) - Profit before tax was **RMB 44.3 million**, a year-on-year decrease of approximately **19.0%**[71](index=71&type=chunk)[75](index=75&type=chunk) - Income tax expense was **RMB 15.8 million**, a year-on-year increase of approximately **9.0%**, mainly due to a decrease in deferred income tax expenses recognized in the current period[72](index=72&type=chunk)[76](index=76&type=chunk) - As of June 30, 2025, current assets were **RMB 1,307.3 million**, a slight decrease from December 31, 2024[73](index=73&type=chunk)[77](index=77&type=chunk) - Cash and bank balances were **RMB 478.0 million**, a decrease of **14.7%** from December 31, 2024[73](index=73&type=chunk)[77](index=77&type=chunk) - The debt-to-asset ratio was **40.6%**, a decrease of **4.6 percentage points** from **45.2%** as of December 31, 2024[73](index=73&type=chunk)[77](index=77&type=chunk) - Total equity was **RMB 937.5 million**, an increase of **3.1%** from December 31, 2024, primarily due to growth from operating profit[78](index=78&type=chunk)[82](index=82&type=chunk) - Trade receivables were **RMB 308.1 million**, an increase of approximately **6.3%** from December 31, 2024, mainly due to an increase in the number of projects under management[80](index=80&type=chunk)[83](index=83&type=chunk) - Trade payables were **RMB 120.9 million**, a decrease of approximately **34.2%** from December 31, 2024, mainly due to shorter payment terms with outsourcing suppliers[85](index=85&type=chunk)[89](index=89&type=chunk) [Outlook for the Second Half of 2025](index=23&type=section&id=Outlook%20for%20the%20Second%20Half%20of%202025) The group aims for sustainable, quality growth by enhancing service innovation, resource focus, and operational efficiency through strategic initiatives and talent development - The Group will continue to expand into new sectors, deeply cultivate advantageous areas, balance the complementary relationship between business increments and existing assets, and promote comprehensive breakthroughs in new businesses and continuous optimization of existing businesses[94](index=94&type=chunk)[96](index=96&type=chunk) - In the second half of the year, the focus will be on developing three core capabilities: "service innovation, resource focus, and efficient operations"[95](index=95&type=chunk)[97](index=97&type=chunk) - In terms of service innovation, the Group will deepen customized standards for various property types, extend the residential community service chain vertically, expand non-residential space operation scenarios horizontally, and accelerate the implementation of intelligent platforms and IoT tools[97](index=97&type=chunk) - Regarding resource focus, the Group will build a "headquarters coordination + regional linkage" mechanism, deeply cultivate core city clusters, expand into new scenarios such as urban services and public supporting facilities, and accelerate ecosystem expansion through strategic joint ventures and mergers and acquisitions[99](index=99&type=chunk)[100](index=100&type=chunk) - For efficient operations, the Group will optimize its talent "selection, cultivation, utilization, and retention" mechanism, compile a comprehensive service manual for all property types, and promote a mobile management and control platform across all regions to achieve online and data-driven service processes[99](index=99&type=chunk)[101](index=101&type=chunk) - Centered on investment-driven strategy, the Group will focus on standard construction, promote the implementation of multi-property type standardized operation guidelines, optimize investment mechanisms, and integrate investment and budget systems[102](index=102&type=chunk)[105](index=105&type=chunk) - Organizational development will be strengthened, adhering to the talent allocation principle of "lean headquarters, strong regions, excellent projects," and systematically building four key talent teams: "Hong Elite," "Hong Butler," "Hong Master," and "Hong Guard"[104](index=104&type=chunk)[107](index=107&type=chunk) - Upholding the core values of "business with integrity, sincerity leads to far-reaching success," the Group will foster cultural cohesion and activate team momentum through a culture of great love[108](index=108&type=chunk)[111](index=111&type=chunk) [Significant Investments, Acquisitions and Disposals](index=26&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals) The company entered agreements to acquire parking spaces and equity in three entities, with total consideration offset against receivables - On February 17, 2025, the Company entered into a framework agreement for the transfer of parking spaces with Hongyang Group, intending to acquire the ownership or usage rights of target parking spaces for approximately **RMB 230.92 million**[110](index=110&type=chunk)[113](index=113&type=chunk) - On the same day, Nanjing Hongshenghuo Property Consulting Co., Ltd., an indirect wholly-owned subsidiary of the Company, entered into equity transfer agreements with subsidiaries of Hongyang Group to conditionally acquire **70%** equity in Chengdu Hongsheng Heding Real Estate Development Co., Ltd. (approximately **RMB 142.4 million**), **20%** equity in Suqian Tongjin Hongzhiye Co., Ltd. (approximately **RMB 73.95 million**), and **19%** equity in Jurong Jinjiarun Real Estate Development Co., Ltd. (approximately **RMB 41.34 million**)[114](index=114&type=chunk)[118](index=118&type=chunk) - The total consideration for these equity interests will be offset against outstanding receivables on an equivalent basis, with no cash payment involved[114](index=114&type=chunk)[118](index=118&type=chunk) - As of June 30, 2025, and the approval date of the condensed consolidated financial information, the transaction had not yet been completed[116](index=116&type=chunk)[119](index=119&type=chunk) [Employment and Remuneration Policies](index=28&type=section&id=Employment%20and%20Remuneration%20Policies) The group employs 2,799 staff, implementing competitive remuneration and multi-tiered talent development programs - As of June 30, 2025, the Group had a total of **2,799 employees**, with **2,326** engaged in residential property management and **473** in non-residential property management[121](index=121&type=chunk)[125](index=125&type=chunk) - Employee remuneration is primarily determined based on responsibilities, job performance, and market levels, complemented by competitive compensation, talent development strategies, internal promotion systems, and corporate culture[122](index=122&type=chunk)[125](index=125&type=chunk) - The Group has designed a three-tiered talent development program, including the "General Plan," "Hong Elite Plan," and "Hongyao Plan," conducted through "offline intensive training + on-site delivery to the front line" methods[123](index=123&type=chunk)[125](index=125&type=chunk) [Events after the Reporting Period](index=29&type=section&id=Events%20after%20the%20Reporting%20Period) No significant post-reporting period events occurred after June 30, 2025 - The Company did not undertake any significant events after June 30, 2025[127](index=127&type=chunk)[129](index=129&type=chunk) [Exposure to Foreign Exchange Risk](index=29&type=section&id=Exposure%20to%20Foreign%20Exchange%20Risk) Operating primarily in China, the group's transactions are mainly denominated and settled in RMB, with ongoing monitoring of foreign exchange activities - The Group primarily operates in China, with most transactions denominated and settled in RMB[128](index=128&type=chunk)[130](index=130&type=chunk) - The Group will continue to monitor foreign exchange activities and make its best efforts to safeguard cash value[128](index=128&type=chunk)[130](index=130&type=chunk) [Corporate Governance/Other Information](index=30&type=section&id=Corporate%20Governance%2FOther%20Information) This section outlines the company's adherence to corporate governance standards, director and shareholder interests, public float, audit committee activities, and securities transactions [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The group adheres to high corporate governance standards, complying with the HKEX Corporate Governance Code - The Group has adopted the HKEX Corporate Governance Code as its corporate governance standard[132](index=132&type=chunk)[136](index=136&type=chunk) - During the reporting period, the Company complied with all applicable code provisions in Part 2 of the Corporate Governance Code[132](index=132&type=chunk)[136](index=136&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=30&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company's directors confirmed compliance with the HKEX Model Code for Securities Transactions by Directors - The Company has adopted the HKEX Model Code for Securities Transactions by Directors of Listed Issuers[134](index=134&type=chunk)[138](index=138&type=chunk) - The directors confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period[134](index=134&type=chunk)[139](index=139&type=chunk) [Changes in Information of Directors and Chief Executive Officer](index=30&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Chief%20Executive%20Officer) No changes in information of directors and the chief executive officer required disclosure during the reporting period - During the reporting period, there were no changes in the information of directors and the Company's chief executive officer required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules[135](index=135&type=chunk)[140](index=140&type=chunk) [Directors' and Chief Executive's Interests](index=31&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2025, no directors or chief executive held disclosable interests in the company's shares or debentures - As of June 30, 2025, no directors or the Company's chief executive held any disclosable interests or short positions in the shares, underlying shares, and debentures of the Company or its associated corporations[141](index=141&type=chunk)[142](index=142&type=chunk) [Substantial Shareholders' Interests](index=32&type=section&id=Substantial%20Shareholders'%20Interests) Redsun Services Group (Holdings) and its affiliates hold a 72.77% equity interest, with various noteholders having security interests in the company's shares Interests and Short Positions of Substantial Shareholders in the Company's Shares and Underlying Shares (As of June 30, 2025) | Name of Substantial Shareholder | Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Redsun Services Group (Holdings) | Beneficial owner | 301,994,000 | 72.77% | | Hong Yang Group Company | Interest in controlled corporation | 301,994,000 | 72.77% | | Hong Yang International | Interest in controlled corporation | 301,994,000 | 72.77% | | Hong Yang Group (Holdings) | Interest in controlled corporation | 301,994,000 | 72.77% | | Mr. Zeng Huansha | Interest in controlled corporation | 301,994,000 | 72.77% | | Ms. Chen Sihong | Spouse's interest | 301,994,000 | 72.77% | | Serica Agency Limited | Person with a security interest in shares | 301,994,000 | 72.77% | | Ares Holdings L.P. | Person with a security interest in shares | 75,649,496 | 18.23% | | BFAM Partners (Cayman) Limited | Person with a security interest in shares | 65,895,091 | 15.88% | | Investment Opportunities V Pte. Limited | Person with a security interest in shares | 43,366,338 | 10.45% | | Ares SSG Capital Partners VI GP, Ltd. | Person with a security interest in shares | 32,283,158 | 7.78% | | Ares SSG Capital Partners VI, L.P. | Person with a security interest in shares | 32,283,158 | 7.78% | | CP6 Hold Co 2 Limited | Person with a security interest in shares | 32,283,158 | 7.78% | | Union Lead Capital Limited | Person with a security interest in shares | 32,283,158 | 7.78% | - Redsun Services Group (Holdings) granted a security interest over **100%** of its shares in the Company (representing approximately **72.77%** of the total issued share capital) to Serica Agency Limited as beneficiary, providing credit support for senior secured notes issued by Hongsheng Limited, a wholly-owned subsidiary of Hongyang Group[147](index=147&type=chunk) [Sufficiency of Public Float](index=35&type=section&id=Sufficiency%20of%20Public%20Float) The company maintained the required public float as stipulated by the Listing Rules - The Company has maintained a sufficient public float as required by the Listing Rules[151](index=151&type=chunk)[155](index=155&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) The Audit Committee, chaired by Mr. Zhao Xianbo, reviewed the unaudited interim results and confirmed compliance with accounting standards - The Audit Committee comprises four directors, including three independent non-executive directors (Mr. Zhao Xianbo, Ms. Wang Fen, Mr. Li Xiaohang) and one non-executive director (Mr. Zeng Juncai)[153](index=153&type=chunk)[156](index=156&type=chunk) - The Audit Committee is chaired by Mr. Zhao Xianbo, who possesses professional accounting and relevant financial management expertise[153](index=153&type=chunk)[156](index=156&type=chunk) - The Committee has reviewed the Company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and confirmed compliance with all applicable accounting principles, standards, and disclosure requirements, with adequate disclosures made[153](index=153&type=chunk)[156](index=156&type=chunk) [Interim Dividend](index=35&type=section&id=Interim%20Dividend) The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024 same period: nil)[154](index=154&type=chunk)[157](index=157&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=36&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[159](index=159&type=chunk) - As of the end of the reporting period, the Company did not hold any treasury shares[159](index=159&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported RMB 510.4 million in revenue, RMB 113.4 million in gross profit, and RMB 28.5 million in profit for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 510,371 | 465,332 | | Cost of services | (396,971) | (337,795) | | Gross profit | 113,400 | 127,537 | | Other income and gains | 1,671 | 1,515 | | Selling and distribution expenses | (1,020) | (636) | | Administrative expenses | (41,387) | (30,727) | | Net impairment losses on financial assets | (26,858) | (40,852) | | Other expenses | (1,003) | (1,329) | | Finance costs | (545) | (862) | | Profit before tax | 44,258 | 54,646 | | Income tax expense | (15,788) | (14,515) | | Profit for the period | 28,470 | 40,131 | | Profit attributable to owners of the parent | 24,444 | 36,602 | | Profit attributable to non-controlling interests | 4,026 | 3,529 | | Basic and diluted earnings per share | RMB 0.06 | RMB 0.09 | [Condensed Consolidated Statement of Financial Position](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities were RMB 958.9 million, with net assets at RMB 937.5 million, and cash and bank balances at RMB 478.0 million Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 22,076 | 25,333 | | Goodwill | 175,050 | 175,050 | | Other intangible assets | 49,502 | 57,725 | | Deferred tax assets | 25,530 | 25,013 | | **Total non-current assets** | **272,158** | **283,121** | | **Current assets** | | | | Inventories | 4,875 | 268 | | Trade receivables | 308,103 | 289,936 | | Prepayments, other receivables and other assets | 120,143 | 133,010 | | Amounts due from related companies | 396,173 | 391,412 | | Cash and bank balances | 478,039 | 560,574 | | **Total current assets** | **1,307,333** | **1,375,200** | | **Current liabilities** | | | | Trade payables | 120,924 | 183,776 | | Other payables and accruals | 143,083 | 177,671 | | Contract liabilities | 258,013 | 258,594 | | Interest-bearing bank borrowings | 13,861 | 13,831 | | Tax payable | 84,654 | 85,136 | | **Total current liabilities** | **620,535** | **719,008** | | **Net current assets** | **686,798** | **656,192** | | **Total assets less current liabilities** | **958,956** | **939,313** | | **Non-current liabilities** | | | | Interest-bearing bank borrowings | 10,341 | 17,235 | | Deferred tax liabilities | 11,067 | 13,000 | | **Total non-current liabilities** | **21,408** | **30,235** | | **Net assets** | **937,548** | **909,078** | | **Total equity** | **937,548** | **909,078** | [Condensed Consolidated Statement of Changes in Equity](index=39&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Equity attributable to owners of the parent increased from RMB 898.1 million to RMB 922.5 million for the six months ended June 30, 2025, driven by comprehensive income Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30, 2025) | Item | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Merger Reserve (RMB thousand) | Statutory Surplus Reserve (RMB thousand) | Retained Profits (RMB thousand) | Total Attributable to Owners of the Parent (RMB thousand) | Non-controlling Interests (RMB thousand) | Total Equity (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2025 (audited) | 3,764 | 387,262 | 87,849 | 71,377 | 347,806 | 898,058 | 11,020 | 909,078 | | Total comprehensive income for the period | – | – | – | – | 24,444 | 24,444 | 4,026 | 28,470 | | At June 30, 2025 (unaudited) | 3,764 | 387,262 | 87,849 | 71,377 | 372,250 | 922,502 | 15,046 | 937,548 | | At January 1, 2024 (audited) | 3,764 | 387,262 | 87,849 | 66,450 | 338,347 | 883,672 | 14,900 | 898,572 | | Total comprehensive income for the period | – | – | – | – | 36,602 | 36,602 | 3,529 | 40,131 | | At June 30, 2024 (unaudited) | 3,764 | 387,262 | 87,849 | 66,450 | 374,949 | 920,274 | 18,429 | 938,703 | [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating, investing, and financing activities resulted in a net decrease of RMB 87.1 million in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30, 2025) | Cash Flow Activity | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows used in operating activities | (78,103) | (142,697) | | Net cash flows used in investing activities | (1,545) | (3,935) | | Net cash flows used in financing activities | (7,409) | (8,409) | | **Net decrease in cash and cash equivalents** | **(87,057)** | **(155,041)** | | Cash and cash equivalents at beginning of period | 560,574 | 637,775 | | Effect of foreign exchange rate changes, net | 73 | 132 | | **Cash and cash equivalents at end of period** | **473,590** | **482,866** | [Notes to Condensed Consolidated Financial Information](index=44&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the company's information, basis of preparation, accounting policies, segment data, revenue, profit before tax, and other financial disclosures [Corporate and Group Information](index=44&type=section&id=Corporate%20and%20Group%20Information) Hong Yang Services Group Company Limited, incorporated in the Cayman Islands, is listed on HKEX and primarily provides property management and value-added services - The Company was incorporated in the Cayman Islands on December 12, 2019, and its shares have been listed on the Main Board of the Stock Exchange of Hong Kong since July 7, 2020[173](index=173&type=chunk)[176](index=176&type=chunk) - During the reporting period, the Group was principally engaged in providing property management services, non-owner value-added services, and community value-added services[174](index=174&type=chunk)[176](index=176&type=chunk) - The Company's controlling company is Hong Yang Services Group (Holdings) Limited, incorporated in the British Virgin Islands[174](index=174&type=chunk)[177](index=177&type=chunk) [Basis of Preparation](index=44&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial information is prepared in accordance with IAS 34 and should be read with the annual financial statements - The condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[175](index=175&type=chunk)[178](index=178&type=chunk) - The condensed consolidated financial information should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[175](index=175&type=chunk)[178](index=178&type=chunk) [Changes in Accounting Policies and Disclosures](index=45&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Accounting policies remain consistent with 2024, with no significant impact from the initial adoption of IAS 21 amendments - Accounting policies are consistent with the 2024 annual consolidated financial statements, except for the initial adoption of "Amendments to IAS 21: Lack of Exchangeability"[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - As the Group's transaction currency and functional currency are both convertible, this amendment has no significant impact on the condensed consolidated financial statements[180](index=180&type=chunk)[181](index=181&type=chunk) [Operating Segment Information](index=46&type=section&id=Operating%20Segment%20Information) Management monitors operating results by project location, but all locations are aggregated into one reportable segment due to similar economic characteristics - Management monitors operating results by project location, but all locations are aggregated into one reportable operating segment[183](index=183&type=chunk)[185](index=185&type=chunk) - The Group's revenue from external customers is derived solely from its operations in mainland China, and no non-current assets are located outside mainland China[184](index=184&type=chunk)[186](index=186&type=chunk) - For the six months ended June 30, 2025, no single customer contributed more than **10%** to total revenue[188](index=188&type=chunk) [Revenue Analysis](index=47&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, total revenue was RMB 510.4 million, primarily from property management services, with most revenue recognized over time Revenue Analysis (For the six months ended June 30, 2025) | Business Line | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 420,018 | 375,410 | | Non-Owner Value-Added Services | 10,993 | 20,321 | | Community Value-Added Services | 79,360 | 69,601 | | **Total** | **510,371** | **465,332** | Revenue from Customers by Timing of Recognition (For the six months ended June 30, 2025) | Revenue Recognition Method | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from customers recognized over time | 427,937 | 391,626 | | Revenue from customers recognized at a point in time | 82,434 | 73,706 | | **Total** | **510,371** | **465,332** | [Profit Before Tax Details](index=48&type=section&id=Profit%20Before%20Tax%20Details) Profit before tax is presented after deducting service costs, depreciation, amortization, and impairment losses, and including net foreign exchange gains Items Deducted/(Credited) from Profit Before Tax (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 396,971 | 337,795 | | Depreciation of property, plant and equipment | 4,636 | 3,530 | | Depreciation of right-of-use assets | – | 629 | | Amortisation of other intangible assets | 7,999 | 8,133 | | Net foreign exchange gains | (73) | (132) | | Impairment losses on amounts due from related companies | 19,831 | 26,064 | | Impairment losses on trade receivables | 2,086 | 13,984 | | Impairment losses on financial assets included in prepayments, other receivables and other assets | 4,941 | 804 | | Loss on disposal of property, plant and equipment | 166 | 120 | [Income Tax Expense](index=49&type=section&id=Income%20Tax%20Expense) Group subsidiaries in mainland China are generally subject to a 25% corporate income tax rate, with some enjoying preferential rates - Subsidiaries operating in mainland China are generally subject to a corporate income tax rate of **25%**[197](index=197&type=chunk)[198](index=198&type=chunk) - Some subsidiaries located in western China or qualifying as small and micro enterprises may enjoy preferential tax rates of **15%**, **2.5%**, or **5%**[197](index=197&type=chunk)[198](index=198&type=chunk) Income Tax Expense Analysis (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax: Corporate income tax | 18,237 | 22,024 | | Deferred tax | (2,449) | (7,509) | | **Total tax expense for the period** | **15,788** | **14,515** | [Dividends](index=50&type=section&id=Dividends) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 same period: nil)[201](index=201&type=chunk)[204](index=204&type=chunk) [Earnings Per Share](index=50&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share attributable to owners of the parent for the six months ended June 30, 2025, was RMB 0.06 - The amount of basic earnings per share attributable to ordinary equity holders of the parent is calculated based on the profit for the period of **RMB 24,444 thousand** and the weighted average number of ordinary shares outstanding of **415,000,000** shares[202](index=202&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) - For the six months ended June 30, 2025, basic and diluted earnings per share was **RMB 0.06**[161](index=161&type=chunk) - There were no potentially dilutive ordinary shares outstanding during the period, so no dilution-related adjustments were made to the basic earnings per share amount[203](index=203&type=chunk)[205](index=205&type=chunk) [Property, Plant and Equipment](index=51&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the group acquired assets at a cost of RMB 1.795 million and disposed of assets resulting in a net loss of RMB 0.166 million - For the six months ended June 30, 2025, the Group acquired assets at a cost of **RMB 1.795 million**[208](index=208&type=chunk)[209](index=209&type=chunk) - The Group disposed of assets with a net book value of **RMB 0.545 million**, resulting in a net loss on disposal of **RMB 0.166 million**[208](index=208&type=chunk)[209](index=209&type=chunk) [Trade Receivables](index=51&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables were RMB 308.1 million, with the majority due within one year, and expected credit losses measured using a provision matrix Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 221,541 | 186,521 | | 1 to 2 years | 62,408 | 71,535 | | 2 to 3 years | 17,931 | 25,855 | | Over 3 years | 6,223 | 6,025 | | **Total** | **308,103** | **289,936** | Credit Risk Information for Trade Receivables (As of June 30, 2025) | Ageing | Expected Credit Loss Rate (%) | Gross Carrying Amount (RMB thousand) | Expected Credit Loss (RMB thousand) | | :--- | :--- | :--- | :--- | | Current | 3.61% | 229,844 | 8,303 | | 1 to 2 years | 6.50% | 66,748 | 4,340 | | 2 to 3 years | 16.48% | 21,469 | 3,538 | | Over 3 years | 47.83% | 11,928 | 5,705 | | **Total** | **6.63%** | **329,989** | **21,886** | [Cash and Cash Equivalents](index=53&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and bank balances totaled RMB 478.0 million, with cash and cash equivalents at RMB 473.6 million after restricted cash Cash and Cash Equivalents Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and bank balances | 478,039 | 560,574 | | Less: Restricted cash | (4,449) | (1,504) | | **Cash and cash equivalents** | **473,590** | **559,070** | - As of June 30, 2025, cash and bank balances denominated in RMB amounted to **RMB 476,111 thousand**[219](index=219&type=chunk)[222](index=222&type=chunk) - Cash and bank balances are deposited with reputable banks that have no recent history of default and are rated as performing well in terms of credit risk[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) [Trade Payables](index=54&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables were RMB 120.9 million, with the vast majority due within one year Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 118,556 | 179,903 | | Over 1 year | 2,368 | 3,873 | | **Total** | **120,924** | **183,776** | [Other Payables and Accruals](index=54&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, other payables and accruals totaled RMB 143.1 million, primarily comprising deposits received, wages, and utility collections Other Payables and Accruals Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Collections on behalf of community residents for utilities | 23,920 | 49,849 | | Deposits received | 60,861 | 65,979 | | Other taxes payable | 31,514 | 27,795 | | Wages and welfare payable | 22,669 | 22,138 | | Others | 4,119 | 11,910 | | **Total** | **143,083** | **177,671** | [Share Capital](index=55&type=section&id=Share%20Capital) As of June 30, 2025, issued and fully paid share capital consisted of 415,000,000 ordinary shares at HK$0.01 par value each, amounting to RMB 3.764 million Share Capital Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid: 415,000,000 ordinary shares of HK$0.01 each | 3,764 | 3,764 | [Contingent Liabilities](index=55&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the group had no significant contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[230](index=230&type=chunk)[231](index=231&type=chunk) [Commitments](index=55&type=section&id=Commitments) As of the reporting period end, the group had contracted but unprovided commitments for other intangible assets totaling RMB 5.86 million Contractual Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Other intangible assets | 5,860 | 4,794 | | **Total** | **5,860** | **4,794** | [Related Party Transactions](index=56&type=section&id=Related%20Party%20Transactions) The group engaged in property management, non-owner value-added, and community value-added services with fellow subsidiaries and joint ventures, including asset acquisitions offset by receivables Transactions with Related Parties (For the six months ended June 30, 2025) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fellow subsidiaries: Property management service income | 20,928 | 31,993 | | Fellow subsidiaries: Non-owner value-added service income | 6,874 | 20,271 | | Fellow subsidiaries: Community value-added service income | – | 453 | | Joint ventures and associates of fellow subsidiaries: Property management service income | 6,279 | 9,900 | | Joint ventures and associates of fellow subsidiaries: Non-owner value-added service income | 2,207 | 14,305 | - During the period, the Group entered into a one-year lease agreement with a fellow subsidiary, with an annual rent of **RMB 808 thousand**[246](index=246&type=chunk) - As of June 30, 2025, the balance of agent deposits receivable from fellow subsidiaries was **RMB 299,746 thousand**[246](index=246&type=chunk) - The Company entered into a parking space transfer framework agreement and equity transfer agreements with fellow subsidiaries to conditionally acquire parking space rights and equity in three entities, with the total consideration to be offset against outstanding receivables on an equivalent basis[246](index=246&type=chunk) Unpaid Balances of Amounts Due from Related Companies (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade-related: Fellow subsidiaries | 365,971 | 361,506 | | Trade-related: Joint ventures and associates of fellow subsidiaries | 30,202 | 29,906 | | **Total** | **396,173** | **391,412** | | Gross amount | 586,280 | 561,688 | | Impairment | (190,107) | (170,276) | | Net book value | 396,173 | 391,412 | Movement in Impairment Provision for Amounts Due from Related Companies (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | At beginning of year | 170,276 | 110,865 | | Impairment losses recognised | 19,831 | 59,411 | | At end of year | 190,107 | 170,276 | Key Management Personnel Compensation (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 1,233 | 2,065 | | Contributions to pension schemes and social welfare | 151 | 280 | | **Total compensation paid to key management personnel** | **1,384** | **2,345** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=60&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) Management assesses that the fair values of various financial instruments approximate their carrying amounts due to short maturity periods - Management has assessed that the fair values of various financial instruments approximate their carrying amounts, primarily due to the short maturity periods of these instruments[259](index=259&type=chunk)[261](index=261&type=chunk) - The Group's finance department is responsible for determining policies and procedures for fair value measurement of financial instruments, which are reviewed and approved by the Chief Financial Officer[260](index=260&type=chunk)[261](index=261&type=chunk) [Events After the Reporting Period](index=61&type=section&id=Events%20After%20the%20Reporting%20Period) No significant post-reporting period events occurred after June 30, 2025 - The Company did not undertake any significant events after June 30, 2025[263](index=263&type=chunk)[266](index=266&type=chunk) [Approval of the Condensed Consolidated Financial Information](index=61&type=section&id=Approval%20of%20the%20Condensed%20Consolidated%20Financial%20Information) The condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 26, 2025 - The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 26, 2025[264](index=264&type=chunk)[267](index=267&type=chunk)

CORPORATE PROFILE China Mengniu Dairy Company Limited (the "Company"; stock code: 2319) and its subsidiaries (collectively "the Group" or "Mengniu") mainly manufacture and distribute quality dairy products in China. It is one of the leading dairy product manufacturers in China, with MENGNIU as its core brand. Mengniu offers diversified products including liquid milk products, ice cream, milk formula and cheese. In March 2014, Mengniu became a Hang Seng Index constituent, making it the first blue-chip Chines ...